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Prosonnomoyi Dassi Vs. Sreenauth Roy and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtKolkata
Decided On
Judge
Reported in(1894)ILR21Cal809
AppellantProsonnomoyi Dassi;sreenauth Roy and ors.
RespondentSreenauth Roy and ors.;muddoosoodun Dutt
Cases ReferredSewbux Bogla v. Shib Chunder Sen I.L.R.
Excerpt:
civil procedure code, section 295 - sale in execution of decree--distribution of sale proceeds--realisation of proceeds of sale--sale under agreement sanctioned by court--sale not of the right or interest of judgment--debtor in property. - .....in the first place, that the sale of the property under the order of the 14th september was a sale in execution11. if the property had been sold under the proviso to section 295, it would have been, doubtless, a sale in execution, but at the same time a sale from the benefit of which the attaching creditors would have been excluded. for the proviso after fixing the order of payment of the prior charges restricts the distribution of the balance to the 'holders of decrees for money against the judgment-debtor, who have, prior to the sale of the said property, applied to the court which made the decree ordering the sale for execution of such decrees and have not obtained satisfaction thereof.'12. the facts show that the sale of this property did not take place under the proviso, and.....
Judgment:

Sale, J.

1. This is an application as to the disposition of a fund representing the balance of the sale-proceeds of the premises No. 22 Strand Road, which was paid into Court to the credit of the two abovementioned suits under an order, dated the 14th September 1893. The circumstances under which this fund was paid into Court are as follows:

2. The plaintiff Prosonnomoyi obtained a decree in the first suit, dated 6th December 1886, for the sum of Rs. 2,14,728 with interest and costs against Sreenauth Roy, Sumbhoonauth Roy and Gopinauth Roy.

3. In February 1887 the plaintiff, in execution of the decree, attached various properties, including the premises No. 22 Strand Road, which were sub-jeot to certain trusts created by an Indenture, dated 2nd February 1858, executed by the father of the judgment-debtors. At that time a suit No. 448 of 1883 was pending, wherein the judgment-debtors as plaintiffs sought for a declaration of what were the valid trusts under the Indenture of Trust, and that, subject to such trusts, the plaintiffs were absolutely entitled to the premises No. 22 Strand Road, and the other properties. On the 26th March 1888 a decree was made in that suit declaring what were the valid trusts, and charging the premises No. 22 Strand Road with the payment of certain specific sums.

4. In 1891, the second of the abovementioned suits was instituted by the judgment-debtors, the object of which was to have the premises No. 22 Strand Road sold freed from the trusts, to provide for the trusts by setting apart a sufficient sum out of the purchase-money, and then to have the balance divided equally amongst the judgment-debtors.

5. By the order of the 2nd September 1892 made in that suit the trustees of the Indenture of Settlement were authorised to sell the premises No. 22 Strand Road, and were directed out of the proceeds to set apart Rs. 45,000 to provide for the trusts; next to pay the costs therein directed, and then to apply the balance 'for the purposes in the plaint mentioned.' In pursuance of this authority the trustees, being the judgment-debtors and one Muddoosoodun Dutt, on the 25th February 1893, entered into an agreement with one Joygobind Law for sale to him of the premises No. 22 Strand Road for the sum of Rs. 1,43,000.

6. On the 8th of August 1893 a notice was issued at the instance of the plaintiff Prosonnomoyi Dassi calling upon the judgment-debtors to show cause why the premises 22 Strand Road should not be sold in execution of her attachment. On the 29th of August 1893 the trustees gave notice to the plaintiff Prosonnomoyi Dassi of an application to be made in both the above-mentioned suits for the removal of her attachment, or in the alternative for an order that the agreement for sale entered into by the trustees be carried out, and that the sale proceeds be applied for the purposes in the notice specified, as having priority over the claim of the judgment-creditor Prosonnomoyi Dassi, that the balance be paid to the credit of the first mentioned suit, as subject to the said attachment, and that the property be thereupon released from attachment. Both applications were heard together, and on the 14th September 1893 an order was made with the consent of all the parties, whereby it was, amongst other things, ordered that the trustees be at liberty to carry out the agreement for sale with Joygobind Law, the plaintiff agreeing to release her claim to the property for the purposes of the sale only; that the sale proceeds be paid to Mr. N.S. Watkins; that he do thereout pay the sum of Rs. 45,000 to the trustees and make the other payments directed by the order and then pay into Court the balance to the credit of both the abovementioned suits, 'the said Prosonnomoyi Dassi retaining her lien under her attachment upon the said balance in the same way as the same then subsisted upon the said property.' There was also a direction that the lien, if any, of Messrs. Watkins & Co. on the title-deeds of the premises should attach to the balance. By this order the attachment was removed, but in place thereof a lien was created in favour of the judgment-creditor which was to attach to the balance of the proceeds of sale. The property was sold by the trustees free from the attachment, and the purchase-money was paid to Mr. Watkins, who made certain payments as directed by the order, and after retaining a sum for costs in respect of which his firm claimed a lien on the title-deeds, paid the balance into Court, Messrs. Watkins & Co. now claim a further sum in satisfaction of their lien, and there is also a claim by the trustees in respect of certain of the payments directed by the order, which, it is alleged, have not yet been satisfied.

7. It appears that the balance, while in the hands of Mr. Watkins, was attached by two other judgment-creditors, being the plaintiff's in the suits No. 52 of 1893 and No. 51 of 1893 who had obtained decrees against the defendants Sreenauth Roy, Shumbhoonauth Roy, and Gopinauth Roy, and that it was paid into Court to the credit of both the abovementioned suits with notice of these attachments.

8. The plaintiff Prosonnomoyi Dassi now asks to have the balance (after satisfaction of the claims of the trustees and of Messrs. Watkins & Co.) paid out to her in priority to the attaching creditors, who, on the other hand, claim to share rateably in the fund under the provisions of Section 295 of the Code.

9. At the hearing of the application a third judgment-creditor appeared and claimed to share in the distribution of the fund.

10. The main question is whether under the circumstances this fund can be treated as 'assets realised by sale or otherwise in execution of a decree' within the meaning of Section 295. Can it be said, in the first place, that the sale of the property under the order of the 14th September was a sale in execution

11. If the property had been sold under the proviso to Section 295, it would have been, doubtless, a sale in execution, but at the same time a sale from the benefit of which the attaching creditors would have been excluded. For the proviso after fixing the order of payment of the prior charges restricts the distribution of the balance to the 'holders of decrees for money against the judgment-debtor, who have, prior to the sale of the said property, applied to the Court which made the decree ordering the sale for execution of such decrees and have not obtained satisfaction thereof.'

12. The facts show that the sale of this property did not take place under the proviso, and that it was a sale, not in execution of any decree or order, but in pursuance of a private agreement entered into by the trustees with the purchaser under a liberty reserved to them by the Court. The sale no doubt was further sanctioned by the Court as part of the arrangement embodied in the consent order of the 14th September, under which Prosonnomoyi agreed to remove her attachment, and thus allow the sale to be carried out, on the condition that instead of the attachment she should have a lien on the purchase-money. But in no sense can it be suggested that the sale was in execution of this order. The case of Purshotam Das v. Mahanunt Surajbharti I.L.R. 6 Bom. 588 decides that Section 295 must be read as if the words 'from the property of the judgment-debtor' were inserted after the word 'realised.' Here the sale did not purport to be a sale of any right, title or interest of the judgment-debtors or of any property belonging to them. It was a sale by the trustees of property which was vested in them as trustees. Moreover, reading the case just cited with the case of Sewbux Bogla v. Shib Chunder Sen I.L.R. 13 Cal. 225, the rule appears to be that to constitute a realisation within the meaning of Section 295, it must be either a realisation by a sale in execution under the process of the Court, or it must be a realisation in one of the other modes expressly prescribed by the sections of the Code. It cannot, I think, be said that the money paid to Mr. Watkins under the order of the 14th September 1893 was realized in any of the methods provided by the Code for realising property in execution of a decree.

13. When the fund was attached it was held by Mr. Watkins subject to a prior lien created by an order of Court in favour of the plaintiff Prosonnomoyi, which lien was binding on the judgment-debtors and those claiming under them. When paid into Court this fund was still subject to that lien. If the * money paid into Court had exceeded the amount due to the plaintiff in respect of which the lien was created in her favour, the amount of such excess having been paid into Court with notice of the attachment might perhaps have been treated as a realisation in execution within the meaning of Section 295. For the excess in that case would have been money belonging to the judgment-debtors attached while in the hands of a third party and subsequently paid into Court under an order of the Court. Payment into Court under such circumstances forms a well recognised method of realisation in execution under the Code. But the balance in Mr. Watkins' hands was very far below the amount due to the plaintiff Prosonnomoyi Dassi and was entirely absorbed by the lien in her favour. There was therefore no surplus upon which the attachments could operate.

14. In my opinion this is not a case of distribution of assets under Section 295. The rights of the judgment-creditors claiming to share in this fund must therefore be postponed to the rights of the plaintiff Prosonnomoyi Dassi under the lien declared in her favour by the order of the 14th September 1893.

15. There being no contest as between the plaintiff Prosonnomoyi Dassi and the trustees and Messrs. Watkins & Co. there must be an order for payment of the balance to her after satisfaction of the claims of the trustees and of Messrs. Watkins & Co. The costs of the parties sharing in the fund may be added to their claims.


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