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Begg, Dunlop and Co. Vs. Jagannath Marwari - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata
Decided On
Judge
Reported in(1912)ILR39Cal104
AppellantBegg, Dunlop and Co.
RespondentJagannath Marwari
Cases Referred and Kinkin v. Naga. Kyaw
Excerpt:
prohibitory order - jurisdiction--execution of decree--civil procedure code (act v of 1908), order xxi, rule 46--competency of court to issue prohibitory order outside ill jurisdiction restraining a person from, faying a debt due to the judgment-debtor. - .....williamson, magor & co. two firms of merchants carrying on business in the town of calcutta. the decree under execution had been made by the court of the subordinate judge of burdwan, and the application for execution had, in the usual course, been presented to that court. the decree-holder next applied for an order of attachment of is sum of rs. 6,750 out of the amount alleged to be due to the judgment-debtor from the two firms just mentioned. the subordinate judge thereupon issued a prohibitory order under rule 46 of order xxi of the code of 1908, which was served upon the two firms on the 13th august, 1910. the firms filed an objection against the prohibitory order, amongst others on the ground that the burdwan court had no jurisdiction to attach the money in their hands, as they.....
Judgment:

Mookerjee, J.

1. The Court is invited in this Rule to consider the legality of an order, by which the Subordinate Judge has directed attachment of a debt payable outside his jurisdiction. The circumstances under which the attachment has been made have hot formed the subject of controversy before us. The decree-holder, opposite party, one Jagannath Marwari, held a decree for money against one Rowland Hill, now deceased. Upon the death of the judgment-debtor, he sought to enforce the decree against his widow Annie Hill, as executrix to the estate of her husband. It appears that Rowland Hill was entitled obtain a large sum of money from Messrs. Begg, Dunlop. & Co. and Messrs. Williamson, Magor & Co. two firms of merchants carrying on business in the town of Calcutta. The decree under execution had been made by the Court of the Subordinate Judge of Burdwan, and the application for execution had, in the usual course, been presented to that Court. The decree-holder next applied for an order of attachment of is sum of Rs. 6,750 out of the amount alleged to be due to the judgment-debtor from the two firms just mentioned. The Subordinate Judge thereupon issued a prohibitory order under Rule 46 of Order XXI of the Code of 1908, which was served upon the two firms on the 13th August, 1910. The firms filed an objection against the prohibitory order, amongst others on the ground that the Burdwan Court had no jurisdiction to attach the money in their hands, as they carried on business in Calcutta and the debt was also payable outside the jurisdiction of the Court. The Subordinate Judge, on the 19th September, 1910, overruled this objection, and held that he had power to issue a prohibitory order, under Rule 46, beyond the local limits of his jurisdiction. We are now invited to set aside this order, on the ground that the prohibitory order was beyond the competency of the Court, and that the Subordinate Judge had exercised a jurisdiction not vested in him by law. In support of the Rule, reliance has been placed upon the cases of Abdul Gafur v. W.J. Albyn (1903) I.L.R. 30 Calc. 713, Rango Jairam v. Bal Krishna (1887) I.L.R. 12 Bom. 44 and Sayad Khan v. Davies (1903) I.L.R. 28 Bom. 198. Reference has also been made to the cases pf Moonshee Hossain Alli v. Ashotosh Gangoolly (1878) 3 C.L.R. 30 and Parbati Charan v. Panchanad (1884) I.L.R. 6 All. 243. In answer to the Rule, on the other hand, reliance has been placed upon the 1 case of In re Hollick (1868) 2 B.L.R. 108 : 10 W.L. 447. It may be conceded that the observations of the learned Judges, who decided the case last mentioned, do tend to support the contention of the decree-holder, that it was competent to the Subordinate Judge to issue a prohibitory order upon a person, resident outside the jurisdiction of his Court, restraining him from paying a debt due to the judgment-debtor of the execution-creditor. This view, however, has not been accepted in the other cases, upon which reliance is placed by the petitioner, and in the case of Abdul Gafur v. W.J. Albyn (1903) I.L.R. 30 Calc. 713 the Court declined to follow the decision in In re Hollick (1868) 2 B.L.R. 108 : 10 W.R. 447. Under these circumstances, and in view of the fact that the decisions mentioned turn upon the construction of the Codes of 1859 and 1882, it is incumbent upon the Court not merely to examine the provisions of the Code of 1908, which alone are applicable to the case before us, but also to consider the question as one of principle.

2. Section 38 of the Civil Procedure Code of 1908 provides that a decree may be executed either by the Court which passed it, or by the Court to which it is sent for execution. Section 39 specifies the circumstances under which the Court, which passed the decree, may, on the application of the decree-holder, a send it for execution to another Court. Clause (a) of this section provides that a decree may be transferred, if the person against whom the decree has been passed actually and voluntarily resides within the local limits of the jurisdiction of the Court to which the decree is sent for execution. Clause (6) provides that a decree may be transferred, if the judgment-debtor has not property within the local limits of the jurisdiction of the Court which passed J the decree sufficient to satisfy such decree, and has property within the local limits of the jurisdiction if the other Court. Clause (c) deals with the case of a decree for the sale or delivery of immovable property situated outside the local limits of the jurisdiction of the Court which passed it. These provisions of Section 38, read along with those of Section 39, plainly indicate the acceptance by the Legislature of the general principle that no Court can execute a decree in which the subject-matter of the suit or of the application for execution is property situated entirely outside the local limits of its jurisdiction. This elementary principle was recognised by a Full Bench of this Court in Prem Chand v. Mokhoda (1890) I.L.R. 17 Calc. 699, 703. It is needless for the purposes of the present case to formulate the exceptions to this rule; it is sufficient to indicate that, in cases of decrees for sale of mortgaged property, an exception has been recognised: Maseyk v. Steel (1887) I.L.R. 14 Calc. 661, Kartick Nath Pandey v. Tilukdhari Lall (1888) I.L.R. 15 Calc. 667, Gopi Mohan v. Doybaki (1891) I.L.R. 19 Calc. 13 Tincouri Debya v. Shib Chandra Pal (1894) I.L.R. 21 Calc. 639 Latchman v. Maddan Mohun (1880) I.L.R. 6 Calc. 513 and Jahar v. Kamini Debi (1900) I.L.R. 28 Calc. 238. An exception has also been recognised by the new Code in cases of attachment of salaries of public officers under Rule 48, and of sale of entire estates situated within the local limits of the jurisdiction of more than one Court, under rule 3 of Order XXI. It is not necessary, however, as just stated, to attempt an exhaustive enumeration of all possible exceptions to the general principle. The sole question for consideration now is, whether the principle should be held inapplicable to the case of attachment of a debt payable outside the jurisdiction of the Court by a person who also resides beyond, the local limits of such jurisdiction.

3. Rule 43 of Order XXI provides the mode of attachment of moveable property, other than agricultural produce, in possession of the judgment-debtor: such attachment must be effected by actual seizure, and it is reasonably plain that the attachment can be so effected only when the property is within the jurisdiction of the Court. Rule 46 then provides for the attachment of moveable property not in possession off the judgment-debtor, including a debt not secured by a negotiable instrument. The attachment is to be effected by a written order, prohibiting the creditor from recovering the debt and the debtor from making payment thereof until farther orders of the Court. A copy of such order must be affixed on a conspicuous part of the Court house, and another copy sent to the debtor. It is further provided that a debtor, so prohibited, may pay the amount of his debt into Court, and such payment shall discharge him as payment to the party entitled to receive the same. The substance of the procedure, therefore, is that upon the application of the decree-holder, the Court records an order which prohibits the judgment-debtor, who is the creditor of the debtor, from recovering the debt, and also prohibits the debtor from paying the debt to his creditor. A copy of the order is published in the Court house, and another copy is sent for communication to the debtor, I am unable to hold, on principle, that it is competent to a Court to issue such a, prohibitory order upon a person, resident outside the local limits of its jurisdiction, in respect of property also beyond such local limits. If such a person disobeyed the order of the Court, and in defiance thereof made the payment, the Court would be powerless to enforce its order by proceedings in contempt. On the other hand, there is no good reason why the decree-holder should not apply for transfer of the decree to the Court, within the local limits of which the garnishee, that is, the debtor of the judgment-debtor, resides. Two objections, however, have been suggested to the adoption of such a course. It has been contended in the first place that the delay, which must necessarily take place before an order of transfer could be obtained, might prove fatal to the decree-holder, who might find that the judgment-debtor had, in collusion with his debtor, received payment of the debt sought to be attached. The obvious answer is, that the procedure of attachment under precepts, provided in Section 46 of the Code of 1908, furnishes a speedy and effective remedy. The object of a precept is to enable a decree-holder to obtain interim attachment where there is ground to apprehend that he may otherwise be deprived of the fruits of his decree. Section 46 expressly provides that, upon the application of the decree-holder, the Court, which passed the decree, may, whenever it thinks fit, issue a precept to any other Court, which would be competent to execute such decree, to attach any property belonging to the judgment-debtor and specified in the precept: and the Court, to which a precept is so sent, shall proceed to attach the property in the manner prescribed in regard to the attachment of property in execution of a decree, this provision plainly indicates that the Legislature did not intend that a Court should directly attach property beyond tile local limits, of its jurisdiction. It has been argued, in the second place, that, if the contention of the petitioners prevails, two separate orders would be required in respect of the same matter: that is, an order by the Court, which passed the decree, upon the judgment-debtor prohibiting him from recovering the debt, and an order by the Court, to which the decree has been transferred for execution, upon the debtor of the judgment-debtor prohibiting him from making payment thereof. This, in substance, was the argument which found favour with the learned Judges who decided the case of In re Hollick (1868) 2 B.L.R. 108 : 10 W.R. 447. I do not feel pressed by the weight of this contention. The course suggested does not lead to any serious inconvenience. On the other hand, if the prohibitory order is issued by the Court which made the decree, to a person beyond the local limits of its jurisdiction, the order may prove infructuous, if it is disobeyed, and the Court may find itself powerless to enforce it.

4. Under these circumstances we are confirmed in the opinion that it is not competent to a Court, in execution of a decree for money, to attach at the instance off the decree-holder, a debt payable to the judgment-debtor by a non-resident outside the jurisdiction. Rule 48 of Order XXI also tends to support this view. It is well-known that, under the law as it stood before the Code of 1908, it had been ruled that the salary of a public officer or railway servant could not be attached, unless the disbursing officer was within the locals limits of the jurisdiction of the Court executing the decree: Rango v. Bal Krishna (1887) I.L.R. 12 Bom. 44 Saiyad Khan v. Davies (1903) I.L.R. 28 Bom. 198 Abdul Gafur v. W.J. Albyn (1903) I.L.R. 30 Calc. 713. This, led to considerable inconvenience in the execution of decrees, and put the decree-holder in many cases to needless expense. In view of the difficulty thus created, the Legislature has provided in Rule 48 of Order XXI a less expensive, and, at the same time, a more effective, machinery for the execution of decrees against this class of judgment-debtors. Under the law as it now stands, the salary of a public officer, or a railway servant, or a servant of a local authority may be attached, whether the judgment-debtor or the disbursing officer is or is not within the local limits of the jurisdiction of the Court executing the decree. The inference may, therefore, be legitimately drawn that the Legislature has provided a special rule in the case of certain judgment-debtors because Rule 46 does not entitle the execution Court to attach a debt payable to the judgment-debtor by a non-resident outside the jurisdiction of the Court. The view we take of the principle applicable to this class of cases also supported by the decision in Moonshee Hossein Alli v. Ashotosh Gangoolly (1878) 3 C.L.R. 30 which was accepted as good law by a Full Bench of the Allahabad High Court in Parbati Charan v. Panchanand (1884) I.L.R. 6 All. 243. These cases support the view that a Court could not issue a prohibitory order, under Section 268 of the Code of 1877, out of its own jurisdiction. We may farther add that as pointed by Mr. Justice Banerjee in Abdul Gafur v. W.J. Albyn (1903) I.L.R. 30 Calc. 713 the contrary opinion indicated in In re Hollick (1868) 2 B.L.R. 108 : 10 W.R. 447 is really an obiter dictum, because there the order was made by the Monghyr Court within whose jurisdiction the office of the disbursing officer was held at Jamalpur. With all respect, therefore, for the opinion of the learned Judges who decided that case, we are unable to accept it as well founded on principle.

5. It is worthy of note that the view we have adopted is in harmony with the procedure followed both in England and America. In England it is expressly provided in Rule 1 of Order 45 of the Rules of the Supreme Court that an order for attachment of a debt may be made only when the person indebted to the judgment-debtor of the execution-creditor is within the jurisdiction of the Court. The same rule has been adopted in Ireland, where also Rule 1 of order 45 0% the Rules of the Supreme Court, Ireland, 1905, provides that, before a garnishee order can be obtained, it must be shown that the debtor of the judgment-debtor is within the jurisdiction. A similar view had been taken in Ireland even before the Judicature Act, Ireland, 1877. Thus, we find that in Martyn v. Kelly (1871) I.R. 5 C.L. 404 it was accepted as settled law, that a debt could not be attached under the garnishee clauses of the Common Law Procedure Act, 1856, unless the garnishee was within the jurisdiction: and that consequently a registered company, whose head office was in London, was not within the jurisdiction, within the meaning of Section 63 of the Statute, although it had an agent residing in Ireland and transacting its business there. In the American Courts, there has been considerable controversy and divergence of judicial opinion upon the question of the suits of a debt for purposes of garnishment proceedings, but it is well settled that, in the absence of express statutory provision to the contrary, a non-resident of a State cannot be summoned in garnishment proceedings, whether the principal debtor be a resident or non-resident, at least unless he is in possession of property within the State belonging to the principal debtor, or is indebted to him, and such debt is, by terms of the contract, to be liquidated within the State. The principle upon which this result reached is lucidly explained by Chief Justice Drake in his classical treatise on the Law of Attachment (7th edition, Section 474). It is there y pointed out that under the custom of London one cannot be charged as garnishee, unless he resides within the jurisdiction of the Court of Lord Mayor: Tamm v. Williams (1783) 3 Doug. 281 : 2 Chitty 438 Crosby v. Hetherington (1842) 4 Man. & Gr. 933 and Day v. Paupierre (1849) 13 Q.B. 802. This doctrine was accepted as well-founded on principle in Tingley v. Bateman (1813) 10 Mass. 343 and Nye v. Liscomb (1838) 21 Pickering 263 where the Court observed follows: 'The summoning of a trustee is like a cess in rem. A chose in action is thereby arrested 1 made to answer the debt of the principal. The person entitled by the contract of the supposed trustee thus summoned by the arrest of this species of effects. These are, however, to be considered for this chose as local and as remaining at the residence of debtor or person entrusted for the principal, and fights in this respect are not to be considered as lowing the debtor to any place where he may be transiently found, to be there taken at the will of bird person within a jurisdiction where neither the original creditor nor debtor resides.' In two later cases Ray v. Underwood (1825) 3 Pickering 302 and Bart v. Anthony (1834) 15 Pickering 445 same doctrine was affirmed, although the defendant s resident within the jurisdiction of the Court and the garnishee was non-resident. Similar expositions s adopted by Reno in his treatise on 'Non-residents' (Section 147), and by Waples in his monograph on 'Situs of Debt' (Section 161). The question is elaborately discussed in National Fire Insurance Co. v. Chambers (1895) 32 Atl. 663 : 53 N.J. Eq. 468 where it is explained that the test to be applied is, whether the judgment-debtor, as creditor, could have sued the garnishee as his debtor in the Court in which the execution proceedings have been commenced. In its essential elements, a garnishment proceeding is a proceeding by the defendant in the suit against the garnishee, in the name and for the benefit of the plaintiff. The plaintiff is empowered by law to step into the shoes of the garnishee's creditor and acquire his rights, no more and no less see In re General Horticultural Co. (1886) 32 Ch. D. 512 (516), where a. similar test was suggested by Mr. Justice Chitty. Whatever he could do, the plaintiff decree-holder, under the statutory novation of garnishment, may do as his assignee and attorney in fact, by operation of law. Wherever the garnishee could be sued by the defendant for the payment, he may be charged as garnishee on account of it: Mooney v. Buford (1896) 72 Fed. Rep. 32 German Bank v. American Fire Insurance Co. (1892) 83 Iowa. 491 : 32 Am. St. Rep. 316 Burlington Ry. Co. v. Thompson (1884) 31 Kam. 180 : 47 Am. Rep. 497 Wyeth v. Lang (1894) 1274 Missouri 242 : 48 Am. St. Rep. 626 Cross v. Brown (1897) 19 R.I. 220, Mobile Ry. Co. v. Burnhill (1892) 91 Tenn. 399 : 30 Am. St. Rep. 889 and Neufelder v. German insurance Co. (1893) 6 Wash. 336 : 36 Am. St. Rep. 166. If this be adopted as the true criterion to determine the suits of a debt in garnishment, no difficulty is presented in the solution of the problem (Rood on Garnishment, Sections 241-245). From this point of view, it becomes needless to consider whether the principle, upon which the situs of a debt is determined for purposes of garnishment, is necessarily identical with what determines the rights of the parties. Nor is it necessary to examine the validity of the rule of law, by which a debt like other personal property is deemed for many purposes (such as transmission and succession) to attach to the person of the owner, that is, the creditor. The case before us, in which the garnishees are admittedly out of jurisdiction, and the debts due from them are also payable out of jurisdiction, does not present any real difficulty. The Court cannot, in a case of this description, issue a prohibitory order under Rule 46 of Order XXI of the Code of 1908. We may add that the principle which underlies the decisions of this Court in Vulcan Iron Works v. Bishumbhur Prasad (1908) I.L.R. 36 Calc. 233 and Jumna Dass v. Harcharan Dass (1911) I.L.R. 38 Calc. 405 and of the House of Lords in Carron Iron Co. v. Mactaren (1855) 5 H.L.C. 416 also supports this view. The order of the Court below, therefore, must be taken to have been made without jurisdiction.

6. There are two other points which require a brief consideration. The Subordinate Judge has held that, as in the case of an attachment before judgment, the writ can be issued in respect of properties outside jurisdiction Nur Muhamed v. Ibrahim (1871) 8 Bom. H.C. (O.C.) 29 Ram Pertab v. Madho Rai (1902) 7 C.W.N. 216 and Amara v. Annamala (1908) I.L.R. 31 Mad. 502 the same doctrine ought to be applied to cases of attachment in execution proceedings. But apart from the fact that there is weighty authority against this view Balaram v. Solano (1872) 8 B.L.R. 335, Kedar Nath v. Luchmun (1878) 1 Calc. 336 Krishna Sami Engel (1884) I.L.R. 8 Mad. 20, Raja v. Janki Bai (1903) 5 Bom. L.R. 570 Dawood v. Moona (1894) P.J.L.B. 56 Pannu v. Sathappa (1902) 1 L.B.R. 310 Siva Swami v. Soleman (1907) 3 L.B.R. 255 and Kinkin v. Naga. Kyaw (1907) U.B.R. 13 there is no analogy between the two classes of cases. In the case of an attachment before judgment, the question turns upon the construction of 1 Order XXXVIII, Rules 5 and 6, read with Section 136. Besides, in the case of an attachment before judgment, the garnishee cannot be required to pay the debt into Court for the benefit of the plaintiff. Whether, after attachment has been so obtained before judgment, it can subsequently be made available for the benefit of the successful plaintiff, is question by no means free from difficulty, and does not require consideration in the present instance. It has also been argued by the learned vakil for the decree-holder opposite party that, as on a previous occasion, the garnishees did not take any objection to the jurisdiction of the Court to issue a prohibitory order under Rule 46, they are not entitled to urge the objection in the present proceedings. There is no substance in this contention. The previous proceeding proved infructuous under circumstances which we need not explain, and it is open to the garnishees to urge the objection they have taken when a fresh attachment is sought in respect of the debts payable by them to the original judgment-debtor. The result, therefore, is that this Kule must be made absolute, and the order of the Court below discharged. The petitioners are entitled to their costs both here and in the Court below.

Carnduff J.

7. I agree.


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