AGHA SYED AYUB ALI SHAH Vs. KALI CHARAN

JUDGEMENT

(1.) This is an application in revision against an order dated 20 May 1938 of the District Judge of Bulandshahr by which he has affirmed an order of the Special Judge of Bulandshahr dated 23 November 1937 on a claim made by a landlord for reduction of interest on a loan in proceedings under Encumbered Estates Act. Agha Syed Ayub Ali Shah is a landlord in Bulandshahr District who made an application under the Encumbered Estates Act. Numerous creditors were made parties to these proceedings and one of them was Kali Charan. Kali Charan held two mortgages of the year 1933 which carried an interest of 10 1/2 per cent, compoundable yearly. It appears that prior to the proceedings under the Encumbered Estates Act, proceedings took place under the Agriculturists Relief Act between Agha Ayub Ali and Kali Charan under Section 33 of the Act and the amount due to Kali Charan under these mortgages as well as the interest to which Agha Ayub Ali Shah was liable was determined and a decree was passed under the provisions of the Agriculturists Relief Act in favour of Kali Charan against Agha Ayub Ali Shah.

(2.) In the proceedings under the Encumbered Estates Act, an inquiry took place under Section 14 as to the amount due to the creditors and when this inquiry was held, the claim of Kali Charan was considered and a question arose as to what should be taken to be due to Kali Charan on those mortgages for the principal and interest. Kali Charan's contention was that the whole matter is at large and the amount should be determined afresh in proceedings under the Encumbered Estates Act, disregarding altogether the finding and the decree which has been passed in the Agriculturists Relief Act. Agha Ayub Ali Shah's contention on the other hand was that the decree passed under the Agriculturists Relief Act should be taken as the basis of the findings in proceedings under the Encumbered Estates Act. The result of this controversy is that if the decree and the finding arrived at in proceedings under the Agriculturists Relief Act are to be accepted, the interest claimed by Kali Charan will to a certain extent be reduced. The trial Court took the view that the matter was at large and it came to the conclusion that the findings and the decree under the Agriculturists Relief Act can be disregarded and it accordingly determined the amount which was due to Kali Charan on those mortgages and it also determined the interest which was due to Kali Charan. Agha Ayub Ali Shah made an appeal to the District Judge and the learned District Judge has in substance affirmed the finding of the trial Court and against these two concurrent judgments this revision has been filed in this Court. Now, with regard to the merits of the contention there is no difficulty whatever. Section 15, Encumbered Estates Act, is in the following words: In determining the amount due on the basis of a, loan which has been the subject of a decree, the Special Judge shall accept the findings of the Court which passed the decree, except in so far as they are inconsistent with the provisions of Section 11.

(3.) It is not disputed that between Agha Ayub Ali Shah and Kali Charan a decree has been passed under the Agriculturists Relief Act and this decree contains a finding both with regard to the principal sum due and with regard to the interest which is due to Kali Charan. Therefore, on a plain interpretation of the section, it is obvious that the previous decree and the finding must be taken as binding between the parties and what the Judge in proceedings under the Encumbered Estates Act has got to do is to take those findings and decree and on their basis pass a fresh decree and it is not open to the Judge in the Encumbered I Estates Act to reopen the whole matter and come to a fresh decision for himself. No doubt, Section 15 lays down that findings of the previous decree may not be accepted in so far as they are inconsistent with the provisions of Section 14, U.P. Encumbered Estates Act. Now, Section 14, Clause 4 is as follows: (4) In examining each claim the Special Judge shall have and exercise all the powers of the Court in which a suit for the recovery of the money due would lie and shall decide the questions in issue on the same principles as those on which such Court would decide them, subject to the following provisions namely: (a) the amount of interest held to be due on the date of the application shall not exceed that portion of the principal which may still be found to be due on the date of the application; (b) the provisions of the Usurious Loans Act, 1918, will be applicable to proceedings under this Act; (c) the provisions of the United Provinces Agriculturists Relief Act, 1934, shall not be applicable to proceedings under this Act.