LAXMAN BABAJI Vs. AKHARAM SAHEBRAM

JUDGEMENT

(1.) THE plaintiff filed Civil Suit No. 4o of 195o in the Court of the Civil judge, Senior Division, Ahmednagar, against the defendants who are brothers for a decree on a promissory note for Rs. 15,351/- executed by them on 25th July, 1947, after giving credit for Rs. 4,375/4/- received in part satisfaction of the dues under the promissory note. It was the plaintiff's case, that on 25th July, 1947, all the four defendants executed a promissory note agreeing to pay Rs. 15,351/- on demand together with interest at the rate of 12 per cent and that in part satisfaction of their liability under the promissory note the defendants had sent some jaggery to the plaintiff's shop for being sold on commission and the proceeds thereof were credited towards the account and the balance of Rs. 15,728/-remained due and payable by the defendants. The suit was resisted by all the defendants. (After stating facts and discussing questions not material for reporting the judgment proceeds ).

(2.) THEN it was urged that as the 4th defendant was adjudged a debtor under the B. A. D. R. Act in an application filed by one of his creditors and an award was made the plaintiff was bound by the award and the liability of the 4th defendant under this promissory note in favour of the plaintiff was extinguished. The learned Judge has found that one Gangadhar Vyankatesh filed a debt adjustment application against the 4th defendant and in that application a general notice under section 14 of the B. A. D. R. Act was issued. In answer to the general notice requiring the creditors to file their statements the plaintiff did not submit a statement of his claim. Thereafter the 4th defendant was adjudged a debtor and an award was made. It is conceded that the award did not deal with the debt due to the plaintiff under the promissory note executed by the fourth defendant. But it is urged that the plaintiff was required by law to file a statement of claim before the Debt Adjustment Court in answer to the general notice, for the debt even if it exceeded Rs. 15,000 /- and the plaintiff having failed to do so, the debt was extinguished. The learned trial Judge was of the view that the penalty of extinction of debts for failure to submit statements is incurred by only those creditors who are named in the debt adjustment application as creditors and who are served with notice under S. 14 (a) and not by other creditors. We are unable to accept that view. Section 15 (1) applies in terms to 'every debt' and is not restricted to debts due to creditors who are named in the application for adjustment of debts and arc served with notice under S. 14 (a ). But sub-section (1) of S. 15 is subject to sub-section (2 ). Whereas sub-section (1) provides that every debt due by a debtor in respect of which a statement is not submitted to the Court by the creditor in compliance with S. 14 shall be extinguished, it is provided by sub-s. (2) that

(3.) IN our view, the 4th defendant had by his act and by his omission as well, intentionally caused the plaintiff to believe that he was not a debtor for the purposes of the B. A. D. R. Act, or that no application could lie for adjustment of his debts under S. 4. The fourth defendant had executed a promissory note for an amount exceeding Rs. 15,000/- and where a person's debts exceed Rs. 15,000/- in the aggregate he cannot claim the status of a debtor under the B. A. D. R. Act. A bona fide admission of liability for an amount exceeding Rs. 15,000/- is a declaration or an act within the meaning of sub-s. (2) of S. 15 which intentionally caused the plaintiff to believe that the debts due by the fourth defendant could not be adjusted under the B. A. D. R. Act. Again the fourth defendant did not file a statement showing that the plaintiff was his creditor for a sum exceeding Rs. 15,000/ -. If the fourth defendant had shown in his statement of liabilities the debt due to the plaintiff, he could not have been declared a debtor. If, with a view to obtain the benefit of the B. A. D. R. Act, the fourth defendant as it must in the circumstances of the case be assumed deliberately withheld from the Court the information that he had executed a promissory note for Rs. 15,351/- in favour of the plaintiff, he cannot, in our judgment, claim that the liability due to the plaintiff is extinguished by virtue of sub-s. (1) of S. 15. In our view, the omission of the 4th defendant must also be deemed to have intentionally caused the creditor to believe that the fourth defendant was not a debtor.