Mohanlal Kanayalal vs Lalchand Motilal Malani on 20 September, 1960

    Mohanlal Kanayalal vs Lalchand Motilal Malani on 20/9/1960

JUDGMENT

   Patel, J.

   1. This application arises out of somewhat unusual circumstances. The
opponents executed a mortgage in favour of the petitioner on. January 24, 1950.
On December 13, 1955, they made an application to the Debt Conciliation Board
under Act I of 1349 Fasli. After this the petitioner filed a suit in the Court
of the District Judge at Aurarigabad on January 4, 1956. The claim in the suit
was 39,100 0.8. equivalent to a sum of Rs. 33,514-4-0 I.G. currency. The Board
came to an ex parte decision that the petitioners before it were agricultural
debtors and, therefore, issued a certificate to the Civil Court on January 12,
1956, of the pendency of the application before it. As a result of the
certificate of February 5, 1957, the suit came to be stayed. The Hyderabad
Agricultural Debtors Relief Act came into force on September 30, 1956. Section
65 of the Act repealed the Conciliation Act and dissolved the Boards. On October
28, 1958, the petitioner made an application to the District Judge at Aurangabad
that the stay should not be continued and the District Court should proceed with
the suit filed by the petitioner. The learned District Judge observed that from
the certified copies of the proceedings of the Board it appeared that the life
of the Board expired on September 30, 1956, and thereafter no extension was made
by the Government. He held that in view of Section 28 of the Debt Conciliation
Act as there was no final decision of the Board, the proceedings in his Court
could not go on, and he had no jurisdiction to take up the trial of the suit. It
is against this decision that the present Revisional Application is directed.

   2. The question concerns interpretation of Section 65 of the Hyderabad
Agricultural Debtors Relief Act, 1956. Until this Act was passed, the Debt
Conciliation Act I of 1349 Fasli was in force in the Hyderabad State. According
to the provisions of this Act, Boards were constituted with defined territorial
jurisdiction for conciliation between debtors and creditors. The debtors were
permitted to make applications for conciliation of their debts and certain
consequences followed. By the enactment of the Agricultural Debtors Relief Act,
these provisions were repealed. Section 65, the repealing section, so far as is
relevant, is to the following effect:-

     The Debt Conciliation Act, 1349 F., is hereby repealed.

     All Boards established under section 3 of the repealed Act shall be
dissolved:

     Provided that-

     (a) All proceedings pending before any such Board at the date when this Act
comes into force shall-

     (i) it they are within the pecuniary limits of the jurisdiction of a Court,
be continued and disposed of by the Court under this Act as if an application
under Section 4 had been made to the Court in respect thereof;

     (ii) if they are beyond the pecuniary limits of the jurisdiction of a
Court, be continued and disposed of as if this Act had not been passed;...

   Under the scheme of the latter Act (Hyderabad Agricultural Debtors Relief
Act, 1956), the Courts having jurisdiction to deal with applications under the
Act are three as denned by Section 2, Sub-section (4). These Courts are, the
Munsiff's Court, the Subordinate Judge's Court, or a Judge of the City Civil
Court having ordinary jurisdiction in the area in which the debtor ordinarily
resides. The City Civil Court has jurisdiction in Hyderabad City and it can deal
with applications of debtors residing within its jurisdiction. Each of these
Courts had different pecuniary jurisdiction and the scheme of the Act is that an
application has to be made by a debtor to the Court of the lowest pecuniary
jurisdiction. Consistent with this scheme, the first part of the proviso to
Section 65 provides that any application pending before the Board on that date
should be transferred to the Court having jurisdiction to deal with the
application and should be continued and disposed of by that Court under the new
Act. The question is, what is to happen to applications pending before the
Boards and beyond the pecuniary jurisdiction of the Courts and where the
indebtedness of the debtor was beyond Rs. 15,000, so that the adjustment of the
debts could not be made under the provisions of this latter Act? On the one hand
it is contended by Mr. Vaishnav that Sub-clause (ii) of Clause (a) of the
proviso to Section 65 is inconsistent with the earlier part, by which all Boards
established under Section 3 of the repealed Act are dissolved and in view of
this inconsistency, it must be regarded as ineffective and void. It is argued on
the other hand by Mr. Kanade that that cannot be the meaning of the section.
What is meant is that the Boards before which those applications were pending
still continue to exist or in any case the powers under Section 3 of the
repealed Act to appoint fresh Boards still continues. The question is, which of
the rival contentions is correct and what is the result of the acceptance of the
one or the other ?

   3. It is not possible to accept Mr. Kanade's contention for the obvious
reason that the main enacting part, by which all Boards established under
Section 3 of the repealed Act are dissolved, does not make any reservation in
favour of continuation of any Board or in favour of the power of appointment of
a fresh Board after the Boards are dissolved. I am, however, referred by Mr.
Kanade to Section 3 of the repealed Act, which contains provisions for
dissolution of Boards by the Government and re-appointment of the Boards or
giving the powers of the Boards to certain officers mentioned in it. The scheme
of Section 3 is to have a Board with a President. That Board has to consist off
10 members to be nominated by the Government and one of them is to be the
President. A quorum has to consist of 3 members. Under certain eventualities,
the President may nominate someone else, who is a member of the Board, to act as
the President, Then Sub-section (5) gives power to the Government to abolish or
to cancel any appointment or abolish a Board, after giving reasons therefor.
Sub-section (6) provides that after having abolished a Board (which would mean
under Sub-section (5)), if the Government deems it necessary or proper to
establish any other Board, it may give specific powers of the Board to any
officer having experience of such work or give powers to some Collector. The
scheme of Section 3 is such that by no stretch of language can it be said that
where the Boards are abolished by the Legislature, the power still continues in
the Government to appoint fresh Boards. The language of the earlier part of
Section 65 is express and mandatory that on and from that date all Boards shall
be dissolved. How is it possible to construe this to mean only such Boards as
would be covered by the first part of the proviso, is difficult to see. It must
also be remembered that the Boards are constituted generally and not for the
purpose of settlement of the debts of a single individual. Moreover, the earlier
part repeals the Debt Conciliation Act. If the Act is repealed and if all Boards
are dissolved, it is impossible to say that Section 3 will still be operative
for the purpose of re-constitution of a Board or Boards. The contention is that
since the second part of the proviso provides that such proceedings, as do not
fall within the jurisdiction of a Court, shall be continued as if the Act had
not been passed, must mean that the Boards continue regarding those
applications. That would have been so, provided the existence of the Boards was
maintained and their jurisdiction continued. Merely from the language of this
proviso it is not possible to say, that though the Legislature, by mandatory
language, has declared that all Boards shall be dissolved, they continued to
exist. It is an admitted fact that the Boards have ceased to function after the
Act came into force. I must, therefore, accept the contention of Mr. Vaishnav
that the second part of the proviso is clearly inconsistent with the enacting
part of the section.

   4. Once this conclusion is reached, what is the result? Though these two
clauses are worded as proviso, in substance, these are saving clauses and must
be construed as such. Crawford on Statutory Construction at page 612 (para. 300)
says:-

     As we have stated elsewhere, the saving clause is used to exempt something
from immediate interference or destruction. It is generally used in repealing
statutes in order to prevent them from affecting rights accrued, penalties
incurred, duties imposed, or proceedings started under the statute sought to be
repealed. Its position or verbal form is unimportant. But if it is in
irreconcilable conflict with the body of the statute of which it is a part, it
is ineffective, or void...

   Craies on Statute Law (Fifth ed.) at page 203-204 says:

     ...and that if the repugnant clause is in the form of a saving clause, then
this rule holds good no longer, for it is said that a saving clause which is
repugnant to the purview of the Act is to be rejected and treated as void...

   I may also refer to the observations of Fry, J. in the case of Corporation of
Yarmouth v. Simmons (1878-9) 10 Ch. D. 518 wherein he says (p. 528) :

     ...But in the next place, it is to be observed that this section is only a
saving clause in a general Act, and it appears to me that, even if it would in
itself have covered the alleged right, and have protected it, yet being, as I
have pointed out, physically inconsistent with the doing of the thing which is
authorized to be done by the special Act, that saving clause would cease to be
operative. I think the law is clearly laid down by Lord Coke in the Case of
Alton Woods 1 Co. Rep. 40 b, that a saving clause in an Act of Parliament which
is repugnant to the body of the Act is void....

   Under these circumstances, the second part of the proviso must necessarily be
treated as void and ineffective.

   5. The further result is that all the proceedings before the Board lapse. It
may be that there is a lacuna in the Act of the Legislature. It is not, however,
the function of the Courts to remedy the same. Since the two parts cannot exist
together, the necessary result must follow, and if the proceedings before the
Board lapse, then there is no hindrance in the way of the Civil Court taking up
the case, which is pending before it.

   6. It is contended by Mr. Kanade that the application of the opponents before
the Board has not been decided and, therefore, the Civil Court will have no
jurisdiction to deal with the matter under Section 28. He has relied on the case
of Ponnambala, v. Sriramulu [1945] A.I.R. Mad. 106, where the provisions of the
Conciliation Act (Madras) were somewhat similar to those of the repealed Act in
question. In that case, however, there was no question of repeal of the Act nor
of dissolution of any of the Boards constituted under the Debt Conciliation Act.
Therefore, clearly the case can have no application to the facts of the present
case.

   7. My attention is also invited to a judgment of this Court in Rai Chotelal
v. Lalchand Motilal [1958] Civil Revision Application No. 1608 of 1957, decided
by Chagla, C.J. on July 10, 1958 (Unrep) decided by Chagla, C.J. where also the
circumstances were similar. The creditor made an application to the Deputy
Collector for recalling the certificate of stay, which was given by the Board.
The Deputy Collector said that it was not competent for him to remove the stay
order but that could only be done by the High Court, Against this order the
creditor came to the High Court and it was held by the learned Chief Justice
that the Deputy Collector had not given any decision, which could be questioned
in the Court, that the objection petition of the petitioner should come before
the Board when it was constituted and be decided by that Board, and for that
reason, it was not necessary for him to make any order in the Revisional
Application. In that case, the present question was not argued. Under these
circumstances, it is not possible to regard this decision as an authority for
the proposition that the Boards still continued and the matter must still be
regarded as pending before the Board. As I have said above, the Boards ceased to
exist, and unless any provision was made for proceeding with pending matters,
the proceedings must lapse. There is then no hindrance in the way of the Civil
Court dealing with the disputes between the parties in accordance with law.

   8. The result is that the Court must be directed to proceed with the suit
from the stage at which it was left. The suit was originally filed in the
District Court, which alone had pecuniary jurisdiction. After the Bombay Civil
Courts Act became applicable to this area, the Civil Judge, Senior Division,
will have jurisdiction to deal with the suit. The suit is yet on the file of the
District Court. It must now be transferred to the Court of the Civil Judge,
Senior Division, for disposal in accordance with law. Order accordingly. There
will be no order as to costs of this Civil Revision Application.

   9. The petitioner has made an application, being Civil Application No. 1325
of 1959, along with the Civil Revision Application, which I have just now
decided, for appointment of a receiver. Since I have disposed of the Civil
Revision Application, this application will not survive in this Court. But in-
stead of asking the petitioner to make another application in the trial Court, I
direct that this Civil Application be forwarded to the Civil Judge, Senior
Division, who will deal with it on merits after giving an opportunity to the
opponents to put in their say.