Ladhu Saha and anr. Vs. Champalal and anr. - Court Judgment

Jagat Narain, J.

1. This is a revision application by the defendants against an order of the Civil Judge, Merta holding that the damages for breach of contract are not covered by 'debt' as defined in Section 2(c) of the Rajasthan Relief of Agricultural Indebtedness Act 1957.

2. The defendants entered into a contract with the plaintiffs for the supply of 85000/- bricks for a price of Rs. 1000/- by. Chet Sudi 15, Section 2017 The price was paid in advance. It was stipulated that on the failure of the defendants to supply the bricks by the due dated they will have to pay damages to the plaintiffs at the rate of Rs. 20/- per thousand bricks in addition to interest at 12 percent per annum on the sum of Rs. 1000/-. The defendants faild to supply the bricks and the present suit for the recovery of a sum of Rs. 2300/- by way of damages and interest was instituted in the court of the Civil Judge, Merta. The defendants filed an application under Section 6 of the Act for the abatement of the suit on the ground that they are agriculturists. This application was dismissed by the trial court on the ground that the damages claimed were not 'debt' within the meaning of the Act. Reliance was placed on a decision of this Court in Manakchand v. Kaney Singh 1965 R.L.W. 224. That decision has no application to the facts of the present case. The question which arose in that case was whether an agreement to sell a house was a transaction relating to a loan which could be reopened under Section 10 of the Act.

3. The question which arises for determination is as to whether the liability to pay unliquidated damages is a 'debt' within the meaning of the Act. 'Debt' is defined as follows under Section 2(c):

Debt' includes all liabilities owing to a creditor, in cash or kind secured or unsecurad payable under a decree or order of a civil court or otherwise whether due or not due, but shall not include land revenue or anything recoverable as land revenue other thean liabilities payable under a decree of a village panchayat or any money for the recovery of which a suit is barred by limitation.

This definition is of very wide import. The following exceptions have been provided under Section 4 which runs as follows:

Section 4. The provisions of this Act shall not affect claims due in respect of-

(a) rent as defined in Clause (32), of Section 5 of the Rajasthan Tenancy Act, 1955 (Rajasthan Act 3 of 1955), or

(b)any liability in respect of any sum due to any society registered or deemed to be registered under the Rajasthan Co-operative Societies Act, 1953 (Rajasthan Act IV of 1953), or

(c) any liability arising out of breach of trust; or

(d) any liability in respect of maintenance whether under a decree of a court or otherwise; or

(e) any liability due to a scheduled: bank; or

(f) arrears of wage or salary; or

(g) any liability in respect of village profits of land revenue arising between co--shares and the lambardar or between a proprietor and a Thekedar or a farmer of proprietary rights or between co--sharers in Ijara and Jagir villgae; or

(h) a mortgage claim against property in the hands of a subsequent transferee who has taken the transfer in order to satisfy the mortgage, or

(i) any liability arising between mortgagor in respect of land revenue of mortgaged property which has been paid by the mortgagee on behalf of the mortgagor;

(j) any revenue or tax payable to Government or any other sum of money due to Government by way of or towards repayment of a loan or otherwise; or

(k) any tax payable to a local authority and any other sum of money due to it by way of or towards repayment of a loan or otherwise.

It will thus be seen that a liabilty to pay-unliquidated damages has not been specially excluded. Oh behalf of the defendants reliance is placed on the decision of a Division Bench of the Bombay High Court in Ismailbhai Sardarbhai v. KondiRavaji I.L.R. 1960 Bom. 276. It was held in that case that although damages are ascertained in the suit the liability is incurred before the institution of the suit when the breach of contract takes place. On behalf of the plaintiffs reliance is placed on the decision of a Full Bench of the Punjab High Court in Ram Lals v. Central Bank of India . That case related to the Displaced Persons (Debts Adjustment) Act 1951. 'Debt' is defined under that act as any pecuniary liability, whether payable presently or in future, or under a decree or order of a civil or revenue court or otherwise ascertained or to be ascertained etc. Capoor J. who delivered the Full Bench observed in para (18).

On behalf of the appellant, however emphasis laid on the pharse 'whether ascertained or to be asceratained' and is contended that this would cover unliquidated damaes for breach of contract. I do not however consider that by the use of the words' whether ascertained or to be ascertained' the Legislature purported to include in the definition of 'debt' liabilities which were not in their inception and essence pecuniary. The main, characteristic of a 'debt' as opposed to unliquidated damages is that the former is a sum certain or capable of being reduced to a certainty (see Corpus Jur is Secundum Voelume 26 Page 6)-

4. Hence the use of the phrase 'whether ascertained or to be ascertained' does not necessarily lead to the conclusion that the Legislature; intended to include unliquidated damages in the term 'debt'.

5. With all respect to the learned Judges who decided the case I am unable to accept this view.

6. There is nothing in the definiton of 'debt' under the Act to exclude a liability for unliquidated damages.

7. I accordingly allow the revision application, set aside the order of the trial court and pass an order abating the suit under Section 6 of the Act.

In the circumstances; of the case, I leave the parties to bear their own costs of this revision application.