Case: Indian &amp; General Investment Trust Ltd Vs. Shri Purna Chandra Mardaraj &amp; Co

principles in Cls. (a) to (f) of sub-s. (2) of S. 20, as to how exactly the calculation has to be made. There is a1so a slight difference in the method of calculation adopted by the Money-Lenders Act and the Abolition Act. But notwithstanding these circumstances, we are of opinion that, in order to determine the principal amount legally and justly due to each creditor as laid down in S. 20 (1) of the Abolition Act, it is the duty of the Claims Officer to find out whether, in respect of a Claim that is made by a creditor, there is a legal impediment for recognising the same, i.e., whether the claim is such which will be recognised by a Judicial Tribunal. 25. The legislature emphasises upon this aspect even in S. 18 (1) (a) of the Abolition Act. The purpose of a claim being made by a secured creditor, under S 18 (1) (a) is, as we have already, pointed out, for the purpose of determining the amount of debt legally and justly payable to each creditor in respect of his claim. The same idea again, reiterated by the legislature in Section 20 (1) of the Abolition Act when it makes it obligatory on the Claims Officer to determine the principal amount, legally and justly due to each creditor. No rules, as contemplated under S. 20 (1) of the Abolition Act, have been brought to our notice. The expression legally and justly due must, certainly, in our opinion, mean that before a claim is recognized by the Claims Officer he must be satisfied that the principal amount covered by that claim is legally and justly due, i.e., that such a claim, if sought to be enforced in a Court or Judicial Tribunal, will find recognition on the basis that it does not suffer from any legal infirmity. 26. In this case, even according to the appellant, in respect of the principal amount of Rs. 77,500 advanced under the mortgage of December 18, 1906, admittedly, a sum of Rs. 1,77,349-18-0 has been received by him as interest. This amount is more than two times the principal amount advanced under this mortgage. If, in spite of this, the present claim had been made for recovery of further amounts, on the basis of this mortgage, by the appellant, in any Court, it is needless to state that the Court would have applied the provisions of the Money-Lenders Act. By applying Ss. 10 and 11 of this Act, the Court would have dome to the conclusion that the appellant is not entitled to recover any more amounts inasmuch as the entire claim must be considered to have been satisfied by the respondent, having paid a sum of Rs. 1,77,349-18-0 by way of interest. That means, the Court would have come to the conclusion that no further amounts, by way of principal, are legally and justly due to the appellant, and, quite naturally, the further finding would be that no interest at all is due. If no Court would have recognized the present claim of the appellant, the same principles must be applicable when the Claims Officer is also called upon, under S. 20 (1) of the Abolition Act, to determine the principal amount legally and justly due. For the purpose of determining whether the principal amount is legally and justly due, he would be perfectly justified in relying on any provisions of other statutes bearing upon that subject - in this particular case, the provisions of the Money-Lenders Act. 27. Mr. B. Sen, learned counsel, has urged that in order to consider a claim made by the creditor, the jurisdiction of the Claims Officer is restricted, by the various provisions contained in Cls. (a) to (f) of Section 20 (2) of the Abolition Act. We are not inclined to accept this large contention of the learned counsel for the appellant. For instance, if a plea of discharge is raised by debtor in a claim proceeding, or, if a plea is raised by a debtor that the claim is barred by the law of Limitation, no provision is made in Cls. (a) to (f) of S. 20 (2) giving jurisdiction to the Claims Officer either to entertain such objection or to investigate the same. Acceptance of the contentions of the learned counse1 for the appellant will lead to this conclusion that when a claim is made under the Abolition Act, the Claims Officer will have, straightway to determine the principal amount and interest under sub-s. (2) of S. 20 without considering the question as to whether the claim is true or whether it is barred by any other law, or whether the claim is still subsisting. These are all matters which, in our opinion, properly arise for consideration when a Claims Officer has to determine the principal amount under S. 20 (1) of the Abolition Act. The expression legally and justly due, occurring in S. 20 (1), clearly indicates that the first and initial duty of the Claims Officer is to find out whether any principal amount is at all due to the creditor which he is entitled to recover either in law or justly. It may be that, after arriving on this aspect, at a conclusion, one way or the other, and depending upon that decision, the Claims Officer will have to adjudicate upon the rights of the parties, having due regard to the various matters mentioned in Cls. (a) to (f) of sub-s. (2) of S. 20.We are, therefore, satisfied that the Board is correct when it held that the provisions of the Money-Lenders Act can be taken into account by the Claims Officer, under S. 20 (1) of the Abolition Act. If the provisions of the Money-Lenders Act apply, as they have been applied by the Board, there is no controversy that the claim under the mortgage of December 18, 1906, must be considered to have been extinguished and that no further amounts will be due, as held by the Board.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]We do, no doubt, see force in the contention of the learned counsel, for the appellant, that there is no specific provision in the Abolition Act making any reference to the Money-Lenders Act. We are also conscious that the Abolition Act does lay down some principles in Cls. (a) to (f) of sub-s. (2) of S. 20, as to how exactly the calculation has to be made. There is a1so a slight difference in the method of calculation adopted by the Money-Lenders Act and the Abolition Act. But notwithstanding these circumstances, we are of opinion that, in order to determine the principal amount legally and justly due to each creditor as laid down in S. 20 (1) of the Abolition Act, it is the duty of the Claims Officer to find out whether, in respect of a Claim that is made by a creditor, there is a legal impediment for recognising the same, i.e., whether the claim is such which will be recognised by a Judicial TribunalWe are not inclined to accept this large contention of the learned counsel for the appellant. For instance, if a plea of discharge is raised by debtor in a claim proceeding, or, if a plea is raised by a debtor that the claim is barred by the law of Limitation, no provision is made in Cls. (a) to (f) of S. 20 (2) giving jurisdiction to the Claims Officer either to entertain such objection or to investigate the same. Acceptance of the contentions of the learned counse1 for the appellant will lead to this conclusion that when a claim is made under the Abolition Act, the Claims Officer will have, straightway to determine the principal amount and interest under sub-s. (2) of S. 20 without considering the question as to whether the claim is true or whether it is barred by any other law, or whether the claim is still subsisting. These are all matters which, in our opinion, properly arise for consideration when a Claims Officer has to determine the principal amount under S. 20 (1) of the Abolition Act. The expression legally and justly due, occurring in S. 20 (1), clearly indicates that the first and initial duty of the Claims Officer is to find out whether any principal amount is at all due to the creditor which he is entitled to recover either in law or justly. It may be that, after arriving on this aspect, at a conclusion, one way or the other, and depending upon that decision, the Claims Officer will have to adjudicate upon the rights of the parties, having due regard to the various matters mentioned in Cls. (a) to (f) of sub-s. (2) of S. 20.We are, therefore, satisfied that the Board is correct when it held that the provisions of the Money-Lenders Act can be taken into account by the Claims Officer, under S. 20 (1) of the Abolition Act. If the provisions of the Money-Lenders Act apply, as they have been applied by the Board, there is no controversy that the claim under the mortgage of December 18, 1906, must be considered to have been extinguished and that no further amounts will be due, as held by the Board6. Under S. 18 (1) (a) of the Abolition Act, every creditor, whose debt is secured by the mortgage of or is a charge on, any estate or part thereof, which has vested in the State Government under S. 3, has to file a claim within the period mentioned therein, to the Claims Officer, for the purpose of determining the amount of debt legally and justly payable to each such creditor in respect of his claim. Though the Claim included the third mortgage dated October 21, 1935, also, there does not appear to have been much of a serious contest about the liability under that mortgage and, there both the Claims Officer, as well as the High Court, on appeal, have substantially accepted the claim of the appellant. Therefore, the rights of the parties under that mortgage do not also arise for consideration, in this appeal17. Though, in this Court, on beha1f of the. Mr. G. L. Sanghi, learned counsel, has challenged the correctness of the decision of the Board about they of S. 17 of thes Act, we do not think it necessary to go into that aspect, because we are accepting his contention that the Board was justified in holding that the mortgage has been extinguished under Ss. 10 and 11 of the