1. This is an application in revision against an order of the civil Judge of Bijnor disallowing an application for stay of execution. One Har Prasad sued Mt. Bismilla and others on foot of a mortgage (Suit No. 52 of 1929). We are informed that the mortgaged property consisted in shops and houses. A puisne mortgagee, by name Ghandi Prasad, was impleaded as a defendant to the suit. A preliminary decree was obtained on 29th May 1929 and the final decree was passed on 3rd August 1931. That decree is now under execution.
2. The facts as stated before us are as follows : Ghandi Prasad in execution of his own decree purchased on 2nd March 1932 a portion of the mortgaged property. Another portion of it was purchased by one Abdul Wahab. These two persons thus replaced the original mortgagors. On 30th August 1932 Abdul Wahab sold his share to Ghandi Prasad and on 26th August 1935 Chandi Prasad sold the whole property to Jwala Prasad, the applicant in the present case. The 2nd September 1935 was fixed by the executing Court for sale of the property in execution of the decree of Har Prasad, but meanwhile, on 29th August 1935, i.e. three days after his own purchase of the property, the applicant presented a petition before the Collector under Section 4, U.P. Encumbered Estates Act (Local Act No. 25 of 1934). That same day the Collector wrote the following order on the application : 'Forwarded to the Special Judge. Let a copy of this order be given to the applicant free of costs'. On 30th August 1935 the applicant appeared before the executing Court and presented an application for stay of execution on the strength of the copy of the Collector's order with which he had been furnished. That application was dismissed for default on 10th December 1935. A second application was made on 16th December 1935, and on 8fch February 1936 it was dismissed on merits. It is against that order of dismissal that the present application for revision has been made. The grounds upon which the application for stay was opposed were that the applicant was no party to the execution proceedings, that Section 52, T.P. Act, operated as a bar and that the sale deed of Chandi Prasad in favour of the applicant was 'collusive and fictitious'. The learned Judge finds that, ceteris paribus, the application was competent under Section 146, Civil P.C., but he dismissed the application on the ground that pendente lite transfers are not recognized by the Act. He observes:
To the relief contemplated by the Encumbered Estates Act in respect of the debt and the property in question in the decree under execution, the applicant can claim such a right only if such transfers are recognized under the Encumbered Estates Act. Therefore, on a consideration of the provisions of Section 4, United Provinces Encumbered Estates Act, read with Rule No. 6 of the rules made under the said Act, it would appear that the said Act does not recognise such transfers and consequently an order passed by the Collector under Section 6 of the Act on the application of such transferee cannot affect the proceedings against his transferor started by the decree-holder.
3. The learned Judge was of opinion that Order 22, Rule 10, Civil P.C., was not applicable. What his finding was on the plea based on Section 52, T.P. Act, is not clear. A preliminary objection is raised that no revision lies on the ground that there has been no 'case decided' within the meaning of Section 115, Civil P.C., and on the ground that no question of jurisdiction is involved. In our opinion this objection cannot prevail. The application of Jwala Prasad was an independent application by an outsider to the suit and to the execution proceedings. The proceedings which began with an application for stay by a person not a party to the suit and not originally a party to the execution proceedings and which terminated with an order of refusal, had the character of a case complete in itself. In our opinion the order which was passed upon that application was an order passed in a 'case decided' within the meaning of Section 115, Civil P.C. We can find nothing in any of the reported authorities on the question of what amounts to a 'case decided' which might be held to be in conflict with this view. We accordingly hold that the order of the executing Court dated 8th February 1936 was an order passed in a 'case decided'. As regards the question of jurisdiction, for reasons which will appear hereafter, we are of opinion that the Court below has refused to exercise jurisdiction on the basis of a rule which had no application to the facts and in any event has acted illegally and with material irregularity in the exercise of his jurisdiction. We accordingly disallow the preliminary objection.
4. As regards the merits of this application, learned Counsel for the applicant contends that Section 7 of the Act is mandatory and that the executing Court had no option but to stay proceedings under the provisions of that section. He points out that under Section 45(3) of the Act the decree-holder had a right of appeal from the Collector's order to the Board of Revenue and he pleads that the executing Court was not competent to go behind the Collector's order; its duty was to pass an order of stay as an automatic consequence of that order. Learned Counsel for the decree-holder concedes that the rule which is referred to by the Court below is entirely foreign to the question before us and has no application. He pleads, however, that the application did not lie either under Order 22, Rule 10, or under Section 146, Civil P.C. Order 22, Rule 10 is admittedly not applicable. As regards Section 146 it is argued that as Chandi Prasad, the transferor of the applicant, had not applied to the Collector under Section 4 of the Act, he would have had no right to apply for stay of execution and therefore the applicant claiming under him could have no such right. This objection has now been conceded by Mr. Piare Lal Banerji, counsel for the applicant. He admits that neither Section 146 nor Order 22, Rule 10, Civil P.C., applies, but he claims an independent right under the Encumbered Estates Act. There can be no doubt that any person who is a landlord within the meaning of the Act and whose immoveable property is encumbered with debts, is competent to apply to the Collector under Section 4. When the Collector is satisfied that the application was 'duly made', he has to Act in accordance with Section 6. In the present case, as soon as a copy of the Collector's order was handed to the applicant, he had a right by force of this independent statute to present that order to the executing Court, and thereafter the provisions of Section 7 would operate. Under Section 4 of the Act it was the duty of the Collector to satisfy himself that the application had been made within one year after the date on which Ch. 3 of the Act came into force, that the applicant was a 'landlord' as defined in Section 2(g) of the Act, that his immoveable property or a part thereof was encumbered with private debts and that his land or a portion thereof was within that district. In 1936 AWE 826,1 the Senior Member of the Board of Revenue observed at p. 832 as follows:
I am also of opinion that the Collector is competent to see that any application made to him is duly made in accordance with the provisions of Section & and that this involves scrutiny of all applications to see whether amongst other things the applicant is a landlord within the meaning of the Act, and that if the applicant is not a landlord, the application is not duly made and that therefore the Collector is competent to withhold an order under Section 6 or cancel an order under Section 6 if facts afterwards come to his knowledge, certainly up to the stage before the Special Judge has started proceedings under Section 6.
5. We agree with these observations but we are of opinion that the Collector is not merely competent but is under an obligatson to satisfy himself that the requirements of Section 4 are fulfilled. From any order which the Collector may make under Section 4 of the Act, an appeal will lie to the Board of Revenue. The next thing to consider is what the executing Court in the present case was required to do under, Section 7 of the Act. Admittedly a decree upon a mortgage had been obtained against certain property, but it was the duty of the Court under Section 7 to determine whether the applicant was the owner of that property. This would involve investigation into the title of his predecessors-in-interest. There was an allegation of the decree-holder that the application was barred by Section 52, T.P. Act, and that the sale deed was 'collusive and fictitious'. What exactly was meant by the latter phrase is not clear. It should have been clarified by the Court. Possibly the decree-holder may have meant that Chandi Prasad himself was not entitled to benefit by the Act and that the transfer was a paper transaction which he entered into collusively with a view to profit by the provisions of the Act. In our opinion investigation on the above lines is necessary. We accordingly remit the following issues to the Court below : (1) Whether the applicant is the owner of the property in suit. In other words, did he take the property under a valid sale deed from a person competent to transfer it? (2) Whether Section 52, T.P. Act, is applicable to the facts of this case? In connection with this last issue it will be necessary for the Court to determine whether Chandi Prasad was himself competent to apply under the Encumbered Estates Act. The parties will be at liberty to adduce such additional evidence as may be relevant to the above issues. We allow three mouths for return of the findings. Thereafter the usual ten days will be allowed for objection.