- (1.)The appellants are the creditor-decree holders and the respondents are the judgment debtors. The predecessors of the respondents borrowed money from the predecessor of the appellants and as a security, executed two mortgage deeds dated 12.3.1927 and 15.3.1931 mortgaging landed property consisting of zamindari property situated within the limits of Unnao Municipality as well as the property outside those limits besides Sir, khudkast. Groves and houses in favour of Manni Lal Shah, predecessor of the appellants, in the year 1934, the state Legislature of the then United provinces enacted U. P. Encumbered Estates act, 1934, hereinafter referred to as "the act", to provide a speedy remedy to liquidate the debts of the then zamindars and to ensure that repayment is made to the creditors at the reduced amount. Predecessor of the respondents made an application on 20. 10. 1936 under section 4 of the said Act and the decision on the liabilities between the parties was entrusted to the special judge appointed under the said Act. The special judge, on 29.6.1939, passed two decrees in favour of the predecessor of the appellants. The first decree was for rs. 1,76,747. 05 with interest @ 4% p. a. The second decree was for Rs. 21.595. 00 with interest @ 4% p. a.
(2.)The said decrees were transferred to the collector, Unnao for execution. The collector dealt with the decrees under section 28 of the said Act and gave an award on 24.4.1942 under section 31 of the Act whereby Manni Lal Shah, predecessor-in- interest of the appellants got encumbered estate bonds of the value of Rs. 26,900. 00 and share in unprotected properties.
(3.)U. P. Zamindari Debt Reduction Act, 1952 (hereinafter referred to as "the Reduction act") came into force. Section 19-A was enacted by the U. P. Act No. XIII of 1954 to give effect to the provisions of the Reduction Act. The respondents moved an application under section 19-A of the Encumbered act in the court of special judge, first class, Unnao on 28.1.1956 which was numbered as EE case no. 1/1956. The applications were listed before the special judge who framed eight issues. The two issues which were tried as preliminary issues are as follows :
"1.Whether the debt sought to be reduced is secured debt within the meaning of section 4 of the U. P. Zamindari Debt Reduction Act, 1952 (Act XV of 1953) or it ceased to be secured debt after passing the decree in the Encumbered estates case by the special judge 2. Whether the decree should be deemed to have been satisfied after the preparation of the final liquidation award by collector and if so, is this application not maintainable for reduction of the debt -