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Megraj Iswaradas Vs. the Corporation of Madras - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1936Mad797; 166Ind.Cas.769; (1936)71MLJ328
AppellantMegraj Iswaradas
RespondentThe Corporation of Madras
Cases ReferredMadden v. Chappani I.L.R.
Excerpt:
- - the fact that execution may be pending in more than one court under section 63 can make no difference and the principle of that decision holds good. in other words, the phrase 'in execution of decrees' is explanatory of the word 'attachment' and may well have been left out without affecting the sense......63 must be treated as constituting an exception to section 73 in this respect. although the decree-holder claiming rateable distribution should ordinarily, as prescribed by section 73, have applied for execution to the court by which the assets are held, section 63, recognizing an exception, lays down when and to what extent this rule may be departed from. where, as is stated in section 63, the property is under attachment in execution of decrees* of more courts than one, if the other conditions specified in section 73 are fulfilled, the right to rateable distribution arises. by adopting this construction alone, we can give full effect to both the sections mentioned. in narasimhachariar v. krishnamachariar : air1914mad454 the facts are thus stated in the judgment of wallis, j., as.....
Judgment:

Venkatasubba Rao, J.

1. This appeal raises a point not covered by authority; before dealing with it, we shall first dispose of certain other matters which have been argued.

2. The first question to be decided is this. Section 73, Civil Procedure Code, provides that those decree-holders alone are entitled to rateable distribution who have applied for execution to the Court by which the assets are held. Mr. T.M. Krishnaswami Aiyar's contention is in effect, that this is a self-contained rule and is not to be read as controlled by or being subject to, the provision embodied in Section 63. To accept this contention would be to defeat and render nugatory the last-mentioned section. Section 63 must be treated as constituting an exception to Section 73 in this respect. Although the decree-holder claiming rateable distribution should ordinarily, as prescribed by Section 73, have applied for execution to the Court by which the assets are held, Section 63, recognizing an exception, lays down when and to what extent this rule may be departed from. Where, as is stated in Section 63, the property is under attachment in execution of decrees* of more Courts than one, if the other conditions specified in Section 73 are fulfilled, the right to rateable distribution arises. By adopting this construction alone, we can give full effect to both the sections mentioned. In Narasimhachariar v. Krishnamachariar : AIR1914Mad454 the facts are thus stated in the judgment of Wallis, J., as he then was,

In the present case a debt due to the judgment-debtor by the Public Works Department and attached in execution of several decrees against the judgment-debtor in several Courts has been paid into this Court under Section 63 and Order 21, Rule 36 Civil Procedure Code by the Executive Engineer who has at the same time forwarded a list of the attachments served on him up to that time, one of which was prior in date to the attachment by this Court. The case then came before me sitting alone, when the prior attaching creditor who has not transferred his decree to this Court, claimed to be paid in priority to the decree-holder in this Court, or at least to be entitled to rateable distribution; and in view of the importance of the question and the conflict of decisions, I directed the case to be posted before a Bench and notice to be served upon all the creditors mentioned by the Executive Engineer as having attached before payment into this Court; and they have now appeared and preferred their claim to rateable distribution.

3. It was held by Wallis and Bakewell, JJ., that the decree-holders in the other Courts were entitled to rateable distribution. It will be seen that the Court which held the assets was the High Court; nevertheless all the creditors, who had attached the debt in the several Courts, were held entitled. There, the Court that held the assets was a Court of higher grade; but the position may be reversed for, that would make no difference in principle.

4. Then, the effect of Clause (2) of Section 63 has to be considered. That clause provides:

Nothing in the section shall be deemed to invalidate any proceeding-taken by a Court executing one of such decrees.

5. Does this merely prevent the sale from being invalid, or does it have the further effect of taking away the right of the rival decree-holders to rateable distribution? As to the effect of Section 285 of the Code of 1882 there was a conflict of opinion. Where a sale was held, for instance, by a Court of lower grade when it ought to have been held by a Court of higher grade, the view taken by the Calcutta, Bombay and Madras Courts was, that the rule being one of procedure, the sale was not invalid; but, according to the Allahabad decisions, the sale was absolutely null and void, as one made without jurisdiction. It was. on account of this conflict, that Sub-Section (2) was introduced by the Code of 1908, and it gives effect to the view taken by the Calcutta, Bombay and Madras Courts (see Mulla's Code of Civil Procedure, 10th Edition (1934, p. 229). That being so, it is no longer possible to maintain that the sale by one of the executing Courts is null and void; it is incumbent on the Court of the higher grade to accept the sale and to call for the proceeds for the purpose of distributing them rateably amongst all the decree-holders. A contrary view would lead to the negation of the very rights intended to be preserved and of the very powers which Sub-Section (1) confers on the Court of the higher grade. In this connection another question arises, namely, whether the fact that the decree-holder purchased the property with the leave of the Court that held the sale and was allowed to set-off the purchase price against the decree amount, ousts the power conferred by Section 63 on the Court of the higher grade, to call for the proceeds and rateably distribute them. In Murugappa Chettiar v. Ramasami Chettiar I.L.R. (1935) 59 Mad. 342, where the question was not complicated by there being more than one Court, it was pointed out that as the purchaser's right under Order 21, Rule 72 is subject to the provisions of Section 73, his right to set-off is controlled by that section in this way, namely, that he is bound to bring into Court such sums as may be found due to those decree-holders whose applications for execution were pending on the date of the sale; the reason for fixing the date of the sale, as the material date being, that where there has been a set-off, the assets must be deemed to have been realised Co-instanti the sale is made. The fact that execution may be pending in more than one Court under Section 63 can make no difference and the principle of that decision holds good. Now turning to Section 63(2), if the decree-holder purchaser is called upon to bring back the proceeds (as in our opinion he should be), what is the 'proceeding' that can be said to be thereby invalidated? As already stated, the purchase by the decree-holder does not confer upon him an unqualified right, but is subject to the terms of Section 73; in other words, as Mr. N. Srinivasa Aiyangar for the appellant rightly contends, the very order of the Court, that is, the Proceeding did cast upon the decree-holder the duty to bring back any part of the proceeds when so required. Our view receives support from Dhirendrarao Krishna Rao v. Virbhadrappa I.L.R. (1934) 59 Bom. 310 where the effect of Section 63(2) has been fully dealt with.

6. It now remains to consider the point to which we adverted at the outset. For making that point clear, we must set out briefly the facts of the present case. The decrees in favour of the respondent (The Madras Corporation) were passed by the High Court on its Original Side; so was the decree in favour of the appellant. The former decrees were sent to the Sub-Court, Chingleput, for execution; the latter to the District Court, Chingleput. In pursuance of the respondent's decrees, the properties were attached by the Sub-Court in January, 1932, and the sale was held on the 28th September, 1932. The Corporation obtained leave to bid and was allowed to set-off the purchase price against the decree amount. As the amount due to it exceeded the amount of its bid, it did not have to bring any sum into Court. In the meantime, the appellant, another decree-holder, got the same properties attached in November, 1931, in the District Court. An order was made fixing 19th October, 1932, as the date of sale. We may take it that so far each decree-holder acted in ignorance of the proceedings taken by the other. The appellant, now becoming aware of the sale that had already been effected, applied to the District Court under Section 63 to call for the proceeds of the sale from the Sub-Court and distribute them rateably. The difficulty arises thus. The decrees passed here are not : decrees 'of more Courts than one' they were all passed, as we have just said, by one and the same Court, namely, the High Court, Madras. That being so, does Section 63 apply? In our opinion it does. There are two modes of arriving at this result: first, by reading the words 'of more Courts than one' in Section 63 as qualifying the word 'attachment' and not the word 'decrees'; secondly by calling in aid Section 42 which says that the Court executing the decree sent to it shall have the same powers in executing such decree as if it had been passed by itself.

7. We are prepared to rest our judgment upon the first of these grounds. The object of Section 63 is to deal with several attachments, no matter whether the decrees passed are, by the same Court, or by different Courts. By which Court the decrees have been passed, is an immaterial detail - the emphasis is upon the word 'attachment' and not upon the word ' decrees. In other words, the phrase 'in execution of decrees' is explanatory of the word 'attachment' and may well have been left out without affecting the sense. The words 'by more Courts' in the place of 'of more Courts' would have made the meaning plain and put the matter beyond doubt.

8. The question then is, what is the proper order to make? As held in Madden v. Chappani I.L.R. (1887) 11 Mad. 356 the purchaser must be allowed to make his choice; either he may elect to have a re-sale or to pay into Court so much of the price as may become due on rateble distribution to the rival decree-holder, the appellant.

9. The Lower Court's order is reversed and the appeal is allowed with costs; the advocate's fee is fixed at Rs. 75.

10. For the purpose of enabling the Corporation to elect, post one week from reopening of the High Court after the summer recess. There will be no order in the Civil Revision Petition.


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