HAR PRASAD Vs. MOHAMMAD USMAN HUSAIN

JUDGEMENT

(1.) This appeal has arisen out of proceedings under the U. P. Encumbered Estates Act (25 of 1934). The respondent, Sheikh Mohammad Usman Husain, is the landlord. He filed an application under Section 4 of the Act on 25 July 1935. In this application he stated that he had only one creditor to whom he owed about Rs. 24,000 and gave the name of that creditor as Rai Bahadur Sahu Har Prasad. He further stated in the application that he was the owner of two items of zamindari property, namely, a five biswas asli out of 20 biswas in village Ballia in the District of Pilibhit and a half share of village Lauwa in the District of Budaun. He alleged that the former share was worth Rs. 20,000, that the latter was worth Rupees 30,000 and that thus the total value of these two items of property was Rs. 50,000. In due course he filed a written statement under Section 8 of the Act. In this document he stated that the creditor had filed a suit against him for the recovery of Rs. 26,085-4-6. He further made it clear that, along with Rai Bahadur Sahu Har Prasad, the latter's five nephews were also his creditors in respect of the debt in question. On the prescribed notices being published, a written statement under Section 10 of the Act was filed by Rai Bahadur Sahu Har Prasad and his nephews on 30 May 1936. They stated that they had instituted a suit against the landlord applicant on 27 March 1935, for the recovery of Rs. 26,085-4-6 and that the amount now due to them came to Rs. 29,823-4-6. They further alleged that, in addition to the two items of zamindari property shown by the landlord- applicant in his application under Section 4 and in his written statement under Section 8, the landlord-applicant owned various other immovable properties details of which were given by them in para. 3 of the written statement. The landlord-applicant, on 1 October 1937, filed a reply to this written statement and alleged therein that he had made a wakf alal-aulad of the entire property mentioned by the creditors excepting the two items of zamindari property shown by him in his application under Section 4 of the Act. Thereupon, on 20th November 1937, the creditors filed an application challenging the wakf relied upon by the landlord and alleging that it was a fraudulent transaction brought into existence by the landlord with the object of delaying and defeating his creditors and that, therefore, it could not affect their rights. The learned Special Judge repelled the contention of the creditors and decided in favour of the landlord. This appeal has, thereupon, been filed by the creditors.

(2.) It appears that on 12 October 1934 the respondent executed in favour of appellant 1, a promissory note acknowledging that a sum of Rs. 24,050 was due from him and promising to pay that sum on demand with interest at 12 annas per cent. per mensem. A fortnight later, on 26 October 1934, the respondent executed the deed in question creating a wakf alal-aulad appointing himself as the first mutwalli and laying down that during his lifetime he would be entitled to spend the income from the wakf property in any way he liked at his discretion and that no one would have the right to require him to explain the accounts. This deed covered all the immovable property, except the shares in villages Ballia and Lauwa, which the respondent owned. Shortly afterwards, the United Provinces Encumbered Estates Act (25 of 1934) was passed by the Provincial Legislature and received the assent of the Governor of the United Provinces on 15 January 1935. It received the assent of the Governor-General on 10 April 1935 and Chaps. I and III of the Act came into force on 30 April 1935. The respondent thereupon filed his application under Section 4 of the Act on 25 July 1935, as has already been stated. The contention of the appellants before us is, as it was before the Court below, that the main purpose of the execution of this deed of wakf by the respondent was to defeat and delay his creditors. The contention of the respondent was that the allegation of the creditors was not well-founded. He pointed out that he had not created a wakf in respect of his entire property, but had left out the two items mentioned above, and alleged that those items were sufficient for the liquidation of the debt due from him to the appellants.

(3.) The appellants examined their Mukhtar-i-am, Barati Lal, who deposed that the respondent's share in village Ballia was worth about Rs. 3000 and that his share in village Lauwa was worth about Rs. 7000. He stated that the market value of zamindari property was generally about twenty times the land revenue. He further stated that the profits from landed property had decreased as there had been remission in rents. The respondent examined a witness called Abdul Hakim, who at first stated that he was the respondent's karinda but later on had to admit that he was not his karinda but was the karinda of his nephew who was a minor under his (the respondent s) guardianship. This witness further stated that the properties which were included in the wakf deed in question were worth about a lac of rupees. He admitted that there had been remissions in rents and that profits of zamindari property had consequently been reduced. Extracts from the khewats, containing the entries in respect of the respondent's shares in villages Ballia and Lauwa, were produced. The khewat of Ballia shows that the government revenue of the respondent's share is half of Rs. 325, in other words, Rs. 162-8-0. As already stated, the witness, Barati Lal, has deposed that the market value is generally about twenty times the land revenue. There is no evidence to rebut this. According to this evidence, the market value of the respondent's share in village Ballia comes to Rs. 3250. Learned Counsel for the respondent has urged that the government revenue is generally 40 per cent. of the collections and has argued that the market value of the property should be calculated in accordance with the profits. If we calculate on this basis, the profits come to a little less than Rs. 244 and at 20 years purchase the value comes to Rs. 4880. The revenue of the two shares held by the respondent in village Lauwa, as shown by the khewat Ex. 2, comes to about Rs. 330. If we follow the method of calculating the market value deposed to by Barati Lal, we get Rs. 6600. If, on the other hand, we follow the method suggested by learned Counsel for the respondent, the value comes to about Rs. 10,000. Thus, the market value of these two properties, according to the method deposed to by Barati Lal, which, as already stated, is the only evidence on the record, comes to Rs. 9850, and according to the principle suggested by learned Counsel for the respondent it comes to Rs. 14,880. The result is that these two items of property are in no way worth more than Rs. 15,000.