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Bhil Ukedia Umedia Vs. Bai Gajarabai Bhulabhai and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtGujarat High Court
Decided On
Judge
Reported in(1963)4GLR381
AppellantBhil Ukedia Umedia
RespondentBai Gajarabai Bhulabhai and anr.
Excerpt:
.....that the total amount of debts exceeds..........this act. the b.a.d.r. court found on a preliminary issue having been raised by it as regards the total debts of the appellant that the total debts due and payable by the appellant exceeded rs. 15 0 and thereupon under the provisions of section 17(2) that court dismissed the respondents application. thereupon on april 12 1954 the respondents filed suit no. 46 of 1954 in the court of the civil judge junior division savli to recover a sum of rs. 9 999 from the appellant under the promissory note dated july 23 1948 presumably the claim was reduced from rs. 15 0 and odd to rs. 9 999 to keep the suit within the jurisdiction of the civil judge junior division savli. the promissory note being of the date july 23 1948 and the suit having been filed on april 12 1954 the appellant contended that.....
Judgment:

J.M. Shelat, J.

1. This appeal raises a question of construction of Sections 11 and 15 of the Bombay Agricultural Debtors Relief Act 1947 and the question arises in the following manner:

On July 23 1948 the appellant who was the original defendant in the suit executed a promissory note in favour of the respondents the original plaintiffs for a sum of Rs. 15 673 The parties to the suit were at the material time residing in Savli which was then in the territory of the Baroda State. After the merger of the Baroda State the Bombay Agricultural Debtors Relief Act 1947 was applied to that territory which included Savli. On January 28 1950 the plaintiffs filed an application under Section 4 of the Act the debt due to him as set out in the application being Rs. 15 673. It would appear that after that application was filed certain suits for adjustment previously filed by the appellant as a debtor against his other creditors were transferred to the B.A.D.R. Court at Savli under the provisions of this Act. The B.A.D.R. Court found on a preliminary issue having been raised by it as regards the total debts of the appellant that the total debts due and payable by the appellant exceeded Rs. 15 0 and thereupon under the provisions of Section 17(2) that Court dismissed the respondents application. Thereupon on April 12 1954 the respondents filed suit No. 46 of 1954 in the Court of the Civil Judge Junior Division Savli to recover a sum of Rs. 9 999 from the appellant under the promissory note dated July 23 1948 Presumably the claim was reduced from Rs. 15 0 and odd to Rs. 9 999 to keep the suit within the jurisdiction of the Civil Judge Junior Division Savli. The promissory note being of the date July 23 1948 and the suit having been filed on April 12 1954 the appellant contended that the suit was time barred and was therefore liable to be dismissed. The respondents claimed the benefit of Section 52 of the B.A.D.R. Act. The learned trial Judge however dismissed the suit as barred by the law of limitation holding that the respondents were not entitled to claim the benefit of Section 52. The respondents then went in appeal before the learned Assistant Judge Baroda. The learned Assistant Judge held that the suit was not barred under the Limitation Act and therefore set aside the judgment and decree of the trial Court which had dismissed the suit and remanded the suit to the trial Court for disposing it of according to law. Mr. Barot for the appellant has challenged this order of the learned Assistant Judge.

Mr. Barots contention is that the respondents are not entitled to the benefit of Section 52 of the Act because when they filed their application under Section 4 they were well aware that the debt due to them was more than Rs. 15000 and therefore their application claiming an amount of more than Rs. 15000 not one which could be entertained by the B.A.D.R. Court. He also argued that though that application was in fact disposed of by that Court under Section 17(2) of the Act and though that application was dismissed the application was one which could have been dealt with under Section 11 and therefore it was an application which the respondents could not have filed as it was one which was not entertainable by reason of Section 11 He also contended that under Sub-section (2) of Section 15 such a debt was not liable to be extinguished on the ground that no application for adjustment was made by the respondents as the creditors of the appellant and that being so the respondents were not entitled to exclude the time spent by them in the B.A.D.R. proceeding from the period of limitation and take the benefit of Section 52 of the Act. He argued therefore that the order passed by the learned Assistant Judge was erroneous and should be set aside. Mr. M.I. Patel for the respondents on the other hand submitted that on a proper construction of Section 11 as also Sections 15 and 17 the respondents were entitled to exclude the time spent by them in their proceedings under the B.A.D.R. Act and that therefore their suit was not time barred and the learned Assistant Judge was right in the view that he took of the suit.

2. In order to appreciate the rival contentions it would be necessary to glance at certain provisions of the Act. Under Section 2(4) a debt means any liability in cash or kind whether secured or unsecured due from a debtor whether payable under a decree or order of any civil Court or otherwise. The definition of the word debt is thus irrespective of the quantum and therefore a debt does not necessarily mean a debt which is not in excess of Rs. 15 0 Under Clause (5) of Section 2 a debtor means an individual who is indebted and who holds lands used for agricultural purposes or has held such land at any time not more than 30 years before the 30th January 1940 and who has been cultivating land personally for the cultivating seasons in the two years immediately preceding the date of the coming into operation of the Act and whose annual income from sources other than agriculture and manual labour does not exceed 33 per cent of his total annual income or does not exceed Rs. 500/whichever is greater. Thus the definition of the word debtor is again irrespective of the quantum of debt due and payable by him. In other words it is not as if a person whose debt exceeds Rs. 15 0 is not a debtor within the meaning of this definition. Section 4 lays down that a debtor ordinarily residing in any local area for which a Board was established under Section 4 of the repealed Act on or after the 1st of February 1947 or his creditor may make an application before the Ist of August 1947 to the Court for the adjustment of his debts. Under Section 15(1) every debt due from a debtor in respect of which no application has been made under Section 4 within the period specified in that section shall be extinguished. Sub-section (2) of Section 15 however inter alia provides that nothing in Section 15 shall apply to any debt due from any person... if in respect of such debt no application... can be entertained in respect of any debt owed by such person to such creditor by reason of the provisions of Section 11. It would thus appear that though under Sub-section (1) of Section 15 A debt due from a debtor in respect of which the creditor has not filed an application under Section 4 within the prescribed period is liable to become extinguished such debt would not get extinguished if an application under Section 4 cannot be entertained in respect of that debt by reason of the provisions of Section 11. If one turns to Section 11 he will find that under that section no application under Section 4 or Section 8 can be entertained by the B.A.D.R. Court either on behalf of the debtor or in respect of the debtor unless the total amount of debts due from him on the date of the application is not more than Rs. 15 0 Under Section 17 it is incumbent upon the B.A.D.R. Court to raise on the date fixed for the hearing of the application under Section 4 two preliminary issues:

(1) whether the person for the adjustment of whose debts the application is made is a debtor and

(2) whether the total amount of debts due from such person at the date of the application exceeds Rs. 150

Under Sub-section (2) if the Court finds either that such a person is not a debtor meaning thereby a debtor within the meaning of Section 2(5) or if it finds that the total amount of debts due from such a person on the date of the application was more than Rs. 15 0 the Court has to dismiss the application forthwith.

Mr. Barot contended that under Section 51 the exclusion of time spent in prosecuting a B.A.D.R. proceeding is provided for only in those cases where the B.A.D.R. Court has held under Section 17 that the person for the adjustment of whose debts the application was made under Section 4 wag either not a debtor or where such an application has been dismissed either by the B.A.D.R. Court or the Court in appeal. He contended that though the B.A.D.R. Court in fact dismissed the application on a finding under Section 17(1)(b) that the total amount of debts due from the debtor exceeded Rs. 15 0 in substance and in effect the B.A.D.R. Court was not entitled to entertain the application of the respondents as on the face of that application the debts shown exceeded Rs. 150 and therefore the B.A.D.R. Court had no jurisdiction to entertain such an application and that that being so Section 52 did not apply.

3. The argument at first blush appears to be attractive but an examination of the sections shows that it is not sustainable. In the first place though in the application under Section 4 the creditor stated that the debt due was Rs. 15 0 and odd the debtor filed a written statement and denied that any amount was due by him to any of his creditors. That being so Section 11 could not apply to such a case and in order to determine whether the total amount of debts exceeded Rs. 15 0 or not the Court after consolidating the claims of all the creditors had to raise a preliminary issue as required by Section 17 and decide whether or not the total amount of debts exceeded Rs. 15 0 That being the position and the application having been dismissed after determining the preliminary issue Section 52 would apply and the creditor was entitled to its benefit. In the second place the scope of Section 11 is different from that of Section 17. It is true that Section 11 inter alia provides that no application under Section 4 shall be entertained by the Court either on behalf of or in respect of any debtor unless the total amount of debts due from him on the date of the application is not more than Rs. 15,000/- But the word 'debtor is defined irrespective of any quantum of debt and the definition of debtor is also without any regard to the fact whether it exceeds Rs. 15,000/-or not. Section 4 also does not limit an application to be made thereunder to a claim not exceeding Rs. 15,000/-. If Mr. Barots construction of Section 11 were to be right viz. that an application which sets out a debt which is more than Rs. 15,000/ -is not to be entertained i.e. not to be even admitted as an application not maintainable then two results would follow:

3.1. As soon as an application under Section 4 is filed by a single creditor which on the face of it shows a debt more than Rs. 15,000/- it has to be rejected at its initial stage. But that would be contrary to the very provisions of Section 11 for they require the Court to be satisfied whether the total amount of debts exceeds Rs. 15,000/- or not. The expression total amount of debts means the total amount of debts claimed by all the creditors. The Act provides that if an application by a creditor or a debtor as the case may be is made under Section 4 the B.A.D.R. Court has to issue under Section 14 a notice to the debtor and to every creditor other than the creditor who is the applicant and also to publish a general notice. Under Section 15(1) a debt due from such a debtor in respect of which a statement is not submitted to the Court by the creditor after such notice under Section 14 is liable to be treated as extinguished. These provisions show that after an application under Section 4 is made the Court has to be satisfied that the total amount of debts of all such creditors including that of the applicant if he is a creditor does not exceed Rs. 15,000/-, then only the Court can proceed further with the application. If the debtor challenges these or any of the debts a preliminary issue has to be raised under Section 17 and if it is found that the total amount of debts exceeds Rs. 15,000/- the application has to be dismissed. This would indicate that where no dispute is raised by a debtor about the debts mentioned in the application and the statements filed by the creditors under Section 14 and the total amount of debts exceeds Rs. 15,000/- Section 11 would apply. If what Mr. Barot argued were to be correct that as soon as the application shows that the claim is for a debt more than Rs. 15000/ the Court must refuse its admission as being without jurisdiction of the Court then no question for the determination of the total amount of debts and the satisfaction of the Court in regard to the total amount of debts as provided for under Section 11 would arise. That would be inconsistent with the provisions of Section 11.

3.2. The second result would be still more startling. It has been said time and again that the Act is a beneficent piece of legislation to relieve the agriculturist from the burden of debts. If Mr. Barots contention were to be accepted, it would mean that whenever a creditor in his application mentions the debt as being over Rs. 15,000/- even where the claim is falsely made or disputed the application has to be rejected on the ground that by virtue of Section 11 the Court has no jurisdiction to entertain it. If that were so the creditor would get the benefit of the provisions of Sub-section (2) of Section 15 in that such a debt cannot be regarded as having been extinguished. If that were to be a correct position every creditor desirous of escaping adjustment of the debt due to him would make an exaggerated and in some cases a false claim exceeding Rs. 15,000/ - and that fact by itself would deprive the debtor of the benefit of the Act without the debtor having been given an opportunity of challenging that the debt is false or exaggerated and is in fact not exceeding Rs. 15,000/- Such a consequence could not have been contemplated or intended when Section 11 was enacted.

4. Considering the various sections as also the scheme of the Act it is patently clear that the two Sections 11 and 17 envisage two different situations. Under Section 11 if the Court after receiving the application under Section 4 and the statements of the creditors under Section 14 can satisfy without having to raise a preliminary issue that the total amount of debts is over Rs. 15,000/- it would have no jurisdiction to proceed further and must decline to try the application. But if a preliminary issue has to be raised and tried by reason for instance of the debtor disputing the debts or their extent then Section 17 would apply and if the Court is satisfied that the total amount of debts exceeds Rs. 15,000/- it should dismiss the application in which event no question of adjustment of debts would have to be gone into. In such a case Section 52 would apply as the proceeding before the Court would take sometime and that time is to be excluded in calculating the period of limitation for a subsequent suit on the same debt. In the circumstances of the case the B.A.D.R. Court rightly entertained the application and rightly raised and tried the preliminary issue though the debt set out in the application by the creditor was over Rs. 15,000/-, but was disputed. The creditor therefore was entitled to the benefit of Section 52 of the Act.

For the reasons aforesaid the learned trial Judge was wrong in not applying Section 52 of the Act and in dismissing the suit on the preliminary issue that it was barred by limitation. The learned Assistant Judge was therefore right in his conclusion though for reasons somewhat different from the ones given by him.

In the result the appeal fails and is dismissed with costs.


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