NARAIN SINGH Vs. RADHEY SHYAM SETH

JUDGEMENT

(1.) The question that arises for decision in the present appeal is whether a special Judge exercising jurisdiction under the U.P. Encumbered Estates Act (Act 25 of 1934) has power to pass suitable orders for the preservation of the property of a landlord applicant. This question did not in terms form the subject of consideration by this Court in Rajendra Singh V/s. Uma Prasad . In that case it was held that a special Judge exercising jurisdiction under the Act has no power to appoint a receiver at the instance of the holder of a simple money decree or a mortgage decree. It was further held in that case that Section 54 of the Act does not contemplate that the Local Government is to make rules which should include a rule making Order 40, Civil P.C. applicable to the proceedings taken before the special Judge. In the course of their judgment the learned Judges, after pointing out that the duty of the special Judge under the Act was merely to ascertain the assets and the liabilities of the landlord, observed that: It is not the province of the special Judge to augment the assets of the landlord debtor by depriving him of all the profits accruing during the pendency of the proceedings under the Act.

(2.) It would be noted that the case cited is an authority only for the proposition that the special Judge has not the jurisdiction to deprive the landlord applicant of the profits of his property pending the proceedings under the Act. The question that arises before us is essentially different. It is, as already stated, whether, while ascertaining the liabilities and the assets of the judgment-debtor, the special Judge has or has not the power to ensure the preservation of the property for the benefit of the creditors pending the proceedings under the Act. By Section 54 of the Act, the Local Government is authorized inter alia to make rules consistent with the provisions of the Act for regulating the procedure of the special Judge "and generally for carrying out the purposes of the Act." In exercise of this power the Local Government framed certain rules and Rule 6 of those rules runs as follows: Proceedings under this Act shall be governed by the provisions of the Civil P. C., 1908, for the time being in force so far as they are applicable and not inconsistent with the provisions of the Act and of these rules.

(3.) In view of this rule it is clear that such provisions contained in the Code as can apply to the proceeding under the Act and are not inconsistent with the provisions of that Act or of the rules framed by the Local Government are applicable to proceedings under the Act. Now, there is nothing in the Act or in the rules depriving the special Judge of the authority to pass orders that are calculated to preclude the landlord debtor from wasting the properties shown by him in the written statement filed under Section 8 of the Act. The object of the enactment is to provide for the satisfaction of the claims of creditors out of the assets of the landlord debtor in the manner prescribed by the Act. The preservation of the assets from which the claims of the creditors are to be eventually satisfied is therefore a purpose consistent, and not inconsistent with the objects of the Act. If the power to ensure the preservation of the assets is denied to the special Judge, the provisions of the Act will in some cases be reduced to an absolute farce. On the one hand, the special Judge may go on ascertaining the assets of the landlord debtor and, on the other, pending the final decision by the special Judge, the landlord may go on alienating or otherwise wasting the assets. It is needless to observe that a situation like the one just mentioned would nullify the object of the enactment. By Order 39, Rule 1, Civil P.C. the Court is authorised to grant a temporary injunction or order to prevent the property in dispute being wasted, damaged or alienated by any party to the suit. The power to issue temporary injunctions is vested in the Courts simply with a view to ensure that the successful litigant may not ultimately be deprived of the fruits of his decree. In proceedings under the Encumbered Estates Act the special Judge ultimately passes a decree in favour of the creditors under the provisions of Section 14(7) of the Act. The decree so passed is realizable from the assets of the landlord-debtor. The preservation of those assets is therefore essential to ensure the realisation of the decree passed in favour of the creditors by the special Judge. An order for preservation is therefore consistent with the objects of the Act. It follows that a special Judge has the power to grand temporary injunctions and to take other steps with a view to prevent the landlord debtor from wasting his assets.