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Dave Sadashiv Jaykrishna Vs. Rana Govubha Alias Velubha Jeshibhai and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtGujarat High Court
Decided On
Judge
Reported in(1962)3GLR1007
AppellantDave Sadashiv Jaykrishna
RespondentRana Govubha Alias Velubha Jeshibhai and ors.
Cases ReferredA.R. Mhatre v. B.H. Patil
Excerpt:
.....and set off purchases the property the decree cannot be regarded as satisfied until the sale is confirmed and that therefore before confirmation of the sale an application by the judgment-debtor under section 19 of the madras agriculturists relief act 1938 would lie as the decree is subsisting. 10 and if he satisfied the definition of debtor given in section 2(6) of the saurashtra agricultural debtors relief act 1954 he was entitled to have the entire debt adjusted under the provisions of that act. the debtor owes the whole debt to the creditor just as much as the other persons who are jointly and severally liable along with him and it is the whole debt which can and must be adjusted under the provisions of the saurashtra agricultural debtors relief act 1954 the learned joint judge was..........m.p. thakkar, learned advocate appearing on behalf of the applicant who was creditor no. 7 in a debt adjustment proceeding filed by the debtor under the provisions of the saurashtra agricultural debtors relief act 1954 it appears that creditor no. 7 sold a house and 1/4th share in a certain piece of land to the debtor for rs. 3 457 creditor no. 7 handed over possession of the properties to the debtor but the debtor failed and neglected to pay the full price to creditor no. 7. creditor no. 7 was therefore obliged to file a suit against the debtor in order to recover the balance of the price which remained to paid by the debtor to creditor no.7. the suit resulted in a decree for rs. 2 350 together with interest and costs. creditor no. 7 made an application for execution of the decree by.....
Judgment:

P.N. Bhagwati, J.

1. This Revision Application has been argued very strenuously by Mr. M.P. Thakkar, learned advocate appearing on behalf of the applicant who was creditor No. 7 in a debt adjustment proceeding filed by the debtor under the provisions of the Saurashtra Agricultural Debtors Relief Act 1954 It appears that creditor No. 7 sold a house and 1/4th share in a certain piece of land to the debtor for Rs. 3 457 Creditor No. 7 handed over possession of the properties to the debtor but the debtor failed and neglected to pay the full price to creditor No. 7. Creditor No. 7 was therefore obliged to file a suit against the debtor in order to recover the balance of the price which remained to paid by the debtor to creditor No.7. The suit resulted in a decree for Rs. 2 350 together with interest and costs. Creditor No. 7 made an application for execution of the decree by attachment and sale of the properties which consisted of the house and 1/4th share in the land and these properties were attached in execution of the decree. The house was ultimately sold by public auction on 15th February 1955 and creditor No. 7 was declared purchaser of the house for Rs. 1 605 It may be mentioned at this stage that creditor No. 7 was given liberty to bid and set off the decretal amount against the purchase price. So far as the 1/4th share in the land was concerned the proceedings in connection with the sale were sent to the Collector since the land was agricultural land. The 1/4th share in the land was thereafter sold by public auction on 12th July 1957 and creditor No. 7 was declared purchaser for the price of Rs. 1 500 Now whilst the application for execution was pending the debtor made an application for adjustment of his debts under the provisions of the Saurashtra Agricultural Debtors Relief Act 1954 and as a result of this application to the Debt Adjustment Board the proceedings in connection with the sale of the house which were pending before the Civil Court were transferred to the Debt Adjustment Board on 19th February 1955 and the proceedings in connection with the sale of 1/4th share in the land which were pending before the Collector were transferred to the Debt Adjustment Board on 15th July 1957 before the respective sales of the house and 1/4th share in the land were confirmed under the provisions of order XXI Rule 92 of the Code of Civil Procedure.

Creditor No. 7 contended before the Debt Adjustment Board that the judgment-debt due and owing to him from the debtor was extinguished since he had become the owner of the house and 1/4th share in the land as a result of the public auction and that there was therefore no question of adjustment of any debt so far as he was concerned. The Debt Adjustment Board however negatived this contention of creditor No. 7 and proceeded on the basis that the judgment debt was outstanding and was liable to be adjusted under the provisions of the Saurashtra Agricultural Debtors Relief Act 1954 There were also various other creditors who were parties to the application made by the debtor before the Debt Adjustment Board and whose debts were sought to be adjusted in that application. The Debt Adjustment Board found that the debtor was a debtor within the meaning of the Saurashtra Agricultural Debtors Relief Act 1954 and proceeded to determine and adjust the debts due and owing by the debtor to the various creditors. The Debt Adjustment Board ascertained the paying capacity of the debtor and ultimately scaled down the debt of creditor No. 7 from Rs. 3 592 to Rs. 2 955 so as to accordwith the paying capacity of the debtor.

2. There was also creditor No. 10 who claimed Rs. 6 92 from the debtor under an agreement dated 13th June 1945 executed by the debtor and two other persons in favour of creditor No. 10. The Debt Adjustment Board found that under the said agreement on taking accounts a sum of Rs. 3 585 was due and payable by the debtor and the said two other persons to creditor No. 10; but taking the view that the debtor being only one of the three persons liable for the debt was under an obligation to pay only 1/3rd of the amount of the debt the Debt Adjustment Board awarded only Rs. 1 195 to creditor No. 10. The debts of various other creditors were also adjusted by the Debt Adjustment Board. Creditor No 7 was dissatisfied with the award made by the Debt Adjustment Board and he therefore filed an appeal in the Court of the District Judge Surendranagar. Creditor No. 10 was also not satisfied with the; award and he also therefore preferred an appeal in the Court of the District Judge Surendranagar. Both the appeals were heard together by the Joint District Judge at Surendranagar. The learned Joint Judge agreed with the conclusions reached by the Debt Adjustment Board so far as creditor No. 7 was concerned and held that creditor No. 7 had not become the owner of the house and 1/4th share in the land as a result of the purchase at the auction sales and that the judgment-debt was therefore outstanding against the debtor and was liable to be adjusted under the provisions of the Saurashtra Agricultural Debtors Relief Act 1954 The learned Joint Judge accordingly upheld the award in so far as creditor No. 7 was concerned. The learned joint Judge however found that the Award was erroneous in so far as only 1/3rd of the amount of the debt was awarded in favour of creditor No. 10 and he came to the conclusion that creditor No. 10 was entitled to claim the full amount of Rs. 3 585 from the debtor. The result was that creditor No. 7 lost in the appeal filed by him whereas creditor No. 10 succeeded to a large extent so far as the appeal filed by him was concerned. Since creditor No. 7 failed in the appeal he filed the present Revision Application in this Court.

The first contention raised by Mr. M.P. Thakkar on behalf of creditor No. 7 was that as a result of the sales by public auction creditor No. 7 became the owner of the house and 1/4th share in the land even though the sales were not confirmed under the provisions of Order XXI Rule 92 of the Code of Civil Procedure and that the judgment-debt against the debtor was therefore extinguished. This contention was argued at some length but the short answer to this contention is to be found in the provisions of Section 65 of the Code of Civil Procedure which runs as follows:

Where immoveable property is sold in execution of a decree and such sale has become absolute the property shall be deemed to have vested in the purchaser from the time when the property is sold and not from the time when the sale become absolute.

3. Now it is clear that where immoveable property is sold in execution of a decree the sale becomes absolute when it is confirmed under Order XXI Rule 92 of the Code of Civil Procedure. The sale cannot be said to have become absolute until it is confirmed by the Court and it is only when the sale becomes absolute that the property vests in the purchaser of course under Section 65 of the Code of Civil Procedure the vesting when it takes place is retrospective; the property is deemed to have vested in the purchaser from the time that the property is sold and not from the time the sale becomes absolute. But the vesting does not take place until the sale has become absolute and the sale does not become absolute until it is confirmed by the Court under Order XXI Rule 92 of the Code of Civil Procedure. The purchaser therefore does not acquire any title to the property sold unless and until the sale is confirmed by the Court. I cannot accept the contention of Mr. M.P. Thakkar that creditor No. 7 became the owner of the house and 1/4th share in the land as soon as the said properties were sold without conformation of the sales by the Court under the provisions of Order XXI Rule 92 of the Code of Civil Procedure. So long as the sale of the house was not confirmed by the Court the debtor continued to remain the owner of the house and similarly the debtor continued to remain the owner of 1/4th share in the land so long as the sale thereof was not confirmed by the Court. Now it is admitted in the present case that the sales of the house and 1/4th share in the land were not confirmed by the Court since before any steps could be taken for confirmation of the sales the execution proceedings were transferred to the Debt Adjustment Board under the provisions of the Saurashtra Agricultural Debtors Relief Act 1954 The stage was therefore, never reached when the title to the house and 1/4th share in the land could pass to creditor No. 7 and creditor No. 7 did not at any time become the owner of the house and 1/4th share in the land. The contention of Mr. M.P. Thakkar that the judgment-debt of creditor No. 7 against the debtor was extinguished founded on the premise that creditor No. 7 acquired title to the house and 1/4th share in the land as a result of the sales by public auction must therefore be rejected. Mr. M.P. Thakkar then contended that in any event even though the title to the house and 1/4th share in the land did not pass to creditor No. 7 the judgment-debt of creditor No. 7 against the debtor was extinguished by reason of the set off which was permitted to creditor No. 7. Mr. M.P. Thakkar also contended in the alternative that even if it might be held that the judgment-debt of creditor No. 7 against the debtor was not extinguished the judgment-debt did not remain enforceable against the debtor and was suspended from the dates of the sales to the extent of the respective amounts set off against the purchase price and that until the sales were either set aside or confirmed it could not be said that the judgment-debt was enforceable and alive against the debtor. These contentions of Mr. M.P. Thakkar are in my opinion not well-founded. I need not deal in any detail with these contentions for a complete answer to these contentions is to be found in a decision of a Division Bench of the Madras High Court reported in Nataraja v. Rangaswami A.I.R. 1942 Madras 119. It has been held in that case by a very eminent Division Bench consisting of Wadsworth and Patanjali Sastri JJ; that where in execution of a decree a sale is held and the decree-holder with leave of Court to bid and set off purchases the property the decree cannot be regarded as satisfied until the sale is confirmed and that therefore before confirmation of the sale an application by the judgment-debtor under Section 19 of the Madras Agriculturists Relief Act 1938 would lie as the decree is subsisting. This decision is on all fours with the facts of the present case and I respectfully agree with the reasoning behind this decision. It is only when the sale is confirmed by the Court under the provisions of Order XXI Rule 92 of the Code of Civil Procedure that the judgment-debt is extinguished and until confirmation of the sale the judgment-debt remains outstanding and subsisting. As a matter of fact it has been held by a Division Bench of the Allahabad High Court in Khalil-Ur-Rahman v. Gokul Prasad I.L.R. XLI Allahabad 526 that if the decree carries interest the creditor is entitled to claim interest between the date of the sale and the date of its confirmation. Merely because a set off is permitted it does not mean that the Judgment-debt is extinguished until the confirmation of the sale. It is only on confirmation of the sale that the set off becomes effective and the judgment debt comes to an end. In the present case the sales of the house and 1/4th share in the land could not be confirmed since the proceedings were transferred to the Debt Adjustment Board under the provisions of the Saurashtra Agricultural Debtors Relief Act 1954 and the position therefore was that at the date when the proceedings were transferred the judgment-debt of creditor No. 7 against the debtor was subsisting. If the judgment debt of creditor No. 7 against the debtor was subsisting when the matter went before the Debt Adjustment Board it is obvious that the judgment-debt was liable to be adjusted by the Debt Adjustment Board. Section 2(5) of the Saurashtra Agricultural Debtors Relief Act 1954 which defines debt includes also a judgment-debt and an application can therefore be made by a debtor under the provisions of the Saurashtra Agricultural Debtors Relief Act 1954 not only for the adjustment of his other debts but also for the adjustment of his judgment-debts and the Debt Adjustment Board can adjust the judgment-debts due and owing by the debtor to the creditors. Once an application is made to the Debt Adjustment Board for adjustment of a judgment-debt it is obvious that the decree cannot be executed by the judgment-creditor against the judgment-debtor and the judgment-creditor must defend the proceedings initiated by the judgment-debtor. The decree obtained by the judgment-creditor against the judgment-debtor ceases to be an enforceable decree and ultimately merges in the Award that may be made by the Debt Adjustment Board under the provisions of the Saurashtra Agricultural Debtors Relief Act 1954 The Debt Adjustment Board can scale down the judgment-debt in accordance with the paying capacity of the debtor and make it payable by instalments and charge it on the properties of the debtor It is also important to note that the amount awarded by the Debt Adjustment Board can be recovered by the judgment-creditor only in the manner provided by the Saurashtra Agricultural Debtors Relief Act 1954 It is therefore obvious that as soon as the execution proceedings were transferred to the Debt Adjustment Board the decree obtained by creditor No. 7 against the debtor ceased to be executable and it ultimately merged in the award made by the Debt Adjustment Board The Debt Adjustment Board was competent to adjust the judgment-debt due and owing from the debtor to creditor No. 7 because on the date when the matter came before it the judgment debt was outstanding and had not been extinguished. The present contention of Mr. M.P. Thakkar must therefore be rejected.

4. The next contention of Mr. M.P. Thakkar was that the debt of creditor No. 10 had been erroneously increased by the learned Joint Judge from Rs. 1 195 to Rs. 3,585 According to Mr. M.P. Thakkar the learned Joint Judge should have confirmed the award of the Debt Adjustment Board in so far as it awarded only 1/3rd of the amount of the debt to creditor No. 10. This contention of Mr. M.P. Thakkar also cannot be accepted. It is no doubt true that the debt claimed by creditor No. 10 against the debtor was under an agreement dated 13th June 1946 which was executed by the debtor and two other persons in favour of creditor No. 10; but the liability of the debtor and the said two other persons under the agreement was obviously joint and several and each one of them was liable for the whole debt to creditor No. 10. So far as the debtor was concerned he was indubitably liable for the full amount to creditor No. 10 and if he satisfied the definition of debtor given in Section 2(6) of the Saurashtra Agricultural Debtors Relief Act 1954 he was entitled to have the entire debt adjusted under the provisions of that Act. It is clear from the provisions of Section 7 of the Saurashtra Agricultural Debtors Relief Act 1954 that a debtor who is jointly and severally liable for any debt along with other person or persons can make an application for relief in respect of such debt even if the other person or persons are not debtors within the meaning of the Saurashtra Agricultural Debtors Relief Act 1954 The Bombay High Court has also in a decision reported in A.R. Mhatre v. B.H. Patil : AIR1957Bom6 taken the view that one of the debtors can make an application for adjustment of the debt for which he is jointly and severally liable along with other persons. This was of course a decision under the Bombay Agricultural Debtors Relief Act 1947 but the material provisions of the two Acts are identical and the principle of this decision must therefore apply equally to a case under the Saurashtra Agricultural Debtors Relief Act 1954 In such a case the debt which the debtor is entitled to have adjusted is the whole debt due and owing from him to the creditor. The debt cannot be split up and adjusted as regards any fractional share in the debt. The debtor owes the whole debt to the creditor just as much as the other persons who are jointly and severally liable along with him and it is the whole debt which can and must be adjusted under the provisions of the Saurashtra Agricultural Debtors Relief Act 1954 The learned Joint Judge was therefore perfectly right in determining the debt due and owing from the debtor to creditor No. 10 at Rs. 5 595 and scaling down that debt to Rs. 2 960 in accordance with the pacing capacity of the debtor.

5. These were the only contentions urged by Mr. M.P. Thakkar in support of the Revision Application. The result therefore is that the Revision Application fails and will be dismissed with costs in favour of the debtor and creditor No. 10.


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