1. This Rule was obtained by the Gauhati Bank Limited against an order of the Subordinate Judge, Upper Assam Districts at Jorhat passed in Miscellaneous Claim Case No. 42 of 1957 whereby the claim of the opposite party No. 2--Assam Co-operative Apex Bank Limited, Sibsagar town, was allowed in respect of a sum attached by the decree-holder Bank in execution of a decree passed against Rajendra Nath Majindar Barua opposite party No. 1. The order itself is not very specific as to the amount under claim which has been allowed and accordingly there had been some confusion even as to the point to be decided.
On a reference to the record and after hearing the learned Advocates for the parties, we are satisfied that this amount in claim refers to the sum of Rs. 2,742.53 naya paise in respect of which a claim was filed by the Assam Co-operative Apex Bank Limited, Sibsagar by an application dated 20-11-1957, For the purpose of precision, I quote below the order of the learned Subordinate Judge dated 20-11-1957 :
'Record put up today. A cheque No. 405028 for Rs. 2,742.53 has been received from the Ex-Engineer, Sibsagar Dn. Office to arrange to acknowledge the cheque by returning the Hand receipt.
Keep the cheque in safe custody until necessary orders are passed.
One claimant appears (Assam Co-operative Apex Bank Ltd.) through lawyer and by a petition No. 1402 files claim against the attached amount of the J. D.
Put up in presence of the lawyers on the date already fixed (i.e. 25-11-57).'
2. The case of the claimant was that the decree-holder Bank had attached some bills of the judgment-debtor for works done by him under the Public Works Department. The money for the contract was advanced by the claimant and the judgment-debtor had no interest over the amount covered by the said bills as the works were financed by the claimant in whose favour the judgment-debtor Rajendra Nath Majindar Barua executed an irrevocable power of attorney to collect the money due to the judgment-debtor till the entire sum of Rs. 15,000/- or more advanced by the claimant was covered.
The decree-holder bank filed an objection stating that the amount under attachment was for works done before the execution of the power of attorney which was executed in favour of the claimant on 29-12-1956. The claimant adduced evidence to prove that the money due on the bills were for works done after the receipt of the money by the judgment-debtor from the claimant and they were not outstanding amounts on bills for other works done previous to the advancement of the money by the claimant to the judgment-debtor.
The learned Subordinate Judge accordingly found that the decree-holder bank failed to prove that the money was in connection with some other work done by the judgment-debtor previous to his execution of the power of attorney in favour of the claimant and it represented the dues to the judgment-debtor for works done with the advance received from the Assam Apex Bank Limited.
3. Two points were urged before the Subordinate Judge for decision, namely--(1) whether the money represented the dues of the judgment-debtor for the works done previous to the acceptance of the accommodation by the judgment-debtor from the claimant and (2) whether a charge was created in respect of the money that was due on the bills for the works done with the money received from the claimant. Both the points were decided in favour of the claimant, and as such, the claim was allowed and the decree-holder's objection was rejected.
4. The decree-holder bank has come to this Court against this order in revision alleging that the order has been without jurisdiction and is fraught with material irregularity. Mr. S.C. Das appearing for the decree-holder bank agitated before us both the points as were raised before the learned Subordinate Judge. We are reluctant to disturb the finding that the money was for the works done after the Apex Bank bad advanced the money to the judgment-debtor as alleged.
As to the second point however, we are not satisfied that either a charge was created in regard to the money due from the Public Works Department for works done by the judgment-debtor with the claimant's money or that the money covered by the cheque under attachment had in fact passed to the possession of the claimant in their own rights under the power of attorney executed by the judgment-debtor in favour of the Apex Bank on 29-12-56. Though the learned Subordinate Judge has referred to the above power of attorney in his judgment, he failed to interpret it strictly and in accordance with law. The finding on this point in the language of the learned Subordinate Judge is as follows :
'It is clear from the power of attorney and the evidence of the witnesses that the money was advanced on the clear understanding and condition that the claimant's dues would be the first charge on the bills and that the claimant would collect the money on the bills. The account Ex, 3 shows that the claimant advanced more than Rs. 15,000/- under the terms of the power of attorney. The claimant has a. lien over the bills so long this amount is not paid. Virtually the amount in the bills to the extent of claimant's dues belongs to the claimant.'
5. In our opinion this finding is incorrect in view of the terms incorporated in the power of attorney which has been placed before us.
6. The material terms in the said power of attorney are only to the effect that the Bank would demand and receive payments of the amounts due on the bills and deposit the sums so collected after deducting the commission to the credit of the loan account of the judgment-debtor in the Bank. I may for the sake of convenience reproduce the following extracts from the power of attorney which are material for the purpose of consideration in respect of this case:
'1. To prepare and sign in my name and in my behalf all bills on the P. W. D. or any other Government Department both under the Central and the State Government for payments to be made to me by the Department for the Contract Works executed by me.
2. To present the same find demand and receive payment of the amounts due on the bills and grant proper receipt for the same in my name and in my behalf.
3. To deposit the amounts so collected after deducting the commission payable to the Bank as mentioned in the Loan and Mortgage Deed executed on 29-12-56 to the credit of my Loan Account in the Bank.
X X X X
7. To do all such or other acts and deeds generally as may be necessary in the premises for claiming and recovering all amounts due to me by the P.W.D. and any other Government Department under the Central and the State Government as mentioned above.
X X X X
Be it clearly stated that the Power of Attorney has been irrevocably granted by me and shall remain irrevocable so long as the entire Loan taken by me from the above-named Bank remains unsatisfied. Be it also stated here that only a formal written discharge granted by the said Bank shall be an evidence of such satisfaction of the loan.'
7. The point is well covered by a recent decision of this Court in Bank of the East v. State of Assam, reported in AIR 1958 Assam 22. In that case the power of attorney was couched almost in similar terms and their Lordships held as follows :
'There are no words in the opening clause of the deed by which it can be inferred that the bills have been given as a security for the advances made by the bank to the contractor. There are no words indicating the transfer of the debt to the bank. The subsequent clauses of the deed also clearly show that the amounts of the bills, when realised by the bank. had to be credited to the accounts of the contractor and after having been credited to the accounts of the contractor it obviously follows, they went towards the discharge of the liability of the bank. But the money realised still remained the money of the contractor and it cannot be said that there was any transfer of the debt to the bank by the contractor under this document.'
8. Earlier to the present one, there was another decision of this Court in the case of Union of India v. Bank of the East Ltd. reported in AIR 1954 Assam 23 which was relied on in the latest decision quoted above. On a consideration of the terms in this power of attorney we cannot but come to the conclusion that in this case also the only power that was given to the claimant bank was to the effect that they would collect the bills and deposit the amounts to the credit of the contractor--the judgment-debtor on deduction of such commission as the bank would be entitled to under the contract and the money would be finally adjusted towards the dues payable by the judgment-debtor to the bank,
This would only indicate that the money remained after collection by the bank as that of the judgment-debtor and the bank held the same more or less as trustee for liquidating the judgment-debtor's liability to the claimant bank. The power of attorney does not go to show that any charge was created against this money or there was even any lien except that the claimant bank had a right to collect the money and hold the same for the debtor's benefit. This point had been considered at some length in the case reported in AIR 1954 Assam 23, and it was held therein that the power of attorney might not exclude the judgment-debtor from collecting the money independently; but that however, is not a question that arises here for decision.
9. The only point we have to consider here is whether the money covered by the attached bills for works done by the judgment-debtor could be said to be lying to the credit of the claimant. In the facts and circumstances of the case and on a perusal of the terms contained in the power of attorney, it cannot be said that the money was so lying or that it had passed into the possession of the claimant bank which was a condition precedent for allowing a claim under Rule 60, Order 21, Civil Procedure Code. In these circumstances, the learned Subordinate Judge obviously failed to appreciate the legal position and acted with material irregularity in allowing the claim in respect of the money (covered by the bills on the Public Works Department) due to the judgment-debtor and which had already been attached by the decree-holder bank.
10. The learned Advocate for the opposite parties relied on two decisions--Nathan Lal v. Durga Das reported in AIR 1931 All 62 and in D.B. Ballabh Das v. Seth Narain Prasad reported in AIR 1926 Nag 206. It is not necessary for us to discuss those cases since those cases nave no application to the facts of this case.
11. In our view the learned Subordinate Judge misconceived his jurisdiction and acted illegally in allowing the claim in respect of the sum in question. We accordingly set aside the order moved against and make the rule absolute. In the facts of the case, however, we make no order for costs.
G. Mehrotra, J.
12. I agree.