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Ningappa Neelappa Katti Vs. Adiveppa Shivappa Tuppad - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case NumberFirst Appeal No. 66 of 1938
Judge
Reported inAIR1939Bom468; (1939)41BOMLR997
AppellantNingappa Neelappa Katti
RespondentAdiveppa Shivappa Tuppad
DispositionAppeal allowed
Excerpt:
.....district court or high court-decretal amount paid in court for specific purpose-whether liable to rateable distribution as assets held by court-order for rateable distribution, whether appealable.;an order for rateable distribution under section 73 of the civil procedure code, 1908, can be passed only by the court which holds the assets.;a court of subordinate judge cannot either of its own motion, or at the bidding of another court, transfer a darkhast pending before it, unless an order for transfer is duly passed either by the district court or by the high court.;where a judgment-debtor pays the decretal amount in1 court for a specific purpose, it cannot be regarded as assets held by the court liable to rateable distribution under section 73 of the civil procedure code, 1908.;sorabji..........one manekchand filed a suit no. 623 of 1932 against the appellant in the court of the second class subordinate judge at gadag and obtained a money decree. he presented darkhast no. 240 of 1936 to recover the decretal amount by the attachment and sale of the appellant's property. the property was duly attached and was to be sold by auction on august 31, 1937. the claim in the darkhast was rs. 6,000 and odd and on august 28, 1937, three days before the date fixed for the sale, the appellant made an application, to the executing court at gadag requesting that he was prepared to pay rs. 3,000 in court for being paid to the decree-holder, manekchand, and that the sale should be postponed to the end of june, 1938. the court passed an order below that application that the amount should be.....
Judgment:

Lokur, J.

1. This is an appeal against an order passed by the First Class Subordinate Judge at Dharwar in special darkhast No. 60 of 1937 ordering rateable distribution under Section 73 of the Civil Procedure Code. The respondent obtained a decree in suit No. 73 of 1934 in the Court of the First Glass Subordinate Judge at Dharwar and presented this darkhast for its execution. One Manekchand filed a suit No. 623 of 1932 against the appellant in the Court of the Second Class Subordinate Judge at Gadag and obtained a money decree. He presented darkhast No. 240 of 1936 to recover the decretal amount by the attachment and sale of the appellant's property. The property was duly attached and was to be sold by auction on August 31, 1937. The claim in the darkhast was Rs. 6,000 and odd and on August 28, 1937, three days before the date fixed for the sale, the appellant made an application, to the executing Court at Gadag requesting that he was prepared to pay Rs. 3,000 in Court for being paid to the decree-holder, Manekchand, and that the sale should be postponed to the end of June, 1938. The Court passed an order below that application that the amount should be produced in Court. The amount was accordingly produced, and on August 30, 1937, the Court passed the following order:

The amount has been deposited. It may be paid to the decree-holders after taking security for the interest of the minor decree-holders.

The respondent then presented an application in his darkhast in the Court of the First Class Subordinate Judge at Dharwar requesting that an order should be passed for the rateable distribution of the amount of Rs. 3,000 which had been produced by the appellant in the Gadag Court. The First Class Subordinate Judge then passed the following order:

The darkhast of the Gadag Court shall be called for from that Court as applied :for.

That Court may be informed by wire at applicant's cost.

In accordance with this order the Gadag Court sent the proceedings of the darkhast to the First Class Court at Dharwar along with the amount of Rs. 3,000, which had been produced by the appellant for being paid to Manekchand, the decree-holder in that darkhast. The darkhast in the Gadag Court, which was darkhast No. 240 of 1936, was then registered as darkhast No. 835 of 1937 by the Court of the First Class Subordinate Judge at Dharwar. The appellant objected to the rateable distribution of the amount produced by him in the Gadag Court on two grounds, viz. that the First Class Subordinate Judge's Court had no jurisdiction to pass an order far rateable distribution and to call for the darkhast from the Gadag Court, and that, as the amount of Rs. 3,000 had been produced by him for a specific purpose, it did not amount to 'assets held by the Court' and was, therefore, not liable to rateable distribution. The lower Court overruled both these objections, and ordered that the amount should be rateable distributed between the two decree-holders. It is against that order that the appellant has come in appeal.

2. A preliminary objection was raised on behalf of the respondent that an order for rateable distribution passed under Section 73 of the Civil Procedure Code is not appealable, and that, therefore, this appeal is not competent. But the order appealed against in this case arises between the decree-holder and the judgment-debtor, and relates to the execution of the decree. It is true that if the question of the rateable distribution had been fought out between the decree-holders, then the order would not fall under Section 47 of the Civil Procedure Code and would not be appealable. But as the question involved in this case affects not only the decree-holders inter se, but it affects also the judgment-debtor, who contends that he had produced the money in Court for a specific purpose and must be harried over to the decree-holder in the Gadag Court, I think that the order for rateable distribution falls under Section 47 read with Section 73 of the Civil Procedure Code. It is therefore appealable Lalchand v. Ramdayal (1938) 41 Bom. L.R. 176.

3. The procedure adopted by the respondent in applying to the First Class Subordinate Judge's Court at Dharwar to call for the record from the Gadag Court, and then order a rateable distribution, is not warranted by Section 73 of the Civil Procedure Code. It is true that under Section 73 assets held by the Court in execution of a decree of one decree-holder are liable to be rateable distributed among all the decree-holders who have made applications for the execution of their respective decrees. But it is only the Court which holds the assets that can order the rateable distribution. Section 73 provides:

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 off 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 rateable distributed among all such persons.

The wording of this section differs materially from the wording of the corresponding Section 295 of the former Code. As observed in Dhirendrarao v. Virbhadrappa (1934) 37 Bom. L.R. 78 the old section (p. 81)

dealt, not with the assets held by the Court, but with assets which had been realised by the Court, and instead of referring as the present section does, to ant application to the Court for the execution of a decree, it refers to an applications to the Court which has realised the assets, so that, there could be no doubt that under the old section the Court to which an application had to be made was the Court which had realised the assets. It is not so clear in the present section that the Court to which the application has to be made must be the Court which holds the assets, and may not be the Court which granted the decree.

These observations were made in a case where the question was whether it was necessary for a decree-holder claiming rateable distribution to make an application for rateable distribution before the assets were realised, and it was held that it was not necessary. But, in the present case, we are not concerned so much with the Court to which the application for rateable distribution, should have been made, but with the order passed by the First Class Subordinate Judge's Court at Dharwar calling upon the Second Class Subordinate Judge at Gadag to transfer the darkhast to his Court along with the amount produced by the appellant. Even assuming that the present Section 73 of the Civil Procedure Code does not require any application for rateable distribution to be presented, still it is the Court which holds the assets that can' distribute them. The proper procedure, therefore, is to have one of the darkhasts transferred by the District Judge so that both the d&rkhasts; would be in one Court and the assets held in one darkhast may be distributed by the Court among the decree-holders who have presented the darkhasts for the execution of their decrees. The Second Class Subordinate Judge at Gadag was not bound to transfer the darkhast in his Court at the bidding of the First Class Subordinate Judge of Dharwar. It was pointed out that Section 39 of the Civil Procedure Code gives power to the Court which passed the decree to transfer it for execution to any other Court. But k is the decree itself which can be thus transferred for execution, and the decree thus transferred can then be executed by the Court to which it has been transferred. But the Court cannot either of its own motion, or at the bidding of another Court, transfer the darkhast or a suit pending before it, unless an order for transfer is duly passed either by the District Court or by the High Court.

4. It was argued that, although the procedure adopted was not correct, yet once the darkhast and the assets were transferred to the First Class Subordinate Judge's Court, the latter Court became the 'holder of the assets', and hence it was that Court which could order the rateable distribution of the assets. But it is the order of the First Class Subordinate Judge calling for the darkhast and the assets from the Gadag Court which is the subject-matter of this appeal. If that order itself is! initially wrong, and the First Class Subordinate Judge's Court at Dharwar became wrongly possessed of the assets, then it cannot be said that it has power to order rateable distribution. It follows, therefore, that the ordter passed' by the lower Court under Section 73 of the Civil Procedure! Code is ultra vires.

5. The other objection urged on behalf of the appellant must also be upheld. It is clear from the application made by the appellant to the Court at Gadag that he offered to produce Rs. 3,000 for the specific purpose of securing a postponement of the sale. The amount was intended to be paid to the decree-holder in that darkhast. The Court passed an order that the amount should be accepted, and when the amount was produced it passed a further order that it should be paid to the decree-holder. It is held in numerous cases that when the judgment-debtor pays the amount for a specific purpose it cannot be regarded as assets held by the Court liable to rateable distribution. In Sorabji Coovarji v. Kala Raghwnath I.L.R. (1911) 36 Bom. 156 where the immoveable property of the judgment-debtor was attached and the judgment-debtor produced the decretal amount in Court in order that the attachment might be withdrawn under Order XXI, Rule 55, of the Civil Procedure Code, it was held that the amount could not be treated as assets distributable under Section 73 of the Code. The reason given was that the 'assets' referred to in the section were assets held in the process of execution. The same view was taken in Ebji Umersey v. W. & A. Graham & Co. : AIR1917Bom275 , where moneys paid by a judgment-debtor to the officer arresting him in order to secure his release were held not to be assets liable to rateable distribution under Section 73 among other decree-holders who had applied for execution of their decrees. In Narayan v. Amgauda I.L.R. (1920) 45 Bom. 1094 it was held that money produced in Court under Order XXI, Rule 89, to have am auction sale set aside was not liable to rateable distribution. In the recent case of Lalchand v. Ramdayal (1938) 41 Bom. L.R. 176 the learned Chief Justice observed that the expression 'assets held by a Court' means assets received in execution and that when the assets have been paid in for a specific purpose, they cannot be applied generally in execution, so as to defeat the specific purpose. 'It seems to me clear that if a Court receives money on terms that it is to be applied for payment of the debt of A, it cannot apply the money in payment of the debt of The Court cannot commit what would be in substance a breach of trust.' These observations fully apply to the facts of the present case. The amount of Rs. 3,000 was not realised by any process in execution, but was produced by the appellant for the specific purpose of securing a postponement of the sale, and it was dearly mentioned by him in his application that the amount should be paid to the decree-holder in that darkhast. The Court accepted the amount for the purpose of its being paid to that decree-holder. It is, therefore, not open to the Court to turn round and allow the amount to be rateable distributed among all the decree-holders. That would be a breach of trust and ought not to be allowed.

6. Thus on both the grounds the appeal succeeds. I allow the appeal and set aside the order of the lower Court granting the respondent's application for rateable distribution. I further order that darkhast No. 240 of 1936 of the Gadag Court, which has been registered as darkhast No. 835 of 1937 in the Court of the First Class Subordinate Judge at Dharwar, should be sent back, along with the amount of the assets, to the Court of the Second Class Subordinate Judge at Gadag. The respondent shall pay the costs of the appellant and bear his own.


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