PATEL RAMJI JASRAJ v. HARIJAN MITHA DUDA — 1990 DIGILAW 110 (GUJ)

JANI, J. ( 1 ) IN this petition under Art. 227 of the Constitution of India, the petitioner has challenged a peculiar order pased by the Debt Settlement Officer. Surendranagar unde Sec. 16 of the Gujarat Rulral Debtors Relief Act, 1976, hereinafter referred to as the Act, as confirmed by the appellate authority, namely, the District Registrar of Co-operative Societies (Rural Debt), Rajkot. ( 2 ) THE facts which can be gathered from the petition are as following : the respondent No. 1-Harijan Mitha Duda filed an application under Sec. 6 (1) of the Act before the Debt Settlement Officer, Surendranagar. It was mentioned therein that the land bearing Survey No. 358 admeasuring 5 acres and 20 gunthas had been mortgaged by the respondent No. 1 with the petitioner. It was, however, pointed out by the petitioner that the said land had been released after the respondent paid the dues to the petitioner. Before the Debt Settlement Officer, the respondent No. 1 deposed that he had mortgaged Survey No. 358 with the petitioner for an amount of Rs. 8,000/ -, but he had sold it under pressure from the petitioner-creditor and had paid his dues. This was the only real evidence recorded by the Debt Settlement officer; but, neither the document of mortgage nor the document of sale executed by the respondent No. 1 was placed on record. Incidentally it may be stated that, according to the petitioner the land was sold by the respondent no. 1 to one Dahya Chhagan and Kikiben for Rs. 26,000. 00. The Debt settlement Officer came to the conclusion that the respondent No. 1 was a small farmer as contemplated in clause (5) of Sec. 2 of the Act, in view of the fact that he was holding only 7 acres and 8 gunthas of land. The debt Settlement Officer passed an order under Sec. 8 (3) of the Act, discharging the debt of respondent No. 1 completely, even though, he did not give the requisite finding that the debtors income did not exceed Rs. 4800/ - per year. In fact, no evidence was led in respect of the income of the respondent No. 1. The Debt Settlement Officer further relied upon the oral statement of the respondent No. 1 to the effect that he had sold the land because of the pressure from the creditors. 4800/ - per year. In fact, no evidence was led in respect of the income of the respondent No. 1. The Debt Settlement Officer further relied upon the oral statement of the respondent No. 1 to the effect that he had sold the land because of the pressure from the creditors. The Debt Settlement Officer held that the petitioner-creditor was unable to deliver possession of the property to the respondent No. 1, and so, he was ordered to pay Rs. 8,000. 00, which was the amount of the debt incurred by the respondent No. 1, to the respondent No. 1. Similarly, the other creditor Magan Nanji was directed to pay Rs. 4,000. 00 to the respondent No. 1. The Debt Settlement Officer also held that the creditors had committed an offence under Sec. 17 of the Act, and so, they were liable to pay the amount of debt to the debtor. ( 3 ) THE petitioner as well as the respondent No. 2 namely, Manji Nanji, filed Appeal No. 131 which came to be heard and dismissed by the District registrar of Co-operative Societies (Rural Debts), Rajkot. Even the appellate authority did not consider whether the requirements of Sec. 8 (3) were completely satisfied. The appellate authority also proceeded on the ground that the petitionercreditor had committed an offence under Sec. 17 (c) of the Act and, therefore, he should be directed to pay the amount recovered by him. ( 4 ) THESE orders Annexures a and b to the petition are being challenged in this petition. ( 5 ) THIS Court (N. H. Bhatt, J.) admitted the petition on 10-4-1980 and issued ad interim stay of the operation of the impugned orders. ( 6 ) ). Mr. D. D. Vyas, learned Counsel appearing for the petitioner submits that the orders passed by the Debt Settlement Officer and the appellate authority are apparently erroneous, inasmuch as, the said authorities have passed an order under Sec. 16 of the Act, on the basis that the petitioner-creditor had committed an offence under Sec. 17 (c ). It is his submission that the facts which have come on record do not justify the passing of any such order. ( 7 ) IT is, therefore, necessary to consider the relevant provisions of Secs. 17 and 16 of the Act. ( 8 ) THE relevant portion of Sec. 17 reads as under :"17. It is his submission that the facts which have come on record do not justify the passing of any such order. ( 7 ) IT is, therefore, necessary to consider the relevant provisions of Secs. 17 and 16 of the Act. ( 8 ) THE relevant portion of Sec. 17 reads as under :"17. Whoever - (a) xxx xxx xxx (b) xxx xxx xxx (c) being a creditor, knowingly takes recourse, for the purpose of recovering a debt from his debtor, to a procedure in contravention of the provisions of this act,. . . . . . . . . and shall on conviction, be liable to be punished with imprisonment for a term which may extend to one year or to a fine which may extend to one thousand rupees or with both. " ( 9 ) ). The relevant portion of Sec. 16 of the Act reads as under :"16. (1) If the possession of the property pledged or mortgaged by a debtor cannot for any reason be delivered to him, the creditor shall pay to the debtor such value of the property, as the debt settlement officer may fix. " ( 10 ) SO far as the present case is concerned, it is an admitted fact that no criminal prosecution had been launched against the petitioner-creditor. If the debtor sells his property in order to pay the dues of the mortgagee, it cannot be said that he had taken recourse to a procedure in contravention of the provisions of the Act. Simply because the proceeding is pending before the Settlement officer, it can never be said that payment of his dues by the debt to the creditor would be contrary to the provisions of the Act. It is not pointed out as to which provisions would be contravened if the debtor pays the debtor to his creditor. Obviously, therefore, Sec. 17 (c) does not apply. If the foundation goes away, the resultant inference about the applicability of Sec. 16 also vanishes. However, I would also examine whether Sec. 16 (1) of the Act applies to the facts of the present case. ( 11 ) SECTION 16 (1) contemplates that the creditor which was in possession of the debtors property has parted with the possession in favour of a third party and is not able to deliver the possession thereof to the debtor. ( 11 ) SECTION 16 (1) contemplates that the creditor which was in possession of the debtors property has parted with the possession in favour of a third party and is not able to deliver the possession thereof to the debtor. In such a case, the creditor has to pay value of the property as determined by the Debt settlement Officer to the debtor. In the present case, the petitioner-creditor has not alienated the property to a third party. It is actually the debtor who has sold the property to a third party by taking possession of the land from the petitioner-creditor in order to pay off the petitioners dues, which was his moral obligation. Therefore, Sec. 16 (1) of the Act does not apply. ( 12 ) EVEN on this limited ground, the orders Annexures a and b require to be set aside. It is, therefore, not necessary for me to examine whether the debt Settlement Officer has committed an error in passing an order of discharge, even though, there was no requisite finding regarding the income of the respondent no. 1 under Sec. 8 (3) of the Act. ( 13 ) IN the result, Rule is made absolute with no order as to costs. The orders Annexurea passed by the Debt Settlement Officer, Surendranagar dated 15-3-1979, and the order Annexure b in Appeal No. 131 dated 3-12-1979 are hereby quashed and set aside. .