RAJA BHAIYA (CHOADHARI) (J. DS. ) v. DAULAT SINGH (CHOUDHARI) (D. HS. )
1961-08-08
S.P.BHARGAVA, T.C.SHRIVASTAVA
body1961
DigiLaw.ai
ORDER Shrivastava, J. This order governs the disposal of the connected Letters Patent Appeal No. 38 of 1960 also. Both these appeals are directed against the orders of a single Judge of this Court passed on 19-9-1960. Respondent No. 1 Choudhuri Daulat Singh and others had obtained two decrees in Civil Suit Nos. 1 of 1929 and 6 of 1932 against the appellants. Applications for execution of these decrees were filed immediately after the decrees; but the details thereof are not material. It need only be mentioned that an execution application in the first case was dismissed on payment of Rs. 500 as partly satisfied in November 1934 with the remark that a stay order passed by the Debt Conciliation Board had been received. Similarly an application to execute the second decree also was dismissed on 20-11-1934 with the Same remark. The judgment-debtors bad applied for conciliation of their debts under the C. P. and Berar Debt Conciliation Act, 1933, in the year 1933. This application was decided on 23-11-1936 when an agreement was arrived at between some of the creditors and was duly registered u/s 12 of that Act. Under the agreement the debtors were allowed to pay the dues by instalments extending upto 20-11-1956. The decree-holders Choudburi Daulat Singh and others did not agree to conciliate their debt; and as the offer made to them was fair in the opinion of the Board, a certificate u/s 15 (I) of the Debt Conciliation Act was ordered to be issued against them. On 19-9-1950 the judgment-debtor Baldeoprasad died and the decree-holders applied for substitution of the present appellants in his place. The judgment-debtors objected to the application for substitution on the ground that as a certificate u/s 15 (1) of the Act had been issued, the proceedings were barred u/s 21 of the Act. The matter went up to the High Court and it was ultimately held that mere proceedings for substitution did not amount to execution of the decree and nothing could be stayed. Accordingly, substitution was ordered. On 27-7-1957 the decree-holders filed applications for execution of both the decrees. The judgment-debtors contended that the execution of the decree was barred by time. Although no provision of the Limitation Act was specifically mentioned, presumably the objection related to section 48 of the CPC and Article 182 (I) of the Limitation Act.
Accordingly, substitution was ordered. On 27-7-1957 the decree-holders filed applications for execution of both the decrees. The judgment-debtors contended that the execution of the decree was barred by time. Although no provision of the Limitation Act was specifically mentioned, presumably the objection related to section 48 of the CPC and Article 182 (I) of the Limitation Act. The decree-holders replied by saying that they were entitled to exclude the time between 20-10-1934 and 20-11-1956 during which period the Debt Conciliation proceedings were pending and the amounts recorded as payable under the agreement registered u/s 12 (2) remained unpaid. The judgment-debtors replied by saying that no certificate u/s 15 was issued against the decree-holders at all and further stated that as the original decrees were for recovery of mesne profits, they were not ''debts" within the meaning of the Debt Conciliation Act. The executing Court negatived the contentions of the judgment-debtors and allowed the exclusion of time as claimed by the decree-holders. The execution applications were, therefore, held to be within limitation and were allowed to proceed. An appeal against the orders of the executing Court failed as also a second appeal to the High Court. The learned single Judge while dismissing the appeals granted a certificate under clause 10 of the Letters Patent. Accordingly, the judgment-debtors have filed these appeals before us. The objection that the decrees obtained by the decree-holders were not "debts" within the meaning of the Debt Conciliation Act is without any Substance. "Debt" is defined in section 2 of the Debt Conciliation Act as including All liabilities owing to a creditor in cash or kind, secured or unsecured payable under a decree or order of a civil Court or otherwise. It is true that an un-liquidated sum recoverable as damages is not a "debt" within the meaning of this definition; but if a decree is passed determining the amount payable as damages, such a decree would fall within the definition of 'debt'. In Bapu Sakharam v. Shrinandanlal 19 NLJ 16 it was held that the liability to render accounts for village profits becomes a debt when it is ascertained and becomes payable under such ascertainment. Accordingly, it was held that a decree obtained for dues recoverable for village profits was a 'debt' within the meaning of section 2 (e) of the Debt Conciliation Act. The case of mesne profits stands on the same footing.
Accordingly, it was held that a decree obtained for dues recoverable for village profits was a 'debt' within the meaning of section 2 (e) of the Debt Conciliation Act. The case of mesne profits stands on the same footing. We hold that the decree obtained on the basis of mesne profits became a debt similarly. In considering the objection whether the decree-holders are entitled to exclude the period as claimed, we shall first refer to the pleadings of the parties on this point. The judgment-debtors in their objection to the execution, filed on 29-10-1957, stated that the execution is barred by time and liable to be struck off as such. In paragraph 5 they further stated that the execution of the decree is further barred by time in view of the fact that there was DO certificate issued u/s 15 of the C. P, Debt Conciliation Act. In their reply, dated 24-1-1958, the decree holders stated that "the judgment-debtor had filed on 20-10-1934 a certificate from the Debt Conciliation Board issued to him u/s 15 (1) of the Debt Conciliation Board Act II of 1933." They further stated that "under the agreement dated 21-11-1936 between the judgment-debtor Baldeoprasad and his debtors (creditors) other than these decree-holders and Chairman and members of the Debt Conciliation Board, the debts of the judgment debtor were payable in 20 instalments from 1-6-1937 to 1-6-1956. Therefore, under sections 21 and 15 (3) of the Debt Conciliation Act, the execution of this decree was stayed from 20-10-1636 to 1-6-1856". They claimed benefit of section 15 of the Indian Limitation Act and section 23 of the Debt Conciliation Act. The record of the Debt Conciliation proceedings has been destroyed and, therefore, it is not possible for any of the parties to obtain certified copies of the certificate which was issued in the case. Exh. A-2 is a copy of the order-sheet of the Board, dated 23-11-1936, which states that the creditors Choudhri Doulatsingh etc. are unreasonable. They refuse fair terms. The creditor Shaikh Rahman also refuses to settle by his absence. Certificates u/s 15, Debt Conciliation Act shall issue against these. The instalments in respect of other creditors were fixed, the date of payment extending upto 1-7-1957. Exh. A-3 is a copy of the Civil Suit Register; the relevant portion in column 27 thereof reads as follows: Intimation received from Collector 20-9-1934/24-11-1934, Decree-holder recovered Be.
Certificates u/s 15, Debt Conciliation Act shall issue against these. The instalments in respect of other creditors were fixed, the date of payment extending upto 1-7-1957. Exh. A-3 is a copy of the Civil Suit Register; the relevant portion in column 27 thereof reads as follows: Intimation received from Collector 20-9-1934/24-11-1934, Decree-holder recovered Be. 500 in cash from judgment-debtor. Case is struck off as partly satisfied as the judgment-debtor filed stay order from Debt Conciliation Board, Coats on judgment, debtor." In the record of the connected execution, a copy of the Civil Suit Register (Exh. N.A.2) shows the following entry in column 27: On 20-10-1934 the judgment-debtor filed a certificate from the Debt Conciliation Board. The proceedings ore struck off as wholly infructuous, but the property will remain under attachment. The agreement u/s 12 of the Debt Conciliation Act between the creditors, debtors and the Chairman has also been filed. There is a recital in it about the present decree-holders saying that: No more documents from the record of the Debt Conciliation proceedings or from the execution proceedings of 1933-34 in the present case have been filed. Shri R. K. Pandey for the appellants contends that the pleadings referred to only one certificate which was said to have been issued in 1933 when the proceedings before the Debt Conciliation Board started. It does not refer to any certificate issued in 1936 at the conclusion of the proceedings and, therefore, it was not open to the decree-holders to rely on any such certificate and the finding that such a certificate was issued is without any foundation in the pleadings. Shri B. L. Seta, counsel for the respondents, on the other hand, argues that the certificate was clearly stated to be one u/s 15 (I) of the Debt Conciliation Act and the pleadings thus referred to this one only; though by a mistake the earlier stay order passed in 1933 was also mentioned. It is true that the pleadings do not, in so many words, say that the certificate was issued in 1936; but on reading the pleadings as a whole we hare no doubt that this was the intention. Further, the appellants knew it welt that the certificate meant was the certificate u/s 15 (1) and, therefore, the parties went into the evidence stage with this fact clearly before them.
Further, the appellants knew it welt that the certificate meant was the certificate u/s 15 (1) and, therefore, the parties went into the evidence stage with this fact clearly before them. As the appellants were never under a misapprehension and have filed all documents and adduced all evidence they could on the point, we hold that the matter could be considered by the Courts. We have reproduced the pleadings earlier. The order of the Board, dated 23-11-1936, was filed by the decree-holders on 25-9-1958 and issues were framed on 7-10-1958. A copy of the agreement before the Debt Conciliation Board was also filed long before the framing of the issues. Both these documents contain a reference to the fact that a certificate had been issued against the present decree-holders u/s 15 (1) of the Debt Conciliation Act. The reference to the certificate in the pleadings was obviously to this certificate and the judgment-debtors could not have understood it otherwise. The judgment-debtor Raja Bhaiya has stated as a witness that no certificate was issued after the conclusion of the Debt Conciliation proceedings in 1936, which shows what he had to deny. It has now to be seen whether such a certificate was issued at all. The Board had passed the order (Exh, A-1) holding that the decree-holder had refused a fair offer and, therefore, a certificate u/s 15 (1) should issue against him. The agreement which followed also refers to the fact that such a certificate was issued. It is to be remembered that after the passing of the order, the creditor has nothing be do in the case. The certificate is issued by the Board and is given to the debtor as a matter of routine. The record of the Debt Conciliation case has been destroyed and the decree-holders are unable to prove the issue of the certificate which is exclusively a matter in the knowledge of the judgment-debtor. The decree-holder Raghunath Singh has entered into the witness-box and said that a certificate was issued. The original judgment-debtor Baldeo Prasad, who was the applicant before the Board, died before the present execution proceedings. His son Raja Bbaiya has deposed that no certificate was issued; but he does not seem to have personal knowledge about what happened before the Board.
The decree-holder Raghunath Singh has entered into the witness-box and said that a certificate was issued. The original judgment-debtor Baldeo Prasad, who was the applicant before the Board, died before the present execution proceedings. His son Raja Bbaiya has deposed that no certificate was issued; but he does not seem to have personal knowledge about what happened before the Board. There is a presumption that when a certificate was ordered to be issued, the ministerial act of issuing it to the judgment-debtor must have been carried out and the judgment-debtor in whose interest it was to have the certificate must have taken it. There is another important circumstance which is relied upon by all the Courts for the conclusion that such a certificate was issued. After the death of the original debtor Baldeo Prasad, the decree-holders applied for bringing the present appellants on record. The decree-holders then stated that they could not execute the decree, as a certificate under Election 15 (1) was issued against them but they could apply for bringing the legal representatives of the judgment-debtor on record. This application was resisted by the appellants on the ground that the certificate u/s 15 had the effect of not only staying the proceedings for execution but also ancillary proceedings for bringing the legal representatives on record. The matter went up to the High Court and it was held that an application for bringing legal representatives on record was not an application for execution and was not barred u/s 21 of the Debt Conciliation Act (see order, dated 25-10-1956, Ex. N.A.I.). Shri R. K. Pandey contends that the production of the judgment alone was not enough to prove the admission of the judgment-debtor. It is true that an admission has to be proved by production of the document in which it is made; but that cannot be an inflexible rule. The copy of the judgment produced is enough to show the grounds which arose on the judgment-debtor's contentions and can be looked into to find out the position raised by the parties. It is clear from the judgment that the claim was resisted on the ground that the certificate u/s 15 had the effect of staying all execution proceedings including the application for bringing the legal representatives on record. It is pointed out that the admission relied on should have been pleaded so that the appellants could explain it.
It is clear from the judgment that the claim was resisted on the ground that the certificate u/s 15 had the effect of staying all execution proceedings including the application for bringing the legal representatives on record. It is pointed out that the admission relied on should have been pleaded so that the appellants could explain it. This contention is based on a misapprehension. We find from the record that when the appellants amended paragraph 5 of their objection by an application, dated 25-7-1958, the decree-holders also amended paragraph 6 of their reply by application, dated 25-8-1958. That amendment was allowed by the executing Court (vide order-sheet, dated 25-8-1958). This was before issues were framed. The appellants thus had full notice of the admission which was sought to be used against them. It was not necessary for the decree-holders to put the admission to them for explanation but it was for them to explain it. The position of a party differs from that of a witness in this respect. While a witness has to be contradicted u/s 145 of the Evidence Act by confronting him with the admission, a party has to explain it himself. All that is necessary is that he must have notice of it at the stage of pleadings from the pleadings or documents filed. The requirements were satisfied in this case and it must be held that the admission remains unexplained. This is an additional circumstance to hold that a certificate was issued. We agree with the finding of the Courts below which has been accepted by the learned single Judge that a certificate u/s 15 (1) was issued in 1936 against the decree-holder. That brings us to the next step in the arguments advanced on behalf of the appellants that a certificate is not effective to operate as a stay order until it is filed in Court. Shri R. K. Pandey relies upon Mahtabsingh Pransingh v. Krishnachandra Tarachand AIR 1938 Nag. 109, Ahbar Ali v. Sobharam 1939 NLJ 283 : AIR 1939 Nag. 282 : ILR 1939 Nag. 654 and Govindram v. Jago 1948 NLJ 125 : AIR 1949 Nag. 43 : ILR 1948 Nag. 384 : M.A. No. 98 of 1968.
Shri R. K. Pandey relies upon Mahtabsingh Pransingh v. Krishnachandra Tarachand AIR 1938 Nag. 109, Ahbar Ali v. Sobharam 1939 NLJ 283 : AIR 1939 Nag. 282 : ILR 1939 Nag. 654 and Govindram v. Jago 1948 NLJ 125 : AIR 1949 Nag. 43 : ILR 1948 Nag. 384 : M.A. No. 98 of 1968. Section 21 of the Debt Conciliation Act, as it originally stood, was as follows: When an application has been made to a Board u/s 4, any suit or other proceedings then pending before a civil Court in respect of soy debt for the settlement of which application has been made shall be suspended until the Board has dismissed the application or an agreement registered under sub-section (2) of section 12 has ceased to subsist. Then in 1935 it wag amended and read as follows: When an application has been made to a Board u/s 4, any suit or other proceedings then pending before a civil Court in respect of any debt for the settlement of which application has been made shall be suspended until the Board has disposed of the application ; Provided that no decree, whether passed before the date of such application or passed in the suit after revival for the recovery of an unsecured debt in respect of which a certificate has been granted under sub-section (1) of section 16, shall be executed until all amounts recorded as payable under an agreement registered under sub-section (2) of section 12 have been paid or such agreement has ceased to subsist. It will be noticed that the effect of stay is automatic under both the drafts of the section; but in the earlier draft, no reference to a certificate u/s 15 in found. The result was that the stay under the original draft lasted till the agreement ceased to subsist without any certificate u/s 15; but in the amended draft, the creditor against whom a certificate was issued u/s 15 alone was debarred from executing the decree after the proceedings terminated. Shri Seth for the respondents argues that the first stay order issued in this case in 1934 was under the original provision and would continue effective till all the debts under the agreement were paid up.
Shri Seth for the respondents argues that the first stay order issued in this case in 1934 was under the original provision and would continue effective till all the debts under the agreement were paid up. We do not agree, as, in our opinion, the amendment of 1935 would apply to the present case as it was made during the pendency of the Debt Conciliation proceedings prior to the issue of" the certificate u/s 15. Turning, therefore, to section 21, as amended in 1935, we find that the language of the proviso is peremptory and bars the decree-holder from executing his decree which he obtained before the application filed before the Debt Conciliation Board. This is the plain meaning of the words "No decree shall be executed etc." occurring in the proviso. Shri Pandey contends that the bar is against execution but not against filing. According to him, therefore, it was the duty of the decree-holder to file an execution application every three years and as soon as the application reached the stage of issuing coercive process, he should have got it dismissed, as it could not proceed further beyond that stage. This seems to be quite an unreasonable interpretation. We should think that "execution" covers the whole process, from the filing of the application till dismissal of the proceedings as infructuous, or partly satisfied or fully satisfied. Beading the section by itself, we find that it is an absolute command to a decree-holder to abstain from executing his decree. As the present decree-holders had decrees obtained before the application, section 21 governed their case and they could not execute their decrees. The decisions relied upon by the appellants, no doubt, support the interpretation that the judgment-debtor cannot claim stay without producing the certificate in spite of the peremptory language of the section. However, it appears to us that the decisions are based on the peculiar facts of each case and have a limited application. In Maktabsingh Pranaingh's case AIR 1938 Nag. 109 : 1938 NLJ 45 the judgment-debtor applied to the Board after the sale was ordered and did not produce the certificate or, more correctly, the intimation in Form II till the sale was confirmed. Thereafter, he applied for setting aided the sale on the ground that it was without jurisdiction.
In Maktabsingh Pranaingh's case AIR 1938 Nag. 109 : 1938 NLJ 45 the judgment-debtor applied to the Board after the sale was ordered and did not produce the certificate or, more correctly, the intimation in Form II till the sale was confirmed. Thereafter, he applied for setting aided the sale on the ground that it was without jurisdiction. This objection was rejected on the ground that section 21, read with rule 11 and Form II, shows that an intimation about the proceedings is to be sent to the civil Court which is enjoined by the statute to stay proceedings and this is the duty of the judgment-debtor who want to take advantage of the special provisions. If he is net diligent enough or neglects to see that each intimation is received by the Court, the proceedings taken by Court in ignorance of the proceedings before the Debt Conciliation Board are not void or without jurisdiction. The second case Akbar Ali v. Sobharam 1939 NLJ 283 : AIR 1939 Nag. 282 : AIR 1939 Nag. 654 deals with the situation which arises when an application is filed before the Debt Conciliation Board after auction sale in execution of decree but before confirmation of such sale. The ratio decidendi of this case is that in such a case the proceedings for confirmation do not at all amount to "proceedings in execution" and are not affected by section 21 of the Debt Conciliation Act. As their Lordships observed, the interpretation of section 21 was for the special facts in that case. The decision does not support the general contention of the appellants that there can be no stay until the certificate is filed and until this is done, the decree-holder must proceed with the execution. The third case AIR 1949 42 (Nagpur) only laid down that a judgment-debtor could not obtain stay of execution by merely producing a copy of the order-sheet of the Debt Conciliation Board directing the issue of a certificate u/s 15(1). The certificate itself must be filed. In that case, it was conceded by the judgment-debtor that for some reasons the certificate was not issued. All that is laid down in the case is that an order to issue a certificate is not equivalent to a certificate.
The certificate itself must be filed. In that case, it was conceded by the judgment-debtor that for some reasons the certificate was not issued. All that is laid down in the case is that an order to issue a certificate is not equivalent to a certificate. All these cases deal with the situation where the judgment-debtor claims relief of stay without complying with the provisions of the Debt Conciliation Act and without satisfying the executing Court that a certificate has actually been issued. They do not deal with the injunction against the decree-holder who is bound absolutely, especially when he knows that a certificate has been issued against him. As we have said, the decree-holder-creditor ceases to be a party in the Debt Conciliation proceedings as soon as an order u/s 15 is passed against him, He has, therefore, no means to know whether the judgment-debtor actually took a certificate. He is entitled to presume that the judgment-debtor did so. If he obeys the injunction of law and does not proceed with execution, he cannot be blamed. The argument that it is the choice of the judgment-debtor to produce the certificate or not to produce puts the decree-holder in a difficult position. He must execute his decree and when he has spent some money and time over the case the debtor can produce the certificate which will operate as absolute stay. On a careful reading: of section 21 and its meaning in the light of the decided cases, we have no doubt that the decree-holder, who fully knows about the order of the Debt Conciliation Board, is bound to abstain from executing his decree until one of the contingencies specified in that section is fulfilled. It has then to be seen whether the decree-holder is entitled to exclude the period during which he could not proceed with the execution. Section 23 of the Debt Conciliation Act provides for the exclusion of the period during which proceedings under that Act were pending. This is not enough to cover the period after the termination of the proceedings on the issue of a certificate u/s 15 (1). We do not agree that the "proceedings" can be deemed to continue until all amounts under the agreement are recovered or a certificate is issued by the Debt Conciliation Board u/s 13 (4) that the amounts are irrecoverable.
We do not agree that the "proceedings" can be deemed to continue until all amounts under the agreement are recovered or a certificate is issued by the Debt Conciliation Board u/s 13 (4) that the amounts are irrecoverable. Section 23 of the Debt Conciliation Act does not thus help the decree-holder. Exclusion of the time in this case was claimed on the basis of section 15 of the Indian Limitation Act. The application of that section was sought to be excluded by the learned counsel for the appellants on the ground that the provisions in section 23 of the Debt Conciliation Act should be deemed to cover all cases in which exclusion of any period from limitation on the ground of any disability imposed by the Debt Conciliation Act can be claimed. This argument leads to the position that although an Act enjoins that the decree-holder shall not execute his decree; yet, if he obeys the injunction, he must lose his money under the bar of limitation. Such an interpretation does monstrous injustice to the decree-holder and cannot obviously be accepted. Under these circumstances, section 15 of the Limitation Act must apply unless the language thereof clearly excludes its application to such a case. Continuing his argument on this aspect, Shri R. K. Pandey pointed out that the words "injunction" and "order" in that section refer to express orders passed by a Court of law in proceedings before it. We find that the application of the section has actually been extended to provisions in statutes which have the effect of staying proceedings. In AIR 1947 157 (Oudh) the provisions in section 6 of the U. P. Encumbered Estates Act came in for consideration. Under that Act the order of the Collector u/s 6 had the effect of staying all suits. It was held that as the plaintiff was prevented from seeking his remedy in an ordinary Court, the period during which that order existed must be excluded u/s 15 of the Limitation Act. The same provision was similarly construed in Umrao v. Bekari Lal AIR 1947 All. 187. We may refer to the following passage from paragraph 2 of the judgment: It was held by this Court in Hulas Singh v. Data Bam 1943 All.
The same provision was similarly construed in Umrao v. Bekari Lal AIR 1947 All. 187. We may refer to the following passage from paragraph 2 of the judgment: It was held by this Court in Hulas Singh v. Data Bam 1943 All. LJ 268 that the rule in section 15, Limitation Act applied to suits and applications for execution stayed under the Encumbered Estates Act because the stay was the indirect result of the order passed by the Collector u/s 6 of the Act. It was also held by the Bombay High Court in Govindnaik Gurunathnaik Kalghatgi Vs. Basawannewa Parutappa Karajgi, that an application for a final decree in a suit on the basis of a mortgage should be considered to come within the provisions of section 16, Limitation Act. Such an application is in effect an application to obtain execution of the decree for recovery of money by the sale of property, although in form it is a preliminary step before actual execution can be taken oat. There is no reason in principle why this particular type of application should be excluded from the relief allowed by section 15, Limitation Act." It will thus be seen that the application of section 15 of the Limitation Act was extended to case where the stay was the indirect result of an enactment. Under the Debt Conciliation Act, the intimation in Form II or a certificate u/s 15 in Form VII is a mere statement of faucal and does not contain any order for staying proceedings. That effect follows from section 21 of the Debt Conciliation Act which has to be enforced by the Courts. It is but fair that a party enjoined by law that he should abstain from proceeding in Court should not be later faced with a plea that his action is barred because he did not take the requisite proceedings earlier. Surely, obedience to law should not lead to such absurdities. Accordingly, we find ourselves in respectful agreement with the interpretation of section 15 of the Limitation Act in the decisions referred to above. We hold that the decree-holders were entitled to exclude the time during which the Debt Conciliation proceedings ware pending as also the period during which the amount under the agreement remained unpaid. The execution applications were rightly held within time by the learned single Judge and by the executing and first appeal Courts.
We hold that the decree-holders were entitled to exclude the time during which the Debt Conciliation proceedings ware pending as also the period during which the amount under the agreement remained unpaid. The execution applications were rightly held within time by the learned single Judge and by the executing and first appeal Courts. Before concluding, we may refer to the plea of the decree-holders that the decision in proceedings for bringing legal representatives on record operates as res judicata. The order in that oases is based on the express consideration that such proceedings are not execution proceedings. The question whether an application for execution would be barred or that the period should be excluded in computing the period of limitation was never considered in that case. The decision does not hence operate as res judicata on these points. Lastly, Shri R.K. Pandey pointed out that the application for execution could not proceed as one of the co-decree-holders had not signed it. This point is not discussed in the judgment of the first appeal Court or that of the learned single Judge. It appears that the contention was not raised before them. It is not open to the appellants to urge the point in this Letters Patent Appeal. In the result, both the appeals are without any merit and are dismissed with costs. Hearing fee is fixed at Rs. 50 in each of the appeals. Final Result : Dismissed