Case: Jt. Family Of Mukund Das Raja Bhagwan Dass &amp;Sons Etc Vs. State Bank Of Hyderabad

11 was the basic provision enabling the creditor or the debtor to move the Board under the Act for settlement of debts. The Act also recognised other modes which would be tantamount to the making of such an application to the Board so as to confer jurisdiction on it to settle debts in accordance with the procedure prescribed by the Act. Section 25 embodied one of these modes. If a suit or appeal or execution proceeding etc. was pending in relation to such debt in any court it had to be transferred to the Board. The Board would proceed to deal with it as though an application under S. 11 had been made. The suit or other proceedings had to relate to a debt in respect of which an application under S. 11 could have been made to the Board. It was also necessary that the proceedings should be pending in the court on the date notified. This would follow from the provisions of S. 11. There could be no difficulty about proceedings which were taken in a court subsequent to an application made to the Board under S. 11. That proceeding had necessarily to be transferred on the notice given by the Board. The point which was canvassed before the Full Bench of the High Court was that the expression "pending" occurring in S. 25 was of wider amplitude and covered all cases of debts whether incurred before or subsequent to the notified date. The High Court, after an exhaustive discussion of the various provisions of the Act, came to the conclusion that there were clear indications in them that the debts to be determined and scaled down by the Board were only such debts as were existing on the date of the application provided for by S. 11. This is what was finally observed:"Thus the entire scheme of the Act makes it abundantly clear that matters concerned with the debts prior to the date of application alone (which date of course cannot extend beyond the notified date under section 11) are within the cognizance and competence of the Board. It follows that only cases relating to such debts and no other debts are liable to be transferred to it under Section 25 (1)."5. In our judgment the High Court came to the correct conclusion that the expression "pending" in Section 25 (l) must relate to proceedings which were pending on the notified date and could not take in any proceedings which came to be instituted after such date. The other condition for the applicability of S. 25 was that the suit or other proceedings must be in respect of a debt with regard to which a jagirdar or the creditor could make an application to the Board on or before the date which the Government had notified for settlement of debts due by the jagirdar. A close examination of S. 22 puts the matter beyond controversy. If no application had been made under S. 11 within the period specified therein or for recording a settlement made under S. 15 every debt due by the debtor was to stand extinguished. In a case of the present kind a debt would have stood extinguished if no application had been made under S. 11 within the specified period. Thus the material date would be the one notified by the Government under S. 11 and only those debts which were due on or before that date from a debtor or in respect of which any proceedings were pending in a court or before the Board could be the subject-matter of settlement by the Board. It may be mentioned that in Babibai Thakuji v. Fazluddin Usmanbhai, ILR (1954) Bom 535 = (AIR 1954 Bom 282 ) a similar provision of the Bombay Agricultural Debtors Relief Act on which the provisions of the Act were modelled came up for consideration and it was said with reference to Section 19 (1) of that Act that only those suits were liable to be transferred which were pending on the date when an application for adjustment of debts could have been made under S. 4 (which corresponded to S. 11 of the Act). In other words, if a suit was filed after the time to make an application for adjustment of debts had expired such a suit was not liable to be transferred. Since both the conditions for the applicability of S. 25 of the Act were not satisfied in the present case the decision of the High Court must be upheld and the appeal (C. A. 1138/66) dismissed. In order to avoid further proceedings which will entail needless expense learned counsel for the parties have agreed that the judgment-debtors will pay the decretal amount in four equal annual instalments. The first instalment which will represent 1/4th of the decretal amount shall be deposited in the executing Court on or before the first January 1971. The subsequent instalments each year shall be similarly deposited on or before first January. In case of failure on the part of the judgment-debtors to make the deposit of anyone of the instalments in time the entire amount due shall become recoverable at once. As and when the said deposit is -made the decree-holder will be entitled to withdraw the same. An order is directed to be made in terms of this settlement between the parties.6. Civil Appeals Nos. 1139 and 1140/66 arise out of the decree in C.C.C.A. Nos. 63 and 66 of 1959 dated February 1, 1963 in O.S.No.37 of 1958 So far as the appeal against the Bank-is concerned there is no merit in it because it has been proved and that finding could not be successfully assailed before us that the debt in question was a post-notification debt. In other words it came into existence after June 30, 1953 which was the date notified by the Government as the last date for settlement of debts due by jagirdars by an application made under S. 11 of the Act.

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

Explanation:
0[ds]5. In our judgment the High Court came to the correct conclusion that the expression "pending" in Section 25 (l) must relate to proceedings which were pending on the notified date and could not take in any proceedings which came to be instituted after such date. The other condition for the applicability of S. 25 was that the suit or other proceedings must be in respect of a debt with regard to which a jagirdar or the creditor could make an application to the Board on or before the date which the Government had notified for settlement of debts due by the jagirdar. A close examination of S. 22 puts the matter beyond controversy. If no application had been made under S. 11 within the period specified therein or for recording a settlement made under S. 15 every debt due by the debtor was to stand extinguished. In a case of the present kind a debt would have stood extinguished if no application had been made under S. 11 within the specified period. Thus the material date would be the one notified by the Government under S. 11 and only those debts which were due on or before that date from a debtor or in respect of which any proceedings were pending in a court or before the Board could be the subject-matter of settlement by the Board. It may be mentioned that in Babibai Thakuji v. Fazluddin Usmanbhai, ILR (1954) Bom 535  = (AIR 1954 Bom 282 ) a similar provision of the Bombay Agricultural Debtors Relief Act on which the provisions of the Act were modelled came up for consideration and it was said with reference to Section 19 (1) of that Act that only those suits were liable to be transferred which were pending on the date when an application for adjustment of debts could have been made under S. 4 (which corresponded to S. 11 of the Act). In other words, if a suit was filed after the time to make an application for adjustment of debts had expired such a suit was not liable to be transferred. Since both the conditions for the applicability of S. 25 of the Act were not satisfied in the present case the decision of the High Court must be upheld and the appeal (C. A. 1138/66) dismissed. In order to avoid further proceedings which will entail needless expense learned counsel for the parties have agreed that the judgment-debtors will pay the decretal amount in four equal annual instalments. The first instalment which will represent 1/4th of the decretal amount shall be deposited in the executing Court on or before the first January 1971. The subsequent instalments each year shall be similarly deposited on or before first January. In case of failure on the part of the judgment-debtors to make the deposit of anyone of the instalments in time the entire amount due shall become recoverable at once. As and when the said deposit is -made the decree-holder will be entitled to withdraw the same. An order is directed to be made in terms of this settlement between the parties.Civil Appeal No.1140 of 1966 which has been preferred by the Bank involves a very short point. According to the decree of the High Court the plaintiff, namely the Bank was to proceed and execute the decree against the second defendant in the first instance and was to proceed against the first defendant only afterwards for such balance amount which could not be realized from the second defendant. It is not disputed that the liability of the first and the second defendant was joint and several and the decree of the High Court proceeded on the basis of some equitable relief which was sought for and granted to the first defendant. We are unable to hold and no such principle or statutory provision has been pointed out to us that any such equitable relief could be granted in. a suit of the nature filed by the Bank against the two defendants.Civil Appeals Nos. 1139 and 1140/66 arise out of the decree in C.C.C.A. Nos. 63 and 66 of 1959 dated February 1, 1963 in O.S.No.37 of 1958 So far as the appeal against the Bank-is concerned there is no merit in it because it has been proved and that finding could not be successfully assailed before us that the debt in question was a post-notification debt. In other words it came into existence after June 30, 1953 which was the date notified by the Government as the last date for settlement of debts due by jagirdars by an application made under S. 11 of the Act.