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Ranchhod Mathurdas Vs. Kanchanlal Chunilal - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case NumberFirst Appeal No. 340 of 1943
Judge
Reported inAIR1945Bom542; (1945)47BOMLR829
AppellantRanchhod Mathurdas
RespondentKanchanlal Chunilal
Excerpt:
.....or adjustment of the decree would prevent the judgment-debtor from showing, if he could that the decree-holder's assignee was really a benamidar for the judgment-debtor, or that the assignment was made in fraud of the latter. 5. we respectfully agree with this view, which has been endorsed by the privy council in bhavani shankar joshi v. it follows, therefore, that although under order xxi, rule 2(3), the appellant cannot be permitted to prove that there was an adjustment of the decree and that he had satisfied it by paying rs. 5,000 to the original decree-holder, by reason of his failure to certify the adjustment and satisfaction to the court, yet on an application by the transferee of the decree to execute the decree under order xxi, rule 16, it is open to the appellant to plead and..........rs. 5,250 and costs by sale of the mortgaged property. subsequently the decree was assigned by the decree-holder hiralal to respondent no. 1, kanchanlal, by a registered sale-deed, dated august 20, 1942. kanchanlal then presented this darkhast to recover rs. 6,674 due under the decree by the sale of the mortgaged property in the hands of the appellant. the appellant resisted the darkhast on the ground that the assignee was not entitled to execute the decree as he was only a benamidar for him. the appellant alleged that he had got the decree adjusted; with the original decree-holder hiralal for rs. 5,000, that as he had no money to pay the amount in cash to hiralal, he requested respondent no. 1, who is his wife's cousin, to advance rs. 5,000 as a loan to him at four and a half per cent......
Judgment:

Lokur, J.

1. This appeal arises out of execution proceedings. On March 10, 1939, one Hiralal obtained a preliminary mortgage decree against the appellant Ranchhod and another, and the decree was made final on October 28, 1942, for the recovery of Rs. 5,250 and costs by sale of the mortgaged property. Subsequently the decree was assigned by the decree-holder Hiralal to respondent No. 1, Kanchanlal, by a registered sale-deed, dated August 20, 1942. Kanchanlal then presented this darkhast to recover Rs. 6,674 due under the decree by the sale of the mortgaged property in the hands of the appellant. The appellant resisted the darkhast on the ground that the assignee was not entitled to execute the decree as he was only a benamidar for him. The appellant alleged that he had got the decree adjusted; with the original decree-holder Hiralal for Rs. 5,000, that as he had no money to pay the amount in cash to Hiralal, he requested respondent No. 1, who is his wife's cousin, to advance Rs. 5,000 as a loan to him at four and a half per cent. per annum as interest and that respondent No. 1 paid the amount to the decree-holder and by way of security got the decree assigned to himself for that amount. It was then agreed that the decree should be treated as satisfied as soon as the appellant paid him Rs. 5,000 with interest and the expenses incurred in the execution of the assignment deed, amounting to Rs. 100, within a period of two years. He, therefore, contended that respondent No. 1 had no right to execute the decree, but the executing Court disallowed that contention on the ground that it was barred under Order XXI, Rule 2(3), of the Code of Civil Procedure, since the alleged adjustment of August 20, 1942, lad not been certified to the Court within three months. The sale of the mortgaged property was, therefore, ordered and the appellant has appealed against that order.

2. The executing Court has not considered the appellant's contention on its merits and has recorded no finding whether there was any adjustment as alleged by him and whether respondent No. 1 had obtained the assignment of the decree for the appellant himself by way of security for the amount advanced by him for payment to the original decree-holder Hiralal. Frima facie respondent No. 1 is the assignee of the decree and as such he is entitled to execute the decree under Order XXI, Rule 16, of the Code of Civil Procedure. In Raghunath Govind v. Gangaram Yesu I.L.R (1923) Bom. 643: 25 Bom. L.R. 474 it was held by a division bench of this Court that when an application is made to the Court which passed the decree by a transferee or an assignee of the decree from the original decree-holder under Order XXI, Rule 16, the application is made to the Court as a Court which passed the decree, and not as a Court which is executing the decree, so that in such proceedings it is open to the judgment-debtor to plead an uncertified payment or adjustment. But this decision has now been overruled by a full bench in Krishna Govind v. Moolchemd Keshavchand : (1941)43BOMLR751 and by the Privy Council in Bhavani Shankar Joshi v. Gordhandas Jamnadas It is now well settled that the Court hearing the application of an assignee of a decree under Order XXI, Rule 16, is an executing Court and is bound, in virtue of Order XXI, Rule 2(3), not to recognise payment or adjustment which has not been certified to the Court as required by Order XXI, Rule 2(1) and Rule 2(2). The lower Court is, therefore, right in refusing to allow the appellant to plead or prove that the decree was adjusted and was fully satisfied by payment of Rs. 5,000 to the original decree-holder.

3. But this disposes of only one part of the appellant's contention. The other part of his contention is that respondent No. 1 is really a benamidar for him and that his only interest in the assignment was to secure the repayment of the loan of Rs. 5,000 which he had advanced to the appellant. In other words the appellant claims that he borrowed Rs. 5,000 from respondent No. 1 for being paid to the decree-holder and that at his instance the decree-holder, instead of endorsing satisfaction on the decree, assigned it to respondent No. 1. As held in several cases like Palaniappa Chettiar v. Subramania Chettiar I.L.R (1924) Mad. 553, Gurdial Singh v. Gurbakhsh Singh I.L.R (1926) Lah. 35, Shaikh Mohammad Anas v. Bhupendra Prasad I.L.R (1937) Pat 223 and Satyendra Narain v. Wahiduddin Khan : AIR1940Pat472 , where a decree has been transferred to a particular person, no other person claiming that he was the real owner under the transfer and that the transferee named therein was a mere benamidar for him can apply for the execution of the decree under the terms of Order XXI., Rule 16. But the authority of the ruling in Palaniappa Chettiar v. Subramania Chettiar and the rulings of the Patna and the Lahore High Courts which were based upon it, is considerably shaken by the decision of the full bench in Subramanyam v. Ramaswami I.L.R (1932) Mad. 720 There too it was held that an application under Order XXI, Rule 16, by the transferee of a decree being an application in execution, it was not open to a judgment-debtor to impeach the character of the transferee by contending that he was not a transferee as the decree had been satisfied and there was no decree to be satisfied, unless the satisfaction was duly certified to the Court. But as observed by Beasley C.J. it is open to a judgment-debtor to attack the transferee's position by showing that he cannot legally possess that character or that he is a benamidar or for reasons of a similar nature. This was cited with approval in Bhavani Shankar Joshi v. Gordhandas Jamnadas I.L.R (1943) IndAp 50: 46 Bom. L.R.228 and their Lordships, after referring to Subrammyam v. Ramaswami, and Sm. Sahedan Bibi v. Mir Ali (1935) 40 C.W.N. 301 observed (p. 56):

In the Madras and Calcutta cases above mentioned the Court expressly refused to hold that a failure to record satisfaction or adjustment of the decree would prevent the judgment-debtor from showing, if he could that the decree-holder's assignee was really a benamidar for the judgment-debtor, or that the assignment was made in fraud of the latter. Their Lordships see no reason to doubt the correctness of this reservation in any case where it becomes necessary to consider whether the assignment was taken by the debtor's agent or with the debtor's money.

4. Referring to Palaniappa Chettiar v. Subramania Chettiar Krishnaswami Iyengar J. observed in Minakshi Iyer v. Noor Muhammad [1939] Mad.1004 (p. 1014):.the decision purports merely to give effect to a principle implicit in the language of the Rule (Order XXI, Rule 16) which in terms recognises a right in the transferee only to apply for execution and it was held that he alone and none other, whatever his true position or right may be, that could take advantage of the rule for the purposes of execution. With that proposition we are inclined respectfully to agree, but we must however express our dissent to certain other observations which occur at pages 558 and 559 of the report if by them the learned Judge intended to lay down as a universal rule that it is not open to the Court in execution to enquire into questions of benami and adjust the rights of parties according to its findings.

5. We respectfully agree with this view, which has been endorsed by the Privy Council in Bhavani Shankar Joshi v. Gordhandas Jamnadas. It follows, therefore, that although under Order XXI, Rule 2(3), the appellant cannot be permitted to prove that there was an adjustment of the decree and that he had satisfied it by paying Rs. 5,000 to the original decree-holder, by reason of his failure to certify the adjustment and satisfaction to the Court, yet on an application by the transferee of the decree to execute the decree under Order XXI, Rule 16, it is open to the appellant to plead and prove that the transferee is a benamidar for him and cannot, therefore, execute the decree against him. The assignment of the decree virtually to the judgment-debtor, though nominally in the name of the benamidar, has the effect of merging the decree-holder and the judgment-debtor and rendering the decree incapable of execution against the judgment-debtor. If the appellant succeeds in proving this contention of his, then respondent No. 1 cannot execute the decree against him, though he may seek his remedy to recover from him Rs. 5,000 admittedly advanced by him, together with interest, etc. The lower Court has not considered this aspect of the case and has not allowed the appellant to prove that respondent No. 1 is his benamidar and, therefore, not entitled to execute the decree against him.

6. We, therefore, set aside the order of the lower Court and remand the darkhast for further hearing and disposal according to law in the light of this judgment. Both parties will be at liberty to adduce their evidence. The costs of this appeal will be costs in the darkhast.


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