Indian Kanoon - Search engine for Indian Law

2. The learned Munsif in his letter of reference has taken the trouble to give a useful summary of the relevant cases already decided by this Court. He himself is of opinion that the Court cannot refuse to stay the proceeding after receipt of the notice under Section 34 and that the creditors must take their objection to the Debt Settlement Board. In some of the reported cases, this Court has pointed out that the Act has set up its own tribunal and has laid down the principle that where the Act has expressly provided that certain matters are to be decided by that tribunal, the Civil Court must refrain from going into those matters, but where there is no express provision in respect of the tribunal under the Act the ordinary Court must act in the exercise of its powers. Following this principle it has been pointed out in cases under Section 34 of the Act that it is for the Court to decide whether there is a proceeding pending before it and whether that proceeding is in respect of a debt which is the subject-matter of an application under Section 8 or a statement under Sub-section (1) of Section 13, as intimated in the notice : see Form 15 prescribed by Rule 73. Thus it has been held that if an execution sale has already taken place the debt is wiped out from the proceeding and the notice under Section 34 cannot operate, for there is nothing to stay. The Act defines what is a "debt" under the Act and what is a "debtor." It does not include all kinds of debt but there are certain exceptions as mentioned in Clause (8) of Section 2. The definition of 'debtor' is narrower because even though there may be a 'debt' as defined in Clause (8), the person who is liable for that 'debt' may not be a 'debtor' within the meaning of Clause (9) of Section 2. Who is to decide the question whether there is a debt and whether the person who is liable for that debt is a debtor within the meaning of the Act. This is provided for in Sections 18 and 2 0rder It will be seen that the relevant terms of the two Sections are somewhat different. Section 18 (1) runs thus:

4. We are not here concerned with the question regarding a debtor. We are here concerned with the question regarding a debt and so the construction of Section 18 is relevant. Mr. Gupta for the creditor in this Court has contended that the provision in Section 18 assumes that the debt is one which comes under the definition of debt as laid down in Clause (8) of Section 2 and on that assumption the only question which the Board is to go into is whether that debt is nil and, if it is not nil, what is the amount of it. I think this contention is correct and it is confirmed by the provision since the decree of the Civil Court which concludes the question before the Board surely does not decide the point whether the debt is one under the Act or not. This is also confirmed by Sub-sections (2), (3) and (4) of Section 18 which deal with the question of the amount. In this connexion, see also Section 36, Clause (a). It is noteworthy that dismissal of the applications by the Board is provided for by Section 17 which expressly lays down the grounds upon which dismissal may be made and these grounds do not specifically include the ground of jurisdiction. This is quite consistent with the fact that the Act creates a special jurisdiction and the procedure laid down in proceedings under the Act assumes that the matter dealt with is one which comes within the four corners of the definition of the terms 'debt' and debtor.' Section 8, for instance, which starts with the application, lays down that the application is to be by a 'debtor' for the settlement of his 'debt.' Thereafter the subsequent proceedings as provided for in the Act assume that the party before the> Board is a 'debtor' and the matter dealt with in the application is 'debt' as defined in the Act. Where there is no 'debt' as defined in the Act, the Act does not apply. In a recent matter before this Court we have already held that Section 34 does not apply to the case of persons who are not applicants before the Board. Upon these considerations, I am of opinion that it is for the Court on receipt of notice under Section 34 to decide the question, not only that there is a proceeding pending before it, but also that the subject-matter of that proceeding is a debt as defined in the Act. If the Court finds it is not such a debt, then the notice under Section 34 cannot operate so as to stay the proceedings in the Court. In my judgment therefore the point referred by the learned Munsif should be decided thus. The Civil Court after receipt of notice under Section 34, Bengal Agricultural Debtors Act, has jurisdiction to enter into the question whether the debt, in respect of which the proceeding is pending before it, is a debt within the meaning of Clause (8) of Section 2 and if it finds that it does not come within that definition, it should not stay proceedings in pursuance of the notice.

7. I agree with 'my learned brother that the question formulated by the Munsif must be answered in the affirmative. The Bengal Agricultural Debtors Act is undoubtedly a special Act which confers special jurisdiction upon the tribunal set up by it, to deal with certain specified cases and it lays down new remedies and new procedure. The jurisdiction that the Debt Settlement Board exercises within the limits of its authority must be deemed to be exclusive and cannot concurrently be exercised by the Civil Court. This is apparent from the whole scheme and structure of the Act and particularly from Sections 33 to 36 which are intended to stay the hand of the Civil Court or to render its orders and decisions nugatory when they come into conflict with anything which is done by the Board under the provisions of the Statute. The Board however can exercise its jurisdiction only in certain limited and special Cases which are laid down in the Act itself. The intention of the Act, as we gather from the Preamble, is to give relief to a particular class of debtors only and the expressions 'debt' and 'debtor', as defined in the Act, have been used in a rather restricted and limited sense. Certain class of liabilities which would ordinarily come with in the meaning of the word 'debt' are specifically excluded from the scope of the Act and even when a liability is a debt, the person saddled with it is not necessarily a debtor. In order to be a debtor and to have the requisite competency to invoke the provisions of the Act, a person must fulfil certain requirements which are enunciated in Section 2, Clause (9) of the Act. It is a 'debtor' thus defined who can present an application for settlement of his debt under Section 8 of the Act. It seems therefore that the Act does not come into operation at all when there is no debt within the meaning of the Act, and the Debt Settlement Board cannot also exercise its functions in the matter of settlement of debts unless the applicant before it is a debtor as defined in the Statute. The question is whether the Board itself can decide as to whether the particular liability is a debt or the applicant before it is a debtor which would entitle it to exercise its jurisdiction under the Act. Ordinarily when a tribunal exercises a subordinate or special jurisdiction the question whether the condition essential to give it jurisdiction is present or not is left to the ordinary Courts of the land. I agree however with Ameer Ali J. in holding that there is no inherent obstacles to a Civil Court being vested with exclusive and final powers in the matter of determining the limits of its own authority : vide Baijnath Tamakuwalla v. Tormull . The question therefore narrows down to this, as to how far the Legislature either expressly or by implication has endowed the Debt Settlement Board with authority to determine the matters which are necessary to enable it to exercise its powers under the Act.

If there is any doubt or dispute as to the existence or amount of any debt, the Board shall decide whether the debt exists and determine its amount.

9. In my opinion the word 'debt' here has, the same meaning that is given to it by Section 2, Clause (8) of the Act, and the enquiry; contemplated by this Section is not one as to whether the liability amounts to a debt at all within the meaning of the Act but whether a debt as defined by the Act and] which is alleged by the party to exist, exists as a fact and if so what is its amount. The word 'existence' cannot have reference to the character of the liability and this is I. clear from the proviso which lays down' that a decree of the Civil Court relating to a debt shall be conclusive evidence as to the existence or amount of the debt as between the parties to the decree. It is obvious that the Civil Court cannot say anything as to whether the liability of the judgment-debtor is a debt within the meaning of the Act or not. This interpretation is also borne out by the marked difference in the language which exists between Sections 18 and 20 of the Act. Under Section 20 if any question arises before the Board as to whether a person is a debtor or not, the Board shall decide the matter. But in Section 18 there are no words to show that the Board has authority to decide as to whether a particular liability amounts to a debt within the meaning of the Act or not. It presupposes that there is an allegation of debt as defined in the Act, the only dispute being with regard to its existence and amount. It is significant to note that Section 17 of the Act which enumerates the circumstances under which an application under Section 8 could be summarily dismissed does not provide for throwing out such an application in limine on the ground that the liability was not a debt.