Decided on November 21,1963



Jaganmohan Reddy, J. - (1.) This is another of those appeals filed against the Award of the Jagirdars Debt Settlement Board consituted under the Hyderabad Jagirdars Debt Settlement Act, 1952 (XII of 1952) hereinafter referred to as the Board and the Act respectively, which we have perforce to set aside and remand for disposal according to law. The appellant, Raja Pannalal, is one of the joint decree-holders. He filed the appeal against the respondents, who are the legal representatives of the original debtor and the joint decree-holder, Raja Goverdhanlal. The debt for which the decree was passed was contracted on 26th May, 1934, between Subhan AH Khan and the appellant, his respondent brother and their father on the mortgage of a building and jewellery. A preliminary decree was passed in April, 1949, and a final decree on 2Oth December, 1949, for the principal amount of Osmania Sicca Rs. 70,000, costs of O.S. Rs. 5,123-3-0 and interest of Rs. 52,539-14-0. The decree also directed future interest at 6 per cent, per annum on the principal of Osmania Sicca Rs. 70,000. On 18th June, 1952, before an application under the Act was made, the mortgagor's house was sold for Rs. 72,500.
(2.) It appears that certain portion of the jewellery was also sold for about Rs. 11,000 and is in deposit to the credit of the decree. It is stated that one of the legal representatives of Subhan Ali Khan, Nizamunnisa Begum, filed an application under section 11 of the Act but whether she did it or not, it is not disputed that the proceedings before the Board commenced with the application of the creditor ; but the substantial proceedings before the Board commenced only after the application by the creditor on 19th March, 1953. Before the Board Form-3 was filed by the legal representatives on 16th February, 1956, disputing the payments and deductions while the creditor himself raised the question of the applicability of the Act to this debt. The Board, however, negatived this contention of the creditor and held that the debt was covered by the provisions of the Act and consequently passed an award for Rs. 33,120-19 nP. India Government, which is being challenged in this appeal. Mr. Vaidya for the appellant contends inter alia : (1) that the Act does not apply to this debt because the legal representatives of the original debtor are not personally liable for the debts and since they are not personally liable for the debt, the provisions of the Act are inapplicable to them ; (2) that if it be held that the Act is applicable, then the Board committed an error in going behind the decree for computing the amount under section 28 of the Act. In respect of this objection, the learned Advocate for the respondents legal representatives also challenges the Award by the Board on the ground that the Board did not apply the provisions of sub-section (3) of section 28 of the Act by scaling down the principal and interest by 30 per cent, and (3) that in deciding the paying capacity, the Board ought to have taken the entire property of the debtor, who in this case are the legal representatives, and in not doing so it has not acted in accordance with the provisions of the Act. POINTS 1 and 3.-Taking the first point, the inapplicability of the provisions of the Act to the debt in question is based upon certain provisions of the Act to which a reference should be made. Mr. Vaidya has relied on the definition of the word 'debt' in section 2 (e) and sections 2, 31, 34, 42 (3) and 44 which may be read as follows : "2(e) ' Debt' means any liability in cash or kind, whether secured or unsecured, due from a jagirdar, whether payable under a decree or order of any civil Court or otherwise and 'debtor' shall be construed accordingly." "11. (1) Any jagirdar ordinarily residing in any part ofthe State of Hyderbad or his creditor may make an application to a Board of competent jurisdiction on or before such date as the Government may notify in the Jarida for settlements of debts due by the jagirdar. (2) Every application made under sub-section (1) shall be in writing in the presecribed form and shall be signed, verified and presented in the prescribed manner . (3) Notwithstanding anything contained in section 3 an application made under this section shall contain also the amounts and particulars of all debts specified in that section due by the debtor." "31. After taking accounts under section 28 the Board shall in the manner hereinafter provided determine- (1) the particulars of the property belonging to the debtor, (2) the value of the said property, (3) the particulars of any encumbrances on the said property, and (4) the paying capacity of the debtor." "34. The paying capacity of the debtor shall, for the purposes of this Act be deemed to be sixty per cent, of the value of all the property of the debtor: Provided that when any portion of such property yields income but the market value of such portion cannot be determined, the value of such portion shall be the amount of the income capitalized at six per cent, per annum." "42 (3) The award so registered shall be executed as follows : (i) If the debtor makes default in the payment of any instalment due under the aw ard to any creditor such creditor may apply in the presecribed form to the Board for execution of the award. (ii) If the Board on receipt of such application is satisfied that the debtor has made default in the payment of the instalment the Board shalltransfer the award for execution to the Collector and thereupon the Collector shal Irecover the amount ofthe instalment from the debtor as arrears of land revenue: Provided that nothing in this sub-section shall affect the right of Government, a local authority or a co-operative society to have recourse to any mode of recovery allowable by any law for the time being inforce." "44. Notwithstanding any law or contract but subject to the provisions of section 45 no alienation of any property belonging to a debtor who is a party to any proceedings or award under this Act, made by him before all his debts are discharged shall be valid, except with the previous sanction of the Government."
(3.) On a reference to these aforesaid provisions, the contention of the learned Advocate is that, the debtor who in contemplation of section 2 (e) of the Act is a debtor from whom a debt is personally due and since the legal representatives are not personally liable, though they may be jagirdars, still they cannot be considered to be debtors within the meaning of section 2 (e) of the Act. This contention of his is sought to be supported by the words "due from a jagirdar "in section 2 (e), "his creditor "in section 11, "the property belonging to the debtor "in section 31, "all the property "in section 34, "arrears of land revenue"in section 42 (3), and "no alienation of any property belonging to a debtor "in section 44. The sum total of the effect of all the aforesaid phrases used in the several sections according to Mr. Vaidya is that, while under the law the legal representatives are only liable to the extent of the estate of the deceased in their hands, the above provisions would seek to make the entire property of the legal representatives liable irrespective of whether that property belonged to the legal representatives as such or constituted the estate of the deceased. It could not have been the intention of the Legislature to make the properties of the legal representatives, who in law are not personally responsible for the debt, either liable for the debt of the decased or to be taken into account for the purposes of determining the paying capacity. As such it must be held that the legal representatives of the deceased-jagirdar-debtor cannot be debtors within the meaning of the Act and the benefits of the Act are not available to them. In support of this contention, he has cited a decision Manubhai v. Trikamlal, AIR 1960 Bom 247. where a purchaser of the equity of redemption was held not to come within the purview of Bombay Agricultural Debtors Relief Act, 1947 (XXVI of 1947).;

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