RAMCHANDRA VITHAL Vs. PAYAGONDA ANANTGONDA

JUDGEMENT

(1.) THE short point of law which arises in these two revisional applications falls to be considered under the second proviso to Section 22 of the Bombay Agricultural Debtors Relief Act, 1947. The petitioners before us are the creditors and on their behalf Mr. Paranjape has strenuously contended that the Courts below acted illegally in submitting the debts due to the petitioners to the cuts prescribed by Section 22 of the Act. His argument is that the effect of the second proviso to Section 22 is that the amount which has already been determined as due to the creditors from their debtors shall be binding on the parties and the said amount shall not be submitted to any further cut under Section 22 of the Act. The answer to the point thus raised by Mr. Paranjape would depend on the construction of the said second proviso.

(2.) BEFORE dealing with this point, it would be relevant to mention a few material facts which give rise to the point. The two creditors before us are Utturkar and Paisule. In favour of Utturkar a mortgage bond had been executed on 22nd July, 1926 for Rs. 1,000. In favour of Paisule three mortgage bonds were executed and the total amount due under these mortgage bonds was Rs. 6,500/ -. It appeal's that the Conciliation Board was established at Ichalkaranji under the Kolhapur Debt Conciliation Act of 1939. The debtors applied to the Board to effect a settlement of their debts. Ultimately a settlement was reached and was reduced to writing in the form of an agreement as required by Section 14 (1) of the Act. This settlement was duly registered by the chairman of the Board. By this agreement the debt due to Paisule was reduced from Rs. 1,1,999 to 9100/- and it was made payable by 13 annual instalments of Rs. 700/- each. Similarly the debt due to the Utturkar was settled at Rs. 960/- and was made payable by 12 instalments of Its. 80 each. It appears that subsequent to this settlement some instalments were paid by the debtor. Then the Kolhapur State with its feudatory Jahagirs was merged with the state of Bombay and as a result of the merger the Bombay Agricultural Debtors Relief Act was made applicable to the merged area with some modifications and the Court to administer the provisions of the Act was constituted at Kurundwad. Before this Court both the parties made applications for adjustment of their debts. These applications were consolidated. Preliminary issues were found in the favour of the debtors and the Court then proceeded to adjust the debts under the provisions of Section 22 of the Act. The learned Judge in applying the provisions of Section 22 assumed that the amounts which were found due to the two creditors were binding between the parties. But nevertheless he proceeded to apply the cuts to these two amounts as prescribed in Sub-sections (2) and (3) of Section 22. The result was that Rs. 1160 were declared to be due to Paisule and Rs. 16 to Utturkar. The other debts due from the same debtors were likewise adjusted and an award was passed under Section 33 of the Act on 31st March 1953. Against this award the two creditors preferred appeals to the District of Kolhapur. The learned Assistant Judge who heard these appeal? noticed the fact that in the District of Kolhapur conflicting views had been taken by the appellate court as to the effect of the second proviso to Section 22. In the result he agreed with the conclusion of the learned trial Judge and dismissed the appeals. That is why the creditors have come to this Court in revision and on their behalf Mr. Paranjape has argued that in directing that the amounts found due to the creditors by the conciliation Court under the Kolhapur Act should be further exposed to the artificial cuts prescribed by Section 22 the courts below have misconstrued the effect of the second proviso to Section 22.

(3.) IN dealing with this argument it would be necessary to bear in mind the material provisions of Kolhapur Debt Conciliation Act and to examine the provisions of Section 2:1 of the Bombay Agricultural Debtors Relief Act in the light of the second proviso which has been subsequently added to Section 22. The scheme of the Kolhapur Debt Conciliation Act generally appears to be to encourage voluntary Conciliation and settlement of disputes between creditors and the Debtors in respect of debts to which the Act applied. Section 4 authorised the debtor or any of his creditors to make an application to the Board appointed for the relevant area. After the application thus made was examined, notice calling upon the creditors to submit a statement of debts was issued under Section 9. Section 14 (1) provided that if the creditor to whom not less than forty per cent, of the total amount of the debtor's debts are owing, came to an amicable settlement with the debtor, such settlements shall forthwith be reduced to writing in the form of an agreement. Sub-section (2) of Section 14 required the said agreement to be registered within one month from the date of its making. If no amicable settlement was arrived at under Sub-section (1) of Section 14, the application was liable to be dismissed under Section 21. Section 22 (1) dealt with the grant of a certificate by the Board in respect of certain debts. Under this section, if any creditor refuses to agree to an amicable settlement, the Board, may, if it is of opinion that the debtor has made such creditor a fair offer which the creditor ought reasonably to accept, grant the debtor a certificate, in such form as may be prescribed, in respect of the debts owed by him to such creditor. The effect of this certificate is specified in Sub-section (2) of Section 22. In a case where the certificate has been issued, if the creditor sues to recover the debt in a civil court, the court shall, notwithstanding the provisions of any law for the time being in force, not allow the plaintiff any costs in such suit or any interest on the debt after the date of such certificate. Where an agreement is registered under Section 14 (2), it becomes capable of enforcement as if it were a decree of a civil court. Where an agreement is not reached and has therefore not been registered, the penalty against the creditor in cases falling under Section 22 (1) is that he would be deprived of his costs and interest in case an action for recovery of the debt is instituted by him in the ordinary Civil Court. Broadly stated, this is the scheme of the Kolhapur Debt Conciliation Act, which it is necessary to remember in dealing with the merits of the arguments which have been urged before us by Mr. Paranjape. It is clear that if an agreement is entered into and is registered the amount determined by the agreement cannot-be disputed by either of the parties in the execution proceedings; and as I have just indicated the agreement itself has to be treated as if it were a decree for the purpose of enforcement. In other words, the creditor, who has agreed to the conciliation of his debts with his debtor under Section 14 and who has entered into an agreement which is ultimately registered under the said section, may be described as a decree-holder in whose favour an agreement has been passed which is capable of execution as if the agreement would be treated as a decretal amount which the creditor is entitled to recover in execution proceedings.