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Girdhari Lal Vs. Muni Lal and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtPunjab and Haryana High Court
Decided On
Case NumberCivil Regular First Appeal No. 126 of 1956
Judge
Reported inAIR1963P& H43
ActsCode of Civil Procedure (CPC) , 1908 - Sections 73
AppellantGirdhari Lal
RespondentMuni Lal and ors.
Appellant Advocate G.C. Mittal, Adv.
Respondent Advocate D.S. Tewatia and; N.K. Jain, Advs.
DispositionAppeal allowed
Cases ReferredAdministrator General of Bombay v. Haji Sultanally Sushtary and Co.
Excerpt:
.....a single judge in exercising powers of superintendence under article 227 of the constitution. - as already pointed out like rule of law has also been enunciated in the other two reported cases, air 1937 lah 937, and air 1956 mad 192. the identity of the interest or character or capacity of babu dayal judgment-debtor defendant in bath the decrees was not the same, in one he was liable as an individual and in the other as a partner of the firm, hence the two decrees cannot be said to be against the same judgment-debtor within the meaning of section 73 of the civil procedure code......lal obtained a decree for rs. 6.000/- on 11th october, 1950 against the firm styled as janardhan babu dayal through babu dayal and janardhan partners thereof. he executed the decree against babu dayal partner and in the course attached the allowance admissible to him as a member of legislative assembly, punjab. te] bhan also on the basis of an award succeeded in getting a money decree against babu dayal. he transferred his rights in the decree in favour of muni lal son of balu dayal judgment-debtor. the latter applied to the executing court that the assets held by (sic) in the execution of girdhari lal's decree might be rateably distributed amongst the aforesaid decree-holders. the executing court allowed his prayer.thereupon girdhari lal plaintiff instituted a suit in the court of the.....
Judgment:

Sharma, J.

1. This is an appeal against the Judgment and decree of the learned Senior Subordinate Judge, Gurgaon. Girdhari Lal obtained a decree for Rs. 6.000/- on 11th October, 1950 against the firm styled as Janardhan Babu Dayal through Babu Dayal and Janardhan partners thereof. He executed the decree against Babu Dayal partner and in the course attached the allowance admissible to him as a Member of Legislative Assembly, Punjab. Te] Bhan also on the basis of an award succeeded in getting a money decree against Babu Dayal. He transferred his rights In the decree in favour of Muni Lal son of Balu Dayal judgment-debtor. The latter applied to the executing Court that the assets held by (sic) in the execution of Girdhari Lal's decree might be rateably distributed amongst the aforesaid decree-holders. The executing Court allowed his prayer.

Thereupon Girdhari Lal plaintiff instituted a suit in the Court of the learned Senior Subordinate Judge, Gurgaon for a declaration that Muni Lal defendant was not entitled to any share in the assets held by the executing Court in the execution of his decree against Babu Dayal defendant on the grounds that Te] Bhan's decree was fictitious and collusive, that the transfer of the said decree was ineffective for similar reasons, that the two decrees were not against the same Judgment-debtor, and that the order for attachment of the judgment-debtor's allowance had been issued long before the other decree-holder applied for rateable distribution of the same.

2. Muni Lal defendant No. 1 controverted the above contentions and further added that the plaintiff's decree was without consideration, collusive and fictitious and that the suit in the form instituted was not maintainable. The proceedings took place ex parte against Firm Janardhan Babu Dayal, Babu Dayal and Janardhan, the other three defendants.

3. The trial Court struck the following issues:-

(1) Whether the decree dated 11th October, 1950 was collusive and with what effect?

(2) If issue No. 1 be not proved, whether defendant No. 1 purchased the said decree?

(3) If issue No. 2 be proved, whether the transfer of the decree was invalid or Illegal?

(4) Whether or not the defendant is entitled to share rateably?

(5) Whether the decree in favour of the plaintiff is invalid?

(6) Relief.

4. The learned Senior Subordinate Judge found issues Nos. 1, 3 and 4 against the plaintiff and Issue No. 2 in favour of defendant No. 1 and issue No. 5 against him in the result the plaintiff's suit was dismissed but the parties were left to bear their own costs.

5. The plaintiff-appellant In his grounds of appeal again took up the same pleas which he had urged before the Court below, but his learned counsel at the time of arguments pressed only one point that the two decrees were not against the same judgment-debtor as contemplated in Section 73 of the Civil Procedure Code, hence Muni Lal defendant-respondent on that score was not entitled to share rateably the assets held by the executing Court in the execution of the plaintiff's decree. Relevant portion of Section 73 of the Civil Procedure Code runs as:

'(1) Where assets are held by a Court and more persons than one have, before the receipt of such assets, made application to the Court for the execution of decrees for the payment of money passed against the same judgment-debtor and have not obtained satisfaction thereof, the assets, after deducting the costs of realization, shall be rateably distributed among all such persons.'

It is common ground that the plaintiff-appellant's decree is against the firm Janardhan Babu Dayal defendant and he executed the same against Babu Dayal defendant as partner thereof. Muni Lal defendant's decree is against Babu Dayal personally. The learned counsel for the plaintiff-appellant in support of his arguments relied on the case, Pacific Bank Ltd. v. Thakur Singh Kalsi, AIR 1949 Cal 39b, where S. R. Das J. while dealing with a similar question observed:

'The words 'same judgment-debtor' appearing In Section 73 indicate not only an identity of the individual but also an identity of the interest or character or capacity of the individual. The individual may be the same but it he has different interests or characters or capacities in different decrees, then the decree is not against 'the same judgment-debtor'.

A decree passed against a firm or against the partners in the firm as such and a decree passed against a partner otherwise than as a partner in the firm as such are not decrees passed against 'the same judgment-debtor' within the meaning of Section 73. To hold otherwise will mean that although a separate creditor-decree-holder cannot attach or sell partnership property, he can yet participate in the rateable distribution of such property. In a converse case, namely, when a separate creditor-decree-holder attaches and sells the separate property of his judgment-debtor who happens to be a partner in a firm and the sale proceeds are paid into Court and become assets held by the Court the partnership creditor-decree-holder, even if he applies for execution of his decree against that firm or the partners in that firm as such before receipt of such assets will not be entitled to participate in the rateable distribution of those assets, because his application would rot be against 'the same judgment-debtor' within the meaning of Section 73.

'This interpretation of Section 73 has the merit not only of carrying the principles of Section 49, Partnership Act, and of Order 21, Rule 49, Civil Procedure Code, to their full logical conclusion as regards the respective rights of the two sets of creditors over the partnership properties but also of giving at least partial effect in execution proceedings to the principles embodied in Section 49 as regards the respective rights of those two sets of creditors over the separate property of a judgment-debtor who hap-pens to be a partner. Hence, when a partnership creditor-decree-holder gets the assets representing partnership property into Court the separate creditor-decree-holder against any of the partners who applied for execution before receipt of assets cannot claim rateable distribution of those assets and when a separate creditor-decree-holder gets into Court the assets representing separate property of the judgment-debtor who happens to be a partner, the partnership creditor-decree-holder who applied for execution before receipt of assets will not be entitled to claim rateable distribution of those assets.

The only case in execution proceedings that will remain outside the operation of the principles enunciated inSection 49, Partnership Act, is one where the partnershipcreditor-decree-holder under Order 21, Rule 50 brings into Courtassets representing the separate property of a partner. Theseparate creditor-decree-holder against that partner whoapplied for execution before receipt of those assets butnot against the property represented by those assets willnot be entitled to rateable distribution of those assets'.

Similarly in T. G. Sundaraiyer v. K. N. Balusami Iyer, AIR1956 Mad 192, Subba Rao J. laid down that.

'A decree against a firm's partners and a decree against the partners in their individual capacity are not decrees against 'the same Judgment-debtor' within the meaning of Section 73.'

The same view was taken by Coldstream and Jai Lal JJ. in the case, Sadhu Ram v. Firm Dhanpat Rai Telu Ram, AIR 1937 Lah 937.

6. The learned counsel for the defendant-respondent brought to our notice a number of authorities In support of the view that the term 'the same judgment-debtor' as used in Section 73 of the Civil Procedure Code was to be liberally interpreted and that the decree against the firm was in fact a decree against the partners individually. There can be no quarrel about these propositions of law. He made an attempt to conclude therefrom that the plaintiff-appellant's decree for all intents and purposes was against Babu Dayal and Janardhan, the two partners of the firm Janardhan Babu Dayal, and that Muni Lal defendant-respondent's decree was against Babu Dayal and so Section 73 of the Civil Procedure Code was wide enough to entitle Muni Lal defendant to share rateably the assets held by the executing Court in execution of the plaintiff-appellant's decree against Babu Dayal defendant. He, however, omitted to take note of the fact that Babu Dayal judgment-debtor's capacities in both the decrees were different, in one he figured as an individual and in the other as a partner or the firm and that made the difference.

The two cases, Kritanta Kumar Guha v. Puliin Krishna Pal, AIR 1938 Cal 316, and Firm Pannaji Devichand v. Firm Lakkaji Dolaji, AIR 1943 Bom 156, relied upon by him no doubt support his line of argument. Both these authorities purport to lay down that where a partner is served and appears in a suit to defend It against the firm the decree could be executed against him personally and therefore he would be the same judgment-debtor in that decree and also in another decree obtained against him personally for the purposes of rateable distribution under Section 73 of the Civil Procedure Code. S. R. Das J. in the case in air 1949 Cal 396 noticed the above Bombay case and disagreed with the views expressed therein and in doing so observed:

'The case In AIR 1943 Bom 156, is on the point now under consideration. The head note is as follows: 'Where a partner is served and appears in a suit against a firm to defend it, under the combined operation of Order 30, Rule 6 and Order 21, Rule 50, Civil Procedure Code, 1908, a decree passed in the suit could be executed against him personally and he would accordingly be the same judgment-debtor in that decree as also in another decree obtained against him personally. The judgment-creditors in the two decrees would, therefore, be entitled to claim rateable distribution under Section 73, Civil procedure code, 1908.'

At p. 309 (of ILR Bom): (at p. 157 of AIR) Divatia J. dealt with the different rules of Order 30 to ascertain the nature of a decree against a firm and then referred to Order 21, Rule 50 and came to the conclusion that by the continued operation of those riles the judgment-debtor in the two decrees was the same. He distinguished Balmer Lawrie and Co. v. Jadunath Banerjee, AIR 1915 Cal 658, as if the principle of the decision in that case was confined to a case where leave had not been obtained to execute the decree against an alleged partner under Order 21, Rule 50 (2). He dissented from AIR 1937 Lah 937, on the ground (1) that Section 49, Partnership Act, which is in the Chapter relating to the dissolution of a firm, applied only after dissolution of a firm and not when a decree was obtained against a going firm, (ii) that it applied to different debts the debt of the firm and the separate debt of the partner - but that when decrees were passed, the debt merged in the decree and there came into being one Kind of debt created by the decrees in both cases, and (iii) that there was nothing in Order 21, Rule 50 to show that personal execution against the partner could not be taken unless the property of the partnership was exhausted. With great respect to the learned Judge he only took notice of the identity of the Individual in construing the words 'the same judgment-debtor' in Section 73 of the Code. Indeed at page 312 Divatia J. observes: The decisions in AIR 1919 Cal 658, and AIR 1937 Lah 937, seem to have been reliedupon on behalf of the respondent, and they were cited with approval in support of the proposition that a decree against A in his personal capacity and another against himas heir of a deceased person were not against the same judgment-debtor. To my mind there is a clear distinction between a person in his capacity as the heir of another person and a person who is a member of a firm and who is personally liable by virtue of the specific provisions of Order 21, Rule 50. This point does not seem to have been brought to the notice of the Court, and the two judgments tad been relied upon and cited with approval only for the general proposition that the judgment-debtor would not be the same where he filled two different capacities. If the learned Judge only referred to Order 21, Rule 49 he would have seen that a distinction had been made there between a decree against a firm or against the partners in the firm as suchand a decree against a partner not as a partner in the firm as such. If his Lordship then went back to Section 13 be would have found that in the application of that section to the claim of a separate creditor-decree-holder for ratable distribution in respect of partnership properties it had to be held that the two decrees were not against 'the same judgment-debtor' for to hold otherwise would be to allow rateable distribution of assets representing partnership properties to a separate creditor-decree-holder who could notunder Order 21, Rule 49 have attached or sold that property - an illogical and impossible position to take up. Once that meaning was given to those words in Section 73 read with Order 21, Rule 49 there Is no escape from giving the samemeaning to those words in Section 73 read with Order 21,Rule 50. The learned Judge overlooked the fact that although Section 49, Partnership Act, does not in terms apply to execution proceedings, yet the salutary principles embodied therein are consonant with 0. 21, Rule 49 and 50 and should be given effect to as far as possible. This can be done to a great extent if not fully by interpreting the word 'the same judgment-debtor' in the way I have, for reasons stated by me, indicated above. With the utmost respect I register my disagreement with the decision of Divatia J. in the last mentioned case.'

While dealing with Krishna Kumar Guha's case, AIR 1938 Cal 316 the learned judge in the same case remarked:

'After quoting the relevant portion of Section 73 of the Code, Nassim Ali J. proceeded as follows :

It has been already stated that the appellants applied for execution of their decree and made an application for rateable distribution before the receipt of the assets. Mr. Sen appearing on behalf of the opposite party, however, contended that the decree obtained by the appellants was against the firm Ram Krishna Bejoy Krishna Paul while the decree obtained by the opposite party was against Pulin Behari Paul and Anil Krishna Paul and three other persons individually. I am unable to accept this contention of Mr. Sen. It has been pointed out that the decree against the firm is In effect a decree against Pulin Behari Paul and Anil Krishna Paul individually. Consequently Pulin and Anil are the common judgment-debtors in the two decrees. This view is supported by a decision of the Bombay High Court in the case of the Administrator General of Bombay v. Haji Sultanally Sushtary and Co., AIR 1927 Bom 255, The appellants are therefore entitled to get rateable distribution of the sale proceeds in Execution Case No. 258 of 1933.'

The above observations only advert to the Identity of the individual and not to the Identity of the interest or character or capacity of the judgment-debtor in construing the meaning of the word . 'the same judgment-debtor' in Section 73. The principles of Section 49, partnership Act, and Order 21, Rule 49 and the distinction made in the last mentioned rules in the two kinds of decrees which I have referred to above were not considered or discussed. With great respect to the learned Judges I am unable to accept the above observations as a full or correct exposition of the law on the point under considerations. The grounds (2) and (3) raised by the learned Subordinate Judge were not dealt with at all.'

7. We are in respectful agreement with the views of S. R. Das J. As already pointed out like rule of law has also been enunciated in the other two reported cases, AIR 1937 Lah 937, and AIR 1956 Mad 192. The identity of the interest or character or capacity of Babu Dayal judgment-debtor defendant in bath the decrees was not the same, in one he was liable as an individual and in the other as a partner of the firm, hence the two decrees cannot be said to be against the same judgment-debtor within the meaning of Section 73 of the Civil Procedure Code. Muni Lal defendar respondent was, therefore, not entitled to claim rateable distribution of the assets held by the Court in the execution of Girdhari Lal plaintiff appellant's decree against the fire Janardhan Babu Dayal and that being so the plaintiff-appellant's suit should have been decreed.

8. For the above reasons the appeal is accepted with costs. The judgment and decree of the trial Court are set aside. The plaintiff-appellant is granted the declaration prayed for.

Mehar Singh, J.

9. I agree.


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