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1949 DIGILAW 262 (ALL)

K. B. Syed Ehrarul Hasan Khan v. Mst. Fatima Khatoon

1949-10-29

CHANDIRAMANI, KAUL

body1949
JUDGMENT Kaul and Chandiramani, JJ. - This is an appeal preferred by one of the creditors in an Encumbered Estates Act Case. 2. The material facts are as follows: On ths 5th of September, 1933, a residential house belonging to Syed Akhlaqul Hasan in Khairabad town, was mortgaged by him with Ehrazul Hasan. On the 19th of October, 1936, Akhlaqul Hasan made an application u/s 4 of the Encumbered Estates Act. In due course the application was forwarded by the Collector to the Special Judge. A written statement as required u/s 8 of the Act was filed by Akhlaqul Hasan on the 17th of Match, 1937. A notice u/s 9 was issued on the 7th August, 1987. On the 8th of November, 1937, Ehrazul Hasan filed his statement of claim. A reference to this house as well as to his mortgage was made in that statement of claim. Paragraph 3 of Ehrazul Hasan's statement of claim stated that he had no objection to the list of the property, moveables and immoveables, filed by the applicant landlord. Akhlaqul Hasan admitted the claim filed by Ehrazul Hasan by a replication dated the 2nd of February, 1938. While admitting the claim he stated that the house mortgaged with Ehrazul Hasan was a residential house which was not liable to sale (for satisfaction of his debts). A notice u/s 11 of the Act was published in the gazette. In the list of properties which was gazetted no mention was made of this house. Ehrazul Hasan's claim was decreed on 5th of October, 1938. After all the claims were decreed a ranking order was prepared and therein Ehrazul Hasan was not ranked as a secured creditor under class 3 of Section 16 but his debt was included in class 4. The decrees were transmitted to the Collector in due course for execution. On the 13th of November. 1942, an application was made by Ehrazul Hasan praying that by an oversight the residential house of the applicant landlord, which was mortgaged with him was not mentioned in the notice published in the gazette u/s 11. He prayed that a publication to that effect be made and the ranking order be amended so as to put him in class 3 instead of in class 4 as had been done by the Special Judge. He prayed that a publication to that effect be made and the ranking order be amended so as to put him in class 3 instead of in class 4 as had been done by the Special Judge. There is on record a written statement dated the 2nd of January, 1943, filed by Afaqul Hasan in reply to this application averring that the list of property published in the gazette u/s 11 included the mortgaged house. It appears, however, that this was not an accurate statement and on the 30th of January, 1943, Shri Ejazul Hasan, who appeared for Ehrazul Hasan, made the following statement before the Court: The property in question has not been published in the gazette and so the application Under Sections 151 and 152 he dismissed, and he will present another application to the same effect after the property is published in the gazette. 3. The Court thereupon passed the following order: In view of the above I dismiss the application. 4. On the 3rd of February, 1943, another application to the same effect, as the previous one, was filed by Ehrazul Hasan. It was prayed by this application that at first the property detailed at the foot of the application be published in the gazette and thereafter the ranking order be modified and the applicant be placed as a creditor in class 3. Mr. Razi Ahmad, who appeared as Counsel for Haider Ali Khan, one of the creditors, and Mr. Abul Hasan who appeared for Misdaqul Hasan and Sughra Begam (Bani), two of the descendants of Ekhlaqul Hasan, stated that they had no objection to the publication of the property mortgaged with Ehrazul Ha an in the gazette. Mr. Bunyad Husain who appeared for Afagul Hasan made the following statement: That the mortgaged property be published in the gazette subject to his objections which be determined subsequently. 5. The proceedings of the Court show that another creditor, Abdul Jabbar, also appeared and stated that he had no objection to the publication of the property mortgaged with Ehrazul Hasan in the gazette. This was done accordingly Afaqul Hasan filed objections contesting the right of Ehrazul Hasan to be ranked as a creditor under class 3 of Section 16 of the Act. This was done accordingly Afaqul Hasan filed objections contesting the right of Ehrazul Hasan to be ranked as a creditor under class 3 of Section 16 of the Act. The learned Special Judge held that the application for amendment of the ranking order was maintainable, that the applicant was not estopped from contending that the property was liable for the debts of the applicant debtor, that the applicant was entitled to get the property published in the gazette, that the property in question should have been included in the list of properties prepared u/s 19 of the Act and that the applicant debtor was estopped from challenging the legality of the inclusion of the property in the list published in the gazette. He further held that the applicant creditor was entitled to be ranked as a class 3 creditor. He accordingly directed necessary amendments to be made in the record. 6. Syed Afaqul Hasan preferred an appeal against this decision which was disposed of by the learned District Judge of Sitapur. Afaqul Hasan died during the pendency of the appeal leaving Fatima Khatoon, Mariyam Khatoon, his daughters, Mst. Iqbal un-nissa his wife, and Misdaqul Hasan his nephew, as his heirs and legal representatives. Of these Fatima Khatoon's name was brought on the record as the Appellant and the names of the other three legal representatives were added in the array of Respondents. It was Mst. Fatima Khatoon who continued the appeal which was contested by Ehrazul Hasan. None of the other creditors cared to take any interest in these proceedings. The learned District Judge disagreed with the trial Court and held that the amendment sought to be made by Ehrazul Hasan was an amendment of his written statement of the claim filed u/s 9 of the Act, and such an amendment could not be made after the decrees had been sent to the Collector u/s 19 of the Act, or the 30th of November, 1939, whichever was later. The learned Judge took the view that the application for amendment having been filed too late should not be entertained. He opined that there was no equity in favour of Ehrazul Hasan. He held that the Special Judge was in error in considering the matter u/s 151 of the Code of Civil Procedure. The learned Judge took the view that the application for amendment having been filed too late should not be entertained. He opined that there was no equity in favour of Ehrazul Hasan. He held that the Special Judge was in error in considering the matter u/s 151 of the Code of Civil Procedure. Ha further held that as there was no mistake of the Court or of any of its officials responsible for the non-inclusion of this property in the list published in the gazette, this was not a case to which the provisions of Section 152 of the Code of CPC applied. Another reason given by the learned Judge for the view taken by him was that "the property had not been mentioned in any of the claims." With regard to the objection taken to the maintainability of the appeal before the learned Judge, he was of opinion that the order of the Special Judge was a final order disposing of the case and so was appealable u/s 45 of the Encumbered Estates Act. In view of the conclusion arrived at by him he allowed the appeal and set aside the order passed by the learned Special Judge. Unsatisfied with this decision Syed Ehrazul Hasan has preferred the present appeal. 7. Having heard the learned Counsel for parties at length, we are of opinion that this appeal should be allowed. Before dealing with the points that were raised as regards the merits of the appeal, we will dispose of an objection raised by Mr. Akhtar Husain as regards the maintainability of this appeal He contended that no appeal Jay against an order refusing to rectify an error in the exercise of powers conferred upon the Court Under Sections 151 and 152 of the Code of Civil Procedure. u/s 45(2)(a) of the Encumbered Estates Act an appeal lies to the High Court or the Chief Court as the case may be, from an appellate order of decree of a District Judge passed under Sub-section (2) on one or more of the grounds mentioned in Section 100 of the Code of Civil Procedure. Clearly the order appealed against was passed u/s 45(2) of the Encumbered Estates Act. Accordingly the objection raised by Mr. Akhtar Husain cannot be upheld. 8. Clearly the order appealed against was passed u/s 45(2) of the Encumbered Estates Act. Accordingly the objection raised by Mr. Akhtar Husain cannot be upheld. 8. Dealing with the merits of the case, we may point out that the learned Judge in the Court below, was not right when he stated that "the property had not been mentioned in any of the claims." A reference to the written statement of his claim u/s 9 filed by Ehrazul Hasan on the 8th of November, 1937, will show that specific reference was made to this property in that document. It cannot, therefore, be said that Ehrazul Hasan did not bring this fact to the notice of the Court. Once this was done it was the duty of the Special Judge u/s 11 of the Act to include it in the list of the properties of the applicant landlord published in the gazette. It was this failure on the part of the Special Judge, (which must be ascribed to an oversight) that is responsible for the subsequent mistake in the ranking order. We may point out that the approach of the learned Judge in the Court below to the matter before him was not correct. Proceedings under the Encumbered Estates Act are akin, and in certain respects analogous, to proceedings in an Insolvency Court, and it is the duty of the Special Judge to bring into the hotchpot, and made available for satisfaction of the debts of the applicant landlord, every property which under the law can be sold and so applied. The learned Judge has, so far as we can gather from his judgment, treated it as a matter entirely between a Plaintiff and a Defendant in an ordinary suit where the Court has to determine the rights of the parties on the material placed before it. In the case before us clearly the Special Judge had by an oversight omitted to include in the list, which was ordered to be published in the gazette, this item of property. In the case before us clearly the Special Judge had by an oversight omitted to include in the list, which was ordered to be published in the gazette, this item of property. It is true that this mistake was brought to his notice at a very late stage, but once it was pointed out to him that such an error had crept in the proceedings and this would result in prejudice to the rights of the creditors, it was his duty to rectify the mistake unless he was debarred from doing so by any rule of law. All such pleas that Ehrazul Hasan having allowed the first application to be dismissed was not entitled to maintain a second application dealing with the same subject were besides the point 1, Once the mistake was brought to the notice of the Court, it was its duty to rectify the error. With regard to the plea just mentioned we might observe that the order dismissing the application made by Ehrazul Hasan on the 13th November, 1942, must be read with the statement on the basis of which that order was passed. The order offerred to is dated the 30th January, 1943. Read in the light of the statement on the basis of which that order was passed we have no doubt that it should be interpreted as granting Ehrazul Hasan permission to file a fresh application dealing with the same matter after the property was published in the gazette. 9. But apart from that, it is clear that action could be taken by the Court Under Sections 151 and 152 of the Code of CPC on its own motion. As already observed by us earlier, once the mistake was brought to the notice of the Court it was its duty to rectify the error. We are unable to agree with the view taken by the Court below that it was not the case of a mistake and hence no action could be taken by the Court in exercise of its inherent powers preserved u/s 151 or Section 152 of the Code of CPC On the other hand we are of opinion that the Special Judge exercised his discretion properly in rectifying the error which had crept into his proceedings owing to some oversight. 10. We are of opinion that this appeal should be allowed. 10. We are of opinion that this appeal should be allowed. We accordingly allow it, and set aside the order of the Court below and restore that of the Special Judge. In the circumstances of the case we direct that the parties shall bear their own costs.