Lal Bahadur Singh vs Bishwanath Prasad Singh and Others

Meredith, J.—These three miscellaneous second appeals are by the judgment-debtor, and arise out of orders rejecting applications u/s 13, Money-lenders Act, in three analogous execution cases relating to decrees on three promissory notes.

Three decrees for money were executed in the Court of the Munsif of Hajipur. On the date fixed for sale the judgment-debtor, who was the same in each case, filed an objection that the sales could not take place as the valuation of the properties had not been made u/s 13, Bihar Money-lenders Act, and asked the Court to fix the valuation.

The learned Munsif merely observed: "Decree being on hand note it is agreed that according to the recent ruling of our own High Court valuation under the Money-lenders Act cannot be fixed," and he then threw out the application summarily.

On appeal the learned District Judge said : "With regard to the question as to whether the Money-lenders Act applies to the present execution cases or not, it would be sufficient to point out that even assuming that the provisions of the said Act are applicable, the judgment-debtor ought to have appeared in time to raise the question of valuation. He had no justification for taking no steps until the date actually fixed for sale and then to come forward with the objection that the sale proclamations had not been correctly drawn up and that the provisions of the Money-lenders Act had not been complied with." Accordingly he dismissed the appeals.

A preliminary objection is made by the respondents that no second appeal lies, because Section 13, Money-lenders Act, itself provides for only one appeal from an order under the section. As against this however it is contended that having regard to the provisions of Section 2, Clause (2), Civil P.C., an order u/s 13, Money-lenders Act, fixing the valuation of the judgment-debtor''s property amounts to a decree, and is therefore appealable as such independently of any provision for appeal in Section 13 itself.

It is not necessary to decide this question finally because as I shall show the appeals are fit to succeed even treating them as application in revision. I am myself, however, inclined to the view that a second appeal does lie and that the order u/s 13 amounts to a decree. It does finally determine the rights of the parties with regard to one of the points in controversy, namely the valuation of the judgment-debtor''s property for sale, and it does come clearly within the provisions of Section 47, Civil P.C. It is true that an order u/s 11 fixing instalments has been held not to amount to a decree, but in my view the two orders are quite different in nature. The order u/s 11, fixing instalments does not determine any rights of the parties. It is merely an exercise of the Court''s discretion with regard to the method of procedure in execution; but the order u/s 13 does finally decide one of the points in controversy. I may refer to a decision of the Federal Court in AIR 1939 74 (Federal Court) , wherein it was held that an order u/s 16 of the old Act (which corresponds to Section 13 of the present Act) finally determines the rights of the parties with regard to a valuable right conferred by the section, nd does not amount merely to fixing procedure.

However that may be, there has, in my view, in these cases clearly been a refusal by the Courts to exercise jurisdiction u/s 13 upon grounds which were wholly incorrect. There is no foundation at all for the view that valuation of the property under the Money lenders Act cannot be fixed in execution cases relating to decrees upon promissory notes. The reference made by the learned Munsif to the recent ruling of this High Court is apparently to the decision in Sagarmal Marwari Vs. Bhuthu Ram and Others, All that was held in that case was that nothing in 8. 8, Bihar Money-lenders (Regulation of Transactions) Act, 1939, can debar the holder or the holder in due course of a promissory note, who sues upon that note, from recovering the full amount of principal and interest due according to the apparent tenor of the note.

It is true that this decision is still binding upon me: vide the decision of a Bench of this Court in Lal Singh Vs. Ramnarain Ram and Others, , decided on 11th November 1941); but the decision had nothing to do with the provision of Section 13, Money-lenders Act. Section 13, Money-lenders Act, has nothing to do with promissory notes. It relates to procedure in execution of decrees. There is nothing in the section which any one could possibly contend conflicted in any way with the provisions of the Negotiable Instruments Act, or affected in any way any provision of law relating to promissory notes. It does not enable the Court to interfere in any way with liabilities under promissory notes, or to go behind the decrees obtained upon promissory notes. I am quite at a loss to understand how the learned Munsif thought that there was anything in Sagarmal Marwari Vs. Bhuthu Ram and Others, upon which it could be contended that Section 13, Money-lenders Act, was in any way ultra vires, whether with regard to the execution of decrees upon promissory notes or decrees upon loans of any sort. The refusal of the learned Munsif to consider the application on the merits upon the ground he did was a refusal to exercise jurisdiction.

As for the decision of the learned District Judge, he also was wrong in rejecting the application because it was made belatedly. The provisions of Section 13 are mandatory. They impose a duty upon the Court, a duty which must be carried out before the sale is held. Whether any application is made or not, the execution Court, having regard to the provisions of the section, is not entitled to hold the sale at all until it has fixed the valuation, and having fixed the value it is not entitled to sell the property without complying with the provisions of Section 14 also.

This being a matter of the duty of the Court, the judgment-debtor is entitled to contend at any time that the sale is bad if the provisions of Section 13 have not been complied with. Being a question of a duty east upon the Court before it is entitled to hold the sale, there can be no question of the judgment-debtor waiving his rights by refraining from making an application.

The application in the present case was actually made before the sale took place, though only just before. Once it had been made the Court was not entitled to refuse to consider it upon merits. This being so, the orders of the Courts below dismissing the application summarily must be set aside. The appeals are accordingly allowed, and the cases are remanded for consideration of the application u/s 13, Money-lenders Act, upon the merits. Having regard to the circumstances, there will be no order, for costs in this Court. Costs of the Courts below will be in the discretion of those Courts, and may abide the final result of the application.