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Jamnadas Parbhudas Vs. Bai Soonabai - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case NumberO.C.J. Suit No. 1851 of 1928
Judge
Reported inAIR1932Bom622; (1932)34BOMLR1405
AppellantJamnadas Parbhudas
RespondentBai Soonabai
Excerpt:
.....held-bombay high court rules (o.s.), 1930, rules 318, 323-negative register-entry-application for execution- application for rateable distribution-property in the hands of receiver-leave of court not necessary to application for rateable distribution.; under section 73 of the civil procedure code, 1908, an application for rateable distribution should be made before or at the time the court sells the property to the highest bidder.; dattatraya v. pundlik (1920) 22 bom. l.r. 1001 and thakurdas motilal v. joseph iskender (1917) i.l.r. 44 cal. 1072, followed.; an application for making an entry in the negative register kept by the prothonotary of the bombay high court is tantamount be an application for execution, and if made before the sale is held, entitles the applicant to rateable..........belonged to one vicaji, and the plaintiff-mortgagee in this suit obtained a preliminary mortgage decree for sale on october 31, 1928, and a decree absolute on june 17, 1929. defendant no. 7 was the secondmortgagee. there are two lots of properties with which i am concerned and they are lots nos. 1 and 4. lot no. 4 was put up for sale by the commissioner on march 17, 1930, and sold in enforcement of the decree absolute for sale. rs. 16,600 were received by way of deposit on that day and the balance was received on april 17, 1930, lot no. 1 was sold by the commissioner on march 28, 1930, when the deposit was paid. the balance was paid on may 28, 1930,3. it is contended by the applicants that on a proper construction of section 73 the time before which applications for rateable.....
Judgment:

Kania, J.

1. This summons is taken out to determine the rights of various persons, who are decree-holders against the defendants, in property in the hands of this Court. Exhibit A to the affidavit of Ranchhordas Lallubhai dated June 29, 1931, gives particulars as to the dates and amounts of the decrees and the dates on which the parties made applications to this Court for the execution of their decrees.

2. Various contentions have been raised at the hearing of the summons as to the rights of the various creditors to get the money. The first question to be determined is the construction of Section 73 of the Civil Procedure Code, and for the purpose of arriving at the decision the following dates are material, The properties originally belonged to one Vicaji, and the plaintiff-mortgagee in this suit obtained a preliminary mortgage decree for sale on October 31, 1928, and a decree absolute on June 17, 1929. Defendant No. 7 was the secondmortgagee. There are two lots of properties with which I am concerned and they are lots Nos. 1 and 4. Lot No. 4 was put up for sale by the Commissioner on March 17, 1930, and sold in enforcement of the decree absolute for sale. Rs. 16,600 were received by way of deposit on that day and the balance was received on April 17, 1930, Lot No. 1 was sold by the Commissioner on March 28, 1930, when the deposit was paid. The balance was paid on May 28, 1930,

3. It is contended by the applicants that on a proper construction of Section 73 the time before which applications for rateable distribution or execution should have been made to this Court, in order that the applicants might share in the surplus sale proceeds, is the time when the Court held the sale of the respective lots. The respondents, other than respondent No. 9, contend that the material time is the time when the sale proceeds are actually received by the Commissioner and not the time when the sale is first held. In support of their contention they rely on the opening words in Section 73 where it is stated that applications should be made before the assets are received by the Court. It is contended that in the same section two different times should not be presumed to have been prescribed unless the words clearly indicate that intention, It is also contended that the first clause is the governing clause while the later part of the section is only a proviso and therefore the words of the proviso could not be so read as to make the words therein conflicting with the operative part of the section itself.

4. I am unable to accept this last contention because it appears to me that the legislature when enacting the new Civil Procedure Code have deliberately altered the words in the first part of the section. The words used in the corresponding Section 295 of the Civil Procedure Code of 1882 were ' where assets are realised by sale or otherwise in execution of a decree'. Those words would clearly indicate that in a case of the present kind the assets would be deemed to be realised only when the sale proceeds are received, In order to set at rest the conflicting decisions of the various Courts under the old Code the words in the first part of the section have been altered and the words 'where assets are held by the Court' inserted, In the proviso to Sub-section (1), Clause (c),Sub-clause (4) which would apply in the case of a sale by the Court in enforcement of a mortgage decree, however, the words are neither 'where assets are realised by the Court' nor 'where the sale proceeds are received by the Court', but the words are 'prior to the sale of the property '. The legislature has seen no reason to alter those words in the proviso. It is, therefore, clear that the legislature, not having used the same expression or words and not having altered the words in this proviso, cannot be deemed to have necessarily meant that the same time should be presumed to have been fixed for making the application under Sub-section (1) and under Clause (e), Sub-clause (4) of the proviso. On the other hand I find that the provisions for execution of decrees ascontained in Order XXI, Rule 84, and the subsequent rules indicate that the word ' sale ' as contemplated by the present Code is the sale when first held and has nothing to do with the time when the proceeds are received. The authorities also show that in execution proceedings a sale is complete when the presiding officer accepts the bid and declares the purchaser, and it is from that time that the property vests in the purchaser and his title commences. See Jaibahadar Jha v. Matukdhari Jha I.L.R. (1823) Pat. 518 and Ramchandra v. Lakshman : (1929)31BOMLR1271 . Under Section 65 of the Civil Procedure Code also although the purchaser may get possession after the certificate of sale is issued in his favour, his title is deemed to have commenced from the moment he is declared a purchaser by the selling officer. This interpretation of Sub-section (1) and Clause (c), Sub-clause (4) of the proviso to that Sub-section in Section 78 finds support from two statements, which, although obiter, are entitled to high respect. I find that in Dattatraya v. Pundlik : (1920)22BOMLR1001 Sir Norman Macleod C J. has pointed out that whilst in a case of assets being received in execution of a money decree the time before which the applicants who claim rateable distribution should apply is the time of the actual receipt of the money by the Court there is a difference in the time prescribed when the Bale is in enforcement of a mortgage decree. I also find that Mr. Justice Mookerjeo in ThakurdasMotilal v. Joseph Iskender I.L.R. (1917) Cal. 1072 has taken the same view and expressed the opinion that under Clause (c) of the proviso to Section 78(1) it is plain that the point of time for consideration is the date of the sale of the property,i.e., the date on which the highest bid is accepted by the Court officer. There is no clear decision of this Court which could throw further light on the point, but I feel that having regard to all the considerations mentioned above, the contention of the applicants, who appear in support of this application, is correct, and the material time before which applications in the present case should have been filed to enable the applicants to claim rateable distribution is the time when the two lots were sold by the Commissioner,viz., March 17 and 28,1930, respectively.

5. This would leave all the parties to the summons except the applicants and, according to the contention of respondent No. 9, that respondent, in the same position, and the claims of the applicants and respondent No. 9 will, therefore, have to be considered. As regards the applicants it is contended that their application filed in Court on March 17, 1930, is not a proper application as prescribed by Section 51 and Order XXI, Rule 11, of the Civil Procedure Code, and that as no leave to take out execution was obtained from this Court before the applicants filed their application the same is invalid because this Court before that date had appointed a receiver of the properties in the mortgage suit, The application of March 17, 1930, in the last column shows the way in which the applicants sought to execute the decree, and it is there stated as follows :-' By making an entry in the negative register.' The applicants had obtained an order for attachment before judgment in their suit in the Court at Thana and that was confirmed at the time of the decree in their favour and under that decree they were also given a charge on the properties. They had thus already attached the right, title and interest of the judgment-debtors in the properties in question. I have, therefore, to decide what is the effect of the application to make the entry in the negative register. I do not find any provision for keeping the negative register in the Civil Procedure Code, but in the schedule to the High Court Rules I find Rs. 28 prescribed as the charges payable for applying for an entry to be made in the register. On inquiring at the Prothonotary's office I find that acting under Rules 318 and 323 the office makes an entry in the register when an application for execution is made in a matter which is pending in this Court. The effect of an application to make an entry in the negative register is the same as that of an application for execution of the decree, and if a party applied for rateable distribution under Section 73, the Prothonotary's office would only make an entry in the negative register. An entry in the negative register would, under Rule 323, entitle the applicants to share in the rateable distribution of the decree under which the property is sold. Having regard to this practice the application of the applicants would, in my opinion, amount to an application for execution of the decree, and the same having been made before any of the lots were sold by the Commissioner would be a proper application.

6. The second contention against this application also fails, because by the application the applicants did not seek to disturb the possession of the Court, Leave of this Court would be necessary only if the possession of this Court through its officer, namely, the receiver, was sought to be disturbed in any way. If on the other hand the application is merely a notice that the applicants claim to share in the rateable distribution of the proceeds, the same will not amount to disturbing the possession of the Court, and therefore before making such an application no leave of the Court would be necessary. If the application was to attach the property in the hands of the receiver such leave would be necessary, but the application of March 17, 1930, was not an application for that purpose, I, therefore, hold that the applicants are entitled to share in the rateable distribution of the balance of the sale proceeds in the hands of the Commissioner.

[The rest of the judgment is not material to this report]


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