1. The petitioner is the decree-holder in S.C.S. No. 167 of 1933. The decree was against two defendants. It ordered them jointly and severally to pay a sum of money, and with regard to the 2nd defendant, it said:
It is further ordered that the decree against 2nd defendant shall stand stayed in case he pays on the 5th of every month commencing from July 5,1933, at the rate of Rs. 10 per mensem until the decree is satisfied, in case of default of any instalment, this stay order will cease. The stay order will also have effect only on 2nd defendant furnishing security of immovable property for the decree amount and agreeing to pay interest at 9 per cent. por annum on or before July 5, 1933,
2. A. security bond was executed by the 2nd defendant and it referred to certain immovable property and stated:
I will be paying without default the said decree amount as per order of Court by the 5th of each month. In case of default of any instalment as , aforesaid, the balance that may then be due after giving credit to payments so far made, may be recovered in one lump sum from me and from my properties described in the schedule hereunder and I can have no objection thereto. Until the aforesaid decree amount is fully realised, I have kept the aforementioned property belonging to me, viz., my house worth about Rs. 1,000 as security. I shall not alienate in any manner the said house until the aforesaid decree amount is fully satisfied.
3. In our view that surety bond and the decree clearly created a charge on the property concerned in favour of the decree-holder. Now the 1st defendant filed an application for rateable distribution in this case and that was allowed by the District Munsif on the ground shortly that no charge was created on the property. The other questions raised in this Revision Petition were apparently not aruged. It was decided on the question of charge or no charge.
4. Mr. Sreenivasathathachariar has argued that on the authority of three decisions of this High Oourt, this property is not available for rateable distribution. We consider that proposition is amply supported by the cases he cited and there appears to be no real difference of opinion in the authorities in this High Court as has been suggested by Mr. Sampath Ayyangar. Two of the cases are reported in Subramanain Chettiar v. Rajah of Pamnad 41 M 327 : 43 Ind Cas. 187 : 6 LW 762 : (1917) MWN 872 : 34 MLJ 84 : AIR 1918 Mad. 442, and the other Ramiah Ayyar v. Gopaliah 41 M 1053 : 49 Ind. Cas. 20 : 35 MLJ 355 : AIR 1919 Mad. 607, a Bench consisting of Wallis, C.J and Kumarasawmi Sastri, J. considered much the same question which we have to consider now and at page 332 Pages of 4l Mad.--[Ed.] the learned Judges held as follows:
The effect of immovable property being given as security is something more than attachment because it makes the property applicable solely in discharge of the judgment debt and not liable to rateable distribution among other judgment creditors,
and on the facts in that case it was held that the immovable property in question had been given as security and that a charge was, therefore, created upon it. In the other case at page 1053 Pages of 4l Mad.--[Ed.] the position was most carefully considered by Ayling and Coutts-Trotter. JJ. in giving the judgment of the Court refers to a statement of the law as given in Subramanian Chettiar v. Rajah of Ramnad 41 M 327 : 43 Ind Cas. 187 : 6 LW 762 : (1917) MWN 872 : 34 MLJ 84 : AIR 1918 Mad. 442, to which we have just referred and cites that very passage obviously with approval. The effect of both these cases does not seem to be very difficult. It amounts to nothing more than this that it is a question of investigation in each case as to whether it was intended that a charge should be given on any property. If it is found that the property is charged and is security to the decree-holder, then it is not available for rateable distribution to third parties 41 Mad. has been followed in another decision of this High Court Janaki Nagasawami Ayyar v. Ramaswami Ayyangar 11 LW 6 : 56 Ind. Cas. 267 : (1920) MWN 264 : AIR 1920 Mad. 409. There does not, therefore, seem to us to be any room for difficulty. But some difficulty has been raised in this matter by Mr. Sampath Ayyanger who has argued this case on behalf of the 1st respondent because he says that in a Madras decision Gopal Aiyar v. Thiruvengadam Pillai 32MLJ 503 : 38 Ind. Cas. 481 : 5 LW 407 : AIR 1918 Mad. 1158 the Bench, while accepting the position that money may be made security for a decree debt, queried whether the same principles may be applicable to immovable property. At page 505 Page of 32 MLJ--[Ed.] the following appears:
The case may be different, though it is not necessary to express any opinion with regard to that question, if what is furnished as security is specific property such as land. In such a case it might be possible to contend that the defendant is not in fact the owner of the property but somebody else and that the title of the real owner would not be lost. But money stands on a different footing.
5. In that case a complication had arisen because the money given as security belonged to a joint family. But the query raised by the learned Judges in that case is in our opinion entirely disposed of by all the three authorities to which we have referred and it is clear from them that those learned Judges at least found no difficulty in accepting the position that immovable property can be made security under circumstances such as these equally and in the case of money.
6. It is suggested that Section 73, Civil Procedure Code, presents a difficulty here. Proviso (c) is not applicable because immovable property in this case was not sold in execution of the decree ordering its sale for the discharge of an incumbrance thereon. Therefore, says Mr. Sampath Ayyangar the plain words of the section apply and the assets had to be distributed to all persons having any claim thereto. That appears to us to beg the question because that argument must be on the basis that land cannot be given as security, Indeed we think that Mr. Sampath Ayyangar was bound to take up the attitude that the decisions to which we have referred are wrong: otherwise the answer which they give, viz., that the property is not available for rateable distribution is clearly an answer to the very wording of Section 73(1). The whole question when considering rateable distribution in, a matter of this kind is to consider whether the property , is open to the other decree holders and the effect of the authorities to which we have referred is that if it is charged as security for a specific decree, it is not so open.
7. The result of these conclusions is that this Civil Revision Petition will be allowed with costs.
8. We only desire to add one further word. This matter originally came before a single Judge and on the representations of the respondent it was posted before a Bench. The result is that it has not reached us for a very long time. It was admitted in February and was referred to a Bench last September and now comes up to us for disposal in January 1937. Ordinarily we should have referred the petitioner to his remedy of a suit under Section 73, but under the special circumstances, we considered it would be a hardship for us to do so and it is only under those special circumstances that we have decided to deal with the matter under Section 115, Civil Procedure Code.