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Dhirendra Nath Sen and ors. Vs. Santa Shila Devi and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtKolkata High Court
Decided On
Case NumberSpecial Suit No. 5 of 1954
Judge
Reported inAIR1968Cal336,72CWN86
ActsCode of Civil Procedure (CPC) , 1908 - Section 47 - Order 34, Rules 14 and 15; ;Registration Act - Section 17; ;Transfer of Property Act, 1882 - Section 100
AppellantDhirendra Nath Sen and ors.
RespondentSanta Shila Devi and ors.
Appellant AdvocateBikas C. Sen, Adv.
Respondent AdvocateAjay K. Basu and ;Harendra Nath Ghosh, Advs.
DispositionApplication allowed
Cases ReferredMahesh Prasad v. Mt. Mundar.
Excerpt:
- .....disputes to the arbitration and as a result of such act of reference the arbitrator has in his award created a charge according to him, the creation of a charge is therefore an act of the parties and as such, section 100 of the transfer of property act is attracted and the charge therefore can only be enforced by a suit as provided in the section. i find a case, mahesh prasad v. mt. mundar. : air1951all141 (fb) where mallick c. j. has made the following observation at p. 144:'where the suit is a contentious suit and in such a suit a charge is created, it is very difficult to say that the charge has been created as a result of an act of the parties, though in a consent or compromise decree, or in a decree based on an award it may be so called. i have pointed out in another case that.....
Judgment:
ORDER

S.A. Masud, J.

1. This is a glaring case where the travesty of justice has been caused by the act of the parties. By an award made by the Late Dr. Radha Binod Pal on 27th May, 1955, several persons were directed to pay a sum of Rs. 5,000 each to the petitioner Sm Santa Shila Devi. the relevant clauses of the said award read as follows:

'10(a) That

1. Sri Dhirendra Nath Sen.

2. Sri Priya Nath Sen.

3. Sri Anandi Nath Sen.

4. Sri Jitendra Nath Sen.

5. Sri Satendra Nath Sen.

6. Sri Fanindra Nath Sen.

7. Sri Rabindra Nath Sen. shall each pay severally to Sm Santosila Debi the sums of Rs 5000 (five thousand) each (in all Rs. 35000) (thirty five thousand) in full satisfaction of her claim to the dividends from the New India Glass Works (Calcutta) Ltd., upto the close of the year 1945-46 as also in full discharge of her claim in respect thereof from the joint family.

(b) That each of the seven brothers named above shall pay to Sm. Santosila Devi the amount thus declared payable by him in five equal quarterly instalments of Rs. 1000 each the first of such instalments falling due on the 1st September 1955. In case of default in the payment of any of these instalments interest on the defaulted amount at the rate of 6 per cent per annum shall be payable from the date of default.

(c) That the above payments shall remain charged on the respective allotments of the seven brothers contained in paragraphs 2, 4 (a) and B of this award these charges having priority over the charges created in paragraph 16 below in favour of Sm Sovabati Sen.'

By a letter dated 1st September, 1955 addressed to M/s T. Banerjee & Co., Solicitors for Sm. Santosila Devi, Mr. Dwaipayan Sen. Solicitor on behalf of his clients Priya Nath Sen, Jitendra Nath Sen, Satyendra Nath Sen and Rabindra Nath Sen. sent a sum of Rs. 4000 in cash being the amount of the first instalment payable by each of them at the rate of Rs. 1000/- each for payment to Sm. Santosila Devi in terms of the said award. On the same day T. Baner-jee & Co. replied by stating that, as an application had been made for setting side the award, their instructions did not permit them to accept the said amount Similarly, a letter was written by the Solicitor for M/s Dhirendra Nath Sen and Phanindra Nath Sen on 2nd September 1955 tendering a sum of Rs. 2,002 in cash being the amount of the first instalment payable by each of them @ Rs. 1,000 each and Re. 1 each being the interest for one day to the said M/s T. Banerjee & Co. for payment to their client, Sm. Santosila Devi. On the same day by a letter. M/s T. Banerjee & Co. expressed their inability to accept the said amount in view of the petitioner's pending application. On the 22nd May, 1956 the petitioner's application to set aside the award was rejected and decree passed. On 28th of May 1956, Mr. Dwaipavan Sen on behalf of his clients, Dhirendra Nath Sen. Priya Nath Sen. Jitendra Nath Sen, Phanindra Nath Sen, Satyendra Nath Sen and Rabindra Nath Sen, sent a sum of Rs 18,000/- in cash to the petitioner's solicitor for payments to her. M/s T. Banerjee & Co. on the same day replied that they could not accept the money without the petitioner's instructions. On 31st May, 1956, another letter was written to M/s T Banerjee & Co. for accepting the said tendered sum of Rs. 18.000 to which there was no reply. On 29th of January 1957, the petitioner's appeal against the said decree dated 22nd May,1956 was dismissed. On 18th of February 1957, a sum of Rs. 5,000 in cash was sent by the said Dwaipayan Sen on behalf of Satyendra Nath Sen to M/s T. Banerjee & Co; who held the said money in a suspense account. On the 13th of March 1957. M/s T. Banerjee & Co. returned the said sum of Rs. 5,000 on the ground that the petitioner instructed them not to accept the said sum. On 14th of June 1963, similarly a sum of Rs 5000 towards the claim against Dr. Jitendra Sen was sent to the petitioner's solicitors. On 27th June, 1963, a sum of Rs. 5,000 was tendered this time by the wife of Dr. Jitendra Nath Sen direct to the petitioner who again refused to accept the same. At last by a letter dated 13th February. 1967, M/s T. Banerjee & Co. on behalf of the petitioner sent a formal notice to M/s Dhirendra Nath Sen, Jitendra Nath Sen Satyendra Nath Sen, Phanindra Nath Sen and Rabindra Nath Sen for payment if the petitioner's dues under the award and also the accrued interest @ 6% per annum. It was also mentioned in the said letter that in default of payment, application for execution of the said award and decree would be made against them. Thereafter, this application was moved before A. N. Sen. J who expressed his desire not to hear the matter on personal ground. The learned Chief Justice has assigned this application to me for hearing.

2. It appears that the petitioner is moving this application only against M/s Dhirendra Nath Sen. Jitendra Nath Sen, Satyendra Nath Sen, Phanindra Nath Sen and Rabindra Nath Sen. Under the award dated 27th May 1955, each one of the said five respondents was to pay the instalment amount of Rs. 5,000 on 1-9-55. 1-12-55, 1-3-56, 1-6-56 and 1-9-56. The petitioner in the tabular statement has asked for appointment of a Receiver with respect to the respondents' share in the properties allotted to them under the award and for sale of their interest on the ground that the respondents have defaulted in making the payments under the award and that their respective interests in the properties allotted to them stood charged.

3. Mr. Ajoy Basu (with Mr. Harendra Kumar Ghose) on behalf of the respondents, has contended that in view of the facts that the money was duly tendered to the petitioner's solicitors and his clients were ready and willing to make the payment at all material times, there was no question of any default on the part of his clients. The petitioner herself has refused to accept the money tendered to her solicitor and the alleged default was caused by the petitioner's own conduct. Mr Basu has further submitted that his clients would not have opposed the petitioner's prayer but in view of the fact that she has taken extraordinary attitude in taking recourse to all kinds of proceedings civil and criminal, against his clients, he has no other alternative but to raise also a point of demurrer. According to him, this is a misconceived application. In a tabular statement, the petitioner has not asked for any general prayer like attachment or a receiver. She has specifically prayed for the appointment of a receiver and for sale of his clients' interests in 7/1, Short Street and 7, Rowdon Street, Calcutta on the basis that the petitioner has a charge on the said interests. According to him, even assuming that there was default on the part of his clients, the decree is only a money decree. The words expressed in the said Clause 10(c) are 'the payments shall remain charged' and not the payments 'remain charged.' There is no automatic charge created under the decree. If it is held that the petitioner has a charge on the properties, the petitioner's only relief is to file a suit and get a decree under order 34, Rules 14 and 15 of the Code of Civil Procedure read with Section 100 and Section 67 of the Transfer of Property Act, 1882. In support of the said contention, reliance has been placed by him on Kanhaiya Lal v. Jangi : AIR1926All527 , Gobinda Chandra Pal v. Kailash Chandra Pal, 25 Cal LJ 354= (AIR 1917 Cal 82(2)). Lastly, he has also contended that a charged property can only be sold without recourse to a suit only if there is a specific clause in the decree itself to the effect that such relief would be obtained by the creditor without instituting any suit, and in support of his contention he has drawn my attention to Kashichandra v. Priyanath Bakshi : AIR1924Cal645 and Postimal v. Radhakrishan Lalchand : AIR1932All439 .

4. In my view, the petitioner's conduct in not accepting the amount tendered was not justified. The petitioner may have a legitimate grievance against the award and she cannot be blamed if she had been advised to challenge the legality of the award on points of law. But, as I was not shown any order from the Appeal Court or from the Supreme Court for staving the award, there is no justification for her solicitor not to accept Rs. 5,000/- which was tendered to the latter for payment to the petitioner on 1-9-55 and 2-9-55. The date of paying the amount under the first instalment was to expire on 1st September 1955, when Jitendra Nath Sen, Satyendra Nath Sen and Rabindra Nath Sen offered Rs. 4,000/- in cash to the petitioner's solicitors Mr. Bikas Sen. learned counsel for the petitioner, has submitted before me that the tender was to be made to his client personally and as the tender was not offered personally to her. the tender was not a valid one. But that was not the ground which was shown by M/s T. Banerjee & Co. in their letters when they refused to accept the said tenderedamounts. Similarly, Dhirendra Nath Sen and Phanindra Nath Sen also tendered asum of Rs. 2,002/- including interest on 2nd September 1955 to the petitioner's solicitors which they chose to return. I therefore hold that there was no default on the part of the respondents in respect of the payments under the first instalment. But, as there was no stay of the execution of the decree, the respondents should have tendered Rs. 5,000/- on 1-12-55. 1-3-56, 1-6-56 and 1-9-56. On 28-5-56 it is true that the tender of Rs. 18,000/- was made but the petitioner was not bound to accept the said sum as the tendered sum should have included the interest accrued under the decree itself. There would have been great force in Mr. Basu's contention if the entire sum of Rs. 25,000/- which would have been tendered on 1-9-55 or on 1-12-55. On 1-12-55 even the money due under the second instalment was not offered by the respondents and, as such, a default did take place and interest would naturally run. Similarly, default took place on 1-3-56. 1-6-56 and 1-9-56. I, therefore, hold that the petitioner is not entitled to claim any interest on Rs. 5,000/- from 27-5-55 to 1-9-55. Each of the respondents is, however, liable to pay Rs. 5,000/- and also interest from 2-9-55 until payment. Mr. Sen has calculated that a total sum of Rs. 38,650/- would be payable by the respondents to the petitioner which would include principal and interest upto 31-8-67 even if the interests accrued upto the date of payment of first instalment are excluded. But. as under the award interest would accrue till the date of payment, it is not necessary for me to mention any specific amount. In my opinion the petitioner's claim against each of the respondents, Dhirendra Nath Sen, Jitendra Nath Sen, Phanindra Nath Sen and Rabindra Nath Sen would be Rupees 5,000/- and interest from 2-9-55 till the date of the payment. In respect of her claim against Satyendra Nath Sen, the petitioner is also entitled to Rs. 5,000/- and interest from 2-9-55 until payment less interest on a sum of Rs 5,000/- from 18th February, 1957 to 13th March, 1957, during which the said sum was held in suspense account by the petitioner's Solicitor

5. The next point of Mr Basu is that the decree obtained by the petitioner is only a money decree with the addition that a charge was only declared collaterally and nothing beyond that; or, in other words the charge itself having not been created by the decree, the petitioner's right to get the charged properties sold can only be exercised by instituting a suit. In my view, in the facts of this case, Mr. Basu's contention cannot be accepted. The cases on which he has relied are distinguishable. In : AIR1926All527 , the award itself has stated the parties agreed to the award and the charge created therein. There the parties agreed before the arbitrator as to the creation of the charge and the main point that was agitated there was whether the arbitrator was competent todeclare a charge on a shop allotted to the charges by an award. Further, there the chargeholder instituted the suit but no point was argued that the suit was not maintainable and that the plaintiff could only obtain the relief in execution proceedings. Similarly, in 25 Cal LJ 354 : (AIR 1917 Cal 82 (2)) (Supra) the suit was filed on a security bond by which 37 immovable properties were made securities for Rs. 25,000/-. The decree on the basis of mortgage was refused expressly in the decree itself. On a proper construction of the decree, in that case, the court held that it was virtually a money decree to which there is an addition to the effect that the judgment-debtor is entitled to a lien over the said 37 immovable properties. The principles decided in : AIR1924Cal645 also cannot be questioned There, the suit was instituted to enforce a mortgage security and a compromise took place. In the terms of settlement there was a clear statement that the decree-holder will realise his dues by getting the charged properties sold in execution without further recourse to a fresh suit But the conclusion in the said judgment does not mean that, unless there is an express provision in the decree itself that the charged properties could be sold in execution without another suit, in all cases where such express provision is not added in the decree itself, a suit has got to be instituted. Such clause is generally added ex abundanti cautela In : AIR1932All439 (Supra) institution of the suit was considered as a valid procedure because the compromise created the charge and the decree is passed after such compromise which is an act of the parties. Thus, it is clear that whether a charge is to be enforced by taking recourse to a suit or an application in execution would all depend upon the facts of the particular case and the construction of the decree itself. In this connection, reference may be made to Manindra Nath v. Radhashyam. : AIR1953Cal676 . where the learned P. N. Mookerjee, J. has made the following observations:

'When a charge is created by the decree and is enforceable in execution under the terms thereof the statutory impediment as contemplated under Order 34, Rules 14 and 15 of the Code does not imply or no suit is imperative in that behalf.'

6. Relying on large number of decisions including Ashutosh Banerjee v. Luckimoni Debya. (1892) ILR 19 Cal 139 (FB) Guha Ray J. has come to the conclusion in Jatabhusan v. Krishna Bhamini : AIR1957Cal204 , that no separate suit is necessary where charge is created by the decree itself. After culling the relevant decisions the following principles are established:

(a) If a charge is created by the act of the parties or by operation of law prior to the decree itself, a suit has got to be instituted.

(b) A charge created by operation of law is not the same thing as a charge created under the decree. Thus, Section 100 of the Transfer of Property Act is limited in its operation to the charges created by the act of the parties or by operation of law and does not extend to a charge created by decree: vide Mt. Prem Kuer v. Ram Lagan. AIR 1948 Pat 199. V.S.N. Thangavelu v. Thirumala-swami AIR 1956 Mad 67. Seethalakshmi Ammal v. Srinivasa Naickar, AIR 1958 Mad 23, Naganna Naidu v. Janardhan Krishna Ranea Rao. : AIR1959AP622 (FB).

(c) If, on a construction of the decree, it appears that it is a money decree and there is collateral declaration that a charge is created or will be created in certain contingencies, the plaintiff's relief lies only in instituting a suit.

(d) But, where the decree itself creates the charge and the words used in the decree are not inconsistent with the intention of the Court to have the judgment-creditor's dues satisfied by sale of the charged properties in execution proceedings, a fresh suit to achieve the same purpose is not maintainable.

7. A point has also been raised by Mr. Basu that in the instant case, the parties have referred all their disputes to the arbitration and as a result of such act of reference the arbitrator has in his award created a charge According to him, the creation of a charge is therefore an act of the parties and as such, Section 100 of the Transfer of Property Act is attracted and the charge therefore can only be enforced by a suit as provided in the Section. I find a case, Mahesh Prasad v. Mt. Mundar. : AIR1951All141 (FB) where Mallick C. J. has made the following observation at p. 144:

'Where the suit is a contentious suit and in such a suit a charge is created, it is very difficult to say that the charge has been created as a result of an act of the parties, though in a consent or compromise decree, or in a decree based on an award it may be so called. I have pointed out in another case that the basis of an award, which gives the arbitrator the jurisdiction to pronounce it is the agreement of reference. In a compromise, the parties decide their own terms. In an agreement to arbitration the parties agree to abide by the Judgment of the person agreed to by them. Where the decree is however, not a consent decree but has been obtained by contest it cannot, to my mind, be said that the charge was created by an act of the parties.'

It appears from the judgment that this observation was really obiter dictum, Be that as it may, in my opinion, when the parties refer their dispute to arbitration, they agree to be bound by the award. It does not mean that by agreement to arbitration they also agree to those parts of the award which are purely questions of law. If that is the correct position, then an award cannot be challenged on so many ingenious grounds, as it is done often successfully. Consent to a jurisdiction of an arbitrator or a court does not necessarily mean consent to any conclusion based upon exercise of such jurisdiction. There is another reason why a charge created by an arbitrator in his award is not an act of the parties, because to enforce the charge it must be registered under Section 17 of the Registration Act or that the award must merge in a decree. Until registration takes place or the award has not been merged in a decree, there is no lawful charge prior to the decree. In such a case the charge is created for the first time in the decree itself and, accordingly, enforcement of the charge takes place in execution and not by another suit. Further, very often in a partition suit also where owelty money is payable by one party to another to equalise the share, a charge may be created by the decree. But if the observations of Mallick, C. J. are to be accepted, then every partition suit must be followed by another suit to get the charge enforced Lastly, assuming that a charge has been lawfully created prior to the decree, the decree itself stands on a different footing. The decree is an adjudication of the Court. The court may or may not confirm the charge or might decide to give other reliefs to the judgment-creditor without enforcing the charge A charge that has been created by act of parties or even by operation of law may not have been given effect to by the court in its own judgment. A charge which is created by a decree need not be restricted to charges created by act of the parties or by operation of law. By the doctrine of merger the charge gets a judicial sanctity and recognition by a superior body. If of course, the decree itself does not create the charge but only mentions it by way of declaration to be enforced in future or with the idea of an additional or collateral security the position is different In this connection, reference may be made to the Judgment of Guha Ray, J. in : AIR1957Cal204 (Supra)

8. Applying the aforesaid principles to the facts of this case. I am convinced that this is a case where a charge is created by the decree Itself and there is no charge created by act of the parties or by operation of law prior to the decree.

9. In the premises, I hold that the present application is maintainable and the petitioner is entitled to get the relief in this application I, therefore, order:

(a) The Official Receiver is appointed to take possession of and sell the undivided 1/3rd share or interest of the respondent No. 1 Dhirendra Nath Sen in the premises No. 7, Rowdon Street, Calcutta, for the purpose of realisation of the petitioner's claim for the sum of Rs. 5,000/- payable by him with interest at C. P.C. from 2-9-55 until payment and costs of and incidental to such sale.

(b) The Official Receiver is appointed o take possession of and sell the undivided 1/3rd share or interest of the respondent No. 3, Satyendra Nath Sen in premises No. 7/1, Short Street. Calcutta, for the purpose of realisation of the petitioner's claim for the sum of Rs. 5,000/- with interest at 6 per cent from 2-9-55 less the interest from 18-2-57 to 13-3-57 and costs of and incidental to such sale.

(c) The Official Receiver is appointed o take possession of and sell the undivided 1/3rd share or interest of the respondent No 4, Jitendra Nath Sen in premises No. 7. Rowdon Street, Calcutta for the purpose of realisation of the petitioner's claim for the sum of Rs 5,000 with interest at 6 per cent from 2-9-55 until payment and costs of and incidental to such sale.

(d) The Official Receiver is appointed o take possession and sell the undivided 1/3rd share or interest of the respondent No. 6 Phanindra Nath Sen in premises No. 7/1 Short Street. Calcutta for the purpose of the realisation of the petitioner's claim for the sum of Rs. 5000/- with interest at 6 per cent per annum from 2-9-55 until payment with costs of and Incidental to such sale,

(e) The Official Receiver is appointed to take possession of and sell the undivided 1/3rd share or interest of the respondent No. 7 Rabindra Nath Sen in premises No. 7/1. Short Street, Calcutta for the purpose of realisation of the petitioner's claim for the sum of Rs 5000/- with interest at per cent from 2-9-55 until payment and costs of and incidental to such sale.

10. Each of the respondents will beliable to pay the costs of the OfficialReceiver if any in respect of the respective debts, I am not satisfied with the conduct of the petitioner in the past and atsuch, there will be no order as to costs inrespect of this application The OfficialReceiver will not take possession until 7thJanuary, 1968.


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