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(Sait) Siva Pratapa Bhattadu Vs. A.E.L. Mission and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported inAIR1926Mad307
Appellant(Sait) Siva Pratapa Bhattadu
RespondentA.E.L. Mission and ors.
Cases ReferredBarendra Nath Mitter v. Martin
Excerpt:
.....appellants here-that this is an exceptional right and does not thereby confer on a judgment-creditor an interest in the land. it, therefore, appears to me, having regard to the change in the language of the section and to the authority of the madras ruling quoted, that this compensation money may be regarded as assets within the meaning of section 73. 13. the third point is one raised under section 64 of the civil procedure code, namely, that the claims must be good and valid claims at the time when the alienation was made......when the decree-holder's claim to partake in the compensation money was decided then at least the money held must be deemed to be assets of the judgment-debtor held by the court, for they were held from the date of the court's award subject to the claim of the decree-holder. i am, therefore, of opinion that this compensation money comes within the meaning of 'assets held by the court' either from the date of receipt or at least from the date of the final award. claimants 7 and 8 are entitled to come in under section 73, if the provisions of section 64 are also fulfilled.6. it is, however, argued that, under section 64, an alienation made pending attachment is not void against the decree-holders claiming rateable distribution unless, at the time of the alienation, the claims were.....
Judgment:

Phillips, J.

1. This appeal relates to the conflicting claims of the parties to money awarded, as compensation for land acquired. The appellants are the fourth mortgagees of the owner of the land and the respondents are the attaching creditors of the owner and have attached the land in execution of their decrees. The fourth claimant (the first respondent) attached the land in execution of his decree on 9th October 1920. The mortgage in favour of the appellants was executed on 12th November 1921, and the attachment by the seventh and eighth claimants (Respondents 2 and 3) was in October 1922. The award of the Collector is dated 31st July 1922, but that does not decide the respective rights of the several claimants, but referred the question to the District Court for decision. The compensation money was not received in the District Court until after October 1922, as distinctly stated by the District Judge, although an attempt has been made to show that he was wrong.

2. The first question raised for the appellants is that the attaching decree holders are not persons 'interested in the land' within the meaning of Section 9 of the Land Acquisition Act, and it is contended that, in order to come within the definition, it is necessary that the party should have some legal interest in the land. The definition in the Act, however, is as follows:

The expression, 'persons interested' includes all persons claiming an interest in compensation to be made on account of the acquisition of the land under this Act.

3. This definition does not seem to contemplate that a person interested need have a legal interest in the land, because it specifically alludes to interest in the compensation to be made, and it has frequently been held that a person may be interested within the meaning of the Act without holding any legal estate in the land ; and in two cases, Chhuttan Lal v. Mul Chand [1917] 18 P.R. 1917 and J.C. Galstaun v. Secretary of State 10 C.W.N. 195. it was held that a person who held an agreement for sale from the owner was a person interested within the meaning of the Act, although such agreement creates no legal estate; and In re The Land Acquisition Act, In the matter of Pestonji Jehangir Modi [1913] 37 Bom. 76 it was held that a person may be interested in the compensation money without having any interest in the land in the legal sense of the term. Here it is clear that an attaching decree-holder who seeks to satisfy his, claim out of the land is certainly interested in the compensation that has to be paid for that land, as it is a matter of considerable importance to him that a sufficient amount of compensation should be paid in order that he may be able to satisfy his decree, and I think there can be no doubt that an attaching decree-holder is a person interested in the land within the meaning of the Act.

4. The next objection relates to the enforceability of the claims of the decree-holders. The District Judge has held that the alienation in favour of the appellants pending attachment by the fourth claimant was void against him, and that Claimants 7 and 8 are entitled to come in before the alienee as persons entitled to rateable distribution. It is quite clear that an alienation made during attachment is void under Section 64, of the Civil Procedure Code, as against all claims enforceable under the attachment, and, in the explanation to that section we find that claims enforceable under an attachment include claims to rateable distribution of assets. Under Section 73, where assets are held by a Court and more persons than one have, before the receipt of such assets made applications to the Court for execution of decree against the same judgment-debtor, the assets shall be rate-ably distributed among all such persons. Claimants 7 and 8 undoubtedly come within the meaning of this section and they would be entitled to share in the distribution of the assets along with the fourth claimant who made the first attachment.

5. The difficulty, however, arises as to whether this compensation money can be deemed to be assets held by the Court within the meaning of Section 73. Under Section 295 of the Civil Procedure Code of 1882 it was necessary that the assets should be realized by sale or otherwise in execution of a decree, but under Section 73 of the new Code there is no definite provision that the assets must be realized by sale or otherwise in execution of a decree. In the present case, it cannot be said that the money paid as compensation has, in the strict sense of the term been realized in execution of a decree, and it has been held in Sorabji Goovarji v. Kala Raghunath [1912] 36 Bom. 156 that assets within the meaning of Section 73 must be assets held in the process of execution. This view has been dissented from in this Court in Thiraviyam Pillai v. Lakshmana Pillai [1918] 41 Mad. 616 and this latter case has been followed in Ghisulal Agarwalla v. Todarmull Agarwalla A.I.R. 1922 Cal. 19. If it were necessary that the assets should be realized in the process of execution, it is difficult to understand why these words have been deliberately omitted from the new Section 73. It appears to me that it will be sufficient if the assets are held by a Court and are assets which may be allotted towards the satisfaction of the decree by the Court and that the manner in which they may have been realized is immaterial. This interpretation gives some force to the change of language in Section 73, which omits all reference to the method of realization. In the present case, the compensation money in the District Court when originally received, may be said to be money belonging to the owner in the hands of the Court in its capacity as a Court of custody, and not as Court of execution; but when the decree-holder's claim to partake in the compensation money was decided then at least the money held must be deemed to be assets of the judgment-debtor held by the Court, for they were held from the date of the Court's award subject to the claim of the decree-holder. I am, therefore, of opinion that this compensation money comes within the meaning of 'assets held by the Court' either from the date of receipt or at least from the date of the final award. Claimants 7 and 8 are entitled to come in under Section 73, if the provisions of Section 64 are also fulfilled.

6. It is, however, argued that, under Section 64, an alienation made pending attachment is not void against the decree-holders claiming rateable distribution unless, at the time of the alienation, the claims were actually being enforced. This view has been taken in Barendra Nath Mitter v. Martin & Co. [1921] 33 C.L.J. 7. where Mookerjee, Ag. C.J. holds that the word 'enforceable' in the explanation to Section 64, must be treated as meaning 'in process of enforcement.' With all respect it seems to me to be adding something to the Code which is not there and there is a prior authority in the Calcutta High Court in Kali Kumar Saha v. Kali Prasanna Majumdar [1916] 33 I.C. 492. that the decree in respect of which rateable distribution is sought need not have been in process of execution at the time of the alienation. The same view has been held in Bombay in Chunilal Devaji v. Karamchand Shrichand A.I.R. 1922 Bom. 241. and in this latter case it was further held that it is unnecessary that the decree should have even been in existence at the date of the alienation. These cases follow the view taken in Sorabji Edulji Warden v. Govind Ramji, F.N. Wadia [1892] 16 Bom. 91 In accordance with this view, which I accept, Claimants 7 and 8 are entitled to rateable distribution along with the fourth claimant, whose claim must be preferred to that of appellant.

7. The appeal must, therefore, be dismissed with costs ; separate vakil's fee for each respondent.

Odgers, J.

8. This appeal raises questions under the Land Acquisition Act. The Government acquired for the Imperial Bank certain lands and houses in Rajahmundry, and the question arises as to who is entitled to participate in the money paid as compensation for the acquisition. The appellants before us represent the fourth mortgagee. The first question is whether the attaching creditors represented by Claimants 4, 7 and 8 take precedence over the fourth mortgagee. The fourth claimant, as attaching creditor, was prior in time to the fourth mortgagee, but the attachments of the seventh and eighth claimants are subsequent, and the question arises whether by Section 73 of the Civil Procedure Code they are entitled to priority over the fourth mortgagee so as to give them a right to rateable distribution. It should be noted that the claims of the seventh and eighth claimants were made prior to the receipt of the assets in the lower Court, as the Acquisition Officer, by his order of the 31st July 1922, left the question of the apportionment of the compensation to the decision of the District Court and also the amount of compensation to be deposited therein. Some attempt was made to argue that Claimants 7 and 8 were not entitled to be heard as they had not appeared before the Land Acquisition Officer. In his letter, dated 25th September 1922, the Land Acquisition Officer refers the case to the District Judge for adjudication and the District Judge in his award, dated 27th January 1923,'states that 'the various claimants have been referred to the Court.' He also states it is admitted as a fact that the attachments by Claimants 7 and 8 were prior to the date when the assets came into the custody of the District Court. There is therefore nothing in that point.

9. The first serious point urged for the appellants is that an attaching creditor is not a person interested under Section 3(b) of the Land Acquisition Act. The definition of 'a person interested' includes all persons claiming an interest in compensation to be made on account of the acquisition of land under the Act and in Section 9, Sub-section 2, notice is to be given and the notice shall require ' all persons interested in the land to appear personally, etc...to state the nature of their respective interests in the land.' In Section 10(1) the Collector may require, etc.' a statement containing as far as may be practicable the name of every other person possessing any interest in the land.' On the strength of these quotations it is argued that as an attachment of land gives no interest in the land, or what in the English Law is called real interest, the attaching creditor is not a person interested in the land within the meaning of the sections quoted of the Land Acquisition Act. It is to be observed that in the definition a person interested includes a person claiming an interest in the compensation and it is to my mind perfectly clear that an attaching creditor-does this ; for it is obviously to his advantage that his debt should be paid out of the sum deposited in Court as compensation for the acquisition of his debtor's land. By Section 91(f) of the Transfer of Property Act, a judgment, creditor of the mortgagor, who has obtained execution by attachment of the mortgagor's interest, is allowed to redeem. That is to say, he stands in the position of the mortgagor with regard to an equitable interest in the property, i.e. the right of redemption. It is urged by the appellants here-that this is an exceptional right and does not thereby confer on a judgment-creditor an interest in the land. That an attaching creditor acquires no charge by his attachment, scarcely needs authority : See Chamiyappa Tharagan v. Rama Ayyar [1921] 44 Mad. 232 and Nachiappa Chettiar v. Subbier A.I.R. 1923 Mad. 505 In Chhuttan Lal v. Mul Chand [1917] 18 P.R. 1917 it was held that a person who entered into a valid agreement for the purchase of land which under the Transfer of Property Act gives no interest in the land itself is a person interested within the meaning of Section 3(b). In In re The Land Acquisition Act, In the matter of Pestonji Jehangir Modi [1913] 37 Bom. 76 Macleod, J. as he then was, observed that it is quite possible that a person may be interested in the compensation money without having an interest in the land in the legal sense of the term. 1; therefore, think that the objection, that an attaching creditor is not a person interested under Section 3(b) of the Land Acquisition Act, cannot be maintained.

10. By Section 53 of the Land Acquisition Act the provisions of the Civil Procedure Code are to apply to proceedings under the Act save in so far as they may be inconsistent.

11. The next point is that Section 73 of the Civil Procedure Code does not apply, because the compensation money has not come into Court as the result of an attachment, so that there are no assets held by the Court within the meaning of the section. The words of the Code of 1882, Section 295, ran:

Where the assets realized by sale or otherwise in execution of a decree.

12. These words have been omitted in the present Code and the section begins : 'Where assets are held by a Court.' It appears to me that if meaning is to be given to the amendment it must be taken that the Legislature meant to extend the meaning of 'the word 'assets' in the section and they are not, therefore, now to be regarded as confined to assets realized by sale or otherwise in execution of the decree. If the word 'assets' is still to be read in its narrow sense, there is no doubt that this compensation money is not ' assets.' If on the other hand, assets may mean any fund held by a Court to the credit of a person, then assets may include compensation money as here. In Sorabji Coovarji v. Kala Raghunath [1912] 36 Bom. 156 it was held that the assets referred to in Section 73 are assets held in the process of execution. In 'this case money was paid into Court under Order 21, Rule 55, and it was held that when money was paid into Court for this particular purpose it could not fall under the words of the section. This has been dissented from in Thiravi-yam Pillai v. Lakshmana Pillai [1918] 41 Mad. 616 where the facts were these : 'The judgment-debtor obtained permission of the Court under Order 21, Rule 83, to raise money by private alienation of the property and thus pay the amount due on one of the decrees. The money was accordingly paid into Court by the alienee. It was held that the money, haying been (paid into Court pending the execution application, was assets under Section 73 of the Code and liable to rateable distribution. The Bombay decision is expressly dissented from. In Ghisulal Agarwala v. Todar mull Agarwala A.I.R. 1922 Cal. 19, a single Judge of the Calcutta High Court held that the natural interpretation of the wide language of Section 73 would allow assets to be applied to any assets in the possession and at the disposal of the Court for the purpose of satisfying a decree obtained against the judgment-debtor. The case in Sorabji Coovarji v. Kala Raghunath [1912] 36 Bom. 156 was referred to and the judgment in Thiraviyam Pillai v. Lakshmana Pillai [1918] 41 Mad. 616 adopted where it says the intention of the Legislature is to afford a creditor equal opportunities of obtaining a rateable advantage in the available assets of the judgment-debtor. It, therefore, appears to me, having regard to the change in the language of the section and to the authority of the Madras ruling quoted, that this compensation money may be regarded as assets within the meaning of Section 73.

13. The third point is one raised under Section 64 of the Civil Procedure Code, namely, that the claims must be good and valid claims at the time when the alienation was made. The argument derives force from the judgment of the Calcutta High Court reported in Barendra Nath Mitter v. Martin & Co. [1921] 33 C.L.J. where it was held that a claim for rateable distribution cannot be recognized under Section 64 of the Civil Procedure Code unless it is in actual existence at the time of the alienation and it cannot ripen into such a claim unless the necessary conditions formulated in Section 73 have been fulfilled. One of the conditions laid down in the judgment is the presentation of an application for execution before the receipt of the assets. The meaning given in the same judgment to the words 'enforceable claim' in Section 64, Civil Procedure Code, therefore, is that there is no claim till there is an application. Now as against this view there is a decision in Kali Kumar Saha v. Kali Prasanna Majumdar [1916] 33 I.C. 492 also of the Calcutta High Court, where it is held that it is immaterial for the application of Section 64 whether the decree of the plaintiff had or had not been passed before the time when the . transfer was effected. And in Chunilal Devaji v. Karamohand Srichand A.I.R. 1922 Bom. 241. the Bombay High Court held following a prior decision of the same Court in Sorabji Edulji Warden v. Govind Ramji, F.N. Wadia [1892] 16 Bom. 91. that under. Section 64 when an attachment has been laid on property in execution that attachment includes not only the claims of creditors, attaching before a transfer but also includes the claims of any other execution creditors who may apply for attachment before assets are realized. The case referred to. in Sorabji Edulji Warden v. Govind Ramji, F.N. Wadia [1892] 16 Bom. 91. is the judgment of a single Judge, Mr. Justice Telang; but the judgment and the reasoning are extremely elaborate. There seems no reason to differ from this body of opinion on the strength of the opinion expressed in Barendra Nath Mitter v. Martin & Co. [1921] 33 C.L.J. 7. and until that decision has been adopted either by the Privy Council or by this High Court, I prefer to rest my judgment on this part of the case on the other, cases I have cited. I, therefore, think that the appeal fails on all points. I agree as to costs.


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