1. This is an appeal by firm Narain Das Devi Prasad' in an Encumbered Estates Act matter.
2. The facts which have led to this appeal are these : Sri Lal and others filed an application under the Encumbered Estates Act, on 30th March 193G. This was transferred to the Special Judge, second grade, and was numbered as 402 of 1936. In that application, the appellant firm Narain Das Debi Prasad, was not mentioned as one of the creditors. Consequently, no notice was sent to the appellants to file their claim and the appellants' name did not appear in the various publications that were made under the Act. The Special Judge finally decided the matter on 30th November 1938. On 7th February 1938, the appellants had filed their claim, but this claim was dismissed by the Special Judge on 30th November 1938 as time barred because under Section 9, as it-then stood, the claim had to be made within three months of the publication in the Gazette and if that was not done, on cause shown, within a further period of two months. Thus, five months from the publication in the Gazette constituted the maximum period under the Act, as it then stood, for making claims. As this claim has apparently been made more than five months after that date, it was rejected as time barred. In September 1939, the Encumbered Estates Act was amended and a provision was made to the effect that claims could be presented at any time before the date on which the Special Judge sent the decrees to the Collector for execution or before 30th November 1939, whichever was later. The appellants, therefore, filed their claim again on 16th November 1939, on the basis of this amendment. They prayed that the claim be accepted and decree passed in their favour and the previous order might be reviewed. This claim was rejected by the Special Judge on 8th May 1941. The appellants went in appeal which was dismissed by the District Judge of Parrukhabad. They have now come up in second appeal to this Court.
3. Three preliminary objections have been taken to the hearing of this second appeal. In the first place, it is urged that no appeal lies at all as it is against an order refusing to review the previous order. In the second place, it is urged that no second appeal lies to this Court. Lastly, it is urged that the appeal is not maintainable as all the creditors have not been made parties.
4. We shall take the first two objections together as they are connected and depend upon the question whether the application of 16th November 1939, was an application for review on. was a claim under the Act. If it was an application for review, there could be no appeal in. view of the provisions of Order 43, Rule 1 (w) which provides for an appeal against an order granting a review but not against an appeal (order?) refusing an application for review. For the same reason, if the application of 16-11-1939, is to be treated as an application for review, no second appeal would lie to this Court. On the other hand, if the application of 16th November 1939,. is an application putting forward a claim, an appeal would lie to the District Judge and a second appeal on a question of law would lie to this Court. It seems to us that the application of 16th November 1939, must be treated as a fresh claim by the appellants under the Encumbered Estates Act, and not as a mere application for review. It was made because of a change in the law which extended the period upto which the creditors could file their claim. The mere fact that the appellant said in their application that the previous order might be reviewed would not turn the application into one for review. We are, therefore, of opinion that what the appellants did on 16th November 1989, was to file a fresh claim on the basis of the amendment in the law. Whether, of course, the appellants could file a fresh claim and succeed is a different matter. But the application, as it stands, must, in our opinion, be treated as a fresh claim. This will be clear from the fact that along with the application, paper No. 800, a fresh claim was filed which is paper No. 81A. We are, therefore, of opinion that what the appellants did on 16th November 1939, was to file a fresh claim. In these circumstances, an order refusing that claim would be appealable to the District Judge and a second appeal would lie to this Court on a question of law.
5. We then come to the last preliminary objection taken on behalf of the respondents. It is to the effect that as all the creditors have not been made parties, the appeal is not maintainable. Reliance, in this connection, is placed on the Full Bench decision of this Court in the Benares Bank Ltd., Benares v. Chaudhri Bhagwan Das and Ors. A.I.R. (34) 1947 ALL. 18. It was held in that case that the creditors become parties to the proceedings under the Act after the notices had been served upon them and, in any event, after they had filed the written statement of their claims. It was further held that there were two tests by which it might be determined as to who was a necessary party and that, on those tests, the creditors were necessary parties and no effective decree could be passed in the absence of the creditors.
6. In the case before us, the other creditors have not been impleaded as respondents. It has been urged on behalf of the appellant that in this case, at any rate, the other creditors were not necessary parties. Reliance, in this connection, has been placed on a recent decision of this Court in Pancham Koer v. Ranbir Prasad : AIR1948All336 where it was said that the Full Bench decision in the Benares Bank Ltd., Benares v. Chaudhri Bhagwan Das and Ors. A.I.R. (34) 1947 ALL. 18 must be confined to the facts of that case and should not be extended to a case of the nature where there is no likelihood of the interests of the other creditors suffering.
7. This case was different from the Full Bench inasmuch as it was an appeal by the landlord against an order of the Special Judge by which that Court had, under Section 14, Encumbered Estates Act, passed a decree against landlord on the basis of a certain decree in favour of a particular creditor. The contention, of the landlord was that that decree had been later revised and reduced and the Special Judge should have passed a decree on the basis of the revised and reduced decree. The landlord applicant came in appeal and made only the particular creditor concerned, a respondent. It was pointed out in this case that the interests of the other creditors would not suffer at all by the decision of the appeal and that, therefore, they were not necessary parties. If the appeal was allowed, the amount to be paid to the particular creditor who was the respondent would be reduced and the other creditors were likely to benefit by it. On the other hand, if the appeal was dismissed, the other creditors who had not appealed would be in no worse position than they were before. If we may respectfully say so, we entirely agree with this view, and it is only when the result of the appeal is likely to affect and prejudice the interests of the other creditors that they are necessary parties and it is from this angle that we have to see whether the other creditors are necessary parties in the present appeal.
8. It has been urged, on behalf of the appellant, that the Special Judge dismissed the claim without going into the merits and without considering whether the claim should be allowed on the ground that the appellant had shown good cause for the delay. It is true that the Special Judge has not yet considered the question whether the appellant had good cause to file its claim so late. But the result of his dismissing the claim on a preliminary point has been that the appellant will get nothing with the result that more would be left for the other creditors. If we were to allow this appeal, the result would be that the Special Judge would consider whether there was good cause for the appellant to apply late and if the Special Judge finds that there was good cause, he would give a decree to the appellant which would certainly affect the interests of the other creditors. Our allowing the appeal, therefore, is likely to prejudice the interests of the other creditors, though we may not be directly passing a decree in favour of the appellant.
9. We are, therefore, of opinion that the principle enunciated in the Full Bench case, Benares Bank Ltd., Benares v. Bhagwan Das A.I.R. (34) 1947 ALL. 18 mentioned above applies to this appeal and all the creditors are necessary parties to it.
10. Mr. Jagdish Swarup, on behalf of the appellant, has urged that if all the creditors are considered necessary parties to this appeal, he may be permitted to file an application under Section 5, Limitation Act, in order to bring them on the record. A similar prayer was also made in the Full Bench case and was rejected. In the appeal before us, there is a further reason why this prayer should be rejected. This appeal had come up for hearing before another Bench of this Court on 17th December 1947, and Mr. Jagdish Swarup had taken time to implead the other creditors, though this is not noted in the order-sheet. From the notes in the note-book of Wanchoo J., it is clear that arguments were cut short, after the Full Bench case, Benares Bank Ltd. Benares v. Bhagwan Das A.I.R. (34) 1947 ALL. 18 had been cited and thereafter the Bench heard two, if not three, other cases. Learned Counsel for the respondents says that he had raised this point based on the full Bench decision then also, and it seems to us that this contention of the learned Counsel must be correct. It also seems to us that the arguments must have been cut short in the middle because of this prayer, But no attempt has been made even up to now to bring the other creditors on the record. Under these circumstances, we are of opinion that we should not give any further time to the appellants to bring the other creditors on the record as the other creditors have acquired a valuable right by lapse of time and there is no reason now to deprive them of that right.
11. We, therefore, uphold the last preliminary objection and dismiss the appeal with costs so the respondents.