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Sewdut Roy Vs. Sree Canto Maity - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata
Decided On
Judge
Reported in(1906)ILR33Cal639
AppellantSewdut Roy
RespondentSree Canto Maity
Cases ReferredPallonji Shapurji Mistry v. Edward Vaughan Jordan
Excerpt:
attachment before judgment - execution--civil procedure code (act xiv of 1382) sections 230, 269, 272, 295, 489, 490--suit--assets, rateable distribution of--decree--sale of goods subject to speedy and natural decay, effect of. - .....the subsequent sale on the 2nd october 1905 must, it is argued, be taken to be a realization of assets in execution. in my opinion there is no ground for such a contention and no authority has been put before me in support of it.3. the particular case before me does not appear to have been provided for by the code, but must be disposed of on the principles underlying the provisions of the code, which bear on the matter before me and as conformably as may be to those provisions.4. the law recognises and rewards the diligence of the creditor, who has realized assets for payment of his debts. but unless there has been actual realization in execution the principle to be applied is that so far as possible creditors should be treated part passu and that nothing short of actual realization.....
Judgment:

Woodroffe, J.

1. This suit was instituted on the 22nd August 1905. The plaintiff applied for attachment before judgment. On the 30th August an order was made in default of security. On the 2nd September the goods which consisted of castor seeds and other articles were actually attached. On the 13th September the goods as perishable articles were at the instance of the plaintiff ordered to be sold, under the provisions of Sections 269 and 486 of the Code. The sale proceeds were thereafter and on the 2nd October paid into Court. On the 23rd November the party, who opposes this application, obtained a decree in another suit. Then on the 18th December the plaintiff obtained a decree in this suit. Then on the 5th January 1906 the opposite party attached the moneys in Court under the provisions of Section 272 of the Code as moneys payable to the defendant. Thereafter and on the 24th January 1906 the plaintiffs gave notice of this application in which they ask that they may be paid the sum in Court representing the proceeds of sale of the property attached before judgment in part satisfaction of their decree, which was for a larger amount or in the alternative for rateable distribution under Section 295. The opposite party is willing that an order should go in this alternative form, but the plaintiff's learned Counsel presses his claim to be paid the whole fund to the exclusion of the opposite party, the other attaching creditor.

2. The contention on behalf of the plaintiff is this. It is said that the assets were realised when the sale proceeds were paid into Court on the 2nd October 1905; that the opposite party did not apply for execution prior to such realization; and that therefore they are not entitled to have a rateable distribution. It maybe conceded that the assets were 'realised' which word simply implies in this connection that the property has been converted into a form, namely money, which renders it available for immediate distribution. But realization is not sufficient. It must be a realization in execution of a decree. It is obvious that there was no such realization in this case on the 2nd October 1905. The goods were then sold before there was any decree which could be executed and were so sold simply because they were of a perishable nature. It is then said that the present application is in substance one for the execution of the decree, that on such application it is not necessary to reattach the property, and that upon such application the attachment becomes one in execution and dates back to the time, when it was made before decree. As a consequence of this fiction the subsequent sale on the 2nd October 1905 must, it is argued, be taken to be a realization of assets in execution. In my opinion there is no ground for such a contention and no authority has been put before me in support of it.

3. The particular case before me does not appear to have been provided for by the Code, but must be disposed of on the principles underlying the provisions of the Code, which bear on the matter before me and as conformably as may be to those provisions.

4. The law recognises and rewards the diligence of the creditor, who has realized assets for payment of his debts. But unless there has been actual realization in execution the principle to be applied is that so far as possible creditors should be treated part passu and that nothing short of actual realization of the debt due should give rights of priority.

5. In short the question is has there been realization and if so when. The object of the attachment before judgment is simply to safeguard the property so as to enable the plaintiff to realize the amount of his decree, if he should get one. He has however no lien or charge on the property, which remains that of the defendant. He has a security. But this does not import present property or even beneficial interest. Further the benefit of the attachment may enure to the benefit of others than the creditor, who has procured it. Though he may have secured the goods another decree-holder may under Section 489 apply for the sale of them. In short a plaintiff attaching before judgment has not by reason merely of such attachment or process incidental thereto any right to be treated preferentially to others. I say this as the contrary has been argued before me. Further when the plaintiff gets a decree he is not ipso facto better situated. For a decree qua decree does not constitute the plaintiff a secured creditor or give him any charge or lien over the property of the judgment-debtor. He must take proceedings in execution, which ore proceedings by which the judgment-creditor seeks to establish a right to have his money paid out of the property of the judgment-debtor. In other words he must apply for execution under Section 230 just like any other creditor. He is not exempted from this by Section 490. All that that section says is that it is not necessary to reattach in execution, that is, if and when execution is applied for and granted. Such an application is necessary not merely for the enforcement of his own right, but also to enable him to control the rights of rival decree-holders. On such application for execution the attachment before judgment enures and becomes upon and by virtue of the application an attachment in execution. If the property has not been sold no difficulty arises. Other creditors may then come in and share before the sale takes place in such assets as are realized in execution.

6. The difficulty in the present case is that the assets were realized in fact before decree and therefore not at that time in execution and having once been realized there is an end of the matter.

7. Now if I were to adopt the applicant's counsel's argument I should have to hold by a fiction contrary to the fact that the assets were realised in execution on the 2nd October 1905 though there was then no decree to execute. As I have said the difficulty arises from there having been a realization in fact though not a realization in execution; the two things having been severed which the Code treats and which ordinarily occur as one.

8. There can in any event be no realization in execution before an application for execution is made. Having regard to the willingness of the opposite party to accept rateable distribution I will treat the application of the plaintiff as in substance one for execution and this being so it is unnecessary further to discuss the case, to which I have been referred. Pallonji Shapurji Mistry v. Edward Vaughan Jordan (1888) I.L.R. 12 Bom. 400. Learned Counsel for the applicant contends that on his application both the attachment and realization became an attachment and realization in execution; in other words that having made this application it must be taken that the goods were realised in execution when they were sold on the 2nd October, that is before the opposite party had attached. the property. But before the plaintiff had made this application the opposite party had attached the property. His learned Counsel on the other hand therefore argues that it must be taken that his client applied before realization in execution, which cannot at any rate be said to have occurred before the decree had been made and the decree-holder had applied for execution of that decree. He submits that, if there has been any realization in execution, it must be taken to have occurred when the application was made to enforce the decree against the attached property.

9. I prefer however to decide the matter on the following ground. The case does not appear to be one provided for by the Code, but that Code clearly indicates that, except where a creditor has actually realised assets in execution before another creditor has applied to execute his decree (which is not the case here), both creditors are to share deteably. I accordingly make an order in the terms of the alternative prayer of the summons. As the plaintiff was unwilling to accept the opposing creditor's offer to stare rateably and insisted on being paid the whole amount, he must pay the costs of the hearing other than the cost of the application itself.


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