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Nursingdas Tunsookdas Vs. Chogemull and ors. - Court Judgment

LegalCrystal Citation
Decided On
Reported inAIR1938Cal402
AppellantNursingdas Tunsookdas
RespondentChogemull and ors.
Cases ReferredLachmi Narain v. Fateh Bahadur Singh
- .....'settled' and recovered through the agency of settlement boards to the exclusion of the civil courts. such being the intention, one should, i apprehend, construe the act if possible in such a way as will carry it into effect equitably and reasonably. on the plaintiff's construction, a debtor will seek the assistance of the board in vain in respect of any debts which have been contracted in a district in which there is no area notified under the act. the advance gives jurisdiction to the court within the territorial limits of which it was made, and the creditor will be able to obtain a decree from that court and in many cases execute it, irrespective of the fact that the debtor has made an application to the appropriate settlement board under section 8 of the act. is it.....

Panckridge, J.

1. This is in form an every day application for execution, but it none the less raises a question of great importance and considerable difficulty as to the construction of the Bengal Agricultural Debtors' Act, 1935. On 20th December 1935, a consent decree was made against the defendants for Rs. 52,000 payable by instalments, and secured on zemindaries in, the District of Jalpaiguri and shares in a limited company. There was default on the defendants' part, and on 30th Augusts 1937, the Official Receiver was appointed receiver of the zemindaries and shares at the instance of the plaintiff. The order of 30th August was varied by a consent order of 7th September, under which two private receivers were appointed with liberty to sell in execution the securities mentioned in the schedule of the decree. Pending the sale of the securities, a notice under Section 34, Bengal Agricultural Debtors' Act, has been received by the Registrar of the Original Side. The notice is not set out in the petition, and the plaintiff says that he has not received a copy. I understand however that it is admitted that the notice is by the Debt Settlement Board established by the Local Government under Section 3(i) of the Act . for all areas known as Sanyasakata in the District of Jalpaiguri, which was notified under Section 1 (3) of the Act on 26th June 1936. The notice is to the effect that the defendants have applied to the Board for a settlement of their debts under Section 8 (i) of the Act, and have in terms of Section 11 included in their statement the judgment debt in this suit.

2. The defendants claim that under Section 34 the notice has the effect of staying the present suit until the Board has adjudicated, and alternatively they say that Section 35 of the Act specifically forbids execution of a decree of a Civil Court for a debt included in an application under Section 8, until the application has been dismissed by the Board in respect of such debt, or until an award made under the Act has ceased to subsist. The plaintiff has now applied for an order on the receivers to sell the shares, and to carry out the other directions in the consent order of 7th September. The plaintiff has advanced several arguments, of which by far the most important is that Sections 34 and 35, and indeed the Act generally have no application to the Original Side of the High Court, because its territorial jurisdiction does not lie within an area that has been notified under Section 1 (3). In this he certainly has authority to support him in Bhagwan Dayal Saha v. Chandulal Agarwalla : AIR1938Cal23 . In that case a money suit was pending in Court of the Subordinate Judge of Darjeeling; before a decree had been made, one of the defendants applied to the Settlement Board of Parbatipur under Section 8 and the Board issued a notice under Section 34 to the Court of Subordinate Judge, who however declined to stay the suit as against the defendant in question. The defendant applied to this Court in its Civil Revisional Jurisdiction to set aside the Subordinate Judge's order. The Court (Costello Ag. C. J. and Edgley J.) dismissed the application. Costello Ag. C. J. observed as follows:.. Fortunately however in the present case we are able to say that the learned Judge was right as regards one other conclusion at which he arrived, or rather one other ground on which he refused to recognize the notice as being effective. That ground is stated by him in this way:

Act 7 of 1936 has not been brought into force in Darjeeling District under Section 1 (3).It has been admitted by the learned advocate appearing for the petitioner here, who, as I have said, is one of the many defendants in the suit, that in fact the Act has not been put into force in the Darjeeling District. There seems to be a curious inconsistency with regard to the manner in which this Act is described. Section 1 (i) says this:

This Act may be called as the Bengal Agricultural Debtors Act, 1935.It also seems to be described as 'Bengal Act 7 of 1936'. There is a notification of 26th June 1936 which gives a list of certain districts in which the Act is to be operative. That list does not include Darjeeling. In these circumstances, it seems quite clear that the Court in Darjeeling was not in any way subject to the provisions of the Act, and the learned Judge was quite entitled to take no notice of the letter which was sent under date 25th May 1937. In any event this is clearly not a matter which comes within the scope of Section 115, Civil P.C.

3. The judgment of Edgley J. is to the same effect. Now this decision is not binding on me sitting on the Original Side, although it is naturally one that I am bound to treat with the greatest respect. Moreover, it is possible legitimately to distinguish that case from the one before me. As the concluding words from the passage which I have cited show, Costello Ag. C. J. was of opinion that, apart from the merits, Section 115, Civil P. C, was not in the circumstances applicable. Again, in Bhagwan Dayal Saha v. Chandulal Agarwalla : AIR1938Cal23 no decree had been made when the notice was issued, and therefore the express prohibition of execution proceedings to be found in Section 35 did not have to be considered. However there is no advantage in disguising the fact that I cannot bring myself to agree with the construction of the Act that commended itself to the Court in that case. I only feel called on to say that the report does not contain the argument, and from the judgments,. I think, it can properly be inferred that the Court had not the advantage of a systematic and illuminating analysis of the Act such as I have had the pleasure of hearing from Mr. Das.

4. I will now consider what seem to be the relevant provisions of the Act. The Preamble states that it is expedient to provide for the relief of indebtedness of agricultural debtors, and to amend the law governing the relations between agricultural debtors and their creditors. Section 1 (2) provides that the Act shall extend to the whole of Bengal, and Section 1 (3) that it shall come into force in such areas on such dates as the Local Government may by notification direct. It should be observed that the areas mentioned in Sub-section (3) need not be administrative or judicial 'districts', and the fact that hitherto the areas notified by the Local Government have been 'districts' in the technical sense must be regarded as an accident. Under the Act the Local Government can notify an area, the entirety of which lies within the limits of the administrative district, but which does not include the whole of such district, or they may notify an area lying partly in one district and partly in another. In Bhagwan Dayal Saha v. Chandulal Agarwalla : AIR1938Cal23 :

It is however clear that no Court situated in a district in which the Act has not been brought into force can be compelled to issue the stay order contemplated in the latter portion of Section 34, Bengal Agricultural Debtors Act, and, in order to obtain a stay order of the nature contemplated by Section 34 it follows that the Act must be in operation both in the district in which the Board is situated to which an application is made for the settlement of a debt and also in the district in which the Court is situated to which the notice under Section 34 of the Act is actually sent.

5. Having regard to the existing state of affairs, the language used is natural, but in my opinion it tends to obscure the precise question at issue. That question is whether 'Civil Court' when used in the Act is confined to a Civil Court within whose territorial jurisdiction the whole or any part of an area notified under Section 1 (3) lies. If this question is answered affirmatively, it will mean that the fact that a few acres of a notified area fall within the limits of a particular district will make the Act applicable to the Courts of that district. If no part of such area is within the district, the Act will not apply. I do not say this construction is impossible, but I do say that it strikes me as artificial and practicably inconvenient. To continue the examination of the Act, 'debtor' is defined by Section 2 (9). Section 3 provides for the establishment of Debt Settlement Boards in notified areas. Under Section 8, a debtor may make an application for the settlement of his debts to a Board established for the local area within which he ordinarily resides. I ought to say here that Mr. Basu admits for the purposes of this application that the defendants ordinarily reside within the local area of the Sanyasakata Board. He does not however admit that they are 'debtors' within the meaning of Section 2 (9).

6. I do not think that this is a matter which I can investigate. It is, at any rate in the first instance, for the Board, subject to such right of appeal as the Act gives, to determine whether it can exercise jurisdiction over any particular applicant. It is to be observed that it is the residence of the debtor that gives jurisdiction to the Board. It is immaterial where the creditors reside, or where the debts were contracted. Under Sections 12 and 13 the Board has power to consider and investigate the application. Under Section 13(2) the Board can, if a creditor fails to comply with a notice under Section 13 (1), declare that any debt due to him from the debtor on the date of such order shall for the purposes of the Act be deemed to be the amount stated in the statement of debts submitted by the debtor, and that no debt of which the creditor has failed to submit a statement, other than a debt which the debtor has included in his statement of debts shall be payable, and such order shall not be questioned in any Civil Court or in any manner other than that provided by the Act. Under Section 18 (1) the Board has power to decide whether the debt exists and determine its amount, provided 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. Section 19 provides for the settlement of debts. Section 33 forbids Civil or Revenue Courts to entertain a suit, application or proceeding against the debtor in respect of any debt included in an application under Section 8 of proceedings in connexion with which are pending before a Board. I have already referred to Section 34. Under Section 35 notwithstanding anything contained in any Act no decree of a Civil Court shall be executed for the recovery of a debt included in an application under Section 3 until the application has been dismissed by the Board in respect of such debt or an award in which such debt is included has ceased to subsist. I have not thought it necessary to set out in detail the rather complicated procedure of award and recovery.

7. Now undoubtedly there is much in the Act which may appear startling to one who has been trained in the English system, which attaches a supreme importance to the principle of the sanctity of contracts. The main intention of the Act is however clear, and it is that the liabilities of certain debtors shall be ascertained, 'settled' and recovered through the agency of Settlement Boards to the exclusion of the Civil Courts. Such being the intention, one should, I apprehend, construe the Act if possible in such a way as will carry it into effect equitably and reasonably. On the plaintiff's construction, a debtor will seek the assistance of the Board in vain in respect of any debts which have been contracted in a district in which there is no area notified under the Act. The advance gives jurisdiction to the Court within the territorial limits of which it was made, and the creditor will be able to obtain a decree from that Court and in many cases execute it, irrespective of the fact that the debtor has made an application to the appropriate Settlement Board under Section 8 of the Act. Is it reasonable to suppose that the Legislature intended the effectiveness of the Act to depend on a matter as fortuitous as the place where the debt was contracted? Moreover, if the plaintiff's contention is correct, creditors will have no difficulty in defeating the provisions of the Act, for, wherever the cause of action in respect of any debt arose, it will be always open to the creditor to assign it in a district not containing a notified area. Such assignment will be part of the cause of action, within the meaning of Section 20 (c), Civil P.C. in a suit brought by the assignee, who can institute proceedings in the Civil Courts of that District, and those Courts will ex hypothesi disregard the provisions of the Act.

8. I have formed no opinion as to the evils that the Act is designed to remedy, or as to the means by which it seeks to do so, but I conceive that I should, if possible, construe the Act in such a way as will make its provisions effective and not illusory. In my opinion Sub-section (3) of Section 1 must be read in conjunction with Sub-section (2) of the same section. Read together, the sub-sections mean that until an area is notified, no Debt Settlement Board can be established therein, but when this has been done, all Civil Courts in Bengal are to treat the proceedings of such a Board in accordance with the provisions of the Act. Mr. Das goes further than the case requires, when he suggests that the restrictions imposed by the Act on the proceedings of Civil Courts affect all Civil Courts in British India, and perhaps beyond it. I understand his argument to be that the Act imposes an incapacity on creditors and deprives them of a substantive right to recover their debts except under the Act, and he submits that all Civil Courts will recognize this disability. He has referred me to Lachmi Narain v. Fateh Bahadur Singh (1903) 25 All 195, where it was held that a person who had been declared a disqualified proprietor under the Oudh Land Revenue Act was incapable of entering into a contract to sell a house situated not in Oudh but in Cawnpore. After dealing with the history of the relevant legislation the Court observed (p. 196):

If it is found that from the beginning the Legislature has had as its object in creating a Court of Wards that persons incapable of managing their own property, shall be in certain cases relieved of such management, and the duties of management and superintendence transferred from them to a Court of Wards; and further, that when such transfer has been effected the incapable persons above mentioned, while so disqualified, shall be absolutely debarred from entering into any contract with reference to the property so transferred, then it may safely be presumed that it was never the intention of the Legislature to draw a sharp boundary line, and while pronouncing A on the hither side of the Ganges to be incapable of administering such of his property as is situate on the hither side of the same river to deem him capable of managing property on the further side. The contrary presumption in such a case would be manifestly absurd, and to hold it would without express words to the contrary be unreasonable.

9. This passage in my opinion furnishes some guidance as to the principle upon which I should construe the Bengal Act. How far the Civil Courts of other Provinces will give effect to that Act is a speculation with which I am not concerned. It is of course most unfortunate that there should be conflicting judicial decisions on so important a matter, and I can only express a hope that the point will be authoritatively dealt with in the near future. In the meanwhile I hold that Sections 34 and 35, Bengal Agricultural Debtors Act, 1935 are bars to the present application which is accordingly dismissed with costs. I certify for counsel.

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