PETITIONER: DHANKI MAHAJAN Vs. RESPONDENT: RANA CHANDUBHA WAKHATSING & ORS. DATE OF JUDGMENT: 11/04/1968 BENCH: HEGDE, K.S. BENCH: HEGDE, K.S. BACHAWAT, R.S. CITATION: 1969 AIR 69 1968 SCR (3) 759 ACT: Saurashtra Agricultural Debtors' Relief Act 23 of 1954, s. 2(6)(i)--Debtor, definition of--Person with liability over Rs. 25,000 not a debtor--Joint liability of usufructury mortgagors for an amount larger than Rs. 25.000--Whether each of them can be regarded as liable for only his share of debt and treated as debtor for purposes of Act. HEADNOTE: Respondents 1 to 3 executed in 1940 a usufructury mortgage, of their land in favour of the appellant and certain others. The liability under the mortgage was a joint liability and under the terms of the deed each one of the mortgagors was liable for the entire debt due under the mortgage. The respondents claiming to be 'debtors' under the Saurashtra Agricultural Debtors' Relief Act 1954 prayed for a scaling down of their debts. The Debt adjustment Board and the appellate court held that the respondents were not 'debtors' under s. 2(6)(i) of the Act as their total liability ex- ceeded Rs. 25,000 and therefore they were not entitled to the benefit claimed. A learned Single Judge of the High Court however held that in computing the debts due from the respondents each one of them should be held liable only for one-third of the mortgage debt and in that event the total debt due from each would not exceed Rs. 25,000. The I Judge in his judgment also considered the question as to how far a Single Judge of a High Court is bound by earlier decisions of the Court. HELD: (i) A Single Judge of a High Court is ordinarily bound to accept as correct judgments of courts of co- ordinate jurisdiction, of Division Benches and Full Benches of his Court. [762 D] Tribhovandas Purshottamdas Thakkar v. Ratilal Motilal Patel, A.I.R. 1968 S.C. 372, reaffirmed. (ii) There could be no dispute that under the Transfer of Property Act each of the respondents must be held to be liable for the entire mortgage debt. There was nothing in the special provisions of the Saurashtra Act which would justify a departure from the said rule. The High Court therefore erred in treating the respondents as 'debtors' under that Act. [763 A-F] V. Ramaswami Ayyangar v. T. N. V. Kailasa Thavar, [1951] S.C.R. 292, distinguished. Ambu Rama Mhatro V. Bhau Halya Patel, A.I.R. 1957 Bom. 6 and Dave Sadashiv Jayakrishna, v. Rana Govubha, (1962) 3 Guj. L. R. 1007, approved. (iii) While applying the provisions of the Saurashtra Act with the provisions of the Transfer of Property Act or the Contract Act in certain cases some difficulty may arise. All these difficulties can be resolved by reasonably interpreting the relevant provisions of the Act. [764 C] JUDGMENT:
CIVIL APPELLATE JURISDICTION : CiVil Appeal No. 38 of 1965.
SuP. CI/68-9
760
Appeal by special leave from the judgment and order dated
February 12, 1963 of the Gujarat High Court in Civil
Revision Application No. 477 of 1960.
I. N. Shroff, for the appellants.
J. A. Baxi, K. L. Hathi and Atiqur Rehman, for respondents
Nos. 1 to 3.
The Judgment of the Court was delivered by
Hegde, J. This appeal by special leave arises out of the
decision of Raju, J. of the Gujarat High Court in an
application under s. 115 of the Code of Civil Procedure.
That application was filed by respondents Nos. 1 to 3
herein. As they are the only contesting respondents in this
appeal, they will hereinafter be referred to as the
respondents.
The respondents are Bhayats and Girasdars of Dhanki village
in Lakhtar Taluka of the Saurashtra region of the, Gujarat
State. ,on December 19, 1940, the respondents executed a
joint usufractury mortgage in favour of Thakker Jethalal
Dosabha (the third appellant herein) and another for a sum
of Rs. 17,725. The liability incurred under the mortgage
was a joint liability and under the terms of the deed each
of the mortgagers was liable for the entire debt due under
the mortgage. Till January 25, 1950, Dhanki village was a
part of the former State of Bombay. As from January 26,
1950, that village became a part of the State of Saurashtra
in view of the provisions in the Provinces and States
(Absorption of Enclaves) Order, 1950. Prior to that date,
the Bombay Agricultural Debtors’ Relief Act, 1939, (Bombay
Act No. XXVIII of 1939), hereinafter referred to as the
Bombay Act, was in force in Dhanki village. As long back as
1945, respondent No. 2 had filed an application before the
Civil Judge (Junior Division) Viramgam both on his behalf as
well as on behalf of his minor cousin, the third respondent,
for adjustment of their debts. At the same time, respondent
No. 1 had also filed an application under the Bombay Act for
adjustment of his debts’ These applications were
consolidated for the purpose of trial. Ultimately they were
dismissed as the debts due from each of those persons were
held to exceed Rs. 15,000 and that being so they could not
be considered as “debtors” under the Bombay Act. In those,
proceedings it was further held that the debt due from the
respondents under the mortgage is a joint debt and each one
of them was liable for the entire No appeal was preferred
against that decision. At the time of the merger of Dhanki
village in Saurashtra, in that State there was no statute
similar to the Bombay Act. The Saurashtra Agricultural
Debtors’ Relief Act (Act No. XXIII of 1954) came to be
enacted in 1954. This Act will hereinafter be referred to
as “the Act”. By and
761
large the provisions of the Act are similar to those of the
Bombay Act. In 1955, the respondents again made
applications before the Debt Adjustment Board for scaling
down their debts under the provisions of the Act. The
appellants resisted those applications principally on two
grounds, viz. :
(1) The respondents cannot be considered as
“debtors” under the Act as the total debts due
from each of them exceeded Rs. 25,000 the
limit fixed, under the Act, and
(2) their applications are barred by the
principles of res judicata in view of the
decision given earlier under the Bombay Act.
Both the Board as well as the appellate court upheld the
contentions of the appellants that the respondents were not
‘debtors” as defined in the Act and that their present
applications were barred by the principles of res judicata,
in view of the earlier decision rendered under the Bombay
Act. They held that the debt due under the mortgage is a
joint debt and each of the mortgagers is liable for the
entire debt. They repelled the plea of the respondents that
the debt in question is liable to be split up under the
provisions of the Act. But the High Court reversed the
above findings. It hold that in computing the total debts
due from the respondents each one of the mortgagers should
be held to be liable only for one-third of the mortgage debt
and in that event the total debt due from each of them does
not exceed Rs. 25,000. It may be noted that under the Act,
a person whose debts exceeded Rs. 25,000 cannot be
considered as a “debtor’. It is admitted that if each of
the respondents is held liable for the entire mortgage debt,
the debts due from each of them would exceed Rs. 25,000 and
in that event, they are not entitled to any relief under the
Act. But it is equally true that if each one of them is
liable only for one-third of the mortgage debt, then the
total debts due from each of them do not exceed Rs. 25,000
and in that event their debts are liable to be scaled down
and adjusted under the provisions of the Act. Therefore,
the main question for decision is whether each one of the
respondents can be held liable for the entire debt due under
the mortgage. If the answer is in the affirmative, as
opined by the Board as well as the appellate court, then the
decision of the High Court is incorrect. But on the other
hand, if we agree with the High Court that each of the
respondents is only liable for one-third of the mortgage
debt then the respondents’ applications should have been
entertained by the Board and dealt with according to law.
As, in our opinion, the decision of the Board and of the
appellate court that each of the respondents is liable for
the entire mortgage debt is correct in law, it is not
necessary for us to consider the other question whether the
applications from which this appeal arises
762
are barred by the principles of res judicata. For the same
reason we are also not going into the question whether on
the facts of this case it was competent for the High Court
to reverse the decision of the appellate court by having
recourse to its powers under s. 115 of the Code of Civil
Procedure.
Before going into the question whether the respondents can
be considered as “debtors” under the Act, it is necessary to
dispose of a subsidiary controversy which appears to have
troubled Raju, J. unnecessarily. Major portion of his
judgment was devoted to the question whether a Single Judge
of a High Court is bound by an earlier decision of another
Judge of that High Court and whether the opinion expressed
by a Full Bench of that Court is binding on Single Judges
and Division Benches of that court. We think that matters
so obvious as, those should not have troubled any Judge of a
High Court. His conclusions on those questions are rather
startling. But there is no need to go into them in view of
the decision of this Court in Tribhovandas Purshottamdas
Thakkar v. Ratilal Motilal Patel.(1) That case also arose
from one of the decisions of Raju, J. wherein the learned
Judge had reached conclusions similar to those reached by
him in the present case. This Court over-ruled those
conclusions and held that a Single Judge of a High Court is
ordinarily bound to accept as correct judgments of courts of
co-ordinate jurisdiction, of Division Benches and Full
Benches of his Court.
Reverting back to the principal point in issue, i.e. whether
each of the respondents is liable for the entire mortgage
debt, it may be noted that the term “debt’ is defined in s.
2(5) of the Act as meaning any liability in cash or kind,
whether-secured or unsecured, due from a debtor, whether
payable under a decree or order of any civil court or
otherwise, and includes mortgage money the payment of which
is secured by the usufractury mortgage, or by an amalous
mortgage in the nature of pura chhoot of immovable property,
but does not include arrears of wages payable in respect of
agricultural or manual labour. “Debtoe’ is defined in s.
2(6) (i) and that definition to the extent material for this
case says-
“6. ‘Debtor means an agriculturist-
(i) whose debts do not exceed Rs. 25,000 on
the date of filing an application to the Board
under section 4; and
…………………..
The definition of “debt” takes in debts under usufractury
mortgages as well. As mentioned earlier, the usufractury
mortgage in question was executed by all the respondents
jointly. The debt
(1) A. 1. R. 1968 S. C. 372.
763
borrowed under it was a joint debt; each one of the
mortgagors was jointly liable for the entire debt. That
being so, under the provisions of the Transfer of Property
Act, each of the respondents must be held to be liable for
the entire mortgage debt. This position is not disputed.
Therefore, we have to see whether there are any provisions
in the Act which alter the position in law. As seen
earlier, neither the definition of “debt” nor of “debtor” is
of any assistance to the respondents in support of the
contention that each of them is liable, for one-third of the
mortgage debt. The learned counsel for the respondents
invited our attention to ss. 7(1), 16, 19, 20(1) (a),
20(1)(c), 20(3), 21 and 29. Section 7(1) provides that if
the payment of debt due by a debtor is guaranteed by surety
or if a debtor is otherwise jointly and severally liable for
any debt along with other person, and if the surety or such
other person is not a debtor, the debtor may make an
application under s. 4 for relief in respect of such debt
and the Board after consideration of the facts and
circumstances of the case proceed with the adjustment of
debts under the Act in so far as such applicant is
concerned. We do not think that this provision lends
support to the contention of the respondents that a joint
mortgage debt gets split up. It is not necessary for us in
this case to consider as to what would happen in a case,
where some of the co-mortgagors are “debtors” and the others
not “debtors”. In the present case, all the respondents are
held to be not “debtors’. Section 16 merely provides that
the question whether an applicant is debtor or not should be
decided as a preliminary issue. Section 19 provides for the
examination of creditor and debtor. Section 20 provides for
taking accounts. Section 21 prescribes that in certain
cases rent may be charged in lieu of profits. Section 29
provides for scaling down debts of debtors. None of these
provisions lends any support to the contention that the debt
due from the respondents under the mortage is liable to be
split up under the Act.
It was next urged by Shri Baxi, learned counsel for the res-
pondents, that s. 7 of the Act permits one of the joint
debtors to apply for adjustment of his debts, and if he so
does, the Board is bound to scale down his debts so far as
he is concerned. That being so unless we hold that for the
purpose of the Act joint debts are liable to be split up,
complications would arise. He gave an illustration of a
debt owned by three joint debtors, each of whom is a
“debtor” within the meaning of the Act. According to him,
in view of the provisions of the Act, if the total debt due
from them is Rs. 30,000; the same may be, scaled down in
respect of one debtor to Rs. 18,000 another to Rs. 17,000
and the third to Rs. 16,000. As the awards against the
several debtors are independent awards, each of those awards
can be executed against the concerned debtor; in that event
the creditor will be entitled
764
to realise, instead of Rs. 30,000 due to him, Rs. 51,000.
We do not think that there is any basis for this
apprehension. It is not necessary for our present purpose
to find out the true scope of s. 7 or what would be the
effect of scaling down a joint debt on the application of
one of the debtors. One possibility is that the debt as a
whole may be scaled down and the creditor not entitled to
collect more than the scaled down debt from Any of the
debtors. Another possibility is that though the creditor
cannot collect more than what is due to him jointly from all
debtors, his right to proceed against art individual debtor
and his property has to be determined on the basis of the
provisions of the Act. We do not think that there is any
need to go into these complications in the present case. It
is likely that while applying the provisions of the Act
along with the provisions of the Transfer of Property Act or
the Contract Act, in certain cases, some difficulties may
arise. All these difficulties will be solved by reasonably
interpreting the relevant provisions of the Act. For our
present purposes, all that we have to see is whether on the
basis of the provisions of the Act, there is any
justification for departing from the ordinary rule that in
the case of a joint debt, each one of the debtors is ‘liable
for the entire debt. We see, no such justification.
The learned Judge in support of his conclusion that the
mortgage debt in this case is liable to be split up has
placed reliance on the decision of this Court in V.
Ramaswami Ayyangar v. T. N. V. Kailasa Thavar.(1) That was a
case arising under the Madras Agriculturists’ Relief Act,
No. IV of 1938. The facts of that case were these : In a
suit to enforce a mortgage executed by defendent No. 1 on
his own behalf and on behalf of defendants Nos. 2 to 7, the
defendant No. 1 remained ex parte and the others contested
the suit. A decree for Rs. 1,08.098 was passed by the trial
court. The Madras Agriculturists’ Relief Act was passed
during the pendency of an appeal and cross appeal, and on
the application of defendants, Nos. 2 to 7 under the said
Act the amount of the decree was scaled down to Rs. 49,255
so far as defendants Nos. 2 to 7 were concerned. So far as
defendant No. 1 was concerned, the decree for the full
amount remained as it was. defendant No. 1 thereupon applied
for scaling down, but his application was rejected.
Defendants Nos. 2 to 7 deposited certain amounts and got
their properties released. Defendant No. 1 deposited the
balance of the amount that remained due under the decree as
scaled down on the application of defendants Nos. 2 to 7 and
prayed that full satisfaction of the decree may be recorded.
The Subordinate Judge rejected this application and the High
Court, on appeal, held that defendant No. 1 was entitled to
the benefit of the scaling down in favour of defendants Nos.
2 to 7 as the mortgage debt was one and indivisible. On
further
(1) [1951] S. C. R. 292.
765
appeal, this Court reversed the judgment of the High Court
and restored that of the Subordinate Judge. Mukherjea, J.
(as he then was), speaking for the Court, observed in the
course of judgment,.”The learned Judges (of the High Court
appear to have overlooked the fact that they were sitting
only as an executing court and their duty was to give effect
to the terms of the decree that was already passed and
beyond which they could not go. It is true that they were
to interpret the decree but under the guise of
interpretation they could not make a new decree for the
parties.” From this observation, it is clear that the main
consideration which influenced this Court to reverse the
decree of the High Court was that whether the decree passed
in the suit was correct or not, the executing court could
not have gone behind it. This Court also noticed yet
another reason for departing from the normal rule that each
one of the joint debtors is liable for the entire joint
debt. Section 14 of the Madras Agriculturists’ Relief Act
provides for separation of debt incurred by a joint Hindu
family, some of the members of which are agriculturists
while others are not. Our attention has not been drawn to
any such provision in the Act, nor is it the case of the
respondents that they belong to a joint Hindu family. Hence
the ratio of the decision in V. Ramaswami Ayyangar’s case(1)
is inapplicable to the facts of the present case.
The provisions of the Bombay Act in material
particulars are similar to the provisions of the Act.
Interpreting the provisions of the Bombay Act in Ambu Rama
Mhatro v. Bhau Halya patel(1), the Bombay High Court,
speaking through Shah, J.. (as he then was) held that it
cannot be disputed that when a mortgage is created jointly
on property in which several persons are interested each of
the mortgagors is liable in the absence of a contract to the
contrary to pay the entire debt, and the liability of a
mortgagor is not proportionate to the extent of his interest
in the mortgaged property; and that position is not altered
under the provisions of the Bombay Act. This decision was
followed by Bhagwati, J. (as he then was) of the Gujarat
High Court in Dave Sadashiv Jayakrishna v. Rana Govubha(3).
We are in agreement with that conclusion.
For the reasons mentioned above, we allow the appeal,
set aside the order of the High Court and restore that of
the appellate court with costs throughout.
G.C. Appeal allowed.
(1) [1951] S.C. R. 292.
(2) A. 1. R. (1957) Bom. 6.
(3) (1962) 3 Guj. L.R. 1007.
766