RANGABAI KRISHNA BADGUJAR Vs. SHANKAR HARI MALI

JUDGEMENT

(1.) A rather interesting point arises on this civil revisional application. The opponent applied to the Bombay Agriculture Debtors Relief Court to have his debts adjusted, and the two statutory issues that he was a debtor and that the total amount of debts due from him on the date of the application was not more than Rs. 15,000 were found in his favour. He challenged two oral sales effected in favour of creditor No. 1 and creditor No. 3. The date of both the oral sales was March 16, 1934. Now, the case of the debtor was that these sales were only ostensible sales and that the transactions were in the nature of mortgage. In view of the decision in Jibhaoo Harising v. Ajabsing : AIR1953Bom145 , it is now settled that an oral sale is a nullity, but the consideration constitutes a charge upon the property, and the Court in that case held that in respect of the consideration, the debtor was indebted to the vendor and, therefore, that debt could be adjusted. The debtor wanted to avail himself of the principle underlying this decision, but the two creditors put forward two agreements of sale, one dated September 21, 1931, and the other dated September 29, 1931, and they contended that in pursuance of these two agreements, they had gone into possession of the property and that they were entitled to protect their possession by reason of the provisions of Section 53A of the Transfer of Property Act. The trial Court held that the creditors were protected under Section 53A of the Transfer of Property Act, that the purchase money had not become repayable to the vendee and there was neither any liability nor any debt which could be adjusted under the Act. There was an appeal from this judgment to the learned Assistant Judge at Jalgaon and he came to the conclusion that the doctrine of part performance did not apply to the facts of this case, and he held that the amount mentioned in the two agreements for sale should be adjusted, and remanded the matter back to the trial Court. It is against this decision that the two creditors have now come in revision.

(2.) MR . Kotwal very fairly conceded that it was difficult to support the decision of the Assistant Judge when he took the view that Section 53A had no application and, therefore, this matter must be argued on the basis that Section 53A applies, that there has been part performance and that the two creditors are entitled to protection under the provisions of that section. But Mr. Kotwal put forward a different argument in support of his client. His contention was that both the agreements for sale mentioned as consideration past indebtedness and admittedly there were earlier mortgages executed between the parties, and Mr. Kotwal says that under Section 22 of the Act, I should ignore the consideration mentioned in these two agreements and ask the Court to determine what was the actual indebtedness under the mortgages ; and when that indebtedness has been ascertained, that could be made a charge on the property, and if the debt is satisfied, the property could be conveyed to the debtor. It is also urged that : under Section 32(2)(v), an order for delivery of possession of any property can be made notwithstanding any law or contract to the contrary. It is urged with some force that the whole object of the Act would be defeated if a creditor were to take from his debtor an agreement of sale, mention as consideration the amount of the debts as settled and thereby prevent the Court from ascertaining what is the amount actually due by the debtor to the creditor notwithstanding what is mentioned in the agreement itself. It is further said that once a debtor has been held to be a debtor and also the amount of his debts do not exceed Rs. 15,000, the whole matter is at large and the debtor is entitled to have an investigation into the affairs of every creditor of his.

(3.) NOW , Mr. Kotwal has two answers to give. He says under Section 22 there is a specific provision that notwithstanding any contract purporting to close previous dealings and create a new obligation, the Court shall inquire into the history and merits of the case; and Mr. Kotwal says that an agreement for sale is a contract which purports to close the previous dealings between the parties and creates a new obligation. I am not at all satisfied whether the agreement of sale is a contract of the nature suggested by this particular provision of Section 22. But even assuming it was, Section 22 is merely procedural. The marginal note 'mode of taking accounts' correctly represents the extent and nature of that Section. Therefore, before accounts can be taken under Section 22, we must find some provision in the Act which would fix the liability upon the creditor to render accounts. Mr. Kotwal is really putting the cart before the horse. He wants to take accounts from the creditor in order to ascertain the liability, whereas in law the liability to account must first be ascertained, and then in taking the accounts, the Court must look to the provisions of Section 22 and follow the procedure laid down in that section. Now, I think it is clear that before accounts can be taken, there must be a debt due by the debtor and that there must be a relationship of debtor and creditor between the parties. In the case of an ostensible sale, as soon as the Court holds that it is a mortgage, that relationship is brought into existence, because whatever the debt due under the mortgage, the mortgage is redeemable and the Court determines the debt and allows the debtor to redeem the mortgage. In the ease of an oral sale, the debtor who has received the purchase price is bound to return the purchase price if the sale is a nullity, and till that purchase price is returned, the vendee has a charge on the property in respect of that purchase price. Therefore, in that case also, the debt is established and there is a relationship of debtor and creditor between the parties.