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PETITIONER: DHANKI MAHAJAN

       Vs.

RESPONDENT: RANA CHANDUBHA WAKHATSING & ORS.

DATE OF JUDGMENT: 11/04/1968

BENCH: HEGDE, K.S. BENCH: HEGDE, K.S. BACHAWAT, R.S.

CITATION:  1969 AIR   69            1968 SCR  (3) 759

ACT: 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.

HEADNOTE: Respondents 1 to 3 executed in 1940 a usufructury  mortgage, of their land in favour of the appellant and certain others. 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  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 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  co- ordinate 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. 372, reaffirmed. (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,  [1951]

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S.C.R. 292, distinguished. 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]

JUDGMENT: 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  Procedure. 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

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                           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

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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  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 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,

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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 res- pondents,  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

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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)  [1951] 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)  [1951] S.C. R. 292. (2)  A. 1. R. (1957) Bom. 6. (3)  (1962) 3 Guj.  L.R. 1007.

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