P.V. Ramalingam Chettiar vs The Debt Conciliation Board and Another

Alfred Henry Lionel Leach, C.J.—This is an application for the quashing of an order passed by the Debt Conciliation Board of Dharmapuri

on the 4th February, 1940. It is abundantly clear that the order of the Board was one which was passed without jurisdiction, but the main question

is whether the petitioner has by his conduct forfeited his claim to have the rule nisi which has been issued made absolute.

On the 19th July, 1939, the second respondent applied to the Board for the settlement of his debts under the provisions of Section 4 of the

Madras Debt Conciliation Act, 1936. His application shows that the petitioner was his only creditor and according to the second respondent he

owed him two sums of Rs. 200 each under bonds which he had executed. Notice was issued to the petitioner u/s 10(1) and the 4th October,

1939, was fixed by the Board for the furnishing of the statement required from him by Section 10(1). On that date the petitioner appeared before

the Board and filed the necessary statement. In addition, he produced the two bonds executed by the second respondent in* his favour and a copy

of each of the bonds. In the statement which the petitioner filed it was mentioned that the second respondent was also indebted to him in the sum of

Rs. 120, for rent. The Chairman of the Board initialled the original bonds and returned them to the petitioner, after which the Board adjourned the

case to the 27th October, 1939, for the production by the petitioner of his accounts. On that date the petitioner reported to the Board that his

accounts had been filed in the District Court and in consequence the Board adjourned the case to the 11th December, 1939, to enable the

petitioner to obtain them from the Court. The petitioner was, however, informed that if he did not produce the accounts on that date an order

would be passed discharging his debt. The petitioner did not attend on the 11th December and the Board adjourned the case to the 4th February,

1940. He had not filed the accounts by the 4th February, 1940 and when the case was called on that date he was absent. Therefore the Board

passed an order declaring that the debt was deemed to be discharged u/s 10(2) of the Act.

As I have indicated, this order was one which the Board had no authority to pass. Section 10(1) requires a creditor to file a statement of the

debts owed to him by the debtor. This statement must be in writing, signed and verified in the manner prescribed by the CPC for the signing and

verifying of claims. If such a statement is not filed, the Board has power under Sub-section (2) to order that the debt shall be deemed for all

purposes and all occasions to have been duly discharged, but Sub-section (3) gives a creditor the right of applying for an order reviving the debt,

and he is entitled to an order if he proves to the satisfaction of the Board that the notice was not served upon him or that he had no knowledge of

the publication or that there was a sufficient reason for his failure to file the statement. The petitioner in this case did file the statement required by

Sub-section (1) and it was signed and verified in the required manner. Therefore the Board could not act u/s 10(2) which it purported to do.

Section 11(1) requires a creditor to furnish with the statement mentioned in Section 10(1) full particulars of all debts owed to him by the

applicant and to produce all documents, including entries in books of account on which the creditor relies to support his claim, together with a true

copy of every such document. If a creditor does not produce the documents required to be produced by him under Sub-section (1), the

documents cannot by virtue of Sub-section (3) be produced in evidence against the debtor in any suit brought by the creditor or by any person

claiming under him for the recovery of the debt. The Board is given power to excuse for valid reasons any default or delay in producing documents

and to grant reasonable time for their production, but failure to comply with Section 11(1) does not empower the Board to declare the debt

discharged. The only penalty is that stated in Sub-section (3). If a creditor fails to prove the debt claimed to be owing to him the Board may decide

the matter u/s 12. In the present case there is no question of the petitioner having failed to prove the debts owing to him, at any rate, so far as the

debts due on the two bonds are concerned, because the second respondent admitted in his petition that they were due and owing to the petitioner.

The Board''s order of the 4th February, being an unlawful order, we should not have hesitated to grant the present application if the matter rested

there; but it does not rest there and it is necessary to examine in detail the subsequent events.

On the 17th February, 1940, the petitioner applied to the Board to review its order of the 4th of that month. This application must be deemed to

have been made under the provisions of Section 23 of the Act and not u/s 10(3), because the latter section obviously does not apply. Section 23

says that a Board may on application from any interested person or on its own motion review an order passed by it and pass such order in

reference to the application as it thinks fit, but no order is to be varied or reversed unless notice has first been given to all interested persons to

appear and be heard in support of the order sought to be reviewed. On receipt of this petition the Board fixed the 26th March, 1940, for its

hearing. Notice of the petition was sent to the second respondent by registered post, but the postal authorities were unable to find that respondent.

On the date fixed for hearing the petitioner appeared, but as the second respondent had not been served, the Board ordered that fresh notice

should be issued to him. The petitioner was required to provide the requisite stamp for service of notice by registered post. The hearing was then

adjourned to the 23rd April, 1940. The petitioner paid the postage and the notice was apparently sent by registered post, because on the 23rd

April, 1940, the Chairman of the Board made a note in the record which indicates that the debtor was served, but that the postal acknowledgment

had not then been received. In these circumstances he granted another adjournment; on this occasion to the 5th May, 1940. On that date the

Chairman of the Board recorded the following order:

Both parties absent. Creditor has not produced postal cover to send notice to the debtor. This petition for revival of the debt is therefore

dismissed.

It would appear that the word ""cover"" is a mistake for ""acknowledgment.

The petitioner was in fault when he failed to attend on the date when the last-mentioned order was passed, because to his knowledge the

proceedings had been adjourned to that date. The question then is whether the Board should have refused the relief asked for because of the

petitioner''s failure to prosecute his application for review with due diligence. The explanation, for the petitioner''s absence on the 5th May, 1940, is

that the postal acknowledgment had not been received on that date. Be that as it may, the fact remains that the petitioner should have appeared

and his failure to do so has certainly prejudiced his position. But after careful consideration, we have come to the conclusion that his fault here is

not sufficient to deprive him of all remedy for the injustice done to him by the Board in declaring his debts discharged u/s 10(2) of the Act.

While the Court will not issue a writ of certiorari when another remedy remains open to the petitioner, it must be a suitable remedy. As was

pointed out by the Privy Council in Besant v. Advocate-General of Madras (1919) 37 M.L.J. 139 : ILR 43 Mad. 146 : L.R. 46 IndAp 176 ,

certiorari according to the English rule is only to be granted where no other suitable remedy exists. Now, can it be said that by giving a person

aggrieved by an order of a Debt Conciliation Board the right to apply for a review u/s 23, there is a suitable remedy for an unlawful order? We

have no hesitation in holding that Section 23 does not provide a suitable remedy. It merely gives the right of applying to the tribunal which has

passed a wrong order to change its mind. If Section 23 were regarded as providing a suitable remedy, it would mean that the Court could not issue

a writ until the aggrieved person had filed a formal application for review. We consider that where a Debt Conciliation Board has acted in abuse of

its powers the aggrieved person should not be compelled to apply for review. Moreover, there is the further factor that it is not obligatory on the

person to apply for review if he is aggrieved. The petitioner here did apply for review, but did not do what the Board required him to do in

connection with his application, namely to appear on the 5th May, 1940. As we have already indicated that is not sufficient in our opinion to

deprive him of all remedy. If the Court does not interfere here, it means that the petitioner loses money which the second respondent admittedly

owes him and he loses It because he failed to appear on one occasion in proceedings which were not really necessary. If the Court deprives him of

all remedy in these circumstances, we think it would be doing the petitioner grave injustice. For these reasons we quash the orders of the 4th

February and 5th May, 1940 and direct the Board to restore the petition and proceed with the case according to law.

As this application has been strenuously opposed by the second respondent, the petitioner is entitled to his costs.