Dhanki Mahajan Vs. Rana Chandubha
Wakhatsing & Ors  INSC 99 (11 April 1968)
11/04/1968 HEGDE, K.S.
CITATION: 1969 AIR 69 1968 SCR (3) 759
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.
Respondents 1 to 3 executed in 1940 a
usufructury mortgage, of their land in favour of the appellant and certain
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 exceeded 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 coordinate
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.
(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,  S.C.R. 292,
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]
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
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
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 respondents, 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)  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)  S.C. R. 292.
(2) A. 1. R. (1957) Bom. 6.
(3) (1962) 3 Guj. L.R. 1007.