1. This is an appeal from an order passed by the Special Judge of Dehra Dun exercising jurisdiction under the U.P. Encumbered Estates Act. The learned Judge has appointed a receiver in respect of the property of the landlord whose application was forwarded to him by the Collector under Section 6 of the aforesaid Act. The order was passed at the instance of a creditor who had obtained a decree for sale on foot of a mortgage deed executed by the landlord. It is contended before us that the learned Judge had no jurisdiction to appoint a receiver in the exercise of his powers of a Special Judge under the Encumbered Estates Act. The question was raised in the lower Court bud the matter does not appear to have been argued as elaborately before it as it has been argued here. The only ground on which the learned Judge justifies the appointment of a receiver is that the appointment 'will not hurt an honest debtor whilst it will help a creditor'. It seems to have been assumed that all the provisions of the Civil Procedure Code, including Order 40, are applicable to proceedings taken before the Special Judge under the Encumbered Estates Act.
2. We have carefully examined the entire framework of the Encumbered Estates Act and have come to the conclusion that a Special Judge exercising jurisdiction under that Act has no power to appoint a receiver at the instance of the holder of a simple money decree or a mortgage decree. It is not disputed that the Act itself does not make the provisions of the Civil Procedure Code in their entirety applicable to proceedings under the Encumbered Estates Act. It is however pointed out that the rules framed by the Local Government under Section 54 of the Act have made the Civil Procedure Code applicable. Rule 6 of those rules runs as follows:
Proceedings under this Act shall be governed by the provisions of the Civil Procedure Code of 1908 for the time being in force so far as they are applicable and not inconsistent with the provisions of the Act and of these rules.
3. A reference to Section 54 under which these rules have been made will show that the Local Government is empowered to make rules consistent with the provisions of this Act for regulating the procedure of the Collector, the Special Judge and the Settlement Officer in proceedings under this Act and generally for carrying out the purposes of this Act.
4. It will be seen that the power of the Local Government to make rules is limited to 'regulating the procedure of the Collector, the Special Judge and the Settlement Officer,' who are to carry out the purposes of the Act. The rules to be made should not be directly or indirectly inconsistent with any part of the Act itself. '8. 3 of the Act provides that:
The Local Government may appoint any civil Judicial officer to be a Special Judge of the first or second grade for any local area and such Special Judge shall, subject to the orders of the Government as regards the area and extent of his jurisdiction, exercise the powers conferred and perform the duties imposed on him by this Act.
5. Such powers and duties are defined in Ch. 4 under which the Special Judge is required to determine two main questions. Ha is to ascertain the amount of debts payable by the landlord. Ha is also to determine the property over which ha has a disposing power and which is available for the payment of his debts. Generally speaking, the power of the Special Judge does not extend beyond the determination of these two important questions. Section 11 requires the Special Judge to determine all claims relating to his property before he passes on to the other question, viz. the extant of his debts for which provision is made in Section 14. Section 52 expressly indicates that
for the purpose of compelling the attendance of witnesses and the production of documents, and of awarding costs, the Special Judge shall have the powers conferred on a Civil Court by the Civil Procedure Code, 1908.
6. We have already referred to Section 54, and it seem to us that the Local Government can make rules regulating the procedure of the Special Judge so far as it is necessary for him to carry out the duties imposed upon him by the Act. As already stated, his duty is to ascertain the assets and the liabilities of the landlord. For that purpose, it is not at all necessary that a receiver should be appointed. It is not the province of the Special Judge to augment the assets of the landlord debtor by depriving him of all the profits accruing during the pendency of the proceedings under the Act. It is clear to us that Section 54 does not contemplate that the Local Government is to make rules which should include a rule-making Order 40, Civil P.C., applicable to the proceedings taken before the Special Judge.
7. Rule 6, made by the Local Government which we have already quoted, is carefully drawn up and makes the Civil Procedure Coda applicable only so far as it is relevant and not inconsistent with the provisions of the Act. Beading it in the light of Section 54 under which it has been made, and the underlying purpose of the Act, we think that the Civil Procedure Coda is applicable to the proceedings under the Encumbered Estates Act only so far as it may regulate the procedure of the Special Judge. the power which Order 40 of that Code gives to a Civil Court in the matter of appointment of a receiver cannot be considered to be necessary for regulating the procedure which a Special Judge is called upon to take in deciding the two questions which we have already mentioned. It was pointed out in the course of the arguments that the Encumbered Estates Act makes a distinction between 'power' and 'procedure,' and reference was made to Section 52, which specifically empowers the Special Judge to exercise the powers conferred upon a Civil Court by the Civil Procedure Code in compelling attendance of witnesses and the production of documents and of awarding costs'. It is suggested that all other powers are, by inference, excluded. The argument is plausible, but as it is difficult to draw a line between the exercise of a power and doing something which amounts only to procedure, we do not lay stress on it.
8. Having regard to all the relevant sections of the Act and the rules framed thereunder, we are clearly of opinion that the power to appoint a receiver in terms of Order 40, Civil P.C., has not been conferred upon the Special Judge. A subsidiary question has also been argued before us. It is said that even if Order 40, Civil P.C., is applicable and assuming the Special Judge has power to appoint a receiver, it is not open to him to exercise that power at the instance of the holder of a mortgage decree or a simple money decree. Reference was made to Order 40, Rule 1(2) which provides that:
9. Nothing in this Rule shall authorise the Court to remove from the possession or custody of property any person whom any party to the suit has not a present right so to remove.
10. This provision was the subject of a consideration in the Full Bench case Anandi Lal v. Ram Swarup : AIR1936All495 J in which it was held that a mortgagor under a simple mortgage is entitled to remain in possession of the property till it is actually sold in satisfaction of the mortgage decree, and that a receiver cannot be appointed of the mortgaged property so as to remove the mortgagor from possession of such property. We may point out that in the case before us the learned Special Judge has appointed a receiver not only in respect of the hypothecated property but all the property belonging to the landlord. There can be no doubt that none of his creditors so far as the record before us shows is entitled to possession of any of the properties for which a receiver has been appointed. To appoint a receiver for the purpose of realising all future rents and profits is obviously tantamount to dispossessing the mortgagor who has got a perfect right to retain possession of his property till he is ousted in due course of law. Accordingly we hold that the appointment of the receiver ordered by the lower Court is not justified, even if he had otherwise the power to apply Order 40, Civil P.C. The result is that we allow this appeal with costs, set aside the order of the lower Court and discharge the order appointing a receiver of the estate of the appellant.