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Natesa Pillai Vs. Govindasami Pathan and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1930Mad4
AppellantNatesa Pillai
RespondentGovindasami Pathan and anr.
Cases ReferredBithal Das v. Nand Kishore
Excerpt:
- - ..in the above view the plaintiff was clearly not entitled to claim a rateable distribution as his execution petition and application for rateable distribution were put in long after the date of the deposit on 6th october 1922 of the amount in o. 505: it is well recognized law that an attachment confers no sort of lien or charge on the attached property and is not effective to create any sort of legal right in the attaching creditor to have the property earmarked for the satisfaction of any decree he has obtained or may obtain. it was there held that in cases in which a receiver appointed at the instance of the judgment-creditor misappropriates money collected by him the decree is not satisfied pro tanto; what then is there in the provisions of the code to justify us in holding.....anantakrishna ayyar, j.1. this second appeal raises a question of some importance under section 73, civil p.c.2. the plaintiff is the appellant in the second appeal. defendant 2, govindasami obtained a money decree in o.s. no, 373 of 1914 on the file of the tiruvarur district munsif's court and had the decree transferred to the district munsif's court, tiruthuraipundi for execution by the attachment of a mortgage debt due to the judgment-debtor (namasivayam chetty) by veerappa thevan on a hypothecation deed. the mortgage-debt was attached, and govindasami himself (defendant 2) was appointed receiver to collect the attached debt. the terms of the order of appointment of the receiver are important: see ex. b dated 29th april 1916:i appoint the petitioner as receiver to collect the debt as.....
Judgment:

Anantakrishna Ayyar, J.

1. This second appeal raises a question of some importance under Section 73, Civil P.C.

2. The plaintiff is the appellant in the second appeal. Defendant 2, Govindasami obtained a money decree in O.S. No, 373 of 1914 on the file of the Tiruvarur District Munsif's Court and had the decree transferred to the District Munsif's Court, Tiruthuraipundi for execution by the attachment of a mortgage debt due to the judgment-debtor (Namasivayam Chetty) by Veerappa Thevan on a hypothecation deed. The mortgage-debt was attached, and Govindasami himself (Defendant 2) was appointed receiver to collect the attached debt. The terms of the order of appointment of the receiver are important: see Ex. B dated 29th April 1916:

I appoint the petitioner as receiver to collect the debt as prayed for. He should pay the realized debt into Court and take out the realized sum after taking the further orders of the Court.

3. The receiver filed O.S. No. 259 of 1917 on the file of the Tiruthuraipundi District Munsif's Court to recover the money due on the mortgage bond, got a final decree on 8th August 1921 and took out execution of the decree by E.P. No. 445 of 1921 on 5th November 1921. The execution petition was, however, dismissed on 5th April 1922.

4. Defendant 1, Thandavaraya got a money decree against Namasivaya Chetty in O.S. No. 372 of 1914 (Tiruvarur District Munsif's Court), on 14th November 1914. He attached on 10th July 1922, the decree in O.S. No. 259 of 1917. After attachment he applied in the District Munsif's Court of Tiruthuraipundi by E.P. No. 301 of 1922 for execution of the decree in O.S. No. 259 of 1917. The full decree amount of O.S. No. 259 of 1917 was paid into the Tiruthuraipundi District Munsif's Court on 6th October 1922.

5. Natesa Pillai, the appellant in the second appeal, got a money decree against Namasivaya Chetty in O.S. No. 30 of 1916 on the file of the Tiruvarur District Munsif's Court and attached on 9th November 1922 (the amount in Court in O.S. No. 269 of 1917) by a precept from the Tiruvarur Court and got his decree transferred for execution to the Tiruthuraipundi District Munsif's Court on 12th December 1922. Natesa Pillai applied by E.A. No. 813 of 1922 to the District Munsif of Tiruthuraipundi for rateable share in the amount in Court, being the decree amount in suit O.S. No. 259 of 1917.

6. Accordingly the District Munsif of Tiruthuraipundi had to consider the rights of;

(a) Govindasami, the decree-holder in O. Section 373 of 1914.

(b) the rights of Thandavaraya, the decree-holder in O.S. No. 372 of 1914, and

(c) the rights of Natesa Pillai, the decree-holder in O.S. No. 30 of 1916.

7. Govindasami claimed the whole of the amount in Court; whereas Thandavaraya claimed rateable distribution, as also Natesa Pillai. The District Munsif of Tiruthuraipundi passed an order (Ex. F) on 22nd December 1922 to the effect that the amount in Court should be distributed among Govindasami and Than davaraya rateably, but that Natesa Pillai was not entitled to share in the same. This is what he said:

The attachment in E.A. No. 813 of 1922 (Natesa Pillai's) has been made after the money was deposited in Court; E.A. No. 813 of 1922 is dismissed. From the amount realized, deduct the costs of the suit (O. Section 259 of 1917); and in the balance allow rateable distribution between Govindasami and Thandavaraya.

8. Natesa Pillai filed the present suit (O.S. No. 14 of 1923), on the file of the Tiruthuraipundi District Munsif's Court against Thandavaraya (defendant 1) and Govindasami (defendant 2), under Section 73, Civil P.C., to compel the defendants to refund a portion of the assets to the plaintiff, on the ground that all the three persons (plaintiff, defendant 1 and defendant 2) were entitled to rateable share in the amount of the decree in O.S. No. 259 of 1917 in Court, and that defendants 1 and 2 were not entitled to share the same to the exclusion of the plaintiff.

9. The District Munsif (who was the successor in office of the Munsif who passed orders on 22nd December 1922 Ex. F) held that all the three (plaintiff, defendant 1 and defendant 2) were entitled to share rateably the fund in Court.

10. Defendant 2 preferred an appeal against the District Munsif's decision and the learned Subordinate Judge of Tiruvarur reversed the District Munsif's decree and dismissed the suit of Natesa Pillai. His reasoning is contained in para. 5 of his judgment. He said;

When money in the custody of a Court in one suit is attached in execution of a decree in another suit, it does not become assets in the latter suit within the meaning of Section 73, Civil P.C., unless and until it is ordered to be transferred to it from the former. There is no difficulty in applying this rule where the suit in which money is in deposit and the suit in which it is attached are distinct and separate and have no connexion with each other. But this is not such a case. In this case O. Section 259 of 1917, in which the money was in deposit in Court was a suit filed by defendant 2 in his capacity as the receiver appointed for the realization of the mortgage debt attached by him in execution of his own decree. It is contended for defendant 2, that O. Section 259 of 1917, though in form a regular suit, was in substance a continuation of the execution proceeding in his own decree; and no transfer of the amount deposited in that suit was, therefore, necessary to make it available for him towards his decree. The argument is, in other words, that the money paid in O.S. No. 259 of 1917 was not merely a deposit made in that suit, but must also be considered to be a deposit made in execution of defendant 2'S own decree in O.S. No. 373 of 1914, on the same date, and the principle of the decisions quoted by the District Munsif is accordingly inapplicable to this case. I am of opinion that this contention is valid and that the assets must be considered to have been received by the Court in O.S. No. 373 of 1914 also on the date on which they were paid and received in O.S. No. 259 of 1917, to the credit, of the plaintiff therein, who was no other than the receiver or officer appointed by the Court for the purpose, in the former suit. Suppose in this case the mortgage debt had been paid to the receiver on demand without any suit. Could it then be contended that the date of the realisation of the assets was not the date on which the debt was so paid up to him on behalf of the Court? I think not. If so, I see no reason why the payment of it into Court to his credit in the suit filed by him for its recovery should place him in a worse position.... In the above view the plaintiff was clearly not entitled to claim a rateable distribution as his execution petition and application for rateable distribution were put in long after the date of the deposit on 6th October 1922 of the amount in O.S. No. 259 of 1917.

11. From the decision of, the learned Subordinate Judge dismissing his suit, Natesa Pillai, the plaintiff, has preferred this second appeal.. Mr. K. Bhashyam, the learned advocate for the appellant, contended that the learned Subordinate Judge's decision was wrong on three main grounds.

(1) The learned Subordinate Judge has misunderstood the scope and effect of the order (Ex. F) appointing Govindaswami as receiver:

(2) The receiver's application for executing the decree in O.S. No. 259 of 1917, was dismissed on 5th April 1922. It was on the application made by Thandavaraya (defendant 1) in execution of his decree in O.S. No. 373 of 1914 that the decree in O.S. No. 259 of 1917 was attached on 10th July 1922. After attachment Thandavaraya applied for execution of the decree in O.S. No. 259 of 1917 and it was in consequence thereof that the decree amount in O.S. No. 259 of 1917 was paid into Court on 6th October 1922. Therefore the amounts were realized not by the receiver but by Thandavaraya; the effect of this has been ignored by the learned Subordinate Judge.

(3) The position of a receiver appointed by a Court and the effect thereof on the rights of the parties have been misunderstood by the learned Subordinate Judge. The receiver is only an officer of the Court and moneys realized by him are moneys in the hands of the Court and unless specifically allotted or carried over to any specific suit or party, could not be said to be moneys realized and earmarked for the benefit of any particular decree-holder.

12. I proceed to discuss each of these three points seriatim.

13. It is only an accident that Govindasami was appointed receiver to file O.S. No. 259 of 1917 and realize the mortgage amount. The terms of the order of appointment of Govindasami as a receiver show that the receiver was bound to hold all moneys realized by him according to the orders of the Court, and that without orders of the Court, he could not in any way deal with the moneys realized in O.S. No. 259 of 1917. The lower appellate Court seems to have attached too much importance to the circumstance that defendant 2 was appointed receiver in O.S. No. 373 of 1914. In one sense no doubt the amount of the mortgage was realized in execution of the decree of Govindasami (O.S. No. 373 of 1914) since it was in execution of that decree that the decree amount was attached and a receiver appointed to realize the mortgage money with a view to discharge the decree in O.S. No. 373 of 1914 but that would not enable Govindasami to claim the whole amount due under the mortgage decree if before the Court passed orders appropriating any portion of the said amount towards the decree in suit O.S. No. 373 of 1914, other decree-holders against the same judgment-debtor applied for execution of their decrees to the same Court. Attachment does not create any lien or charge in favour of the attaching decree-holder: see the remarks of the Privy Council in Motilal v. Kanabuldin [1898] 25 Cal. 179. 'Attachment only prevents alienation. It does not confer title.' As remarked by the Privy Council in Raghunatha Das v. Sundar Das A.I.R. 1914 P.C. 129:

an attachment prevents and avoids any private alienation, but does not invalidate an alienation by operation of law.

14. At p. 82 (of 42 Cal.) their Lordships observed:

The judgment-creditors had no charge on the land, and the Court could not properly give them such a charge at the expense of the other creditors of the insolvent.

15. In the case before the Privy Council insolvency intervened and by operation of law the property vested in the Official Assignee. In the case before me, the property was attached and sold by other holders of decrees for money against the same judgment-debtor. If the judgment-creditor, defendant 2, had no charge on the mortgage amount by reason of his attachment, the Court could not properly give him such a charge at the expense of the other creditors of the common judgment-debtor, who in execution of their decrees also attached the mortgage amounts, and had the same realized or who applied for execution for their decrees before the fund in Court was allotted and earmarked to any particular decree-holder. In the words of Wallace, J., at P. 519 of Nachiappa Chetty v. Subbier A.I.R. 1923 Mad. 505:

It is well recognized law that an attachment confers no sort of lien or charge on the attached property and is not effective to create any sort of legal right in the attaching creditor to have the property earmarked for the satisfaction of any decree he has obtained or may obtain.

16. It is also a distinguishing feature in the present case that the receiver who obtained the decree in O.S. No. 259 of 1917 applied for execution of that decree but his execution application was dismissed on 5th April 1922. It was in fact at the instance of Thandavaraya (defendant 1) and in execution of his decree in O.S. No. 373 of 1914 that decree in O.S. No. 259 of 1917 was attached and execution carried out and completed with the result that the amount due in O.S. No. 259 of 1917 was paid into Court on 6th October 1922. The present case is consequently not a case where the mortgage amount was realized solely by the receiver appointed in execution of the decree in O.S. No. 373 of 1914. So far as defendant 1 is concerned, this is a material point of distinction, and so far as the plaintiff is also concerned it has a material bearing on the question whether his application for execution was made before the receipt of such assets by the Court. It must be noted here that defendant 1 does not oppose the plaintiff's right to rateable distribution.

17. The question elaborately discussed before me turned on the powers of receivers appointed by Court and the effect of such appointment on the rights and liabilities of parties interested in the property. The plaintiff's contention was that the receiver should be taken to be his (plaintiff's) agent and the receiver's suit O.S. No. 259 of 1917 should be taken to be really an execution application in the plaintiff's suit O.S. No. 373 of 1914 and that the moneys realised by the receiver should be taken to be moneys appertaining to the plaintiff's suit. The learned advocate for the plaintiff (respondent) relied on Fink v. Maharaj Bahdoor Singh [1899] 26 Cal. 772; Indra Chand v. Ghaneshyam Missir [1909] 9 C.L.J. 210; Venkatayya Heggade v. Kuppanna [1913] 14 M.L.T. 533; Miadhar v. Rajani Kanta Roy [1910] 14 C.W.N. 339 and Radha Kissore v. Aftab Chandra [1881] 7 Cal. 61. In a sense it is true that the receiver represents the interests of the decree-holder (defendant 2) in execution of whose decree he was appointed. It is also true that the proceedings in suit O.S. No. 259 of 1917 could be viewed as really execution proceedings taken to realize the decree debt in suit O.S. No. 373 of 1914. But the analogy seems to stop there. It could not be said that the receiver is the agent of defendant, 2. Nor could it be said that the moneys realized by the receiver become ipso facto moneys belonging to defendant 2 and as moneys paid to the credit of defendant 2's suit the moment the receiver came into possession of the same. In this connexion the decision of Muthuswamy Iyer reported in Orr v. Muthia Chetti [1894] 17 Mad. 501 and of the appellate Court from his decision, reported in Muthiah Chetty v. Orr [1897] 20 Mad. 224, are specially helpful. It was there held that in cases in which a receiver appointed at the instance of the judgment-creditor misappropriates money collected by him the decree is not satisfied pro tanto; but the loss falls on the estate, or its owner, subject to the receiver's liability. At p. 503, Muthuswamy Iyer, J., remarked as follows:

The appellate Court considers that the receiver in the present case was the judgment-creditor's agent, because it was on his application that the appointment was made. The appointment is the act of the Court and once made in the interests of justice or ex debito justitiae. He is an officer or representative of the Court and subject to its orders. His possession is the possession of the Court by its receiver. The moneys in his hands are in custodia legis for the person who can make a title to them.

18. It has been held in England in similar cases that a receiver appointed by the Court is appointed on behalf and for the benefit of all persons interested, as parties to the suit or proceeding. Moneys in the hands of the receiver belong to the Court which appointed him and are in custodia legis, and he cannot spend them except under the orders of the Court. A Letters Patent Appeal was preferred against the judgment of Muthuswami Aiyar, J., and was heard by two learned Judges, Shepherd and Davies, JJ. Shepherd, J., agreed with Muthuswami Iyer, J., while Davies, J., was of a different opinion. The appeal was ultimately posted before three learned Judges; the appellant not having prosecuted the appeal further, the same was dismissed and the judgment of Muthuswami Iyer, J., was held to prevail. In the judgment of Shepherd, J., there are some passages which are useful to the present case. At p. 226, it is said that:

the case is one which cannot be decided upon any theory of agency. A receiver appointed to collect moneys is not an agent of either party. He is an officer of the Court deputed to collect and hold the moneys collected by him in accordance with the orders of the Court. The party at whose instance a receiver is appointed has no greater or less control over his acts than the other parties to the litigation. What then is there in the provisions of the Code to justify us in holding that a judgment-creditor must be deemed to be satisfied by the mere fact of a receiver getting in moneys duo to the judgment-debtor. The money which came to the receiver's hands was collected by him from persons who were indebted to the judgment-debtor. There was no payment by the judgment-debtor either out of Court to the judgment-creditor or into Court. The receiver who has collected moneys duo to the judgment-debtor does not hold them for the judgment-creditor. He holds them for the Court in order that the Court may decide regarding them.

19. The decision in In re Dickinson Ex parte_Charrington & Co. [1889] 22 Q.B.D. 187, relied on by Shepherd, J., contains certain passages regarding the position of a receiver appointed by Court. Though the rights of a decree-holder in England who applied for equitable execution and had a receiver appointed for that purpose, or had writs issued to have judgment-debtor's property seized and sold are not the same in England and in India and though the decree-holder in England seems to possess comparatively higher rights as against other decree-holders of the same judgment-debtor, yet the views of the Court of Appeal as to the effect of the appointment of the receiver in such cases would be helpful here also. Lord Esher (M.R.) observed at p. 190 as follows:

It is not pretended that the order appointing the receiver gave the appellants any mortgage or charge on the property of the debtor, but it is said that by means of the receiver they held a lien upon the property of the debtor which he received as a security for their debt. How can the possession of a receiver establish a lion in favour of the creditor at whose instance he was appointed? Does the receiver hold the goods so as to give the creditor possession of them? He holds the goods as agent for the Court, not for the creditor. There cannot, therefore, be a possessory lien of the creditor. Is there any other lien? In my opinion the receiver appointed under such an order does not hold the goods for the creditor at all; he holds them for the Court in order that it may decide the right to them.

20. Fry, L.J., remarked at p. 192:

How does the order create any 'charge' on the property? It only directs the person mentioned in it to receive the specified property without prejudice to certain rights; all further questions being reserved until the further order of the Court. It is equally plain to me that the order creates no lien on the debtor's property in favour of the receiver, and it certainly creates none in favour of the judgment-creditors, who have no possession of the property.

21. See also In re, Potts Ex parte Taylor [1893] 1 Q.B. 648. In England:

enforcing judgment by appointment of receivers is not execution in its technical sense, but a substitute for it.

22. In England:

equitable execution so called, is not strictly speaking a process of execution. It is rather a mode of relief granted to a judgment-creditor on the ground that either no remedy by execution at law is open to him, or is likely to be effective owing to the peculiar nature of the property of the judgment-debtor which it is sought to make available to answer the judgment. The process is based upon the old practice of the Court of Chancery to assist in enforcing a judgment for the recovery of money of a Court of ordinary jurisdiction by entertaining an application for the appointment of a receiver of such of the interests in, property of the judgment-debtor as could not, owing to the nature thereof, be taken under a common law writ of execution': see Halsbury's Laws of England, Vol. 14, p. 115, Section 208, and p. 4, foot note 'F.

23. But in India it is not so, and the practice is different. Under Section 52, Civil P.C., Court may order execution of decrees in various ways, of which appointment of receiver is one. Again in England, the rule of priority of writs prevails; whereas in India the rule of priority which prevailed under the Civil Procedure Code of 1859 has been subsequently altered by the legislature, and under Section 73 of the present Civil P.C., all decree-holders who have applied for execution of decrees of money against the same judgment-debtor are entitled to share rateably in the assets held by a Court provided applications for execution are made to the Court before the receipt of such assets.

24. This distinction will have to be kept in view when English cases are referred to on the question of execution.

25. Under Section 51 of the present Civil P.C. the Court may on the application of the decree-holder order execution of the decree by attachment and sale of any property of the judgment-debtor, or by appointing a receiver, or in such other manner as the nature of the relief granted may require. Does the Court by ordering execution by appointing a receiver confer on the decree-holder higher rights than what he would have if execution was ordered by attachment and sale of the judgment-debtor's property? In the case of execution by attachment and sale of the judgment-debtor's property, it has been held by a Full Bench of five learned Judges of this Court in the case reported in Viswanadham Chetty v. Arunachalam Chetty A.I.R. 1921 Mad. 218, that where the attaching Court and the custody Court are the same, there is a receipt of assets within the meaning of Section 73, Civil P.C., only when so much of the money standing to the credit of the judgment-debtor as is necessary to satisfy the decree-holder who has applied for execution, is ordered to be transferred to the credit of the first attaching creditor's suit. The judgment of the learned Sir John Wallis, C.J., contains a full discussion of the question. Krishnan, J. at p. 111, stated as follows:

When the attaching Court and the custody Court are the same, it seems to me that an order should be made by the Court as attaching Court for transferring the money from the suit in which it came into Court to the suit in which the attachment took place. It is only when this is done, the Court as attaching Court can properly be said to have received the assets and to hold the same within the meaning of Section 73; and decree-holders who have attached prior to that are entitled to rateable distribution.

26. Order 21, Rule 52, Civil P.C., would clearly apply when the attaching Court and the custody Court are different. But the Full Bench has held that it applied also when the two Courts are the same The decision of a later Full Bench of three learned Judges reported in Nachiappa Chettyar v. Subbier A.I.R. 1923 Mad. 505 also adopts the same view: see pp. 513, 517 and 521 (of 46 Mad.) at p. 517, it is observed:

According to the ruling in the Full Bench case, the money became assets held by the Court and available for payment out in execution only after the District Munsif passed the order for payment. (Per Krishnan, J.).

27. Wallace, J., at p. 521 remarked as follows:

The point of time of the conversion is the point of time at which the Court says: I, as attaching Court, take this property of the judgment-debtor lying in this Court as custody Court and make it property available for distribution in satisfaction of decree against him.

28. It seems to be clear therefore that if it were a case of attachment and sale, defendant 2 would have no superior or exclusive rights over the fund in question. Having regard to the position of a receiver appointed by the Court, as expounded in the cases quoted by me, it seems to me that defendant 2's position is not in any way improved by the fact that the Court ordered execution of his decrees by appointment of a receiver, and not by attachment and sale, of judgment-debtor's property. The learned advocate for defendant 2 has not satisfied me that by the mere appointment of a receiver in execution of defendant 2's decree, defendant 2 has in law secured a preferential or exclusive right to the moneys that may be realized by the receiver in circumstances like the present. If his contention be right, then other decree-holders could not proceed to attach the same property in execution of other money decrees obtained against the same judgment-debtor, and their remedies would be confined to the surplus, if any, in the receiver's hands. That contention is really inconsistent with the views of Muthusamy Iyer and Shepherd, JJ., in the decision quoted by me. Further, could defendant 2 claim to continue the retention of the receiver in case the judgment-debtor (Namasivaya) became insolvent and the properties of the judgment-debtor vested in the Official Receiver?

29. The circumstances that the person who was appointed as receiver happened to be Govindasami, defendant 2, himself could not in law make any difference. If a stranger had been appointed as receiver to file O.S. No. 259 of 1917, and if he realized some moneys in execution of the decree in O.S. No. 259 of 1917, could it be said that any moneys paid or realized in O.S. No. 259 of 1917 should be deemed at that moment to have been paid or realized in O.S. No. 373 of 1914?

30. Under the order appointing Govindasami as receiver:

he should pay the realized debt into Court and take out the realized sum after taking the further orders of the Court.

31. This shows clearly that before further orders are passed appropriating any sum towards the decree in O.S. No. 373 of 1914, moneys realized in O.S. No. 259 of 1917 do not ipso facto become moneys realized in O.S. No. 373 of 1914, or otherwise become exclusively moneys of the decree-holder in O.S. No. 373 of 1914.

32. The contention of defendant 2 that he is solely entitled to the fund in Court is unsustainable for another reason also. The circumstance that one decree-holder has attached certain properties of the judgment-debtor is by itself not a ground for preventing another decree-holder of the same judgment-debtor from attaching the same property. Under Order 21, Rule 52, Civil P.C., property in the custody of any Court could be attached. Similarly property over which a receiver has been appointed could also be attached, assuming that the permission of the Court would be necessary before such attachment, in the same way as permission of the Court is necessary to file a suit against a receiver. The Court would not ordinarily refuse such permission, if such permission be necessary. Defendant 1 who attached the property in question after receiver had been appointed has been held to be entitled to rateable distribution. The plaintiff also could have attached the decree in O.S. No. 259 of 1917, in which case he would also have been held entitled to rateable distribution. But is separate attachment by each decree-holder in such circumstances necessary? As remarked by Strachy, C.J., in Bithal Das v. Nand Kishore [1901] 23 All 106:

The object of the section is twofold. The first object is to prevent unnecessary multiplicity of execution proceedings, to obviate, in a case where there are many decree-holders each competent to execute his decree by attachment and sale of a particular property, the necessity of each and every one separately attaching and separately selling that property. The other object is to secure an equitable administration of the property by placing all the decree-holders in the position I have described upon the same footing, and making the property rateably divisible among them, instead of allowing one to exclude all the others merely because he happened to be the first who attached and sold the property.

33. In such cases, it is not necessary that the other decree-holders should again attach the same properties.

34. For similar reasons, when once a receiver has been appointed to realize properties in execution proceedings, it seems to me that the other decree-holders need not again apply for the appointment of a receiver over the same properties in execution of their decrees also. If their applications for execution be pending in the same Court before the assets are received, then I think they are all entitled to rateable distribution.

35. For these reasons, I think that defendant 2's contention that he is entitled exclusively to the fund in Court is unsustainable. It is admitted that the plaintiff applied for execution before any order was passed transferring or appropriating the fund or any portion thereof to the decree in suit O.S. No. 373 of 1914 obtained by defendant 2. That being so the plaintiff is entitled to rateable distribution along with defendants 1 and 2. The second appeal is accordingly allowed, the decision of the lower appellate Court reversed and that of the 1st Court restored. Defendant 2 (respondent 1) in the second appeal should pay the plaintiff's costs in this and in the lower appellate Court. I pass no orders as to costs of defendant 1 (respondent 2), either here or in the lower appellate Court. The order as to costs of the suit made by the first Court will stand.


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