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1964 Supreme(Bom) 67
IN THE HIGH COURT OF BOMBAY
( L. M. Paranjpe J. )
LAXMIBAI and others (Defendants) Appellants
V.
.
RAMRAO MHATARJI and others (Plaintiffs) Respondents.
Advocates Appeared
For appellants -S. N. Kherdekar.
For respondents Nos. 1 to 5 -R. N. Deshpande.
Important Points
Subject
Property Law - TRANSFER OF PROPERTY
Act Referred
Headnote
DEBT RELIEF ACT - SECTION 15 (2) - C.P. AND BERAR RELIEF OF INDEBTEDNESS ACT, 1939 - INTERPRETATION AND APPLICATION OF SECTION 15 (2) - VOID TRANSFERS OF IMMOVABLE PROPERTY BY DEBTOR DURING SUBSISTENCE OF SCHEME - REQUIREMENT OF DEPUTY COMMISSIONER'S SANCTION - APPLICABILITY TO ALL IMMOVABLE PROPERTIES OF DEBTOR OR ONLY TO THOSE MENTIONED IN SCHEME - DISTINCTIONS BETWEEN DEBT CONCILIATION ACT AND DEBT RELIEF ACT - PURPOSE AND EFFECT OF SECTION 15 (2) - PROTECTION OF CREDITORS' INTERESTS - NO CLOG ON DEBTOR'S RIGHT TO DEAL WITH PROPERTY - ANALOGY TO DEBT CONCILIATION ACT INAPPLICABLE - DECISIONS RELATING TO SECTION 15 (3) OF DEBT CONCILIATION ACT AND SECTION 15 (2) OF DEBT RELIEF ACT DISCUSSED.
Fact of the Case:
Plaintiffs, sons of the original defendant, filed a suit for possession of four fields against the defendant-appellant, Yedusingh. Two of the fields were specifically mentioned in the scheme framed by the Debt Relief Court under section 11 (1) of the Debt Relief Act, and their sales were held void as they were taken by Yedusingh during the pendency of the scheme without obtaining prior permission from the Deputy Commissioner. The dispute arose regarding the other two fields, which were not mentioned in the scheme. Yedusingh contended that section 15 (2) of the Debt Relief Act should be read as applying only to transfers of immovable property mentioned or included in the scheme, arguing that applying the section literally would militate against the purpose of the Act and amount to a clog on the debtor's right to deal with his property.
Finding of the Court:
The court held that section 15 (2) of the Debt Relief Act applied to every transfer of immovable property made by a debtor during the subsistence of a scheme framed under the Act, regardless of whether the property was mentioned or included in the scheme. The court rejected the argument that the section should be read as containing additional clauses limiting its applicability to certain types of property, as this would amount to amending the legislation rather than interpreting it. The court also distinguished the Debt Relief Act from the earlier Debt Conciliation Act, highlighting several material distinctions between the two Acts and their provisions.
Issues: 1. Whether section 15 (2) of the Debt Relief Act applies only to transfers of immovable property mentioned or included in the scheme framed under section 11 (1) of the Act. 2. Whether the provisions of the Debt Conciliation Act can be analogously applied to interpret section 15 (2) of the Debt Relief Act.
Ratio Decidendi: 1. The court interpreted section 15 (2) of the Debt Relief Act as applying to every transfer of immovable property made by a debtor during the subsistence of a scheme framed under the Act, regardless of whether the property was mentioned or included in the scheme. The court held that the language of the section was mandatory and did not permit any whittling down of its provisions to make them applicable only to certain kinds of property. 2. The court rejected the analogy to the Debt Conciliation Act, finding several material distinctions between the two Acts and their provisions. The court noted that the Debt Relief Act did not require the mention or inclusion of a debtor's property in the scheme, unlike the Debt Conciliation Act, which mandatorily required the inclusion of all the debtor's property in the agreement to be registered.
Final Decision: The court dismissed the appeal, upholding the decrees of the lower courts that declared the transfers of the debtor's fields in violation of section 15 (2) of the Debt Relief Act as void.
2. The question of interpretation of section 15 (2) has arisen under the fo1lowing circumstances. The plaintiffs Nos. 1 to 4 are the sons of the original defendant No. 2 one Mhatarji who was allowed to be transposed as the plaintiff No.5 at the appellate stage. This Mhatarji and his two brothers applied under section 6 of the Debt Relief Act for scaling down their debts. The Presiding Ofticer, Debt Relief Court, Buldana, framed a scheme in accordance with section 11 (1) of the Debt Relief Act with respect to the debts of Mhatarji and his brothers, on 28th August 1941. By this scheme, the debts of the creditor Shridhar Govind were ordered to be paid in 26 annual instalments and consequently the scheme was to remain in force for 26 years. At the foot of the scheme, certain fields including two of the suit fields, survey Nos. 213/3 -B and 213/ -A, were mentioned among the property belonging to the judgment -debtor. How -ever, fields survey Nos. 213/4 and 213/2 which also were the subject -matter of the suit were not mentioned in that list of the debtors property in the scheme.
Field survey No. 213/4 was acquired by Mhatarji by inheritance from his aunt in the year 1944, that is about three years after the scheme was framed, but the date and the mode of acquisition of field survey No. 213/2 by Mhatarji are •,not disclosed. During the subsistence of this scheme, Mhatarji sold field survey
No.213/1 -A to one Bhausingh on 2nd April 1947 for Rs. 400 and Bhausingh subsequently sold that field to the defendant -appellant Yedusingh on 3rd June 1952. Mhatarji sold field survey No. 213/3.B and a part of field survey No. 213/4 to the appellant Yedusingh for Rs. 2,000 on 18 -12 -1948. Similarly, Mhatarji sold field survey No. 213/2 and the remaining portion of field survey No. 213/4 to the appellant Yedusingh for Rs. 500 on 14.4.1951.
3. The four sons of Mhatarji filed the present suit against the appellant Yedusingh for possession of field survey Nos. 213/1.A, 213/3.B, 213/2 and
213/4, firstly on the ground that those sales were void as having been effected without permission from the Deputy Commissioner under section 15 (2) of the Debt Relief Act and secondly, on the ground that the sales were without legal necessity. The appellant Yedusingh had denied that the fields were the property of the joint family of the plaintiffs and their father Mhatarji. According to him, these fields were the self -acquired property of Mhatarji and the sales were justified by legal necessity as per details stated by him. The scheme framed by the Debt Relief Court was not acted upon and was allowed to lap18 and, therefore, the sales of these fields without the Deputy Commissioners per. mission were not void.
4. Holding that the impugned sales taken by Yedusingh during the pend. ency of the debt relief scheme without obtaining permission from the Deputy Commissioner under section 15 (2) of the Debt Relief Act were void, the learned trial Judge _decreed the claim for possession in favour of the four sons of Mhatarji. The learned Assistant Judge, Khamgaon, affirmed the decree in favour of the four sons of Mhatarji, who were the original plaintiffs, as also in favour of the transferor Mhatarji, who was allowed by him to be transposed as the plaintiff No.5. The defendant Yedusingh has come up to this Court to challenge the correctness and legality of these decisions by the lower Courts.
5. In view of the admitted faot that the fields survey Nos. 213/1 -Aand 213/3 -B were specifically mentioned in the scheme, Exhibit pol, framed by the Debt Relief Court under section 11 (1) of the Debt Relief Act, Mr. Kherdekar did not want to question or challenge the findings of the Courts below that the sales of these two fields were vo
