H. Sitarama Reddy vs Bilehal Somappa and Another

Horwill, J.—The appellant obtained a decree and brought property of the judgment-debtor to sale in execution of his decree. Before the

property had been brought to sale, the judgment-debtor had applied to the Debt Conciliation Board, and u/s 25 of the Debt Conciliation Act the

Court was therefore bound to stay its proceedings. The Court was not however made aware of the existence of an application before the Debt

Conciliation Board, and so it proceeded with the sale. Subsequently, the judgment-debtor applied to have the sale set aside on the ground that it

was void. The executing Court declared that it was. On appeal, the learned District Judge said he would not have hesitated to confirm the sale if it

had not been for the fact that the decree-holder appellant, who was a practising advocate, was aware of the existence of those proceedings before

the Board and failed in his duty to inform the Court.

A preliminary objection was taken that no appeal lies. That objection seems to be well founded, in that the suit was of a small cause nature, its

value being Rs. 400. In view, however, of the fact that the question of the jurisdiction of the Court to set aside the sale was raised the appellant

was permitted to convert the appeal into a civil revision petition.

Section 25 of the Debt Conciliation Act says that,

When an application has been made to a Board u/s 4, any suit or other proceedings then pending before a Civil Court ...shall not be proceeded

with...

which means that the Court has no jurisdiction to proceed with the application when once an application has been made before the Board. The fact

that the Court did not know of the existence of the application and that the Court was therefore unaware of the fact that it had no jurisdiction to

proceed, does not clothe it with jurisdiction in regard to subsequent proceedings. The analogy of a stay order by a superior Court to an inferior

Court is not a good one; for the efficacy of a stay order depends upon its being communicated. It is a prohibitory order by a superior Court to an

inferior Court and the word "" order "" connotes the communication of the substance of the order to the inferior Court; if it is not communicated it is

not an order. In this case, however, we are dealing with a statutory prohibition; and when once, an application has been filed before the Debt

Conciliation Board any Court enquiring into the same matter is deprived ipso facto of its jurisdiction to proceed further.

I agree with the learned advocate for the appellant that if the proceedings were not ab initio void the fact that the decree-holder failed in his

moral obligation to the Court to inform it of what had taken place would not render the proceedings void, though it was very reprehensible on the

part of the appellant not to inform the Court of what he knew had taken place, the obligation being all the stronger because the appellant was a

member of the bar.

The appeal is dismissed with costs.