CHAMPAKLAL CHHABILRAI BHATT Vs. COMMONWEALTH ASSURANCE CO LTD

JUDGEMENT

(1.) This revision application has been referred to a division bench by Mr. Justice Weston as it involves a somewhat difficult) question of the interpretation of Section 19 of the Bombay Agricultural Debtors Relief Act of 1947 as to under what conditions a pending suit must be transferred from the ordinary civil Court to a special Court. The suit out of which the present revision application arises was filed on a promissory note executed by defendant No. 2 personally and on behalf of Messrs. Dave & Company, Ahmedabad, who are defendant No. 1 and by defendant No. 3. Defendant No. 2 admitted the execution of the note, but contended that the promissory note was taken from him by undue influence, fraud and misrepresentation. The suit was filed in the Court of the Civil Judge, Senior Division, Poona. After the written statement was filed, defendant No. 2 made an application asking that the suit be transferred to the Debt Adjustment Board at Ahmedabad where this defendant was said to reside claiming that he was a debtor within the meaning of the Bombay Agricultural Debtors Relief Act, and that his debts did not exceed Rs. 15,000. The learned trial Judge declined to order the transfer under Section 19 of the Act being of the opinion that as defendant No. 2 denied the very existence of the debt, he could not properly claim to be a debtor until the suit debt was proved against him. The learned Judge remarked that on this being done, the transfer of the suit would have to be considered. He accordingly filed the application and made no order as to costs. It is against this order that this application has been filed in revision.

(2.) A Debt Adjustment Board was created at Ahmedabad under Bombay Act XXVIII of 1939 on February 1, 1947. This Act was repealed by Bombay Act XXVIII of 1947 which came into force on May 27, 1947. Under Section 4(1) of the Bombay Agricultural Debtors Relief Act Act XXVIII of 1947 of 1947, any debtor ordinarily residing in any local area for which a Board was established under Section 4 of the repealed Act on or after the 1 of February 1947, or his creditor may make an application before the 1 August 1947 to the Court for the adjustment of his debts. As the Board in this ease was established on February 1, 1947, any application made to the Board either by the creditor or by the debtor had to be made before August 1, 1947. The suit against the defendants was filed on October 25, 1946, and the application for the transfer of the suit on the ground that defendant No. 2 was a debtor and that his total debts did not aggregate to more than Rs. 15,000 was filed on July 29, 1947. Under Section 19(1), all suits, appeals, applications for execution and proceedings other than revisional in respect of any debt pending in any civil or revenue court shall, if they involve the questions whether the person from whom such debt is due is a debtor and whether the total amount of debts due from him on the date of the application exceeds Rs. 15,000 be transferred to the Court. By an amendment of the Act by Bombay Act LXX of 1948, the words "on the date of the application" have been deleted. The question was argued before Mr. Justice Weston as to whether in the absence of an application having been before the Board by a debtor or a creditor under Section 4 of the Act an application for a transfer of the suit to the Board could be maintained. The learned Judge had held in Parsappa Channappa V/s. Madeppa Basappa Bugade (1948) Civ. Appln. No. 1222 of 1947 on June 29, 1948 (Unrep.) that a transfer under Section 19 of the Act may be made only when an application under Section 4 of the Act has in fact been made. The learned Judge based his decision on the words "on the date of the application" occurring in Sub-section(1) of Section 19. In the present revision application, the learned Judge expressed his view that although he was not very happy about his interpretation of Section 19(1) in Parsappa Channappa's case, there was a good deal to be said for the view that Section 4 was the dominating section of the Act. He further went on to observe: No suit, appeal or application for execution ordinarily involves the questions whether a person from whom a debt is due is a debtor under the Bombay Agricultural Debtors Relief Act, or that of the total amount of debts due from him does not exceeed a particular amount, and, if au ordinary suit or other proceeding is to be made to involve these questions, it would seem arguable that this must be done by express pleading. The application to be made under Section 4 by a debtor has to be in a prescribed form when the debtor has to give details, of his debts and of his assets. It Would not seem therefore in accord with the policy of the Act that, when seeking a transfer under Section 19, all that a debtor has to do is to make, as in the present case, a mere application asserting that he is a debtor, a statement apparently inconsistent with his pleading in the suit, and that his debts do not exceed Rs. 15,000, and that he should not be required to give the details which are required to be given in any application under Section 4. He therefore referred the following questions to a division bench: (1) Whether without making an application under Section 4 a debtor can apply to a Court for transfer, under Section 19, of a pending matter which does not of itself involve the questions set out in Section 19? (2) If the answer is in the affirmative, whether a simple demand for transfer is sufficient?

(3.) Section 19(1) of the Act requires that all suits, appeals, applications for execution and proceedings, including revision applications under the Dekkhan Agriculturists Relief Act, 1879, in respect of any debt pending in any civil or revenue Court shall, if they involve the questions whether the person from whom such debt is due is a debtor and whether the total amount of debts due from him on the date of the application exceeds Rs. 15,000, be transferred to the Court, which has taken the place of the Board by reason of the new Bombay Agricultural Debtors Relief Act of 1947. This section does not in terms require that before the transfer can be ordered there must be in existence an application before the Court. Indeed it would seem from the wording of the section itself that it is within the power of the Civil or Revenue Court suo motu to transfer all suits, appeals, applications for execution, etc. then in respect of any debt pending before it to the special Court , if they involve the question whether the person from whom a debt is due is a debtor and whether the total amount of debts due from him exceeds Rs. 15,000. Ordinarily therefore if the Court were to act suo moto, the Civil or Revenue Court would not be in a position to know whether any application is pending before the Court, and if that is the proper construction of Section 19(1), it would appear that the existence or otherwise of an application under Section 4 before a special "Court" is immaterial, so far as the question of transfer of the pending suits to that Court is concerned. Mr. Justice Weston in deciding Parsappa Channappa's case was largely impressed by the words on the date of the application" occurring in Sub-section (1) of Section 19 as it stood before its amendment by Act LXX, of 1948, and he considered that the existence of these words meant that there must be an application under Section 4 pending before the special Court. He thought that the question of a transfer in a suit, appeal or an application can arise only when there has been an application under Section 4. But these words, which induced the learned Judge to take the view that an application under Section 4 must be pending before the special Court before a transfer could be ordered under Sub-section(l) of Section 19, have been deleted, and if the learned Judge had to decide that application under the amended Act, he would probably have taken a different view, for he realised that in the view that he took Section 19(5) of the Act becomes meaningless. Under Sub-section (3) of Section 19 "when any suit, appeal, application or a proceeding is transferred to the Court under Sub-section (1) or Sub-section (2), the Court shall proceed as if an application under Section 4 had been made to it." The words "as if an application under Section 4 had been made to it" would clearly indicate that a transfer can be ordered even if such an application is not pending before it. If an application was pending before the special Court and included the debt in respect of which a suit was pending before the ordinary civil or revenue Court, then it was within the power of the special Court under Sub-section (2) to give a notice thereof to such civil or revenue Court, and on receipt of such notice, such other Court was bound to transfer the suit, appeal or application to the special Court. Sub-section (3) of Section 19, therefore, clearly contemplates the transfer of a suit, appeal or any other proceeding from an ordinary civil or revenue Court to a special Court, even when an application under Section 4 is not pending before such special Court. We are therefore of opinion that it is not necessary that an application under Section 4 of the Act should be pending before a special Court before a suit, appeal or an application for execution pending before a civil or revenue Court could be transferred to such special Court on the ground that they involve the questions whether the person from whom the debt is due was a debtor and whether the total amount of his debts exceeds Rs. 15,000. This very point came up before Mr. Justice Bavdekar in Kanku V/s. Krishna Joti (1947) C.R.A. No. 449 of 1947, decided by Bavdekar J., on December 17, 1947 and he expressed his opinion as follows: I am rather inclined to think that Section 37(1) was intended to meet the circumstances in which no application for adjustment of debts was made to a Board, because the time or the last date for making an application had not yet arrived. The Act obviously intended that both the creditor as well as the debtor should have a certain amount of time after the Board was established under the Act, and if Section 37(1) had not been enacted, if a debtor wanted to have a suit pending against him transferred, he would have been hurried to make in an application even before the last date upon which it could be made. Section 37(1) seems to have been enacted in order to meet those cases in which an application had not been made to a Board.