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Eliakutty and ors. Vs. Pudukkad Public Bank - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKerala High Court
Decided On
Case NumberSecond Appeal Suit No. 173 of 1959
Judge
Reported inAIR1963Ker195
ActsCode of Civil Procedure (CPC) , 1908 - Sections 144 and 151 - Order 21, Rule 53
AppellantEliakutty and ors.
RespondentPudukkad Public Bank
Appellant Advocate M.K. Narayana Menon, Adv.
Respondent Advocate Varghese Kalliath, Adv. for; George Vadakkel, Adv.
DispositionAppeal allowed
Cases ReferredIn Firm Mahesh Dass Chanan Dass v. Mehnga Ram
Excerpt:
.....in the attached decree tut only in the first instance for the benefit of the attaching decreeholder, and nothing can be paid to the judgment-debtor of the attaching decreeholder till the decree in execution of which the other decree was attached has been satisfied......an attachment before judgment does not entitle the creditor to proceed upon the same before his suit is decreed and execution moved thereon. the only provision which allows a person, who has attached a decree, to execute it is in order 21, rule 53, c. p. c., sub-section 3 of which reads:'the holder of a decree sought to be executed by the attachment of another decree of the nature specified in sub-rule (1) (i.e. a decree for payment of money or for sale in enforcement of a mortgage or charge) shall be deemed to be the representative of the holder of the attached decree and to be entitled to execute such attached decree in any manner lawful for the holder thereof.'it entitles only 'the holder of a decree sought to be executed by the attachment of another decree' to execute the attached.....
Judgment:

M. Madhavan Nair, J.

1. This appeal has exposed a strange process by which a plaintiff could forcibly realise his claim from a defendant before the suit came up for trial. The manoeuvre did not stop there. After that recovery the plaintiff collected the suit amount from another defendant in the suit and agreed to the dismissal of the suit as against the first mentioned defendant and resisted successfully a claim for refund of what has been admittedly taken twice over on the ground that the section of the Code is misquoted.

2. The facts are thus: One K. R. Anthony issued a post-dated cheque to P. K. Anthony on the Cochin Nayar Bank Ltd., Puduhad branch. P. K. Anthony endorsed it in favour of the respondent-Bank and got it discounted by Nanappan Anthony who was then manager of the Bank. The cheque was dishonoured by the drawee Bank on presentation at maturity. The respondent Bank then filed O. S. No. 38 of 1122 on the file of the District Court, Anjikaimal (now Ema-kulam), against K. R. Anthony, P. K. Anthony and Nanappan Anthony for damages suffered by it on account of the above transaction, and attached before judgment a money-decree that had been obtained by Nanappan Anthony In 0. S. No. 615 of 1121 on the file of the Munsif, Irinjalakuda. Pursuing the attachment, the respondent got itself impleaded as the attaching decree-holder in O. S. No. 615, executed that decree, collected its proceeds on November 24, 1952, and credited the amount in what was styled a 'suspense account' In the name of Nanappan Anthony.

By the time O. S. 38 cams up for trial, P. K. Anthony had died and his estate had been adjudicated insolvent by the District Court, Anjikaimal, and vested in the Official Receiver. On March 11, 1955, the respondent Bank compromised the suit (0. S. 38) with K. R. Anthony and the legat representatives of P. K. Anthony, and filed an affidavit (Ext. P2 here) agreeing to the dismissal of the suit as against Nanappan Anthony and his estate and claiming a decree for the suit amount against K. R. Anthony and the est, ofP. K. Anthony; and that was accepted by the court and made the decree in the suit on March 18, 1955. On November 30, 1955, the respondent applied to the Insolvency Court for payment out of the estate of P. K. Anthony and the entire decree amount in O. S. 38 was deposited by the Official Receiver and paid to the respondent.

3. The appellants 1 to 10 are the widow and children of Nanappan Anthony and the 11th appellant is their assignee. On November 19, 1957, they filed a joint application in O. S. 615, under Section 144 C. P. C for 'restitution' of the amount 'wrongfully realised' by the respondent Bank. The Bank opposed the application as unsustainable in law and barred by limitation.

The Munsif, Irinjalakuda, held :

'When because of the dismissal of the suit as against the petitioners and their predecessor-in-interest, the attachment and all subsequent proceedings in pursuance of such attachment would cease to have any effect any amount realised by virtue of such attachment is liable to be refunded. It is immaterial whether the amount is sought to be recovered by restitution or not. This application if it had been filed in the Anjikaimal District Court in 0. S. 38/22 there Would have been no objection for the respondent, because 'In that case it would be In strict compliance with the provisions contained in Section 144. But even If it is filed in this court, in order to meet the ends of justice, I think that I can direct the respondent bank to deposit the amount in court which they have realised by virtue of an attachment before judgment. The suit as against the petitioners having been dismissed, the respondent is liable to refund that amount so realised. Even if the provisions in Section 144 may not be strictly applicable to this petition, since the facts I have stated above are undisputed, the respondent is bound to. refund the amounts already realised by them on behalf of the petitioners' predecessor-in-interest. In this view t do not think it necessary for me to consider whether Section 144 strictly applies here or not.

'It is argued by the learned counsel for the respondent that the claim to ask for refund is at any rate barred by limitation. It must be noticed that the suit as against the petitioners was dismissed only on 18-3-55. Tbe right to ask for refund accrues only when the suit was finally adjudicated, viz., on 18-3-55. From that date under Article 181 of the Limitation Act, the petitioners get a period of three years for relief. I therefore find that the claim is not barred by limitation.

'It is further argued for the respondent that the expenses incurred by him in realising the amount must be given credit to. I think this is a fair demand. Even if the petitioners are to execute the decree they will have to expend money for executing the decree and realising the amounts. I therefore find that the petitioners would be liable to pay off the expenses incurred by the respondent in executing the decree and realising the amounts. Crediting that amount the balance alone will be liable to be refunded.. .......

'In the result, this petition Is allowed'. The respondent will have his costs incurred In executing the decree in 0, S. 615/21 which he can set off from the amount liable to be refunded by him.'

The respondent appealed before the Subordinate Judge Irinjatakuda, who held:

'In so far as the decree in 0. S. 615/21 has not been varied or reversed, Section 144 does not apply.

'The next question is whether the Inherent power of the court can be invoked for granting the refund. There is one distinction between the exercise of powers under Sec-tion 144 and the exercise of court's Inherent Jurisdiction. While section 144 is mandatory the exercise of the power under section 151 depends upon the discretion of the court which will be used only In the interest of the justice. Where the applicant for restitution having another remedy open to him and has failed to avail himself of the same, the court will not grant the restitution under its inherent power. The inherent powers of a court do not extend to convert an application which has nothing to do with restitution Into one for restitution. ...... The proper forum for thisapplication for restitution is in 0. S. No. 38/22. There is also no bar for the petitioners to file an original suit for the recovery of the amount. The appellant bank has also raised a question of limitation with regard to this petition on the ground that the decree 0. S. 615/21 was satisfied as early as 24-11-1952 and this petition for refund is long after three years of the satisfaction of that decree. The appellant concedes that there is no limitation if Section 144 is maintainable, it is argued by the respondent that there is no bar even otherwise in so far as his cause of action for making an application for restitution had arisen on 18-3-55, bv the dismissal of the suit In 0. S. 38/22 against the respondent-petitioners and therefore there is no bar for this petition. I accept the contention put forward by the respondent and find that there is no limitation for the petition. In so far as the respondent-petitioners have not applied to the proper forum for restitution and this is not the only remedy for them for the recovery of the amount, there is no scope for exercising the inherent jurisdiction of the court under Section 151 when Section 144 is not directly applicable to the fact of the case. In the circumstances referred to above the petition for restitution under Section 144 in 0. S. 615/21 is incompetent.

'In the result the appeal is allowed and the order of the court below is reversed.'

Hence this second appeal by the applicants being the legal representatives of Nanappan Anthony and their assignee.

4. It is clear from the narrative, that the fundamental error was in having allowed the respondent Bank to execute the decree In 0. S. 615 before its claim in 0. S. 33 was adjudged.

5. An attachment before Judgment does not entitle the creditor to proceed upon the same before his suit is decreed and execution moved thereon. The only provision which allows a person, who has attached a decree, to execute it is in Order 21, Rule 53, C. P. C., Sub-section 3 of which reads:

'The holder of a decree sought to be executed by the attachment of another decree of the nature specified in Sub-rule (1) (i.e. a decree for payment of money or for sale in enforcement of a mortgage or charge) shall be deemed to be the representative of the holder of the attached decree and to be entitled to execute such attached decree in any manner lawful for the holder thereof.'

It entitles only 'the holder of a decree sought to be executed by the attachment of another decree' to execute the attached decree. It postulates that the attaching creditor has a decree to be executed by the attachment, and that execution of the attached decree is only a process in execution of that subsisting decree of the attaching creditor. Law nowhere contemplates a process in court in realisation of a claim which has not been adjudicated upon. Execution is the end and fruit of an action, and can only be after judgment, and never before it.

Attachment as a process in execution is far different In nature and effect from an attachment before judgment. Thelatter is only to prevent any attempt on the part of the defendant to defeat the decree that may be passed against him. It is only a preventive or preservative action.

'An attachment before judgment does not for all purpose stand on the same footing as an attachment in execution proceedings. This indeed is obvious from first principles. The attachment does not of necessity ensure the property to the person who attaches it. He becomes entitled to proceed against it only if he eventually gets a decree.'

Basiram v. Kattyayani Debi, ILR 38 Cal 448.

There is no law, nor equity, In favour of a creditor being allowed to execute a decree obtained by his debtor before he has obtained judgment in his cause; and even if he be allowed to execute it, he can only bring the amount to court and cannot take it from court for himself.

6. The execution of the decree In O.. S. 615 and the withdrawal of its proceeds from court by the respondent were clearly wrong on its part and that is sufficient reason to direct it to bring the amount less the expenses of that execution back to Court. The gravity of the wrong becomes, redoubled in this case when we remember that O. S. No. 38 of 1122 has never been decreed, but only been dismissed as against Nanappan Anthony, the predecessor-in-interest of the appellants here.

The principle is what Cairns L. C. has laid in Rodger v. Comptoir d'Escompte de Paris, (1871) 3 PC 465, and was followed by the Privy Council in Jai Berham v. Kedar Hath Marwari, AIR 1922 PC 269:

'One of the first and highest duties of all Courts is to take care that the act of the Court does no injury to any of the suitors.'

Jackson and Butler JJ. ordered in Perianan Chettiar v. lakshmanan Chettiar, AIR 1935 Mad 212:

'It is the duty of the Court to rectify its own mistake, and having paid out moneys which were under attachment to get them returned.'

In Firm Mahesh Dass Chanan Dass v. Mehnga Ram, AIR 1934 Lab 142, the appellant had, in execution of his decree against the respondent, attached a decree for a much larger amount obtained by the latter against a third person. The respondent executed his decree for the difference, that is to say, for the amount of the decree minus what was due to the appellant, and realised a part thereof in rateable distribution along with other creditors of his debtor. The appellant then moved for refund of the amount collected by the respondent to be paid to him in discharge of his attachment. Jai Lal j., ordering refund as prayed for by the appellant, held:

'I am unable to find any express provisions of law entitling the Judge to pass an order of refund; probably Section 151, Civil P. C., would cover a case like the present..... When a decree is attached in execution of another decree, the former decree can be executed either by the attaching decreeholder or by the decreeholder in the attached decree tut only in the first instance for the benefit of the attaching decreeholder, and nothing can be paid to the judgment-debtor of the attaching decreeholder till the decree in execution of which the other decree was attached has been satisfied.'

In these cases, the court exercised its inherent powers to recall amounts wrongly paid to a party by the court. It was an obvious error on the part of the court to have allowed execution by the respondent which had no decree to execute and to have disbursed the proceeds of the attached decree to it. It was an abuse of the process of the court on the part of the respondent to have taken out execution of a decree attached before judgment, before judg-ment was entered on his claim and to have drawn the, amount realised therein from the court. It then behoved on the court w exercise its inherent powers to rectify that error by recalling the amount from the respondent Bank to be paid to the appellants who are legitimately entitled thereto.

7. The Subordinate Judge has held that the application for restitution ought to have been mcved in O. S. 38 and not in O. S. 615. The reason given is that 'the decree (in O. S. 38) was modified exonerating the petitioners'. Evidently the Subordinate Judge was labouring under a mistake. O. S. 38 was decreed for the first time on March 18, 1955, and that exonerating the petitioners, the appellants here, from liability. The suit was dismissed as against them. There was no appeal from, nor review of that decree, and the decree passed on March 18, 1955 was never modified. It was a consent decree. Though the reason is thus exposed to be incorrect, counsel for the respondent Bank contended that his conclusion is correct. I cannot agree. The amount was realised by the respondent as the attaching decreeholder in O. S. 615. Refund can be sought only in a suit in which credit has been entered for the amount. The concerned amount was never brought to the credit of O. S. 38; and therefore an application for refund in O. S. 38 cannot lie.' The wrongful process by which the money has been collected by the respondent was in O. S. 615 of 1121. it should be rectified in O. S. 615 itself. The motion for refund made by the appellants in O. S. 615 must be found proper and correct.

Section 144 of the Code of Civil Procedure reads:

'Where and in so far as a decree (or an order) is varied or reversed, the Court of first instance shall, on tha application of any party entitled to any benefit by way of restitution or otherwise, cause such restitution to be made as will, so far as may be, place the parties in the position which they would have occupied but for such decree (or order), or such part thereof as has been varied or reversed.'

Obviously, the present case cannot come under this Section. Restitution proceedings under Section 144 are essentially proceedings in execution and can only be between parties arrayed on either side of the suit. The section is inapplicable to claims between parties on the samo array. Nanappan Anthony was the decree-holder in O. S. 615; and it is as attaching decreeholder in O. S. 615, that the respondent Bank collected (though wrongly) the amount in question. Order 21, Rule 53 provides that an attaching decreeholder shall be deemed to be the representative of the decreeholder. Hence the appellants cannot call Section 144 C. P. C. to their aid. Refund has to be ordered under Section 151 C. P. C.; and that order has to be made in O. S. 615 where the court's process was in abuse by the respondent.

8. Counsel for respondent contended that the impugned realisation having been on November 24, 1952, the present application for refund moved on November 19, 1957, is barred by limitation. I do not think so.

To the execution ordered in O. S. 615 at ths instance of the respondent, the appellants were also parties. Thsugh the orders therein were grossly erroneous the appellants were bound by it. So long as the attachment remained in force, the steps taken in pursuance thereof cannot be held to have been without jurisdiction, though grossly improper. The authority that the respondent had to keep the amount collected by him for later appropriation in satisfaction of his claim In O. S. 38 against Nanappan Anthony lasted till, and only till, that suit was dismissed by court on March 18, 1955. The motion for refund of the amount made onNovember 19, 1957, being within three years of that dismissal cannot be held beyond time.

9. In the result, the order of the Subordinate Judgeis discharged and that of the Munsif restored, with coststo the appellants throughout.


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