Satish Chandra, J. - (1.) This special appeal is directed against the judgment of a learned single Judge partly allowing a writ petition. The writ petition, which was filed by the respondent Gauri Shanker, an unsecured creditor of the appellants-debtors, was directed against orders passed in liquidation proceedings under the U.P. Encumbered Estates Act, 1934.
(2.) On 13th April, 1937, respondent Gauri Shanker's claim was decreed for Rs. 1,33,671/- (comprising Rs. 90,000/- principal and Rs. 43,671/- interest up to the date of the application) with pendente lite and future interest at 41 per cent. This was an unsecured debt. It was ranked in class (6).
(3.) On 25-5-1964 the Additional Collector, Saharanpur, framed a provisional liquidation award. Gauri Shanker filed objections. They were, however, dismissed and the award was affirmed by the Additional Collector on 25-8-1964. Gauri Shanker preferred an appeal which was, however, dismissed by the Additional Commissioner, Meerut. The Board of Revenue affirmed this decision and dismissed the revision filed by the creditor. These authorities unanimously held that the decree of an unsecured creditor like Gauri Shanker was liable to be satisfied out of the compensation bonds and rehabilitation grant, after scaling down his debt under Sec. 9 of the U.P. Zamindars' Debt Reduction Act, 1952. It was also held that this creditor was not entitled to payment of any part of his decree from out of the cash moneys realised by the sale of non-zamindari property of the debtors and which still remained in the hands of the Additional Collector after satisfying the priority debts.;