SUBBARAYA CHETTIAR Vs. DEBT CONCILIATION BOARD

JUDGEMENT

(1.) This is an application for the issue of a writ of certiorari for the purpose of quashing an order of the Debt Conciliation Board, Cuddalore. The record shows that the order complained of has been passed without jurisdiction and the application will be granted.

(2.) On the 18 September, 1939, the debtor respondents filed a petition under Section 4 of the Madras Debt Conciliation Act, 1936, asking for the settlement of their debts. Section 5 of the Act states that every application shall be in writing and shall be signed and verified in the manner prescribed by the Civil Procedure Code for signing and verifying plaints. Section 6 sets out the particulars which a debtor must give in his application. If the application does not comply with the requirements of Section 5 or Section 6, Section 7 requires the Board to reject it. When an application has been accepted as complying with the provisions of Secs.5 and 6 the Board must by reason of Section 8 pass an order fixing a date and place for the hearing of the application and notice of this order must be sent by registered post to the applicant and his creditors. Section 9 gives the Board power to dismiss an application at any stage of the proceedings if the Board does not consider it desirable or practicable to effect a settlement of debts or if in its opinion the applicant fails to pursue his application with due diligence or if it includes a claim which the Board considers is collusive and intended to defraud a creditor. Section 17 states that if no amicable settlement is arrived at under Sub- section (1) of Section 14 within twelve months from the date of the application under Section 4 the Board shall dismiss the application. There is no power to extend the proceedings beyond twelve months.

(3.) In this case the Board dismissed the petition, which the debtor respondents filed on the 18 September, 1939, because of non-compliance with the provisions of Section 6. The order dismissing the petition was passed on the 11 November, 1939. A dismissal under Section 7 does not preclude a debtor from filing a fresh application and this course being open the debtor respondents adopted it five days later. The new petition was found to be in order and the Board took the steps which it was bound to take in view of the provisions of Section 8. The debtor respondents obviously did not proceed to serve their creditors or the legal representatives of deceased creditors with due diligence. The creditor who has instituted the present proceedings alleges that the debtor respondents did not do so because they intended to delay the proceedings as far as they possibly could with the object of being allowed to file a fresh petition at the end of the twelve months. The petitioner is a secured creditor and has obtained a mortgage decree against the debtor respondents. Whether there is some excuse to be found for their failure to serve the creditors or whether they deliberately neglected to do so as the result of a deep laid plot on their part matters not for the purpose of deciding the application now before the Court.