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The Official Assignee, High Court, Madras Vs. Kantiayalal Sharma - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Case NumberC.R.P. No. 1671 of 1978
Judge
Reported inAIR1980Mad198
ActsCode of Civil Procedure (CPC), 1908 - Order 37, Rule 3 - Order 38, Rule 5
AppellantThe Official Assignee, High Court, Madras
RespondentKantiayalal Sharma
Appellant AdvocateS.V. Kumaraswami and ;V. Ahalya, Advs.
Respondent AdvocateK.R. Ramabadran, Adv.
Cases ReferredErikulappa Chetty v. Official Assignee Madras
Excerpt:
.....can have the benefit of the money for the general body of creditors.;the plaintiff filed a suit against the defendant for the recovery of certain amount and also sought for an attachment before judgment. pursuant to the orders of attachment passed by the court moneys were brought into court. thereafter the defendant filed an application for leave to defend. the plaintiff did not oppose the said application. the defendant became an insolvent and after adjudication the official assignee, madras took out an application for payment out of the said money which was brought into court. the said application was dismissed by the trial court as not maintainable on the ground that the money should be deemed to have been charged for the benefit of the plaintiff and if at all, such a..........the official assignee, madras as taken out the present application for payment out of the suit money which was so brought into court as above. the application was under s. 151, c. p. c. the city civil judge after going through the facts was of the view that the money should be deemed, in the circumstances, to have been charged for the benefit of the plaintiff and if at all, such a payment out could be made in favour of the official assignee subject to any lien which the plaintiff may secure at the end of the suit. he, therefore, found that the application for payment out by the official assignee was not maintainable as the suit was still pending and he dismissed the application. it is as against this the present revision petition has been filed.2. it is common ground that the.....
Judgment:
1. In this case, the Official Assignee cannot have the benefit of the money as claimed by him. The short facts are as follows:-

The respondent-plaintiff filed a suit against the defendant and sought for an attachment before judgment pursuant to which moneys were brought into court in compliance with the order of attachment issued and for averting the physical attachment of the properties of the defendant Thereafter, the defendant filed an application for leave to defend. The plaintiffs counsel was conscious of the fact that the entire suit claim was paid by the defendant and in that light, he did not oppose the grant of leave to defend. It appears that the defendant became an insolvent. After adjudication, the Official Assignee, Madras as taken out the present application for payment out of the suit money which was so brought into court as above. The application was under S. 151, C. P. C. The City Civil Judge after going through the facts was of the view that the money should be deemed, in the circumstances, to have been charged for the benefit of the plaintiff and if at all, such a payment out could be made in favour of the Official Assignee subject to any lien which the plaintiff may secure at the end of the suit. He, therefore, found that the application for payment out by the Official Assignee was not maintainable as the suit was still pending and he dismissed the application. It is as against this the present revision petition has been filed.

2. It is common ground that the respondent-plaintiff filed an application for attachment before judgment contemporaneous with the filing of the suit for recovery of moneys from the defendant. An order under O. 38, R. 5, C. P. C. was issued. Apparently, the said order was issued because the court was satisfied that the defendant with intent to obstruct or delay the execution of the decree that is likely to be passed against him is either about to dispose of the whole or any part of his property or is about to remove the whole or any part of the property from the local limits of the jurisdiction of the court. In order to subserve the ends of justice, an option was given to the defendant by the court to furnish secuity in such sum as may be specified in the order, so as to avoid a physical attachment of the property of the defendant. It was in this context that a sum of Rs. 5888 was brought to court. The defendant thereafter filed an application, the suit being one filed under O. 37, C. P. C. for leave to defend. It was at this stage that the plaintiff being aware of the fact that in the proceedings under O. 38, R. 5, C. P. C. the entire suit amount has been brought to court, did not oppose the grant of leave and this circumstance was noted by the City Civil judge who said that it was the fact of deposit of money which weighed with the court it granting the leave as also, the stand taken by the plaintiff who did not oppose such grant. Later, it appears that the defendant became an insolvent. The Official Assignee filed the present application for the benefit of the generality of the creditors stating that the amount as above brought to court should be intended and held to be for the benefit of the creditors of the defendant and the plaintiff solely cannot have the benefit thereto and appropriate it for himself to the prejudice of the general body of creditors. As each case has to be decided on its merits, it has to be found factually whether in the circumstances of this case the amount in court can still be said to be an amount belonging to the defendant free from any lien in favour of the plaintiff who (a) filed an application under O. 38, R. 5, C. P. C. to bring the amount into court, and (b) being conscious of such deposit by the defendant in court did not even oppose the application for the grant of leave to defend the suit instituted by the plaintiff.

A similar case was dealt with by Mr. Justice Sadasiva Iyer and Mr. Justice Unreported case in L. P. A. No. 364 of 1914. There, their Lordships were of the view that if money is deposited clearly as security for satisfying any judgment that might be passed, then the amount must be regarded as being charged as a benefit in the person who brought the amount to court. This was referred to by a Division Bench in a case reported in Gopala Aiyar v. Thiruvengada Pillai, 32 Mad LJ 503: (AIR 1918 Mad 1158). That was a case where the plaintiff filed a suit on a promissory note under the summary procedure. That decree was sought to be set aside. A condition was imposed by the court that it would be so set aside on the defendant depositing security for satisfying any judgement that may be passed against In such circumstances, the Division Bench of this Court in the said decision held that the said amount must be regarded as being charged and the plaintiff after obtaining a decree would e entitled to proceed against the same as if it was already charged for his benefit. The Division Bench was emphatic that in such circumstances the court cannot hold an enquiry as to whether the amount so deposited really belongs to the defendant or not. In the decision in Ramiah Aiyar v. Gopala Aiyar 41 Mad 1053: (AIR 1919 Mad 807), the defendant was arrested before judgment and was ordered to be released from custody on depositing in court a sum of money sufficient to meet the plaintiff's claim in the suit under O. R. 2, C. P. C. There was subsequently an attachment of the said by another decree-holder. The defendant was also adjudicated insolvent thereafter. Deciding on the questions as to the entitlement of the plaintiff to the said money in preference to the Official Assignee, the Division Bench in the said decision observed that the money which was paid into court to general credit of the action stood charged with a lien in favour of the plaintiff on the plaintiff obtaining a decree in his favour and that the later attaching creditor as well as the Official Assignee cannot claim the same ignoring the lien or the charge in favour of the plaintiff in the original action.

As against the said two decisions of this court, reference was made by Mr. Kumaraswami, the learned counsel for the Official Assignee, to the decision in Erikulappa Chetty v. Official Assignee Madras 1916) 39 M 903: (AIR 1917 Mad 7432)). There, an application under O. 38,5, C. P. C. for attachment before judgement was made and in the course of e said process summons was issued to the defendant to furnish security for a certain amount in order to avoid attachment. The defendant paid into court the amount specified in the summons but subsequently became an insolvent. It was held that the plaintiff had no charge on the money paid into court as against the Official Assignee of the insolvent. A distinguishing feature in the case in (1916) 89 Mad 903 is that there was no application for leave to defend by the defendant in that case. In the instant case, such an application was made and there the plaintiff unequivocally said that he had no objection to the grant and this was obviously for the reason that the suit claim has already come into court and he could have the benefit of it if he obtains a decree at the end of the trial. I am of the view that the ratio in the decisions in 41 Mad 1053: (AIR 1919 Mad 607) and 32 Mad LJ 503: (AIR 1918 Mad 1158) and the observations of another Division Bench of our court in L. P. A. No. 364 of 1914 govern the situation. The money which was brought into court has become charged for the benefit of the plaintiff having regard to the facts and circumstances of this case. In (1916) 89 Mad 903: R 1917 Mad 748 (2)), there was only a bare attachment and no further proceedings like an application for leave to defend, which distinguishes that case from the other Bench decisions. Following the ratio in the other two Bench decisions cited above I am of the view that the lower court was right in having held that the Official Assignee cannot have the benefit of the money for the general body of creditors as in the circumstances, the plaintiff should have secured a lien thereon.

3. The revision petition is dismissed. There will be no order as to costs.

4. Petition dismissed.


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