Jonnalagadda Ramaswami Chetti vs T.K. Ramachandra Rao

Alfred Henry Lionel Leach, C.J.—The petitioner filed the application before us for the issue of a writ of certiorari against the Debt

Conciliation Board of Dhone, Kurnool District, and for the quashing of an order of the Board dated the 28th May, 1939. A rule nisi was issued,

and we have heard the arguments. It is clear that the rule must be made absolute. The facts are these. On the 6th February, 1939, the respondent,

who claims to be an agriculturist filed an application purporing to be an application to the Debt Conciliation Board u/s 4(1) of the Madras Debt

Conciliation Act, 1935. In this petition the respondent set out three debts all of which were shown to be due to the petitioner. The respondent

apparently had only one creditor. Having set out the debts payable to the petitioner the respondent''s petition proceeded as follows:

I hereby declare that I am an agriculturist and the debts shown above are liable to be scaled down under the provisions of the Madras

Agriculturists Relief Act, 1938.

The Board entertained the petition and served notice on the petitioner in these proceedings. In due course the Board went into the question

whether the respondent was in fact an agriculturist, and came to the conclusion that he was. The petitioner contended that as the debts were

secured on house property they were excluded from the scaling down sections of the Madras Agriculturists Relief Act by virtue of Section 4(d) of

that Act. The Board decided against the petitioner and held that the respondent''s debts should be scaled down under the provisions of the Madras

Agriculturists Relief Act. It is this order which the petitioner asks the Court to quash.

Although the petition which the respondent filed on the 6th February, 1939, purported to be a petition u/s 4 of the Madras Debt Conciliation

Act, 1936, what he was in effect asking the Board to do was to scale down his debts under the provisions of the Madras Agriculturists Relief Act

which the Board had no power to do. But treating the respondent''s application to the Board as an application under the Madras Debt Conciliation

Act, 1936, it is manifest from the provisions of that Act that the petition should have been dismissed. Section 4 provides that a debtor may make

an application ""for the settlement of his debts"". Section 14(1) says that if the creditors to whom more than"" fifty per cent, of the total amount of the

debtor''s'' debts is owing come to an amicable settlement with the debtor, such settlement shall be reduced to writing in the form of an agreement

recording the amounts payable to such creditors and the manner in which, the assets from which, and the times at which they are to be paid. But if

the creditors representing more than fifty per cent, of the applicant''s debts do not agree the Board is bound u/s 17 of the Act to dismiss his

application. As I have already pointed out, there is here only one creditor and he has not agreed to a settlement of his debts. There having been no

settlement the proper and only course for the Board to follow was to dismiss the application filed by the respondent.

The respondent has entirely misconceived the object of the Madras Debt Conciliation Act and has misread its provisions. If he is an agriculturist

and the debts which he owes to the petitioner are debts which do not fall within the provisions of Section 4(d) of the Madras Agriculturists Relief

Act, 1938, he is entitled to have the debts scaled down in accordance with the provisions of that Act, and if the petitioner asks a Court to enforce

the payment of a larger sum than is allowed by the Act the Court will have no power to do so.

The Board having acted without jurisdiction in passing the order of the 28th May, 1939, that order must be quashed, and there will be an order

accordingly. The petitioner having succeeded is entitled to his costs which we fix at Rs. 50.