# SUKH LAL AND ORS v. STATE BANK OF INDIA AND ORS

- **Citation:** [1967] 1 S.C.R. 317
- **Court:** Supreme Court of India
- **Decided:** 1966-09-13
- **Case number:** Civil Appeals Nos. 582-583 of 1964
- **Bench:** K. N. Wanchoo, J.C. Shah, R. S. Bachawat; Jj
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/sukh-lal-and-ors-v-state-bank-of-india-and-ors-3827
- **Pages:** 7

## Headnote

Displaced Persons (Debts Adjustment) A.ct, 1951 (70 of 1951), •· 2(6),
(10)-Disp/aced debtor, who is-"p/ace of residence", meaning of.
·
The joint Hindu family, comprisi.11g of the appellants and some others,
carried on business in groceries at Harunabad, now in Pakistan.
The
respondent-Bank had advanced loans to the business.
On the setting up
of the Dominions of India and Pakistan, riots broke out in Harunabad,
and the business was closed and the members of the family residing at
Harunabad migrated to India.
The Bank filed a suit against all the
members of the family fur the amount due. The members then applied
to the Tribunal set up under the Displaced Persons (Debts Adjustment)
Act, 1951 and the Bank's suit was also transferred to the Tribunal. The
Tribunal held that all members of the family were displaeed debtors and
on appeal, the High Court held that the appellants were not displaced
debtors.
HELD : One of the appellants had established his status as a displaced
debtor.
For a person to be a displaced debtor under the Act it is not necessary
that he. must have before migration to India a place of residence only in
the territory which later was included in Pakistan, and bad no place of
residence in the territory which is now in India. The words of the definition in s. 2(10) read with s. 2(6) are sufficiently wide to include the
cue of a person who had a place of R&idepce in India as well as a place
of residence in an area now forming pan Of Pakistan, provided that such
a pen;on was displaced from the latter residerice because of the setting
up of two domiruons . or on account of civil disturbances or fear of such
d1Sturbances. [321 F; G]
The expression 'place of residence' connotes . a place where a penon
has bis dwellillg house which need not necessarily be permanent or exclusive. [321 DJ
The 'displacementl contemplated by the Act is the 'displacement' of the
person and not of the business. [323 El
.
Civn. APPELLATE JURJSDICilON : Civil Appeals Nos. 582-583
of 1964.
Appeals from the judgment and order dated July 21, J!/60
of the Punjab High Court in R. F. A. Nos. 7 and 8of1954.
A. K. ·sen, Uma Mehta and S. K. Mehta and K. L. Mehta,
for the appellants (in both the appeals).
H. L. Anand and K. Baldev Mehta, for the respondent No. I.
'rhe Judgment of the Court was delivered by
Shah, J.-Sukh Lal, Karam Chand, Sohan Lal and Prabh
Dayal are four brothers and they with their sons constituted joint
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SUPREME COVRT
REPORTS
[1'67] I S.C.R.
Hindu family. Sukh Lal has two sons Nand Lal and Hardwari
Lal and Karam Chand has a son Shiv Dayal. The family carried
on business in groceries at Ganganagar in the former Bikaner
State and at Fazilka in the Province of Punjab, in the name and
style of "Pan ju Mal Tilok Chand". A branch of the Business
was started in or about 1930 at Harunabad in the former State
of Bahawalpur. The name of that business was later changed
to Sohan Lal Shiv Dayal.
In September 1946 two cash credit
accounts were opened by Sukh Lal with the Imperial Bank of
India, and certain commodities of Sohan Lal Shiv Dayal were deposited as security with tbe Bank. On the setting up of the Dominions of India and Pakistan there were riots in Harunabad and
a large quantity of the goods pledged with the Bank by Sohan
Lal Shiv Dayal was looted. The business was then closed, and the
members of the family who were residing at Harunabad migrated
on August 19, 1947 to Fazilka. The Bank sold the goods which
were saved, and instituted suit No. 198 of 1950 in the Court of
the Subordinate Judge, First Class, Fazilka against the members
of the joint family for a decree for Rs. 23,418/12/- being the balance
due at the foot of the accounts of Sohan Lal Shiv Dayal.
The members of the joint family then applied to the Tribunal
set up under the Displaced Persons (Debts Adjustment) Act 70
of 1951 for adjustment of their debts due to the Bank and to other
creditors. It was their case that they were displaced debt9rs and
since the branch at Harun

## Text

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SUKH LAL AND ORS.
v.
STATE BANK OF INDIA AND ORS.
September 13, 1966
[K. N. WANCHOO, J.C. SHAH AND R. S. BACHAWAT; JJ.j
Displaced Persons (Debts Adjustment) A.ct, 1951 (70 of 1951), •· 2(6),
(10)-Disp/aced debtor, who is-"p/ace of residence", meaning of.
·
The joint Hindu family, comprisi.11g of the appellants and some others,
carried on business in groceries at Harunabad, now in Pakistan.
The
respondent-Bank had advanced loans to the business.
On the setting up
of the Dominions of India and Pakistan, riots broke out in Harunabad,
and the business was closed and the members of the family residing at
Harunabad migrated to India.
The Bank filed a suit against all the
members of the family fur the amount due. The members then applied
to the Tribunal set up under the Displaced Persons (Debts Adjustment)
Act, 1951 and the Bank's suit was also transferred to the Tribunal. The
Tribunal held that all members of the family were displaeed debtors and
on appeal, the High Court held that the appellants were not displaced
debtors.
HELD : One of the appellants had established his status as a displaced
debtor.
For a person to be a displaced debtor under the Act it is not necessary
that he. must have before migration to India a place of residence only in
the territory which later was included in Pakistan, and bad no place of
residence in the territory which is now in India. The words of the definition in s. 2(10) read with s. 2(6) are sufficiently wide to include the
cue of a person who had a place of R&idepce in India as well as a place
of residence in an area now forming pan Of Pakistan, provided that such
a pen;on was displaced from the latter residerice because of the setting
up of two domiruons . or on account of civil disturbances or fear of such
d1Sturbances. [321 F; G]
The expression 'place of residence' connotes . a place where a penon
has bis dwellillg house which need not necessarily be permanent or exclusive. [321 DJ
The 'displacementl contemplated by the Act is the 'displacement' of the
person and not of the business. [323 El
.
Civn. APPELLATE JURJSDICilON : Civil Appeals Nos. 582-583
of 1964.
Appeals from the judgment and order dated July 21, J!/60
of the Punjab High Court in R. F. A. Nos. 7 and 8of1954.
A. K. ·sen, Uma Mehta and S. K. Mehta and K. L. Mehta,
for the appellants (in both the appeals).
H. L. Anand and K. Baldev Mehta, for the respondent No. I.
'rhe Judgment of the Court was delivered by
Shah, J.-Sukh Lal, Karam Chand, Sohan Lal and Prabh
Dayal are four brothers and they with their sons constituted joint
3!8
SUPREME COVRT
REPORTS
[1'67] I S.C.R.
Hindu family. Sukh Lal has two sons Nand Lal and Hardwari
Lal and Karam Chand has a son Shiv Dayal. The family carried
on business in groceries at Ganganagar in the former Bikaner
State and at Fazilka in the Province of Punjab, in the name and
style of "Pan ju Mal Tilok Chand". A branch of the Business
was started in or about 1930 at Harunabad in the former State
of Bahawalpur. The name of that business was later changed
to Sohan Lal Shiv Dayal.
In September 1946 two cash credit
accounts were opened by Sukh Lal with the Imperial Bank of
India, and certain commodities of Sohan Lal Shiv Dayal were deposited as security with tbe Bank. On the setting up of the Dominions of India and Pakistan there were riots in Harunabad and
a large quantity of the goods pledged with the Bank by Sohan
Lal Shiv Dayal was looted. The business was then closed, and the
members of the family who were residing at Harunabad migrated
on August 19, 1947 to Fazilka. The Bank sold the goods which
were saved, and instituted suit No. 198 of 1950 in the Court of
the Subordinate Judge, First Class, Fazilka against the members
of the joint family for a decree for Rs. 23,418/12/- being the balance
due at the foot of the accounts of Sohan Lal Shiv Dayal.
The members of the joint family then applied to the Tribunal
set up under the Displaced Persons (Debts Adjustment) Act 70
of 1951 for adjustment of their debts due to the Bank and to other
creditors. It was their case that they were displaced debt9rs and
since the branch at Harunabad was closed after the partition of
India, the debts due by them were liable to be adjusted under the
provisions of the Displaced Persons (Debts Adjustment) Act 70
of 1951. The suit filed by the Bank was transferred to the Tribunal
and was consolidated for trial with the petition under s. 5 of Act
70 of 1951. The Tribunal held that all the members of the family
were residing and carrying on business and owning property both
residential and agricultural at Harunabad and as they left Harunabad after March I, 1947 due to civil disturbances and were at the
date of ~he suit and thereafter residing at Ganganagar, they were
displaced debtors. The Tribunal further held that under s. I 7(b)
of Act 70 of 1951 the Bank was not entitled to recover from the
debtors the balance of the debt for which the goods pledged were
sold by the Bank. Accordingly the Tribunal allowed tire application under s. 5 of Act 70 of 1951 and declared that nothing· was
due by the applicants to the Bank in respect of the liability under
the two accounts. The suit filed by the Bank was also dismissed
by the Civil Court. Against the orders passed in
the petition
under s. 5 of Act 70 of 1951 and the decree in Suit No. 198 of
1950 two appeals were preferred to the High Court of Punjab.
The High Court held on a review of the evidence that four members
of the family : Nand Lal and Hardwan Lal, sons of Sukh Lal,
Shiv Dayal, son of Kar am Chand and Sohan Lal, son of Tilok Chand
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SUKH LAL V. STATE BANK (Shah, /,)
319
were displaced debtors since they were actually residing and carrying .on business at Harunabad immediately before the partition
of India and their liability to the .Bank stood extinguished, but the
other members of the family; Sukh Lal, Karam Chand and Prabh
Dayal who were not residing in Harunabad immediately before
the partition, were not displaced delitors. The High Court accordingly modified the decree in the suit and the order passed in the
petition under s. 5 of Act 70 of 1951, and declared that three members of the family, Sukh Lal, Karam Chand and Prabh Dayal were
liable to satisfy the debt due to the Bank for their proportionate
share under s. 22 of the Act, and. remanded the proceedings· for
d~termination of their "final liability" in accordance with the provisions of the Displaced Persons (Debts Adjustment) Act- 70 of
1951.
The relevant provisions of Act 70 of 1951 are briefly these :
Section 2(10) defines a 'displaced person' as meaning "any person, who,
on account of the setting up of the DominionsoflndiaandPakistan,
or on account of civil disturbances or the fear of such disturbances
in any area now forming part of West Pakistan, has, ilfter the !st
day of March, 1947, left, or been displaced from, his place of residence in such area and who has been subsequently residing in India,
and includes any person who is resident in any place now forming
part of India and who for that reason is up.able or has been rendered unable to manage, supervise or control any immovable property belonging to him in West Pakistan, but does not include a
banking company." Section 2(9) defines a 'displaced debtor'
as meaning "a displaced person from whom a debt is due or is
being claimed". The expression 'debt' is defined in cl. (6) of s. 2.
The material part of the definition reads :
" 'debt' means any pecuniary liability, whether
payable presently or in future, or under a decree or order
of a civil or revenue court or otherwise,
or whether
ascertained or to he_ ascertained, which-
(a) in the case of a displaced person who has left or
been displaced from his place of residence in any
area now forming part of West Pakistan, was incurred before he came to reside in any area now
forming part of India;
(b) in the case of a displaced person who, before and
after the 15th day of August, 1947; has been residing in any area now forming part of India, was
incurred before the said date on the security of
any immovable property situate in .the territories
now forming part of West Pakistan;
320
SUPRBMB COURT
REPOl.TS
(1967) I S.C.R.
Provided
(c)
Under s. 5 of the Act a person who is a displaced debtor may
apply within the time fixed thereby to the Debt Adjustment Tribunal for adjustment of his debts. Section 22 provides for the
apportionment of joint d~bts. It enacts :
"Where a debt is due from a displaced person jointly
with another person, the Tribunal shall, for the purposes
of this Act apportion the liability between them according
to the following rules, namely :
(a) if the liability of each debtor is defined, then according
to the defined share of each;
(b) if the debt was taken for any trade or business of
the joint debtors, then according to the shares held
by each of the joint debtors in the trade or busi-
(c)
(d)
ness;
(e) ;r the debt was taken by a joint Hindu family, the mem-
,' bcrs of the joint Hindu family shall be deemed to
be joint debtors widun the meaning of this section
and the debt shall be apportioned amongst the members thereof in the same proportion in which shares
would be allotted to them on partition:
Provided .
The test applied by the High Court for determining the status
of the· applicants was in our judgment, erroneous. The High
Court thought that a person may claim the status of a displaced
person under the Act if he was actually residing in Pakistan immediately before the partition and has left that place. The learned
Judges observed :
"The evidence, which the learned Tribunal has considered, does not really. support the suggested
conclusion that all the respondents were residing in Pakistan
immediately before partition. Learned counsel have taken
us through the entire evidence, and it appears that, out
of the seven adult members of this family, four, namely,
Sohan Lal, Nand Lal, Hardwari Lal and Shiv Dayal,
were living in Harunabad immediately before partition and attending to their business in Pakistan, while
the other members of the family were not living there.
I feel satisfied that, out of the respondent~. Sohan Lal, Nand Lal, Hardwari Lal and Shiv Dayal
were actually residing in Pakistan before the partition,
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SUKH LAL v. STATE BANK (Shah, I.)
and equally no doubt that they were displaced from
their place of residence in Pakistan, on account of the
partition of the country
The
other respondents Sukh Lal, Karam Chand and Prabh
Dayal are not proved to have been residing in Pakistan
immediately before partition and cannot be called displaced debtors."
321
Under the Act a person who had a place of residence in the
territory which at the date of the Act was in Pakistan and had been
displaced from that place of residence on the setting up of the
Dominions of India and Pakistan, or on account of civil disturbances or fear of such disturbances after March 1, 1947 would be
a displaced person. The Legislature has conferred the status of
a displaced debtor (provided other conditions are fulfilled) upon
a person who is displaced from his place of residence in Pakistan,
as well as upon a person who has left Pakistan, The expression
"place of residence" connotes a place where a person has his dwelling house, which need not necessarily be permanent or exclusive.
A person may have more places of residence than one at a given
time. A place occupied by a person with the intention of setting
up a fixed, though not permanent-abode, would be deemed to
be a place of residence. Sojourn for a purely temporary purpose
will not constitute residence, and the place of sojourn will not
be deemed a place of residence within the meaning of the Act:
but where a person possesses establishments at more places than
one and spends time more or less considerable in all those places,
as exigencies of his occupation, vocation or fancy demand,
he
would be deemed to have a place of residence at each of those
places.
We are unable to agree with the contention of the Bank that
for a person to be a displaced debtor under the Displaced Persons
(Debts Adjustment) Act 70 of 1951 he must have before migration to India a place of residence only in the territory which later
was included in Pakistan, and had no place of residence in the
territory which is now India. The words of the definition in s.
2(10) read with s. 2(6) are sufficiently wide tci include the case of
a person who had a place of residence in India as well as a place
of residence in an area now forming part of Pakistan, provided
that such person was displaced from that latter residence because
of the setting up of the two Dominions or on account of civil disturbances or fear of such disturbances.
The three appellants claim, that they had a place of residence
in Pakistan, and they were displaced from that place of residence.
A large number of witnesses were examined on behalf of the appellants before the Tribunal and they generally stated that four members of the family, Nand Lal, Sohan Lal, Shiv Dayal and Hardwari
322
SUPREME COURT REPORTS
[1967] 1 S.C.R.
Lal used to reside and carry on the business at Harunabad. They
also stated that the "applicants" or the "petitioners," meaning
thereby all the members of the family-had been displaced from
Harunabad. But if the other members of the family had no place
of residence in any area now in Pakistan, mere general assertions
cannot come to their aid. Jagan Nath .deposed that before the
creation of Pakistan, some times Sukh Lal used to live at Fazilka
and some times at Harunabad. Nathu Ram stated that Sukh
Lal used to stay at Harunabad from time to time. Ganesh Dass
stated that Sukh Lal was one of the proprietors of the business and
used io come off and on to Harunabad. If Sukh Lal was ordinarily residing at Fazilka and for the purpose of attending to the business
visited Harunabad and set up his residen~ in that town, it would
be difficult to say that be bad no place of residence at Harunabad.
It is true that Soban Lal, the only member of the family examined
as a witness, did not say that Sukh Lal had a place of residence
at Harunabad. But that by itself is not a ground for rejecting
Sukh Lal's claim. Our attention was also invited to the examination of Sukh Lal presumably under O.X of the Code of Civil
Procedure before framing issues in which there is no record of
Sukh Lal having clain1ed that he had a place of residence in Harunabad. But the examination under O.X of the Code of Civil Procedure is by the Court with a view to ascertain the case of a party
and to frame appropriate issues, and omission to make any statement on the point under discussion cannot be pressed into service
against him.
The Tribunal apparently accepted the testimony of the witnesses who deposed that Sukh Lal had a place of residence at
Harunabad. The High Court disagreed with that view, for
in
their opinion Sukb Lal was not proved to have actually resided
immediately before the partition at Harunabad. But the test
of actual residence before partition, applied by the High Court
was, in our judgment, erroneous. -On a consideration of the evi"
dence, we are of the view that Sukh Lal has established his status
as a displaced debtor and the High Court was in error in setting
aside the order of the Trial Court in so far as it related to Sukh
Lal.
About Karam Chand and Prabh Dayal, however, there is
no evidence on the record that they had at any time a place of
residence at Harunabad. Counsel for the appellants, however,
contended that the business of Sohan Lal Shiv Dayal was a joint
family business and even though only four members of the family
were actually residing and carrying on the business and attending
to it at Harunabad, the entire family must be deemed to have a
place of residence at Harunabad and by reason of the setting up
of the Dominions of India and Pakistan and also on account of
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SUKH LAL V, SJ'ATE BANK (Shah, J.)
323·
the civil disturbances in the area all the members of the family
must be deemed to have left or to have been displaced from that
place of residence. It is not necessary to decide in this case whether
the expression "person" in s. 2(10) includes a Hindu joint family.
But in the present case there is no evidence that the place of resi-·
dence at Harunabad of the four members of th.e family was the
place of residence of the joint family. The contention that the
joint family had a place of residence at Harunabad was not set
up either in the Trial Court or in the High Court. It was urged for
the first time in this Court.
It was contended in the alternative, by counsel for the appellants, that what is material in deciding whether a person is a displaced person, especially when he was carrying on business, is the
location of the business and if on account of the setting up of
the two Dominions, or on account 'of disturbances-actual or
apprehended-the business had to be closed, the person carrying
on the business must be deemed to be a displaced person. As a
corollary to that submission it was urged that the joint family of
the appellants and other members was carrying on the business
at Harunabad and since that business had to be closed on account
of civil disturbances, the members of the family owning that business
must be deemed to be displaced persons. But this is the argument
that the joint family was displaced .from its place of residence in
another garb. The displacement contemplated by the Act is
the displacement of the person and not of the business. If the
owner of the business whether he was carrying on business in
the territory now in Pakistan or not at the relevant time had left
or had been displaced on account of the circumstances mentioned
in cl. (IO) of s. 2, he would acquire the status of a displaced person.
The status of an individual as a displaced person arises on account
of leaving or being displaced and not on account of closure of the
business that .he may be carrying on.
In our view, therefore, the appeal of Sukh Lal must be allowed
and the appeal filed by Karam Chand and Prabh Dayal must
be dismissed. The order passed by the High Court will stand modified and the Court . of First Instance will determine the final liability of Karam Chanel and
Prabh Dayal for the debt due to
the Bank in accordance with the provisions of s. 22 of the Displaced Persons (Debt Adjustment) Act 70 of 1951.
There is little doubt that on account of the circumstances,
over which the appellants had no control, property of considerable value belonging to them had been destroyed. In the circumstances there will be no order as to costs in this Court and in the
High Court till this date.
Y.P.
Appeal No. 582164 allowed.
Appeal No. 583/64 dismissed.