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Bisheshwar Dayal Vs. Chandrika Prasad - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAllahabad
Decided On
Case NumberEx. Second Appeal No. 532 of 1945
Judge
Reported inAIR1950All85
ActsUttar Pradesh Encumbered Estates Act, 1934 - Sections 9 and 13; Debt Law
AppellantBisheshwar Dayal
RespondentChandrika Prasad
Appellant AdvocateB.R. Avasthi, Adv.
Respondent AdvocateS.S. Verma, Adv.
DispositionAppeal dismissed
Excerpt:
.....in every case of a failure on the part of the claimant to prefer a claim under section 9 of the act, it being another matter whether such failure was due to something practised by the judgment-debtor himself......matter whether such failure was due to something practised by the judgment-debtor himself. even fraud practised by a party upon another, resulting in a certain order or certain consequences, does not make the same absolutely void or final but only renders them voidable. once we get to the position the result of fraud makes the order only voidable, it has to be given full effect, so long as it has not been avoided by the party affected. this also lends support to the position that the consequence laid down by section 13 would follow even in cases in which fraud has been practised on the decree-holder, rendering him unable to prefer a claim under section 9 of the encumbered estates act.5. where the party affected by fraud is able to prove the fraud, the only effect of this would be to.....
Judgment:

Mustaq Ahmad, J.

1. This is a decree-holder's appeal arising out of an application for execution of a mortgage decree. The decree was obtained by the appellant in 1929 against the respondent Chandrika Prasad and one Arya Muni. Execution was taken of this decree off and on, until the last application was dismissed on 28th July 1987. On 1st January 1938, the U. P. Temporary Stay of Execution of Decrees Act (X [10] of 1937) came into force and remained in force upto 31st December 1940. Claiming an exclusion of this period the appellant again applied for execution of his decree on 28th July 1943.

2. Objections were taken to this application by the respondent on the ground that it was barred by limitation and also on the ground that the claim had already got discharged by reason of the decree-holder not proving his claim in certain proceedings under the Encumbered Estates Act. Those proceedings had been taken by the respondent Chandrika Prasad only Arya Muni, the other judgment-debtor, being impleaded as an opposite party. The execution Court held that the respondent judgment-debtor had been guilty of fraud, inasmuch as he had not disclosed this particular debt in the proceedings under the Encumbered Estates Act, and that, therefore, the application for execution was neither barred by time nor the claim had become discharged under Section 13 of that Act. In this view that Court disallowed the objections and proceeded to execute the decree.

3. On appeal the lower appellate Court while affirming the finding of the execution Court with regard to the judgment-debtor's fraud, took the view that the debt had in fact got discharged under Section 13 of the Act and that, therefore, it was not open to the decree-holder to apply for execution of the decree straightway in the civil Court.

4. The principal question argued before us by Mr. Avasthi, learned counsel for the decree-holder, was whether the appellant was entitled to apply for execution of his decree in the civil Court, in spite of the Encumbered Estates Act. He contended that fraud having been found to have been practised by the judgment-debtor, according to the findings of both the Courts below, on the decree-holder, the latter was entitled to ignore the provisions of Section 13 of the Act and, under the general law, was also entitled to seek relief in the civil Court. He cited a number of cases in support of the argument that the omission of the judgment-debtor to disclose a particular debt or a particular creditor in the proceedings under the Encumbered Estates Act amounts to a fraud. We need not consider those cases in detail as we are in entire agreement with them on this point. The real question which emerges for our decision is whether the result of the judgment-debtor having practised fraud on he decree-holder by omitting to disclose the latter's name or his debt in the proceedings under the Encumbered Estates Act could prevent the claim getting discharged under Section 13 of the Act, as it would certainly be the case where no fraud has been practised. The only effect, in our opinion, of fraud having been committed on the decree, holder in such proceedings is that the decree-holder acquires an extended period of limitation to prefer a claim under Section 9 of the Act. This period may even go beyond 30th November 1939, or the date on which the decrees are sent to the Collector for execution. This was held in Kishni v. Murli Singh : AIR1940All344 . But to contend that when fraud is found to have been practised by the judgment-debtor, the consequences mentioned in Section 13 of the Act should not be held to have accrued is, in our opinion, not correct. This section, as, it is worded, does not profess to make any discrimination between cases in which fraud has been practised and those in which such is not the case. It appears that the penalty of a discharge of the debt, as mentioned in the section, would follow in every case of a failure on the part of the claimant to prefer a claim under Section 9 of the Act, it being another matter whether such failure was due to something practised by the judgment-debtor himself. Even fraud practised by a party upon another, resulting in a certain order or certain consequences, does not make the same absolutely void or final but only renders them voidable. Once we get to the position the result of fraud makes the order only voidable, it has to be given full effect, so long as it has not been avoided by the party affected. This also lends support to the position that the consequence laid down by Section 13 would follow even in cases in which fraud has been practised on the decree-holder, rendering him unable to prefer a claim under Section 9 of the Encumbered Estates Act.

5. Where the party affected by fraud is able to prove the fraud, the only effect of this would be to relegate him to the position in which he would have stood if there had been no fraud practised on him. In the present case, the Courts below having found that fraud had been practised upon the decree-holder, the only position to which he could be relegated is, as it stood on the date the notices under Section 9 were published in the Gazette. In other words, he would be entitled to claim' the period prescribed under Section 9 of the Act for the presentation of a claim from the date on which he discovers the fraud. If within that period he prefers a claim, there can be no question of the drastic consequences mentioned in Section 13 of the Act following against him.

6. This, in our opinion, is sufficient to dispose of the point raised by the learned counsel in support of this appeal. The appellant was not entitled, as held by the lower appellate Court, to apply for execution of his decree by ignoring the provisions of the Encumbered Estates Act, under which, if there had been no fraud, he would have an opportunity of proving his claim.

7. For these reasons we think that the view taken by the lower appellate Court was correct and accordingly, we dismiss this appeal with costs.


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