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Agha Syed Ayub Ali Shah Vs. Kali Charan - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad
Decided On
Reported inAIR1941All400
AppellantAgha Syed Ayub Ali Shah
RespondentKali Charan
Excerpt:
- - 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......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.....
Judgment:

Dar, J.

1. This is an application in revision against an order dated 20th May 1938 of the District Judge of Bulandshahr by which he has affirmed an order of the Special Judge of Bulandshahr dated 23rd 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.

4. In the Court below it was contended on behalf of Kali Charan that under the provisions of Section 3, Usurious Loans Act, 1930, 7 per cent, interest per annum with six monthly rests is not considered excessive and as Usurious Loans Act applies to proceedings under Encumbered Estates Act, 7 per cent. interest would not be considered excessive In proceedings under Encumbered Estates Act and Kali Charan would be entitled to claim this interest. But inasmuch as the decree under Section 33, Agriculturists' Relief Act, having regard to the provisions of the Agriculturists' Relief Act allows a lesser interest than what is permissible under Usurious Loans Act, the decree passed in favour of Kali Charan under Agriculturists' Relief Act is inconsistent with the provisions of the Encumbered Estates Act and this contention of Kali Charan has found favour with both the Courts below. We do not think that there will be any inconsistency in the decree passed under the provisions of Encumbered Estates Act if the findings in the previous decree passed under the Agriculturists' Relief Act be taken as a basis of decree under the Encumbered Estates Act. If in proceedings under Encumbered Estates Act it is found that by agreement of parties a lesser interest than 7 per cent, which is allowed by Usurious Loans Act is agreed to, the Court will have to allow the lesser interest and it cannot be possibly contended that the agreement was in any way inconsistent with the provisions of the Encumbered Estates Act. Likewise if by a previous decree of the Court a lesser amount has been fixed for the interest between the landlord and a creditor than what is allowed under Encumbered Estates Act, it cannot be said that there is any inconsistency between that decree and the provisions of Section 14, Encumbered Estates Act.

5. The view of the two lower Courts was not seriously maintained before us. But Mr. Seth who appeared on behalf of Kali Charan raised a new point before us. His contention was that by virtue of Section 14, Clause (4) Sub-clause (c) the provisions of the U.P. Agriculturists' Relief Act, 1934, do not apply to proceedings under Encumbered Estates Act and he contended that on that ground the previous decree passed under the provisions of Agriculturists' Relief Act be disregarded. Section 14 only prohibits the application of provisions of Agriculturists' Relief Act in proceedings under this Act. A landlord in this case was not asking that the provisions of Agriculturists' Relief Act be applied to him. What he is contending for is that the findings in a previous decree inter partes should be taken as a basis of the fresh decree which is to be passed under Section 15, Encumbered Estates Act, and for that purpose it makes no difference whether the previous decree is passed under Agriculturists' Relief Act or any other Act. We therefore think that the Courts below were wrong in not accepting the findings as to the loan and its interest, arrived at in proceedings under Agriculturists' Relief Act and therefore the orders passed by the Courts below are wrong and should be set aside.

6. But Mr. Seth's next contention is that we have got no power under law to interfere in revision in this case. We are of opinion that the Special Judge had no jurisdiction to go behind the findings and the decree arrived at under the Agriculturists' Belief Act and the lower appellate Court has entirely misconceived the law and has not applied its mind to the problem which arose in the case and there was material irregularity in exercise of jurisdiction by the District Judge. We accordingly allow the revision and set aside the order of the Court below and remand the case to the Court of the Special Judge with the direction that the claim of Kali Charan be restored to its original number and the controversy between Agha Ayub Ali Shah and Kali Charan be decided afresh and a decree be passed on the basis of findings and decree arrived at between the parties in proceedings under Agriculturists' Relief Act. There will be no order as to costs in this revision. The other costs will be in the discretion of the Court below.


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