L CHADAMMI LAL Vs. B GOVIND PRASAD

JUDGEMENT

(1.) These two appeals arise out of an application under Section 12, Encumbered Estates Act.

(2.) On 22nd November 1935, two separate application were made under Section 4, E. E. Act, one by Ram Sarup, Girwardhari and their minor sons, and the other by Govind Prasad and his sons. The application of Bam Sarup and others was numbered as 89 of 1936 and the other application of Govind Prasad and others was number, ed as 160 of 1936. First Appeal No. 258 of 1942 arises out of case No. 160 of 1936, while the other First Appeal No. 271 of 1942 arises out of case No. 89 of 1936. Proceedings under Section 14, E. E. Act, were being taken in Court. When all the evidence was finished, on 29th November 1941, an application was put in by one of the creditors, namely, Mt. Pushpawati Devi, under Section 12 of the Act, alleging that four mortgages made by the applicants in the two cases in favour of certain creditors were invalid as they had not been made in good faith after chap. I of the said Act had come into force and before the applications were filed by the landlord-applicants. These four mortgages were as follows: (a) Mortgage deed dated 8th May 1935, executed by the landlord-applicants in favour of one Bengali Bhushan for Rs. 5000. It was alleged in this mortgage that the money was required by the landlord-applicants for carrying on their business (b) Usufructuary mortgage deed dated 25th June 1935, executed by the landlord-applicants in favour of Chandammi Lal, the present appellant. In this mortgage, one of the shops belonging to the landlord-applicants was mortgaged for a sum of Rs. 4000. (c) Mortgage deed dated 26th June 1935, executed in favour of the same creditor, Chadammi Lal, in this the same shop as was mortgaged in the usufructuary mortgage of the same date was mortgaged for a sum of Rs. 2000, and (d) mortgage deed dated 16th August 1935, executed in favour of Krishna Narain and Satya Narain Bank Ltd. for Rs 11,100.

(3.) No notice was issued of this application. It appears that the creditors who were concerned in the different mortgages took notice of it and arguments were addressed to Court by counsel on their behalf and also by counsel on behalf of Pushpawati Devi.