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Ramzan Khan Vs. Seth Hiralal and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtRajasthan High Court
Decided On
Case NumberCivil Revn. No. 101 of 1957
Judge
Reported inAIR1961Raj118
ActsCode of Civil Procedure (CPC) , 1908 - Sections 73
AppellantRamzan Khan
RespondentSeth Hiralal and ors.
Appellant Advocate Sagar Mal, Adv.
Respondent Advocate N.M. Kasliwal, Adv.
DispositionRevision dismissed
Cases ReferredMulchand v. Shiddappa
Excerpt:
- - although execution proceedings in all these decrees were pending simultaneously in the two courts the property was first put to safe in ramzaa khan's decree and was sold for rs. 8. under sections 270 and 271 of the code or 1859, the creditor who first attached the property had a statutory priority to have his claim satisfied in full out of the sale proceeds to the exclusion of other creditors. ' 11. in a case like the present one where the assets are obtained by the sale of property which is liable to attachment and sale in the decrees of creditors of estate a and those of estate b there will be no injustice if the assets are rateably distributed between the creditors of the two estates......shops are equally liable to attachment and sale in execution, of all these decrees. nona of the decree-holders is entitled to get any priority over the other decree-holders. 3. ramzaa khan obtained a decree against lekh raj in respect of a liability of his father, bala bus after the death of bala bux. lekh raj however died in 1951 leaving a widow smt. suraj bai and a minor son mahesh kumar. ramzan khan filed his execution application against them, 4. in the other decrees also execution is proceeding against smt. suraj bai. the liabilities on the basis of which these decrees: were passed were however incurred by lekh raj. some of the decrees were passed against lekh raj and some were passed against bis legal representative smt, suraj raj. the shops were attached in the above decrees on.....
Judgment:
ORDER

Jagat Narayan, J.

1. This is a revision, application by one Ramzan Khan against an order of the District Judge Jaipur City directing that the assets obtained by the sale of twelve shops in execution of his decree be ratably distributed amongst him and Hiralal, Pyarelal, Manakchand and Motilal respondents Nos. 1 to 4.

2. These twelve shops originally belonged to one Khawas Balabux who died before 1944 leaving a son Lekhraj. Khawas Balabux and Lekhraj constituted a joint Hindu family and the twelve shops which were attached by Ramzan Khan and four, of the respondents in their decrees are ancestral properties. It is not disputed that these twelve shops are equally liable to attachment and sale in execution, of all these decrees. Nona of the decree-holders is entitled to get any priority over the other decree-holders.

3. Ramzaa Khan obtained a decree against Lekh Raj in respect of a liability of his father, Bala Bus after the death of Bala Bux. Lekh Raj however died in 1951 leaving a widow Smt. Suraj Bai and a minor son Mahesh Kumar. Ramzan Khan filed his execution application against them,

4. In the other decrees also execution is proceeding against Smt. Suraj Bai. The liabilities on the basis of which these decrees: were passed were however incurred by Lekh Raj. Some of the decrees were passed against Lekh Raj and some were passed against bis legal representative Smt, Suraj Raj. The shops were attached in the above decrees on the dates given below :

(1) Heera Lal's decree .... 22-12-48(2) Pyarelal's 3 decrees ... 11-10-59.(3) Ramzan Khan's decree .... 10-2-54(4) Moti Lal's decree .... 13-7-54(5) Manak Chand's decree .... 22-18-54.

Ramzan Khan's decree was being executed in the court of Civil Judge Jaipur. City. The other decrees were being executed in the court of the District Judge Jaipur City. Although execution proceedings in all these decrees were pending simultaneously in the two courts the property was first put to safe in Ramzaa Khan's decree and was sold for Rs. 16,000/-. Oil an application made by the other decree-holders under Section 63, C. P. C. the assets obtained by the sale of the attached property were transferred to the court of District Judge Jaipur City for distribution amongst the various decree-holders who may be entitled to get them in execution, of their decrees.

5. Before the learned District Judge Ramzan Khan claimed priority over the other decree-holders on the ground that he was the first to get the property sold in execution of his decree, contending that the other decree-holders were not entitled to ratable distribution under Section 73 as then decrees had been passed on the basis of the liabilities of a different person. The learned District Judge overruled this contention and ordered ratable distribution. Against that order the present revision application has been filed.

6. On behalf of Ramzan Khan applicant reliance was placed on Jamiyatram v. Umiyashankar, AIR 1941 Bom 327. On behalf of the other decree-holders the decisions in Hemendra Nath v. East Bengal Commercial Bank, AIR 1936 Cal 210 and Ramakrishnan v. Kasi Viswanathan, AIR 1936 Mad 40 were relied upon.

7. There is a conflict of opinion as to the interpretation of the words 'passed against the same judgment-debtor' occurring in Section 73. 'Judgment-debtor' is defined in Section 2(10) as meaning any person against whom a decree has been passed. If a strict literal interpretation was to be put upon the expression it is clear that before Section 73 could apply there most be complete identity of the judgment-debtor in all the decrees. Such an interpretation would however defeat the very object of the Legislature in enacting this provision.

8. Under Sections 270 and 271 of the Code or 1859, the creditor who first attached the property had a statutory priority to have his claim satisfied in full out of the sale proceeds to the exclusion of other creditors. This superior position assigned to the first attaching creditor naturally led to scrambles and mal-practices among attaching creditors and with a view to put an end to the same, the section was changed by the Code of 1877 so as to place all decree-holders on an equal footing regardless of any priority in attachment or of the application for rateable distribution. The object of the section is two-fold:--

(1) to prevent unnecessary multiplicity of execution proceedings, to obviate in a case where there are many decree-holders, each competent to execute his decree by attachment and sale of a particular property, the necessity of each and every one separately attaching and separately selling that property;

(2) to secure an equitable administration of the property by placing all the decree-holders on the same footing and making the property rateably divisible among them.

The rule enunciated in this section is only a rule of procedure. It does not alter or limit the substantive rights of rival decree-holders.

9. All the High Courts now agree that it is necessary to give to Section 73 a liberal interpretation consistently with the object which the Legislature intended to carry out by enacting the section. But the limits to which they have extended the meaning of the expression 'judgment-debtor' as occurring in Section 73 vary. In my opinion the intention of the Legislature can only be fully carried out if Section 73 is made applicable to all cases in which the assets have been realised by the sale of a particular property which is liable to attachment and sale in morethan one decree. It was observed by the Full Bench in Dundappa v. Annaji, AIR 1953 Bom 65.

'Although the Legislature has used the expression 'the same judgment-debtor', it is clear that what is emphasised in Section 73 is more what is realised in execution than the identity of the judgment-debtor. What is to be distributed rateably are the assets, and if the assets belong to the same person, then it is difficult to see why the principle of rateable distribution should not be open to the judgment-creditor. Did the Legislature really intend that although the assets realised were of the same debtor, merely because the judgment-debtors on the record were different, the principle of rateable distribution should not apply. It is difficult to come to that conclusion unless the language is so plain that we would feel that we were doing violence to it by placing this more liberal interpretation upon the expression 'the same judgment-debtor'. In our opinion the expression 'the same judgment-debtor' must be construed in its own context, and, as I said before, when the context deals with the realisation of the assets and when judgment-creditors are more concerned with the assets they realise for the purposes of satisfying the decree than, with the identity of the judgment-debtor, it is clear that the Legislature did not intend that the expression 'the same judgment-debtor' should be construed in a strictly technical sense.

.... .... ..... .....' It seems to us, again speaking with very great respect, that that High, Court (Calcutta) having gone as far as Gonesh Das Bagria v. Shiva Lakshman Bhakat, ILR 30 Cal 583 (FB), seemed to have paused and refused to, what they considered, extend further the meaning of 'the same judgment-debtor' used in Section 73. But in our opinion if it is possible for the Court to take the view that was taken in ILR 30 Cal 583 (FB), we do not see why it is not possible to take the view which was taken in AIR 1936 Mad 40 (FB), Hoti Lal v. Chatura Prasad, AIR 1941 All 110 (FB) and Sheo Charan Das v. Ram Saran Das, AIR 1943 Lah 148 (FB).'

Section 73 will therefore be applicable in cases in which the same property is liable to attachment and sale in more than one decree whether against the same estate or different estates and the assets in which rateable distribution is claimed have been realised by the sale of it. If it were to be held that Section 73 is not applicable to the distribution of such assets then the consequence would be that there would be scramble amongst the decree-holders for getting the property sold first in execution of their decrees. Each decree-holder will try to prosecute his execution proceeding separately. There will be multiplicity of proceedings which the Legislature intended to avoid. This scramble would give rise to malpractices which also the Legislature intended to avoid.

10. Jamiyatram's case, AIR 1941 Bom 327 is distinguishable from the present case. There one decree was in respect of the liabilities of the father and another was in respect of the liabilities of the son as in this case. But there is nothing in the report to show that the assets in which rateable distribution was claimed were obtained by the sale of property which was liable to attachment and sale to both the decrees. On the other hand the followingobservations made in the judgment go to show that the property which was sold was not liable to attachment and sale in both the decrees :

'It seems to me that the grossest injustice and absurdity may follow from holding that decrees against the same person must always be regarded as decree against the same judgment-debtor for the purposes of Section 73. One may have creditors of estate of A, which is solvent, being compelled to share the assets of that estate with the creditors of estate B, which is insolvent and possesses no assets, merely because there is a common trustee of the two estates.'

11. In a case like the present one where the assets are obtained by the sale of property which is liable to attachment and sale in the decrees of creditors of estate A and those of estate B there will be no injustice if the assets are rateably distributed between the creditors of the two estates. On the contrary in such a case it will be more equitable to distribute the assets rateably amongst the attaching creditors than to allow the creditor, who has been able to get the property put to sale in execution of his decree first, to take away the entire assets. In the present case Ramzan Khan obtained a decree in respect of the liability of Bala Bux the father.

The other creditors obtained decrees in respect of the liabilities of Lekh Raj the son. All the creditors are entitled to attach and sell the twelve shops which have been sold in Ramzan Khan's decree. Now supposing, instead of the creditor of the father, one of the creditors of the son had succeeded in getting the property sold in execution of his decree, first then if the assets are not rateably distributee the creditor of the son would be able to appropriate the entire assets for the satisfaction of his decree to the complete exclusion of the creditor of the father. This will be highly inequitable.

12. The observation of Tek Chand J. in AIR 1943 Lah 148 (FB) to the effect :

'the holder of the first decree applied for rateable distribution but the application was disallowed as the two decrees were not against the 'same judgment-debtor.' The case really fell in class (III) above and not class (II) with which we are concerned and the conclusion, if I, may say so with re-pect, is correct as the two decrees although they were passed against the same person but were passed with regard to debts of two entirely different persons'

and the observations of Gajendragadkar J. in Mulchand v. Shiddappa, AIR 1947 Bom 18 (FB) to tile effect-

'before Section 73 can be applied, it must also be shown that the said identical judgment-debtor occupies the same legal character in all the decrees'

envisage a situation in which rateable distribution is sought merely on the basis of identity of judgment-debtors. They are not intended to apply to a case Hike the present one where the property from the sale of which assets have been obtained is liable to attachment and sale in decrees against both the estates. As pointed out in AIR 1953 Bom 65 (FB) under Section 73 the stress is on the identity of property which is liable to attachment and sale in more than one decree.

13. In the present case the assets have been realised by the sale of twelve shops which are liable to attachment and sale in all the decrees obtained either against the estate of Balabux the father or Lekh Raj the son. Section 73 is therefore applicable to the case as was held by the learned District Judge.

14. The revision application is accordingly dismissed with costs.


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