MOHAMMAD ALI HASAN KHAN Vs. BHAGIRATHLAL

JUDGEMENT

(1.) These two appeals arise out of an award made by the Jagirdars Debt Settlement Board in case No. 159 of 1953. They raise two questions of law of some importance. The first question is, whether the debt due to an evacuee vested in the Custodian under the Administration of Evacuee Property Act (31 of 1950) is beyond the- reach of the Hyderabad Jagirdars Debt Settlement Act, 1952 (hereinafter referred to as the Act). The second is, whether, on the facts and circumstances of the case failure to comply with the provisions of Sections 27 to 29 of the Act would vitiate the award.

(2.) In order to appreciate the arguments advanced in this behalf, it is expedient to make a brief statement of facts. Nawab Fakhar Nawas Jung, Ex-Jagirdar, had run into huge debts. Some of his creditors had obtained decrees from the courts. There were also others, both secured and unsecured creditors. After the abolition of the Jagirs and the advent of the Hyderabad Jagirdars Debt Settlement Act, one Sayeda Hafeesunnissa Begum applied for a settlement of her debts amounting to O.S. Rs. 6,000.00. She filed her application under Section 11 on Form No. 1. Thereupon, a notice was issued to the debtor and also a general notice was directed to be published under Section 21(2) of the Act. Various creditors made their applications, one of them being the applicant, P. Rajagopalarao, creditor No. 9, who had obtained a decree in his favour. His decree under the provisions of the Act was also transferred to the Board. The mortgagee-creditor shown as creditor No. 3, and Nawab Fakhar Nawas Jung, the Jagirdar-debtor having come to terms made an application under Section 15 on form No. 2 on 7-8-1953. The debtor in response to the notice issued to him also took care to show in his application filed on Form No. 3 on 18-8-1953 all his various creditors including Haji Dawood Nasir, who had migrated to Pakistan and whose debt consequently became vested in the Custodian. The debt to Haji Dawood Nasir was in fact the subject matter of an award which was made the rule of the Court in O.S. No. 70 of 1950 on the file of the erstwhile Hyderabad High Court. After Haji Dawood Nasir had migrated to Pakistan, the Custodian sought to recover this sum due from Fakhar Nawaz Jung by attachment and sale of his properly. The latter took exception to it and approached the Board. The Board issued notice. Thereupon, the Custodian on 9-9-1953 sent a letter stating that the debt in question having vested in him was due to him and could be recovered by him as arrears of land revenue under Section 48 of the Administration of Evacuee Property Act. The Board did not pursue the matter further at that stage; on the other hand on 15-9-1953 while rejecting, on ground of limitation, the Form III filed by Fakhar Nawaz Jung showing the evacuee as one of the creditors, they (the Board) declared that with it the proceedings started in relation to the Custodian got automatically cancelled as the evacuee was no longer a party before them. The interim orders already passed against the Custodian to stay his hand were also revoked. Form No. 2 filed by the debtor and Creditor No. 3 -- mortgagee for want of verification could not be recorded under Section 15 of the Act. Nevertheless, it was directed to be treated as an application under Section 11. Similarly, form No. 3 which as shown above, was rejected on 15-9-1953 was subsequently on 17-11-1953 treated as an application under Section 11. Notices were then directed to be issued, but from the proceedings on 2 9/12/1954, it appears that they were not in fact issued to all the creditors. At any rate, it is common ground that no notice under Section 21 was in fact issued to the Custodian. Nawab Fakhar Nawaz Jung died during the pendency of the proceedings. His legal representatives were sought to be brought on record. At that time, it was represented to the Board that the Custodian as representative of the creditor, Haji Dawood Nasir, had auctioned the properties of the debtor in Medak District and had also written to the Jagir Administrator for commutation amount and a request was made that he may be given notice. Accordingly, a notice was sent to the Custodian along with a copy of the application to show cause why the applicants request should not be granted. The Custodian was directed to represent his case before the Board on the next date of hearing. In response to this notice, the Custodian filed a counter stating therein that he was entitled to recover the debt as it was payable to him under Section 13 of the Administration of the Evacuee Property Act being the debt due to the evacuee and that he had already recovered a sum of Rs. 14,758-5-6 and that a sum of Rs. 75,241-10-6 was still due to him in respect of which he was preferring his claim. The proceedings for settlement of debts were then continued. Eventually, the Board passed an award on 27-11-1957 holding inter alia that the appellants, Mohammed Farooq Hussaini and the other comortgagee-creditbrs were entitled to a sum of O.S. Rs. 15,000.00as admitted by Nawab Fakhar Nawaz Jung its, form No. 2 and in two agreement deeds executed by him and that the Custodian had power to recover by attachment and sale of the assets of the debtor under the provisions of the Administration of Evacuee Property Act. They recognised the priority of the debt vested in the Custodian over all the unsecured debts and said that in view of the extent of the amount due, it was not possible to make any provision for discharge of any other unsecured debts. On this basis, settlement of debts was effected and the amounts due to the various creditors who had established their claims were determined.

(3.) Against this award, the present appeals have been preferred, one by Rajagopal Rao a creditor who had obtained a decree, his appeal being Appeal No. 61 of 1958 and the other by the legal representatives of the debtor, their appeal being appeal No. 24 of 1958. The questions that these appeals raise have been set out earlier. We take up the question No. 1 first. As already noticed, the Custodian of the evacuee property did not make an application under Section 11. Though Form No. 3 was treated as an application under Section 11, no notice as contemplated by Section 21(1) was sent to him. He appeared in the proceedings only in connection with certain notices given to him on the application of the debtor first, and thereafter of his legal representatives. His contention has always been that the debt due to the evacuee which had vested in him, could not be brought within the purview of the Hyderabad Jagirdars Debt Settlement Act, so that it may be liable to be scaled down, or the recovery thereof may be subjected to the provisions of the said Act. It is the correctness of this contention that is strenuously challenged in these appeals.