1. The question in this case is particularly one of the interpretation to be put on the statement made by defendant 1 through his counsel that the sum of Rs. 1,000, which stood to his credit in the criminal Court, should be sent for and paid to the plaintiff in satisfaction of his decree. The order passed by the Court was that the sum of Rs. 451, which represented the decretal amount, should be requisitioned from the Court of the Magistrate. If the proper intention is that the judgment-debtor had assigned this sum of money to the decree-holder, then it would at once become the decree-holder's property and would not be capable of being attached by any other creditor. There are two difficulties which must be stated. The first is that if it were an assignment of that amount, then the Court should have at once ordered that the decree was adjusted and was paid up in full, and should have struck off the execution case in full satisfaction, because an assignment of a debt ought to amount to payment. The Court, however, did not proceed in that way, but still proceeded to attach this amount as if it were executing a decree. The second difficulty is that the sum of Rs. 1,000 had been awarded by the Joint Magistrate as compensation to defendant 2, out of the fine paid by the accused in a defamation case. It may be doubtful whether the money could be the property of the defendant before it was actually paid to him by the Government Treasury. If either the amount had not become the property of the defendant or if it had not been validly assigned so as to pass the property to the decree-holder, it could be attached by the second creditor before the amount was realized by the execution Court. And even if the amount be considered as a part of the assets realized, both the decree-holders would be entitled to a rateable distribution.
2. That an oral assignment of a debt is legally valid cannot be doubted. The question really was one of the interpretation of the statement made by the defendant's counsel. Both the Courts below interpreted it in favour of the defendant decree-holder and held that the money had become the property of the defendant decree-holder before it was attached by the plaintiff and dismissed the suit. A learned Judge of this Court has taken a different view, and held that Section 73, Civil P.C., is applicable as the assets were realized by the execution Court after both the decree-holders had applied for execution, and that accordingly the plaintiff was entitled to rateable distribution. It does not appear to have been argued before the learned Judge that the statement made by the defendant's counsel had amounted to an assignment of the debt. He has accordingly expressed no opinion on this point. As my learned brother interprets the statement as amounting to an assignment of Rs. 451, and this view is in affirmance of the views taken by the Courts below, I feel that I should not differ from that view. No doubt there are difficulties in the way of holding that there was an out and out assignment, but at the same time the intention of the judgment-debtor was to give the sum to the decree-holder. I, therefore, concur in the order proposed.
3. This is a Letters Patent appeal from the decree passed by a learned Judge of this Court, reversing the concurrent decree of the first two Courts in a suit in which the plaintiff-respondents claimed a declaration of their right to a sum of Rs. 451 received by the City Munsif of Benares in suit No. 513 of 1929 from the Joint Magistrate of Benares. The facts which gave rise to the litigation are not in dispute. A sum of Rs. 1,000 was awarded by the Joint Magistrate of Benares to defendant 2 out of the fine to be paid by the accused in a defamation case. Defendant 2 was the complainant and the sum was awarded to him-as compensation. The fine was paid and consequently defendant 2 had a right to recover Rs. 1,000 thereout in terms of the order of the Magistrate. Before defendant 2 could recover that amount, one of his creditors, namely defendant 1, instituted a suit, in the Court of the City Munsif, Benares, claiming, inter alia, a sum of Rs. 451 and took out attachment before judgment under the Court's order dated 11th November 1929 and had the aforesaid sum of Rs. 1,000 attached. The case was fixed for 18th December 19291 when the defendant of that case (present defendant 2) stated through his counsel, admitting the claim of the then plaintiff to Rs. 451, that out of Rs. 1,000, which stood to his credit in the criminal Court; and which had been attached before judgment Rs. 451 be sent for and given to the plaintiff in satisfaction of the decree which was or was to be passed that day. The order of the Court passed on this statement, was that a decree under Order 12, Rule 6, Civil P.C., be passed and the sum of Rs. 451 attached before judgment be requisitioned from the Court of the Joint Magistrate. The statement referred to above gives an impression that it was made after the Court had passed a decree under Order 12, Rulse 6, that is to say a decree in respect of that part of the claim which was admitted, the plaintiff's suit to continue for the rest of his claim. The original record of that case is not before me but the munsif who apparently had the record before him has noted in his judgment in this case that
the Count recorded an order on 18th December 1929 under Order 12, Rule 6, decreeing the claim for Rs. 451 and requisitioning Rs. 451 from the Joint Magistrate's Court for payment to Bam Govind.
4. This shows that the order decreeing the suit in part also contained a provision that Rs. 451 be requisitioned from the Joint Magistrate's Court and be paid to Ram Govind, defendant 1. To resume the narrative of the facts of the case, a requisition was sent to the Court of the Joint Magistrate on that very day. The money was not, however, received from the Joint Magistrate's Court till 31st January 1930. In the meantime, the plaintiff who was also a creditor of defendant 2, instituted, on 20th December 1929, a suit for recovery of Rs. 1,010 obtained attachment before judgment of the sum of Rs. 1,000 standing to the credit of the debtor in the Court of the Joint Magistrate. It should be noted that the plaintiff's suit and attachment before judgment at Ms instance all took place after 18th December 1929 when defendant 2 had confessed judgment in favour of defendant 1 and had requested the Court to requisition Rs. 451 from the Court of the joint Magistrate for satisfaction of his (defendant 1's) claim and the Court had requisitioned the money. The suit of the plaintiff was eventually decreed and he applied for execution of his decree, claiming the entire sum of Rs. 451 then held by the Munsif. On objection by defendant 1, his application, as far as it related to the sum of Rs. 451, was dismissed. He then filed the suit which has given rise to this appeal, claiming a declaration that he is exclusively entitled to Rs. 451 received by the Munsif from the Court of the joint Magistrate. His case is that defendant 1 never applied for execution of his decree and consequently no money could be paid to him in satisfaction of his decree passed on 18th December 1929 and that he, the present plaintiff, having made a formal application for execution was entitled to the entire sum including the Rs. 451 received by the Munsif. The trial Court dismissed the plaintiff's suit. The plaintiff's appeal which was disposed of by the Subordinate Judge of Benares was also unsuccessful. In second appeal by the plaintiff, a learned Judge of this Court partly allowed it and directed that the sum of Rs. 1000 recoverable by defendant 2 from the Court of the joint Magistrate be rateably distributed between the plaintiff and defendant 1. In this Letters Patent appeal, defendant 1 contends that he is solely entitles to the sum of Rs. 451 which had been specifically given to him by defendant 2, and by the order of Court, on 18th December 1929.
5. The decision of the case turns, in my opinion, on the effect of the proceedings taken on 18th December 1929 in the suit brought by defendant 1 against defendant 2 (suit No. 513 of 1929). It may be stated at once that attachment before judgment or otherwise does not create any interest in favour of the attaching creditor. It merely amounts to the property attached being held by the Court in its own custody. So long as the attachment subsists, the judgment-debtor cannot exercise any disposing power over it except with the leave of the Court. The attachment before judgment obtained by defendant 1 therefore conferred no right upon him. Similarly subsequent attachment before judgment obtained by the plaintiff did not give him any right to the sum so attached. But the declaration of defendant 2 made on 18th December 1929 and given effect to by the Court which had attached the sum, in my opinion, amounted to an assignment of Rs. 451 out of Rs. 1000 which stood to his credit in the Court of the joint Magistrate. Before the attachment defendant 2 could have withdrawn the amount from the Court of the joint Magistrate; but after attachment obtained by defendant 1, he could do so only under the orders of the Court attaching it. On 18th December 1929, he stated before the Court that out of Rs. 1000, Rs. 451 be requisitioned from the Court of the joint Magistrate and he paid to defendant 1 in satisfaction of his claim. There is no doubt that the creditor who had obtained the order of attachment before judgment had accepted the arrangement. The Court which attached it gave effect to the wishes of the parties before it. The only manner in which defendant 2 could assign Rs. 451 out of Rs. 1000 to defendant 1 was by requesting the Court, which had attached it and under whose orders the joint Magistrate held it, to hand it over to defendant 1. He could not himself draw that amount and hand it over to defendant 1. He did everything which he possibly could to make an effective assignment of his right to receive Rs. 451 out of Rs. 1000 which stood to his credit. Even if the Court had been no party to the assignment, I am clearly of opinion that its validity would not have been affected. Section 64, Civil P.C., prohibits transfer or delivery of the property attached only 'against all claims enforceable under the attachment'. The attachment had been made at the instance of the person to whom it was assigned and Section 64, Civil P.C., would not have made the assignment invalid.
6. That the declaration made by defendant 2 amounted to assignment in law can, in my opinion, admit of no doubt. I have already shown that the assignor had a right to the fund and that he did everything which he could to convey his right to the assignee. The right of defendant 2 to the sum of Rs. 1000 held by the joint Magistrate amounted to 'chose in action' as distinguished from 'chose in possession' (Halsbury's Laws of England, Vol. 4, Section 777). A distinction exists in English law between legal assignment and equitable assignment. There is statutory provision in England contained in the Law of Property Act 1925, in respect of legal assignment. Even where a trans-action does not amount to legal assignment for want of due formalities, English law recognizes equitable assignment under which a right is created in favour of the assignee. The subject is well discussed in Halsbury's Laws of England, Vol. 4, Sections 805 to 807. I quote below a few relevant passages:
805. From the earliest times Courts of equity have always permitted and given effect to assignments of all kinds of choses in action when made for valuable consideration and not contrary to public policy.
806. No form of words is required for an equitable, assignment; the only thing that is necessary is to make the meaning plain. The assignment may be by word of mouth, unless in the particular case writing is required and no particular form of words is necessary so long as they clearly show an intention that the assignee is to have the benefit of the chose in action. It may be addressed either to the debtor or to the assignee. An agreement amounting to an equitable charge may even be made out from a course of dealing between the parties. An engagement or direction to pay a sum of money out of a specified debt or fund constitutes an equitable assignment, though not of the whole debt or fund. But it is necessary to specify the debt or fund. So also a mere charge on a debt or fund operates as a pactial equitable assignment. It is immaterial that the amount of the debt assigned is not ascertained at the date of the assignment.
807. In the case of future choses in action an assignment in terms present and immediate is sufficient, and will bind the subject matter when it comes into existence, if it is of such a nature and so described as to be capable of being ascertained and there is consideration for the assignment.
7. The above rules are based on decided cases which are quoted in the work. Applying them to the facts of the present case. I find that every requirement of the rule is present. There was valuable consideration for the assignment. Rs. 451 were due to defendant 1 from defendant 2 who made the assignment. It was in satisfaction of that sum that the assignment was made. There is nothing in Indian law which requires an assignment to be expressed in any particular words, nor is a particular form prescribed for effecting it. The intention of defendant 2 to pay Rs. 451, out of the sum of Rupees 1000 recoverable by him, to defendant 1, is clear. The words constituting the assignment were addressed to the assignee and also to the Court which had dominion over the fund. The fund was dearly specified. As a matter of fact, it had been already attached by the Court and there could be no doubt about its identity. There is a clear authority of this Court in support of the view I am inclined to take. In Gur Prasad v. Gorakhpur Bank Ltd. A.I.R. 1914 All 279, it was held on the authority of an English case that:
It is competent to a person who has money with a banking company on fixed deposit, with the assent of such company, if not without it, to assign to any person, either absolutely or by way of a charge, the debt due or about to become due to him from the banking company.
8. The facts of the case were that one Majid Husain Khan had a sum of Rupees 8,700 in deposit with the Kayastha Trading and Banking Corporation and had obtained a receipt in the ordinary form which was marked, 'not transferable'. Majid Husain Khan borrowed Rs. 4,650 from the Gorakhpur Bank and gave a writing to its manager authorizing it, to recover the amount from the sum for the time being standing in his name with the Kayastba Trading and Banking Corporation. On the same date the Gorakhpur Bank wrote to the Manager of the Kayastha Trading and Banking Corporation, claiming a charge on the fixed deposit. The latter acknowledged the letter and noted the claim. Another creditor of Majid Husain Khan attached the deposit and thereupon the Gorakhpur Bank instituted a suit for recovery of the sum held by the Kayastha Trading and Banking Corporation to the credit of Majid Husain Khan. The contest was between the attaching creditor who had applied for execution of his decree and the Gorakhpur Bank which claimed a charge on the deposit. A Division Bench of this Court (Chamier and Rafiq JJ.) observe:
In the present case we can see no reason why it should not be held that there was what would be called in England an equitable assignment by way of charge of the amount of the fixed deposit to the Gorakhpur Bank. The circumstance that the fixed deposit receipt bears the words 'not transferable' is immaterial, because it is not suggested that any charge on the money is claimed by the Kayastha Trading and Banking Corporation, and the latter distinctly recognized the right of the Gorakhpur Bank to a charge on the balance of the deposit. It has been held in many cases that the form of an assignment of this description is of no importance so long as the intention to assign or to make a charge is clear. An agreement between a debtor and a creditor that the debt shall be paid out of a specific fund coming to the debtor is a good equitable assignment.
9. The learned Judges relied on William Brandt's Sons & Co. v. Dunlop Rubber Co. Ltd. (1905) A.C. 454. I have referred to the report of that case and find that it is fully applicable to the facts of the present case also. Among the cases decided by other High Courts which support the view I am taking, may be mentioned Nandu Bai v. Gau (1903) 27 Bom 150 and Thakur Das v. Malik Chand A.I.R. 1933 Lah 102. If for some reason, the declaration made by defendant 2 on 18th December 1929 be not considered to amount to an assignment, its words created, at least, a charge on the sum of Rs. 1000 recoverable by him. Where a fund is indicated out of which a specified liability is to be met, a charge is created. In Nathan Lal v. Durga Das : AIR1931All62 , it was held that:
In order to constitute a charge it is not necessary to employ any technical terms. A charge does not involve the transfer of the interest in the property subject thereto and arises from the circumstance that certain property, moveable or immoveable or any interest in such property is indicated with certainty as the fund out of which a certain claim is to be met or satisfied, the fund so indicated being the security for the claim.
10. In the present case the fund is clearly indicated and the liability of the owner of that fund to the extent of Rs. 451 was to be satisfied out of that fund. For the reasons explained above, I am of opinion that defendant 1 acquired an absolute interest in the sum of Rs. 451, which was requisitioned from the Court of the joint Magistrate by the Munsif's order, dated 18th December 1929, and, in any case, he acquired a charge which, when worked out, would give him the same right. On the contrary, the plaintiff did not acquire any interest by taking out attachment before judgment under a subsequent order in his own suit, as defendant 2 had no right left to the sum of Rs. 451. On this view, this appeal must be allowed, the decree appealed from should be set aside and that of the Court of first instance should be restored.