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1977 Supreme(Kar) 123

Karnataka High Court
GANESH BISTO DESAI - Appellant
Versus
NAGESH BISTO DESAI - Respondent
Decided On : 05-30-77
E.F.A. : 41 of 1976

Advocates:
K.I.BHATTA, K.S.Savanur

To obtain relief under the Karnataka Debt Relief Act, a person must satisfy the statutory standards of a 'debtor' under Section 3 and show that the liability arises from a 'debt advanced' under Section 4.

Headnote:

Karnataka Debt Relief Act - Interpretation of Sections 3 and 4

Fact of the Case:

The appellants, judgment-debtors in a special execution case, claimed relief under the Karnataka Debt Relief Act, 1976. The court held that they were not 'debtors' within the meaning of Section 3 of the Act, and even if they were, they would not be entitled to relief under Section 4 as the liability did not arise from a 'debt advanced'.

Finding of the Court:

The court found that the costs sought to be recovered in the execution proceedings did not qualify as 'debt advanced' under Section 4 of the Act, and therefore, the appellants were not entitled to relief.

Issues: The main issue was whether the appellants qualified as 'debtors' under Section 3 of the Karnataka Debt Relief Act, and if so, whether they were entitled to relief under Section 4.

Ratio Decidendi: The court emphasized that to obtain relief under the Act, a person must not only show that they are 'debtors' as defined in the Act but must also show that the nature of the transaction respecting which they seek relief is one which comes within Section 4 of the Act.

Final Decision: The court concluded that the appellants were not entitled to relief under the Act, and the execution proceedings against them required to be proceeded with. The appeals were dismissed with costs.

VENKATACHALIAH, J.

( 1 ) THESE appeals by judgment-debtors 2 and 15a respectively in Special execution Case No. 277 of 1969 on the file of the Court of the Addl Civil judge, Hubli, arise out of and are directed against the order dt. 20-11-76 by which the Court below held that the appellants were not 'debtors' within the meaning of Sec. 3 of the Karnataka Debt Relief Act, 1976 (Act 25 of 1976 ).

( 2 ) THE factual antecedents are these: The respondent-decree-holder sued cut execution of the decree for costs awarded to him in Special suit No. 35 of 1950 affirmed by this Court in RA. 157of 1956, and the appellants, who were amongst the judgment-debtors, filed objections to the executability of the decree against them on the ground that they were 'debtors' within the meaning of S. 3 (c) of Act 25 of 1976 and that accordingly their liability under the decree must be deemed to have been wholly discharged. In the enquiry held in that behalf, the son of the decree-holder tendered evidence and accepting this evidence, the court-below held that both, the appellants were not 'debtors' within the meaning of S. 3 (c) of the said Act 25 of 1976. It is the correctness of this finding that is challenged in this appeal,

( 3 ) SHRI K. I. Bhatta, learned Counsel appearing for the appellants, contended that the approach of the Court-lelow to the question whether the appellants were 'debtors' within the meaning of the said Act or not, was confined to the aspect whether they were 'small farmers' which, was one of the bases on which appellants claimed the status of debtors under the Act and that the question whether appellants were entitled to that status on the ground that they belonged to the "weaker sections of the people" within the meaning of S. 3, had not been considered though the appellants had also contended before the Court-below that they were 'debtors' within the meaning of the said Act not only on the ground that they were 'small farmers' but also on the ground that their income being less than Rs. 2,400 per year, they were "persons belonging to the weaker sections of the people" who also came within the scope of the expression 'debtor' as denned in and for the purposes of the Statute. It is no doubt true that the latter aspect of the appellants' case has not been considered by the Court-below.

( 4 ) HOWEVER, Shri Savanur, learned Counsel for the respondent, has raised a more fundamental objection and has urged that question whether the appellants were 'debtors' within the meaning of s. 3 of the Act or not, would not be of any practical significance in the present case as, according to him, even if the appellants are 'debtors' within the meaning of S. 3 of the said Act, they would not ipso facto be entitled to any relief under the Act. The contention of Sri Savanur is that to obtain relief under the Act, a person must not only show that he is a 'debtor' as defined in the Act but must also show that the nature of the transaction respecting which he seeks relief is one which comes within Sec. 4 of the Act. Section 4 of the Act reads thus :" 4. Relief from indebtedness.-Notwithstanding anything in any law for the time being in force or in any contract or instrument having force by virtue of any such law and save as otherwise expressly provided in this Act, with effect from the date of commencement of this section,- (a) every debt advanced before the commencement of this section including the amount of interest, if any, payable by the debtor to the creditor shall be deemed to be wholly discharged; (b) no civil court shall entertain any suit or proceeding against the debtor for the recovery of any amount of such debt including interest, if any:. . . . . . . . " (Rest of the Section omitted as unnecessary ). To be entitled to relief under the Act, appellants must show that two conditions coalesce. The first is that they must show that they are debtors by the statutory standards. Secondly, they must show that the transaction respecting which the




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