P. Pedda Nagi Reddy vs G. Pullaiah Setty

A. Hanumanthu, J.—This revision is directed against the order and decretal order dated 27-9-1991 passed in E.P. No. 348/ 90 in O.S. No. 59 / 77 on the file of the Principal District Munsiff, Kurnool. The petitioner herein is the 1st judgment-debtor and the respondent herein is the decree-holder in the said E.P. No. 348/90 in O.S. No. 59/77.

The facts, in brief, giving rise to this revision petition are as follows:

The respondent herein obtained a money decree against the petitioner and 2 others and in execution of that decree, he brought the immovable properties for sale in E.P. No. 348/90. The 1st judgment-debtor resisted that execution and filed a counter stating that he possesses only 1 acre and 20 cents in S. No. 14 which fell to his share in the partition effected with his father and his brother, that he has no other property except the said extent of Ac. 1.20 cents, that he is living upon agriculture, that he is a small farmer and that he is entitled for the benefits of A.P. Act 7 of 1977. During the enquiry, R.Ws.1 and 2 were examined and no documents were marked. No oral or documentary evidence was adduced on behalf of the decree-holder. On a consideration of the evidence on record, the learned Principal District Munsiff, Kurnool by his order dated 27-9-1991 held that the 1st judgment-debtor is not a small farmer and as such, he is not entitled for the benefits of A.P. Act 7 of 1977. Assailing the said order, the 1st judgment-debtor has come up with this revision petition.

Heard the learned Counsel for the petitioner and the respondent and perused the impugned order.

The learned Counsel for the petitioner-judgment-debtor assails the impugned order contending that the lower Court erred in the interpretation of "Family" as defined in A.P. Act 7 of 1977 (hereinafter called as Act), that the lower Court, contrary to the provisions u/s 13 of the Act, held that the burden lies on the debtor to prove and establish that he is a small farmer while, the statutory burden lies on the creditor to prove that the debtor does not come within the definition of ''small farmer'', that even if the debt is a joint family debt, the joint family is entitled for the benefits under the Act and when the debt is owed by the joint family, each unit thereof consisting of an individual, the husband, or the wife, as the case may be of such individual and their unmarried minor children should be taken as a debtor within the meaning of the Act in respect of each share of the debt owed by the joint family. The learned Counsel for the respondent-decree-holder, submits his arguments in support of the impugned order.

Act 7 of 1977 of A.P. Agricultural Indebtedness (Relief) Act, 1977 (hereinafter called as Act) was enacted to provide relief from indebtedness to agricultural labourers, rural artisans and small farmers in the State of Andhra Pradesh and the matters connected therein and it came into force on 29-12-1976. This Act 7 of 1977 covers the debts which were in existence on the date on which the said Act came into force. Section 3 of the Act relates to the definitions. Section 3(h) defines "creditor" as a person from or in respect of whom the debtor has borrowed or incurred a debt and includes his heir, legal representatives and assignees. Section 3(1) defines "family" as "in relation to a person, means the individual, the wife, or husband, as the case may be, of such individual and their unmarried minor children." "Debtor" has been defined in Section 3(j) as an agricultural labourer, a rural artisan, or a small farmer who has borrowed or incurred any debt before the commencement of the Act. Section 3(i) defines the "debt" as any liability owing to a creditor in cash or in kind whether secured or unsecured, payable under a decree or order of the Civil Court or otherwise and subsisting at the commencement of this Act. Section 3(t) defines the "small farmer". Section 4(1) provides that "notwithstanding anything in the various Acts mentioned in that section or any other law for the time being in force, or any contract or other instruments 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 creditor by any agricultural labourer, a rural artisan or a small farmer shall be deemed to be wholly discharged." u/s 4(2)(b), "all suits or proceedings including appeals, revisions, attachment or execution proceedings pending at the commencement of this Act against any debtor for recovery of any such debt including interest if any, shall abate." Provisio to this Section relates to the exceptions for application of this Act. It is not disputed that the decree-debt in this case was existing by the date of commencement of A.P. Act 7/77. Therefore, the judgment-debtor is entitled for the relief under the Act if he is able to establish that he comes within the definition of agricultural labourer, or artisan or a small farmer. Section 3(t) of Act 7 of 77 contains the definition of "small fanner". On an analysis of definition of "small farmer" contained in Section 3(t) of the Act 7 of 1977, the larger Bench of this Court in "P. Masthanaiah v. CH. Veeraiah and Ors. 1987 (1) ALT 166 : 1987 (1) APLJ 203. held that "for being a ''small farmer'', a person must satisfy the following requirements:

(1) His principal means of livelihood should be income derived from agricultural land.

(2) He must hold and personally cultivate agricultural land not exceeding the extent specified, or he must have cultivated it as a tenant or a share-cropper or as a mortgagee with possession (usufructuary mortgagee) agricultural lands not exceeding the limit specified.

(3) If he does not belong to any of the scheduled Tribes, the land which he holds and cultivates, or cultivates as a tenant, or a share-cropper or as a mortgagee with possession should not exceed one hectare if it is wet or two hectares if it is dry.

(4) If such a person is a member of Scheduled Tribe, the agricultural lands which he holds and personally cultivates or which he cultivated as a tenant or as a share-cropper or as a mortgagee with possession should not exceed two hectares if it is wet or four hectares if it is dry; and

(5) In either event, the annual house-hold income of such person other than from agriculture, should not exceed Rs. 1,200/- in any two years within three years immediately preceding to the commencement of the Act.

The above analysis shows that four categories of persons can be called small farmers, viz.,

(1) Person who holds and personally cultivates agricultural lands.

(2) Person who does not hold an agricultural land but merely cultivates it as a tenant.

(3) Person who does not hold agricultural land but merely cultivates it as a share-cropper, and

(4) Person who does not hold (own) agricultural land, but cultivates it as a mortgagee with possession - provided all of them are within the definition."

According to Section 13 of Act 7 of 1977, in any suit or proceeding, the burden of proving that the debtor is not entitled to the protection of this Act, shall, notwithstanding anything in any law for the time being in force, lie on the creditor. It is no doubt true that interpreting the Section, this Court held that "the initial onus to prove that he is a small farmer, within the meaning of this Act, lies on the debtor before the statutory burden of proof is shifted to the creditor."

As seen from the impugned order, the learned District Munsiff contrary to the provision u/s 13 of the Act wrongly placed the burden entirely on the judgment-debtor and not on the decree-holder, to prove and establish the fact that the judgment-debtor is a ''small farmer'' and that he is entitled for the benefits under the Act. The approach of the District Munsiff is erroneous in law. As observed earlier, the statutory burden lies on the creditor, but before that, the initial burden lies on the debtor. In discharge of the initial burden which lies on him, the 1st judgment-debtor in this case got himself examined as R.W.1 and also examined R.W.2. It is in the evidence of R.W.1 that he owns and cultivates 1� acres of land. It is also in the evidence of R.Ws.1 and 2 that judgment-debtor has no other income except from agriculture. No evidence has been adduced on behalf of the decree-holder to rebut the evidence of R.Ws.1 and 2. Nothing has been elicited in the cross-examination of these witnesses to discredit their testimony. Therefore, there is no reason to disbelieve the evidence of R.Ws.1 and 2 that the holding of the judgment-debtor No. 1 is not more than Ac.1.20 cents only.

As seen from the impugned order, the learned District Munsiff relying on certain admissions made by R.Ws.1 and 2 in their cross-examination, held that the debt was borrowed for the benefit of the joint family of the 1st judgment-debtor, his father and brothers and as their joint family possessed more than 13 acres of land, the joint family does not come within the definition of ''small farmer'' and the 1st judgment-debtor as a member of that joint family is not in exclusive possession of his share in the joint family property and as such, he is not entitled for the benefits under the Act. Though it is not specifically observed in the impugned order that the Act is not applicable to the joint family when the debt is owed by it, the finding of the learned District Munsiff is based on that presumption only. It is observed in Para 9 of the order thus:

"From the above piece of evidence it is quite clear that the partition of the property took place only subsequent to 1979 and prior to that there was only joint family in existence. That means even during 1976-79 also the family of the 1st respondent was joint and he was member of the joint family. That shows that on the date when the Act came into force, the 1st respondent was a co-owner of the joint family properties which means the lands of the joint family were being cultivated jointly, and that there was no personal cultivation by 1st respondent. Thus it is obvious that when the Act came into force the 1st respondent was in joint possession of more than five acres of land and not Ac.1.20 cents as alleged by him. So, the first respondent cannot be declared as small farmer entitled to the provisions of Act 7/77."

The reasoning seems to be based on the basic principles of Hindu Law that every co-parcenar in a Joint Hindu Family has joint interest and possession in the co-parcenary property and a co-parcenar is not entitled to exclusive possession of any part of the joint family property. The incidents of Joint Hindu Family or co-parcenary property as understood under the Hindu Law cannot be imported in interpreting the provisions of this Act. As earlier stated, this Act has been passed to wipe out the rural intendebtedness of small farmers, etc., in the crusade against oppression and harassment of the weaker Sections at the hands of creditors. Therefore, the joint family also is entitled to the benefits under the Act when the joint family is the debtor. Division Bench of this Court in P. Varahalamma Vs. Repeti Ramanna and Others, .& " categorically held thus:

"Reason and spirit of the statute relentlessly pursued compels one to the conclusion that a debt of a Joint Hindu Family is attracted by the provisions of the Act and the share of each major member of the joint family has to be notionally computed for ascertaining whether he is a ''small farmer'' within the provisions of the Act."

Another Division Bench of this Court in Krishna Murthy and Others Vs. Government of Andhra Pradesh, refuting the contention that ''joint family'' does not get the benefit under the Act, observed thus:

"In our opinion, the definition of "family" in relation to a person is deliberately included by the Legislature to give benefit to the different units of a joint family which satisfy the requirements of the Act. When a debt is owed by a joint family, it will have to be split up into different units as defined in Clause (1) for the purpose of giving benefit under the Act. Otherwise there is no purpose in defining the "family" limiting its scope to an individual, the wife or husband and their unmarried minor children. Therefore, this definition clearly leads to the conclusion that when a debt is owed by a joint family, each unit thereof consisting of an individual, the wife or husband as the case may be of such individual and their unmarried minor children should be taken as a debtor within the meaning of this Act in respect of each share of the debt owed by the family. Let us illustrate. Supposing there is a joint family consisting of five such units and possessing five hectares of wet land. As per the definition contained in Section 3(1) read with other provisions, it is logical to conclude that the family must be deemed to have been in five smaller units, each having one hectare. Since each unit comes within the definition of a "small farmer" as it owns only one hectare of wet land, then each of the five units gets the benefits of the Act."

This decision has been approved by the Full Bench of this Court in Dasam China Pappayya Raju Vs. Sripada Ramachandra Prabhakara Rao, . In Para 24 of that judgment. Full Bench observed thus:

"We are in agreement with the said decision and we are of the view that when a debt is owed by a joint family, it has to be split up into different units according to the expression ''family'' for the purpose of giving benefit under the Act. Otherwise, there was no purpose in defining the expression ''family'' in that manner."

In a recent Case in- Gollareddigari Golla Reddy Vs. Mallepalli Adinarayana Reddy, , my learned brother Justice C.V.N. Sastri also relying on Full Bench decision observed thus:

"When a debt is owed by a joint family, each unit thereof consisting of an individual, wife or husband, as the case may be, of such individual and their unmarried minor children should be taken as judgment-debtor within the meaning of the Act in respect of each share of the debt owed by the family."

It is well settled thus:- If the debt is a joint family debt, it has to be split up into different units of ''family'' as defined in the Act and it has to be considered whether each unit is a small farmer or not and each unit of the joint family consisting of an individual, husband or wife, as the case may be, of such individual and their unmarried minor children should be taken as judgment-debtor within the meaning of the Act in respect of each share of the debt owed by the family.

In the instant case, the learned District Munsiff held that the debt is owed by the Joint Hindu Family of which the three judgment-debtors and their father are members and all of them are major members of the joint family. Therefore, for the purpose of this Act, the joint family has to be construed to consist of four units and each unit should be taken as a debtor within the meaning of this Act in respect of each share of the debt owed by the ''family''. There fore, even if it is taken that the extent of the holding of property possessed by the joint family of the judgment-debtor is about 13 acres of dry land which is more than the statutory maximum under the Act, the share of each of the four units in the joint family comes to 3 1/4 acres of dry land and therefore, comes, within the definition of ''small farmer'' and each of the four units gets the benefit under the Act and the decree-debt should be deemed to have been discharged, and the decree-holder is not entitled to recover the debt from any of the judgment-debtors under the decree.

The impugned order suffers with an error apparent on the record. The conclusions drawn by the lower Court are illegal and they are based on incorrect interpretation of the provisions of the Act and as such, the order is liable to be set aside.

In the result, the civil revision petition is allowed. The impugned order in E.P.348/90 in O.S. No. 69/77 on the file of the Principal District Munsiff Court, Kurnool is set aside. The judgment-debtors are held to be small farmers within the meaning of the Act 7/77 and the debt is deemed to have been discharged and the E.P. is not maintainable against them. In the circumstances, the parties are directed to bear their costs in this petition.