Per Mufti J.-
(1) The question referred for our opinion by a Learned Single Judge of this court is 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 a '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?"
(2) The Jammu and Kashmir Debtors Relief Act, 1976 (hereinafter referred to as 'the Act') was enacted by the State Legislature in order to relieve the indebtedness of the weaker sections of the people in the State. Section 3 provides for the constitution of Debt Conciliation Boards for the purpose of settlement of debts. Section 4 requires every debtor and creditor to apply to the Board for settlement of debts in which he may be interested and provides as under:
"4. Application for settlement between a debtor and his credit others.-Within six months or such longer period as the Government may by notification specify for a particular area from the date on which a Board is established under section 3, a debtor or any of his creditors shall apply to the Board appointed for the area in which a Debtor resides or holds any land to effect settlement between the debtor and his creditors;
Provided that in case of a debtor or any of his creditors residing in the District of Ladakh in the sub-division of, Gurez, in Matchil Illapa of Tehsil Kupwara and Tehsil Karnah in the District of Baramulla; in Tehsil Gool Gulabgarh ; in Niabat Panchari of Tehsil Udhampur, in the territorial jurisdiction on the police station Dudoo Basantgarh of Tehsil Ramnagar and in Thakra Kote and Nagrote Illaqas of Tehsil Reasi in the District of Udhampur, in Tehsil Budhal in the District Rajouri, in Niabat Bantu in the District of Kathua and in Marew Wadwan and Paddar Illaqas of Tehsil Kishtwar in the District of Doda, application may be made within twice such period."
(3) Section 14 requires a creditor to make such application on pain of the debt being extinguished if he fails to move the Board. The only exception to this rule is a debt in respect of which a suit or other proceedings is pending in a civil or revenue court. Such suit or proceeding is liable to be transferred for disposal to the Board under section 29 of the Act. The expression 'debt', 'debtor' and 'creditor' have special meanings given to them in section 2 of the Act. To begin with, the Board is required to make endeavours to induce the parties to arrive at an amicable settlement and such efforts fail, the Board is required to record whatever evidence may be adduced by the parties and then, consistently with the Act, make such orders as may be just and equitable. Section 17 empowers the Board to decide all the relevant questions which might arise during the course of the proceeding before it. An appeal can be taken against an adjudication made by the court touching the rights of the parties as also against the final orders made by it to the appellate authority appointed under the Act. Section 18 bars the jurisdiction of the civil courts and provides:
"18. Bar of civil court jurisdiction-
Notwithstanding anything contained in any law for the time being in force and save as otherwise provided in this Act-
(1) no civil court shall have jurisdiction to' settle, decide or deal with any question or to determine any matter which is by or under this Act or the rules made thereunder required to be settled decided or dealt with or to be determined by a Board or Appellate Authority to be appointed by the Government;
(2) no order of any Board or the Appellate Authority to be appointed by the Government shall be called in question in any civil court on any ground whatsoever including that relating to non-compliance with the provisions of this Act or the fundamental principles of judicial procedure."
(4) Section 36 invests the Government with powers to make rules consistent with the Act in order to carry out its purposes. The Government has since framed the rules styled "Jammu and Kashmir Distressed Debtors' Relief Rules, 1977". Rule 9 provides as under:-
"9. Preliminary enquiry on receipt of application.-(1) The application shall be rejected, if, upon enquiry, it is found that the amount sought to be settled is not 'debt' or that the person liable therefor is not a 'debtor' within the meaning of the Act.
(2) Where the application is not rejected under sub-rule (i), further proceedings shall be taken according to the provisions of the Act and these rules."
(5) The question set out in the beginning depends for its determination mainly upon the construction of Section 21 which reads thus :
"29. Transfer of pending suits and proceedings to the Board-(1) Any suit or other proceedings for the recovery by a creditor of any debt against a person who is a debtor pending in any civil or revenue court shall be transferred by such court to the Board to which an application under section 4 lies.
(2) When an application under section 4 includes a debt in respect of which a suit or other proceeding is pending before a civil or revenue court, the Board may give intimation there of to such court in the manner prescribed. On receipt, of such intimation the court shall transfer the suit or proceeding, as the case may be, to the Board."
(3) When any suit or proceeding is transferred to the Board under sub-section (I) or sub-section (2), the Board shall proceed as if an application under section 4 had been made to it.
Explanation.-The word "proceeding" in this section includes an appeal, an application for revision and an application for execution.”
(6) On the face of it, section 29 does not say who has power and jurisdiction, the Board or the Court, to determine in a pending suit or proceeding, whether the amount claimed is a 'debt' or whether the person against whom the amount claimed is laid is a 'debtor' or even whether the person laying the claim is a 'creditor' within the meaning of the Act.
(7) For the petitioner it has been contended that the power and jurisdiction to determine these questions rests exclusively with the Board- Therefore, where such a question is raised in a pending suit or proceedings, the court is under a legal obligation to transfer the case for disposal to the Board. It is for the Board to determine the question and deal with the case accordingly. In our opinion, there is ample force in this contention. The object of the Act, as we have noticed above, is to provide relief for indebtedness of the weaker sections of the people of the state. The scheme of the Act is to have all the debts liquidated through the Conciliation Board within the shortest possible period. The Boards have been invested with full powers to settle the debts and determine all the allied questions-Such allied questions will naturally include the questions mentioned above. In fact, Rule 9 expressly says so. Therefore, the Legislature manifestly intended that sections 4 and .19 should be treated as complementary provisions so as to enable the Boards to be seized of all the cases of indebtedness contemplated by the Act. In such a setting, section 18 (1), which bars the jurisdiction of the civil court, must be held to apply as such to the pending suits and proceedings as to the suits and proceedings that might be instituted after the commencement of the Act. Section 18 (1) is widely worded. It forbids civil courts to settle, decide or deal with any question or to determine any matter which is by or under the Act or the rules made thereunder required to be settled, decided or dealt with or to be determined by the Bard or the Appellate Authority. There is no corresponding provision barring the jurisdiction of Revenue Court. On principle, however, the bar must be treated to be equally applicable to the Revenue Courts. For, the Act deals with a particular subject comprehensively and, so, the jurisdiction conferred on the special machinery constituted under the Act must be held to be exclusive.
(8) Reading section 28 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.
(9) The case alongwith our opinion shall be laid before the learned Single Judge at an early date.
Sd/-
Mufti Baha-Ud-Din Farooqi J.
I agree,
Sd/- I. K Kotwal J.