Skip to content


Syed Aijaz Husain, Debtor and anr. Vs. Rameshwar Prasad - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad
Decided On
Reported inAIR1945All235
AppellantSyed Aijaz Husain, Debtor and anr.
RespondentRameshwar Prasad
Excerpt:
- .....they promised to pay a sum of rupees 365 with interest at 2 per cent. per mensem. one of them, syed aijaz husain, made an application under section 4, encumbered estates act, on 27th october 1936 and in that application and the subsequent written statement required by the act he admitted his liability for the payment of the sum due on the basis of the promissory note. the other signatory, muhammad azhar husain khan, was made a party in order that the liability for the payment of the money should be apportioned between the two signatories. the learned special judge held that syed aijaz husain was the principal debtor and muhammad azhar husain khan was merely a surety. he therefore, decided to, pass a decree under the encumbered estates act for the full amount against syed aijaz.....
Judgment:

Allsop, J.

1. This appeal arises out of proceedings under the Encumbered Estates Act. The two appellants, Syed Aijaz Husain and Muhammad Azhar Husain Khan jointly executed a promissory note on 1st September 1934 in favour of Rameshwar Prasad. They promised to pay a sum of Rupees 365 with interest at 2 per cent. per mensem. One of them, Syed Aijaz Husain, made an application under Section 4, Encumbered Estates Act, on 27th October 1936 and in that application and the subsequent written statement required by the Act he admitted his liability for the payment of the sum due on the basis of the promissory note. The other signatory, Muhammad Azhar Husain Khan, was made a party in order that the liability for the payment of the money should be apportioned between the two signatories. The learned special Judge held that Syed Aijaz Husain was the principal debtor and Muhammad Azhar Husain Khan was merely a surety. He therefore, decided to, pass a decree under the Encumbered Estates Act for the full amount against Syed Aijaz Husain. He went on to say in his order that Syed Aijaz Husain and Muhammad Azhar Husain Khan would each be liable for the balance due after the other had discharged a portion of the liability and that each should be relieved of liability by means of a payment made by the other. In his decree he set forth the total amount due on account of principal and interest after making a deduction of Rs. 150 which had been paid on account of the money due and then found that a sum of Rs. 446-11-0 was due at the date of the decree. He says in the decree that this amount will be the joint and several liability of Aijaz Husain and Mohd. Azhar Husain Khan with this limitation that the opposite party shall be liable for the payment of the amount which remains unrealized from applicant 1, and applicant 1 shall be liable for the payment of the amount which remains unrealized from the opposite party, that is, the joint debtor. He added that the implication of the order was that the total amount realized by the decree-holder should not exceed the amount which was actually realizable by the decree-holder under the decree.

2. Both Syed Aijaz Husain and Muhammad Azhar Husain Khan have appealed against this decree. It is not very clear to us that the decree is against their interest in any way, but they have pressed the point that Muhammad Azhar Husain Khan should be completely relieved from the liability as a decree for the full amount has been passed against Syed Aijaz Husain. In our judgment the decree in its present form cannot be upheld because the special Judge must fix absolutely the liability of the applicant under the Encumbered Estates Act, that is, Syed Aijaz Husain, to enable the Collector to administer the estate and execute all the decrees in favour of the several claimants against him. We do not think that it is in accordance with the provisions of Section 9, Encumbered Estates Act, that the learned Judge should state in his decree that there is still a joint and several liability imposed on Syed Aijaz Husain and Muhammad Azhar Husain Khan. In substance we think that the decree is right, but it must be amended in form. We think it necessary once more to explain that the special Judge is concerned primarily with the liabilities of the applicant before him and that he can pass executable decrees only against the applicant. When questions of joint and several liabilities arise, it is necessary for him in apportioning the share of the applicant also to apportion the share of the joint debtors who are not applicants, but he can pass no decree against those joint debtors, and after the apportionment has been made the creditor is left to the ordinary Courts in order to recover the money which is found due from them. The apportionment is in the nature of a declaratory decree which has to be enforced by a suit against the joint debtors in the ordinary Courts. The special Judge has no jurisdiction against the joint debtors except in so far as it is necessary to determine their liability in order to determine the liability of the applicant. In the present case it has been found that Syed Aijaz Husain, the applicant, as the principal debtor is liable for the whole amount due and therefore a decree for the whole amount has rightly been passed against him. It has never been contended either in this Court or in the Court below that Syed Aijaz Husain was not, in the first instance, liable for the whole amount due on the promissory note. As that is the situation it is unnecessary to determine the liability of the joint debtor, Muhammad Azhar Husain Khan, except in so far as to declare that he is in the position of a surety. It is unnecessary to determine what in reality his liability may be. We will, therefore, amend the decree so as to make the point clear and declare that Muhammad Azhar Husain Khan is in the position of a surety for a principal debtor against whom a decree has already been passed. We have no jurisdiction in these proceedings to decide what the liability of Muhammad Azhar Husain Khan may be. That is a matter which will be determined in the ordinary Courts if and when proceedings are taken against Muhammad Azhar Husain Khan on the basis of his liability as a surety for the payment of the amount due under the promissory note.

3. We may mention that the appellants have also taken the point that the sum decreed by the Court below is excessive. The learned Judge reduced the rate of interest from 24 per cent. per annum to 18 per cent. per annum but he directed that interest should be calculated on the whole amount due from the date of the execution of the promissory note till 27th October 1936, the date of the filing of the application and thereafter again on the principal sum due on the promissory note at the rate of Rs. 4-4-0 per cent. per annum till 16th April 1941, the date of his decree. He directed that from the whole amount of principal and interest so calculated a sum of Rs. 150 should be deducted, that sum having admittedly been paid to the creditor. Learned Counsel urges that the interest should have been varied on each date on which parts of the Rs. 150 were paid to the creditor. There might have been some force in this argument, but we see no justification for the reduction of the interest from the sate of 24 per cent. per annum to the rate of 18 per cent. per annum. The Usurious Loans Act which alone applies says that the rate of interest for unsecured debts shall not necessarily be deemed to be excessive if it does not exceed 24 per cent. per annum. The learned Judge has given no special reason for thinking that the rate of interest was excessive in this case. We think that the concession which he has granted to the appellants overbalances the fact that he has not calculated interest on the sum after deducting Rs. 150 which was paid to the creditor, and we see no reason to interfere with the conclusion that the final amount due was Rs. 446-11-0. We, therefore, direct that the decree shall be amended as follows:

4. The passage as represented in our translation, beginning- with the words 'and Rs. 446-11-0, the balance shall be a joint and several liability' up to the words 'realizable by the decree-holder under this decree' shall be deleted. In their place there shall be substituted the words 'A decree is passed against Aijaz Husain for a sum of us. 446-11-0. Muhammad Azhar Husain alias Mahmud Agha shall be relegated to the position of a surety for the principal debtor, Aijaz Husain, against whom a decree has been passed for the payment of the whole amount due. His liability for payment, if any, is specifically not determined by this decree.' The remaining part of the lower Court's decree, that future interest shall run at 4 per cent. per annum and that the amount shall be treated as a simple money decree, is maintained. As it seems to us that the appeal was really unnecessary, we direct that the parties shall pay their own costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //