Bapna, J. - (1.) THIS is an appeal under sec. 40 of the Displaced Persons (Debts Adjustment) Act, 1951 (Act No. LXX of 1951 ).
(2.) KISHANLAL filed an application to the Civil Judge, Nim-ka-Thana, exercising jurisdiction as tribunal under the aforesaid Act on 8th Dec, 1952, under sec. 5 of the Act. He said that he was a displaced person from Nowshera cantonment, North West Frontier Province, where he had property and business worth about Rs. 50,000/- but it was all lost as a result of events followed by partition of India. He came to India as a totally ruined man, and his average annual income for three years preceding the application was about Rs. 500/ -. He prayed that his debts may be adjusted in accordance with the provisions of the Act. He produced four schedules along with his application, schedule A mentioning the debts or claims against him, schedule B of property owned and possessed by the applicant but which was exempt from attachment, schedule C of property other than mentioned in schedule B showing nil, and schedule D giving a list of the property in respect of which he had made a claim under the Displaced Persons (Claims) Act, 1950 (XLIV of 1950 ). Of the creditors Vidya Dhar Gupta and Jagdish Sahai contested the application. The learned Civil Judge rejected the application by order of 30th June, 1955. Kishanlal has come in appeal. The learned Civil Judge has held that the applicant, now the appellant, was displaced person as defined in the Act. He also overruled the objection of Vidya Dhar Gupta and Jagdish Sahai that an applicant under the Act could not seek the assistance of the court without admitting the debts, and that since he was disputing the debt of these two persons, he could not seek the assistance of the court. There were two other issues : - "no. 3 - What is the amount due to each of the opposite parties ? No. 4 - What are the assets of the applicant, and are those mentioned in schedule 'b' correct ?" It was on the findings on these issues that the application was thrown out. On issue No, 3 he found that the applicant had not given full particulars of the debts required to be mentioned, and that as the other creditors except Jagdish Sahai were his relations or friends, and had not cared to contest the application their debts were fictitious. On issue No. 4 he held that the applicant had not disclosed his interest in the firm Birdhi Chand Kishanlal and the consideration which he received on account of the sale of his interest in Shanker Oil Mill at Shri Madhopur by a sale deed dated 29th August, 1950 and he had, thereby, concealed his assets. For the two reasons aforesaid he rejected the application purporting to act under secs. 6 and 12 of the Act. Learned counsel for the respondents also supported the order on one more ground which has been decided against him, namely, that the applicant having chosen to dispute his liability in respect of the claim by Vidya Dhar and his assignee Jagdish Sahai he could not seek the assistance of the court under sec. 5. It was contended that the schedule of creditors mentioned in sec. 5 related to such creditors whose claims were admitted by the petitioner. As to the last contention the definition of "debt'' in sec. 2 (6) of the Act makes it clear that 'debt*' includes any pecuniary liability, whether ascertained or to be ascertained. Sec. 9 permits the tribunal to ascertain the existence or the amount of the debts due to any creditor, and, therefore, a debtor against whom a claim exists, but which claim may not be admitted by the debtor is also entitled to seek the assistance of the court under the Act, and it is for the tribunal to decide subsequently whether the claim of the creditor is valid and enforceable. I have perused the judgment of the learned Civil Judge which is inordinately lengthy but without any substance. The power under sec. 6 is to be exercised before the issue of notice to the creditors, and in any case as provided in sec. 6 it is discretionary with the court to ask the applicant to furnish further particulars in respect of any of the schedules. In the present case the statement of the applicant shows that all the debts referred to by him except that of Jagdish Sahai, which is not admitted by him, were taken by him before partition at Nowshera, and that all his books of account remained behind. That may have been the reason why the applicant was not able to furnish more particulars than what he has given, but in any case if the court did want particulars, an opportunity should have been given to the applicant to comply with that order so far as it was possible. The fact that the other creditors did not contest this application need not necessarily have led the court to the conclusion that the debts were fictitious. Two of the creditors are near relations of the applicant, while the third is alleged by Jagdish Sahai to be a friend of the family of the applicant. While one reason for their not contesting may be the fictitious nature of the debts, there maybe equally other good reasons. It may be that they did not think it worthwhile to contest the application as schedule C, from which the debts were to be recovered is nil. In any case that was a point which was to be decided after enquiry when the time came for passing a decree under sec. 9. The court could very well, after enquiry, have decided that these debts did not exist or were not recoverable, and that they were not entitled to any rateable distribution or to get anything out of the assets of the debtors if the court had come to that conclusion. On the other issue also the court has gone wrong. The firm of Birdhichand Kishan Lal was at Nowshera and it would have served no useful purpose in mentioning the interest of the applicant in that firm in schedule C. Its assets were in Pakistan, and were not available for distribution to the creditors in India. Again, the non-discloser of the sale of the applicant's interest in Shanker Oil Mill at Shri Madhopur could not have affected the application. In schedule C the properties to be included are those which can become available for distribution to the creditors. The document of 29th August, 1950, showed that Kishanlal had parted with that interest before the application. That interest did not exist on the date of the application, and, therefore, there was no point in mentioning that fact. The learned Civil Judge was of opinion that the property had been fraudulently transferred by the debtor shortly before the application, but even that finding did not authorise the Judge to throw out the application purporting to act under sec. 12. Sec. 12 says that - (1) Any creditor of a displaced debtor may make an application to the Tribunal stating that the displaced debtor, who has made an application under sec. 5 or sub-sec. (2) of sec. 11, has concealed any part of his assets, and the Tribunal shall, after giving due notice thereof to the displaced debtor, determine the matter. (2) If the Tribunal finds that the displaced debtor has wilfully and fraudulently omitted to include such assets in his application the Tribunal may dismiss the application or refuse to allow to the displaced debtor any of the reliefs under this Act to which he would otherwise have been entitled or pass such other order in relation thereto as it thinks fit. The section does not speak of any fraudulent transfer of property giving rise to any disability to the debtors. The disability is attached to the debtor who has concealed his assets. If an applicant has parted with his assets before his application, and the assets are not left to be mentioned in the application there is no omission to include the assets in the application. Learned counsel for the respondents contended that that document mentions the receipt of Rs. 35000/ - by Kishanlal as consideration of the sale and the utilisation of that amount by the debtor has not been shown and, therefore, this amount of Rs. 35000/ - was concealed and omitted from being mentioned in the application. Learned counsel for the applicant explains that this amount was not received in cash, but was adjusted in the books of account. Whether the explanation is correct or otherwise, an action under sec. 12 can only be taken when there is an application to that effect, and the debtor has a chance to explain the grievance against him. No application was made in the present case that this particular sum of Rs. S5000/ - was with the debtor, and he has not mentioned the asset in his application. The issue as stated above was what were the assets of the applicant and whether those mentioned in schedule B were correct. The attention of the judgment-debtor was not pointedly drawn to this alleged receipt of Rs. 35000/- a few weeks before the application and even when he came in the witness box no question was put with regard to this item In the written statement the allegation was that he was still a partner in that Oil Mill and not an employee, as the applicant suggested. That allegation of the petitioner being a partner was negatived by the document of transfer of his interest some time before the application. It was not right for the court to take decision under sec. 12 of the Act when no application by a creditor had been made as to concealment of any property and no notice thereof was given to the debtor and the matter was not even determined judicially. The applicant was not questioned as to the reasons why he came to transfer his interest in the Shankar Oil Mill at Shri Madhopur and the conclusion at which the court jumped that it must have been fraudulent because it was made after the claim of Jagdish Sahai had been put in court at Delhi is not correct. The order of the learned Civil Judge exercising powers as a tribunal under the Act is erroneous, and is hereby set aside and the case will go back to that tribunal for proceeding in the matter according to law. If there is an application by the creditor under sec. 12, it will be decided as required by law. The matter of the validity of the debts of Jagdish Sahai can be determined by the court under sec. 9, and similarly existence of other debts can be decided under sec. 9. If there is any other property of the applicant available, that point can also be decided under sec. 9. Of course, the power to throw out an application under sec. 12, if there is concealment of property, is also vested in the court. One more observation is required. The court in its judgment has mentioned that if the debtor has no property how he has been able to employ two advocates to plead his cause. The debtor has some property which he says is exempt from attachment and otherwise also there may be good reason for the advocates to appear in the court and the matter of the fees they receive is a matter between the litigant and the advocates. The appeal is allowed. The contesting respondents will pay costs of this appeal. . ;