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Gokhul Bihari Pande And Another v. Khijhu Rai Opposite Party.
Factual and Procedural Background
This opinion concerns an application under Section 25 of the Provincial Small Cause Courts Act challenging a decree in favor of the plaintiff-respondent against applicants who were defendants 1 and 4 in a suit for recovery of Rs. 178 and interest. The suit originated as a recovery action based on a rehun bond executed by members of a joint family for a debt that included rent arrears and a loan. The suit was initially brought under ordinary procedure but was converted by the Munsif into a Small Cause Court suit. Defendant 2 had applied for insolvency, which raised questions about the jurisdiction of the court and the nature of the debt recovery suit.
Legal Issues Presented
- Whether the suit for recovery of Rs. 178 fell within the jurisdiction of the Provincial Small Cause Courts Act.
- Whether the insolvency application by defendant 2 ousted the jurisdiction of the Small Cause Court and required the suit to be heard only by the District Judge’s Court.
Arguments of the Parties
Applicant's Arguments
- The suit did not fall within the Provincial Small Cause Courts Act because it was originally brought under ordinary procedure and related to rent recovery, which should have been brought as a rent suit.
- Defendant 2’s insolvency application removed jurisdiction from the Small Cause Court, leaving only the District Judge’s Court competent to hear the matter.
Respondent's Arguments
- The suit was validly converted into a Small Cause Court suit by the Munsif.
- The relationship between the parties had changed from landlord-tenant to creditor-debtor based on the rehun bond, making it a small cause suit under the Act.
- The insolvency application by defendant 2 was in his personal capacity and did not affect the liability of defendants 1 and 4, who remained jointly and severally liable.
- The plaintiff was entitled to sue co-promisors under Section 43 of the Contract Act despite the insolvency proceedings.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Section 25 of the Provincial Small Cause Courts Act | Jurisdiction of Small Cause Courts over certain suits for recovery of debts | Used to assess whether the suit for recovery of Rs. 178 was maintainable in the Small Cause Court |
| Section 43 of the Contract Act | Right of a creditor to sue all or any of the joint promisors | Supported the court’s conclusion that the plaintiff could sue defendants 1 and 4 notwithstanding defendant 2’s insolvency |
Court's Reasoning and Analysis
The court first addressed the contention that the suit did not fall within the Small Cause Courts Act. It held that although the suit was originally brought under ordinary procedure, the Munsif validly converted it into a Small Cause Court suit. The court reasoned that the relationship between the parties had evolved from landlord and tenant to creditor and debtor by virtue of the rehun bond executed on 13th August 1929. The debt was a personal covenant to pay a sum of money, which is recognized as a small cause under the Act. The argument that the plaintiff was limited to a rent suit was rejected because the debt acknowledged by the bond superseded the original landlord-tenant relationship.
Regarding the second contention, the court observed that defendant 2’s insolvency application was made in his personal capacity and did not affect the liability of defendants 1 and 4. The decree was against defendants 1 and 4 only, who were jointly and severally liable with defendant 2. The court also noted that the plaintiff’s mistaken application in insolvency proceedings to treat the debt as secured did not affect his entitlement to sue the co-promisors. The court relied on Section 43 of the Contract Act to affirm that the plaintiff could sue any or all joint promisors. Consequently, the challenge to jurisdiction based on insolvency was dismissed.
On both points, the court found the applicants’ contentions untenable and discharged the rule with costs.
Holding and Implications
The court’s final decision was to DISCHARGE THE RULE WITH COSTS, rejecting the application under Section 25 of the Provincial Small Cause Courts Act.
The direct effect of this decision is that the decree in favor of the plaintiff against defendants 1 and 4 stands affirmed, and the suit’s maintenance in the Small Cause Court is upheld. No broader precedent was established beyond the resolution of the jurisdictional and procedural issues specific to this case.
1. This is an application under Section 25 of the Provincial Small Cause Courts Act against a decree in favour of plaintiff-respondent against the applicants who were defendants 1 and 4, in a suit for recovery of Rs. 178 and interest. The contentions on behalf of the applicant are, first, that the suit did not fall within the Act: and, secondly, that defendant 2 having applied for insolvency no Court except that of the District Judge had any jurisdiction.
2. In my judgment neither of these points is tenable. As regards the first point, the suit was originally brought under the ordinary procedure.
3. The Munsif himself converted it into a Small Cause Court suit. The joint family consisting of the defendants 1 to 5 owed the plaintiff Rs. 156 for rent of land which they held shikmi under him. Being unable to pay and being anxious to get more money, they borrowed Rs. 22 from their creditor and for the whole debt of Rs. 178 they executed on 13th August 1929, a rehun bond for the whole sum which included the usual personal covenant to pay. The suit was brought on 2nd August 1932, on the personal covenant only. In point of fact only three of the members of the joint family executed the bond, namely, defendants 1, 2 and 4. Defendants 3 and 5 neither joined in the execution nor admitted the registration and defendant 1 himself took back the original bond from the sub-registry office and failed to make it over to the plaintiff. Seeing that they would not give effect to the rehan, defendant sold up the rehan property on his decree on a previous simple mortgage and bought it in. The date of cause of action is given as 13th August 1929, the date of contract and acknowledgment. On behalf of the petitioner it is urged that as the plaintiff did not rely upon the rehun he is thrown back upon the original consideration which was the shikmi rent and so should have brought a rent suit. Here there is a fallacy. Before or at least latest at the execution of the bond the relationship of landlord and tenant had already given place to, the relationship of creditor and debtor, in respect of the money and it was this money debt which the defendants or at least those who executed the bond promised on 13th August 1929, to pay. Article 6 of the Act does not apply and a suit by the plaintiff merely to recover the mortgage debt personally from the mortgagor (without at all claiming any charge on the property) is, as has very frequently been held, a small cause. The first point fails.
4. When defendant 2 applied in insolvency, he did so in his personal capacity and not as karta of the joint family. It is true that in his application he mentioned the debt, but the effect of so doing was limited to himself. Actually no decree of any kind has been passed against defendant 2 the decree impugned is limited to his co-defendants 1 and 4 who were jointly and severally liable with the insolvent. It is of no significance that in the insolvency proceedings the plaintiff under a mistake of fact filed an application that his was a secured debt. In any event, it would not follow that if his security against the insolvent failed, he was not entitled to sue the co-promisors. Under Section 43 of the Contract Act, he is entitled to sue all or any of the joint promisors. Defendants 1 and 4 are entitled to take any steps which they may be advised, against the property of the joint promisors including defendant 2. The second point also fails. The application is without merits and the rule is discharged with costs.
R.K
5. Rule discharged.
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