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Nrishingha Charan Nandi Choudhury Vs. Kedar Nath Chaudury - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata
Decided On
Reported inAIR1937Cal713
AppellantNrishingha Charan Nandi Choudhury
RespondentKedar Nath Chaudury
Excerpt:
- .....him. on 11th may 1937, a notice was received in the court of the munsif from the debt settlement board, a notice which had been served or at any rate sent under the provisions of section 34, bengal agricultural debtors' act, 1935. it is important that we should observe the exact phraseology of that section. it is in these terms:when an application under section 8 or a statement under sub-section (1) of section 13 includes any debt in respect of which a suit or other proceeding is pending before a civil or revenue court, the board shall give notice thereof to such court in the prescribed manner, and thereupon the suit or proceeding shall be stayed until the board has either dismissed the application in respect of such debt or made an award thereon, and if the board includes any part of.....
Judgment:

Costello, Ag. C.J.

1. This matter affords some illustration of what may be the amazing and unexpected results of the Bengal Agricultural Debtors' Act 1935, (Bengal Act 7 of 1936). It is not in my opinion putting the situation in too serious a light to say that the effects of the Act, unless the Courts are very careful to interpret its provisions with the utmost strictness, may be to work untold hardship to persons to whom money is owing and to entail much injustice. This case is concerned indirectly with a decree which was obtained by one Nrishingha Charan Nandi Choudhury described as a shebait of Sri Sri Raj Rajeswar Bigrahaya Thakur of Mohanganj, Dinajpur, against one Kedar Nath Choudhury of Kandi in the District) of Murshidabad. Nrishingha is the petitioner before us and as long ago as the year 1932 he instituted a suit for accounts against Kedar Nath Choudhury upon the footing that Kedar Nath Choudhury had been his patwari entrusted with the duty of collecting rents, cesses and so forth and that Kedar Nath Choudhury had left the service of the plaintiff without rendering any or, at any rate, any proper accounts. The suit was registered and numbered as Suit No. 312 of 1932 in the Court of the Munsif of Raigunj, District Dinajpur. The suit was contested on various grounds. Ultimately a decree was made in favour of the plaintiff on 22nd May 1933. That decree was affirmed on appeal by the Subordinate Judge. The defendant brought the matter to this Court in second appeal and that appeal by a judgment of this Court was dismissed on 2nd February 1937. It therefore had taken about five years for the plaintiff to obtain a final decree for the amount due to him. That amount was round about Rs. 1200. The plaintiff put the decree to execution-the decree which was really the decree of the High Court, and he asked that the decree should be satisfied by the attachment and sale of properties belonging to the judgment debtor.

2. These properties were situated within the jurisdiction of the First Munsif at Kandi and accordingly the decree was sent to that Court, that is to say, the Court of the First Munsif for execution. The properties were put up for sale on 16th April 1937, and the judgment-debtor then petitioned for a stay of the sale, pending the bringing by him as he put it, of a stay order from the Debt Settlement Board at Dinajpur to which he had applied presumably under the provisions of Section 8, Bengal Agricultural Debtors' Act, 1935. The Munsif of Kandi rejected that application on the ground that the properties under attachment were situated within the jurisdiction of the Court of the Munsif at Kandi, District Murshidabad, and that no Settlement Board of the District of Dinajpur had jurisdiction to deal with the matter. Subsequently, that is to say on 19th April 1937, an order was made permitting the decree-holder to bid at the sale. The sale took place on the same day and the decree-holder purchased the property for the sum of Rs. 1,200. He then applied to be allowed to set-off the purchase price as against the sum due to him under the decree, The set-off was allowed. The matter was recorded in the order sheet in these terms:

Decree-holder auction-purchased judgment-debtor's property at Rs. 1,200 and applied for set-off. Set-off allowed. Put up on 21st May 1937 for confirmation of sale.

3. So the position was that on 19th April 1937, the decree-holder had been allowed to exchange the debt due to him for the purchase price of the property which he was buying. In other words, instead of having to pay Rs. 1,200 as purchase money for the properties of the judgment-debtor, the decree-holder gave up the debt due to him. On 11th May 1937, a notice was received in the Court of the Munsif from the Debt Settlement Board, a notice which had been served or at any rate sent under the provisions of Section 34, Bengal Agricultural Debtors' Act, 1935. It is important that we should observe the exact phraseology of that section. It is in these terms:

When an application under Section 8 or a statement under Sub-section (1) of Section 13 includes any debt in respect of which a suit or other proceeding is pending before a Civil or Revenue Court, the Board shall give notice thereof to such Court in the prescribed manner, and thereupon the suit or proceeding shall be stayed until the Board has either dismissed the application in respect of such debt or made an award thereon, and if the Board includes any part of such debt under C1. (d) of Sub-section (1) of Section 25 in the award or the Board decides that the debt does not exist, the suit or proceeding shall abate so far as it relates to such debt.

4. Having received the notice on 11th May 1935, the Munsif of the First Court at Kandi on 21st May 1937, records this decision:

Section 34, Bengal Agricultural Debtors' Act, 1935, provides that when an application under Section 8 or a statement under Sub-section (1) of Section 13 includes any debt in respect of which a suit or other proceeding is pending before a Civil or Revenue Court, the Board shall give notice thereof to such Court in the prescribed manner and thereupon the suit or proceeding shall be stayed until the Board has either dismissed the application in respect of such debt or made an award thereon.

5. That was of course merely quoting the section. Then follows this order:

Further proceedings of this execution case must therefore be stayed. The question whether Maligaon Debt Settlement Board has any jurisdiction to entertain the judgment-debtor's application cannot be determined by this Court. Hence it is ordered: Let further proceedings of this execution case be stayed till the disposal of judgment-debtor's application by Maligaon Debt Settlement Board. Judgment-debtor's application under Order 21, Rule 90, Civil P.C., be put up after receipt of the said Board's decision.

6. The judgment-debtor's application there referred to had been made on 17th May 1937, on which date the learned Munsif recorded, this order:

Judgment-debtor's petition for stay of proceedings and that under Order 21, R. SO, Civil P.C., be put up on 18th May 1937 in presence of pleaders on both sides.

7. On the 18th, he recorded this order: 'Heard pleaders on both sides. To 21st May 1937 for orders'. When 21st May arrived, the learned Munsif made an order staying all proceedings on the footing that the judgment-debtor was prima facie at any rate a debtor within the meaning of the Bengal Agricultural Debtors' Act. The present proceedings are directed against the order which the learned Munsif made on 21st May 1937. It has been argued by Mr. Lahiri on behalf of the petitioner (who is of course the decree-holder) that the learned Munsif ought not to have stayed the proceedings, because at the time when the notice was received by him there was no debt in existence at any rate so far as the Court of the Munsif was concerned. Mr. Lahiri has also argued that Section 34 does not apply in the circumstances of this case because at the time when the Board gave notice or purported to give notice to the Court of the Munsif, there was then neither a suit nor any other proceeding pending before the Court concerning any debt which had been or might have been included in the application made by the judgment-debtor under Section 8 of the Act. Mr. Lahiri has contended that the effect of the order of 19th April 1937, allowing the set-off was to extinguish the debt which up to that time had been due from Kedar Nath to Nrishingha upon the basis of the decree affirmed by this Court on 2nd February 1937. We think that contention is correct. At the time when the notice was issued there was a lull, if-I may so put it, in the proceedings which had been in progress in the Court of the Munsif. On 19th April 1937, the sale had taken place, the purchase price had in effect been paid by the set-off and all that remained to be done was for the sale to be confirmed. It may no doubt be the case that the execution proceedings were still in existence but they were not pending in respect of any debt. The debt had disappeared, at any rate temporarily and on 17th May 1937, different proceedings were instituted, namely, proceedings on the part of the judgment-debtor under the provisions of Order 21, Rule 90, Civil P.C. It may be that as a result of those proceedings the debt might eventually have been revived, but it certainly was not in existence at any time between 19th April and 17th May. This case approximates to the case which was before Chief Justice and Mukherjea, J. on 10th May last, the case of Jagabandhu Saha v, Rashmani Dasya (1937) 41 C W N 924. The head-note of that case is as follows:

In order that a notice under Section 34, Bengal Agricultural Debtors' Act may be given, there must be a debt in respect of which some proceeding is pending in a Civil Court. Where in execution of a decree, the decree-holder purchases the property of the judgment-debtor and the sale is confirmed under Order 21, Rule 92, Civil P.C., the decree is satisfied to the extent of the purchase money, Therefore a proceeding for delivery of possession of such property started by the decree-holder is not a proceeding in respect of a debt and consequently the Court cannot stay such proceeding on a notice under S, 34, Agricultural Debtors' Act.

8. Now, if in the present instance the position had been that the sale which took place on 19th April 1937, had been formally confirmed under the provision of Order 21, Rule 92, Civil P.C., this case would have been to all intents and purposes, identical with the case which was considered by he learned Chief Justice and Mukherjea, J. But there is of course this distinction that, in the matter we are now considering, the proceedings had not quite reached the stage at which the sale was confirmed. The sale had taken place, the decree-holder as the purchaser was allowed a set-off. The price had therefore been paid, with the consequence the debt had been obliterated. All that remained to be done was for the sale to be confirmed and the purchaser put into possession. Stating the matter in another way it comes to this: We are considering a situation in execution proceedings which is one stage further away from the termination of those proceedings as compared with the situation which had to be considered by the Chief Justice and Mukherjea, J. on other similar proceedings. We have to decide whether in those circumstances we can say that the matter is sufficiently analogous to the case in Jagabandhu Saha v, Rashmani Dasya (1937) 41 C W N 924 to enable us to hold that the precise conditions contemplated by the provisions of Section 34 of the Act did not exist: the conditions laid down in that section which entail that a Civil Court has to stay its hand pending some decision of a Debt Settlement Board,

9. We are of opinion that in the circumstances of this case the conditions necessary to attract the operation of the Act did not obtain, and therefore, the learned Munsif was wrong in taking the view that he was obliged to stay all further proceedings in his Court pending some adjudication by the Maligaon Debt Settlement Board. I said at the outset that this case gives some idea of the amazing result which may arise out of the operation of the Bengal Agricultural Debtors' Act. In the present instance, as far as we can see, there was nothing more or very little more than the judgment-debtor's own assertion to warrant the assumption that he was a debtor within the meaning of the Act, that is to say, within the definition given in Section 2(9) of the Act, which says:

Debtor means a debtor whose primary means of livelihood is agriculture and... (I emphasize the word and) who (a) is raiyat or an underraiyat or (b) cultivates land himself or by members of his family or by hired labourers or by adhirars, bargadars or bhagdars; and includes a group of persons who join in making an application under the provisions of Sub-section (1) of Section 9.

10. It is also to be observed that in the present instance the amount in issue was the comparatively substantial sum of Rs. 1,200. What apparently happened was that the debtor as a last and desperate effort to avoid paying his just debt which he had been ordered to pay by a decree of the High Court rushed off to a Board set up under the Bengal Agricultural Debtors' Act and upon the assertion that he was a 'debtor' managed to induce the Board to send a notice which but for the fact that the purchaser at the sale happened to be a decree-holder with permission to set off the debt against the purchase price would have enabled the debtor to secure a holding up of all the proceedings in execution until it pleased this Agricultural Debt Settlement Board to decide whether or not the judgment-debtor was 'debtor' within the meaning of the Act. It is almost by pure accident or rather by a fortuitous conjunction of circumstances that we are in this case able to say that there was no debt and so the Munsif was wrong in staying the proceedings. I think this case ought to be regarded as a warning of the kind of thing which may happen in the future and an index of how the provisions of the Agricultural Debtors' Act may be taken advantage of by dishonest debtors with the object of defeating or delaying the just claims of their decree-holder creditors. The Rule will be made absolute, hearing fee being assessed at two gold mohurs.

Edgley, J.

11. I entirely agree with the observations which have been made by my Lord the Acting Chief Justice and the conclusions at which he has arrived. The provisions of the Bengal Agricultural Debtor's Act are so drastic and interfere to such a large extent with the ordinary rights of decree-holders and creditors, that it is obvious that they must be very carefully and strictly interpreted. During the course of his argument Mr. Das, who appeared for the opposite party, placed some reliance upon Sections 18 and 20 of the Act and, having regard to the provisions of these sections he argued that the learned Munsif had no jurisdiction to decide for himself whether the debt actually existed at the time when the notice under Section 34 of the Act was served. He maintained that all questions relating to the existence or non-existence of the debt should be determined by the Board. Section 18(1) provides that if there is any doubt or dispute as to the existence or amount of any debt, the Board shall decide whether the debt exists and determine its amount. Section 20 of the Act goes on to say that if any question arises in connection with proceedings before a Board under this Act, whether a person is a debtor or not, the Board shall decide the matter. It seems, however, to be clear from the language of these sections and also from the context in which they appear that they relate primarily to questions relating to the existence or non-existence of debts which have been mentioned in applications made to the Board under Section 8 and with regard to which some question or dispute has been raised before the Board itself. In my opinion, these sections as they stand do not debar the Civil Court from satisfying itself that the valid requirements of any notice which may be issued under Section 34 of the Act actually exist and, in my view it is in fact the duty of a Civil Court not to stay proceedings on receipt of a notice which purports to be a notice under Section 34 of the Act, unless the Court is satisfied that the notice in question is really a valid notice.

12. Section 34 of the Act requires that the debt in respect of which a notice under this section may be issued should be included in the application under Section 8 or in the statement which may have been filed under Sub-section (1) of Section 13 of the Act. It also requires that there should be a suit or proceeding pending in respect of that debt before the Court at the time when the notice is issued. It therefore would appear to follow that the debt must actually be in existence at the time when the notice is issued under Section 34, Bengal Agricultural Debtors' Act. In this particular case, it is clear that having regard to the order dated the 19th April 1937, the alleged debt had been entirely wiped out, at any rate for the time being, and that this must have been the position appears also clear from the provisions of Order 21, Rule 72(2), Civil P.C.

13. What was actually pending before the Civil Court at the time when the notice was issued and received was in fact not a proceeding in respect of the debt but was a proceeding in respect of the confirmation of the sale which had been held on the 19th April 1937. This being the case, I do not think that the learned Munsif had any jurisdiction to stay proceedings on receipt of the notice from the Debt Settlement Board which purported to be under Section 34, Bengal Agricultural Debtors' Act, and I therefore agree that this Rule must be made absolute.


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