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Baboo Raj Narain vs Ahmadi Jan

High Court Of Judicature at Allahabad|23 October, 1940


JUDGMENT Iqbal Ahmad, J.
1. This is an appeal by a creditor against an order passed by a special Judge, first grade, exercising jurisdiction under the Encumbered Estates Act (25 of 1934) and arises under the following circumstances. Ahpaadi Jan, who is respondent in the present appeal, filed an application under Section 4 of the Act on 17th October 1936. Her application was, in due course, transmitted by the Collector to the special Judge and, thereafter, Ahmadi Jan filed a written statement in accordance with Section 8 of the Act. One of the debts shown in the written statement was the debt due on the basis of a mortgage deed dated 22nd November 1928, executed by Ahmadi Jan in favour of Mt. Morni, the wife of Raj Narain, appellant. The allegation contained in the written statement with respect to this debt was that the debt was, as a matter of fact, advanced by one Ram Ghulam and that Mt. Morni was a mere benamidar for him (Ram Ghulan). It was also alleged that, Ram Ghulan having died, his legal representatives were Raj Narain and Pirbhu Narain, and that the last two named persons were the real mortgagees under the said mortgage deed. The names of Raj Narain and Pirbhu Narain were shown in the array of the creditors mentioned in the written statement with the result that the notices prescribed by Section 9 were issued to these two persons. The notices were served personally on Raj Narain and Pirbhu Narain in January 1937. The notice in the Gazette was published on 1st May 1937. But, before the publication of the notice in the Gazette, Morni filed a written statement of her claim with respect to the mortgage debt on 31st March 1937. It is not disputed that the written statement of Morni was within the time prescribed by Section 9 of the Act. It is also a fact that neither Raj Narain nor Pirbhu Narain filed a written statement, within the time allowed by Section 9, claiming to be entitled to the mortgage debt.
2. Morni died on 7th August 1937, and thereafter, on 6th October 1937, Raj Narain filed an application praying that, as he was the real mortgagee, his name be substituted for Mt. Morni. Pirbhu Narain also filed an application on 4th December 1937, alleging that the mortgage debt was advanced by a joint family of which Ram Ghulam, Pirbhu Narain and Raj Narain were members and that, on the death of Ram Ghulan, both Pirbhu Narain and Raj Narain were entitled to the mortgage debt. On this allegation, Pirbhu Narain also prayed to be substituted as a legal representative of Mt. Morni. These applications of Raj Narain and Pirbhu Narain were opposed by Ahmadi Jan, the landlord applicant, on the ground that the applications, in fact and in substance, were written statements of claim within the meaning of Section 9 of the Act and, as they were filed after the expiry of the period prescribed by that section, they were time-barred. In view of the respective contentions of the parties the learned Judge framed the following issues:
(1) Whether the claim of Raj Narain is or is not timebarred?
(2) Whether the mortgage debt due under the mortgage deed dated 22nd November 1928, executed by Mt. Ahmadi Jan in favour of Mt. Morni deceased, belongs to Raj Narain aforesaid alone or to him and Pirbhu Narain jointly?
3. On issue 1 the learned Judge held that the application of Raj Narain dated 6th October 1937, was tantamount to a written statement of claim under Section 9 and, as it was filed more than five months after the publication of the notice in the Gazette, it was barred by limitation. In this view of the matter, he concluded that the debt due on the basis of the mortgage deed must be deemed to be discharged under Section 13 of the Act. Having arrived at these conclusions, he refrained from deciding issue No. 2 noted above and dismissed "the claim" of Raj Narain. In our judgment the decision of the Court below cannot be supported.
4. It is common ground that the position of Mt. Morni was that of a benamidar, and the only dispute in the case was whether she was a benamidar for Raj Narain or was a benamidar for Pirbhu Narain also. The consideration of the case must therefore be approached on the assumption that Mt. Morni was not the real mortgagee and was a benamidar, either for Raj Narain alone, or both for Raj Narain and Pirbhu Narain. It is well settled that a benamidar represents the real owner, and, so far as their relative legal position is concerned, is a mere trustee for him (the real owner). It is also beyond dispute that an action can be maintained in the name of the benamidar in respects of the property that stands in his name although the beneficial owner is no party to it : vide Gur Narayan v. Sheo Lal Singh ('18) 5 A.I.R. 1918 P.C. 140. That being so, it is clear that Morni had the right of putting the mortgage deed into suit and, if she had sued in her name, it would have been no answer to her claim that she was not the real mortgagee and was a mere benamidar. It. follows that Morni, even though a benamidar was entitled to prefer a claim in the proper Court for the realization of the mortgage debt. Because of the enactment of the Encumbered Estates Act, the right of the creditors to resort to the ordinary Courts of law for the recovery of the debts due to them is, in cases coming within the purview of the Act, barred and a substituted remedy has been provided by the Act. This substituted remedy is prescribed inter alia by Sections 9 and 10 of the Act. By those sections a creditor has the right to put forward a claim in respect of the debt due from the landlord. Mt. Morni had therefore the right to have recourse to this substituted remedy. In other words, she had the right to file a written statement of claim in accordance with the provisions of Sections 9 and 10 of the Act. This, as already stated, she did within the prescribed period of limitation. The claim preferred by her was, therefore, within time and, if she had been alive, that claim would have had to be adjudicated upon in due course by the special Judge in accordance with the provisions of Section 14 of the Act. Mt. Morni, however, died before the claim preferred by her had been adjudicated upon. On her death, her legal representative had the right to be substituted in her place and to continue the prosecution of the claim preferred by her: vide Gokaran Singh v. Brij Bhukan Singh ('39) 26 A.I.R. 1939 All. 717. As observed in the case just quoted, it was the duty of the landlord applicant to have taken appropriate steps to bring upon the record the legal representatives of Mt. Morni after her death.
5. The question, then, arises whether Raj Narain was or was not the legal representative of Mt. Morni. In our judgment he was. A benamidar being a trustee for the beneficial owner has at least the trustee's estate vested in him and, on the death of the benamidar, it is open to the beneficial owner to say that he would thenceforward represent that estate. If the beneficial owner chooses to adopt such a course, the trustee's estate and the estate possessed by the beneficial owner merge in one and the same person, vis., in the beneficial owner. In the present case, Raj Narain being admittedly one of the beneficial owners had, therefore, the right to ask to be substituted as the legal representative of Mt. Morni after her death. This is what Raj Narain prayed for by his application dated 6th October 1937. The learned Judge was, therefore, wrong in not acceding to that application. The true nature and effect of that application have been totally misunderstood by the learned Judge. It was not, as held by him, a written statement of claim within the meaning of Section 9. It was a bare application to be substituted on the record in place of Mt. Morni who had already preferred the claim. There was, therefore, no question of the claim being barred by time. For the reasons given above, we allow this appeal, set aside the order of the Court below dated 5th November 1938, and remand the case to that Court for decision according to law. It is needless to observe that issue No. 2 quoted above will also have to be decided by the learned Judge. The appellant is entitled to the costs of this appeal.
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Baboo Raj Narain vs Ahmadi Jan


High Court Of Judicature at Allahabad

23 October, 1940