JAI GOPAL Vs. LALA BADRI PRASAD

JUDGEMENT

(1.) This is a Defendants' appeal from a decree passed against them by the Civil Judge of Etawah declaring that the Respondents are entitled to remain in possession over the property in dispute as mortgagees;

(2.) The Appellants are father and four sons. They jointly executed a usufructuary mortgage on 9-1-1930 in favour of the Respondents Badri Prasad and Ram Charan for Rs. 17145/ - in respect of the property in dispute which is zamindari property situated in village Turkpur of Etawah district. On 3-3-1936 the Appellants is filed an application under Section 4 of the U.P. Encumbered Estates Act, case No. 8 of 1986. In the application they did not mention the mortgage debt due to the Respondents or he fact that they were their creditors. The application was forwarded in due course to the Special Judge who under Section 8 of the Encumbered Estates Act called upon the Appellants to submit a written statement containing so far as was practicable, full particulars respecting private debts to which they were subject or with which their immoveable property was encumbered, the nature and extent of their proprietary-rights in land, the nature and extent of their property which was liable to attachment and sale under Section 60 of the Code of Civil Procedure and names and addresses of their creditors so far as they were known to them or could be ascertained by them. The written statement was required under the law to be verified in the manner prescribed by law for the verification of a plaint. The Appellants in compliance with the notice filed before the Special Judge a written statement but they concealed at facts relating to the mortgage debt due to the Respondents. They were living in Jalaun district where they had some zamindari property; this property was mentioned by them in the written statement. They also mentioned some small debts that they owed to various persons. They owned the property in dispute, a grove and a house in village Turkpur, district Etawah but did not mention any of these three properties in the written statement. The mortgage debt was still due from them but they mentioned neither it nor the names of the creditors-Respondents. After the written statement was filed the Special Judge published in the official gazette a notice as required by Section 9(1) calling upon all persons having Claims in respect of private debts against the persons or the property of the Appellants within a certain time. Under Section 9(2) he was also required to cause copies of the notice to be exhibited at the office of each Collector within whose district any part of the property of the Appellants was situated and to send a copy of the notice together with a copy of the written statement to each of the creditors whose names and addresses were mentioned in the written statement. Accordingly he should have caused a copy of the notice to be exhibited at the office of the Collector Etawah and sent copies of it and the written statement to the Respondents; but this was not done simply because the Appellants did not mention their Etawah property, the mortgage debt and the names of the Respondents in the written statement. The Respondents did not file any claim within the time mentioned in the notice. The Special Judge was required under Section 11 to publish a notice in the manner specified in Section 9 specifying the property mentioned by the Appellants in their written statement; this notice also (sic) not exhibited at this office of the Collector Etawah because the Etawah property was not mentioned in the written statement. Among the creditors mentioned by the Appellants was one Ram Charan, who its different from the Plaintiff Ram Charan On 13-10-1936 he filed his claim and applied to the Special Judge, in response to the notice issued under Section 11, that the Appellants had given a totally wrong and false (sic) of their properties and had concealed their Etawah property. In the application and the written statement he mentioned the property in dispute, the house and the grove, On 15-1-1938 the Appellants applied for an amendment of their application, and written statement B(sic)adding the Etawah property in it. It was stated in the application that it had been left out by mistake from these documents. They, however did not apply for adding the mortgage debt due to the Respondents and their names and addresses in the written statement. They did not also explain what mistake had been submitted by them. The Special Judge at first allowed the amendment, but on 30-9-1939 he passed an order that the Etawah property added under the amendment would not be taken into consideration when deciding which property of the Appellants was liable to attachment, sale etc, Though the Etawah property was added in the written statement and a copy of the notice issued under Section 9 should have been caused by the Special Judge to be exhibited at the office of the Collector Etawah in compliance with the provisions of Section 9(2) it was not done. The Special Judge then completed proceedings in his court and passed decrees under Section 14(7) in respect of the claims made before him. Since the Respondents did not appear before him at all and did not lodge any claim no decree was passed in their favour. Under Section 19(2) The Special Judge was required to send to the Collect or a list of the property of the Appellants mentioned in the notice under Section 11 and found by him to be liable to attachment, sale or mortgage in satisfaction of their debts. Though the Etawah property was added under the amendment order in the application and the written statement, no fresh notice in respect of it was published as required under Section 11. Moreover, the Special Judge had directed that the Etawah property would not be taken into consideration in deciding which property of the Appellants was liable to attachment, sale etc. Consequently the property in dispute was not included by the. Special judge in the list prepared under Section 19(2). He transmitted the, decrees to the Collector for liquidation and the sub-divisional officer concerned proceeded to liquidate them. The Appellants filed an application before the sub-divisional officer for being put in possession over the property in dispute; the application purported to have been made under Section 35 of the Act which lays down that if at any time after the decrees granted by the Special Judge have been sent to the Collector "any person entitled to possession of any property under the provisions of this Act applies to the Collector to be put in possession of such property, the collector shall deliver possession of such property to him." The sub-divisional officer issued a notice of this application to the Respondents. Then the Respondents appeared before the Special Judge on 3-1-1944 with an application complaining that they had received no information about the Encumbered Estates Act proceedings until they got the notice from the sub-divisional officer, that their debt had been concealed from him by the Appellants, and that they had not even been made parties to the proceedings and requesting that the proceedings be re-opened and they be permitted to the their claim. The application was dismissed by the Special Judge. on 14-10-1944 on the ground that it was barred by the provisions of Section 11 which lays down that no claim to any property mentioned in the notice issued under the section can be entertained after the expiry of the prescribed period if certain proceedings had been taken by the Collector in liquidation proceedings. Section 11 has nothing to do with the application made by the Respondents for being allowed to file a claim under Section 9; but we are not concerned with that matter now. On 26-4-1944 the sub-divisional officer ordered possession over the property in dispute to be delivered to the Appellants in spite of opposition by the Respondents. He was of the view that Section 35 applied even though the property was not mentioned in the application under Section 4 and was not included in the list prepared by the Special Judge under Section 19(2) of the Appellants' property liable to attachment, sale etc. He repelled the contention of the Respondents that the Appellants had practised fraud upon them on the ground that the question was irrelevant. He held that he could order possession over the property under Section 35 even though it was not included in the list prepared under Section 19(2) The Respondents filed an appeal against the order but it was dismissed. Symbolical possession over the property was given to the Appellants on 23-12-1944. Hence the suit by the Respondents.

(3.) The main grievance of the Respondents is that the Appellants practised fraud in the proceedings under the Encumbered Estates Act on account of which they remained in complete ignorance of the proceedings and could not file a claim on the foot of the mortgage. So they wanted a declaration that they were entitled to remain in possession of the property as mortgagees.