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Seth Balakisonlal Jankiprasad Vs. the Debt Conciliation Board by Its Chairman and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported in(1940)2MLJ463
AppellantSeth Balakisonlal Jankiprasad
RespondentThe Debt Conciliation Board by Its Chairman and ors.
Excerpt:
- - in these circumstances the petitioner is clearly not entitled to an order quashing the board's order of the 11th august, 1939. at the same time we would point out that it is the duty of the board to dispose of the application with reasonable promptitude, and if it becomes apparent that the petitioner, and other creditors who support him represent more than fifty per cent, of the debts and that there is no hope of an amicable settlement, it will be the duty of the board to dismiss the application......second respondent in these proceedings applied to the debt conciliation board of kovvur for the settlement of his debts under the provisions of the madras debt conciliation act, 1936. his application disclosed fourteen creditors of whom the present petitioner is one. according to the petition of the second respondent the total amount owing by him was rs. 1,51,000 and of this rs. 1,25,000 was owing to the petitioner. the amount due to the petitioner was payable under a mortgage decree dated 16th november, 1937, passed by tha,court of the subordinate judge of ellore. the petitioner obtained an order for sale of the mortgaged property on the 14th april, 1939 and the sale was fixed for the 17th july, 1939. a fortnight before the date fixed for the sale the second respondent made his.....
Judgment:
ORDER

Alfred Henry Lionel Leach, C.J.

1. The second respondent in these proceedings applied to the Debt Conciliation Board of Kovvur for the settlement of his debts under the provisions of the Madras Debt Conciliation Act, 1936. His application disclosed fourteen creditors of whom the present petitioner is one. According to the petition of the second respondent the total amount owing by him was Rs. 1,51,000 and of this Rs. 1,25,000 was owing to the petitioner. The amount due to the petitioner was payable under a mortgage decree dated 16th November, 1937, passed by tha,Court of the Subordinate Judge of Ellore. The petitioner obtained an order for sale of the mortgaged property on the 14th April, 1939 and the sale was fixed for the 17th July, 1939. A fortnight before the date fixed for the sale the second respondent made his application to the Debt Conciliation Board. Notice of the application was served upon all the creditors, who appeared before the Board on the 1.1th August, 1939.

2. The petitioner and another creditor, the Standard Bank of India, took a preliminary objection. They said that in as much as they represented more than fifty per cent, of the debts owing by the second respondent and they objected there could be no settlement of his debts under the Act and therefore the petition should be dismissed in limine. The Board overruled the preliminary objection and decided to proceed with the hearing of the second respondent's application. The reason given for this decision was that it was nowhere stated in the Act that if fifty per cent, of the creditors did not agree the application should be rejected. Here the Board erred because Section 17 expressly provides that if no amicable settlement is arrived at under Sub-section (1) of Section 14 within twelve months from the date of the application under Section 4, the Board shall dismiss the application. The petitioner asks the Court to quash the order of the 11th August, 1939, on the ground that it has passed it without, jurisdiction. It is not suggested that the Board has in any way acted mala fide and it cannot be said that the Board had no jurisdiction to pass the order objected to. All that the Board decided was that the application of the second respondent should be heard. We have been informed by the earned Counsel appearing for some of the other creditors that the amount claimed by the petitioner is disputed. By virtue of the proviso to Section 12(2) the fact that the Subordinate Court has passed a decree for a sum of Rs. 1,22,000 cannot be disputed, but the Court has been given to understand that there is some question as to whether the decree-holder has not received payment in part of the decretal amount. In these circumstances the petitioner is clearly not entitled to an order quashing the Board's order of the 11th August, 1939. At the same time we would point out that it is the duty of the Board to dispose of the application with reasonable promptitude, and if it becomes apparent that the petitioner, and other creditors who support him represent more than fifty per cent, of the debts and that there is no hope of an amicable settlement, it will be the duty of the Board to dismiss the application. The petitioner has got an order for sale of the mortgaged properties and that order should not be stayed a moment longer than is necessary.

3. The application, will be dismissed but there will be no order as to costs.


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