1. This Civil Miscellaneous Appeal is against the order of the learned Subordinate Judge, Kakinada, in A. S. No. 102 of of 1960 on his file. That was an appeal against the order of the Principal Disrict Munsif, Kakinada, in I, A. No. 29 of 1955 in O. S. No. 295 of 1948, which was filed under Order XX, Rule 12, C. P. C. for ascertainment of the mesne profits. The District Munsif dismissed the petition on the ground that the second petitioner, Amajala Bojayya and the respondent Amajala Sathiraju (Judgment-debtor) are both brothers and legal representatives of the deceased decree-holder, Amajala Sathemma, that the interest of the decree-holder merged in both of them and the second petitioner having agreed not to press the petition, dismissed it as not maintainable.
2. On appeal by Gunda Subbayya the transferee D.H. against the order of the District Munsif, the lower appellate Court remanded I. A. No. 29 of 1955 with a direction that the trial Court will implead the appellant, Subbayya, as a petitioner therein and dispose of that application after considering the truth and validity of the transfer.
3. Aggrieved by the said order of remand the present appeal is filed.
4. The contention of Mr. K. B. Krishnamurty, the learned counsel for the appellant is that the appeal (A. S. 102 of 1960) is not competent, and the order of remand is unsustainable.
5. The facts relevant for the aporeciation of the respective contentions, are these. One Amajala Sathemma obtained an ex parte decree for mesne profits for Rs. 300/- with interest and costs on 31-3-1955 in I. A. No. 29 of 1955 in O. S. No. 295 of 1948 against Amajala Sathiraju, and on 28-2-1958 she transferred that decree in favour of the respondent herein. Gunda Subbavva (the appellant in A. S. 102 of 1960 and respondent before me) by a deed of transfer. After paying Court-fee on the amount decreed, he filed E. P. No. 93 of 1958 for execution of the said decree and also prayed for the recognition of the transfer inhis favour. In those proceedings, it is represented before me by the counsel for the transferee decree-holder, that the decree-holder filed a counter admitting the receipt of consideration and execution of the transfer-deed. During the pendency of those proceedings the decree-holder died. Notices were taken to the judgment-debtor, but he filed no objections.
6. On the other hand, he filed I. A. No. 494 of 1958 under Order IX, Rule 13, C. P. C., for selling aside the ex parte decree in I. A. No. 29 of 1955, without impleading the transferee decree-holder, notwithstanding the fact that in his affidavit he referred to the fact of transfer of the decree. On the death of Sathemma, the judgment-debtor took notice to her brother, Amajala Bojjayya, as her legal representative, but not the transferee decree-holder. Bojjayya, the brother of the judgment-debtor did not file any counter. The transferee decree-holder, though not impleaded, filed a counter contending that he ought to have been brought on record as the legal representative. Yet the District Munsif took the view that because the transfer in his favour was not recognised in E. P. No, 93 of 1958, he had no locus standi to contest T. A. No. 494 of 1958, and that he was not the legal representative of the deceased. In that view, he set aside the ex parte decree in I. A. No. 29 of 1955. By reason of this order, the executing Court dismissed E. P. No. 93 of 1958 on the ground that there was no decree to be executed. After the ex parte decree was set aside, the District Munsif took up I. A. No. 29 of 1955 for disposal on its merits, and on 23-12-1959 he passed the order referred to above.
7. The points now for determination are :
(1) Whether the transferee decree-holder had no locus standi to maintain the appeal (A. S. No. 102 of I960) before the lower appellate Court and
(2) Whether the order setting aside the ex parte decree in I. A. No. 29 of 1955 cannot be questioned by the transferee decree-holder in a decree passed on merits. In other words, the first question is, whether [the transferee decree-holder is or is not a person claiming under the decree-holder. If the answer is in the affirmative, there can be no doubt that he ought to have been brought on record as the legal representative of the deceased Sathemma in I. A. No. 494 of 1958. The incidental argument is that since the transfer was not recognised in E. P. No. 93 of 1958 the transferee decree-holder is debarred from enforcing his rights under the transfer deed in other proceedings.
8. Before adverting to the decisions on the point, the provisions of the Code of Civil Procedure may be referred to. Section 146, C. P. C., enacts thus :
'Save as otherwise provided by this Code of by any law for the time being in force, where any proceeding may be taken or application made by or against any person, then the proceeding may be taken or the application may be made by or against any person, claiming under him,'
Order XXI. Rule 16, omitting unnecessary words. is as follows:
'Where a decree...........is transferred by assignment in writing or by operation of law, the transferee may apply for execution of the decree to the Court which passed it; and the decree may be executed in the same manner and subject to the same conditions as if the application were made by such decree-holder;
Provided, that, where the decree or such interest as aforesaid has been transferred fay assignment, notice of such application shall be given to the transferor and the judgment-debtor, and the decree shall not be executed until the Court has heard the objections (if any) to its execution :
Order XXII, Rule 10, C. P. C., provides thus :
'(1) In other cases of an assignment, creation or devolution of any interests during the pendency of a suit the suit may, by leave of the Court, be continued by or against the person to or upon whom such interest has come or devolved.
(2) The attachment of a decree pending an appeal therefrom shall be deemed to be an interest entitling the person who procured such attachment to the benefit of Sub-rule (1)'.
9. The decisions may now be considered.
10. In Sadagopa Chariar v. Raghunatha Chariar, ILR 33 Mad 62 it was held that where a decree is transferred by an instrument in writing, such transfer takes effect from the date of such instrument and not from the date of its recognition by the Court. The learned Judges, at p. 63, observed thus :
'It has been suggested on the strength of certain observations in Puthiandi Mammed v. Avalil Moidin, ILR 20 Mad 157, that the property in the decrees had not passed to the plaintiff prior to the attachment before judgment, under Section 232, Civil Procedure Code (Act XIV of 1882). We do not think it necessary to read the decision in the case quoted as laying down -- a thing it does not do in plain terms -- that when a decree has been transferred by assignment in writing the property in the decree does not pass to the transferee at the time of assignment, but passes only after the transfer has been recognised by the Court..... There is nothing in Section 232, Civil Procedure Code, to suggest anything of the kind. On the other hand it can be gathered from the section itself that the completion of the transfer does not depend upon any recognition by the Court, for it begins by saying. 'If a decree be transferred by assignment in writing', thus assuming that there has been a complete transfer.'
11. A Full Bench of this Court in Krishna Somayajulu v. Annappa, (S) AIR 1957 Andh Pra 66 (FB) ruled that an application for execution by the legal representative of a deceased decree-holder under Order XXI. Rule 16, which does not contain a specific prayer for recognition, would nevertheless be an application made in accordance with law within the meaning of Article 182 (5) of the Limitation Act, and an order for substitution of names on the record is not a condition precedent to the legal representative's right to apply for execution. It was also held that where an application is made by a transferee by assignment or by operation of law, the rule as such does not require that there should be a prayer for recognition of the transfer, and that the Court to which the application is made might require the applicant to adduce proof that he is a transferee of the interest of the decree-holder and if the Court is satisfied that he is a lawful transferee, execution should proceed. It was further pointed out that the judgment-debtor might raise objections about the locus standi of the applicant to execute the decree in which case the Court would consider the objections so raised and if it is eventually found that the person who has applied for execution is not a transferee of the decree-holder's interest, the execution petition Would be dismissed otherwise execution would proceed.
12. This case is an authority for the position that the prayer for recognition to transfer is not a condition precedent for a valid application for execution by the transferee decree-holder, but the truth and validity of the transfer may be gone into if they are questioned. It, therefore, follows that, if there is a transfer of a decree, the transferee is entitled to the rights under the decree though he may not be able to execute it if he is not able to establish the truth or validity of the transfer,
13. A Bench of this Court recently held in Sitharamaiah v. Gubba Atchiah, (1962) 2 Andh WR 65 : (AIR 1962 Andh Pra 497) that Order XXI, Rule 16. C. P. C., regulates the procedure and does not affect substantive rights, and that it is perfectly consistent with the hypothesis that a transfer as between the assignor and the assignee might operate as an assignment, but so far as the execution of the decree is concerned the assignee has to conform to the procedure prescribed to enforce the right that he had obtained by the assignment. In that view, it was held that the assignee without applying under Order XXI, Rule 16, cannot question the attachment and sale of the property by an attaching creditor of the decree-holder-assigrtor, even though the attachment was effected only subsequent to the assignment. The decision in ILR 33 Mad 62 was referred to by the learned Judges and was not disapproved.
14. In Jugalkishore Saraf v. Rao Cotton Co. Ltd., (S) AIR 1955 SC 376, it was ruled that the sequence of events contemplated by Order XXI. Rule 16, is first that a decree has been passed, and secondly that a decree has been transferred (i) by assignment in writing, or (ii) by operation of law. In that case, during the pendency of a suit on a book-debt the plaintiff transferred all book and other debts due to him, and there was no mention in the document of transfer of the suit or the decree to be passed. It was held that though a transfer of a debt which is the subject-matter of a suit cannot, ipso facto, make the transferee .a transferee of the decree within the meaning of Order XXI, Rule 16, he is nonetheless, in equity entitled to the decree, and to enforce it in execution, and his right to do so can be gone into by the execution Court both by virtue of Section 146, C. P. C. as well as Section 47 read with Order XXII, Rule 10. C. P. C.
15. The observations of Bhagwati, J. at p. 400, who agreed with S. R. Das, J., are very apposite.
'In case of transfer of book debts or property coming within the definition of actionable claim there is therefore necessarily involved also a transfer of the transferor's right in a decree which may be passed in his favour in a pending litigation and the moment a decree is passed in his favour by the Court of law, that 'decree is also automatically transferred in favour of the transferee by virtue of the assignment in writing already executed by the transfetor. The debt which is the subject-matter of the claim is merged in the decree and the transferee of the actionable claim becomes entitled by virtue of the assignment in writing in his favour not only to the book debt but also to the decree in which it has merged. The book debt does not lose its character of a debt by its being merged in the decree and the transferee is without anything more entitled to the benefit of the decree passed by the Court of law in favour of the transferor', (Italics (here in single quotation mark -- Ed.) mine).
These observations, in my opinion, lend support to the view that, in a converse case, by transferring a decree the transferor also transfers the debt which is merged in the decree. If, therefore, for any reason the decree ceases to exist, it cannot be said that the transferor's right to the debt also disappears. This case points out clearly the distinction between the right to the decree as such, and the debt which has become merged in the decree, and lays down that the language of Section 146. C. P. C. permits a transferee of a debt to maintain an application for execution of the decree as a person claiming under the transferor.
16. It follows that the fact that the application for setting aside the ex parte decree, was decided against the transferee would only disentitle him to enforce his rights under the decree, but not to claim the rights as a transferee of the debt. There is nothing in law which prevents the holder of an ex parte decree from agreeing to or to allowing a decree being set aside, and the suit being tried on merits. The position cannot be different in the case of a transfer of the decree.
17. In Saila Bala Dassi v. Nirmala Sundari Dassi, : 1SCR1287 , during the pendency of a suit the transfer of the suit claim was made, but no application was made by the transferee to be brought on record in the suit. It was held that, though a transferee of the subject-matter of the suit during the pendency of the suit cannot be brought on record under Order XXII, Rule 10, C. P. C., he is a person entitled to be brought on record under Order XXII, Rule 10 in a pending suit, and as such entitled to prefer an appeal against a decree therein, if his assignor could have filed such an appeal, and that under Section 146, C. P. C. the right to file an appeal must be held to carry with it the right to continue the appeal which has been filed by the person under whom the appellant claims. The earlier decision of that Court in (S) AIR 1955 SC 376 was cited in this case.
18. In view of these authorities, I am of the opinion that the orders passed by the District Munsif on I. A. No. 494 of 1958 did not preclude the transferee decree-holder from prosecuting the application, I. A. No. 29 of 1955, for determination of mesne profits, in his capacity as the transferee of the actionable claim.
19. The other contention of Sri Ramanujachari is that the transferee-decree-holder is entitled to question the propriety and correctness of the order passed on I. A. No. 494 of 1958 in a decree subsequently passed on merits after the ex parte decree is set aside, and for that he relied upon Gopala Chetti v. Subbier, ILR 26 Mad 604. In the view that I have taken, it is not necessary for me in this case to decide that question.
20. The learned Subordinate Judge has directed that the respondent (transferee decree-holder) will be impleaded as a petitioner in I. A. No. 29 of 1955, and also directed that the truth and validity of the transfer in his favour shall be determined, and also the quantum of mesne profits to which he would be entitled.
21. In view of the foregoing discussion, the transferee decree-holder is entitled to be brought on record as the petitioner in I. A. No. 29 of 1955. In order to comply with strict legal procedure, he has filed an application for that purpose, C. M. P. No. 347 of 1963, to which a counter has been filed. There is no substance in the contentions on behalf of the appellants (judgment-debtors), and I hereby order that application, and direct that the respondent be impleaded as the petitioner in I. A. No. 29 of 1955 in O. S. No. 295 of 1948 on the file of the District Munsif's Court, Kakinada, and I confirm the direction given by the lower appellate Court.
22. The learned counsel for the appellants relied upon the decision in Kishan Dayal Gir v. Mahomed Amirul Hussein, 26 Ind Cas 673: (AIR 1915 Cal 373) for the proposition that after an ex parte decree is set aside, the transferee could not proceed with its execution before the order setting aside the ex parte decree was set aside and the Court could not set aside the order setting aside the ex parte decree under Section 151, C. P. C. This decision is of no assistance to the appellant, since the respondent is not now trying to execute the ex parte decree, but is only trying to enforce his rights as the transferee of the claim to mesne profits, and wants a determination of that amount in I. A. No. 29 of 1955. The other contentions on behalf of the appellant for the reasons stated above are unsustainable. I hold that the order of the learned Subordinate Judge under appeal is correct, and needs no interference.
23. The appeal fails, and is dismissed. In the circumstances, I make no order as to costs. No leave.