Kasaraneni Kutumba Rao vs Kakaria Basava Purnamma

Narasinga Rao

This revision petition is directed against the order of the Additional Subordinate Judge, Vijayawada whereby he refused to extend the benefits of Section 4 of the Andhra Pradesh Agricultural Indebtedness (Relief) Act (Act 7 of 1977) to the revision petitioner, in an insolvency proceeding. The case of the petitioner was that he is a small farmer within the meaning of Section 3 (1) of the Act and therefore, the debt, on account of which the insolvency proceeding, i.e., I.P. No. 48/74 arises, must be deemed to have been discharged. It is further alleged that the creditor cannot recover the debt doe under the pronote that the petitioner has got four major sons and the family has got Ac. 4-44 cents of wet and dry land, that the share of the petitioner would be only Ac. 0-89 cents and that the wife of the petitioner has got Ac. 1-00 of land. Hence, the petitioner is a small farmer owning less than one hectare of wet land.

The creditor-respondent resisted this petition on the ground that the petitioner is not a small farmer and that he owns Ac. 4-50 cents of wet land and Ac. 3-50 cents of dry land and the property is worth more than Rs. 1,50,000/-. It is also alleged that the wife of the petitioner owns some land. The further averment is that before filing this I.P., the petitioner collusively brought into existence a sale-deed purporting to have sold Ac. 0-93 cents of wet land The I.P. was filed treating the said sale as an act of insolvency. Subsequent to the filing of the I.P., the petitioner is said to have brought into existence another sale-deed purporting to sell Act. 1-50 cents of dry land. Therefore, the two items of land sold under the above sale-deed have to be included in the holding of the petitioner and thus, he is not a small farmer.

The respondent did not adduce any oral evidence. The petitioner examined himself as P.W.1.

Even on the basis of the evidence of P.W.1, it was held that the 4th son of the petitioner is still a minor and that the wife of the petitioner also owns Ac. 1-00 of land and thus the petitioner and the share of his son, together with the land held by his wife would exceed the prescribed limit of one hectare of wet land and therefore, the petitioner is not a small farmer. The learned Subordinate Judge also held that the petitioner has not proved that his fourth son has attained majority and under the definition of ''family'', the share of the minor son has to be included in computing the land held by the petitioner. For that purpose, the learned Subordinate Judge relied upon the description of the fourth son as a minor in a sale-deed dated 14-5-1975. The learned Subordinate Judge also held that the petitioner has not proved by filing any extract of birth register or other documentary evidence to prove that his fourth son had attained majority and in view of the description in the sale-deed as aforesaid, he treated the fourth son as a minor and held that his share has to be included in the holding of the petitioner. In short, he held that the petitioner was not a small farmer. The learned Subordinate Judge also held that the insolvency proceeding is not a proceeding for the recovery of a debt and as such, the provisions of Section 4 of Act 7 of 1977 has no application to an insolvency proceeding.

At the outset, it is to be seen whether the provisions of Act 7 of 1977 are attracted to a proceeding in insolvency. In order to decide this question, it is necessary to read Section 4 of the Act so far it is necessary for our purpose. It reads;

Discharge of debts and relief to debtors:--

(1) Notwithstanding anything in the Andhra Pradesh (Andhra Area) Agriculturists Relief Act, 1938 (Act 4 of 1938), the Andhra Pradesh (Telangana Area) Money Lenders Act, 1349 F. (Act 5 of 1349 F.) the Andhra Pradesh (Andhra Area) Pawn Brokers Act, 1943 (Act 23 of 1943), the Andhra Pradesh (Telangana Area) Agricultural Debtors'' Relief) Act, 1956 (Act 16 of 1956), the Andhra Pradesh (Scheduled Area) Money Lenders Regulation, (1 of 1960), the Andhra Predesh Indebted Agriculturist, Landless Labourers and Artisans (Temporary Relief) Act 1976 (Act 23 of 1976), or any other law for the time being in force or any contract or other instrument having the force of law and save as otherwise provided in this Act, with effect on and from the commencement of this Act, every debt including interest, if any, owing to any agricultural labourer, a rural Farmer shall be deemed to be wholly discharged.

(2) (a) No Civil Court shall entertain any suit or other proceeding against the debtor for the recovery of any amount of the debt, including interest if any, which is deemed to be discharged under sub-Section (1):

Provided that where any suit or other proceeding is instituted jointly against the debtor and any other person, nothing in this Sub-section shall apply to the maintainability of such suit or proceeding in so far as it relates to such other person.

(b) All suits and other proceedings including appeals, revisions, attachments or execution proceedings pending at the commencement of this Act against any debtor for the recovery of any such debt, including interest, if any shall abate:

Provided that nothing in this clause shall apply to the sale, in respect of any such debt, of--

(i) any movable property held and concluded before the commencement of this Act;

(ii) any immovable property, confirmed before such commencement.

Sub-section (1) of Section 4 clearly lays down that any debt owed to any creditor by any agricultural labourer, a rural artisan or a small farmer shall be deemed to be wholly discharged. Clause (b) of sub section (2) of Section 4 also further alleges that all suits and other proceedings including appeals, pending at the commencement of this Act against any debtor for recovery of such debt shall abate. Sub-section (1) or Section 4 clearly lays down that all debts due to any creditor by any small farmer would be deemed to be wholly discharged. Sub-section 2 (b) relates to all proceedings pending at the commencement of this Act. It further says that all such proceedings shall abate.

It is true that all such proceedings must be in relation to recovery of any such debt. Sub-secs. (1) and (2) (b) cannot be read disjointly. If a debt owed by a small farmer to a creditor stands discharged by virtue of this provision, there is no more any relationship of debtor and creditor even though the insolvency petition is not directly for recovery of any debt. It is only in view of the relationship of debtor and creditor, the creditor can complain about the acts of insolvency of the debtor. But once that relationship of debtor and creditor comes to an end, the very ground on which he can bring the insolvency petition, on account of an alleged act of fraudulent transfer or otherwise amounting to an act of insolvency, is not available to the creditor. Thus, reading sub-section (1) with sub section (2) (b), if the debt stands discharged, all proceedings on account of the debt shall be deemed to be abated though the proceeding pending on the date of the commencement of this Act may not be directly for recovery of the debt. So long as the proceeding can be traced in relation to a debt recoverable by the creditor, the provisions of sub-sections (1) and (2) (b) of Sec. 4 can be held attracted. The insolvency proceeding undoubtedly arises on account of a debt and on a further ground that the debtor has been guilty of acts of insolvency. This is so in the creditor''s petition. But once the debt is held to be discharged, a proceeding based on a debt though it may not be directly for recovery of the debt stands abated and that is the logical conclusion. In this view of the matter, the finding of the lower court that the provisions of Section 4 of Act 7 of 1977 are not attracted to insolvency proceeding, is unsustainable. I therefore hold that a debtor against whom an insolvency proceeding is pending can still invoke the provisions of this Act and claim benefit thereunder.

The next question is whether the petitioner can be said to be a small farmer. The trial Court held that the petitioner and his four sons own Ac.4--44 cents of wet land by a notional computation, each member would get Ac.0--90 cents of land after excluding 0-10 cents of land being ''Dibba''. The learned Judge thus held that the petitioner and even the fourth son each owns 0-90 cents of land. But, on the date of the commencement of the Act, the fourth son is a minor and therefore, the share of the petitioner together with the share of his minor son works out at Ac. 1--80 cents and that the wife of the petitioner also owns Ac. 1-00 of land and this makes up the total holding of the family as Ac. 2-80 cents.

The point in dispute is whether the fourth son is a major or minor. If it is held that he is a minor even on the date of the commencement of the Act, the total holding of the petitioner and his family would only make up Ac. 1-90 cents of wet land which would be less than one hectre of wet land prescribed under the Act. It is true that before the trial Court, a sale-deed purported to have been executed even by the fourth son dated 14-5-1975 was filed wherein the fourth son is shown as a minor. The Act has come into force on 29-12-1976. Though an explanation is sought to be given by the petitioner that the fourth son though was a major on the date of execution of the sale-deed dated 14-5-75, he was so shown at the Instance of the vendee. But this explanation was not accepted by the learned Subordinate Judge. At this revision stage the petitioner has filed CMP No. 13757/78 and CMP No. 6375/79 seeking the admission of a transfer certificate and an extract from birth register, as additional evidence. The respondent, is absent and no counter is filed to these two petitions. The petitioner would explain that he could not be in a position to get these documents and therefore, he could not file them in the trial Court. Since the substantial question now is whether the fourth son was major or minor, the admission of these documents is essential to throw light on that question. I therefore hold that it is just and necessary to admit these documents as additional evidence and they are marked as Exs. A-2 and A-3 respectively. Ex. A-2 is a transfer certificate in which the date of birth of the fourth son of the petitioner is shown as 1-11-1957. Similarly, the date of birth of the fourth son as entered in the birth register extract, Ex. A-3, is 1-11-1957. From the above dates of birth as entered in Exs. A-2 and A-3, it is clear that the age entered in the sale-deed dated 14-5-1975 was not correct and the fourth son was a major at that time i.e., by the date of commencement of this Act, he completed the age of 18 years. If he is held to be a major, his share cannot be included in the holding of the family, for the definition of the family contained in Section 3 (1) of the Act includes the wife and the unmarried minor children. Thus, the fourth son by the date of enforcement of this Act is shown to be a major. If his share of 0-90 cents is deducted, the holding of the family of the petitioner inclusive of his wife''s share would only be Ac. 1-90 cents which means, less than one hectare of wet land. He is thus a small farmer within the definition of Section 3 (1) of the Act and is entitled to the benefits of the Act. The findings of the lower Court on both the issues as set out by it are unsustainable. The petitioner is thus held to be entitled to the benefits of the Act as the debt in relation to which the I.P. proceeding arises is liable to be abated. The revision petition is accordingly allowed and the order of the trial Court is set aside. In the circumstances of the case, there will be no order as to costs.