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Dattatraya Durgappa, Ganeshbhat Lingbhat and Anant Krishnappa Bilgi Vs. Pundlik Narayan Pandit - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtMumbai
Decided On
Case Number Second Appeal Nos. 932 to 934 of 1918
Judge
Reported in(1920)22BOMLR1001; 58Ind.Cas.992
AppellantDattatraya Durgappa, Ganeshbhat Lingbhat and Anant Krishnappa Bilgi
RespondentPundlik Narayan Pandit
Excerpt:
.....able distribution among decree-holders-application should be made before receipt of asset-sale by collector-payment of sale-proceeds to collector amounts to receipt of assets by court.;an application by a judgment-debtor to obtain a rateable distribution of assets realised in execution of a decree and held by a court must be made, under section 73 (1) of the civil procedure code, before the receipt of such assets. where an execution sale is held by the collector, such an application must be made before that officer receives the sale proceeds. - - 4. therefore in my opinion these appeals fail and must be dismissed with costs. it is perfectly true that he sometimes does remit the money, after deducting necessary charges, to the court, as he did in this case. the collector can..........of march 1915. thirteen creditors of the judgment-debtors applied for rateable distribution of the assets received in execution, the plaintiff had to hie this suit, because he objected to five of them, the present defendants nos. 1 to 5, sharing in the rateable distribution and lie had to make the other seven parties, now defendants (i to 12, as they were the other execution creditors. although as regards defendant no. 1 it was held that the restoration of the application was correct, apparently he was not allowed by the trial court to share in the distribution, and the decree of the trial court was confirmed in first appeal. he has not appealed to us_ therefore, as far as he is concerned, his application to share in the distribution must be considered as refused.2. as regards the.....
Judgment:

Norman Macleod, Kt., C.J.

1. The plaintiff obtained decree in Suit No. of 191.0 against two of his debtors. In execution of that decree the plaintiff attached certain iminovuable property belonging to the said judgment-debtors. The property was put up for sale by the Collector on the 18th of January 1915. The whole of the said proceeds wore received on the 3rd of February 1915 and were forwarded to the Court, which had sent the decree for evocation to the Collector, on the 4th of March 1915. Thirteen creditors of the judgment-debtors applied for rateable distribution of the assets received in execution, The plaintiff had to hie this suit, because he objected to five of them, the present defendants Nos. 1 to 5, sharing in the rateable distribution and lie had to make the other seven parties, now defendants (i to 12, as they were the other execution creditors. Although as regards defendant No. 1 it was held that the restoration of the application was correct, apparently he was not allowed by the trial Court to share in the distribution, and the decree of the trial Court was confirmed in first appeal. He has not appealed to us_ Therefore, as far as he is concerned, his application to share in the distribution must be considered as refused.

2. As regards the defendants 2, 3, 4 and 5 the question is whether they filed their application before the receipt of the assets within the meaning of Section 73 of the Civil Procedure Code. That section says; '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-debtor and have not obtained satisfaction thereof, the assets, after deducting the costs of realization, shall be rateably distributed among all such persons.' I first draw attention to an obvious mistake which was made by both the lower Courts, viz., that Clause 1(c) of Rule 73 applied to the facts of this case. Both Courts seem to be of opinion that in cases where the assets come to the hands of the Court by sale of immoveable property applications to share in the sale proceeds must be made, in order to be in time, prior to the sale. But Clause 1(c) of Section 73 only refers to cases of immoveable property being sold in execution of a decree ordering the sale for the discharge of an incumbrance thereon. It is only if there is a balance after discharging the expenses and the incumbrances that the balance can be rateably distributed amongst those creditors who have, prior to the sale of the property, applied to the Court. But where property has been realised in execution of a decree other than a decree referred to in w. 7D (I) (') then the important date is the date of the receipt of the assets by the Court, and the- only question is whether, when a decree has been sent to the Collector under the rules for execution and when the Collector has sold the property and received the sale proceeds, it can be said that the assets are held by the Court and have been received by it. Para 9 of the third Schedule of the Civil Procedure Code lays down what the Collector should do when he sells the property under the orders of the Court. He has to render accounts to the Court of all moneys which come to his hands and of all charges incurred by him in the exercise and performance of the powers and duties conferred and imposed on him under the provisions of the Schedule and then he shall hold the balance at the disposal of the Court. Therefore the Court on receiving an account from the Collector can direct him to pay what is due to the executing creditors and the actual cash need never come into the hands of the Court. So that if the appellant's argument were correct, it follows that there would be no time fixed before which applications should be made for rateable distribution as the assets might never be received by the Court at all.

3. I do not think it necessary to consider the question whether the Collector is the Agent of the Court. The word 'agency' generally arises in questions of contract. There' is no reason why, when the Court is given powers by Statute to appoint the Collector as its officer to execute the decree, it may not be said that the Collector is the officer of the Court with certain delegated powers, for instance, he is empowerd to confirm the sale although he has no power to set aside the sale. Since the >' . Collector has to hold the money of the sale proceeds at the; disposal of the Court, the Court can draw against those sale! proceeds and direct how they shall be dealt with in the same way as a person may draw against his balance with his bank. We must hold that when the Collector receives the sale proceeds' in execution, then the assets are hold by the Court and have been received by the Court, But the assets are received by the Court when the whole of the purchase money has been received, not when a deposit merely has been received according to the conditions of sale when the sale takes place. But when the whole of the purchase money agreed to be paid at the sale is paid to the Collector, then I think that the purchase money must be treated as assets held by the Court and received 'by the Court. Any application made thereafter by a judgment creditor for rateable distribution must be out of time.

4. Therefore in my opinion these appeals fail and must be dismissed with costs.

Heaton, J.

5. In order that the provisions of Section 73 of the Code of Civil Procedure can be applied, there must be two things: a receipt of assets and a holding of those assets by the Court. When a sale of immoveable property in execution is transferred to the Collector, the Collector or one of his subordinate officers actually receives the sale proceeds, and that is what happened in this ease. Clause 9 of the Third Schedule to the Civil Procedure Code lays down what the Collector has to do with the money that he so receives. It is quite plain from this clause that he is not directed at any time whatever to remit the money to the Court. It is perfectly true that he sometimes does remit the money, after deducting necessary charges, to the Court, as he did in this case. But whether he does that or not depends altogether upon the particular system which obtains in a particular province or district. The Collector can just as well make every payment as can the Court. It is clear therefore that theoretically there might be-and I have no doubt that actually there are-cases in which the sale proceeds, i.e., the assets, are never received by the Court at all in the narrow sense of actually being paid into Court or to one of the officials of the Court. And yet although there is no receipt of assets by the Court in the narrow sense, there can be, and rightly can be. a rateable distribution. If that is the result of the law-and it seems to me to be inevitably a possible result, and very properly' and rightly a result-then the receipts by whomsoever they are held must be deemed to be held by the Court. And they are very properly deemed to be held by the Court, because they consist of money which is at the disposal of the Court and which cannot be paid to anybody except under the Court's orders.

6. It seems to me, therefore, that in this case the law shows us, and plainly shows us, that the 3rd of February 1915, the date on which the price was paid to the Collector, is that date before which applications for rateable distribution were to be made if they were to be allowed under Section 73. The particular applications we are dealing with wore not made before that date, so they cannot be allowed.

7. The result is that the decrees of the lower Court are confirmed.


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