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V. Ramaswami Ayyar and ors. Vs. S.S. Krishnasa and Sons and ors. - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported inAIR1935Mad904; 162Ind.Cas.221
AppellantV. Ramaswami Ayyar and ors.
RespondentS.S. Krishnasa and Sons and ors.
Excerpt:
civil procedure code (act v of 1908), section 73 - auction sale--decree-holder permitted to set off--court ignorant of attachment by another in another court--such prior decree-holder, if entitled to rateable distribution--contract--enforcement against third parties--b agreeing to collect outstandings due to a and pay a's creditors--a's creditors abstaining from proceeding against a and b's promise--held, b was liable to pay a's creditors. - .....principle of the decisions does not apply. if no other execution creditor intervenes, no doubt the sale obtained by the respondent will stand on the terms he has obtained, namely with the permission to set off. but now there is another execution creditor who comes to the sub-court praying for rateable distribution seeing that he obtained his attachment so long ago as june 29, long before the order of december 19, there is no reason why the error should not be rectified because no actual payments have been made. if that attachment had been known, the order permitting the sale with a permission to set off would not have been made, and if made, it would be erroneous. in punnamchand chatraban v. satyanadum 65 m.l.j. 569 : 145 ind. cas. 975 : a.i.r. 1933 mad. 804 : 38 l w 579 : 6 r m 178 :.....
Judgment:

Ramesam, J.

1. The facts out of which this appeal arises are these: Defendants Nos. 1 to 4 are a firm of merchants trading in Madura, Defendant No. 5 and his undivided son, defendant No. 6 are merchants carrying on business in Tiruvalur. The plaintiffs are cloth merchants in Conjeeveram. Defendants Nos. 1 to 4 became indebted to the plaintiffs and various other creditors to the extent of nearly Rs. 45,000. They had outstandings due to them to the extent of Rs. 12,000, and their stock-in-trade amounted to Rs. 30,000. Under these circumstances they entered into an arrangement with defendant No. 5 according to which defendant No. 5 should take over the stock-in-trade of defendant No. 1, put on his own signboard and carry on the business. Ganpathi Ayyar, defendant No. 5's brother, should also remain in the shop to see that everything is properly done and only Ganapathi Iyer should be in charge of collecting the outstandings due, to defendant No. 1 and defendant No. 5 undertook to realise Rs. 30,000 by sale of the stock by December 9, and as the sums are being collected, he undertook to pay up the creditors of defendant No. 1. This arrangement is embodied in Ex. IX. This document also,shows that practically it is a sale of the stock-in-trade by defendant No. 1 to defendant No. 5 because if by December 9, he is not able to collect Rs. 30,000 defendant No. 5 should pay the difference to defendant No. 1 with interest, and if more is collected, it should be retained by defendant No. 5.

2. Now it appears from the documents earlier than Ex. IX such as Exs. II, III and IV that this arrangement was really arrived at after consultation with the creditors particularly the plaintiffs. Exhibit IX-a is a counterpart of Ex. IX. A month after this arrangement that is, on July 31, 192-1, Ex. B was written by defendant No. 5 to the plaintiff. In this he refers to the fact that the prior arrangement was arrived at after consultation with the plaintiff's agent and clerk Doraiswami Mudaliar. Then defendant No. 5 proceeds to say that he was able to raise Rs. 10,000 and to pay it to the most pressing and worrying among the creditors of defendant No. 1, that he was not able to collect further amounts to pay to the plaintiff on account of his illness and because the times are bad and money is not available. Then he says that he expected to realise more money within a week. He says:

As soon as I get the said amount if you ask me to send it to Conjeeveram I shall send it by registered post. I have also written to your clerk that I would either send the money to him to Madura or he may on his return halt at Tiruvalur and take the money that I may collect here.

3. Finally he says:

I shall return the amounts due to you in course of time.

4. We think on a construction of Ex. B taken with all the surrounding circumstances that it amounts to a promise by defendant No. 5 to pay the plaintiffs debt. We are not concerned here with other creditors. The plaintiff's debt was only about Rs. 7,000. Seeing that defendant No. 5 undertook to raise Rs. 30,000 by sale of the stock-in-trade and has already raised Rs. 10,000, there is nothing improbable in this conclusion, namely, that defendant No. 5 promised to pay off the plaintiffs debt. It is clear from lire prior correspondence that the plaintiff was not in a mood to wait unless he is given some kind of security or assurance that his debt will be easily forthcoming. But lor the promise of defendant No. 5 seems to us unlikely that he would have waited so long as more than a year and four months, the suit having been actually filed in October 1925. When defendant No. 1 afterwards failed to pay, the plaintiff was addressing letters. Both to defendant No. 1 and defendant No. 5 see Exs. VIII, VI, VIII-d, VIII-g, VIII-a, and I. Finally in Exs. V and VII the plaintiff complains to defendant No. 5 that money was not realised and paid and he was looking forward to him for seeing that the money is properly paid. No doubt the parties might have made it more definite. But taking all these circumstances we think that there was a promise by defendant No. 5 to the plaintiff. In this view the decision in Rajuchettiar v. Shukkur & Co. 25 l w 44 : 98 Ind. Cas. 609 : A.I.R. 1927 Mad. 179, does not help the appellants. That merely follows the principle in Tweeddle v. Atkinson (1861) 1 b & s 393 : 30 L J Q B 265 : 8 Jur. (N S) 332 : 4 L t (N S) 468 : 9 w R 781 : 124 R R 610, which of course is correct law and against which we have to say nothing. The facts of this case are distinguishable. The result is that the appeal fails and is dismissed with costs.

5. In C.M.A. No. 93 of 1930 the appellant's learned Advocate admits that after the decision in the main appeal there is nothing to press in this appeal. It is dismissed with costs. The petitioner in Civil Revision Petition No. 1005 of 1930 is another decree-holder against defendant No. 5 in the first appeal just disposed of. He obtained his decree before the District Munsif's Court of Salem. He got a transfer of that decree to the District Munsif's Court of Madura Town. He applied for attachment of the house of defendant No. 5 on April 8, 1929. The attachment was effected and the fact was reported by July 19, 1929. Meanwhile the plaintiff in the first appeal obtained attachment of the same house in July 1928, and brought it. to sale on December 16,1929. On December 20, 1929, the petitioner applied for rateable distribution. The sale by the respondent was effected after an order giving him permission to set-off the purchase money against this decree amount. But at that time the attachment in execution of the petitioner's decree had already been obtained and he was not a party to that order. In these circumstances the question arises whether the petitioner, is entitled to rateable distribution or whether he should be held bound by the order permitting the sale with a set off. Two decisions have been cited before us, Civil Revision Petition No. 586 of 1926 andDandayutha Pani Devasthanam v. Muthayanswami Chetii A.I.R. 1930 Mad. 699 : 123 Ind. Cas. 193 : Ind. Rul. (1930) Mad. 465.

6. In these cases it was held that where one Court not only realised assets but actually distributed them in ignorance of the existence of attachment in another Court, it is too late to rectify the error. In the present case, it is true that when the order permitting the sale with set off was passed on December 19, the Sub-Court was ignorant of the existence of another attachment in the District Munsif's Court of Madura Town. But this is not a case where any amount has been actually realized and distributed so that the principle of the decisions does not apply. If no other execution creditor intervenes, no doubt the sale obtained by the respondent will stand on the terms he has obtained, namely with the permission to set off. But now there is another execution creditor who comes to the Sub-Court praying for rateable distribution seeing that he obtained his attachment so long ago as June 29, long before the order of December 19, there is no reason why the error should not be rectified because no actual payments have been made. If that attachment had been known, the order permitting the sale with a permission to set off would not have been made, and if made, it would be erroneous. In Punnamchand Chatraban v. Satyanadum 65 M.L.J. 569 : 145 Ind. Cas. 975 : A.I.R. 1933 Mad. 804 : 38 L W 579 : 6 R M 178 : (1933) M W N 1145 : 57 M 38, and in the decision in Krishna Rao v. Sundar Shiva Rao (1931) M W N 568 : 131 Ind. Cas. 318 : A.I.R. 1931 P C 109 : 58 I A 148 : 54 M 440 : 50 C L J 355 : 35 C W N 617 : Ind. Rul. (1931) P C 126 : 33 Bom. L R 937 : 61 M.L.J. 91 (P C), there was no application for execution prior to sale. The only applications that were made there were on the date of sale and after the order directing to set. off which was, therefore, a proper order. Those cases do not help the respondent. There is nothing to prevent us from adjusting the rights of the parties on the correct footing. The only other question to be discussed in this case is whether the application for execution not being pending in the Sub-Court of Madura Section 73 does not apply. This point has been considered by Wallis, J. and Bakewell, J., in a decision in Narasimhachariar v. Krishnamachariar 26 M.L.J. 406 : 23 Ind. Cas. 909 : A.I.R. 1914 Mad 454 : 1 L W 403. All the authorities then existing were reviewed. We agree with that decision. It deals with the general effect, of Sections 63 and 73.

7. It has also been since followed in other cases and though there are one or two differing judgments of other Courts we do not see any reason why we should depart from that decision now. As all the facts and dates are clear there is no purpose in referring the petitioner to a regular suit and not interfering now. Such a course has been followed by this Court in cases of this kind: see Sree Krishna Doss v. Chandookchand 32 M 334 : 4 Ind. Cas. 509 : 5 M L T 125 : 19 M.L.J. 307. The result will be the petition is allowed. There will be a rateable distribution of the amount realised in the sale, i.e., the effect of this will be the respondent will pay the proportionate amount due to the petitioner. He need not bring in his own proportion of the amount as he is still entitled to set off. The Sub-Court will determine the actual amount to be paid by the respondent to the petitioner. The petitioner will have costs of this petition in the High Court only. No order as to costs in the lower Court.

8. This case having been set down to be spoken to this day, the Court made the following:

ORDER

9. The vakalat filed for the respondent after judgment is accepted and the decree will be drafted on the footing that the respondent was represented at the time of the argument.


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