Judgement

WANCHOO, CJI. : - The appellant obtained a decree for over Rs. 41,000 against Modern Electric Iron and Brass Works, Delhi which was the property of two partners, namely, Mohd. Sabar and Noor Mohd. Butt, in January 1950. He also obtained another decree for over Rs. 95,000 against the same two persons and one more to which proceeding the Custodian of Evacuee Property (hereinafter referred to as the Custodian) had also been made a party. Before, however, the first decree was obtained by the appellant Mohd. Sabar and Noor Mohd. Butt had in April 1947 executed two deeds of release with respect to their property in favour of their wives. Later Mohd Sabar and Noor Mohd. Butt and their wives migrated to Pakistan and their properties were declared evacuee properties under the Administration of Evacuee Property Act No 31 of 1950 (hereinafter referred to as the 1950-Act). Under Section 10 of the 1950 Act the Custodian had the power to pay any debt due from the evacuee to any person subject to rules framed thereunder. Further under the Rules a person to whom an evacuee owed money could apply for registration of his claim and the Custodian could register such claim; but mere registration of a claim did not entitle the claimant to payment and the Custodian could refuse payment for reasons to be recorded.

2. The claim of the appellant, based on the first decree passed in his favour, was registered by the Custodian. But in June 1950 the Custodian held that the evacuee property in question in the present case belonged to the wives of the judgment-debtors (namely, Mohd. Sabar and Noor Mohd. Butt). He futher directed the appellant to go to the civil court to get the release-deeds set aside. On November 28, 1955, the appellant filed the suit out of which the present appeal has arisen in the court of the Subordinate Judge First Class Delhi claiming that the release-deeds in question were of no effect as being in fraud of the creditors. He claimed a declaration that the building in suit belonged to Mohd. Sabar and Noor Mohd. Butt and not to their wives and that the release-deeds of April 1947 were fictitious and fraudulent and intended to defeat and delay the creditors and were not binding on the appellant. He also claimed that the Custodian was bound to open the account of the income of the said building in the names of Mohd. Sabar and Noor Mohd Butt and the proceeds of the said building were bound to be adjusted against the claims of the appellant.

3. The suit was resisted by the Custodian and the Union of India. Their case firstly was that the civil Court had no jurisdiction to entertain the suit. Secondly, it was pleaded that the property in dispute which was a building in the city of Delhi had been acquired by the Central Government in pursuance of a notification issued on June 3, 1955, under Section 12 of the Displaced Persons (Compensation and Rehabilitation) Act, No 44 of 1954, (hereinafter referred to as the 1954 Act) and therefore the appellant could not get a declaration to the effect that the proceeds of the suit building should be adjusted against his claim. The appellant had also pleaded in his plaint that the acquisition of the building by the notification of June 3, 1955 was subject to his rights and that in any case the notification and Section 12 of the 1954 Act were ultra vires.

4. Originally, the trial court dismissed the suit holding that as the property in suit had been acquired by the Central Government by the notification dated June 3, 1955, the appellant could not claim to proceed against the property or its income. The appellant went in appeal and the appellate court remanded the suit on the ground that the appellant s plea that the notification and Section 12 of the 1954-Act were ultra vires had not been decided. When the suit went back for re-trial on his issue, the appellant applied for transfer under Article 228. of the Constitution to the High Court praying that the constitutional issue be first determined by th