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1952 Supreme(Bom) 141

HIGH COURT OF BOMBAY
CHAGLA, J.
Keshav P. Ganashyam
Versus
Waman Rangaji
Civil Revn. Appln. No.1333 of 1951
Decided On : 12-11-1952

Advocates:
T.N. Walawalkar, for Petitioner; R.G. Samant, for Opponent.

An award made under the Bombay Agricultural Debtors Relief Act is binding on all creditors, including those who were not parties to the award.

Headnote:

BOMBAY AGRICULTURAL DEBTORS RELIEF ACT - S.15 - DEBT EXTINGUISHED - AWARD UNDER THE ACT - BINDING ON ALL CREDITORS - NOTICE TO CREDITORS - S.14 - GENERAL NOTICE - TO BE GIVEN TO ALL CREDITORS - AWARD - NOT A JUDGMENT IN REM - BUT BINDING ON ALL CREDITORS.

Fact of the Case:

A creditor filed a suit in the Court of Small Causes to recover a debt. The defendant contended that the debt was extinguished under S.15 of the Bombay Agricultural Debtors Relief Act, as an award had been made in his favor by the Bombay Agricultural Debtors Relief Act Court and the plaintiff's debt was not included in that award. The plaintiff argued that the award was not binding on him as he was not a party to it and that he should be allowed to challenge the finding that the defendant was a debtor.

Finding of the Court:

The court held that the award made by the Bombay Agricultural Debtors Relief Act Court was binding on all creditors, including the plaintiff, even though he was not a party to the award. The court reasoned that the purpose of the Act was to give relief to agricultural debtors by adjusting all their debts and that this would be impossible if creditors were allowed to challenge the findings of the special Court.

Issues: Whether the award made by the Bombay Agricultural Debtors Relief Act Court was binding on the plaintiff, who was not a party to the award.

Ratio Decidendi: The court held that the award was binding on all creditors, including the plaintiff, because: * The purpose of the Act was to give relief to agricultural debtors by adjusting all their debts. * This would be impossible if creditors were allowed to challenge the findings of the special Court. * The Act provided for notice to be given to all creditors and an opportunity for them to come forward and prove their debts. * If a creditor failed to do so, the award may be ex parte against him, but it would still be binding upon him.

Final Decision: The court dismissed the plaintiff's revision application and held that the debt was extinguished under S.15 of the Bombay Agricultural Debtors Relief Act.

Judgement

CHAGLA, C.J. :- A very interesting and important question under the Bombay Agricultural Debtors Relief Act arises on this revision application. The petitioner filed a suit in the Court of Small Causes, Sawantwadi, to recover a debt, and the learned Judge held that the debt was extinguished under S.15, Bombay Agricultural Debtors Relief Act and non-suited the plaintiff; and the point that has been urged before me by Mr. Walawalkar on behalf of the plaintiff is that the learned Judge was in error in preventing the plaintiff from contending that the defendant was not a debtor within the meaning of the Bombay Agricultural Debtors Relief Act and therefore the provisions of S.15 would not apply.

2. In this case an application for adjustment of debt was made by a creditor under Section 4, and on that application the Court held that the defendant was a debtor and passed an award adjusting the debts of the defendant. The defendants contention before the learned Small Causes Court Judge was that inasmuch as an award has been made in his favour by the Bombay Agricultural Debtors Relief Act Court and inasmuch as the debt of the plaintiff was not included in that award, the debt is extinguished under Section 15. Mr. Walawalkars contention is that the award made by the Bombay Agricultural Debtors Relief Act Court was not binding on him as he was not a party to that award, and therefore the adjudication before the Bombay Agricultural Debtors Relief Act Court that the defendant was a debtor was an adjudication which was not binding and conclusive as against him and it was open to him to challenge that finding and to ask the Court before applying Section 15 to be satisfied that the defendant was a debtor. Under S.15, debts mentioned in that section are to be extinguished and one of the debts which is mentioned is a debt in respect of which a statement is not submitted to the Court by the creditor in compliance with the provisions of Section 14, and turning to S.14 it provides for service of notices on debtors and creditors. Under sub-S.(1), when an application for adjustment of debts is received by a Court, a notice is to be served upon the debtor, unless the debtor is himself an applicant, and upon every creditor, other than the creditor who himself makes an application, whose names and addresses are given in the application, and sub-cl.(b) deals with a general notice, which notice is to be given to the debtor and all creditors to submit a statement in the prescribed form within one month of the date of the service of the notice or publication of the general notice, whichever is later. Mr. Walawalkars contention is that the general notice is to be given only to those creditors whose names and addresses are given in the application. It is not possible to put that interpretation upon the expression "all creditors" used in sub-cl.(b), because if the intention of the Legislature was that general notice should be given only to those creditors referred to in sub-cl.(a), then the language used by the Legislature would not have been "all creditors", but either "such creditors" or "the creditors". But the very fact that the Legislature has used the general expression "all creditors", and has not specified or limited the, class of creditors to the class referred to in sub-cl.(a), makes it clear that the intention was to give a general notice for giving intimation to all creditors of the debtor. Mr. Walawalkar says that even if a general notice is given to all creditors, unless a creditor responds to that notice and files a statement and appears on the application for adjustment of debts, the ultimate award that is passed is an award between the parties to the application and a creditor who is not a party to that application or who has not answered the notice cannot be bound by that award. Mr. Walawalkar says that an award under the Bombay Agricultural Debtors Relief Act is not a judgment in rem within the meaning of S.41, Evidence Act and there




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