ISHAR SINGH Vs. NATIONAL BANK OF LAHORE LTD

JUDGEMENT

(1.) This appeal by a displaced person against the order of the Tribunal constituted under the Displaced Persons (Debts Adjustment) Act, 1951, raises on interesting question. The appellant admittedly owes the respondent Bank, the National bank of Lahore Limited, a sum of Rs. 21116/1-as calculated upto 15th August, 1947 in an account which was opened with the Bank in Pakistan before the partition. The advances made by the Bank were secured both by an equitable mortgage of certain immovable property and by the pledge of movable property regarding the value of which the only available evidence is the statement of the appellant that it was worth Rs. 25,000/-. The Bank admits the pledge of moveable goods but has not been able to produce its own accounts to prove the value.

(2.) The positions of displaced debtors whose debts were secured on immovable property and movable property are set out in Ss. 16 and 17 of the Act. Under S. 16 where a debt was secured on immovable property situated in West Pakistan the creditor can elect either to retain the security or to treat it as an unsecured debt, and in the former case, which the Bank has adopted in this case, the bank will be entitled to recover a sum calculated according to a certain formula out of the compensation to be received by the debtor in respect of his verified claim regarding the mortgaged property.

(3.) On the other hand S. 17 has the effect of wiping out completely a debt secured on movable property where the movable property is no longer available, as in the present case. The legislature has, however, completely omitted to make any provision in these sections regarding how a debt should be dealt with if it is secured on both kinds of property, and in these circumstances the Tribunal has passed an order in favour of the Bank in accordance with the provisions of S. 16.