TMI Blog1953 (10) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... . The landlords on 26th August, 1938, submitted a written statement to the special judge under section 8 of the Act and therein stated inter alia that they had a pro- prietary interest to the extent of ten annas share in 52 items of taluqdari villages which formed part of taluka Bharawan. A notice of this application was published as required by section 11(1) of the Act in the U.P. Gazette dated 13th May, 1939. On 30th November, 1939, Raja Dev Singh, who subsequently became a ward of the Court of Wards, filed a claim petition under section 11(2) of the Act and alleged therein that he was the proprietor of 6 1/2 pies share in 47 items of property mentioned in schedule (A)- of the landlords' written statement. This claim was. disallowed by the special judge by an order dated 24th August, 1940, and it was held that Raja Dev Singh was not the owner of the property claimed by him in his objection petition. The Deputy Commissioner of Hardoi who is the Court of Wards of Bharawan estate filed an appeal against this decision of the special judge to the High Court. All the applicant-landlords were impleaded as respondents in the appeal along with the Unao Commercial Bank Ltd., one of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... granted the certificate was erroneous and the certificate being defective this appeal could not be heard. In our opinion, this contention is without force. It is no doubt true that costs are not taken into consideration and are treated as extraneous to the subjectmatter of a suit, and variation in the matter of costs does not make the decree of the appellate court a decree of variance; but as already stated, the appellant did not pray for the certificate on that ground. He had expressly alleged that the decree being one of affirmance he was entitled to a certificate, because the subject of the suit as well as of the appeal was a sum of orver ₹ 10,000 and the case involveda4 substantial question of law. It is obvious that the ground on which the appeal was dismissed by the High Court raises a question of law of importance to the parties and that being so, on that ground alone the appellant was entitled to a certificate under section I 10, Civil Procedure Code. The certificate therefore is good, though the -around on which it was granted is erroneous. It is always open to an appellant to support the certificate on grounds other than those, on which it has been actually ordered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent, but he has to furnish information, regarding the names and addresses of his creditors so far as they are known to or can be ascertained by him and his failure to give information may result in a dismissal of the application. Section 9 requires the special judge to publish in the official gazette a notice in English calling upon all persons having claims in respect of private debts both decreed and undecreed against the person or the property of the landlord to present to the special judge within three months from the date of the publication of the notice, a written statement of their claims. He is also required to cause copies of such notice to be published in such paper or papers as he may direct and to exhibit it at his own office, at the office of the collector and at some conspicuous place where the landlord resides. He is further directed to send a copy of the notice and a copy of the written statement under sub-section (1) of section 8 by registered post to each of the creditors whose names and addresses are mentioned in the statement under clause,(d) of sub-section (1) of section 8. Section 10 provides that every claimant referred to in section 9 shall in the written st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidering the evidence, if any, produced by them. The section lays down them mode of calculating interest on the amount of such claims and provides for the application of the provisions of the Usurious Loans Act to the proceedings under the Act. Sub-section (7), provides as follows:---- If the special judge finds that any amount is due to the claimant be 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 future 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. Section 18 provides that subject to the right of appeal or revision, the effect of a decree of the special judge under sub- section (7) of section 14 shall be to extinguish the previously existing rights, if any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to relief in respect of or arising of the same act or transaction or series of act transactions is alleged to exist, whether severally or in the alternative, where, if such persons brought separate suits, any common question of law or fact would arise. Rule 3-provides:- All persons may be joined as defendants against whom any right to relief in respect of or arising out of the same act or transaction or series of acts or transactions is alleged to exist, whether jointly, severally or in the alternative, where, if separate suits were brought aaainst such persons any common question of law or fact would arise. It is apparent that strictly speaking the provisions of these rules cannot be applied to the proceedings contemplated by the U. P. Encumbered Estates Act. These proceedings cannot be. described as suits. It was conceded at the Bar that an inquiry into third party claims under section 11(2) cannot be described as a suit. Neither section 8 nor section 1 1 provides that the creditors have to be impleaded as parties respondents in such an objection application. As already said, the section provides that the applicant has to give information about the names of the credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dlord succeeds, then in an appeal against that decision he need only implead the landlord as a party respondent and it is not necessary to implead all the creditors as respondents merely on the ground that ultimately they would be affected by-the result, either to their benefit or to their detriment. The court has power, if it considers that the presence of the creditors is necessary at the hearing, to give them notice of the appeal so that they may have the opportunity of placing their con- tentions before it. The observance of such a procedure may well conduce to a fair hearing of the appeal, even if the creditors have raised no plea of any kind before the special judge. In a case, however, where the creditors raise a plea that the landlord has secreted certain property and it should be included in the schedule and such property is then claimed by a third party, they may well be regarded as real parties to the controversy and failure to implead them may result in the appeal being imperfectly constituted. In the situation that arises in the present case the appeal should have been held to be properly constituted because all those who raised any controversy whatsoever as to the own ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of all the creditors, that though it is true that each creditor is interested in establishing his own debt against the landlord, he is further interested that the landlord should not be allowed to withhold any property from the court, and that if 'a claimant under section I I sets up a title to the property shown by the landlord to belong to him, although the real contest may for the time being be between the claimant on the one hand and the landlord on the other hand, it is to the ultimate interest of the entire body of the creditors that the property should be held to belong to the landlord, and if the decision is in favour of the landlord, all the creditors will be entitled to have their debts satisfied out of such property; but if, however, the decision is against them, the property will go out of the reach of the creditors and will not be available to them for the satisfaction of their debts. It was further held that as all. the creditors had not been joined as parties to the appeal and as they were interested in the result of the appeal, it could not be held that they were wholly unconcerned in the result of the case and therefore the appeal was not maintainable. It seem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal detective. In Lakshmi Narain v. Satgurnath(A.I.R. 1942 Oudh 339) another Bench of the Oudh Court took the' same view. In this case.the earlier decisions of the Oudh Court were followed The view was reiterated that creditors are parties in the proceedings under the Encumbered Estates Act. In Benares Bank Ltd., Benares v. Bhagwandas (A.I.R. 1947 All. 18), a Full Bench of the Allahabad High Court considered this question and expressed the same opinion as had been expressed in the Oudh decisions referred to above. Mr. Justice Braund, who was one of the Judges constituting the Full Bench, with great reluctance shared the opinion of the majority merely out of respect for the opinion of Pathak J. and it appears that, left to himself, he would have held otherwise. The majority judgment was delivered by Pathak J. He enunciated two tests for deciding whether a certain person was a necessary party in a proceeding: (1) that there must be a right to some relief against such party in respect of the matter involved in the proceedings in question, and (2) it should not be possible to pass an effective decree in the absence of such party, and proceeded to observe that the creditors of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... faction of decrees that may eventually be passed in their favour. In his judgment Pathak J. proceeded to observe that though the landlord is a, party to the dispute under section 11, it is obvious that the main party who is vitally interested in that dispute is the entire body of creditors, because the issue that arises out of such a -claim is whether the property which is the subject matter of the claim is liable for the satisfaction of the debts due to the entire body of creditors. This statement also, in our opinion is not very precise. It is not correct to say that the result of a decision,in such a claim makes the property liable for satisfaction of debts due to the entire body of creditors who had made claims at that stage. The property is only liable for satisfaction of decrees that may be passed subsequently under section 14. It may well be that of the persons who have been disclosed as creditor under section 8, a number of them may not at all be interested in the result of the decision of the claim under section II. It is an overstatement to make that the main party who is vitally interested in the dispute is the entire body of creditors '. The dispute relates to title ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice has been served upon them and in any event after they have filed the written statements, that they continue to remain' as parties until the debts are liquidated or proceedings terminated in accordance with the provisions of the Act. This seems to be too wide a statement of the law on the point. Can it be said that after each individual creditor obtains a decree in respect of his claim under section 14, each one of these creditors has to be impleaded as a party in an appeal preferred by that creditor or by the debtor. It is not possible to give an answer in the affirmative to such proposition. no hesitation in saying that though he ultimately abondoned n thinking that in. We have therefore Mr. Justice Braund, his view, was right administrative proceedings technical rules of the First Schedule of the Code of Civil Procedure regarding impleading of parties should not be invoked and that the matter should be viewed in a more liberal way, regard always being had to the fact that there is no collusion between the debtor and the claimant and that there are persons who are bona fide litigating in respect of the title of the claimant under section 11, and if there has been such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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