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The Madanapalli Lakshmikantha Nidhi Limited by Official Liquidator Sri K. Venkata Rao Vs. Katte Raghunathacharlu and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported in(1943)2MLJ561
AppellantThe Madanapalli Lakshmikantha Nidhi Limited by Official Liquidator Sri K. Venkata Rao
RespondentKatte Raghunathacharlu and ors.
Excerpt:
- - in calculating the period of limitation for any suit filed in, or proceedings before, a civil court for the recovery of a debt which was the subject of any proceedings under this act, the time during which such proceedings were pending as well as the time taken for the obtaining of certified copies of the order of the board shall be excluded. it has been repeatedly laid down by this court that executing courts ought not to pass orders like 'struck off' or 'closed' and that they should either adjourn the execution application directing the decree-holder to take other steps or dismiss it if owing to the decree-holder's default the court is unable to proceed with execution......the date on thich the previous execution application was struck off. the ground upon which the decree-holder sought to save the present execution application was by reference to a petition filed by one of the judgment-debtors before the debt conciliation board, a copy of which is exhibited as ex. a. in that petition before the debt conciliation board some other debts due to the present petitioner decree-holder were mentioned, but the decree debt which is sought to be recovered in the present execution proceedings was not mentioned. the lower court held that as the decree debt now under execution was not mentioned by the debtor in his application before the board, section 27 of the debt conciliation act did not apply and that therefore the execution application was out of time......
Judgment:

Somayya, J.

1. Madanapalli Lakshmikantha Nidhi, Limited, by its liquidator is the petitioner in this Court. The order of the lower Court sought to be revised is one dismissing an execution application in a small cause suit on the ground that the application was barred by limitation. The decree was passed on nth November, 1936, for a sum of Rs. 156-4-0 with further interest and costs. The first application, so far as I can gather, was S.E.P. No. 160 of 1937, which appears to have been struck off on 12th October, 1937. The execution application out of which the present revision arises was filed on the 18th October, 1940, more than three years from the date on thich the previous execution application was struck off. The ground upon which the decree-holder sought to save the present execution application was by reference to a petition filed by one of the judgment-debtors before the Debt Conciliation Board, a copy of which is exhibited as Ex. A. In that petition before the Debt Conciliation Board some other debts due to the present petitioner decree-holder were mentioned, but the decree debt which is sought to be recovered in the present execution proceedings was not mentioned. The lower Court held that as the decree debt now under execution was not mentioned by the debtor in his application before the Board, Section 27 of the Debt Conciliation Act did not apply and that therefore the execution application was out of time. Section 27(1) runs thus:

In calculating the period of limitation for any suit filed in, or proceedings before, a Civil Court for the recovery of a debt which was the subject of any proceedings under this Act, the time during which such proceedings were pending as well as the time taken for the obtaining of certified copies of the order of the Board shall be excluded.

2. The question therefore is whether the decree debt in question was the subject of the proceedings under the Act.

3. From an examination of Section 10 and the other relevant sections of the Act it seems to me that even debts not specified by the debtor in his petition to the Board should also be taken to be the subject of the proceedings under the Act., It is said that the stage of Section 10 was reached in this case. Section 10, Clause (1) states,

If, after examining the debtor, it is in the opinion of the Board, desirable to attempt to effect a settlement between him and his creditors, a notice shall be issued and served or published in the manner prescribed, calling upon every creditor of the debtor to submit a statement of debts owed to such creditor by the debtor....

4. Sub-clause (2):

Subject to the provisions of Sub-section (3) every debt of which a statement is not submitted to the Board in compliance with the provisions of Sub-section (1) shall be deemed for all purposes and all occasions to have been duly discharged.

5. The decree-holder, Madanapalli Lakshmikantha Nidhi, Limited, was a creditor whose name was mentioned in the petition and a notice under Section 10(1) is alleged to have been sent to the Nidhi (vide counter-affidavit filed by the debtor in the lower Court in this execution proceeding). According to the provisions of Section 10(1) the debts which he has to get from the debtor, means all the debts which he has to recover from the debtor whether or not the debtor included all the debts in his petition. The result of that would be that if the creditor did not file a statement in the manner provided by Section 10(1), that is, in the form of a verified statement under the Civil Procedure Code, the debts shall be deemed to be discharged for all purposes, subject to the creditor moving the Board or the Court; for the restoration of the debt. This is the view taken by Byers J.,in Siddappa Ckettiar, In re 1.

6. It. is said that the application before the Board was subsequently dismissed on account of the absence of the debtor. If the debtor's petition was dismissed before the expiry of the two months from the date of service of the notice under Section 10, Clause (1) on the decree-holder, the result would be that this decree debt or any other debt owing to him will not be discharged. But the question whether the decree debt would be discharged if the debtor's petition was dismissed after the expiry of the two months aforesaid may have to be considered. If that is the case, it would be open to the decree-holder to take the necessary steps under sub-clause (3) of Section 10. The question whether the decree debt should be deemed to be discharged will depend upon whether the notice under Section 10(1) was actually served upon the decree-holder. The lower Court, it would be observed, has not gone into any of these questions but dismissed the execution application on the sole ground that the application was barred by limitation. This conclusion cannot be upheld.

7. There is also a question raised whether the order on the prior execution application, namely, 'struck off' which was passed on the 12th October, 1937, is a proper order. It is urged that if, as is mentioned in the present execution petition, the prior application was dismissed merely for the reason that there were no bidders on the date when the sale came on, it would not be a legal disposal of the previous application, in which case the present application must be deemed to be a continuation of the old proceeding. It has been repeatedly laid down by this Court that executing Courts ought not to pass orders like ' struck off' or 'closed' and that they should either adjourn the execution application directing the decree-holder to take other steps or dismiss it if owing to the decree-holder's default the Court is unable to proceed with execution. Orders in execution are passed in a very careless manner and such disposals have worked serious injustice and given rise to very many complications at the later stages of the proceedings. Executing Courts ought to be careful in following the directions laid down by this Court again and again and there can possibly be no excuse for the Court passing the order in 1937 when it had been repeatedly laid down that such orders ought to not be passed. The lower Court seems to have dismissed some application for amendment, and, if that amendment application was merely to say that the present application is a continuation, of the old proceeding, that is not an order which I can possibly uphold. It will be open to the decree-holder to say that the present application is a continuation of the old application and add words to that effect within one month from the date of receipt of the records in the Court below and the Court will proceed to decide all the questions taking it that I have allowed the amendment to the execution application. The costs of this revision petition will abide and be provided for in the final order.


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