Bai Harkore Harichand vs Devisinhji Bhojrajji

Shah, C.J.—This is a reference by the Civil Judge, Senior Division Bhavnagar, under Order 46, Rule 1, Code of Civil Procedure. The

Defendant Devisinhjji Bhojrajji was indebted to the deceased Harichand Ramji, father of the Plaintiff Harkore, in a large sum of money aggregating

to about Rs. 22000/ - due on khatas executed by the Defendant to the said Harichand. It is not clear from the record when Harichand died, but it

is submitted by the debtor that Harkore is Harichand''s legal heir. Harkore and Devisinhji referred the dispute regarding the debt to arbitration and

the arbitrators, after hearing the parties, made an award whereby Devisinhji was to pay to Harkore Rs. 15000/ - in all by certain instalments.

Harkore and Devisinhji having applied to the Civil Judge, Senior (sic) a point was raised whether a decree can be passed without the production of

a succession certificate as required by Section 214, Indian Succession Act. It was urged before the learned Judge that Section 214 had no

application in as much as here there was an award by an arbitrator and that as the provisions of Sections 15 and 16 of the Indian Arbitration Act

were not to be resorted to, the Court had no option but to pass a decree in terms of the award u/s 17 of the Act. It was also urged that the

arbitration agreement amounted to a fresh contract, that the debt to be recovered was not a debt due to the deceased, but was one due to

Harkore herself and that the question of obtaining a succession certificate did not therefore arise. The learned Judge was of the opinion that Section

214 was not affected by Sections 15 to 17 of the Arbitration Act and that notwithstanding an award, a succession certificate was required to be

obtained by an heir of a deceased creditor, who wished to realise a debt due to the deceased. The learned Judge also appeared to take the view

that the debt did not become a debt due to Harkore herself simply by reason of the debtor recognising Harkore as the heir of the deceased and of

their agreeing to refer the dispute to arbitration.

The question referred to us is whether Section 214 of the Indian Succession Act applies to a case where the heir of a deceased creditor obtains

an award in respect of a debt due to the deceased. Now originally the debt was undoubtedly due to the deceased Harichand Ramji and Harkore

claimed the same from the Defendant as an heir of her deceased father and had she merely sued to recover the debt on that basis, no decree could

have been passed except on the production by her of a succession certificate, but the fact of the reference to arbitration makes a vital difference to

the whole position. By the arbitration agreement, which has been signed by Harkore and the Defendant, the Defendant has accepted Harkore as

his creditor. The reference to arbitration presupposes an agreement between them to treat Harkore as the creditor and a specific contract to that

effect is implicit in the arbitration agreement. By the award the sum found due is made payable to Harkore, and as that award proceeds on an

agreement whereby Harkore is accepted as a creditor, the debt sought to be realised becomes a debt due to Harkore and not to the deceased

Harichand. It follows that by the suit she does not seek to recover a debt due to her on succession, but she claims a debt due to herself, and this is

so by reason of the arbitration agreement and the award amounting to a new contract. Our decision accordingly is that the arbitration agreement

amounts to a new contract between the parties whereby the heir of the deceased is accepted as the creditor and the debtor undertakes to pay to

him or to her, and that therefore, Section 214 of the Indian Succession Act will not apply and a decree can be passed without the production of a

succession certificate.

We are fortified in this view by a decision of the Madras High Court in - Kottam Zamindar v. Pittapur Zamindar 9 Mad. 171. There the

Respondent-Defendant Zamindar of Pittapur owed to the deceased brother of the Appellant, the Zamindar of Kottam, a large sum of money the

bond in suit to the Appellant, as his heir, by which the debt was to be repaid in two instalments. Certain disputes arose thereafter between the

Appellant and his brother''s widow, which are not material for the present purpose, and the Defendant having insisted on the Appellant producing a

succession certificate, to which the Appellant would not agree, the Appellant instituted a suit to recover the sum. A certain sum had been deposited

by the Respondent into Court and a question incidentally arose whether further interest was to run from the date of the deposit or not. The trial

Judge upheld the Defendant''s contention that a decree could not be passed except on the production of a succession certificate, but on appeal it

was held by the High Court that the Respondent having executed the bond to pay the debt to the Appellant, he could not rely on the protection of

Act 27 of 1860, and that a succession certificate was not necessary. Their Lordships observed:

The suit having been brought upon the specific contract (Ex. A), any defence available to the debtor must arise out of the contract, and he cannot

be permitted to rely on the prior state of things which had merged into it in order to add to its terms. It was open to him to have inserted a

provision in document A that the debt would be paid only on the production of a certificate, but this he did not choose to do. On the contrary he

waived the right which he had under Act 27 of 1860 and contracted new obligation.

The learned Civil Judge considers that the acceptance by a debtor of a certain person as an heir of the deceased creditor cannot by itself entitle

such person to a decree without the production of a succession certificate, and the learned Judge feels apprehensive that if such a position was to

be accepted, it might lead to fraud and collusion resulting in keeping out the rightful heir. No doubt, the mere acceptance of person as an heir

should not be enough to entitle him or her to obtain a decree without the production of a succession certificate, and the case of a compromise in a

suit will fall under this category. However, where the debtor not only recognises a person as an heir to the deceased creditor, but also enters into a

fresh contract with him, the position becomes entirely different, because there the debtor, creates a liability in favour of such person and in doing so

he takes all the attendant risk, in the event of the heir, with whom he enters into a contract not being the legal heir or the only heir. However that

circumstance is not relevant to the question at issue.

We may note that Harkore has described herself in the suit as heir of Harichand Ramji but that is due to a laxity of pleading and we do not think

we should take a strict notice of the same. In the result therefore, we decide the question as stated in paragraph 2 above, and hold that the

production of a succession certificate is not necessary in this case, and need not be insisted upon.

Chhatpar, J.

I agree.