In Abdul Majid v. Shamsherali, AIR 1940 Bom 285 Beaumont, C. J. and Sen, J. considered the scope of Section 214 and said "
"It is not correct to say that Section 214, Succession Act, does not apply where the suit was originally instituted by the creditor himself, but only applies where it is instituted by his legal representatives. Section 214 applies even if the suit was started by a creditor who died pending the suit, and his legal representatives were brought on record under O. 22, Civil P. C.
The necessity for obtaining a succession certificate cannot be waived by the parties. The obligation is not merely one in favour of the debtor ; it benefits also those interested in the deceased's estate by requiring that moneys forming part of the estate shall only be paid to a person who has been considered suitable for the grant of a succession certificate."
We are in agreement with the construction put upon Section 214 by the learned Judges and hold that compensation 'debt' within the meaning of the expression 'debt' occurring in Section 214 (2) and that succession Certificate is necessary.
Andhra High Court
Ali Mohammed Khusro And Ors. vs The Special Deputy Collector Land ... on 6 November, 1972
Equivalent citations: AIR 1974 AP 18
Bench: O Reddi, M Rao
1. The only question that arises for determination in this civil miscellaneous appeal is whether the legal representatives of the deceased decree-holder (appellants) can execute the decree obtained by the deceased decree-holder in land acquisition proceedings awarding compensation in a sum of Rs. 3.61.816-75 to the claimant-decree-holder in respect of the lands acquired from her and the costs awarded to her under the said decree, without obtaining a succession certificate under S. 214 (1) (b) of the Indian Succession Act.
2. The facts necessary for determining the question involved are these : The Second Additional Chief Judge, City Civil Court, in O. P. No. 111 of 1966, by his judgment dated 25-9-1968, awarded compensation of Rupees 3,61.816-75 and costs of Rs. 2,002/- to one Fareedunnissa Begum, the claimant in those proceedings. The Government deposited the compensation amount into Court, but she died before she could make an application for withdrawal of the amount. The present appellants filed an application. E. P. No. 24 of 1970, for recovery and withdrawal of the amount deposited by the Government. Their application was opposed by the government ((respondent) on the ground that they are not entitled to execute the decree without obtaining a succession certificate as required under Section 214 (1) (b) of the Indian Succession Act (hereinafter referred to as 'the Act'). The case of the appellants before the Court below and here as well is that question of obtaining succession certificate does not arise as, under Mohammadan Law, they are entitled to the 'matruka' of deceased and that, even otherwise, under Section 214 (1) (b), a succession certificate is necessary only if the decree had been obtained on the basis of a pre-existing debt and that this provision has no application to an amount of compensation payable under the provisions of the Land Acquisition Act. The Court below, on a consideration of the relevant provisions and the decisions cited before it, negatived the contention of the legal representatives of the deceased claimant and dismissed their application.
3. Mr. Gururaja Rao appearing for the appellant contended that the amount of compensation payable under Land Acquisition Act is not a debt so as to attract Section 214 (1) (b) of the Act and, therefore, the Court below went wrong in dismissing the application filed for withdrawal of the compensation amount in Court deposit:
4. Section 214, to the extent revelant for the purpose of disposal of this appeal, reads:
"214. (1) No court shall--
(a) pass a decree against a debtor of a deceased person for payment of his debt to a person claiming on succession to be entitled to the effects of the deceased person or to any part thereof, or
(b) proceed, upon an application of a person claiming to be so entitled, to execute against such a debtor a decree or order for the payment of his debt, except on the production, by the person so claiming of..........
(I) a probate or letters of administration evidencing the grant to him of administration to the estate of the deceased, or
x x x x
(iii) a succession certificate granted under part X and having the debt specified therein, or
x x x x
(2) The word "debt" in sub-section (1) includes any debt except rent, revenue or profits payable in respect of land used for agricultural purposes."
5. The scope of the two clauses (a) and (b) is this: Clause (a) of sub-section (1) is mandatory and it injucts that a Court shall not pass a decree against a debtor of a deceased person of his debt, unless such person claiming to be entitled to the effects of the deceased person produces a probate or letters of administration or a certificate granted under Section 31 or S. 32 of the Administrator-General's Act, 1913 mentioning the particular debt or a succession certificate, the object being not only to facilitate collection of debts by those who succeed to the estate of the deceased creditor, but also to protect the debtors against his rival claimants, if any, and give them complete discharge of the debt. While sub-section (1) (a) applies to obtaining a succession certificate, probate or letters of administration, as the case may be, before a legal representative can ask for a decree from the Court against the debtor of the deceased person, sub-section (1) (b) deals with the procedure to be followed in respect of decrees obtained by the deceased person against a debtor. This sub-section places a restriction on the power of the Court to execute a decree obtained by a deceased creditor unless those, who claim succession to the estate of the deceased, produce a succession certificate. It prohibits or bars the institution of the execution proceedings, notwithstanding the decree obtained by the deceased creditor against the judgment debtors.
6. The question not to be considered is whether compensation awarded under the decree of the Court is not a 'debt' within the meaning of sub-section (2) of Section 214. The definition of the word 'debt' is comprehensive enouogh to include every kind of debt except those excluded from its meaning and they are: rent, revenue or profits payable inrespect of land used for agricultural purposes. The term 'compensation' has not been defined; but, in view of the definition of 'debt', as given in sub-section (2) of S.214, it is contended by the Principal Government Pleader that any sum of money payable under the decree, be it an amount payable towards compensation or payable in respect of any other decree, will be a debt within the meaning of that term as defined in sub-sec(2).
7. The various meanings given to the term "compensation" in 15 Groups Juris Secundum at pages 651 and 652 with reference to decided cases referred to therein are these:--
"Compensation : In Spanish Law, compensation, set-off, or the extinction of a debt by another debt or equal dignity. Compensate : to pay a person its value in money for an article or property obtained from him; to pay the value of : It has been said that the word denotes equal remuneration, and does not carry with it an authority to award more damages than actually proved. The term etymologically suggests the image of balancing one thing against another, its primary signification being equivalence, and its secondary and more common meaning something given or obtained as an equivalent, and its secondary and more common meaning something given or obtained as an equivalent. It and the subject-matter in connection with which it is used ; and it has been said that, as sometimes used, it is a somewhat misleading term, and is made use of only because there is no other word use of only because there is no other word more nearly expressing the thought of the law which permits recovery for an imponderable and intangible thing for which there is no equivalent in terms of money. x x x x x x In the sense, of an act, the word has been defined as meaning an act which a Court orders to be done, or money which a Court orders to be paid, by a person whose acts or omissions have caused loss or injury to another, in order that thereby the person damnified may receive equal value for his loss, or be dame whole in respect of his injury -- the giving back an equivalent in either money, which is but the measure of value, or in actual value otherwise conferred ; indemnification , making amends, payment of damages, or the rendering of an equivalent in value or amount. "In Bowen v. Hockley, C. C. Md. (71 F 2d 781, 783, 94 AIR 856), "ordinary debt" is distinguished (See Note 40 at p. 658). "Such compensation does not mean merely the right to secure a judgment. The constitutional guaranty of just compensation..............is not satisfied by the judgment but only by payment of it." (See at p. 658)."
8. In 26 Corpus Juris Secundum at page 9, it is stated that the liability for damages for land taken for public use is no ordinarily regarded as a 'debt' and reliance is placed by the learned counsel for the appellant on the meaning given here, forget g the fact that it is not a case of payment of damages for land taken for public use. We are here concerned with monies deposited towards compensation and not with damages due to a party.
9. What emerges from the various meanings given to the term "compensation" when viewed in the context of the payment of compensation under the Act, is that, when a person is deprived by law of acquisition of his property, he is entitled to be compensated in equivalent to the value of the property acquired. Once the Court determines the equivalent of the property taken over in money, he is entitled to payment of the same and if the decree is not satisfied, he has a right to execute the decree against the judgment-debtor as in the case of any other debt.
10. In Brojendra Sundar v. Niladrinath, AIR 1929 Cal 661, Two questions were referred to the Full Bench for its decision and they are: "(1) If a property is acquired under the Land Acquisition Act after the death of the owner when it was in the hands of his widow or a person having a life-estate and the compensation money is kept in deposit in the Land Acquisition Collector's Office under Section 31, Land Acquisition Act, 1894, is such amount a debt within the meaning of Section 214, Succession Act, 1925, for which a certificate under part 10 of that Act has to be obtained? (2) was the case of Abinash Chandra Pal v. Prabodh Chandra Pal, (911) 15 Cal WN 1018 = 10 Ind Cas 357 rightly decided?
11. On the second question, Rankin, C. J. with whom the other four Judges agreed, though held Abinash Chandra Pal's case, (1911) 15 Cal WN 1018 = 10 Ind Cas 357, was rightly decided, was not prepared to approve the reasoning of the Judges in that case. On the first question, learned Chief Justice said: " I would observe that the first question together with a considerable portion of the order of reference deals with a matter which in this case does not arise. We are not here concerned with the question whether a certificate "has to be obtained." We are only concerned with the question whether the learned Judge has jurisdiction to issue the certificate." The learned Chief Justice only construed the scope of Section 373 of the Act and said:
"In the proceedings under Section 373 it is not open to the Judge of allow the exact character of the appellant's claim to be illigated. He has only to see if there is ground for entertaining the application. He is not required to ascertain whether the debts were due to the deceased within the meaning of Section 214 nor can he go into the question whether Succession certificate will be necessary or exigible under Section 214. He has to decide in a summary manner the question of right to certificate. A reasonable and sensible claim to be enabled to proceed against a person as being a debtor of the deceased is sufficient for the purpose of clothing the Court with jurisdiction under Section 373 and may be regarded as a ground for entertaining the application."
12. The learned Chief Justice never said anywhere that compensation money is not a debt and that a succession certificate is not necessary under Section 214 (1) (b). He was only considering the extent of the power of the Court under Section 373 and in his view, the Court should confine itself entirely to the question of the right to a certificate and it is not within its province to decide upon questions of title, reality and character of claim.
13. In (1911) 15 Cal WN 1018 = 10 Ind Cas 357 it was held by Mookerjee and Caspersz, JJ. that the right of the reversionary heirs of a deceased Hindu to take our succession certificate in respect of debts due to the estate of the deceased is not affected by the interposition of the estate of the widow and the Court cannot reject an application for succession certificate by such heirs merely on the ground of the deceased having died long ago. The learned Judges further held that a succession certificate should be obtained for all debts due to the deceased Hindu including the compensation money awarded under the Land Acquisition Act. The correctness of that decision was doubted by Suharwardy and Jack, JJ. and, therefore, the two questions formulated by them (as already noticed by us) were referred to the Full Bench of five Judges. As already seen, Rankin, C. J. with whom the other four Judges concurred did not decide the question regarding the correctness of the decision in Abinash Chandra Pal's case (1911) 15 Cal WN 1018 = 10 Ind Cas 357 as, in the Full Bench's view, that question did not arise on the facts of the case with which they were concerned.
14. The case of Aparanji v. Arunachalam. , was one where a reversioner claimed the compensation amount in respect of lands acquired after the death of the last male-holder. That was a case where there was acquisition of the property of the last male-holder after his lifetime and during the lifetime of his widow the limited owner. The reversioner claimed the compensation after the death of the widow. In those circumstances, it was observed by Krishnaswami Nayudu, J. :
"If he could inherit the other properties of Kanniya without the necessity of the production of any succession certificate, is it any reason that he should be asked to produce a succession certificate only in respect of this money since it happened to be converted into money, not during the lifetime of Kanniy but after his life-time, and kept in Court deposit by reason of a person who is the next heir having had only a limited interest. x x x x x It is not justifiable to insist on the reversioners to produce succession certificates in respect of amounts which have come into the hands of the limited owner after the lifetime of the last male-holder. Further from a reading of Section 214 of the Succession Act, a succession certificate is necessary only in respect of debt due to a deceased person. It cannot be said that this debt was due and owing to Kanniya Chetti whose properties only the petitioner is claiming, not the properties of Bangaru. It is obviously a case where it could not be said to be the recovery of a debt to the deceased person, Kanniya. That is sufficient to dispose of the contention that Section 214 would not be applicable to this case."
We can very well understand the learned Judge holding that production of a succession certificate is not necessary on the ground that, if one could inherit the other properties of the last male-holder, he could as well claim the debt also without the necessity of producing any such succession certificate, for Section 214 speaks of a person claiming "on succession" or "any part thereof" and "the payment of his debt". But the learned Judge does not seem to rest his decision on that ground and that is evident from what is stated thereafter viz., that it is not justifiable to insist on the reversioners to produce succession certificates in respect of amounts which have come "into the hands of the limited owner after the lifetime of the last male-holder." He seems to draw a distinction between a debt forming part of the estate of the last maleholder and a debt due to the deceased person, in the sense , due to him in his lifetime. Either it was a debt due to the limited owner for the reason that the amounts came into the hands of the limited owner after the lifetime of the last male-holder or debt due to the deceased person, but certainly not a debt due to the reversioner. If the debt formed part of the effects of the last male-holder, to which the reversioner is entitled, and the properties did not devolve by operation of the law of survivorship, we fail to understand how it could be held that Section 214 is not applicable. The expression "on succession" occurring in Section 214 is introduced in order to exclude cases of claims to the properties of the deceased person on the ground of survivorship.
15. It should be remembered that, though the correctness of the decision in Abinash Chandra Pal's case (1911) 15 Cal WN 1018 = 10 Ind Cas 357, was doubted by the Division Bench, which referred Brojendra Sundar's case AIR 1920 Cal 661 to the Full Bench, it was not overruled by the Full Bench, though the Full Bench had not chosen to endorese the reasoning of the learned Judges in Abanish Chandra Pal's case supra. Now the questions posed for answer of the Full Bench in Brojendra Sundar's case supra, have become purely academia in view of coming into force of the Hindu Succession Act XXX of 1956, which enlarges the estate of a limited owner into an absolute one.
16. The case of Khadim Husain Khan v. Abdur Rahman Khan, , is relied upon by the learned Counsel for the
appellant to show that there must be a preexisting debt for the application of Section 214 (1) (b). That was a case where an application for execution was also made for recovery of the costs decreed in favour of the petitioner's father. The objection to that application was that that application cannot be granted unless a succession certificate was obtained under Section 214 (1) (b). The learned Judges construed the word 'such' occurring in Section 214 (1) (b) thus : --
"The word 'such' in Section 214 (1) (b) is very significant and evidently refers to a debtor against whom a debt is due before the decree is passed. It would not, therefore, cover a decree for costs which is not passed on the basis of any pre-existing debt, but is passed for the recovery of costs incurred during the pendency of the suit."
That was a case of recovery of costs awarded during the pendency of the suit and therefore the learned Judges were not prepared to equate costs awarded during the pendency to the suit to a debt. It was for the reason that the learned Judges said that the decree for costs was not passed on the basis of any pre-existing debt. The liability to pay compensation under the Land Acquisition Act arises the moment the land is acquired. It is in respect of that liability that an award is made determining the sum of money payable towards compensation. It is thus a liability or debt to be paid on ascertainment of the money equivalent for the property acquired under the provisions of the Act. Since that liability to pay compensation in money is there even before the decree or award of the Court, it falls within the ambit of sub-section (1) (b) of S. 214.
17. The decision of Commissioner of Wealth Tax v. Pierce Leslie & Co., , also does not render any assistance to the case of the appellant. The learned Judges construed the expression "debt owed" in Section 2 (m) of the Wealth Tax Act. What they said is : " A future contingent liability is not a debt due and owing. An inchoate liability with a fair prospect of maturity into a debt in future and still in its embryo stage would answer the description of a debt. Till it is born it is not a debt." The amount payable under the Land Acquisition Act is not a future contingent liability nor an inchoate liability in its embryo stage. The money payable under the Land Acquisition Act is an ascertainable sum. It is, therefore, is liquidated money obligation for the recovery of which an action will lie.
18. The decision of the single Judge in Gokul Singh v. Ramsewak Singh, , is one similar to the case of .
There an application made under Order 21, Rule 10. Civil P. C. was reviewed by the learned single Judge relying upon the case of supra, that costs awarded is not a debt within the meaning of the expression 'debt' to require a succession certificate under S. 214 (1) (b).
19. Subba Rao, J. (as he then was) in Kesoram Industries v. Wealth Tax Commissioner (Central), , after an elaborate review of the Indian and English case, summed up the scope of the definition of 'debt' in Section 2 (m) of the Wealth Tax Act, in these words :
"There is no conflict on the definition of the word "debt". All the decisions agree that the meaning of the expression "debt" may take colour from the provisions of the concerned Act : it may have different shades of meaning. But the following definition is unanimously accepted : "a debt is a sum of money which is now payable or will become payable in future by reason of a present obligation ; debitum in present, solvendum in futuro.
The said decisions also accept the legal position that a liability depending upon a contingency is not a debt in present or in futuro till the contingency happened. But if there is a debt the fact that the amount is to be ascertained does not make it any the less a debt if the liability is certain and what remains is only the qualification of the amount. In short, a debt owed within the meaning of Section 2 (m) of the Wealth Tax Act can be defined as a liability to pay in present or in futuro an ascertainable sum of money."
Though the learned Judge was dealing with the word "debt" as defined in Section 2 (m) of the Wealth Tax Act, the meaning given there applies equally to the expression of the 'debt' as defined in sub-section (2) of S. 214. The expression of 'debt' in Section 214 (2) is of wide amplitude to take in compensation amount payable under the Land Acquisition Act. Such of those liabilities which do not constitute "debts" have been excluded from the definition of the word "debt" in sub-section (2). All liabilities other than those excluded in sub-section (2) will be debts within the meaning of the word "debt". The Supreme Court in Ramanathan v. Ramanathan, while dealing with the meaning of the word 'debt' in Madras Agriculturists Relief Act held, as in the case of Kesoram Industries case, that it is a liability to pay in present or in futuro an ascertainable sum of money.
20. The learned counsel, however, sought to rely upon what Shah, J. (as he then was) said in state of Gujarat v. Shantilal, , to show that compensation need not be necessarily in terms of money and, therefore, it will not be a debt in terms of money. Their Lordships in that case were concerned with the meaning of the expression "compensation" in Art. 31 (2) of the Constitution and therefore, they said that if it were to be in terms of money alone, the expression "paid" would have been more appropriate. The learned Judge never said that, when compensation is determined in tersm of money, it need not be paid in money and that the amount payable is not a debt.
21. In Abdul Majid v. Shamsherali, AIR 1940 Bom 285 Beaumont, C. J. and Sen, J. considered the scope of Section 214 and said "
"It is not correct to say that Section 214, Succession Act, does not apply where the suit was originally instituted by the creditor himself, but only applies where it is instituted by his legal representatives. Section 214 applies even if the suit was started by a creditor who died pending the suit, and his legal representatives were brought on record under O. 22, Civil P. C.
The necessity for obtaining a succession certificate cannot be waived by the parties. The obligation is not merely one in favour of the debtor ; it benefits also those interested in the deceased's estate by requiring that moneys forming part of the estate shall only be paid to a person who has been considered suitable for the grant of a succession certificate."
We are in agreement with the construction put upon Section 214 by the learned Judges and hold that compensation 'debt' within the meaning of the expression 'debt' occurring in Section 214 (2) and that succession Certificate is necessary.
22. The next question raised is that a succession certificate is not necessary in the case of Muslims entitled to the Matruka. The sections to be read in this connections are Sections 212, 213, and 370 apart from S. 214. Section 212 (1) deals with cases of intestates and says that no right to any part of the property of a person who has died intestate can be established in any Court of Justice, unless letters of administration have first been granted by Court of competent jurisdiction. Sub-section (2) says that this section shall not apply in the case of the intestacy of a Hindu, Muhammadan, Buddist, Sikh, Jaina, Indain Christian or Parsi. The scope of the section is limited to an action in which a party seeks to establish a right to any part of the property of the intestate. It does not deal with recovery of debts only with cases of recovery of debts due to the estate of the deceased and it prohibits the Courts from passing any decree in respect of a debt due to the deceased or executing the decree in respect of such debt, unless a probate or letters of administration or a succession certificate as the case may be is produced. Section 213 deals with obtaining of probate of will or letters of administration and further, it does not apply in case of wills made by Muhammadans etc., and the present one is also not a case where an executor or a legatee is claining any rights under the will. Section 370 (1) says that a succession certificate shall not be granted under Part X with respect to any debt or security to which a right is required by Section 212 or Section 213 to be established by letters of administration or probate. This case is governed by Section 214 and not by Section 212 and 213. There is nothing in Section 370 to show that, where the deceased is a Muhammadan, a succession certificate is not necessary when such person claims, on succession, to be entitled to the effects of deceased person. Section 214 does not exempt, when a claim is made, on succession, either in respect of the effect of the deceased person or in respect of execution of a decree or order for payment of the deceased's debts from obtaining a succession certificate by a person claiming to be entitled to them.
23. In the result, the order of the Court below is confirmed and the appeal dismissed with costs.
24. Appeal dismissed.
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