JUDGMENT

1. This is an appeal under Section 45, Encumbered Estates Act, against an order passed by the Special Judge of the first class, Unao, directing under the provisions of Section 151, Civil P.C., the rehearing of a claim made by certain creditors under the Encumbered Estates Act in respect of which an ex parte decree had been passed in their favour for Rs. 12,000. The circumstances in which this order was passed are these : On 5th November 1935, the applicants under Section 4 of the Act stated that upon a mortgage deed for Rs. 8,000 in favour of two brothers, Bhagwan Din and Bala Din, a sum of only Rs. 6000 was due as principal together with interest on this amount. The proceedings show that they repudiated liability in respect of the remaining Rs. 2000 as that amount was not, according to them, borrowed for legal necessity. Thereafter notices were published under Section 9 and on 14th April 1936, these creditors, Bhagwan Din and Bala Din, claimed the full amount of Rs. 8000 in respect of which the mortgage deed was executed, plus a sum of Rs. 9040 on account of interest. The order sheet shows that the last date on which these creditors were present or represented was 1st May 1936. The order sheet also shows that a date for the next hearing was fixed on each subsequent adjournment of the case, but that no intimation of the data was sent to the parties or their counsel who were not present at each hearing.

2. On 23rd August 1937, issues were framed in respect of certain claims and it was noted that Bhagwan Din and Bala Din were absent. It was ordered that the case would be ex parte against them. 30th March 1938, was fixed for further proceedings under Section 14. A decree for Rs. 12,000 was passed on that date in favour of Bhagwan Din and Bala Din upon the admission of the applicants. On 30th May 1938, these creditors made an application under Section 151, Civil P.C., or alternatively under Order 47, Rule 1. The Special Judge considered that the case was a fit one for the application of Section 151. The contention of these creditors was that they had not attended the proceedings under Section 14 because no notice was given to them under that section as required. Under Sub-section (1) of Section 14 the Special Judge shall, by an order in writing, fix a date for enquiring into the claims made in pursuance of the notice published in accordance with Section 8 and give notice of such date to all the claimants and the persons who made the application under Section 4. The opposite parties contended that these creditors had knowledge of the date fixed for hearing their claim. They produced one witness to support this contention, but the Special Judge found that his evidence was worthless and nothing has been said in this Court against this view. The Special Judge thought that the case was a fit one for the application of Section 151 because notice had not been issued to these creditors as required by Section 14.

3. We were in some doubt at first as to whether this was a fit case for the exercise of the Special Judge's discretion under Section 151 because it appeared from the entry in the order sheet of 30th March 1938, that counsel for these creditors was present on that date. Bhagwan Din and Bala Din were creditors Nos. 2 and 3 in the proceedings under the Encumbered Estates Act. The statement in the order sheet in question reads: "The counsel for creditor No. 2 now admits the debts due to Ganga Shankar creditor." Ganga Shankar was another creditor in the case and it appeared at first as if one creditor was disputing the amount due to another creditor. From the English record of the proceedings, however, we are satisfied that this was not the case. There was this entry in the record of the English proceedings of 30th March 1938: "The counsel for creditor No. 1 now admits the debts due to Ganga Shankar creditor." We are satisfied from this that the reference to the counsel for creditor No. 2 in the order sheet was a mistake for th