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Tarak Nath Kundu Vs. Panchanon Dutt - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata
Decided On
Reported inAIR1939Cal564
AppellantTarak Nath Kundu
RespondentPanchanon Dutt
Cases ReferredBritish Columbia v. Attorney
Excerpt:
- .....certain proceedings in execution of a decree in spite of a notice sent to him by the jagadishpur debt settlement board under section 34, bengal agricultural debtors act. the decree was one for a sum of rs. 1200 only, obtained by the opposite party against the petitioner, on the basis of a promissory note in the original side of this court. on the application of the decree-holder it was transmitted for execution to the court of the munsif, first court, howrah, and the decree-holder applied for attachment and sale of certain immovable properties, belonging to the judgment-debtor which were situated within the jurisdiction of that court. the judgment-debtor there, upon presented an application under section 8, bengal agricultural debtors act, to the jagadishpur debt settlement board for.....
Judgment:

B.K. Mukherjea, J.

1. This rule is directed against an order of the Munsif, First Court, Howrah, dated 19th April 1939, by which he refused to stay certain proceedings in execution of a decree in spite of a notice sent to him by the Jagadishpur Debt Settlement Board under Section 34, Bengal Agricultural Debtors Act. The decree was one for a sum of Rs. 1200 only, obtained by the opposite party against the petitioner, on the basis of a promissory note in the original side of this Court. On the application of the decree-holder it was transmitted for execution to the Court of the Munsif, First Court, Howrah, and the decree-holder applied for attachment and sale of certain immovable properties, belonging to the judgment-debtor which were situated within the jurisdiction of that Court. The judgment-debtor there, upon presented an application under Section 8, Bengal Agricultural Debtors Act, to the Jagadishpur Debt Settlement Board for settlement of his debts, and the latter issued a notice under Section 34 of the Act, requesting the executing Court to stay further proceedings in execution of the decree. The Munsif has refused to stay the proceedings on the ground that the decree being passed by the High Court, Section 34, Agricultural Debtors Act, did not apply, and he has relied upon the Special Bench decision of this Court in Narsing Das v. Chogemull : AIR1939Cal435 . The propriety of this view has been challenged by Mr. Chandra Sekhar Sen who appears in support of the rule and his contention is that the Special Bench decision has no application to the facts of the present case where the proceedings sought to be stayed are not before the High Court but before a Civil Court which is subordinate to this Court. In the Special Bench case undoubtedly the proceedings in execution were pending in the original side of this Court in respect of a decree passed by itself, and as according to the opinion expressed by the majority of the Judges who composed the Bench, the expression 'Civil Court,' as used in the Agricultural Debtors Act, was held not to include the High Court, the operation of Section 34 of the Act was necessarily excluded. In the opinion of the other two Judges who did not accept this view, the expression 'Civil Court' did include the High Court, but the provisions of Section 34 of the Act, so far as they related to proceedings of the High Court in its original side, were ultra vires and hence inoperative. The Special Bench decision therefore does not directly touch the present case, where the proceedings are not before the High Court itself.

2. I think however that if the expression 'Civil Court' as used in the various Sections of the Agricultural Debtor's Act be taken to mean a Court of civil jurisdiction separate from and subordinate to the High Court as held by the majority of the Judges in the Special Bench case, the conclusion would be irresistible that a debt payable under the decree of the original side of this Court would not be a debt within the meaning of the Agricultural Debtors Act. It would not be within the competence of the Debt -Settlement Board constituted under the Act to settle such debts, and no proceeding in respect of the same could be stayed by a notice under Section 34. In no other way I think we can consistently explain the various Sections of the Act, and find out a rational basis for the scheme which underlies it. Agreeably with the view taken by the majority of the Judges in the Special Bench case, we must assume that the Legislature when it passed this enactment was aware of its own limitations, that it did not intend to trench upon the jurisdiction of the High Court derived from Parliament and that in all the Sections where the words 'Civil Court' were used it intended to exclude the High Court. If this is the correct position, the Legislature, in my opinion, never intended that a debt which was payable under a decree of the original side of the High Court would come within the purview of the Agricultural Debtors Act at all. I will first of all examine the definition of 'debt' as given in Section 2(8) of the Act. 'Debt' as defined in that sub-section includes all liabilities of a debtor in cash or in kind, secured or unsecured, whether payable under a decree or order of a Civil Court or otherwise, and whether payable presently or in future. Then follow certain exceptions which we need not mention at this stage. If a debt is payable under a decree, then to come within this definition it must be under a decree or order of a Civil Court and a decree passed by the High Court, must, in my opinion, be deemed to have been excluded. The expression 'or otherwise', I think, would mean debt not founded on a decree, and even if it includes decretal debts, they would be decrees passed by other Courts, e.g. the Revenue Court, but not by the High Court. This view is fortified by the provision of Section 18(1) which provides that a decree of a Civil Court relating to a debt shall be conclusive evidence as to the existence and amount of the debt as between the parties to the decree. It might sound absurd that a decree passed by an inferior Court would be held final by the Debt Settlement Board, whereas no value need be attached to a decree of the High Court. But this incongruity will disappear if we hold that a decree of the High Court being outside the Act, the Debt Settlement Board would have no jurisdiction to consider it at all or appraise its value.

3. This interpretation would not be in any way inconsistent with the object of the Act as explained in the Preamble. The object was undoubtedly to give relief to certain classes of debtors, but not certainly in respect of all their liabilities. There are exceptions stated in the Section itself, e.g. public demands and debts due to a Scheduled Bank. Other debts must also be deemed to be excluded which were beyond the competence of the Legislature to deal with, if the Legislature acted with full sense of its limitations and wanted to avoid anything which would be in excess 'of its powers. This conclusion would be irresistible if we come to the provisions of Sections 25(3), 33, 35 and 36 of the Act, which are aimed at ousting the jurisdiction of the Civil Courts in cases where the Debt Settlement Board can deal with the matters exclusively under the provisions of the Act. The result of the Special Bench decision is that the High Court would have jurisdiction in spite of Section 33 of the Act to entertain a suit or proceeding in respect of a debt, even though it is included in an application under Section 8 of the Act. A decree passed by the High Court could be executed though the matter is before the Debt Settlement Board, and such decree would be operative and binding even if it is against the decision of the Debt Settlement Board. An award under Section 25 would not prevail over a decision of the High Court and nothing but confusion and anomaly would result if both the award of the Board and the decree of the High Court are deemed to be valid and binding. I hold therefore that the Legislature definitely intended to exclude a debt founded on a decree of the High Court from the scheme of the Act, and Section 2(8) should be interpreted in such a way as would give effect to this intention of the Legislature. This would prevent anomalies and place all the provisions of this Act on a consistent and logical basis. In this view of the case, Section 34 of the Act would have no application inasmuch as there is no proceeding in respect of a debt, even though the Court is a Civil Court within the meaning of the Special Bench decision. The object of Section 34 is to stay proceedings in Civil Courts pending settlement of debt by the Debt Settlement Board. It helps to avoid conflicts which would otherwise result from the operation of Sections 35 and 36. But if these other Sections are not applicable, there can be no sense in applying Section 34 which is merely ancillary to the other provisions. I hold therefore that Section 34 would not apply to this case and the Munsif could not be called upon to stay the proceedings.

4. I think that much the same result would be produced even if we proceed on the view adopted by the minority of the Judges who composed the Special Bench. Their view is that the expression 'Civil Court' includes the High Court and those provisions in the Act which affect the jurisdiction of the High Court and the validity of its decrees are ultra vires. 'We cannot say that the only offending provisions are those contained in Section 25(3) or Sections 32 to 36. These are provisions intended to enable the Debt Settlement Board to carry on its work of settling debts, without any interference from the Civil Courts whose decrees and orders are made nugatory when they came into conflict with the decisions of the Board. They are all parts of and interwoven with the scheme which enables the Debt Settlement Board to settle debts founded upon decrees of the High Court, and as I have shown above, this scheme would fail altogether if these Sections are made inapplicable. What is ultra vires therefore is the assumption of jurisdiction by the Debt Settlement Board over debts payable under decrees of the High Court, and it must be said that it was outside the competence of the Legislature to include a liability based upon a decree of the High Court within the definition of a debt as given in Section 2(8), Agricultural Debtors Act. It is however not necessary in the present case to discuss this matter in further details. For the reasons given above I hold that the rule must be discharged with costs, hearing fee being assessed at two gold mohurs.

Roxburgh, J.

5. This rule has been issued on the ground that the Munsif of the first Court, Howrah, on receipt of a notice under Section 34, Bengal Agricultural Debtors Act, 1936, has refused to stay proceedings in execution of a decree passed on the original side of this Court, and transferred to the Howrah Court for execution. The learned Munsif has based his decision on the recent case in Narsing Das v. Chogemull : AIR1939Cal435 decided by a Special Bench of this Court. Mr. Sen arguing the case for the petitioner, has contended that the Special Bench decision has no application to the present which is a case of execution under Sections 39 and 42, Civil P.C.; and further that the present proceeding is before a 'Civil Court' even on the restricted view of the meaning of those words as found by the majority of the learned Judges who decided the Special Bench case. Similarly, if the view of the minority of the Judges is followed, namely that the words 'Civil Court' include the High Court, that the latter is not involved in the present matter as the proceeding stayed is not that of the High Court, and that in any event the powers given under Sections 39 to 42 to the High Court are not conferred by Act of Parliament, but by Act of the Indian Legislature. Mr. Das, appearing for the decree-holder opposite party, urges that Sections 32 to 36, Bengal Agricultural Debtors Act, provide a complete scheme for excluding the Civil Courts by staying and rendering infruetuous any of their proceedings in respect of a debt, and he contends that the definition of 'debt' in Sub-section 8 of Section 2 of the Act is to be read as excluding a debt based upon a decree of the High Court. He endeavoured to found his argument on the restricted interpretation of 'Civil Court' taken by the majority of the Judges in the Special Beneh case and contended that the words 'all liabilities...whether payable under a decree or order of a Civil Court,' must exclude a liability payable under a decree of the High Court. Mr. Sen, of course, has retorted by the contention that the latter debt is included in the phrase 'or otherwise' appearing in the definition. It must be conceded that the interpretation that 'Civil Court' in Section 34 and other Sections of the Act does not include 'High Court' is alone not sufficient to support the order challenged here; but it would appear that the reasons for that view will suffice to justify the interpretation of 'debt' contended for by Mr. Das. It seems also that if we treat the matter on the ground of ultra vires the result will be the same. To understand this it is necessary to consider the general scheme and real purpose of the Act.

6. The scheme of the Act which has been framed for the purpose of giving relief to agricultural debtors, is first to divide his debts into two classes, those which can be dealt with by Debt Settlement Boards, and those which cannot be so dealt with. The important exclusions which shall not be subject to the operations of the Boards are amounts recoverable as public demands, and debts due to scheduled banks: [Section 2(8)(iv) and (vi)]. Broadly speaking the scheme was to leave the recovery of these to the ordinary law, while other debts were to come under the jurisdiction of the Boards. The scheme then provides for bringing before the Board intimation of all debts subject to its jurisdiction (Section 8 to 13). An important provision is included in Section 13(2) by which a Board may pass an order that no debt of which the creditor has failed to submit a statement to the Board other than a debt which the debtor has included in his statement of debt shall be payable, and that such order shall not be questioned in any Civil Court or in any manner other than that provided in the Act. The Board is then to attempt amicable settlement of the debts (Section 15) and if it is a Board so empowered it can compel the remaining creditors to accept an amicable settlement on terms equivalent to those agreed to by creditors to whom not less than 40 per cent, of the total debt is owing [Section 19(1)(b)]. The 'total debt' means the total of the debts of which the Board has cognizance and excludes, for example, debts to scheduled banks or amounts recoverable as public demands. A creditor who refused to accept the terms offered may take a certificate and wait in accordance with the terms of Section 21 for the recovery of his dues. When the debts have been determined and settlement has been made fixing how payments are to be made, the whole culminates in the award under Section 25 and this is to be binding on the debtor and his creditors in supersession of all previous decisions of a Civil Court. It is contemplated that payment will be made by instalments, and if the full amounts due under the award are paid the debtor will be duly discharged of all the debts dealt with by it.

7. There is a special 'insolvency procedure' provided in Section 22 under which in certain circumstances the Board can compulsorily reduce the debts of the debtor to such amount as it considers he can pay within a period not exceeding 20 years, or else it may order his property (with some exceptions) to be sold. When the amounts have been paid or the property has been sold the debtor will receive under Section 22(5) a certificate of discharge which will release him from all debts which were or might have been included in the application under Section 8. Provision for the enforcement of an ordinary award under Section 25 is made in Sections 28 and 29. If any amount payable under the award is not paid in time or in the extended time allowed by the Certificate Officer, he is to proceed to sell the property of the debtor and to distribute the proceeds according to the order of priority laid down in Section 29. Amounts due under Civil Court decrees are to be paid in full if there are assets available [Section 29(2)(a)]; mortgaged properties may be sold subject to mortgage, unless there is a decree of a 'Civil Court' for the recovery of the debt outstanding in which case the property will be sold, and the mortgage debt as decreed will take priority [Sections 28(6) and 29(2)(a)]. Finally, if the Certificate Officer fails to recover as a public demand any amount payable under the award, the award shall cease to subsist and any amount payable under it shall be recoverable within three years from the date on which the award ceased to subsist as if a decree of the Civil Court had been passed for its payment on such date [Section 29(5)]. Alternatively the Certificate Officer may put in force the insolvency procedure of Section 22.

8. The provisions then in Sections 32 to 36 relating to Civil Courts are merely ancillary to the above scheme in order that there shall not be two concurrent agencies at work for the determination and collection of a person's debts. It is an essential corollary to the jurisdiction of the Boards to deal with a debt that concurrent proceedings by the Civil Courts shall not take place or shall be of no effect if they do. If there are debts which the local legislature cannot deal with for lack of jurisdiction they cannot give jurisdiction to the Boards in respect of those debts, or if they can and do so the result will only be confusion. It is unnecessary to labour by giving numerous examples, it is perhaps sufficient to consider the effect on an award in Section 25 of the Act if it contains a debt due on a High Court decree. The amount is both recover, able under the decree and at the same time under the award. Similarly, under Section 19 if the creditor to whom more than forty per cent, of the total debt were owing were a decree-holder of a decree of the High Court in its original jurisdiction he would be able to impose his settlement on the remaining creditors, but would be under no restriction as to recovery of his full dues by execution proceedings. Examples of such anomalies could be multiplied.

9. If we assume then that the Act was drafted with the knowledge that provisions affecting the jurisdiction of the High Court in respect of decrees passed in its original jurisdiction would be ultra vires, and that it was drafted to avoid including any such ultra vires provisions, we must conclude that the intention was to exclude debts founded on such decrees. We must conclude therefore that it was intended to exclude such debts from the definition of 'debt' in Section 2, Sub-section (8) of the Act: that is to say the interpretation contended for by Mr. Das must be accepted. Following the judgments of the majority of the Judges who decided the Special Bench case I think such an-assumption is to be made, and hold that 'debt' as defined in the Act does not include one payable under a decree or order of the High Court exercising its original jurisdiction. Though the point has not been argued' before us, it may be noted that even treated as a case of ultra vires the result is probably the same. In applying the doctrine, the Act is to be interpreted as a whole; it is then seen that what is ultra vires in the Act is, as already discussed, the whole of the scheme by which jurisdiction is given to the Boards to settle debts payable under decrees of the High Court in its original jurisdiction, and not merely the ancillary provisions directly giving power to the Boards to interfere with the High Court. Full consideration of this question would' involve considering what provisions of the-Act were ultra vires, and whether they could be excluded from the Act without making the Act a substantially different law from that enacted; in other words the-question of severability discussed in such cases as In re Initiative and Referndum Act (1919) 6 A.I.R. P.C. 145 and Attorney-General for British Columbia v. Attorney-General for Canada (1937) A.C. 391. It would probably be found that the result would be very similar to that now arrived at, and that by interpreting 'debt' to exclude amounts payable under decrees of the. High Court, all the provisions in the Act which are ultra vires of the local legislature and all that are so interwoven with those provisions as to require exclusion along with them would be severed together, leaving a valid Act dealing with matters within the competence of that Legislature. In other words a draftsman, given the defective Act and asked to exclude the provisions that were ultra vires, would have done so by the simple method of amending the definition of 'debt' to exclude these decrees.

10. As already stated I base my conclusion on the view that the draftsman in fact did exclude the decrees in question though not as explicitly as might have been done. I therefore hold that the debt in this case which is before the Board is not a debt within the meaning of the Act, and the notice under Section 34 is therefore erroneous and the Munsif is not required to stay the proceedings in execution pending before him. I agree therefore that the rule should be discharged.


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