JUDGMENT Bajpai and Dar, JJ. - This is a second appeal by a creditor in a proceeding under the Encumbered Estates Act. Ram Chandra and Markandey obtained a money decree against Chandi Prasad and Jwala Prasad in suit No. 725 of 1922 and this decree was put in execution by Ram Chandra and Markandey and as some agricultural land was sought to be attached and sold the execution came to the Collector. At the time when the execution was pending Regulation of Sales Act No. XXVI of 1934 came in operation and the creditors Ram Chandra and Markandey exercised option to purchase the property of Chandi Prasad and Jwala Prasad in lieu of the amount due to them under the decree. On January 8, 1936, an order was passed by the Collector accepting that the transfer be made in favour of Ram Chandra and Markandey and in pursuance of this order on March 3, 1937, a sale was executed by the Collector in favour of Ram Chandra and Markandey. 2. On May 6, 1936, an application was made by Chandi Prasad and Jwala Prasad u/s 4 of the Encumbered Estates Act which was transmitted to the Special Judge, second grade, Gorakhpur, by an order of the Collector dated July 23, 1936. In these proceedings the landlords Chandi Prasad and Jwala Prasad disclosed the debt which was due to Ram Chandra and Markandey under the decree in suit No. 725 of 1922 and Ram Chandra and Markandey also appeared in Encumbered Estates proceedings. The contention raised by Ram Chandra and Markandey was that inasmuch as an order was passed by the Collector under Regulation of Sales Act on January 8, 1935, transferring the property in their favour their debt had ceased to exist and consequently in proceedings under the Encumbered Estates Act the property which was agreed to be transferred to them could not be taken into account nor the debt could be taken into account. The Special Judge, Second Grade, Gorakhpur, did not accept the contention of Ram Chandra and Markandey.
The Special Judge, Second Grade, Gorakhpur, did not accept the contention of Ram Chandra and Markandey. The view of the Special Judge was that inasmuch as the order which was made on January 8, 1935, was not completed by a registered sale before proceedings under the Encumbered Estates Act started there was no completed sale in favour of Ram Chandra and Markandey and the debt which existed in their favour was not satisfied and continued to exist and consequently in the proceedings under the Encumbered Estates Act the debt could be taken into account and the property sold could be treated as the property of the landlord. In support of this view the learned Judge relied upon a case--Sheobaran Singh v. Ranbir Prasaa 1937 AWR 119. 3. Ram Chandra and Markandey made an appeal to the District Judge of Gorakhpur and the learned Judge affirmed the judgment of the Special Judge, second grade. Ram Chandra has now made a second appeal in this Court and on his behalf Mr. Bhargawa has raised two contentions. The first contention is that u/s 7 of the Encumbered Estates Act proceedings could only be stayed which are pending in a Civil or Revenue Court and was in this particular case the proceedings were pending before the Collector, Section 7 was inoperative because the Collector could not be regarded as Court. With regard to this contention it is sufficient to say that even if the Collector could not be regarded as a Court the proceedings must be taken to be pending then in the Civil Court and Section 7 enjoins the stay of proceedings in Civil Court. Mr. Bhargava's contention is that in a case where proceedings are pending before the Collector with regard to the sale of an agricultural land automatically the execution ceases to exist in the Civil Court and in a case like this Section 7 of the Encumbered Estates Act has no application. We do not think that this is a correct interpretation of the section. The Collector after all acts under directions of the Civil Court and if as Mr. Bhargava contends he cannot be regarded as an execution Court then the execution cannot remain in abeyance and proceedings must remain in execution in the Civil Court. 4. Mr.
We do not think that this is a correct interpretation of the section. The Collector after all acts under directions of the Civil Court and if as Mr. Bhargava contends he cannot be regarded as an execution Court then the execution cannot remain in abeyance and proceedings must remain in execution in the Civil Court. 4. Mr. Bhargava's next contention is that it is not necessary u/s 5 of the Regulation of Sales Act that an actual deed should be executed to vest a title in the purchaser. The order passed u/s 5 itself operates as a complete transfer. We do not think that this is a correct interpretation of the section. In our opinion in order passed u/s 5 has got necessarily to be completed by a sale-deed and till the sale-deed is executed and registered the property remains still in the landlord and if before that sale Section 7 of the Encumbered Estates Act comes into play the proceedings have got to be stayed and the sale cannot be effected. In our opinion the view taken by the Court below is correct. The appeal therefore fails and is dismissed with costs.