RANCHHOD DAHYA Vs. MUSAJIBHAI

JUDGEMENT

(1.) This is an application in revision by the petitioners, who were the defendants in the lower Court, against an order made by the Second Class Subordinate Judge of Bulsar in a suit filed against the petitioners by the opponent. The suit was for possession of certain property which the opponent alleged had been sold to . him by the petitioners and one Bai Mani, and for rent due under a registered rent-note passed by the petitioners to the opponent on February 19/1931. The suit was filed on September 26, 1941. On January 1, 1942, the Bombay Agricultural Debtors Relief Act was made applicable to the Bulsar Taluka of the Surat District and a Debt Adjustment Board was established under Section 4 of the Act. On June 29, 1942, the petitioners applied to the Debt Adjustment Board under the Act. On July 3, 1942, they applied to the Court under Section 73 of the Act that the hearing of the suit should bet stayed till the application to the Debt Adjustment Board had been decided, and on the same day the learned Judge made an order staying the suit. Thereafter on August 6, 1942, it was decided by this Court in Dadiba Arsiwalla V/s. Thakuji Ramji (1942) 44 Bom. L.R. 865 that the Bombay Agricultural Debtors Relief Act does not provide that on an application being made under Section 17 Section 73 comes into operation, and that in respect of pending suits the jurisdiction remains in the Court under Section 37 to determine whether the applicant is a debtor within the meaning of the Act and whether his debts are below Rs. 15,000. As a result of this decision the petitioners applied to the trial Colurt on March 23, 1943, to raise an issue regarding their status as debtors under the Bombay Agricultural Debtors Relief Act. Before that they had taken an adjournment for paying court-fees for redemption. The learned Judge granted the application and raised an issue as regards the status of the defendants. This was on April 27, 1943. Thereafter another decision of this Court under the Act was reported in In re Reference under Order XLVI, C. P. C., (1942) 45 Bom. L.R. 445 in which it was held that in a suit relating to a transaction which is said by one side to be a mortgage and by the other side to be a sale, that question must be determined by the Court before transferring the suit to the Debt Adjustment Board under Section 37 of the Bombay Agricultural Debtors Relief Act, 1939.

(2.) In the present suit it was the contention of the defendants that the real transaction between the parties was not one of sale but of mortgage. The opponent thereupon applied toi the Court for raising an issue regarding the nature of the transaction in suit and for deciding it before the issue about the defendants status as debtors under the Agricultural Debtors Relief Act. The application was opposed by the defendants, but the learned Judge allowed it and ordered that the question whether the transaction was a sale or a mortgage should be decided first, and he directed the defendants to pay court-fees for redemption within fifteen days. Against this order the defendants have come in revision.

(3.) The main contention of the applicants is that under Section 73 of the Act the Court was bound to stay the suit as soon as it was informed that an application had been made to the Debt Adjustment Board by the defendants. The suit had admittedly been filed before the that Adjustment Board was established for the Bulsar Taluka. Section 73 provides that except as otherwise provided by the Act, no civil Court shall entertain or proceed with any suit pending before the Board or the Court under the Act. The question before us is whether under this section the pending suit should have been stayed. Section 85(2) of the Act provides that on the date on which a Debt Adjustment Board is established for any local area under Section 4, the Dekkhan Agriculturists Relief Act, 1879, shall cease to have any force in that area. -Sub- section (2) provides that nothing in Sub-section (1) shall be deemed to affect, in regard to persons who are debtors and in respect of whose idebts an application under Section 17 can be made, any right, - title, obligation or liability already acquired, accrued or incurred, before the aforesaid date (i.e. the date on which a Board is established) and any remedy or proceeding in respect of such right, title, obligation or liability, or anything done in the course of any proceeding pending in any Court on the aforesaid date, and any such remedy or proceeding may be enforced, instituted or continued, in so far as the enforcement, institution or continuance is not inconsistent with the provisions of the Act. The proviso to the section says that nothing in it shall in any way affect the transfer under Section 37 of any suits or proceedings to which such debtor was a party. Section 37 provides that all pending suits and applications for execution before any civil Court in which the question involved is the recovery of any debt from a person who is a debtor under the Act shall, if the total amount of debts due from such debtor is not more than Rs. 15,000, be transferred to the Board to which an application for adjustment of debts of such person under Section 17 lies. Reading the three sections together it appears that Section 73 is not applicable to suits or applications for execution which are pending on the date on which a Board is established for that particular area. To hold otherwise would conflict with the provisions of Section 85 which expressly says that pending proceedings shall be continued. Section 73 would apply to all suits and applications for execution filed after the establishment of a Board in any particular area, and if after the filing of a suit or of art application for execution in such area an application is made to the Debt Adjustment Board, the Court would be bound to stay further proceedings. But as. regards suits filed prior to the establishment of the Board, and which were pending at the date of the establishment of the Board, Section 37 read with Section 89 provides that it is for the Court to decide whether the defendant is a debtor within the meaning of the Act and whether his debts do not exceed Rs. 15,000 ; and if the Court so finds, it is bound to transfer the suit to the Board. We agree with respect with the remarks of Kania J. in Dadibd Arsiwalla v. Thakuji Ramji that (p. 867) :- In respect of the pending suits the jurisdiction remains in the Court [under Section 37] to determine whether the applicant is a debtor within the meaning of the Act and whether his debts are below the amount of Rs. 15,000.