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Ramiah Vs. Cowdiah and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKarnataka High Court
Decided On
Case NumberCivil Revn. Petn. No. 608 of 1956
Judge
Reported inAIR1958Kant140; AIR1958Mys140; ILR1957KAR351; (1958)36MysLJ158
ActsCode of Civil Procedure (CPC), 1908 - Order 21, Rules 55, 57, 58, 58(2), 59, 60, 72(3), 89, 90 and 91
AppellantRamiah
RespondentCowdiah and anr.
Appellant AdvocateG. Dayananda, Adv.
Respondent AdvocateB.V. Rama Rao, Adv.
Excerpt:
.....:rule 58. (i) where any claim is preferred to, or any objection is made to the attachment of any property attached in execution of a decree on the ground that such property is not liable to such attachment, the court shall proceed to investigate the claim or objection with the like power as regards the examination of the claimant or objector, and in all other respects, as if he was a party to the suit: rule 60. where upon the said investigation the court is satisfied that for the reason stated in the claim or objection such property was not, when attached in the possession of the judgment-debtor or of some person in trust for him, or in the occupancy of a tenant or other person paying rent to him or that, being in the possession of the judgment-debtor at such time, it was so in his..........and a copy of the proclamation shall be affixed in the manner prescribed by the last preceding rule.rule 57. where any property has been attached in execution of a decree hut by reason of the decree-holder's default the court is unable to proceed further with the application for execution, it shall either dismiss the application or for any sufficient reason adjourn the proceedings to a future date. upon the dismissal of such application the attachment shall cease.8. these rules do not provide that an attachment ceases when the attached property is sold. normally, in the absence of a provision to that effect in the code the assumption that an attachment is determined by the mere sale of an attached property would, to my mind, amount to a plain contravention of the rule that a court.....
Judgment:
ORDER

1. In execution of a money decree obtained against respondent 2, by respondent 1 an immoveable property was attached and ordered to be sold on 22-3-1956 and five days before that date the petitioner presented a claim petition under the provisions or Order XXI rule 58 C. P. C. objecting to the attachment. In that application he asked for a postponement of the sale on which the Court below does not however appear to have made any order.

The property appears to have been sold and purchased by the decree-holder for the amount due to him under the decree. On 28-9-1956 the Court below dismissed the claim petition on the ground that an investigation of the claim was not competent after the sale of the attached property. This revision petition is directed against that order,

2. Sri Dayananda learned Counsel for the petitioner contended that the view taken by the Court below that the sale of the attached property deprived the Court of its Jurisdiction to investigate the claim was unsupportable. He urged that in this case the petitioner had preferred his claim before the sab actually took place and since the court did not, under the proviso to rule 58 of Order XXI C. P. C., consider that the claim was designedly or unnecessarily delayed, it was bound to investigate it.

He further contended that the decision in Abdul Razack v. Jainullabudin, 55 Mys HCR 42 (A), on which the lower Court depended was a case in which the claim petition was presented after the attached property had actually been sold and so had no application to the present case.

3. Sri Rama Rao learned Advocate for the decree-holder has argued that an attachment does not survive the sale of the attached property and that the moment the property is sold, the attachment ceases. He, therefore, submitted that an investigation of a claim after the cessation of the attachment in that way would be purposeless and therefore incompetent.

4. Rules 58, 59 and 60 of Order XXI of the Code of Civil Procedure read as hereunder :

Rule 58. (i) Where any claim is preferred to, or any objection is made to the attachment of any property attached in execution of a decree on the ground that such property is not liable to such attachment, the Court shall proceed to investigate the claim or objection with the like power as regards the examination of the claimant or objector, and in all other respects, as if he was a party to the suit:

Provided that no such investigation shall be made where the Court considers that the claim or objection was designedly or unnecessarily delayed.2. Where the property to which the claim or objection applies has been advertised for sale, the Court ordering the sale may postpone it pending the investigation of the claim or objection.

Rule 59. The claimant or objector must adduce evidence to show that at the date of the attachment he had some interest in, or was possessed of, the property attached.

Rule 60. Where upon the said investigation the Court is satisfied that for the reason stated in the claim or objection such property was not, when attached in the possession of the judgment-debtor or of some person in trust for him, or in the occupancy of a tenant or other person paying rent to him or that, being in the possession of the judgment-debtor at such time, it was so in his possession, not on his own account or as his own property, but on account of or in trust for some other person, or party on his own account and partly on account of some other person, the court shall make an order releasing the property, wholly or to such extent as it thinks fit, from attachment.

5. The question whether a court is competent to investigate a claim under Rule 58 after the attached property is sold in execution of a decree has been the subject of considerable controversy. The High Courts of Calcutta, Bombay, Lahore and Rangoon have taken the view that such investigation was incompetent, whereas the High Courts of Madras and Nagpur have taken the view that it was not.

There are also two pronouncements on this question by the former High Court of Mysore. In Abdul Razack v. Jainullabudin (A), Mallappa J., took the view that an investigation of a claim made after the sale of the attached properties, was not possible. Indeed, the order of the lower Court is made to rest on this decision. In Gangaiah v. Na-gabhushana Gowda, 33 Mys LJ 100 (B), Balakrishnaiya J., took the view that if a claim had been made before the sale of the attached properties, an investigation into it was obligatory.

6. The decisions which forbid an investigation of a claim after the sale of the attached properties, rest on the theory that an attachment of a property comes to an end the moment it is sold in execution of a decree. It is pointed out in those cases that if an attachment is terminated in that way, it being no longer possible for the Court to make an order releasing the property from attachment under rule 60 of Order XXI of the Code of Civil Procedure, when it is satisfied that the attached property was not when attached, in the actual or constructive possession of the judgment-debtor in his own right, the investigation of that claim under Rule 58 was incompetent.

The Courts taking the opposite view have repelled the theory that the attachment of a property comes to an end when it is sold in execution of a decree for the reason that the Code of Civil Procedure which makes express provision in Rules 55 and 57 for the removal and determination of an attachment omits to provide that the mere sale of an attached property itself removes or determines the attachment,

7. Rules 55 and 57 of Order XXI C. P. C., read :

Rule 55. Where--

(a) the amount decreed with costs and all charges and expenses resulting from the attachment of any property are paid into Court, or

(b) satisfaction of the decree is otherwise made through the court or certified to the court, or

(c) the decree is set aside or reversed, the attachment shall be deemed to be withdrawn and in the ease of immovable property, the withdrawal shall, if the judgment-debtor so desires, be proclaimed at his expense, and a copy of the proclamation shall be affixed in the manner prescribed by the last preceding rule.

Rule 57. Where any property has been attached in execution of a decree hut by reason of the decree-holder's default the Court is unable to proceed further with the application for execution, it shall either dismiss the application or for any sufficient reason adjourn the proceedings to a future date. Upon the dismissal of such application the attachment shall cease.

8. These rules do not provide that an attachment ceases when the attached property is sold. Normally, in the absence of a provision to that effect in the Code the assumption that an attachment is determined by the mere sale of an attached property would, to my mind, amount to a plain contravention of the rule that a Court cannot ordinarily add to a statute words which it does not contain.

9. On the question presented by this revision petition one shirts with the case of Gopal Chandra Mukherji v. Notobar Kundu, 15 Ind Cas 53 (Cal) (C), in which Mookerjee J., said :

'On behalf of the decree-holder auction-purchaser, it has been contended that after the sale had taken place, the Court was no longer competent to proceed with the application under Rule 58 and to make on the basis thereof an order under Rule 60. In our opinion, this contention is manifestly well founded and must prevail.

Rule 60 of Order XXI provides that where, upon the investigation contemplated in Rules 58 and 59, the court is satisfied that the claim ought to be allowed, it shall make an order releasing the property wholly or to such an extent as it thinks fit, from attachment. It is thus plain that an order under Rule 60 must be made before the sale has taken place. This is also made clear by Sub-rule (2) of Rule 58 which provides for the adjournment of a sale pending the investigation of the claim preferred under Sub-rule (i).

* * * * * * * *In the case before us, Rule 60 plainly indicates that an order upon an application under Rule 58 must be made before the sale has taken place; upon the sale the application by which the claim has been preferred ipso facto terminates.'

It is not clear from the judgment in that case, why the learned Judges reached the conclusion that an attachment ipso facto terminates upon the sale of an attached property, nor is there in that judgment a reference to the provisions of Rules 55 and 57 C. P. C. It does not appear that the contention that an attachment does not come to an end except in the manner provided by those two rules was raised before those two learned Judges.

The later decisions of the High Court of Calcutta and those of the High Courts of Bombay, Rangoon and Lahore rest on the same theory that an attachment ipso facto terminates upon such sale. Kali Charan Chose v. Sm. Rani Sarojini Debi, AIR 1926 Cal 463 (D): Sasthi Charan v. Copal Chandra, : AIR1937Cal390 ; Ningauda v. Nabisaheb AIR 1942 Bom 26-3 (F); Maung Po Pe v. Maung Kwa, AIR 1928 Rang 80 (C); Sant Lal v. Firm Udho Ram, AIR 1938 Lah 588 (H).

10. The observations of Jackson J., who did not agree with this view in Jagannadhan v. Pydayya, ILR 55 Mad 251: (AIR 1931 Mad 782) (If, are very much in point. He said this :

'But in Copal Chandra Mukerji v. Notobar Kundu (C), the Calcutta High Court has held it to be incompetent to an execution Court to proceed with an application under Order XXI, Rule 58 after the sale has actually taken place. The reasoning is not easy to follow. Rule 60 provides for the Court releasing property from attachment after investigating a claim and 'it is thus plain that an order under Rule 60 must be made before the sale has taken place which would seem to assume that after the sale has taken place the property is ipso facto released from attachment, and therefore any investigation after the sale and consequent release is on the face of it absurd.

But there is no warrant for this assumption. The Code is quite clear on the point when an attachment is released, and sets forth under Order XXI Rule 55, the three occasions when the attachment shall be deemed to be withdrawn. In the circumstances of the present case, the attachment would normally cease on satisfaction being made through the court after the full payment of the purchase-money.

Until that point of time the attachment undoubtedly subsists and while it so subsists it would be a strange state of the law if a Court is to be precluded from hearing the complaint of the lawful claimant. At any rate there is nothing in the Code that precludes it.'

To the same effect are the decisions in Ramchandra Jagannath v. Kayam Hussain, AIR 1938 Nag 475 (J) and Ramchandra Komti v- Koodoo Jagna, AIR 1940 Nag 7 (K).

11. It seems to me that a Court cannot decline the investigation of a claim preferred before the attached property was sold in execution of a decree on the ground that that property had been subsequently sold.

12. Now it is clear that Rule 58 of Order XXI of the Code of Civil Procedure which does not contain any express prohibition against an investigation of a claim after the attached property is sold in execution of a decree, provides on the contrary that when a claim is preferred, the Court shall proceed to investigate it unless it refuses to do so on the ground that the claim was in its opinion designedly or unnecessarily delayed. It is therefore plain that it is only when the Court considers that the claim was designedly or unnecessarily delayed that its investigation could be declined and not otherwise.

13. It is also not easy to understand the basis for the assumption that the moment the attached property is sold in execution, the attachment comes to an end. As I have already pointed out the Code of Civil Procedure does not provide that an attachment is terminated in that way. Rules 55 and 57 expressly enumerate the cases in which an attachment is either removed or shall cease. Rule 55 provides that where a decree is satisfied by payment into court of the amount decreed and all costs incurred or otherwise, or set aside or reversed, the attachment shall be deemed to he withdrawn.

Rule 57 provides that where any property has been attached in execution of a decree but by reason of the decree-holder's default the Court dismisses the application the attachment shall cease. I should he unwilling to think that a court could properly add to this enumeration or invent any further situations causing the disappearance of an attachment for reasons other than those specified in the Code.

14. In my opinion the enunciation of a rule that a sale displaces the attachment may sometimes lead to odd results. In cases where a sale does not become absolute because it is set aside under Sub-rule (3) of Rule 72 of Order XXI of the C. P. C., for the reason that the decree-holder, or his agent purchased the property without the required permission of the court or when a sale is set aside under the provisions of Rule 89 or 90 or when the sale does not become complete on account of the purchaser's default in making the deposit of the purchase money, it is clear that the decree-holder would be entitled to again bring the properties to sale in execution of his decree without any further or another attachment of the property sold in that way, although those sales did not become complete for one reason or the other.

It the supposition that when a property is sold the safe determines the attachment is correct, how is it possible for any decree-holder to bring those properties to sale once again without again attaching them? This incongruity is explained by Sri Rama Rao, the learned Counsel for the decree-holder in the same way in which it was done in Kishan Singh v. Vaishno Das Daswandi Mal -- (AIR 1937 Pesh. 90) (L). It was observed in that case that:

'Order XXI, R. 55, Civil P. C. is not exhaustive of the modes in which attachment ceases. An attachment ceases as soon as the sale of the property attached takes place. It is wrong to suppose that an attachment subsists until the confirmation of the sale, because in the event of a resale being ordered a fresh attachment is not necessary. In a case where re-sale is ordered without a fresh order of attachment, the real reason is not that the original attachment continues, but the first sale and all subsequent proceedings are set aside, the status quo before the sale is restored and the attachment revived.'

Here again, it is clear that the Code of Civil Procedure contains no provision that when a sale is set aside and a resale is ordered, the attachment, if it ceased to exist on the date of sale, gets revived. It appear to me that the theory that an attached ment disappears with the sale but re-appears where such sale is set aside or docs not become complete for any reason has as little statutory foundation as the theory that the sale terminates an attachment.

The acceptance of any such theory will only enable a refractory judgment-debtor to make a surreptitious alienation of the attached property after the termination of the attachment by sale and before its reappearance, without the decree-holder being able to do anything about it.

If during this intermission there was no attachment for the reason that it had ceased when the property was sold and did not fasten itself to the property until the cancellation of the sale, the intermediate clandestine alienation would become unimpeachable for the reason that when the judgment-debtor made the alienation, there was no prohibition against it, unless the principle is further extended so as to make the revival of the attachment retroactive. An argument producing such alarming results has, in my opinion, only to be stated to be displaced by its own unsustainability. In Ram-chandra Jagannath v. Kayam Hussain, (J) Niyogi, J. said this in a similar context :

'If it is assumed that the attachment ceases with the execution sale, then the judgment-debtor may dispose of his property with impunity in the interval between the sale and its reversal and thus preclude the executing Court from putting up the property to sale again. A hypothesis which leads to such a startling and absurd conclusion cannot but be rejected.

It must therefore follow that the attachment must be deemed to continue in spite of the sale until it is confirmed. It is only after confirmation of the sale that all fear of the judgment-debtor's surreptitiously disposing of the property will cease.' I am, therefore, of opinion that the attachment of a property sold in execution of a decree does not cease until the sale becomes absolute by confirmation. The conclusion, I have reached is not only in consonance with the provisions of Rule 55 of Order XXI of the Code, but has the merit of not depriving a purchaser in an appropriate case of his right to apply for a cancellation of the sale under Rule 91 of that order in the event of a claim turning out to be legitimate.

15. In the present case it is regrettable that the court below which did not reject the claim under the proviso to Rule 58 of Order XXI of the Code allowed the sale to proceed, keeping before it an unascertained claim. Thus, is limitation protracted. But it is fortunate for the petitioner that the sale had yet to be confirmed when the impugned, order was made and if only the later decision of the former High Court of Mysore in Gangainh v. Nagabhushana Gowda (B) by which the lower Court was then bound, had been brought to its notice, it would not have proceeded to decline jurisdiction to investigate the claim as it did.

16. I set aside the order of the court below and direct that the claim preferred by the petitioner be investigated in accordance with law. There will, however, be no order as to costs.

17. Let the records be forthwith sent to the Court below.

18. Petition allowed.


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