NANDIRAM JAMNADAS Vs. RAMCHAND TARACHAND SIPAHIMALANI

JUDGEMENT

(1.) The appellant entered into certain share transactions with the respondent who was a broker in 1946 in Karachi, and he became liable to pay to the broker losses incurred in these transactions. On Oct. 2, 1946, the respondent filed a suit, being suit No. 433 of 1946, in Karachi to recover his losses which according to him amounted to 30,000.00. On April 18, 1948, an ex-parte decree was passed by the Karachi Court. On Oct. 10, 1949, the respondent filed a suit here to enforce that foreign judgment and in that suit a decree was passed on Jan. 30, 1952. There was an appeal and on Aug. 19, 1952, the appellate Court passed a decretal order of reference referring the disputes between the parties to arbitration. The arbitrator appointed was Mr. Shroff, the President of the Share and Stock Brokers' Association. Mr. Shroff gave his award on Nov. 4, 1952, and he awarded to the respondent 30,000.00 with 3 per cent. interest thereon from the date of the suit filed in the Karachi Court. On Dec. 4, 1952, the appellant filed a petition under the Displaced Persons (Debts Adjustment) Act, Act LXX of 1951, for the adjustment of his debt due under the award. The trial Court held that the petition was not maintainable and dismissed it. The appellant has now come in appeal. Now, "debt" is defined in section 2(6) of the Act as:

(2.) For the purposes of this appeal we are not concerned with clause (b) or (c). What is contended by Mr. Mani in support of the judgment is that the pecuniary liability which is sought to be adjusted under section 5 of the Act is the pecuniary liability which arose on the passing of the award, viz., Nov. 4, 1952, and as that liability was not incurred at the time referred to in clause (a), the petition of the appellant is not for adjustment of a debt as defined by section 2(6) (a). As against this, Mr. Advani's contention is that although the award was passed on Nov. 4, 1952, the pecuniary liability in respect of which this award was passed was incurred in 1946 and that was before the petitioner came to reside in any area now forming part of India. It is perfectly true that when a suit is filed on a debt and the suit results in a decree, the cause of action on which the suit was founded is merged in the decree and it would not be open to the plaintiff to reagitate this cause of action in another suit. But could it be said that till the decree is satisfied the pecuniary liability itself is discharged? A distinction must be drawn between a pecuniary liability which results in the decree and the cause of action which is furnished by the pecuniary liability.

(3.) The merger of the cause of action gives rise to the principle of res judicata and the decree prevents parties from relitigating any claim arising out of that cause of action. But when the question is asked whether the pecuniary liability incurred by the judgment-debtor has been discharged or not, the answer must be "it has not been discharged", although at the same time it may be said that that liability can only be discharged under the decree and not by any other mode. Therefore, the decree puts the imprimatur of the Court on the pecuniary liability of the plaintiff and gives the sanction to him to enforce it through the Court by means of executing the decree. But what he is doing is that he is enforcing his pecuniary liability under the process of the law and with the assistance of the Court. Therefore, when the appellant went to the Displaced Debtors' Tribunal he was seeking to adjust the pecuniary liability which lie had incurred in Karachi and which liability now became enforceable by means of the award which was passed on Nov. 4, 1952. Therefore, we do not agree with Mr. Mani that the pecuniary liability itself was incurred on Nov. 4, 1952. The liability on which the award was based in respect of which it was passed was incurred long before 1952. It was incurred in 1946 and that liability has remained undischarged till today.