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1954 DIGILAW 87 (ALL)

Syed Mujtaba Husain v. Buniad Husain

1954-03-09

MALICK, R.SINGH

body1954
JUDGMENT Malick, C.J. - This is a Defendants' appeal. The Plaintiff filed a suit for possession of certain properties detailed in the plaint. The Plaintiff's suit was decreed by the learned Civil Judge of Sitapur and the Defendants have filed this appeal. 2. Various pleas were taken in the written statement and a large number of issues were framed by the lower court. It is not necessary to go into all those issues as in our view the Plaintiff's suit must fail on a preliminary ground. 3. Nawab Begum was the owner of the property. She was heavily indebted and on the 29th of December, 1904, she had borrowed a sum of Rs. 55,733/ 6/9 from one Baldeo Sahai on a mortgage Ex. 7. One of the items of the property included in the mortgage was a house in Bavarchi Tola and the mortgage deed was registered in Lucknow. Interest on this mortgage and on another debt had mounted up and on the 15th of October, 1936, Nawab Begum sold a half share in the zamindari property and a half share in the house in Baverchi Tola to the Plaintiff Buniyad Husain for Rs. 500/ - only. In all a sum of Rs. 40/ - was paid before and at the registration and Rs. 400/ - were left in the hands of Buniyad Husain for expenses of litigation. The sale deed provided that he had to meet any further expenses that may be required and for which Nawab Begum will not be responsible. This sale deed was also registered in Lucknow and a half share in the house in Baverchi Tola, Lucknow, was included in it; the rest of the property was situated outside Lucknow. 4. On the 20th of October, 1936, Nawab Begum applied u/s 4 of the Encumbered Estate Act. Buniyad Husain acted as her pairokars in the Encumbered Estate Act proceedings. In the application u/s 4 of the Encumbered Estates Act no mention was made either of the transfer of a half share of the property to Buniyad Husain or of the house in Baverchi Tola, Lucknow. On the 14th of January, 1937 her written statement u/s 8 was filed through Buniyad Husain and in this the house was shown as one of the item of property belonging to her and it was also mentioned that she had transferred half of the property to Buniyad Husain. On the 14th of January, 1937 her written statement u/s 8 was filed through Buniyad Husain and in this the house was shown as one of the item of property belonging to her and it was also mentioned that she had transferred half of the property to Buniyad Husain. On the 14th November, 1937, Nawab Begum died leaving two daughters Wazir Jahan Begum and Anjuman Aar Begum, as her heirs and legal representatives and their names were brought on the record of the case before the learned Special judge in place of the name of Nawab Begum. The Plaintiff, Buniyad Husain, became their General Attorney and a general power of attorney was executed in his favour on the 22nd of January, 1938. On the 18th of January, l939, Chandrika Prasad creditor applied that a half share in the property had been sold to Buniyad Husain and he was therefore, a co-debtor and a necessary party u/s 9(5)(a) of the Encumbered Estates Act and he should be impleaded. Notice of this application was issued to Buniyad Husain and was served on him on the 27th of January and on the 30th of January, 1939, the application was granted ex-parte and Buniyad Husain was thus impleaded as a party to the proceedings before the learned Special Judge. 5. Section 9(5)(a) of the Encumbered Estates Act provides that if one or more of several joint debtors apply but all of them do not apply under the Encumbered Estates Act, the Special Judge has to determine the amount of the joint debt which is due by the debtor or debtors who have applied and the amount due by those who have not applied and for the purpose of this determination the Special Judge has to make the joint debtors who have not applied parties to the proceedings and hear any objection that they may make before recording his finding. Under Clause (b) of this Sub-section the creditor has right to recover from the debtors who have not applied only such amount on account of the joint debt as may be determined by the Special Judge to be due by them, and on the basis of the determination by the Special Judge they can obtain a decree under Clause (e) of the same Sub-section. As a result of the application made by the creditor, therefore, the Special Judge would have had to determine the share of the joint debt payable by Nawab Begun and the share payable by Buniyad Husain and the creditors would have been entitled to the amount from Buniyad Husain by obtaining a decree for the amount and executing the decree in the ordinary Civil Court by sale of his share of the property. 6. On the 18th of February, 1939, however, Buniyad Husain filed an application in which he said that the sale deed in his favour was invalid as it had been registered in Lucknow where a farzi and fictitious item, the Baverchi Tola house in Lucknow had been included, and when he came to know of the invalidity of the sale deed he did not get his name mutated in the village records and had never considered himself to be the owner of the property. He, therefore, pleaded that his name be removed from the record. On the 16th of March, 1939, this application of Buniyad Husain was put up for orders in the presence of all the parties and Buniyad Husain made the following statement: I do not claim any interest in the property covered by the mortgage deed in dispute, under the deed of sale dated 19th October, 1936, which Mst. Nawab Begum had executed in my favour. 7. After the statement of Buniyad Husain was recorded counsel for the creditors discharged Buniyad Husain. The note made by the learned Judge reads as follows: B. Narain Lal, counsel for the claimants, discharges Buniyad Husain stating that he is not a necessary party to the proceedings as he disclaims all interest to the property covered by the mortgage. 8. As a result of the statement made by Buniyad Husain and the attitude taken up by the parties the learned Special Judge discharged Buniyad Husain and his name was removed from the array of parties. 9. The result, therefore, was that the entire property was treated as the property of Nawab Begum and a decree for Rs. 81, 600/2/2 was passed in favour of the claimants u/s 14 of the Encumbered Estates Act. This decree was amended on the 26th of March, 1950, as a result of a review application and the amended figure was Rs. 1,53, 612/13/6. 10. 81, 600/2/2 was passed in favour of the claimants u/s 14 of the Encumbered Estates Act. This decree was amended on the 26th of March, 1950, as a result of a review application and the amended figure was Rs. 1,53, 612/13/6. 10. u/s 19 of the Encumbered Estates Act the Special Judge sent the decree to the Collector for execution in accordance with the provisions or the Act and also informed the Collector that the entire property belonged to Nawab Begum and was liable to attachment, sale or mortgage in satisfaction of the debts of the applicants. 11. How the debt is to be liquidated by the Collector is provided for in Chapter v. of the Encumbered Estates Act. The mode of execution is entirely different from the mode of execution under the CPC Code. We have been informed by counsel that the debt due from Nawab Begum was liquidated in accordance with the provisions of Chapter V. Certain items of property were transferred and bonds were executed in favour of the creditors u/s 30 of the Act. The amount of these bonds is ultimately recoverable by the Government out of the property of the landlord applicants. 12. After the passing of the debts u/s 14 an application was filed on behalf of the landlords-applicants, i.e., the two daughters of Nawab Begum, u/s 35 of the Act that the mortgagees should be deprived of the possession of the property and other should be put in possession there. This application was granted on the 3rd of September, 1941, and on the 9th of September, 1941, the creditors made an application for review and set out the grounds of review in Ex. 20. The landlords-applicants however, in Ex. 21 claimed that they were entitled to possession of the property, with the result that the objections were dismissed and the landlords applicants got possession of the property. 13. One of the grounds on which the mortgage in favour of the creditors was challenged was that as the Baverchi Tola house did not exist the registration of the mortgage in their favour was bad and they were not entitled to recover anything on the basis of the mortgage. This plea, however, failed and the court held that the house did exist on the date of the mortgage, though it had fallen down later, and that the mortgage was valid. This plea, however, failed and the court held that the house did exist on the date of the mortgage, though it had fallen down later, and that the mortgage was valid. On behalf of the Defendants a plea was taken that the Plaintiff was guilty of fraud and he could not ask for relief on the basis of the fraud perpetrated by him. Learned Counsel for the Respondent has admitted that there was a conspiracy between Buniyad Husain and Nawab Begum and later her daughters to defraud the creditors but has pleaded that as the fraud failed the Plaintiff is entitled to a decree. In the alternative it is pleaded that the Defendants were in pari delicto; that if anything they were more guilty than the Plaintiff and, therefore, this plea on their behalf should not be entertained. 14. It is true that the Plaintiff and the Defendants failed to defeat the creditors' claim in its entirety as the learned Special Judge in the Encumbered Estates Act proceedings held that the mortgage had been validly registered but it cannot be said that the fraud had failed in its entirely. 15. We have already set out the facts above from which it would be clear that if Buniyad Husain had not made the statement on the 16th March, 1939, that he did not claim any interest in the property, he would have been impleaded as a party to the proceedings and the Judge would have determined his share of the liability which would have been half, that is, he would have been held liable to pay half of Rs. 1,53,612/13/6. This amount would have been realisable from him by sale of his share of the mortgage property, in execution of a decree by the civil court and he would not have got the benefit of Chapter v. of the Encumbered Estates Act for the liquidation of his half share in the debt. Further, by reason of this fraud the creditors were deprived of possession of the property in September, 1941, though if the debts had been apportioned and Buniyad Husain had not disclaimed all interest in the half share of the property, the mortgagees would have been entitled to remain in possession of the half share till the amount due to them from Buniyad Husain was paid up. The landlords-applicants have also suffered in much as their set has property as protected estate then they would have got if it had been known that they were the owners of only half share in the property and further they would not be liable for the entire amount of the debt and would not have to pay to the Government the full amount due under the bonds. The person who could be said to have benefited all along the line is the Plaintiff Buniyad Husain. The entire debt was treated as the debt of Nawab Begum. The mortgages were deprived of the possession of the property in September, 1941. The entire debt was liquidated under Chapter v. of the Encumbered Estates Act and from what has now been salvaged the Plaintiff claims a half share free from all liability. In the circumstances we are not satisfied that the Plaintiff should be allowed to take advantage of his own fraud. 16. In T.P. Petherpermal Chetty v. R. Muniande Serrai and others L.R. 35 Indian Appeals 48 Their Lordships of the Judicial Committee said: The fact that A, has assumed the name of B, in order to cheat X can be no reason whatever why a Court should assist or permit B, to cheat A, required the help of the Court to get the estate back into his own possession, or to get the title into his own name, it may be very material to consider whether A, has actually cheated X or not. If he has done so by means of his alias, then it has ceased to be mere mask, and has become a reality. It may be very proper for a Court to say that it will not allow him to resure the individuality which he has once cast off in order to defraud others............ But where the fraudulent or illegal purpose has actually been effected by means of the colourable grant, then the maxim applied. 'In parti delicto potior set condito possidents.' The Court will help neither party. 'Let the estate lie where it falls. 17. We are therefore, of the opinion that the Plaintiff should not get the benefit of his own fraud and be allowed to claim a half share in the property. 18. There is a further objection to the Plaintiff's suit being decreed. 'Let the estate lie where it falls. 17. We are therefore, of the opinion that the Plaintiff should not get the benefit of his own fraud and be allowed to claim a half share in the property. 18. There is a further objection to the Plaintiff's suit being decreed. The plaintiff was on the 30th of January, 1939, impleaded by reason of an objection filed u/s 9(5)(a) of the Encumbered Estates Act by the creditors. The questions, where the landlord-applicants owner half the property or the whole property, how much was due from them and how much was due from Buniyad Husain would have been decided by the learned Special Judge u/s 9(5)(a) and Section 1 of the Encumbered Estates Act if Buniyad Husain had not made the statement on the 16th of March, 1939, and disclaimed all interest in the property and thus got his name removed from the array of parties. As a result of the statement of Buniyad Husain his name was exempted and on his disclaimer the entire property was treated as the property of Nawab Begum and the learned Special Judge u/s 19(2) certified to the Collector that the entire property was the property of Nawab Begum. 19. Section 47 of the Encumbered Estates Act provides that-"Except as provided in Section 45 and 46, no proceedings of the Collector or Special Judge under this Act shall be questioned in any court." 20. Buniyad Husain not only got his name removed but acted as the general attorney of the landlord-applicants and all along purported to act in their interest on the ground that they were the owners of the entire property. We do not think that it is now open to him to challenge the proceedings before the Special Judge and claim that he was the owner of a half share in the property. We do not think that it is now open to him to challenge the proceedings before the Special Judge and claim that he was the owner of a half share in the property. No doubt it has been held in some cases that where a third party who was not aware of the proceedings under the Encumbered Estates Act did not come forward to put in claim and that property was saved to the landlord applicant, on the determination of the 'Encumbered Estates Act proceedings he could come and prove his title to the same, but those decisions do not help the Plaintiff who was actually impleaded as a party and who disclaimed all interest in the property, got his name removed from the array of parties and thus made the special Judge as also the Collector treat the entire property as the property of the landlords-applicants. The Plaintiff's suit must, therefore, fail. 21. The appeal is allowed, the decree of the lower court is set aside and the Plaintiff's suit is dismissed with costs.