Radhey Shyam v. Ram Kishan Das — 1980 DIGILAW 217 (ALL)

ORDER S.C. Mathur, J. - This petition has arisen from the proceedings for liquidation of debt under the provisions of U.P. Encumbered Estates Act, 1934. The petition calls for interpretation of Section 8 of the U.P. Zamindari Debt Reduction. Act. 1952 (U.P. Act No. XV of 1953). The petition has arisen in the circumstances hereinafter indicated. 2. One Smt. Gulab Kunwar was the proprietor of eight annas share in village Maura, Tehsil and district Lucknow: On 19th December, 1924 she mortgaged this eight annas share to Debi Dass predecessor-in-interest of the petitioners. Two annas out of this eight annas share was sold in execution of a decree against Smt. Gulab Kunwar and the mortgage security was thus reduced to six annas only. On 26th July, 1927. Debi Dass mortgaged his mortgagee rights to opposite party No. 1 for the consideration of Rs. 22,000/-. Opposite party No. 1 filed Suit No. 55 of 1931 on the basis of this mortgage deed. The suit was decreed on 14th September, 1931 for the sum of Rs. 29,000/- together with costs and future interest. On 9th July, 1932 the preliminary decree dated 14th September, 1931 was made absolute. Opposite party No. 1 had brought another suit, being Suit No. 61 of 1934 which was decreed for' recovery of Rs. 4,271-15-6 together with costs and future interest. In the year 1934 the U. P. Encumbered Estates A 1934 (U.P. Act No. XXV of 1934) was passed. The Act came into force with effect from 30th April, 1935. After the enforcement of this Act, Debi Dass the judgment-debtor in the suits herein before referred to made an applications under Section 4 of the Encumbered Estates Act. This application was registered as Encumbered Estates Case No. 3 of 1935. Opposite Party No. 1 preferred his claim in this case which was based on the two decrees herein before mentioned. The Special Judge constituted under the Encumbered Estat Act passed a decree on 17th September, 1941 in favour of opposite party No. for the sum of Rs. 38,000/- together with costs and pendente lite and future interest at 3% relating to the secure debt and for the sum of Rs. 5,104-00 together with costs and pendente lite future interest at 3% in respect of the simple money decree. Opposite party No. 1 under this order, was treated as a creditor of class IV. On 26th August. 38,000/- together with costs and pendente lite and future interest at 3% relating to the secure debt and for the sum of Rs. 5,104-00 together with costs and pendente lite future interest at 3% in respect of the simple money decree. Opposite party No. 1 under this order, was treated as a creditor of class IV. On 26th August. 1950 Debi Dass died leaving petitioners as his heirs and legal representatives. The liquidation proceedings in respect of the decree passed on 17th September, 1941 were held up pending passage and enforcement of U.P. Zamindari Abolition and Land Reforms Act and U.P. Zamindari Debt Reduction Act. The proceedings were reopened on 14th March. 1956 and the petitioners were substituted in place of Sri Debi Dass deceased. Before the decree could be satisfied Zamindari was abolished in the State of U.P. through U.P. Zamindari. Abolition and Land Reforms Act, 1950. The State Government issued notification under Section 4 of the Act and the estate which was the subject matter of mortgage vested in the State. Then followed the passing of the U.P. Zamindari Debt Reduction Act, 1952 (U.P. Act No. XV of 1953) by the State Legislature. This Act provided for the scaling down of the decreed as well as non-decreed debts of the former intermediaries whose estates had vested in the State under the provisions of U.P. Zamindari Abolition Act. Section 4 of the Act, dealt with the reduction of the debt after a decree had already been passed in respect thereof. This provision was applicable to the debts in question and accordingly the petitioners applied for reduction and their case was registered as Case No. 65 of 1965. Through the application made under Section 4 of the Act the petitioners claimed reduction of secured as well as unsecured debts. They also claimed adjustment of amount allegedly paid to Debi Dass towards satisfaction of the decree. On 25th May, 1966 the Special Judge by his decree reduced the debt. so far as it related to the mortgage, to Rs. 16,395/-. The decree for the unsecured debt was not reduced. The special Judge did not award any interest with effect from Ist July. 1952. Against this reduction opposite party No. 1 filed Civil Revision No. 217 of 1966 in this Court which was dismissed on 6th Sept, 1966. so far as it related to the mortgage, to Rs. 16,395/-. The decree for the unsecured debt was not reduced. The special Judge did not award any interest with effect from Ist July. 1952. Against this reduction opposite party No. 1 filed Civil Revision No. 217 of 1966 in this Court which was dismissed on 6th Sept, 1966. The decree as reduced by order dated 25th May, 1966 was sent to Liquidation Officer for liquidation of the debts under Section 19 of the U. P. Encumbered Estates Act. On 27th July, 1966 the petitioners moved an application before the Liquidation Officer claiming that Sri Debi Dass, their predecessor-in-interest, had paid Rs. 3446/- to opposite party No. 1 between 1932 and 1944 and the said amount was liable to be adjusted against the unsecured debt; it was further pleaded that the secured debt could be realised only out of the compensation and rehabilitation grant to the extent of th as provided under Section 8 (2) of the Debt Reduction Act and the balance, if any could not be realised out of other properties of the petitioners. The Liquidation Officer found payment to the extent of Rs. 3198/- only instead of Rs. 3446.00, as proved and allowed adjustment for the same. After allowing the adjustment he found the balance amount of the unsecured debt as Rs. 913.97. He also accepted the petitioners' plea that the secured debt could be realised only out of the compensation and rehabilitation grant to the extent of th and thereupon the decree was to be treated as fully satisfied and discharged. Against the order of the Liquidation Officer opposite party No. 1 preferred appeal which was partly allowed by the Additional Commissioner, Lucknow Division. Lucknow by his order dated 11-5-1970. The Additional Commissioner enhanced the balance amount of the unsecured debt to Rs. 4894.00 instead of Rs. 913.97 determined by the Liquidation Officer. He further confirmed the order of the Liquidation Officer regarding the secured debt. Aggrieved' by this decision the opposite party No. 1 preferred revision before the Board of Revenue who allowed the same by order dated 26th May, 1976 (Annexure No. 4). 4894.00 instead of Rs. 913.97 determined by the Liquidation Officer. He further confirmed the order of the Liquidation Officer regarding the secured debt. Aggrieved' by this decision the opposite party No. 1 preferred revision before the Board of Revenue who allowed the same by order dated 26th May, 1976 (Annexure No. 4). While allowing the revision of opposite party No. 1 the Board of Revenue held that the debts in question could be realised from property other than the mortgaged property of the debtors (petitioners): it was also held that the petitioners were entitled to adjustment of the amounts paid to opposite party No. 1 although the same had not been certified. With these observations the case was remanded to the Liquidation Officer for liquidating the debts in accordance with the observations made by him. 3. The above order of the Board of Revenue has been challenged by Sri K.B. Sinha, learned counsel for the petitioners with these pleas : In view of Section 8 (2) of the U.P. Zamindari Debt Reduction Act, the amount of the decree, so far as it relates to secured debt, can be realised only from the compensation and rehabilitation grant to the extent of th and if after such realisation any balance remains the same cannot be recovered at all. 4. The above contention of Sri K.B. Sinha was countered by Sri S. M. Fakhruzaman learned counsel for opposite party No. 1 who argued that the decree that was passed on 17th September, 1941 under Section 14 (7) (b) (i) of the Encumbered Estates Act was a simple money decree and the amount due thereunder could not be treated to be "amount.........as respects mortgaged estates............" so as to attract subsection (2) of Section 8 of the Zamindars' Debt Reduction Act. The learned counsel further argued that there was no provision in the Encumbered Estates Act, under which the decree was being liquidated, prohibiting recovery of the decretal amount from properties other than the compensation and rehabilitation grant and therefore the amount of the secured debt could be recovered from the said other properties also. In support of his contention the learned counsel relied upon ( AIR 1971 SC 1678 ) Mst. Jamshed Jahan Begum v. Lakhan Lal. 5. The learned counsel for the petitioners however. In support of his contention the learned counsel relied upon ( AIR 1971 SC 1678 ) Mst. Jamshed Jahan Begum v. Lakhan Lal. 5. The learned counsel for the petitioners however. urged that the judgment in Jamshed Jehan Begam's case (supra) had no application to the facts of the present case inasmuch as in the said case their Lordships were not considering the provisions of Debt Reduction Act but were considering the provisions of the Encumbered Estates Act, under which there was no prohibition against realisation of the decree from properties of the ex-intermediary other than compensation and rehabilitation grant. The learned counsel argued that sub-section (2) of Section 5 applied only to those cases in which determination of the reduced amount had been done either under Section 3 of the Act or under Section 4 and that in Jamshed Jahan Begum's case (1970 All LJ 1104) (SC) (supra) there was no determination of the reduced amount under either of the two sections. Sri Sinha further pressed that the term "as respects mortgaged estate" used in sub-section (2) of Section 8 referred to the nature of the original transaction and not to the nature of the decree passed. Learned counsel also pointed out that the material question that cropped up for consideration before their Lordships was : whether bhumidhari rights were proprietary rights so as to be beyond the reach of the Collector in view of Section 24 of the Encumbered Estates Act. 6. In order to appreciate the legal position some of the provisions of the enactments relating to Zamindars' properties, their debts, and the liquidation of their debts require examination. These enactments are U. P. Encumbered Estates Act, 1934 (U. P. Act. No. XXV of 1934), (hereinafter referred to as En cumbered Estates Act), U.P. Zamindari Abolition and Land Reforms Act, 1950 (U.P. Act No. 1 of 1951) (hereinafter called the Z. A. Act), and U. . Zamindars' Debt Reduction Act, 1952 (U. P. Act No. XV of 1953), (hereinafter referred to as Debt Reduction Act). The Encumbered Estates Act was enforced with a view to assist the land holders whose estates were threatened with insolvency on account of slump in prices and consequent increase of the burden of their indebtedness. The assistance was provided by reducing the amount of debt and providing a special mode for the liquidation of the reduced amount of the debt. The Encumbered Estates Act was enforced with a view to assist the land holders whose estates were threatened with insolvency on account of slump in prices and consequent increase of the burden of their indebtedness. The assistance was provided by reducing the amount of debt and providing a special mode for the liquidation of the reduced amount of the debt. This mode aimed at saving the properties as far as possible. The Act applied to such land holders as opted to have relief thereunder by making an application under Section 4 of the Act. Under this section application could be made by any landlord "who is subject to or whose immovable property or any part thereof is encumbered with "private debts". The term "private debt" is defined under Section 2 (b) as "any debt other than a public debt". "Public debt" is defined under Section 2 (c) as a debt due to the Crown or local authority. The term debt is defined under Section 2 (a) as any debt including any pecuniary liability except a liability for unliquidated damages. Chanter IV of the Act dealt with the determination of the amount of debt and reduction thereof. Liquidation of the reduced amount of the debt was provided under Chapter V. 7. For the purposes of the present case a detailed examination of all the sections falling under chapter IV is not necessary. The sections which call for examination are Sections 14, 16 and 19. Section 14 dealt with the examination of claims of creditors and determination of the amount of debts. The manner in which the amount of debt is to be determined is prescribed under sub-sections (4) to (6). After the amount has been determined the Special Judge appointed under Section 3 of the Act is required to proceed under sub-section (7). Section 14 dealt with the examination of claims of creditors and determination of the amount of debts. The manner in which the amount of debt is to be determined is prescribed under sub-sections (4) to (6). After the amount has been determined the Special Judge appointed under Section 3 of the Act is required to proceed under sub-section (7). This sub-section as it stood before the enforcement of the Zamindari Abolition Act read as follows:- "7 If the Special Judge finds that any amount is due to the claimant he shall pass a simple money decree for such amount together with any costs which he may allow in respect of proceedings in his court and of proceedings in any Civil Court stayed under the provisions of this Act, together with pendente lite and furture interest at a rate not greater than the rate specified in Section 27, and if he finds that no amount is due, he may pass a decree for costs in favour of the landlord. Such decree shall be deemed to be a decree of a Civil Court of competent jurisdiction but no decree against the landlord shall be executable within the United Provinces except under the provisions of this Act:- (emphasis supplied). Provided that no pendente lite interest shall be allowed in case of any debt where the creditor was in possession of any portion of the debtor's property in lieu of interest payable on such debt." Section 16 provided for ranking of the debts for priority in payment. The section as it stood prior to the amendment made by U. P. Act No. XIII of 1954 read as follows:- "16. The Special Judge shall rank all debts for priority, provided that debts in the earlier of the following classes shall have priority over those in the latter classes Class (1) Debts recoverable under the Agra Tenancy Act, 1926, the Oudh Rent Act, 1886, and the Land Revenue Act. 1901: Class (2) Public debts due to the Government and public debts due to a local authority creating charge on immoveable property. 1901: Class (2) Public debts due to the Government and public debts due to a local authority creating charge on immoveable property. Class (3) Debts secured upon property against which the Collector may take action under the provisions of Section 24 up to the value of the security: Class (4) other secured debts; Class (5) Debts due on account of goods supplied or services rendered; and Class (6) Unsecured debts due to a local authority, debts falling into class (3), in excess of the value of security and other unsecured debts." 8. Under Section 19 the decree passed under Section 14 (7) was required to be transmitted to the Collector for execution in accordance with the provisions of Chapter V. Section 19 as it stood prior to 1954 provided as follows : "19. (1) The Special Judge shall send the decrees granted under. sub-section (7) of Section 14 to the Collector for execution in accordance with the provisions of the Chapter. The Special Judge shall also inform the Collector of the order in which he has ranked the debts for priority. (2) The Special Judge shall inform the Collector of the nature and extent of the property mentioned in the notice under Section 11 which he has found to be liable to attachment, sale or mortgage in satisfaction of the debts of the applicant." Under the above provision the Special Judge was required to inform the Collector the ranking of debts fixed under Section 16. Under sub-section (2) he was required to inform the Collector of the property found liable to attachment sale or mortgage in satisfaction of the debts of the applicant. Under Section 22 falling under chapter V the Collector was required to give opportunity to the debtor to pay into court the whole or part of the amount found due against him within two months. If the amount of the debt was not paid in full the Collector was required to realise the value of the debtor's property and apply the amount realised in discharging the debts in order of priority fixed under Section 16. If the amount of the debt was not paid in full the Collector was required to realise the value of the debtor's property and apply the amount realised in discharging the debts in order of priority fixed under Section 16. The examination of the provisions hereinabove mentioned brings out the following position : (1) Although application under Section 4 (1) could be made only when the Landlord's immovable property or any part thereof was encumbered with private debts, the proceedings for determination of the amount of debts due and for the liquidation thereof were not confined either to private debts or to secured debts only. The Special Judge determined the amount due in respect of public debts as also in respect of unsecured debts. Liquidation was also made of all the debts, private, public, secured and unsecured. (2) Although a simple money decree was passed in respect of the debts under Section 14 (7) and under Section 18 previously existing rights of the creditor were extinguished the original character of the loan was not completely obliterated. This consequence was obvious from the provisions of Section 16 which used the words "secured debts" and "unsecured debts" and gave priority to "secured debts" over "unsecured debts" in the liquidation of debts. Thus, after Section 14 (7) wherever the term "secured debt" was used in the Act it denoted the original character of the loan. It did not refer to a transaction which continued to retain the mortgaged security even after passing of the decree under Section 14 (7) which was not possible in view of the provision contained in S. 14 (7). 9. I have referred hereinabove to Section 22 which falls under chapter V relating to execution of decrees and liquidation of debts - If after resort to Sections 22 and 23 any amount of the debt determined against the landlord remained unpaid the Collector was required to liquidate the debt in accordance with the provisions of Sections 24 to 42. For the purposes of the present writ petitions a close examination of these provisions is not necessary. Sections 24 (2) and 32 referred to the ranking of debts made under Section 16 and provided for priority in payment to the debts ranked highest. As observed hereinbefore "secured debt" ranked higher than transferred or unsecured debts and therefore enjoyed priority in payment over the latter. Sections 24 (2) and 32 referred to the ranking of debts made under Section 16 and provided for priority in payment to the debts ranked highest. As observed hereinbefore "secured debt" ranked higher than transferred or unsecured debts and therefore enjoyed priority in payment over the latter. I have referred to the provisions of chapter V only to indicate that even after passing of the simple money decree under Section 14 (7) a distinction is maintained between a debt which was originally obtained on the security of immovable property and other debts. It is in this context that connotation of the terms "secured debt" and "Judgment debtor ,, ,.....as respects mortgaged estate" used in Section 8 of the Debt Reduction Act have to be understood. 10. Encumbered Estates Act was enacted to save land holders from the blow dealt by slump in prices which had the consequence of increasing the burden of their indebtedness. Another blow was dealt to the land-holders by vesting of their estates in the State on the enforcement of the Zamindari Abolition Act. Before vesting of the estates the land-holders had the estates to fall back upon for liquidation of their debts. After vesting of the estates in the State Government they were left with compensation, rehabilitation grant, properties not acquired under the Act and other new rights acquired under the Act. These assets were of a considerably reduced value and in order to provide relief to ex-intermediary or ex-landlord, the State Legislature enacted Debt Reduction Act. Relief under the Act was made available in respect of un-decreed debts as well as in respect of decreed debts. The Act laid down the mode and the procedure for reduction of these debts. Reduction of un-decreed debt was provided under Section 3 while Section 4 provided for reduction of the decreed debt. Subsection (1) of Section 3 provides as follows :- "Notwithstanding anything in any law, agreement or document, in any suit to which this Act applies relating to a secured debt the Court shall, after the amount due has been ascertained but before passing a decree, proceed as hereinafter stated". Subsection (1) of Section 3 provides as follows :- "Notwithstanding anything in any law, agreement or document, in any suit to which this Act applies relating to a secured debt the Court shall, after the amount due has been ascertained but before passing a decree, proceed as hereinafter stated". (emphasis supplied) Sub-section (1) of Section 4 provides as follows :- "Notwithstanding anything in the Code of Civil Procedure, 1908, or any other law, the Court, which passed a decree to which this Act applies relating to a secured debt shall, on the application either of the decree-holder or judgment-debtor, proceed as hereinafter stated." (emphasis supplied) The use of the term "secured debt" in the above sub-sections makes it clear that the provisions of the Act apply only to secured debts, Sub-section (1) of Section 4 further uses the words "on the application either of the decree-holder or judgment-debtor." This indicates that jurisdiction of reducing the debt under Section 4 would be acquired by the court only when approach is made to it in that behalf: this approach may be made either by the decree-holder or by the judgment-debtor. In the present case it is not disputed that approach was made under Section 4 by the petitioners and the amount of the decree that was passed under the Encumbered Estates Act was reduced. It is not contended before me that this reduction was illegal because at the time of the enforcement of the Debt Reduction Act there was no "secured debt" in favour of the opposite parties and the decree passed under the Encumbered Estates Act was not "a debt to which this Act" applied. Indeed such a challenge could not be raised in the present proceedings which arise from proceedings for execution of the decree, because executing authority could not go behind the decree. Such a challenge would not be applicable on merits also. Sub-section (1) of Section 4 uses the words "decree.........relating to secured debt". It cannot be disputed that the decree passed under the Encumbered Estates Act in favour of the opposite parties related to secured debt also. When the Debt Reduction Act was passed the Legislature was already aware of such a decree and still such a decree was not exempted from the purview of Section 4 (1). It cannot be disputed that the decree passed under the Encumbered Estates Act in favour of the opposite parties related to secured debt also. When the Debt Reduction Act was passed the Legislature was already aware of such a decree and still such a decree was not exempted from the purview of Section 4 (1). It is, therefore, obvious that the term "secured debt" in Section 4 (1) has been used to denote the nature of the original transaction of debt and not the nature of the debt as it came to be under the decree passed under Section 14 (7) of the Encumbered Estates Act. 11. For the proper appreciation of Section 8 of the Debt Reduction Act, it is necessary to consider the extent of the reduction that is permissible of the "secured debt". There is no difference in this regard in the provisions contained in Sections 3 and 4 of the Act. I am reproducing below subsections (2) and (3) of Section 4. "(2) Where the mortgaged property (***) consists exclusively of estate and such estate has been acquired under the provisions of the U.P. Zamindari Abolition and Land Reforms Act. 1950, the Court shall- (a) If there is only one judgment- debtor entitled as owner to the estate, calculate the amount due on the first day of July, 1952, and then reduce it in accordance with the formula given in the schedule: (b) If there are two or more judgment-debtors and all or more than one out of them were on the thirtieth day of June, 1952, entitled as owners to the mortgaged estate- (i) calculate the amount due on the first day of July, 1952; (ii) apportion between the judgment- debtors so entitled an amount due, where the decree defines their respective liability in the ratio of their liability otherwise in proportion to their respective shares in such estate: and (iii) after the amount due has been so apportioned, reduce the amount in the case of each the judgment-debtors in accordance'... with the formula given in Schedule I. (3) Where the mortgaged property (***) consists partly of estate and part-IV of property other than estate the Court shall- (a) determine the amount due on the Ist day of July, 1952, and distribute the same on the two properties separately in accordance with the principles contained in Section 82 of the `Transfer of Property Act, 1882, as if the decree had been a debt and the two properties belonging separately to two persons with separate and distinct rights of ownership: and (b) after the amount due as respects the estate has been so calculated, (i) if there is only one judgment debtor who was on the 30th day of June, 1952, entitled as owner to the estate. reduce it in accordance with the formula given in Schedule I; (ii) if there are two or more judgment-debtors and all or more than one out of them were on thirtieth day of June, 1952, entitled as owners to the estate, apportion the amount due ' as aforesaid between them, where the decree defines their respective liability, in the ratio of their liability, otherwise in proportion to their respective shares: and (iii) after the aforesaid amount has been so apportioned reduce the amount in accordance with the formula given in Schedule I." 12. From the above provisions it would be seen that the entire secured debt is not reduced but only that portion of it is reduced which on apportionment is found to have had an "estate" or portion thereof as security for its repayment. Under sub-section (3) the court is required to determine the total amount due on 1-7-1953 in respect of the secured debt. Thereafter the court is required to apportion the debt so as to identify the debt related to "estate". Under clause (b) it is this debt which is reduced and not the debt related to property which is not "estate". In the context in which it has been used the term "estate" has the same meaning as assigned to it under Section 3 (8) of the Zamindari Abolition and Land Reforms Act. 13. Having thus determined the nature of the reduction made under the Debt Reduction Act I' now come to the main provision of the Act which requires interpretation viz. Section 8 which is in the following terms: "8. Debt realisable from compensation money and rehabilitation grant. 13. Having thus determined the nature of the reduction made under the Debt Reduction Act I' now come to the main provision of the Act which requires interpretation viz. Section 8 which is in the following terms: "8. Debt realisable from compensation money and rehabilitation grant. (1) Notwithstanding anything in any agreement, document or law for the time being in force, but subject to the provisions of sub-section (2) a decree relating to a. secured debt passed in any suit to which this Act applies- (a) shall, in so far as the compensatipu for the mortgaged estate is concerned, be executed to the extent of three-fourths amount only against such compensation, and (b) be also executable, in addition to and without prejudice to every other remedy to which the decree-holder may be entitled under the decree or law for the time being in force, against the rehabilitation grant payable in respect of the mortgaged estate to the extent of three-fourths of such grants. (2) Notwithstanding anything in any law the reduced amount found in the Case of a mortgagor or judgment-debtor as the case may be. under Section 3 or Section 4 as respects mortgaged estates shall not be legally recoverable otherwise than out of the compensation and rehabilitation grant payable to such mortgagor or judgment-debtor in respect of such estates." Sub-section (1) is subject to sub-section (2). Sub-section (1) provides for realisation of the "decree relating to secured debt passed in any suit to which this Act applies." Sub-section (2) refers to the reduced amount found under. Section 3 or 4 as respects mortgaged estate. Sub-section (1) therefore, relates to that portion of the secured debt which is not related to estate and which has not been reduced under the Debt Reduction Act. In view of the provisions contained in clauses (a) and (b) of sub-section. (1) of Section 8 the compensation and the rehabilitation grant payable in respect of the mortgaged estate can be proceeded against to the extent of three-fourths only for recovery of such debt; that is one- fourth of the compensation and one- fourth of the rehabilitation grant is exempted from being proceeded against. Clause (b) makes it clear that the decree can be executed against other properties of the debtor without the restriction of any limit such as is prescribed in respect of compensation and rehabilitation grant. Clause (b) makes it clear that the decree can be executed against other properties of the debtor without the restriction of any limit such as is prescribed in respect of compensation and rehabilitation grant. This is obvious from the use of the words "be also executable, in addition to and without prejudice to every other remedy to which decree-holder may be entitled under the decree or law for the time being in force." Sub-section (2) of Section 8 on the other hand relates to that portion of the secured debt which is related to estate and which has been reduced either under Section 3 or under Section 4 of the Act. Such a debt can be recovered only from the compensation and rehabilitation grant and from no other property. This is obvious from the use of the words "shall not be legally recoverable otherwise than out of the compensation and rehabilitation grant." In view of this position Sri Sinha is right in saying that the amount of debt reduced under Section 4 of the Debt Reduction Act can be realised only from three-fourths of the compensation and three-fourths of the rehabilitation grant payable in respect of the estate. This disability will not attach to other debts which are not reduced under the provisions of Debt Reduction Act. 14. Debt Reduction Act only provides for reduction of the debt. After a debt has been reduced the execution proceedings again take place under the provisions of the Encumbered Estates Act. In view of the abolition of zamindari and enactment of Debt Reduction Act the provisions of Encumbered Estates Act were amended by U. P. Encumbered Estates (Amendment) Act, 1954 (Act No. XIII of 1954) so as to bring them in conformity with the provisions of the Zamindari Abolition Act and the Debt Reduction Act. Under the unamended provisions only an attempt. was required to he made to save proprietary rights of the landlord in the land but such rights were not completely immune from being proceeded against in satisfaction of the decree. Under Section 25 even mortgage could be granted in favour of a person who agreed to pay the amount due. After the estate had vested in the State there was obviously no question of mortgage being granted in respect of the estate. Under Section 25 even mortgage could be granted in favour of a person who agreed to pay the amount due. After the estate had vested in the State there was obviously no question of mortgage being granted in respect of the estate. Accordingly sub-section (7) of Section 14 was replaced as follows :- "If the Special Judge finds that (a) no amount is due, he may pass a decree for cost in favour of the landlord: (b) an amount is due to the claimant he shall- (i) pass a simple money decree, having regard also to the provisions of Section 3 of the U. P. Zamindari Debt Reduction Act, 1952 for such amount together with any costs which he may allow in respect of the proceedings in his court and of proceedings in any court staved under the provisions of this Act together with pendente lite and future interest at a rate not higher than 4% per annum and (ii) also certify the amount, if any, of such decree which, in accordance with the provisions of Section 8 of the U.P. Zamindari Debt Reduction Act. 1952, is not legally recoverable otherwise than out of the compensation and rehabilitation grant payable to the landlord: Provided that no pendente lite interest shall be allowed in the case of any debt where the creditor was in possession of any portion of the debtor's property in lieu of interest payable on such debt for the period he was so in possession." Section 19 (2) was also substituted as follows:- "The Special Judge shall inform the Collector (a) of the amount of the secured debt which is not legally recoverable otherwise than out of the compensation and rehabilitation grant payable to the landlord in respect of the mortgaged estate; and (b) of the nature and extent of the property mentioned in the notice under Section 11 which he has found to be liable to attachment or sale in satisfaction of the debts of the applicant." Then Section 19-A was added so as to make the decree executable only for the reduced amount determined under the Debt Reduction Act. Section 19-A reads as follows :- "19-A Amendment of 'decrees transmitted to the Collector, - Where a decree has been passed by the Special Judge before the commencement of the U. P. Encumbered Estates (Amendment) Act. Section 19-A reads as follows :- "19-A Amendment of 'decrees transmitted to the Collector, - Where a decree has been passed by the Special Judge before the commencement of the U. P. Encumbered Estates (Amendment) Act. 1954, and the decree not having been already fully satisfied is in respect of secured debt to which the U.P. Zamindari Debt Reduction Act. 1952, applies, the Special Judge shall, upon reduction of the amount of the debt in accordance with the provisions of the said Act- (a) inform the Collector of the reduction so made. and (b) certify the amount, if any, of the decree aforesaid which is not legally recoverable otherwise than out of the compensation and rehabilitation grant. payable to the landlord in respect to the mortgaged estate; and the decree transmitted to the Collector under Section 19 shall be deemed to have been amended accordingly." Consequential amendments were made in Chapter V of the Encumbered Estates Act also. Section 23 was also added to empower the Collector to collect the amount of compensation and rehabilitation grant. The new Section 23-B (1) provided as follows :- "23-B (1) Without prejudice to the provisions of Section 8 of the U.P. Zamindai Debt Reduction Act. 1952, the amount or the bonds on account of compensation or rehabilitation grant received by the Collector in pursuance of the requisition under Section 23-A shall be expended or utilised by the Collector in liquidation of the amount of the secured debt which having regard to the provisions of the U.P. Zamindari Debt Reduction Act, 1952, was secured on the proprietary rights in land in respect of which such money has been received." The above provision is without pre-judice to the provisions of Section 8 of the Debt Reduction Act. Therefore, what is provided under Section 8 prevail and the debt has to be discharged in the manner provided therein. 15. From the amended provisions also it is apparent that the disability of recovering the debt from three-fourths of the compensation and rehabilitation grant attaches only to such debts as have been reduced under Section 3 or under Section 4 of the Debt Reduction Act. It does not attach to any other debt. Therefore, if in a particular case no reduction of debt is made either under Section 3 or tinder Section 4 the debt can be recovered from the other properties of the debtor. It does not attach to any other debt. Therefore, if in a particular case no reduction of debt is made either under Section 3 or tinder Section 4 the debt can be recovered from the other properties of the debtor. 15-A. It is in the context of the above legal position that the dictum laid down by their Lordships of the Supreme Court in Jemshaed Jehan Begum's case, (supra) has to be understood. In the entire judgment of their Lordships there is no reference to the Debt Reduction Act. It is, therefore. obvious that their Lordships were not dealing with a decree which had been reduced under Section 3 or under Section 4 of the Debt Reduction Act. The judgment of their Lordships, therefore, has no application to the present case in which debt had been reduced under Section 4 of the Act. Reliance placed by the Board of Revenue on the decision of their Lordships was, therefore, misconceived. The judgment was relied upon by the learned counsel for the opposite parties also during the course of argument. 16. In view of the above discussion, the order of the Board of Revenue so far as it holds that the secured debt reduced under Section 4 can be recovered from properties other than compensation and rehabilitation grant is obviously erroneous and deserves to be quashed. The said order holds good so far as other debts are concerned. The said order also holds good in respect of the adjustment allowed in favour of the petitioners inasmuch as the same was not challenged by the opposite party No. 1. As such, the writ petition succeeds partially. 17. In view of the above, the writ petition is partly allowed. The order of the Board of Revenue dated 26th May, 1976 (Annexure No. 4) so far as it relates to the secured debt reduced under Section 4 of the Debt Reduction Act is hereby quashed. A writ of certiorari will issue accordingly. The Board of Revenue will decide the revision in accordance with law indicated hereinabove. The costs of this petition shall be easy.