BAIJ NATH SAHAI Vs. SETH PARBIN SINGH

JUDGEMENT

(1.) This is a first appeal under" the Encumbered Estates Act arising out of the following circumstances. On 31 January 1893 one Johri Mal, grandfather of the debtor applicant Seth Parbin Singh, executed a usufructuary mortgage in respect of 19 biswas 15 biswansis out of a 20-biswa share in village Etawah in favour of Rai Bahadur Nanak Chand of Bijnor. This mortgage deed provided that the Rai Bahadur was being put in possession or occupation of the property but it also implied that the mortgagee was giving a lease to the mortgagor of the mortgaged property. The document provided that the consideration of Rs. 20,000 would be paid off at the rate of Rs. 5000 per annum in four instalments and that the mortgagor would deposit Rs. 1200 as interest or profits with the mortgagee in two half-yearly instalments each year. There were provisions in case of failure with which we shall have to deal later. The executant Seth Johri Mal had two sons, Banwari Das and Partap Singh. Each of these two sons had three sons, Banwari Das's sons being Parbin Singh the landlord applicant, Zalim Singh and Bhara Mal, while Partap Singh's sons were Naunihal Singh, Harbans Singh and Balwant Singh. Thus of the property originally belonging to Seth Johri Mal each of the grandsons would have had a one-sixth share, it being not in dispute that there had been separation.

(2.) On 29 October 1936 Seth Parbin Singh and his son Mahindrapal Singh a minor filed an application under Section 4, Enpumbered Estates Act, stating inaccurately that Baij Nath Sahai was the mortgagee of their zamindari property, whereas in fact he was mortgagee in respect of only one piece of property. On 4th February 1937 Parbin Singh filed his written statement under Section 8 in which he named Baij Nath Sahai as a creditor but alleged that the mortgage of 1893 had been paid up out of the usufruct of the property. It may be noted here that the usufructuary mortgagee had, after a short time, to sue the mortgagors to recover the interest mentioned in the mortgage deed and had obtained actual possession. On 1 November 1937 Baij Nath Sahai son of the original mortgagee Rai Bahadur Nanak Chand, filed a written statement of his claim seeking a decree for Rs. 20,000 principal plus Rs. 77,342 odd interest. To this claim the landlord applicants put in no reply, their main contention having already been stated in the written statement under Section 8. One of the cousins, Balwant Singh, filed a written statement on 12 September 1939 in which he also alleged that the amount of the mortgage had been paid out of the income from the mortgaged property and in fact a considerable sum of money amounting to about Rs. 10,000 was really due to the mortgagor by the mortgagee on account of excess payment. It was also alleged that the mortgagee had cut trees belonging to the mortgagor. In para. 4 of this written statement Balwant Singh stated as follows: Dr. Harbans Singh Babu Naunihal Singh and I the opposite party, being own brothers, are the representatives of Seth Pratap Singh, i.e., we are the grandsons of Seth Johri Mal, and are cosharers to the extent of one- half in the property mortgaged; and I the opposite party have a one rule share therein, i.e., I am the cosharer of a one-sixth share in the entire property mortgaged. If it is held by the Court that a certain amount is due to the mortgagee on account of the mortgage money then it should be divided and set apart to the extent of the share of me the opposite party. That "was request for an apportionment under Section 9 (5) (a), Encumbered Estates Act. No written statement was filed by either Dr. Harbans Singh or Babu Naunihal Singh and the only other written statement filed was by Damodar Das a claimant to a one-sixth share of Bhara Mal in competition with one Desh Bandhu who was ultimately successful in establishing that he was the prior purchaser of the one- sixth share. The position which thus arose before the learned Special Judge was that the landlords applicants had, on the one hand, asked for an apportionment of the debt as between them and the non-applicant- co-debtors as also had one of those co-debtors, while on the other hand the landlords applicants had further contended that the amount of the mortgage had been satisfied out of the usufruct of the property and one of his cousins had alleged that there had even been an excess payment. Section 9 (5) (a), Encumbered Estates Act, provides and has always provided as follows: If one or more of several joint debtors, who are not members of the same joint Hindu family, apply under Section 4 but all the joint debtors do not apply then the Special Judge shall determine the amount of the joint debt which is due by the debtor or debtors who have applied and the amount due by those who have not applied. For the purpose of this determination the Special Judge shall make the joint debtors who have not applied parties to the proceedings and shall hear any objection that they make before recording his finding.

(3.) Clause (b) of this sub-section originally provided as follows: If all the joint debtors have not applied under Section 4 the creditor shall have a right to recover from the debtors who have not applied only such amount on account of the joint debt as may be decreed by the Special Judge to be due by them. By the Amendment Act, 11 of 1939, the word "determined" was substituted for the word "decreed" in this clause for the obvious reason that the learned Special Judge, as such, had no jurisdiction and could scarcely be given a jurisdiction to make a decree against a non-applicant debtor. There might possibly be room for doubt as to what was the original intention of the Legislature in enacting Clauses (a) and (b) of Sub-section (5) of Section 9, Encumbered Estates Act. The Encumbered Estates Act enables a Judge appointed under the provisions of that Act to interfere, very substantially indeed, with the contract between a creditor and an applicant under the Act. Prima facie, it is difficult to see how a Court exercising this special jurisdiction could be given a power to interfere with the contract as between the creditor and non-applicant joint debtors, but taking the provisions of these two Clauses (a) and (b) as a whole it would seem that the intention was to give the Special Judge a power to fix the amount of the debt not only as against the applicant but also as against the non-applicant joint debtors and establish a rule that a regular Court should not be able to give a decree against the non-applicant debtor for a larger or smaller amount than the amount so ascertained or determined. Be that as it may, the question which must arise is, in what proceedings is the Special Judge to determine the amount of the joint debt due by the applicant debtor and the amount due by the non-applicant debtor or debtors? It appears to us to be clear that this has to be done in the proceedings for the examination of claims and determination of the amount of debts under Section 14 of the Act. The first two sub-sections of Section 14 provide as follows: (1) The Special Judge shall, by an order in writing fix a date for inquiring into the claims made in pursuance of the notice published in accordance with Section 9 and give notice of such date to all the claimants and the person who made the application under Section 4. (2) The Special Judge shall examine each claim and after hearing such parties as desire to be heard and considering the evidence, if any, produced by them shall determine the amount, if any, due from the landlord to the claimant on the date of the application under Section 4. It is true that there is a slight difference in the wording of this Sub- section (2) and that of Clause (a) of Sub-section (5) of Section 9 but the difference of wording does not appear to imply any difference of meaning. In Section 9 (5) (a) the Act speaks of determining the amount of the joint debt due by the debtor applicant and the amount due by the non-applicant whereas Sub-section (2) of Section 14 speaks of determining the amount, if any, due from the landlord to the claimant (creditor) on the date of the application under Section 4.