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M.R.Rm.Mr.Rm. Murugappa Chettiar and ors. Vs. Kannammai Achi and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Case NumberLetters Patent Appeal No. 79 of 1955
Judge
Reported inAIR1959Mad76; (1958)IIMLJ461
ActsCode of Civil Procedure (CPC) , 1908 - Order 21, Rule 90
AppellantM.R.Rm.Mr.Rm. Murugappa Chettiar and ors.
RespondentKannammai Achi and ors.
Appellant AdvocateR. Kesava Iyengar and ;K. Parasaram, Advs.
Respondent AdvocateK.S. Ramamurthy, Adv.
DispositionAppeal dismissed
Cases ReferredRameshwar v. Hari Prasad
Excerpt:
.....likely to be affected and not interests which may hypothetically and remotely be affected by the sale. a decree in favour of a person will not clothe him with sufficient interest to file an application to set aside the sale of one of the properties of his judgment-debtor.; ayyappa v. kasiperumal i.l.r. [1939] mad. 374 (f.b.) explained.; appeal under clause 15 of the letters patent against the judgment of krishnaswamy nayudu j., dated 7th march 1955, and passed in appeal against order no. 48 of 1952, preferred against the order of the subordinate judge of sivaganga, dated 8th march 1951, and made in execution application no. 334 of 1950, in execution petition no. 113 of 1949 in original suit no. 125 of 1948.; r. kesava ayyangar and k. parasaram for the appellants.; k.s. ramamurthy for..........a petition to adjudicate the judgment-debtor as an insolvent applied to set aside a court auction sale of property belonging to the judgment-debtor held before his appointment. it was held that the interim receiver had no locus standi to maintain the application. he was certainly not a person entitled to share in the rateable distribution of the assets belonging to judgment-debtor and he was also not a person whose interests were affected by the sale, within the meaning of the provisions of order xxi, rule 90, c. p. c. the learned judges approved of the decision of stodart, j. in 1939-1 mad lj 608 : (air 1939 mad 501). krishnaswami ayyangar, j., who it might be remembered was a party to the decision in ilr 1939 mad 374 : (air 1939 mad 250), delivered the judgment of the bench and dealt.....
Judgment:
1. This appeal raises an interesting question of law which we think can be answered by a reference to the principle of the Full Bench decision in Ayyappa v. Kasiperumal Nayakar, ILR 1939 Mad 374 : (AIR 1939 Mad 250). The question is whether a creditor who has obtained a decree against a debtor whose property has been sold in execution of a decree obtained by another creditor can apply to have the sale set aside under Order XXI, Rule 90, C. P. C. Of course if the applicant is not only the holder of another decree but also had applied for rateable distribution of assets or taken steps which would entitle him to such a rateable distribution, then ho would have the right to apply; hut in the present case admittedly the decree-holder who is the appellant before us, has not taken any step in execution. He will not therefore be a person entitled to share in the rateable distribution of assets.

Then it only remains to consider whether he can he said to be a person whose interests are affected by the sale. The words are indeed very wide and on a literal construction of the words not only decree-holders but even ordinary creditors who have not yet sought to enforce their claims can be said to be affected by the sale of any of the properties of their debtor. Indeed any one who has a prospective claim which can be satisfied by a sale of the properties of a person against whom he has the claim can he said to be a person whose interests are affected by the sale of such property.

We have no hesitation in holding that this wide construction was not contemplated by the words. The interests which are alleged to be affected by the sale should be interests which are directly and immediately likely to be affected and not interests which may hypothetically and remotely be affected by the sale. It is on this principle that the decision of the Full Bench, in ILR 1939 Mad 374: (AIR 1939 Mad 250) was based. In that case a person who had obtained an attachment before judgment was held to be a person whose interests were affected within the meaning of Order XXI, Rule 90, C. P. C., when the property attached had been sold in execution of a decree obtained by another person.

One of the points which was decided by the Full Bench was that the expression "interests" cannot be confined to interest in the property but would comprise any kind of pecuniary benefit that the appellant is likely to have derived if the sale had not taken place. To this extent the learned Judges of the Full Bench overruled the decision of a Division Bench in Kathiresan Chettiar v. Ramaswami Chettiar, 27 Mad LJ 302 : (AIR 1915 Mad 541 (2)) which was founded on the view that "interests" referred to interests in the property sold. It may be mentioned that the actual decision in 27 Mad LJ 302 : (AIR 1915 Mad 541 (2)) is quite in consonance with the ruling of the Full Bench because the appellant in that case was a mere decree-holder who was not entitled to rateable distribution and therefore he was not entitled to apply.

The learned Chief Justice who delivered the judgment of the Full Bench after referring to the decision in Narayanan v. Pappayi, 26 Mad LW 164 : (AIR 1927 Mad 783), observed thus :

"The learned Judge (Srinivasa Aiyangar, J. in 26 Mad LW 164 : (AIR 1927 Mad 783) considered that the legislature intended to confer the right to apply on any one who is directly and immediately affected by the sale and with this opinion I am in entire agreement."

Applying this test the learned Chief Justice held that a plaintiff who had obtained an attachment before judgment was directly and immediately affected in such circumstances by a sale of the property attached and therefore he is within the rule. The fact that he had not obtained a decree at the time he filed the application did not make any difference. Can it be said that a mere decree-holder who has not attached any particular property of the judgment-debtor is directly and immediately interested in the sale of any of the properties of the judgment-debtor? Evidently not. The decision of Stodart, J., in Govindasami Chetti, in re, 1939-1 Mad LJ 608: (AIR 1939 Mad 501) follows the same view.

In Official Receiver, Ramnad v. Veerappa, ILR 1943 Mad 577 : (AIR 1943 Mad 199), it was pointed out that an interim receiver who was appointed on a petition to adjudicate the judgment-debtor as an insolvent applied to set aside a court auction sale of property belonging to the judgment-debtor held before his appointment. It was held that the interim receiver had no locus standi to maintain the application. He was certainly not a person entitled to share in the rateable distribution of the assets belonging to judgment-debtor and he was also not a person whose interests were affected by the sale, within the meaning of the provisions of Order XXI, Rule 90, C. P. C. The learned Judges approved of the decision of Stodart, J. in 1939-1 Mad LJ 608 : (AIR 1939 Mad 501). Krishnaswami Ayyangar, J., who it might be remembered was a party to the decision in ILR 1939 Mad 374 : (AIR 1939 Mad 250), delivered the judgment of the Bench and dealt with the general question thus :

"But then the question is whether the creditors of a person, even when he had not assets enough to pay all his debts, can be regarded as persons whose pecuniary interests are affected by the sale of the debtor's property in execution at the instance of the decree-holder. We consider that it would be an unwarrantable extension of the meaning of the expression used in the rule if we are to accept the argument...... In the face of the qualifications here insisted upon, it is impossible to accept the argument that every creditor, whether or not he has taken the steps indicated here, is a person entitled to apply to the court under Order XXI Rule 90. If this extended meaning is to be given to the expression under consideration, it would result in attributing to the legislature a contradictory intention. If a creditor is not qualified to obtain rateable distribution until he has done all that Section 73 requires him to do it is difficult to agree that the legislature intended that any and every creditor, even without taking the steps which he is bound to take for the purpose of qualifying himself for rateable distribution, is still to have the right to apply under the rule........ But it will be doing violence to the principle underlying the section to hold that the legislature gave the right to apply under Rule 90 to every creditor, if only there was the possibility of his not getting the full amount of his decree out of the assets of the debtor,"

2. With respect we agree with these observations. Ail that the applicant who is the appellant before us has to his credit is a decree; but that in itself will not clothe him with sufficient interest to file an application to set aside the sale of one of the properties of his judgment-debtor. Our attention was drawn to certain observations made by a learned Judge of the Patna High Court in Rameshwar v. Hari Prasad, AIR 1933 Pat 445. The actual decision in that case is obviously in accord with the principle enunciated above. There a judgment creditor obtained an attachment before judgment and subsequently obtained a decree. It was held that that such judgment creditor's interests are affected by the sale of the attached property at the instance of another judgment creditor and he could apply under Order XXI, Rule 90 of the Code. But the learned Judge went on to say :

"The petitioners by obtaining a decree against the judgment-debtors have to my mind, obtained an interest which is affected by the sale of any of the assets of the judgment-debtors against which the petitioners could proceed in execution of their decree, and if one of these assets is the subject-matter of a sale at the instance of another judgment creditor the petitioner are persons whose in-terests are affected by the sale in so much as the chances of their being able to realise the amount of their decree are lessened by the sale held in execution of the later decree."

3. With respect to the learned Judge, we cannot subscribe to this opinion. The interpretation of the expression "whose interest are affected by the sale" would let in several classes of persons who we are convinced were never intended to be given the right to apply under Order XXI, Rule 90, C. P. C, and would obstruct the course of execution. The view taken by Krishnaswami Nayudu, J., is sound and the appeal is therefore dismissed. No order as to costs.


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