Karnataka High Court
K. Chikkabalusa vs S. Nagaraju on 22 March, 1989
Equivalent citations: ILR1989KAR1268, 1989(1)KARLJ309
JUDGMENT Prem Chand Jain, C.J.
1. Our Judgment would dispose of W.A.No. 354/83 and also W.As.Nos.1750/86 and 2723/86.
2. In order to appreciate the controversy the facts in Writ Appeal No. 354/83 may be noticed
3. K. Chikkabalusa and Smt. Gangobai have filed this appeal against the Judgment of a learned single Judge of this Court dated 4th February 1983 by which Writ Petition No. 16014/81 filed by them has been dismissed.
4. Appellant-1 had mortgaged the property in dispute to respondent-1 S. Nagaraju. After the coming into force of the Karnataka Debt Relief Act, 1976, (Karnataka Act No. 25 of 1976), (hereinafter referred to as '1976 Act'), an application dated 22-12-1976 was filed by appellant-1 claiming relief on the plea that he was a debtor as defined in that Act. That application was allowed by the Executive Magistrate vide his order dated 24-9-1977 and it was declared that the debt was discharged and the property should be redeemed. Feeling aggrieved by that order, respondent-1 filed Writ Petition No. 3536/78 in this Court on the plea that the relief was granted to appellant-1 without holding a proper enquiry. The Writ Petition was allowed and the matter was remitted for fresh disposal in accordance with law. After holding a fresh enquiry, the Executive Magistrate vide his order dated 8-4-1981 rejected the application of appellant-1. The appellants filed Writ Petition No. 16014/81 calling in question the legality of the said order dated 8-4-1981.
5. The learned single Judge on considering the entire matter in depth, has found that the application filed prior to the promulgation of Karnataka Debt Relief Act, 1980, (Karnataka Act No. 29 of 1980), (hereinafter referred to as '1980 Act') has to be disposed of in the light of the provisions contained in the 1976 Act, and that appellant-1 cannot be treated as a person belonging to 'weaker sections.' In view of these two findings, the learned Single Judge, as earlier observed, has dismissed the Writ Petition.
6. We have heard the learned Counsel for the parties at length.
Mr. M. Papanna, learned Counsel for the appellants, has contended that the interpretation placed by the learned Single Judge on the words 'weaker sections of the people' occurring in Section 3(g) of the 1976 Act is opposed to the intention of the Legislature as reflected in Section 15(1)(3) of the 1980 Act.
On the other hand, it was contended by Mr. Parthasarathy, learned Counsel for respondent-1, that in the circumstances of the case the interpretation put by the learned Single Judge is in consonance with the intention of the Legislature, that while trying to find out the income it is not necessary to look into the actual income and that even that income can be taken into consideration which a property in possession of a debtor is likely to fetch. According to the learned Counsel, the real test should be to find out as to how much interest a person can earn on the value of the property and that should be deemed to be the income of the person possessed of the property.
On our request the learned Advocate General also assisted us. According to him, as the income is not defined the proper approach would be to find out the notional income. What was sought to be emphasized by him was that while finding out the status of a person it may become necessary to determine whether the property which is in his possession could fetch any income and if so the extent of that income, and in this case, the property in dispute which is situated in the heart of Bangalore City is very valuable and that plot can get income which would be more than the limit prescribed in the definition of 'weaker sections.'
7. Before adverting to the merits of the controversy, it would be appropriate to notice the definition of the words 'debtor' and 'weaker sections of the people' both in 1976 Act and 1980 Act:-
1976 Act:
3. (c) 'debtor' means -
(i) a small farmer; or
(ii) a landless agricultural labourer;
or
(iii) a person belonging, to the weaker sections of the people.
(g) 'weaker sections of the people' means persons not being small farmers or landless agricultural labourers whose annual income from all sources does not exceed two thousand and four hundred rupees.
1980 Act:
2. (6) 'debtor' means a person who is -
(i) a landless agricultural labourer;
(ii) a person belonging to the weaker section of the people; or
(iii) a small farmer, and from whom a debt is due;
(ii) 'weaker section of the people' means persons whose annual income from all sources does not exceed four thousand and eight hundred rupees.
Provided that a person shall not be deemed to belong to the weaker section of the people if-
(i) he or his family has in both the two years immediately preceding the first day of April 1979, been assessed to property or house tax in respect of buildings or lands other than agricultural lands, under the Karnataka Municipal Corporations Act, 1976 (Karnataka Act 14 of 1977), the Karnataka Municipalities Act, 1964 (Karnataka Act 22 of 1964), the Karnataka Village Panchayats and Local Boards Act, 1959 (Karnataka Act 10 of 1959) or any law governing the Municipal or local bodies anywhere in India, provided that the aggregate annual rateable value of such buildings or land, whether let out or in the occupation of the owner, is not less than two thousand four hundred rupees; or
(ii) he and members of his family own immovable property anywhere in India the market value of which is not less than ten thousand rupees;
EXPLANATION: 'annual rateable value' of any building or land for the purposes of Clause (i) shall -
(a) where the assessment is based on annual rateable value be deemed to be such value;
(b) where the assessment is based on the capital value, be deemed to be ten percent of the capital value; and
(c) in any other case be deemed to be the value ascertained in the prescribed manner.
As is seen in 1976 Act, the word 'debtor' means: (i) a small farmer or (ii) a landless agricultural labourer or (iii) a person belonging to the weaker sections of the people; Clauses (d) and (e) of Section 3 define who is a landless agricultural labourer and who is a small farmer, and Clause (g) defines weaker sections of the people as persons not being small farmers or landless agricultural labourers whose annual income from all sources does not exceed Rs. 2,400/-.
8. In the instant case, the facts found are that the appellant-1 owns a piece of land worth more than Rs. 30,000/- in central locality in Bangalore City, that the annual rental value of that property would be Rs. 1,800/- and that he has spent about Rs. 2000/- on the performance of the marriage of his daughter. The arguments have proceeded on admitted facts. There is no proof that appellant-1 is having an actual income of Rs. 2,400/- per annum. The whole controversy centres round the landed property which he owns and the market value of which is more than Rs. 30,000/-. According to Mr. Papanna mere possession of some valuable property without actual income would not affect the status of a person who belongs to weaker sections of the people; while the stand on the opposite side is that a person who is possessed of means to get income of more than Rs. 2,400/- per annum, would not fall within the definition of weaker sections of the people, that the Act was made to provide relief and prevent exploitation of persons belonging to weaker sections, that the Act is not meant for those who are possessed of means to earn income from the property owned by them and that the real test is to see the potential and not the actual income. We have earlier reproduced the relevant definitions from 1980 Act also. There was no contest during the course of arguments that the provisions of 1980 Act have no applicability to the facts of the case in hand. But the relevant provisions from 1980 Act have been reproduced as assistance was sought from the definition of "weaker sections of the people' as found in 1980 Act in order to bring out the real intention of the Legislature. Mr. Papanna, learned Counsel for the appellants, sought benefit of the amended definition in the 1980 Act by contending that in 1976 Act the Legislature intended to take into consideration the actual income and not the notional income and that is why the definition of 'weaker sections of the people' underwent change in the 1980 Act. According to him, on the basis of the definition in the 1980 Act, something which did not exist in the 1976 Act could not be read, while the view opposite that was projected was that from the very inception of the legislation the intention of the Legislature was to help those who live from hand to mouth and have no source of income and that by elucidating the definition in the 1980 Act nothing more has been done than making the already existing intention of the Legislature clear.
9. As we see from the preamble of the 1976 Act the legislation was brought in order to prevent exploitation of agriculturists with small holdings, landless agricultural labourers and the weaker sections of the community as exorbitant rates of interest were being charged and malpractices were being indulged. The necessity of amending the provision of 1976 Act is reflected in the statement of objects and reasons which read as under:-
"After issue of Karnataka Debt Relief Act, 1976, many representations were received from the people suggesting inter alia the following:
(i) Orders issued by Sub-Divisional Magistrates should be made appealable to the judiciary;
(ii) To clear off the debtors who have taken loans 5 to 10 years before the coming of this Act into force;
(iii) There is no need for enquiry by the Sub-Divisional Magistrates in cases where the creditor and the debtor mutually agree that the Debtor is within the specified income group;
(iv) The definition of 'Weaker Section' should include the aggregate income of 'Family' of the debtor as against the individual income at present;
(v) To increase income limit from Rs. 2,400/- to Rs. 4,800/-.
2. After issuing the Karnataka Debt Relief Ordinance 1979 incorporating the suggestions, representations have been received to increase the time limit for the creditors to file the application from 45 days to 180 days. It has also been proposed to increase the extent of land holding from one unit to two units.
3. The Ordinance issued in 1979 has to be replaced by the Bill.
4. It has become therefore necessary to amend the provisions of the Act to help the weaker sections of the people as defined in the Act. Hence the Bill."
10. Thus it is quite evident that the whole intention of the aforesaid legislation was to protect the three types of people i.e., a small land owner, a landless agricultural labourer and a person belonging to the weaker section from the clutches of unscrupulous creatures who were indulging in malpractices and were charging exorbitant interest.
11. Coming to the definition of person belonging to weaker sections, it is clear that he should neither be a small farmer nor a landless agricultural labourer and should be a person whose annual income from all sources does not exceed Rs. 2,400/- i.e., his income should not exceed Rs. 200/- per month from all sources. Now, the question that arises for consideration is whether it is the actual income of a person which should be the decisive factor for determining his status as a person belonging to weaker section or whether the means which he is possessed of should also be taken into consideration. On giving our thoughtful consideration to the entire matter, we find that the view taken by the learned single Judge is more plausible and in consonance with the intention of the Legislature in bringing this legislation.
12. In the 1976 Act it is true that the definition 'weaker section' does not indicate anything more than saying that income from all sources should not be more than Rs. 2,400/- per annum, but that by itself would not warrant a finding in favour of the appellant as it is necessary to find out the real intent of the Legislature as to which class of people would fall in that category.
13. Except the aforesaid definition of 'weaker sections of people', we do not find any other definition of this phrase. However, there is no gainsaying that the phrase 'weaker section' is generally understood to mean the class of persons, who are from the dismally depressed categories comparable economically and educationally to scheduled castes and tribes or those who live in poverty and destitution, those who barely eke out a miserable existence, those who are helpless victims of an exploitative society. The question that arises for consideration is whether a person who has no actual income of Rs. 2,400/- per annum but owns a palatial building or is possessed of land of substantial market value, can claim himself to be a person belonging to the category of weaker section. As has been observed earlier, the intention of the Legislature in bringing out the legislation was to protect the three types of people i.e., a small land owner, a landless agricultural labourer and a person belonging to the weaker section from the clutches of creatures who were indulging in malpractices and were charging exhorbitant interest.
14. This class of people because of their means were unable to discharge the debt or pay interest thereon. Such type of people were living in misery. To save them from exploitation and to relieve them of the debt, this legislation was introduced. If the intent of the Legislature is kept in view, then the interpretation sought to be put by Mr. Papanna would destroy the whole purpose of the Act e.g. a person nay be possessed of gold ornaments and other property worth more than a few lakhs of rupees, but that property does not bring him any income and according to the view projected by Mr. Papanna, learned Counsel for the appellant, such a person would also belong to the category of 'weaker section'. On the face of it, this is an unacceptable proposition. In our view what has to be seen is the potentiality of the person, who is claiming himself to belong to the weaker section. If a person has means to earn and by that means he can generate income which positively is to be more than the income prescribed in the definition of 'weaker section', then he would certainly be out of that category.| A some-what similar question arose before Venkata-ramiah, J. as His Lordship then was, in KAMALAKAR MAHAVIR v. SUNDAR & CO.1976(2) KLJ 116. In that case the person owned land measuring 26 acres and 37 guntas more than the land which a small land owner can own under the Act, against whom a suit was instituted, for Rs. 4,800/-. An application was filed by him (debtor) under Section 4 of the Debt Relief Ordinance stating that he was unemployed, having no source of income and had got no means of earning and that his actual income was nil and that therefore he was a person belonging to the 'weaker section of the people' as defined under the Act and that the suit claim may be declared liquidated. That application came to be rejected by the Munsiff on the ground that he held 26 acres and 37 guntas of land, that he does not come under the definition of 'small farmer' under Section 3(c) and that he cannot claim benefit of Section 3(g) stating that his income was less than Rs. 2,400/-. Against the order of the Munsiff, the debtor filed revision petition in this Court, which came to be dismissed by the learned Single Judge thus:
"The petitioner admittedly has been allotted 26 acres 37 guntas of agricultural land and a site in Raichur Town measuring 42'x27' at the partition. It is not his case that if 26 acres 37 guntas of land is cultivated he would not be able to earn Rs. 2,400/- per year. A person who owns land more than the land which a small owner can own under the Karnataka Debt Relief Act and who does not make any attempt to cultivate it cannot claim that he belongs to the weaker section of society on the ground that he does not earn any amount."
15. Mr. Papanna, learned Counsel, had argued before us that as the definition of a 'small farmer' stands, the holding of such a small farmer in a given case may be verv valuable in terms of money; yet that person would not lose status of a small farmer. This argument of the learned Counsel in no way solves the problem or helps in interpreting the definition of weaker sections of the people in the way in which he desires. The three categories are independent of each other and the status of a person has to be determined in accordance with the norms laid down in Section 3 of the Act. Merely this fact that a person falls in the definition of small farmer but the property of his has a very high market value would not mean that he ceases to be a small fanner. Similarly a person owning considerable moveable and immoveable property without any income therefrom would not fall within the definition of weaker section as the intention of the legislature in including that category is to protect a person from the clutches of his creditors, who is unable to make both ends meet and lives in poverty and destitution.
16. It was also contended by Mr. Papanna, learned Counsel, that the learned Single Judge has legislated and not interpreted the provisions of Section 3. According to the learned Counsel, the definition as it stood earlier i.e., in the 1976 Act only mentions actual income and does not make reference to the means of the debtor and that under the old definition in the garb of interpretation the means of a person could not be taken into consideration. This contention of the learned Counsel again is untenable. The learned Single Judge did not legislate, but he only interpreted the provisions in the light of the object for which the legislation was made The 1980 Act has done nothing more than clarifying the definition of weaker section of people. Even without such clarification the only possible view could be the one taken by the learned Single Judge and as concurred by us.
17. Our attention was also drawn to an unreported Judgment of this Court in PUTTATHAYAMMA v. TAHSILDAR & ORS. W.P.No. 28662 of 1982 DD 28-2-1986 in support of the proposition that mere owning of a valuable property is not sufficient to debar a person from claiming himself to belong to 'weaker section'. On going through that Judgment we find that no such view has been taken by the learned Judge. In that case the specific question debated was whether the application was to be decided under the provisions of 1976 Act or 1980 Act. As the Tahsildar decided the application under the 1980 Act, the order was set aside on the ground that provisions of 1976 Act were applicable and the case was remanded for fresh consideration. However, Mr. Papanna who appeared in that case for the creditor had placed reliance on the impugned Judgment and had contended that as the debtor therein also owned valuable property, he could not claim to belong to 'weaker section'. That contention after reproducing the observations of Doddakalegowda, J. from the impugned Judgment in this appeal was rejected thus:
"It is not possible to hold that the aforesaid observations amount to laying down the law as to the criteria for determining the question as to whether an applicant is a debtor under the provisions of the relevant Karnataka Debt Relief Act. At the most the same may amount to assessing the evidence in that case and recording a finding on the basis of the evidence adduced in that case that the applicant concerned therein was not a debtor. The question as to whether an applicant is a debtor or not has to be decided as per the provisions of the relevant Karnataka Debt Relief Act. Therefore, I am of the view that the said decision cannot be held to lay down the law that a person owning a property in the heart of Bangalore cannot be considered to be a debtor even though he satisfies the provisions of the relevant K.D.R. Act. Hence, it is not possible to hold on the basis of that decision that the petitioner is not entitled to a relief under the X.D.R. Act. The application is required to be enquired into as per the provisions contained in the K.D.R. Act 1976 and it has to be decided on the basis of the evidence adduced in the case as per the provisions contained in the K.D.R. Act, 1976."
In our view, the aforesaid observations do not in any way help the learned Counsel for the appellant. There can be no gainsaying that the application has to be decided on evidence and in the light of the statutory provisions. The manner in which the point has been projected before us was never put forth before Swami, J. As earlier observed the aforesaid unreported Judgment does not help the case of the appellant. In this view of the matter, we hold that the appellant does not belong to weaker section of people as defined in the 1976 Act.
18. No other point arises for consideration.
For the reasons recorded above, the appeals fail and are dismissed, but without any order as to costs.