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Durgadutt Nathmal Vs. Bholaram Jasraj - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case NumberO.C.J. Suit No. 1645 of 1926
Judge
Reported in(1927)29BOMLR409
AppellantDurgadutt Nathmal;In Re: Vishvambharlal Kanhaiyalal
RespondentBholaram Jasraj;
Excerpt:
.....against the estate-attachment by decreeholder on the debt-attachment not competent.;the plaintiffs obtained a money-decree, on august 24, 1926, against the estate of a deceased judgment-debtor. before that, on august 11, 1926, the applicants on behalf of themselves and other creditors filed an administration suit to administer the estate of the deceased ; and on august 16, 1926, a receiver was appointed to take charge of the estate and to recover its outstandings. the administration decree was passed on september 7, 1926. a third party owed a sum of money to the estate of the deceased. on september 6, 1926, the plaintiffs applied for and obtained a notice on the receiver under order xxi, rule 52, and a warrant on the debtor under order xxi, rule 46, attaching the money due to..........that as against the administrator general the attachment was void ab initio. at the date of the decree obtained by the plaintiff', the administrator general was entitled, by virtue of the high court's order, to take possession of the estate of the deceased. as soon as that order was made, his right to possession became paramount and excluded that of the defendant (the son of the deceased), who was then no longer entitled to recover payment of debts due to his father. a decree, therefore, subsequently obtained against the defendant could not, as against the administrator general, confer any rights on the decree-holder who could not stand in a better postition than the defendant, his judgment debtor, did. fulton j. remarks as follows (p. 438) :-mr. scott referred to the oases of fowler.....
Judgment:

Mirza, J.

1. The plaintiffs have obtained a decree in this suit, on August 24, 1926, for Rs. 19,613-15-6, costs and further interest at six per cent, against the defendant, as the legal representative of one Jesraj Morarka deceased. On August 11, 1926, the applicants, on behalf of themselves and all the other creditors of the estate of Jasraj Morarka, filed a suit No. 1932 of 1926 against the defendant as the legal representative of the deceased for the administration of the deceased's estate. By an order in that suit dated August 16, 1926, Mr. N.H. Moos has been appointed Receiver and is enjoined to take charge of the estate of the said deceased and to recover outstandings due to the estate. On September 7, 1926, Percival J. passed an administration decree in the suit which now stands referred to the Commissioner inter alia to investigate the claims of the creditors of the estate.

2. On September 6, 1926, the plaintiffs made an application to me in Chambers supported by the affidavit of Mahadev Tolaram, a partner in the plaintiffs' firm The affidavit stated that the defendant was temporarily residing in Bombay and was a permanent resident of a Native State, that about Rs. 17,000 were due by Messrs. Jivanram Modi to him as the legal representative of Jasraj Morarka deceased ; that the estate of Jasraj Morarka was heavily indebted and there was no property of the deceased in Bombay except the amount payable by Jivanram Modi to the defendant as such legal representative. Para. 4 of the affidavit mentioned that after the filing of the suit and before the plaintiffs had obtained a decree in their favour, the applicants claiming to be creditors of the deceased had filed suit No. 1932 of 1926 on behalf of themselves and all the other creditors of Jasraj Morarka deceased for the administration of his estate and that Mr. Moos had been appointed Receiver of the estate. Para. 5 of the affidavit stated that if the plaintiffs were not given leave to execute the decree before the same was sealed their interest would be seriously prejudiced and they would be deprived of the fruits of the decree which they had obtained. The plaintiffs prayed for an order giving them leave to execute the decree before it was sealed by attaching the sum of Rs. 17,000 payable by Jivanram Modi to the defendant, or in the alternative by attaching the moneys in the hands of the Receiver if Jivanram Modi had already paid over the amount to him. I made an order giving leave to the plaintiffs to execute the decree before the same was sealed by attaching the sum of Rs. 17,000 payable by Jivanram Modi and if the said sum or any part thereof had already been paid by Messrs. Jivanram Modi to Mr. N.H. Moos, the Receiver, the plaintiff was given leave to attach those monies in the hand: of the Receiver.

3. In pursuance of the order the plaintiffs have served a notice on the Receiver in terms of Order XXI, Rule 52, and also a warrant under Order XXI, Rule 46, upon the debtor Jivanram Modi. It appears that the garnishee notice under Rule 307 of the High Court Rules has not been issued as the applicants on becoming aware of the ex parte order threatened to obtain immediately a stay order if the plaintiffs procceeded further in execution. Thereupon the plaintiffs agreed not to do so until the disposal of the present summons.

4. The present summons is taken out by the applicants, who are plaintiffs in Suit No. 1932 of 1926, for an order to vacate the ex parte order made on September 6, 1926, and to raise the attachments levied in pursuance of that order.

5. The plaintiffs contend that they are entitled to obtain from the garnishee monies to the full extent of their decree in priority to any other creditor of the deceased. Mr. Coltman on behalf of the plaintiff has cited Darnell's Chancery Practice, 8th Edition, Vol.II, p. 1643, where the case-law on the subject is thus stated :-

A creditor will not, however, be stopped, unless there is a judgment or order giving him an absolute and unconditional right to come in and prove his debt at once; for, until there is such a judgment or order, the creditor ought not to be deprived of the benefit of a judgment which has been obtained by him. But when an administration order has been made, it must be preferred, if it precedes the judgment in point of time: although a creditor who has obtained a judgment, or charging order, previously to the administration order will not be restrained from issuing execution on the judgment, or making the charging order absolute ; nor from obtaining the benefit of the judgment, by means of a gavnishee order, under the provisions already mentioned.

6. He relies upon the case of Fowler v. Roberts. (1860) 2 Giff. 226 There a creditor of the testator had obtained judgment by default against the testatrix on April 24, 1860. On April 26, he obtained an order from the Judge in Chambers for execution aganst a garnishee. The order was served on the garniahee on the same day. On May 3, 1860, another creditor obtained the usual administration decree for the administration of the testator's estate. The Vice Chancellor held that (p. 228):

By the settled rule of this Court a creditor, who has shown such diligence as to recover judgment at law against the legal personal representative of his debtor before a decree for administration of his estate, will not be deprived by this Court of the fruit of his diligence. A judgment so obtained binds the assets in the hands of the legal personal representative.

7. In this case, it does not appear that a receiver of the estate was appointed before the monies became payable under the garnishee proceedings.

8. Mr. Coltman has also cited In re Womersley. Etheridge v. Womersley. (1885) 29 Ch. D. 557 There previously to the administration order in a creditor's action another creditor had obtained judgment in a County Court against the defendant, a sole executrix. The Court refused to restrain the creditor from pursuing his remedy in the County Court against the executrix personally, but ordered payment to the creditor by the Receiver of the estate, without prejudice to the question whether the executrix should be allowed the payment.

9. The above cases relied upon by the plaintiffs counsel, in my opinion, do not apply to the point raised by the present summons. That point, in my opinion, is covered by the authority of the Appeal Court's decision in Bhaiji Bhimji v. Administrator General of Bombay. I.L.R. (1898) 23 Bom. 428 That was a reference made by the Small Cause Court to the High Court. The facts there were that on April 16, 1898, the plaintiff had obtained an ex parte decree against the defendant as heir and legal representative of his deceased father. On March 4, 1898, an order had been made by the High Court authorizing the Administrator General to collect the assets of the deceased and to take out letters of administration to his estate, if necessary. On April 29, 1898, the plaintiff attached certain money in the hands of a third party due to the deceased's estate. The Court held that as against the Administrator General the attachment was void ab initio. At the date of the decree obtained by the plaintiff', the Administrator General was entitled, by virtue of the High Court's order, to take possession of the estate of the deceased. As soon as that order was made, his right to possession became paramount and excluded that of the defendant (the son of the deceased), who was then no longer entitled to recover payment of debts due to his father. A decree, therefore, subsequently obtained against the defendant could not, as against the Administrator General, confer any rights on the decree-holder who could not stand in a better postition than the defendant, his judgment debtor, did. Fulton J. remarks as follows (p. 438) :-

Mr. Scott referred to the oases of Fowler v. Roberts (1860) 2 Giff. 226 and Burton v. Roberts (1860) 29 L.J. Ex. 484. but they merely showed that in England a judgment-creditor, who had obtained a decree and attachment of a debt in a suit against an executor before the rights of the latter were snperceded under an administration decree, could enforce payment from the garnishee. In Emanuel v. Bridger (1874) L.R. 9 Q.B. 286 which was also cited, it was held that a creditor who had obtained and made absolute a garnishee order, before the bankruptcy order, had a charge to the extent of the attachment on the bankrupt's estate. But cases of this sort do not touch the point now under consideration. Here the Administrator General's rights had accrued before decree : the defendant at the time when the decree was passed merely represented the deceased's estate subject to those rights: and those rights could not be impaired by a decree to which the Administrator General was not a party.

10. In this case admittedly Mr. Moos was appointed Receiver on August 16, 1926, and that was before the decree in this suit was passed and the attachment levied. The estate of the deceased was vested in the Receiver and the Receiver's rights were paramount as against those of the defendant, the legal personal representative of the deceased. I am of opinion that the procceedings taken in attachment on behalf of the plaintiffs were wrong and misconceived and I must allow this summons with costs. I vacate my order dated September 6, 1926, and order that the attachments levied in pursuance of that order be raised. Counsel certified.

11. The defendant has appeared separately by counsel on this summons. He was obliged to do so because the plaintiffs alleged that he and the applicants were in collusion with one another in the administration suit. The defendant did not file any affidavit and at the hearing of the summons his counsel supported the applicants' counsel. Under the circumstances I am of opinion that the defendant was justified in appearing separately, but was not justified in instructing separate counsel. So far as he is concerned he will have his separate costs without counsel being certified. Mr. Thakordas Ghandi appears on behalf of a creditor for Rs. 1,69,000 and asks for his costs on the summons. The summons was not served upon him and he need not have appeared separately. As the applicants' suit is a representative creditors' suit his interests are identical with those of the applicants. I, therefore, disallow his costs.


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