MOHANLAL KHUSHALBHAI Vs. YAKUBKHAN PIRKHAN

JUDGEMENT

(1.) This is a Second Appeal by the heirs of the original defendant one Khushaldas Makandas. Respondents Yakubkhan Pirkhan and Parshottam Gopal were plaintiffs who brought Regular Civil Suit No. 44 of 1954 in the Court of the learned Civil Judge (Junior Division) Vyara from out of which this Second Appeal arises. The main question which requires to be decided in the present appeal is whether sec. 65 of the Indian Contract Act is or is not applicable to the facts of the present case. Those facts may be stated at first. On 17th September 1948 Yakubkhan plaintiff No. 1 executed a Khata for Rs. 2 701 in favour of Khushaldas defendant. The parties were the resident of Vyara which was then a part of the former Baroda State. After that State merged with the State of Bombay the Bombay Agricultural Debtors Relief Act 1947 (hereafter called the Relief Act) was applied to the aforesaid territory sometime in 1950. Thereafter Khushaldas made an application under the Relief Act for adjustment of the debt of Yakubkhan however at the same time contending that he did not admit that Yakubkhan was a debtor within the meaning of the Relief Act and further stating that he had made then application for adjustment of Yakubkhans debts only out of caution. The finding recorded by the learned appellate Judge is that Yakubkhan did not know that such an application had been made at the time when the settlement presently to be referred tot was made between him and Khusualdas. On 22nd May 1951 when the aforesaid application was pending in the B. A. D. R. Court a settlement was arrived at between Khushaldas Yakubkhan and Parshottam plaintiff No. 2 as a result of which the debt of Rs. 2 701 due from Yakubkhan to Khushaldas was settled at Rs. 2 125 and in consideration of a Khata executed by Parshottam for that amount in favour of Khushaldas Khushaldas discharged Yakubkhan of his liability under the debt. Ex. 62 is the original Khata executed by Yakubkhan and the entry on the credit side of that Khata evidences the aforesaid settlement. Ex. 63 is the new writing which Parshottam executed in favour of Khushaldas. Parshottam paid the amount due under that writing after the aforesaid settlement had been arrived at between the parties. Khushaldas did not appear in the B. A. D. R. Court and consequently his application was dismissed for non-prosecution. The present suit was thereafter brought in 1954 by Yakubkhan and Parshottam for recovering the payment which Parshottam had made under the new writing Ex. 63. The suit was based mainly on the ground that the settlement arrived at between the three parties was void under sec. 10 of the Relief Act; that therefore the payment was made under a void transaction and that therefore Khushaldas was bound to pay the amount which he had received under that transaction. Khushaldas resisted the claim on a number of grounds all of which need not be stated in the Second Appeal. The learned trial Judge accepted the contentions of Yakubkhan and Parshottam and repelled these of Khushaldas and decreed the claim of Yakubkhan and Parshottam. Aggrieved by this decision Khushaldas preferred an appeal to the District Court at Surat the appeal being Regular Civil Appeal No. 26 of 1956. The appeal was decided by a learned Assistant Judge on 31st October 1957. He found that Yakubkhan was a debtor within the meaning of the Relief Act; and that the settlement aforesaid was procured by keeping Yakubkhan and Parshottam in darkness about Khushaldas having made an application under the Relief Act. He also found that the settlement was void and that under sec. 65 of the Indian Contract Act Khushaldas was bound to refund the amount of Rs. 2 125 received by him from Parshottam. The present Second Appeal is directed against that decree of the learned Assistant Judge.

(2.) Before I mention the main point urged by Mr. Shah in support of this appeal I may dispose off a few subsidiary points which were urged by him. The first contention of Mr. Shah was that the finding of the learned Assistant Judge that Yakubkhan was a debtor within the meaning of the Relief Act was not supported by any evidence on record. In my judgment there is no merit in this contention. From the judgment of the learned Assistant Judge it appears that both the sides had adduced oral evidence on the subject. It is true that on the side of plaintiffs Yakubkhan alone went into the witness-box. But as against this Khushaldas who according to the learned Judge had personal knowledge on the subject did not go into the witness box but examined instead his son and one witness. The learned Assistant Judge has considered the oral evidence on both the sides and recorded a finding that the evidence given by Khushaldass son and his witness is not worthy of credence. The learned Judge then went on to consider the documentary evidence in support of Yakubkhans claim that he was personally cultivating a land during the relevant period. The documents considered by the learned Judge are Exs. 92 93 and 94 which are extracts from the combined register in respect of the relevant years. Two of those exhibits showed that some lands stood not in the name of Yakubkhan but they stood in the name of his father. The learned Judge has held that though this was so and the lands belonged to Yakubkhans father an inference can be drawn that Yakubkhan was personally cultivating the lands belonging to his father. Mr. Shah made some comments about this inference. He urged that the learned Judge had confounded the practice prevailing amongst Hindu families and thought that the same practice applies to a Mahomedan family. There is some force in this criticism of Mr. Shah. However the finding of the learned Judge is not merely based upon the aforesaid practice. The learned Judge has also taken into account Ex. 94 and has interpreted the document to mean that in the relevant years Yakubkhan was personally cultivating a piece of land with one Ayubkhan. Having regard to the aforesaid materials which the learned Judge had before him it is impossible to accept the contention of Mr. Shah that the aforesaid finding of the learned Judge was not supported by any evidence on record.

(3.) Before I mention the other points which Mr. Shah urged in support of the appeal I may first refer to sec. 10 of the Relief Act on which the case of the two plaintiffs is based. That section enacts that Every settlement of a debtor due from a debtor to any creditor which is not certified by the B. A. D. R. Court under sec. 8 or in terms of which no award has been made under sec. 9 shall be void and shall not be recognised by any Court for any purpose whatsoever. On the facts found in this case there is no doubt whatsoever that the aforesaid settlement was not certified under sec. 8 of the Relief Act. Sec. 8 requires a debtor or a creditor to make an application within thirty days from the date of a settlement for the recording of such settlement and provides for an enquiry to be made on the subject and on the Court being satisfied about the points mentioned therein enjoins on the Court to issue a certificate of settlement. There is also no doubt whatsoever that an award was not passed under sec. 9 in terms of the aforesaid settlement. Therefore it cannot be denied and Mr. Shah does not deny this that the aforesaid settlement came within the mischief of sec. 10 and was void on account of the contravention of that section. Mr. Shah conceded that if Parshottam had not honoured the writing Ex. 63 and if Khushaldas was required to file a suit to enforce the writing then having regard to the fact that the settlement was void the suit of Khushaldas would be dismissed. He conceded that because of the void nature of the transaction no relationship of debtor and creditor ever came into existence between Parshottam and Khushaldas. He also conceded that in law Yakubkhan would still be the debtor of Khushaldas and that if Khushaldas had pursued his application for adjustment of debt then the debt of Rs. 2 701 would have been required to be adjusted in accordance with law However Mr. Shah contended and this was his second contention that whilst all this was true when the settlement remained in an executory state once Parshottam discharged his obligation under the aforesaid writing Ex. 63 and made a payment then different considerations would arise and no resort needs to be made to sec. 10 of the Relief Act. His argument was that there being a novatio between Parshottam and Khushaldas even if Parshottam made a payment under such a new transaction Parshottam had legally no remedy whatsoever for recovering back the amount paid under the void document. In my judgment in advancing this argument Mr. Shah ignores the provision contained in sec. 65 of the Indian Contract Act. That section has been enacted to provide exactly for a contingency of this type. Therefore if sec. 65 applies to the facts of the present case there is no merit in the aforesaid contention of Mr. Shah. I shall consider the arguments advanced by Mr. Shah against the application of sec. 65 just in a moment.