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The Burmah-shell Oil Storage and Distributing Company of India Limited Vs. the Official Receiver - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported inAIR1943Mad244; (1942)2MLJ661
AppellantThe Burmah-shell Oil Storage and Distributing Company of India Limited
RespondentThe Official Receiver
Cases ReferredHari Ram v. Hukam Chand
Excerpt:
- .....stated. the joint family firm, which may be described as a p. s. firm, had a deposit with the burma shell company. this p. s. firm assigned the deposit to another firm, which may be described for the sake of facility as r. p. d. firm. notices of assignment of the deposit were given to the burma shell and company (exs. e and f) both by the assignor and the assignee. after this assignment of the debt, members of the e. p. d. firm were adjudged insolvents. two creditors had in the meantime brought suits in the district munsiff's court at tinnevelly and tenkasi. decrees were passed in these suits and in execution, they obtained attachment of the debt due by the burma shell and company to the r. p. d. firm. the burma shell and company objected and also wrote to the receiver and the.....
Judgment:

Abdur Rahman, J.

1. Stripped of further details the only question to be decided in this case is whether a debtor, the debt due from whom has been assigned over to a third person, can, even after the notice of the assignment of the debt, pay a portion of that debt under the orders of Court in a case to which the assignee was not a party and in such a manner as to protect him from paying it over again to the assignee when called Upon so to do.

2. The facts out of which the above question emerges are quite simple and may be briefly stated. The joint family firm, which may be described as a P. S. Firm, had a deposit with the Burma Shell Company. This P. S. Firm assigned the deposit to another firm, which may be described for the sake of facility as R. P. D. Firm. Notices of assignment of the deposit were given to the Burma Shell and Company (Exs. E and F) both by the assignor and the assignee. After this assignment of the debt, members of the E. P. D. Firm were adjudged insolvents. Two creditors had in the meantime brought suits in the District Munsiff's Court at Tinnevelly and Tenkasi. Decrees were passed in these suits and in execution, they obtained attachment of the debt due by the Burma Shell and Company to the R. P. D. Firm. The Burma Shell and Company objected and also wrote to the receiver and the insolvents' advocate informing them of these attachments. The receiver, however, took no action and the money attached with the Burma Shell and Company was ordered by both the Courts to be paid over to the decree-holders. One payment appears to have been made before the institution of the present suit and the other, a few months afterwards, although by then the fact of the institution of the suit (i. e., the one out of which the present appeal arises), by the Official Receiver, for the recovery of the whole of the amount deposited with the Burma Shell and Company had been brought to their notice. The suit was decreed by the Subordinate Judge of Tinnevelly and the payments which were made by the Burma Shell and Company in obedience to the orders of the execution Courts were not taken into consideration. The Burma Shell and Company appeals in respect of those payments on the ground that they are being made to pay the same debt twice over.

3. In view of Section 130 of the Transfer of Property Act, the validity of the assignment of the debt due by the Burma Shell and Company to the R. P. D. Firm, is not disputed, but it is contended that the notices served by the appellant on the insolvents' advocate and the Official Receiver (Exs. V, M and XIII) ' protect them from making the payment of a portion of the debt over again. Reliance is placed in support of this contention on an English case in Wood v. Dunn L.R. (1866) 2 Q.B. Cases 73. This case, however, has no application as the payment by the debtor had been, in that case, made before he had any notice of the assignment. Such a payment would be protected even under the Indian law under the proviso to Section 130. Certain doubts were, however, expressed in that case to which learned Counsel for the appellant drew our attention. But in view of the clear provisions of Section 130 of the Transfer of Property Act, those doubts do not in any way affect the decision of this case. Under Section 130 of the Transfer of Property Act, the transfer of an actionable claim when effected by the execution of an instrument in writing signed by the transferor, as in this case, becomes complete and effectual upon the execution of such an instrument and all the rights and remedies of the transferor come to vest in the transferee as soon as that is done, whether or not a notice of the transfer is given to the person from whom the money is due. But that section also provides for an exception. It is as follows:

Provided that every dealing with the debt or other actionable claim by the debtor or other person from or against whom the transferor would, but for such instrument of transfer as aforesaid, have been entitled to recover or enforce such debt or other actionable claim shall (save where the debtor or other person is a party to the transfer or has received express notice thereof as hereinafter provided) be valid as against such transfer.

In view of this proviso every 'dealing with the debt' (which we take it, would include the dealing with the debt under the order of the Court) would be valid as against such transfer except when the debtor was a party to the transfer or had received express notice of the assignment. We have already said so in the earlier portion of our judgment that notices of the assignment were given to the Burma Shell and Company both by the P. S. Firm, the assignors and R. P. D. Firm, the assignees (Exs. E and F) and in view of those express notices, the payment by the Burma Shell and Company, even if it happens to be under the orders of Court cannot be protected. The same view was taken by Shadi Lal, J., (as he then was) in Hari Ram v. Hukam Chand (1915) 28 I.C. 317.

4. For the above reason the appeal fails and is dismissed with costs.


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