Jammu & Kashmir Bank vs Ghulam Ahmad Bhat

This revision is directed against an order dated 31121980 passed by Sub Judge, Baramulla, whereby he had directed the transfer of a suit inter

parties pending in his court to the Debt Conciliation Board (hereinafter called 'the Board'). The suit was for the recovery of a sum of Rs. 7,770. 08

on account of a loan advanced by the plaintiffBank to the defendant. In his written statement, the defendant inter alia pleaded that he is an

agriculturist and earns his livelihood principally by agriculture In this context, he also pleaded that the amount claimed was a debt in the

contemplation of the Jammu and Kashmir Distressed Debtors Relief Act, 1976, (shortly 'the Act) Therefore, the question arose whether the

amount claimed was a debt and whether the defendant was a debtor in the since contemplated by the Act. Relying on the decision of a Division

Bench of this court in Ghulam Rasool vs. Ghulam Mohd (1967 J&RR): Page 673), the trial court referred the matter for determination to the

Board. In the case of Gh. Rasool (Supra) the question referred to the Division Bench was as follows:

In a matter pending in a civil court for the recovery of an amount, whether it is that court which has the jurisdiction to decide as to whether an

amount is 'debt'

within the meaning of the Debtors' Relief Act, 1976 and also whether the person liable to pay the same is 'debtor' within the meaning of the said

Act or it is the Board under the Act which alone has the jurisdiction to determine the matter.

The Bench observed:

Reading section 29 in its proper perspective we are inclined to hold as a matter of construction that, in a pending suit or proceeding, the Civil or

Revenue court has no jurisdiction to determine whether the amount claimed is a 'debt' or whether the person sued against is a 'debtor' or whether

the person is a 'creditor' in the sense contemplated by the Act, Where such a question is raised, the court, without anything else, must transfer the

case to the Conciliation Board. The Board shall have exclusive power to determine the question and proceed with the case accordingly treating it

as an application under section 4 of the Act. In this view, our answer to the question set out in the beginning would be that if such a point as is

mentioned in the question arises in a pending suit or proceeding in a civil court the court is bound to transfer the case to the Board. The Board shall

have exclusive power and jurisdiction to decide the point and deal with the case accordingly as if it were an application under section 4 of the Act"".

The argument of the learned counsel for the petitioner is that on a true interpretation of the Judgment of the Division Bench reference to the

Board would be necessary only if the civil court comes to the conclusion that exfacie the amount claimed is not a 'debt' or that the defendant is not

a 'debtor' in the sense contemplated by the Act. He urged that Banking companies were exfacie excluded from the operation of the definition of the

term 'debt' and as such reference to the Board was incompetent in the present case. I am afraid, learned counsel has not appreciated the judgment

of the Division Bench in its correct perspective. The question before the Bench was whether the power and jurisdiction to determine whether the

amount claimed is a 'debt' or whether the person again ""t whom the amount is claimed is a 'debtor' or whether the person claiming the amount is a

'creditor' in the sense contemplated by the Act belongs to a civil court or to the Board ? The court held that the power and jurisdiction to

determine this question exclusively belongs to the Board. Such power and jurisdiction cannot obviously be divided into two compartments; one of

which may be styled as power and jurisdiction to determine ex facie and the other as power and jurisdiction to determine after enquiry. Where an

authority has the power to determine a question, it has power to determine that question ex facie as also after enquiry. Therefore when the court

held that the power and jurisdiction to determine the aforementioned question belonged to the Board, what it intended to lay down was that such

power and jurisdiction belongs exclusively to the Board irrespective of the fact whether the matter can be decided ex facie or after enquiry. As a

matter of fact this is the only interpretation that section 29 can bear. Any other interpretation would lead to many absurdities and might even

frustrate the object for which this Act intended. The object of the Act is to liquidate indebtedness among the poor and indigent sections of the

people in the S ate as quickly as possible. For this purpose, a special machinery has been created by the Act in which the Board plays the main

role. The Board is required to determine the claim summarily. The exercise of this jurisdiction it dependent upon the question whether the amount

claimed is a 'debt' and there is a relationship of creditor and debtor between the parties in the sense contemplated by the Act. It is a settled

principle of law that if the exercise of a jurisdiction is dependent upon the existence of a fact, then the power and jurisdiction to determine that fact

belongs to the authority having power to exercise such jurisdiction. That apart, if the question whether the amount claimed is a 'debt' and whether

there is a relationship of creditor and debtor between the parties is left to be determined by the Civil Court either in whole or part, that would not

only lead to absurdities but also frustrate the object of the Act. Because this would inevitably lead to a situation where the Board would be

competent to determine the matter on merits only if the civil court has found that the condition precedent for the exercise of the jurisdiction by the

Board exists and this will create an anomalous and absurd situation which could never he contemplated by the Legislature.

It is true that case may arise where reference to the Board would be an idle formality and this might cause some hardship, but such exceptional

cases always do come in whenever an attempt is made to enact a welfare legislation. For, it is difficult to expect any Legislature to enact a welfare

legislation which does not include a hard case. Therefore, merely because reference to the Board might involve hardship in some cases, it cannot

be said that section 29 admits of an interpretation other than the one placed on it by the Division Bench of this court. Accordingly the argument of

the learned counsel for the petitioner does not have much substance in it and must fail.

The result therefore is that this revision fails and is hereby dismissed but without any order as to costs. The party present is directed to appear in

the lower court on 30121982.