1. This is an appeal from a judgment of Mr. Justice Coyajee by which he dismissed a notice of motion to set aside an insolvency notice dated December 19, 1952. The insolvency notice callea upon the appellant to pay a sum of Rs. 35,000, being the balance of the amount due under a decree obtained by the respondent against the appellant in suit No. 842 of 1952 filed in the High Court of Calcutta. The insolvency notice was sought to be set aside on two grounds. The first ground 'was that the execution of this decree had been stayed, and the other ground was that the appellant did not reside or carry on business within one year from the date of the insolvency notice as required by the Insolvency Act.
2. Turning to the first point, suit No. 842 of 1952 was a suit for dissolution of partnership and accounts and it was filed on March 4, 1952. The decree in this suit was passed on March 31, 1952. Under this decree the appellant became liable to pay Rs. 50,000 by certain instalments. Another suit was filed by one Joharmal Bose against the respondent, the appellant and others, being suit No. 2386 of 1952. The claim in this suit was Rs. 8,000. Joharmal applied for an attachment before judgment on the day on which the suit was filed, via. June 19, 1952, and what he sought to attach was the decree in suit No. 842 of 1952. An order was passed by the High Court of Calcutta on that application on June 19, 1952, and the contention of the appellant is that it is this order which operates as a stay of the decree in suit No. 342 of 1952.
It is urged by Mr. Laud on behalf of the appellant that the order passed by the High Court on 19-6-52, operates as an attachment & the effect of the attachment is to prevent the respondent from executing his decree in suit No. 842 of 1952. On the other hand, it is contended by Mr. K. T. Desai on behalf of the respondent that although the High Court might have passed an order on June 19, 1952, no attachment was levied pursuant to that order and a distinction has got to be made in law between an order of attachment and the attachment levied pursuant to that order; and it is further urged that it is only when the order is effectuated by an attachment being levied pursuant to that order that it could be said that the attachment is complete and the consequences of the attachment would follow.
For this purpose Mr. Desai relies on a decision of the Privy Council in' -- 'Muthiah Chetti v. Palaniappa Chetti', AIR 1928 PC 139 (A). That was a case where the Privy Council was considering the provisions of Order XXI, Rule 54, and the Privy Council considered the scheme of the Civil Procedure Code with regard to attachments, and: their Lordships point out that the order passed by the High Court is one thing and attachment is another, and the real thing is not the order but the attachment. They also point out that the provisions of the Code of Civil Procedure make it amply clear that the Legislature intended to. prevent a mere order of a Court from effecting attachment, and plainly indicating that the attachment itself is something separate from the mere order and is something which is to be done and effected before attachment can be declared to have been accomplished, and their Lordships considered the provisions with regard to attachment of shares of moveables, shares of salary, and. attachment of partnership property.
It is rather significant that their Lordships did. not expressly consider the provisions with regard to attachment of a decree, but they do point out at p. 142 that no property can be declared to be attached unless first the order for attachment has been issued, and, secondly, in execution of that order the other things prescribed by the rules in the Code have been done. Therefore, it is clear that we must look to the Code itself in order to find out what are the things prescribed by the Code which have got to be done in order that the attachment should be effective.
3. Turning to Order XXI, Rule 53, Sub-rule (1) deals, with decrees to be attached which are for money or for sale in enforcement of a mortgage or charge, and Clause (a) deals with decrees to be executed and to be attached being passed by the same Court, and Clause (b) deals with the case where the decree sought to be attached was passed by another Court. In the second class of cases where the decree sought to be attached was passed by another Court, the attachment is by issue to-such other Court of a notice by the Court which passed the decree sought to be executed, requesting such other Court to stay the execution of its decree unless and until the two conditions set out in that clause are satisfied.
It is instructive to note that as in the case of attachment of other property as far as Clause (a) is concerned the Code does not make any provision for the levying of the attachment, it does not indicate what has to be done in order that the order of attachment should be effectuated. In the case of decrees falling under Clause (b) the Code-does prescribe what has got to be done, and that is the issue of a notice to the Court which passed the decree sought to be attached. Sub-rule (2) of Rule 53 enables both the attaching creditor and his judgment-debtor to execute the decree attached.
Sub-rule (3) makes the attaching creditor the representative of his judgment-debtor for the-purpose of executing the decree. Sub-rule (4) deals with decrees other than those mentioned in Sub-rule (1), and it is again significant to note that in the case of such decrees Sub-rule (4) provides that the attachment shall be made, by a notice by the Court which passed the decree sought to be executed, to the holder of the decree sought to be attached, prohibiting him from transferring or charging the same in any way. Therefore, it is only in the case of decrees which are other than decrees referred to in Sub-rule (1) that the attachment has to be made by a notice being served on the holder of the attached decree.
Therefore, Sub-rule (4) makes it perfectly clear that in the case of decrees which fall in Sub-rule (1) attachment has not to be made by a notice being served upon the holder of the attached decree. ' That again makes it clear that as far as Sub-rule (1) is concerned, the attachment can be made without following the procedure laid down in Sub-rule (4). Sub-rule (6) provides for the Court giving notice of the order of attachment to the judgment-debtor bound by the decree attached, and it provides that no payment or adjustment of the attached decree made by the judgment-debtor in contravention of such order after receipt of notice thereof, either through the Court or otherwise, shall be recognised by any Court so long as the attachment remains in force.
It may be urged that the expression 'on the application of the holder of a decree' refers to the main application made by the holder under Rule 53, Sub-rule(1), but the better view is that the application contemplated by Sub-rule(6) is an independent application which the holder of a decree sought to be executed has to make if he wants the judgment-debtor of the decree sought to be attached to be bound by the attachment. It is clear from the position in which Sub-rule(1) is to be found in Order XXI, Rule 53, that the intention of the Legislature was not that the notice to be issued by Sub-rule(6) was the mode of effecting the attachment under Rule 53, Sub-rule(1).
If that had been the intention, then one would have found this provision not in Sub-rule(6) but in Sub-rule(1) itself and as part of Sub-rule(1); and we find that a Pull Bench of the Madras High Court in -- 'Lakshminarasimham v. Lakshminara-simham', AIR 1927 Mad 728 has taken the same view. There the learned Judges were considering a case that fell under Clause (b) of Sub-rule (1) of Rule 53, and the view taken was that notice under OrderXXI, Rule 53 (6), was not necessary for the purpose of completing the attachment of the decree. The attachment is effectuated by the service of notice on the Court which passed the decree.
4. Now, looking at the scheme of Rule 53 as a whole, the position now appears to be fairly clear. Where the decree which is sought to be executed and the decree which is sought to be attached were passed by the same Court, then all that is necessary in order to effectuate the attachment is an order passed by the Court. The Code does not provide for any further steps to be taken in order to make the attachment complete. It is clear that the effect of the attachment would be to prevent the holder of the decree attached from receiving any payment from the judgment-debtor contrary to the attachment. The principle underlying Section 64 of the Civil Procedure Code would come into play, and it has been pointed out that Order XXI, Rule 53 (6), is a statutory- exception to the principle underlying Section 64.
In other words, unless a notice is served upon the Judgment-debtor bound by the decree attached, any payment by him to his Judgment-creditor would give him a proper discharge. Therefore, It the holder of the decree which is sought to be executed wishes to protect himself, he must give notice under Sub-rule (6) of Rule 53 to the judgment-debtor to the decree attached.
But whatever the position of the judgment-debtor of the decree attached might be, it is clear that as far as the holder of the decree attached is concerned, an order passed under sub-Rule (1) of Rule 53 must operate as a stay of execution. He would be prevented from executing the decree & receiving from his judgment-debtor the amount, due under the decree, and the stay can only be got over provided the conditions of executing the decree laid down in Sub-rule (2) are carried out, and that is that he must make an application for execution and the net proceeds in satisfaction of the decree are applied to the credit of the decree sought to be executed.
Therefore, although an attachment would operate as a stay to the extent that the decree-holder cannot execute the decree for his own benefit, he as well as the holder of the decree sought to be executed may both apply for execution under Sub-rule (2) But as just pointed out that application for execution, as far as the holder of the decree attached is concerned, would not be for his own benefit but for the benefit of the holder of the decree sought to be executed.
Therefore, we would be inclined to accept the contention put forward by Mr. Laud that if there was an order passed by the Calcutta High Court in terms of OrderXXI, Rule 53 (1) (a), such an order would operate as a stay of execution. As soon as such an order was passed, the Judgment-creditor would no longer be entitled to call upon his judgment-debtor to pay to him any amount in satisfaction of the judgment debt. He could only execute the decree as provided by Sub-rule (2) But 'quae' his own judgment-debtor and 'quae' the satisfaction of the decree as far as he himself was concerned, Rule 53 (1) (a) would operate as a stay.
5. We must now turn to the order of the Calcutta High Court itself to see whether it is an order contemplated by Rule 53 (1) (a), in the first place it must be borne in mind that this was an application for attachment before judgment. Therefore the application fell under Order XXXVIII, and Order XXXVIII, Rule 5, provides that when the conditions laid down in that rule are satisfied, the Court may direct the defendant within a time to be fixed by it, either to furnish security in such sum as may be specified in the order, to produce and place at the disposal of the Court, when required, the said property or the value of the same, or such portion thereof as may be sufficient to satisfy the decree, or to appear and show cause why he should not furnish security. Rule (6) provides:
'Where the defendant fails to show cause why he should not furnish security, or fails to furnish the security required, within the time fixed by the Court, the Court may order the property specified, or such portion thereof as appears sufficient to satisfy any decree which may be passed in the suit, be attached.'
Therefore, ordinarily, the scheme of Rules 5 and 6 of Order XXXVIII is that when a plaintiff applies for attachment before judgment, all that the Court does is to call upon the plaintiff either to give security or to show cause why he should not give security. It is only when he fails to show cause that an order of attachment is made under Rule 6. But it is true that under Rule 5 itself the power is given to the Court to make a conditional attachment. This conditional attachment is made pending the disposal of the application made by the plaintiff under Rule 5 Rule 7 of Order XXXVIII provides;
'Save as otherwise expressly provided, the attachment shall be made in the manner provided for the attachment of the property in execution of a decree.'
Now, when we turn to the order of the Calcutta High Court, with respect, it does not provide for furnishing of security' or showing cause why security should not be furnished as required by Rule 5 of Order XXXVIII. It does speak of an interim attachment and therefore obviously the learned Judge who passed the order was thinking of the conditional attachment which could be made under Order XXXVIII, R, 5. But when we turn to the effective part of- the order itself, all that it says is that till the disposal of the said application a writ of attachment do issue out of and under the seal of this Court commanding the Sheriff of Calcutta to attach the monthly instalments of Rs. 3,000 payable by the defendant Mahadeo Vasudeo Joshi to the defendant Janak-singh Saigal under the forms of settlement filed in suit No. 842 of 1952.
Therefore, the High Court of Calcutta did not intend to pass an order which effectuated an attachment. In other words, the High Court of Calcutta did not contemplate that this order itself would operate as an attachment. All that the High Court wanted to do was to direct the Sheriff to issue a warrant of attachment which would effectuate the attachment, and this is made clearer still by the latter part of the order where an aircraft and a motor car is attached. Obviously, these being moveable properties, they could not be attached merely by an order of a Court. There should be an order of seizure.
Therefore, with regard to these two properties also, the order contemplates a warrant of attachment being issued by the Sheriff of Calcutta. Reading the order as a whole it is clear that it does not constitute an order under Order XXI, Rule 53 (1) (a). It is, as it were, an inchoate attachment which had to be completed and effectuated by something which had to be done at the instance of the plaintiff and through the instrumentality of the Sheriff of Calcutta. It is common ground that the plaintiff in that suit having obtained this order did nothing more. He never approached the Sheriff with the necessary warrant of attachment, he never gave any intimation to the appellant or the respondent, and the matter rested at the plaintiff having obtained, with respect to the High Court of Calcutta, this rather curious order.
Therefore it would be difficult to take the viewthat this order, couched as it is in this language,can operate as a stay of execution of the decreein suit No. 842 of 1952. There is nothing in thisorder which prevents the plaintiff in suit No. 842of 1952 from executing this decree. There isneither a prohibition nor is there a substantiveorder as contemplated by Order XXI, Rule 53 (1). Nordoes this order constitute any prohibition uponthe appellant from paying the decretal amountto the respondent. Nor can it be said that ifthe appellant paid the amount under the decreeto the respondent, he would not get a properdischarge.
6. We, therefore, agree with the learned Judge for the reasons given above that there was no stay of execution of the decree in suit No, 842 of 1952 and therefore the respondent was not prevented from taking out an insolvency notice In respect of that decree.
7. Turning to the other point, Mr. Laud very fairly says that looking to the evidence and looking to the judgment it is quite possible that the appellant, although he may have resided in Calcutta and Delhi during the material period, may also have resided in Bombay, and it is possible for a person to have more than one residence. In view of that he does not press the second point.
8. The result is that the appeal fails and is dismissed with costs.
9. Liberty to the respondent's attorneys towithdraw the sum of Rs. 500 deposited in Court.
10. Appeal dismissed.