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Narayan Ganesh Varde Vs. Fatma Daud Taraporwala and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai High Court
Decided On
Case NumberCivil Revn. Appln. No. 258 of 1948
Judge
Reported inAIR1952Bom70; (1951)53BOMLR821; ILR1952Bom83
ActsCode of Civil Procedure (CPC), 1908 - Sections 64 and 73 - Order 21, Rules 43 and 74 - Order 38, Rule 11
AppellantNarayan Ganesh Varde
RespondentFatma Daud Taraporwala and anr.
Appellant AdvocateM.M. Virkar, Adv.
Respondent AdvocateM.H. Shah, Adv.
Excerpt:
.....of defendant--sale of property pending suit--money deposited in court to credit of first creditors suit--attachment made absolute under money decree--application for execution praying for satisfaction of decree from court deposit--second creditor of same defendant attaching same property before judgment--attachment made absolute under his money decree--application for execution--whether second creditor entitled to rateable distribution with first creditor.; one v had applied for attachment before judgment of a certain movable property of the defendant. the attachment was granted and it was made absolute under the money decree obtained by v on january 23, 1948. the property being of perishable nature was sold pending v's suit and the amount realised was placed in court to the credit of..........property of the defendant. the attachment was granted and the same was made absolute under the decree. opponent no. 2 also had applied for attachment before judgment upon the defendant's moveable property and that attachment too was made absolute under the decree.[3] the moveable property in respect of which attachment was sought and levied happened to be property of a perishable nature and it appears that the property was sold, pending the opponent's suit and a sum of rs. 1,412 was realised as a result of the sale. this sum of rs.1,412 was placed to the credit of suit no. 191 of 1947, that is to say, in the suit of opponent no. 2.[4] on 27-1-1946, that is to say, about four days after obtaining his decree, opponent no. 2 filed darkhast no. 32 of 1948, and in the prayer clause of the.....
Judgment:

Dixit, J.

[1] This revisional application raises aquestion of rateable distribution under Section 73, CivilP. C. and the facts necessary to understand thequestion are these.

[2] The applicant obtained against Opponent No. 1 a decree for a sum of Rs. 2,386-9-0 in civil Suit No. 196 of 1917 on 7-2-1948. Opponent No. 2 to the application obtained a money decree for a sum of RS, 1,285-6-0 against the same defendant in civil suit no. 191 of 1947 on 33-1-1948. The petitioner had applied for attachment before judgment upon the moveable property of the defendant. The attachment was granted and the same was made absolute under the decree. Opponent No. 2 also had applied for attachment before judgment upon the defendant's moveable property and that attachment too was made absolute under the decree.

[3] The moveable property in respect of which attachment was sought and levied happened to be property of a perishable nature and it appears that the property was sold, pending the opponent's suit and a sum of Rs. 1,412 was realised as a result of the sale. This sum of Rs.1,412 was placed to the credit of Suit No. 191 of 1947, that is to say, in the suit of opponent No. 2.

[4] On 27-1-1946, that is to say, about four days after obtaining his decree, Opponent No. 2 filed darkhast No. 32 of 1948, and in the prayer clause of the darkhast he stated that he should be given the sum of Rs. 1,412 which lay to the credit of his suit and which amount was recovered as a result of a sale of the moveable property of the defendant. Upon the application for execution, the executing Court made an order on 30-1-1948, directing notice to the plaintiff in civil suit No. 201 of 1947 and Civil Suit No. 196 of 1947 to issue. It appears that the notice was made returnable on 10-2-1943, and the matter stood adjourned to 19-2.1948. Upon the latter date, viz, 19-2-1948, the petitioner applied for execution of his own decree by darkhaat no. 31 of 1948. In the application for execution the petitioner in prayer Clauses 10 stated that there was in the Court a deposit of Rs. 1412 and that ho should be given rateable distribution with the decree-holder in regular darkhast No. 22 of 1918.

[5] The executing Court considered this dispute between the two rival decree-holders and the learned Judge of the executing Court made on 30th March 1948, an order directing that the decree-holder of darkhast No. 32 of 1943 was entitled to get the whole of his decree satisfied out of the amount lying in Court, and it is the correctness of this order which has been assailed by Mr. Virkar on behalf of the petitioner.

[6] Now, there are certain facts about which there can be no dispute. In the first place, the two decrees are decrees for the payment of money. The decrees in question have been passed against the same judgment-debtor. The two decree-holders have also applied for execution of the money decrees, and the question is whether the applicant is entitled to claim rateable distribution in the sum of Rs. 1413 with opponent No. 9.Section 73 which has a bearing upon this question, so far as material, runs as follows :

'Where assets are held by a Court and more persons than one have, before the receipt of such assets, made application to the Court for the execution of decrees for the payment of money passed against the same judgment mane-debtor and have not obtained satisfaction thereof, the assets, after deducting the coats of realization, shall be rateably distributed among all such persons.'

[7] The words in Section 73 which require construction are (1) 'where assets are held by a Court' and also the words 'before the receipt of such assets.' It is, I thick, apparent from the language of Section 73 that the question of rateable distribution must arise of necessity, in the course of execution proceedings. The decree must be a decree for the payment of money. The decree must be passed against the same judgment-debtor and there must be an application for execution to the Court before the receipt of the assets. Now, in this case, the applicant had applied for attachment before judgment. So too opponent No. 2 had applied for attachment before judgment. Each of them had got attachment levied upon the move-able property of the same judgment-debt or, viz, the defendant in the suit, and the attachmentwas made absolute under each of the two decrees. But Mr. Shah for the second opponent contends that he is entitled to a preferential treatment because the moveable property was attached in his suit, that the moveable property was sold in the course of his suit and that the sale proceedswere credited in his suit. It seems to me that the contention is not well founded. An attachment does not create any interest in the property attached. It does not create any lien in favour of opponent No. 2, It only prevents alienation of the property on the part of the judgment-debtor, so that if the judgment-debtor alienates the property contrary to attachment, then the alienation becomes void as against all claims enforceable under the attachment under Section 64, Civil P. 0. Now, in this case, since the property had been attached before judgment, it was not necessary to reattach it in the course of execution proceedings, having regard to the provisions contained in Order 38, Rule 11 of the Code. The result is that when opponent No. 2 applied for attachment of the property, the attachment which was originally attachment before judgment became one in execution. But it so happened in this case that the amount of RS. 1,412 was lying in the game Court, that is to say, the custody Court and the attaching Court were the same. In most cases it is not difficult to ascertain the date of the receipt of the assets. If immoveable property is sold and the sale proceeds are realised by the Collector, the amount of sale proceeds is sent to the Court and the date of the receipt of the sale proceeds is the date when the Court receives the assets; so too in the case of sale of moveable property. In this case, since the moveable property was of a perishable nature, the moveable property wassold when the suit was pending. Ordinarily, if the property is not attached, the property will have to be attached under Order 21, Rule 43 of the Code, and the property will have to be sold under the provisions of Order 21, Rule 74 of the Code. But in this case there was no necessity of selling the property since the property had been already Bold.

[8] The question, therefore, arises as to when the assets can be said to have been received by the Court. Now, in order to entitle a person to claim rateable distribution the assets must be assets held by a Court, and, secondly, the person claiming rateable distribution must have made an application for execution of his decree before the receipt of such assets. It appears from a certified copy of darkhast No. as of 1948 that the sum of Rs. 1,412 was credited in a book called 'o' book of the Court on 8th December 1947. It is obvious that the moveable property was sold either on 8th December 1847, or on a date prior to that date. The material date so far as the petitioner is concerned is the date when he filed the execution application, viz. 19th February 1948. In order to succeed, Mr. Yirkar has to establish that the assets were received by the Court on a date subsequent to the date of his application for execution, viz. 19th February 1948. It is clear from the facts of the case that the sum of Rs. 1,412 was lying in suit No. 191 of 1947 to the credit of the suit of opponent No. 2 and it continued in that state of things until the Court made an order on 20th March 1948, directing that out of the amount lying in Court the opponent's decree should first be satisfied. Mr. Virkar for the petitioner relies upon a decision of the Madras High Court reported in Nachi-appa Chettiar v. Subbier, 46 Mad. 506. The faota of that case have, to some extent, a close resemblance to the facts of the present case and it will be convenient to mention the facts in some detail. In that case A having instituted a suit in a District Munsif's Court, obtained attachment before judgment of certain goods belonging to the defendant. The goods were sold pending the suit and the sale-proceeds deposited in the Court to the credit of that suit on 14th April 1917. B, another creditor, instituted a suit in the same Court against the same defendant, obtained attachment before judgment of the amount deposited in Court on 14th April 1917, and went on to obtain a decree on I9th April 1917, and he applied on 7th June 1917, in A'S suit for payment of the amount in deposit in satisfaction of his decree, C, a third creditor, obtained a decree against the same defendant on 8th June 1917, and applied for payment on a9th June 1917. A obtained his decree on 2nd July 1917, and applied on 3rd July 1917 for payment out of the whole money deposited in his suit. On 31st August 1917, the District Munsif made an order in his favour, but B objected to the order upon a revisional applicationpreferred by him in the High Court, Upon these facts, the Madras High Court held that the amount deposited in Court became 'assets held in Court' within the terms of Section 73, Civil P. C., only when the Court passed an order on the application of A for payment in execution of his decree and A, B and c were entitled to rateable distribution under Section 73.

[9] The decision of the Madras High Court arose upon an appeal preferred under the Let-term Patent from the decision of Sadasiva Ayyar J. whose opinion prevailed in preference to the view of Coutts-Trotter J. That matter again arose out of the decision given by Bakewell J. Both Bakewell and Coutts-Trotter JJ. took the view that B was not entitled to claim rateable distribution but that A was entitled to the whole of the amount. It is apparent that there was in the Madras High Court a difference of opinion upon the question, hut the three learned Judges in the decision just cited held that all the three decree-holders were entitled to rateable distribution. In our opinion, the principle of the Madras High Court should be applied to this case with the result that the monies must be taken to have been received by the Court on 20th March 1948, when in this case the lower Court made an order (or payment to opponent No. 2. In this case the custody Court and the attaching Court were the same. When the two Courts are different there is not much difficulty in ascertaining the date when the money can be said to have been received by the Court, The difficulty arises when both the Courts happen to be the same, and as ; as we have been able to gather from the facts of this case the sum of Rs. 1,412 continued to the credit of suit No. 191 all along until the date 20th March 1948, when the Court said in effect: 'assets we held by me and I have now to distribute the same', and it was upon that date the executing Court made an order directing payment to be made to opponent No. 2.

[10] The deoision of the Madras High Court in Nachiappa. Ghettiar's case 46 Mad. 506 (supra) was approved in a later decision of the Madras High Court reported in the case of Imperial Bank of India v. Balaubramania Pandia A. I. R. 1945 Mad. 412 In that case the Madras High Court considered the earlier cases reported in Visvanadhan Chetty v. Arunachelam Chetti, 44 Mad. 100 and Nachiappa, Chettiar v. Subbier, 46 Mad. 506. It seems to us, therefore, that in the face of the two authorities just cited, it is not possible for Mr. Shah to successfully contend that merely because the moveable property had been sold in his suit and the money was lying in the Court to the credit of his suit, he was entitled to any preferential treatment. The object underlying Section 73, Civil P. C., was stated by the learned Chief Justice of the Allahabad High Court in Bithal Das v. Nand Kishore, 23 ALL. 106, as follows:

'The object of the section is two old. The first object is to prevent unnecessary multiplicity of execution proceedings, to obviate, in a case where there are many decres holders, each competent to execute his decree by attachment and sale of a particular property, the necessity of each and every one separately attaching and separately selling that property. The other object is to secure an equitable administration of the property by placing all the decree-holders in the position 1 have described upon the same footing, and making the property rateably divisible among them, instead of allowing one to exclude all the others merely because he happened to be the first who had attached and sold the property,'

[11] In this case, the facts proved are that both the petitioner and opponent No. 2 had obtained decrees for the payment of money and bad applied for attachment before judgment and in eacb case the attachment was made absolute. It so happened that opponent NO 2. obtained his decree before the petitioner obtained his. Consequently, opponent no. 2 applied for execution of his decree before the petitioner could apply for execution of his own decree. But that makes no difference to the application of the principle. As usually happens, a creditor applies for execution of his decree. The property of the debtor is attached and sold in the course of execution proceedings and long after the first application for execution other creditors come in and apply for execution of their decrees and in such cases the Court has to consider whether they are entitled to rateable distribution. They are entitled to rateable distribution provided they apply for execution of the decrees before the receipt of the assets. In our opinion, therefore, the lower Court was wrong in holding that the applicant was not entitled to claim rateable distribution along with opponent no. 2. Consequently, the application must succeed.

[12] The result is that this application will be-allowed, the order of the executing Court dated20-3-1948 set aside and that the proceedings willbe sent back to that Court with a direction thatthe sum of Rs. 1,412 will be rateably distributedbetween the applicant and opponent No. 2 and thedarkhasts disposed of in accordance with law.Opponent No. 2 will pay the applicant the costs ofthe revisional application and the costs in theexecuting Court will be dealt with by that Court.

[13] Revision allowed.


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