Srivastava, J. - (1.) THIS is a petition under Article 226 of the Constitution. A writ in the nature of certiorari is prayed for to quash the orders of the Commissioner and the Board of Revenue dated the 11th of November, 1960, and the 29th of April, 1961.
(2.) THE Petitioners were landlords who had applied under Section 4 of the U.P. Encumbered Estates Act. They had a residential bungalow in Faizabad which on the date of the application was subject to a mortgage. In the Encumbered Estates Act proceedings, claims were filed by the creditors including the creditor to whom the residential house was mortgaged. Decrees were passed by the Special Judge and were sent for liquidation to the Collector. Before the Collector the Petitioners made an application under Section 24 of the Encumbered Estates Act praying that the residential house be released. The application was opposed, inter alia, on the ground that as this residential house was subject to a mortgage when the application under Section 4 of the Encumbered Estates Act was made, it could not be released in view of Cl. (b) of the second proviso to Sub -section (1) of S. 24. This plea found favour with the Additional Commissioner as well as with the Board of Revenue and the application made under Section 24 of the Encumbered Estates Act for the release of the house was rejected. By the present petition the Petitioners seek the quashing of the orders of the Commissioner and the Board of Revenue on the ground that they suffer from an apparent error of law. The error pointed out is that a wrong interpretation has been put on the words of Cl. (b) of the second proviso to Sub -section (1) of S. 24. The relevant portion of S. 24 reads like this: The Collector shall first realise the value of such of the debtor's property other than proprietary rights in land as shall have been reported by the Special Judge under the provisions of Sub -section (2) of S. 19 to be liable to attachment and sale.... Provided also that the Collector shall leave to the debtor at least one residential house and the necessary furniture thereof it: (a) the debtor owns such house and furniture and desires to retain it, and (b) such house and furniture is free from any mortgage or charge.
(3.) THE contention is that as the verb "is" is used in Cl. (b) quoted above in the present tense, what the Collector has to do is to see whether on the date on which he is considering the question of release the residential house sought to be released is free from any mortgage or charge. It is not open to him to refuse to release the residential house on the ground that at an earlier stage on the date on which the application under Section 4 of the Encumbered Estates Act was made or on which the decrees under Section 14 were passed the house was subject to a mortgage or charge. It is stressed on behalf of the Petitioners that a claim having been submitted to the Special Judge by the mortgagee in whose favour the house stood mortgaged and the claim having been decreed, the mortgage stood extinguished under Section 18 of the Encumbered Estates Act. Thereafter the house became free from any mortgage or charge and could, therefore, be released in favour of the debtor in spite of the fact that at an earlier date it was subject to a mortgage. Learned Counsel also pointed out that the mortgage or charge mentioned in Cl. (b) of the second proviso in all probability referred to the mortgage or charge created with the sanction of the Collector under Section 7(2) of the Encumbered Estates Act and not to the mortgage or charge with which the property was originally encumbered before the application under Section 4 of the Encumbered Estates Act was filed.;