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Rm. Ar. Ar. Rm. Arunachala Chettiar and anr. Vs. Virappa Chettiar and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1928Mad800
AppellantRm. Ar. Ar. Rm. Arunachala Chettiar and anr.
RespondentVirappa Chettiar and ors.
Cases ReferredIn Kesari v. Ganga Sahai
Excerpt:
- - what they pay is towards the decree and when satisfaction is entered to the extent of the amounts paid and the decree is satisfied to that extent, that satisfaction must to that extent be against the interest of all the creditors, and, therefore, it is but fair that they should have the benefit of their share of the amount which went to satisfy the decree. it is unnecessary to discuss this matter any further as we are, satisfied that a joint decree-holder who executes a decree executes it, unless there is a direction in the decree or unless the court permits execution for his......be accountable to the others for the excess. this argument is on the face of it untenable. when a joint decree-holder executes a decree to which he and others are entitled, he executes the decree prima facie for the benefit of all, unless there is a direction by the court or in the decree itself which permits execution for the benefit of the executing creditor alone. in the absence of any such express direction by the court or a provision in the decree for the purpose, execution by any one of the joint creditors is for the benefit of all the joint decree-holders and any amount received by the executing creditor, whether in court or outside the court during the pendency of the execution application must enure for the benefit of all the joint decree-holders. it is immaterial whether the.....
Judgment:

Devadoss, J.

1. The plaintiffs, defendant 1's father and some others were joint decree-holders in a mortgage decree in O.S. No. 330 of 1911 on the file of the Sub-Court of Ramnad. Defendant 1's father, Murugappa Chetti, applied for execution of the decree and collected some amounts. Plaintiffs have brought this suit for their share of the decree amount against Murugappa Chetti's son, defendant 1, and his grandsons, defendants 2 and 3. The defendants raised several contentions. The District Munsif found that Murugappa Chetti received the amount? from the judgment-debtors on behalf of all the judgment-creditors, but dismissed the suit on the ground that it was barred by res judicata. On appeal the Subordinate Judge of Devakotta dismissed the plaintiffs suit holding that the amounts were not realized in execution and that they were paid to Murugappa Chetti towards his own share of the decree amount and that the plaintiffs were not entitled to participate in them. The plaintiffs have preferred this appeal.

2. The facts are that the plaintiffs are entitled to 34 out of 225 shares and Murugappa Chetti was entitled to 110 1/2 out of 225 shares and others were entitled to the rest of the shares. Murugappa Chetti applied for execution, in E.P. No. 259 of 1918, on behalf of all the decree-holders, and prayed among other things for the sale of item 6 (more correctly item 5) and for the appointment of a receiver in respect of certain other items. Notice was given to all the decree-holders and no objections were raised to the grant of the prayers in the execution petition. Defendant 2 paid Rs. 2,250 to Murugappa Chetti and allowed him to receive Rs. 850-5-4, his (defendant 2's) share of the income of a village. The plaintiffs claim their share of these two items. Murugappa Chetti is dead and his heirs are the defendant 1, his son, and defendants 2 and 3, the sons of defendant 1.

3. The contention of the appellants is that as the decree was executed by Murugappa Chetti for the benefit of all the decree-holders, they are entitled to their share of the amounts realized in the proportion of 34 to 225. The respondents' contention is that the amounts were not realized in execution or through Court but were paid to Murugappa Chetti outside the Court towards his own share of the decree amount and the plaintiffs are not entitled to a share in them. From the facts admitted or proved it is clear that the amounts received by Murugappa Chetti were during and in consequence of the pendency of the execution application. Murugappa received the amount of Rs. 2,250 under an arrangement that he should not press the receiver application and he did not press it. This is clear from the arrangement set out in Ex C, a memo filed on behalf of Murugappa Chetti and defendant 2, namely,

that in the matter of the petition presented for the appointment of a receiver with respect to the produce of Manjur village in the said suit as defendant 2 has paid to-day in cash Rs. 2 250 for being credited towards the assignee decree-holders' share in the suit decree amount no village receiver need be appointment for the said Manjur

4. According to the arrangement between Murugappa Chetti and defendant 2 satisfaction of the decree was entered to the extent of Rs. 2,250. It cannot be said that the amount of Rs. 2,250 was received without reference to the execution application then pending and without the knowledge of the Court.

5. The argument on behalf of the defendants is that the amount was paid to Murugappa not through Court but outside the Court and only towards his share of the decree amount and, therefore, he is entitled to retain it as against the plaintiff, and it is only when one of the decree-holders executing a decree receives more than his share of the decree amount that he would be accountable to the others for the excess. This argument is on the face of it untenable. When a joint decree-holder executes a decree to which he and others are entitled, he executes the decree prima facie for the benefit of all, unless there is a direction by the Court or in the decree itself which permits execution for the benefit of the executing creditor alone. In the absence of any such express direction by the Court or a provision in the decree for the purpose, execution by any one of the joint creditors is for the benefit of all the joint decree-holders and any amount received by the executing creditor, whether in Court or outside the Court during the pendency of the execution application must enure for the benefit of all the joint decree-holders. It is immaterial whether the judgment-debtors pay the whole or any portion of the amount into Court or into the hands of the executing creditor outside the Court, so long as they pay the amount by virtue of or during the pendency of an execution application filed and prosecuted by the creditor who receives the amount. It would be putting a premium upon fraud to allow one of the 'judgment-creditors to execute the decree on behalf of all the creditors and to permit him to retain for his sole benefit any money paid to him or any property purchased by him in part-satisfaction of the decree which he is executing. If there is no execution by him he may receive his share of the decree amount from the judgment-debtors and the other judgment-creditors could not claim from him any share of the money paid to him. But where he is acting on behalf of all the judgment-creditors he cannot, when any advantage accrues to him, retain that for himself alone.

6. Order 21, Rule 15, is as follows:

Where a decree has been passed jointly in favour of more persons than one, any one or more of such persons may, unless the decree imposes any condition to the contrary, apply for the execution of the whole decree for the benefit of the survivors and the legal representatives of the deceased;

and Clause 2 says:

Where the Court sees sufficient cause for allowing the decree to be executed on an application made under this rule, it shall make such order as it deems necessary for protecting the interests of the persons who have not joined in the application.

7. This rule is the same as Section 231 of the Code of 1882 and the only amendment introduced into the rule is 'unless the decree imposes any condition to the contrary.' Under the rule any one of the joint decree-holders may execute the whole of the decree unless the decree imposes any condition to the contrary and the Court shall make such order as it deems necessary for protecting the interests of the persons who have not joined in the execution application. It is immaterial to consider whether the judgment-debtors, in paying any portion of the decree amount, intended that the executing creditor alone should have the benefit or not. What they pay is towards the decree and when satisfaction is entered to the extent of the amounts paid and the decree is satisfied to that extent, that satisfaction must to that extent be against the interest of all the creditors, and, therefore, it is but fair that they should have the benefit of their share of the amount which went to satisfy the decree.

8. It is urged for the respondent that the plaintiffs are not debarred from executing the decree for their share of the decree amount. No doubt, as the law stands, one of joint decree-holders can apply with the permission of the Court for the execution for his share. But the existence of that remedy does not stand in the way of their claiming their share of the amount realized by another decree-holder who executes the decree on behalf of all.

9. Rupees 805-5-7 were collected out of defendant 2's share of the income of a certain village. This amount was collected during the pendency of the execution application and was given credit to in the petition filed by Murugappa Chetty in E.A. No. 316 of 1921, Ex. D, and the observations made with regard to the sum of Rs. 2,250 apply equally to this amount. To allow the contention of the respondents would result in a joint creditor, who applies for the execution of a decree, realizing his share of the decree amount and defeating the claims of the other joint decree-holders. Where the judgment-debtors are not in a position to pay the whole of the decree amount they might compound with the creditor who actually executed the decree or pay him the amount and plead inability to pay anything to the other joint judgment-creditors who do not apply for execution, or they may sell their property to the executing creditor alone and leave nothing for the rest. It is unnecessary to discuss this matter any further as we are, satisfied that a joint decree-holder who executes a decree executes it, unless there is a direction in the decree or unless the Court permits execution for his. share alone for the benefit of all the joint decree-holders.

10. In Tarasundari Burmoni v. Beharilal Roy 1 B.L.R. A.C. 28, it was held that execution by one creditor is for benefit of all the judgment-creditors. Phear, J., observes at p. 29 that

the execution which has been taken out by the Chatlangis has been, as by law it must be, execution of the whole decree; and as the result of the process issued for the execution of Rupees 34,000 has been realized, there can be no doubt that all the persons representing the joint decree-holders, are entitled to share in that according to their interests.

11. Under Section 207, Act 8, 1859, corresponding to Section 231 of the Code of 1882, it was for the Court to protect the interests of the other decree-holders when it permits execution of the interests of one joint decree-holder. Phear, J., went the length of observing that the other decree-holders could not be allowed to suffer in consequence of the omission of the Court to protect their interests. In Tarruck Chunder Bhuttacharjee v. Divendro Nath Sayal [1883] 9 Cal. 831, Tottenham, J., observes that

the Court ought not to recognize payments made out of Court, unless made and certified for the benefit of all, at least in oases where, as in this one, the extent of the shares is in dispute. I am rather strengthened in the view by the terms of Section 231.

12. In Kesari v. Ganga Sahai [1911] 33 All 563, the Allahabad High Court 'held that the purchase by one of the joint decree-holders, who executed a decree and who has obtained leave to bid, of a portion of the judgment-debtor's property was for the benefit of all the judgment-creditors and they were entitled to their share in the property purchased proportionate to the share of the decree amount. This decision shows that, whatever be the benefit that is derived directly or indirectly by the creditor executing the decree, that must enure for the benefit of all.

13. It is urged for the respondent that the plaintiffs are not entitled to interest from the date of the receipt of the amounts but only from the date of the plaint. It is urged by Mr. Patanjali Sastri for the appellants that, inasmuch as the amounts were received for the benefit of the creditors including the plaintiffs, they are entitled to interest from the dates of the receipts of the amounts as Murugappa Chetti was accountable to them for their share. Murugappa, Chetti was not accountable in the sense of his being a trustee. He received the amounts no doubt on behalf of all, but so long as the plaintiffs did not claim the share of the amount he was not bound to go to them and pay them. If they did not claim them he would have been entitled to keep the amount in his hands. It is not suggested that any demand was made on Murugappa or the defendants to pay the amount before the date of the suit. The plaintiffs are not entitled to claim interest under the Interest Act. Interest will be allowed on the plaint amount from the date of the plaint at 6 per cent per annum.

14. In the result the judgments of the lower Courts are aside and the plaintiffs will have a decree for the plaint amount with interest at 6 per cent per annum from date of the plaint. Parties will pay and receive proportionate costs througout.

Kumaraswami Sastri, J.

15. I agree.


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