DHANKI MAHAJAN v. RANA CHANDUBHA WAKHATSING & ORS. April 11, 1968 [R. S. BACHAWAT AND K. S. liEGDE, JJ.] Sdurashrra Agricullurd Debtors' Relief Act 23 of 1954, •· 2(6)(i)- Debtor, definition of-Person with liability over Rs. 25,000 not a debtor- /oint liability of umfructury mortgagoro for an
amount llD'.ger than Rs. 25.000-Whether each of them ccn be regarded as liable /or only hi• share of debt and rrta1ed as >debtor for purposes of Act. Respondents 1 to 3 executed in 1940 a usufructury mortgal!e of their land in favour of the al'l"'llant and certain others. The liability under the mortgage was a joint bability and under the terms of the deed each one of the mortgagors was liable fo'r the entire debt due under the mortgage. The respondents claiminB to be 'debtors' under the Satirashtra Agricultural Debtors' Relief Act 1954 prayed for a scaling down of their debts. The· Debt adjustment Board and the B!>pellate 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 computin' the debts due from the respondents each one of them should be held liable only for on&-tbird of the mrirtgage debt and in that event the total debt duo from each WClOlld not exc=I Rs. 25,000. The learned JUdge in bis judgment also considered the question as to bow far a Single Judge of a High Court is bound b)r earlier decloions of the COurt. HELD : (i) A Single Judge of a High Court is ordinarily bound to accept as ccrrect judgments of courts of CO-Ordinate jurisdiction, of Divi- sion Benches and Fiil! Be:nches of bis Olurt. [762 DJ
Tribhovandas Purshottllmdas Thakkar v. · Ratilal Alotlla/ P"'e/, A.1:R. 1968 s.c. 372, re-affiimed. (ii) Thero could be no dispute that under the Ttansfer of Property Act each of tho respondents must be held to be liable fo'r the entire mOrt- gag<i debt There was nothing in the special provisions of the Sau!ashtra Act which would justify a departure from the said rule. The High Court therefore erred in treating die respondents as 'debtors' under that Act. [763 A-Fl
V. Rcma.rwaml Ayyangar v. T. N. V. Ka/Iara Thavar, [1951] S.C.R. 291. distinguished. Ambu Rama Mhatro v. Bhau Halya Patel, A.l.R. 1957 Bom. 6 and Dave Sadashiv JayakrishM v. Rana Govubha, (1962) 3 Guj. L. R. 1007, approved.
(iii) While aj,plying the provisions of the Saurashtra Act with the provisiom of the Transfer of Picperty Act or the Contract Act in cettain ca8es s0me difficulty may arille. All these difflculties can be resolved by
reasonably -lnt«preting the relevant provisions of the Act. (764 CJ CrvlL APPELLATE Ju11.1so1cT10N : Civil Appeal No. 38 of 1965. 8 Sap. Cl/6S-'J [1968] 3 S.C.R · Appeal by special leave from the judgment and order dated
Febf1:1al)'. 12, 1963 of the Gujarat High Court in Civil Revision Application No. 477 of 1960. I. N. Shroff, for the appellants. I. 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 responde~ts Nos. 1 to 3 herein. As they are the only contesting respondents m this appeal, they will hereinafter be referred to as the respondents.
The respondents are Bhayats and Girasdars of Dhanki village in Lakhtar Taluka of fre Saurashtra region of the Gujarat State. On December 19, 1940, the respondents executed a joint usu- fraotury 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 . .XXVIlI of 1939), hereinafter referred to as the Bombay Act, was in force in Dhanki village. As long back as 1945, respon- dent 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 adjustm~t of his debts. These applications were consolidated for the purpose of trial. Ultimately they were dismissed as the debts due from each of those pers.ons 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 debt. No appeal was prefer- red 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. XXIlI of 1954) came to be enacted in 1954. This Act will hereinafter be referred to as "the Act". By and c DHANKI v. CHANDUBHA (Hegde, J.) 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 debfs under the provisions of the Act The appellants resisted those appli- cations 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. C Both the Board as well as the appellate court upheld the conten- tions of the appellants that the respondents were not "d~btors" 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 mort- D gagers is liable for !he 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 t11e High Court reversed the above findings. It held 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 E 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 nuder 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 in- correct. 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' applications1 should have been. entertained by the Board and dealt with according to law. As, in our opinion, the decision of the Board and of !he 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 anses SUPl.EMB COUllT REPORTS
[196ll] 3 S.C.R. 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 revei:se the deci- sion 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 dis- a pose of a subsidiary controversy which appears to have troubled Raju, J. unnecessarily. Major portion of his judgment was de· voted 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. c 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
T1 ibhovandas Purshottamdas Thakkar v. Ratilal Motilal Pa:el. (') · 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 pre- sent 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 bis 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. ~
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 mort- gage, or by an amalous mortgage in the nature of pura chhoot Qf immovable property, but does not include arrears of wages payable in respect of agricultural or manual labour. "Debtor" 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 mort- gages as well. As mentioned earlier, the usufractwy mortgage in question was executed by all the respondents jointly. The debt (I) A. I. R. 1968 S. C. 372.
DHANKI v. CHANDUBHA (Hegde, J.) A . borrowed under it was a joint debt; each one of th.!l mortgagors was Jointly liable for the entire debt. That being so, unde~ tbD provisions of the Transfer of Property Act, each of the respon- dents 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 conte1_1tion that each of them is liable for one-third of the mortgage debt. The learned counsel for the respondents invited our attentiQ_n to ss. 7(1), 16, 19, 20(1)(a), 20(l)(c), 20(3), 21 and 29.
Section 7 ( 1) provides that if the payment of debt due by a debtor is guarantel:d 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 delitor 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 fC)r us in this case to consider as to what would ha~n in a case where some of the co-mortgagors are "debtors" allcl 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 mort- gage 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 ~ct permits one of the joint debtors to apply for adjustment of his debts, and if he so does the Board is ~ound to scale down his debts so far as he is condmed. That bem~ so unless we ~old that for. th~ purpose of the Act joint debts ~re hab!e to be split up, complications would arise. He gave an tllustration of a debt owned by three joint debtors each of whom ~s a ."debtor" within. t~e meaning of the Act.
Ac~ording to him, m Vie~ of the prov1s1ons of the Act, if the total debt due from them 1s Rs. 30,000; the same may w 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 inde- pendent awards, each ?f those awards can be executed against the concerned debtor; 1n that event the creditor will be entitled (1968] 3 S.C.R.
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 thougli the creditor cannot collect more than what is due to him jointly from all debtors, his right to pro- ceed against an individual debtor and his property has to be deter- mined 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 rele- vant 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 ntle 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 mort- gage debt in this case is liable to be split up has placed reliance on the decision of this -Court in V. Ramaswami Ayya11gar v. T. N. V. Kai/asa 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 1 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 1 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 (I) {1951] S. C.R. 292.
c c DHANKI v. CHANDUBHA (Hegde, J.) appeal, this Court reversed the judgment of the ~gh Court and restored that of the Subordinate Judge. Mukheqea, J. (as be 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 cou)d 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 agricqlturists 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(') 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 Ha/ya Patel(2 ), the Bombay High Court, speaking through Shah, J. (as ~ then was) held that it cannot be disputed that when a mortgage is created jointly on property in which several persons are in· terested each of the mortgagors is liable in the absence of a con- tract to the contrary to pay the entire debt, and the Jiabilitv of a mortgagor is not proportionate to the extent of his interest 'in the mort,g~ged property; and that position is not altered under the provmo~s of the Bombay Act.
This decision was followed by Bhagwat1, J. (as he {hen was) of the Gujarat High Court in Dave Sadashiy J ayakrishna ".· Rana Govubha ('). We are in agree· ment with that conclus10n .
. For the reasons mentioned above, we allow the appeal, set aside the or~er of the High Court and restore that of the appel- late court with costs throughout. G.C. (I) [1951] S. C.R. 292.
(2) A. I. R. (1957) Born. 6. (3) (1962) 3 Guj. L.R. 1007. Appeal allowed.