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Thakurdas Moti Lal Vs. Joseph Iskender and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata
Decided On
Judge
Reported in41Ind.Cas.516
AppellantThakurdas Moti Lal
RespondentJoseph Iskender and ors.
Cases Referred and Frederick Peacock v. Madan Gopal
Excerpt:
civil procedure code (act v of 1908), section 73, order xxi, rule 52 - rateable distribution--time for making application--anticipatory attachment, validity of--priority of attachment, effect of--attaching creditors, relative rights of. - .....was only intended to relate to an officer who has, at the time the application is made, in his hands the fund which may be the subject, of attachment. my interpretation of the rule is borne out by the judgment of this court, to which my learned brother mr. justice mookerjee was a party, in the case of padmanand singh, v. rama prosad 11 ind. cas. 422 : 16 c. w. n. 14, 14 c. l. j. the passage in his judgment to which i desire to refer is at page 19* and is as follows:---in so far as rule 52 of order xxi is concerned, the case is equally clear. as already stated, that rule applies only where the property to be attached is in the custody of a public officer. it does not allow of an anticipatory attachment of money expected to reach the hands of a public officer, and is restricted only to.....
Judgment:

Sanderson, C.J.

1. This is an appeal from a judgment of Mr. Justice Chaudhuri, whereby he granted the application of Joseph Iskender. That application was made asking for an order that the Comptroller-General of Accounts for the time being of the Government of India and the Secretary and the Treasurer for the time being of the Bank of Bengal with the privity of the Accountant-General of this Court do out of the funds standing to the credit of this suit (No. 617 of 1915), viz., Rs. 29, 894-5-11 pay to the plaintiff the sum of Rs. 16, 519-7-0, being the decretal amount due to him under the decree made in this suit, dated 16th December 1915, with interest.

2. One of the points which has been raised in the course of the argument is in my judgment of considerable importance, and in order that it may be correctly appreciated, it is necessary to look at the facts carefully and in some detail.

3. The facts, as stated by the learned Counsel for the appellant, Mr. Sarkar, in opening the appeal and which, it is agreed, are not disputed are as follows:---It appears that on the 14th of August 1915 the appellants, Thakurdas Motilal, the names under which they carry on business, obtained a decree for Rs. 14, 842 12-6 against one Kally Churn Sett. At sometime or other---the date of which is not material---a decree was made in a mortgage suit against the said Kally Churn Sett, and certain property which was comprised in the mortgage was on the 11th of December 1915 sold for the sum of Rs. 1,63,500. The sum of Rs. 41,000 was paid on the day of the purchase by the purchaser, as a deposit made to the Registrar of the Original Side of the High Court. On the 16th of December 1915 the respondent in this appeal, Joseph Iskender, obtained a money-decree for Rs. 16,519-7-0, against the said Kally Churn Sett. On the 13th of January 1916, the respondent Joseph Iskender obtained an order for attachment of moneys to the extent of Rs. 17,300 out of the above-mentioned purchase money of Rs. 1,63,500. The application upon which that order was made was as follows: 'I pray that the total amount of Rs. 16,519-7-0 together with interest on the principal sum up to date of payment and the costs of the suit and the costs of taking out execution be realised by attachment to the extent of Rs. 17,300 in the hands of the Accountant-General of this Honourable Court payable to the defendant out of a sum of Rs. 1,63,500, representing the sale proceeds of the defendant's immoveable properties sold by the Registrar of this Honourable Court on the 11th December last in execution of decrees, dated respectively 17th February 1911 and 1st March 1912, made in Suit No. 1144 of 1910 of this Court Raja Sreenath Roy v. The Defendant in this suit and the amount be paid to me.' The order which was made upon that application by the Registrar on behalf of the Court was in these terms, and it was addressed to the Accountant-General of the High Court, Original Side. 'Sir,---The plaintiff haying applied under Order XXI, Rule 52, of the Code of Civil Procedure for an attachment of the money now in your hands* to the extent of Rs. 17,300 payable for the defendant out of a sum of Rs. 1,63,500, representing the sale proceeds of the defendant's immoveable property sold by the Registrar of this Court on the 11th December 1915 in execution of decrees, dated respectively the 17th February 1911 and 1st March 1912, made in suit 1)44 of 1910 of this Court Raja Sreenath Roy v. The, Defendant in this suit. I am directed to request that you will withhold the said money subject to the further order of this Court---(Sd.) J. H. Hechle, Registrar.'

4. Now, it is to be noticed that at that time there was no money in the hands of the Accountant-General in respect of this matter. The sum of Rs. 41,000 which was paid as a deposit was in the hands of Mr. Hechle in the capacity of the Registrar of the High Court, and it was not until the 24th of January 1916 that the purchaser upon an order of the Court paid in the balance into Court. On the 26th of January two days after the money was paid in, the appellant applied for attachment of the sale proceeds. On the 11th of February, Chuni Lal Johurry another creditor, made a similar application for attachment of the sale proceeds. On the 15th of February 1916 the appellant obtained an order for attachment, and that attachment was effected, as I assume, in a manner similar to that in which the attachment of the respondent was effected on the 13th of January 1916. Then comes an important date: It appears that on the 16th of February 1916, the money was transferred by the Registrar to the Comptroller-General of Accounts with the privity of the Accountant-General. On the 29th of February the other creditor, Chuni Lal Johurry, obtained an order for the attachment of the sale proceeds in execution of his decree. On the 15th of March there was an order that the mortgagee should be entitled to take out of Court a sufficient sum in satisfaction of his claim in respect of the mortgage decree, leaving a balance of Rs. 29,894 in Court to the credit of the mortgage suit. On the 20th of July 1916 an order was obtained, as we are informed, ex parte by the respondent Joseph Iskender that this balance of Rs. 29,894, should be transferred from the mortgage suit to the suit in which the respondent was the plaintiff and Kally Churn Sett was the defendant. That application was based upon the allegation that the respondent had obtained an order for attachment of the balance of the purchase money, and it was also upon the basis that the application was made for the purpose of having the sum transferred in order that it might be rateably distributed amongst the creditors of the defendant Kally Churn Sett. These are all the dates and facts which I think it necessary for me to mention for the purpose of my judgment. Then the application in this case was made on the 26th August 1916. I have already referred to the application and I need not mention the terms again. Upon that application the learned Judge made an order that the respondent should be paid out of the balance the sum which he asks.

5. It is against that order that this appeal is brought: and, the first point that was argued by the learned Counsel for the appellant was that this application was one which was under Order XXI, Rule 52 of the Code of Civil Procedure. I do not think myself that there is any doubt that that was so, having regard to the documents which have been put before us. That Rule is as follows:---Where the property to be attached is in the custody of any Court or public officer, the attachment shall be made by a notice to such Court or officer, requesting that such property, and any interest or dividend becoming payable thereon, may be held subject to the further orders of the Court from which the notice is issued.' Then there is a form in the Appendix (No. 21 of Appendix E) which was followed in this case in the order which I have read, dated the 13th of January 1916.

6. The learned Counsel for the appellant argued that inasmuch as this was an order directed to the Accountant-General of the High Court and inasmuch as at that time there was no money in the hands of the Accountant-General, the attachment was invalid. In my judgment that argument must prevail.

7. It was urged on the other hand that Mr. Hechle occupied the position of the Registrar and also that of the Accountant-General and that there was no doubt as to the identity of the fund which was in question and that the intention was that the respondent was asking for an order to attach the balance which might remain over, after the mortgagee was paid out That might be so. It is quite true that there was no doubt about the identity of the fund, as there was no doubt as to what was the object of the respondent. But we have got to follow the words of the Statute, which are in my opinion quite clear and which have been also interpreted by the decision of the High Court. I think that when the Rule says that where the property to be attached is in the custody of any Court or public officer, the attachment shall be made by a notice to such Court or officer,' it is clear that that Rule was only intended to relate to an officer who has, at the time the application is made, in his hands the fund which may be the subject, of attachment. My interpretation of the Rule is borne out by the judgment of this Court, to which my learned brother Mr. Justice Mookerjee was a party, in the case of Padmanand Singh, v. Rama Prosad 11 Ind. Cas. 422 : 16 C. W. N. 14, 14 C. L. J. The passage in his judgment to which I desire to refer is at page 19* and is as follows:---In so far as Rule 52 of Order XXI is concerned, the case is equally clear. As already stated, that Rule applies only where the property to be attached is in the custody of a public officer. It does not allow of an anticipatory attachment of money expected to reach the hands of a public officer, and is restricted only to money actually in his hands.' Those are words which in my judgment are strictly applicable to this case, and are words with which I entirely agree: and, I think, that is sufficient for the judgment at which I have arrived, namely, that the attachment which was attempted to be made by the respondent on the 13th of January 1916 was an invalid attachment

8. The result of that conclusion is that not only was the attachment of the respondent an invalid one, but also the attachment effected by the appellant on the 15th of February 1916 was invalid, because it was exactly in the same form as the attachment of the respondent. At that time there were no funds in the hands of the Accountant General: and, therefore, the result is that the attachment of the respondent and the attachment of the appellant were both equally invalid.

9. Then it was argued by Mr. Das on behalf of the respondent that even if that were so, and even if the attachment which was effected by his client was invalid, still there was this sum standing to the credit of the suit in which his client was the plaintiff and he had made an application to have so much as would satisfy his claim paid out of that sum, and that inasmuch as the creditor whose attachment was valid, namely, Chuni Lal Johurry had not made any objection, and inasmuch as the attachment effected by Mr. Sarkar's client was invalid, he was entitled to have the money paid out of that sum. With that argument I cannot agree for this simple reason. To my mind it is obvious that that application was based upon the original application for execution; it was clearly, having regard to the wording of the petition, made in continuation of his application for execution: and, inasmuch as I have already come to the conclusion that the attachment was an invalid attachment, I do not think that that application for the payment out of the money in question was one which could have been acceded to by the Court, quite apart from the fact that the order for the transfer of the money had been obtained ex parte, upon a representation that it was for the purpose of distributing the money rateably amongst the creditors. The position, therefore, is this: Both the attachment effected by the respondent and the attachment effected by the appellant were invalid; and it appears that the attachment effected by Chuni Lal Johurry, which was made after the money had reached the hands of the Accountant-General, was a valid attachment. I now have to consider what are the rights of Chuni Lal Johurry on the one hand and the appellant and the respondent on the other hand, because on this part of the case the appellant and the respondent are in the same position. It appears from the enquiries which have be6n made during the course of the argument that there are no other creditors who attached or attempted to attach this fund.

10. Now the learned Counsel for the respondent Mr. Das and the learned Counsel for the appellant Mr. Sarkar have both applied to us to-day that we should allow them to make an application for attachment of the fund. To this application, in my judgment we ought to accede, not only because we think that otherwise a great deal of unnecessary expense would be incurred but also because we think that right and justice necessitate that we should accede to that application. Therefore, I will consider this further question from the point of view of there being an attachment effected not only on behalf of Chuni Lal Johurry on the 29th of February 1916, but also there being an attachment on behalf of the respondent and an attachment on behalf of the appellant both of which became effective on the 3rd of January 1917, to-day, simultaneously and contemporaneously. This is a point which in my judgment is of considerable importance.

11. The learned Counsel for Chuni Lal Johurry has argued that inasmuch as his client's attachment was antecedent in point of date to the attachment effected by the respondent and the attachment effected by the appellant, his client ought to be allowed to take out of the money which is in Court the whole amount of his client's debt: and that after his debt has been satisfied to the full extent, he does not mind how the fund is to be treated, whether rateably or not. I have come to the conclusion that that argument ought not to be acceded to. The conclusion depends upon what is the effect and meaning of such an attachment as has occurred in this case. Does it on the one hand give to the creditor, who has attached the money, any interest in the fund or is it merely an order restraining alienation of the fund until further order of the Court? In my judgment it means the latter: and, I think that has been decided not only by authority of this Court but also by authority of the Privy Council. I desire only to refer to three Cases, the first of which is the case of In re Soobul Chunder Law, Soobul Chunder Law v. Russick Lall Mitter 15 C. 202 : 12 Ind. Jur. 307 : 7 Ind. Dec. (N. S.) 719. Another case which was decided by a Full Bench of this Court is the case of Frederick Peacock v. Madan Gopal 29 C. 428 : 6 C. W. N. 577. and the third is a Privy Council decision, Raghunath Das v. Sundar Das Khetri 24 Ind. Cas. 304 : 18 C. W. N. 1058 : I L. W. 567 : 27 M. L. J. 150 : 16 M. L. T. 353 : (1914) M. W. N. 147 : 16 Bom. L. R. 814 : 20 C. L. J. 555 : 13. A. L. J. 154 : 42 C. 172 : 41 I. A. 251 (P. C.). The result of all these decisions is that such attachment as has occurred in this case is merely to prevent alienation of the fund subject to the further order of the Court, and does not give title to the creditor who effected the attachment. That being so, when it is found that subsequently two other creditors have obtained attachment of the same fund, what is the farther order of the Court that is to be made? Having regard to the scheme of the Code, I think that the order ought to be that those creditors ought to share rateably with regard to the amounts which are due to them respectively.

12. For these reasons I think that this appeal must be allowed and the order will be drawn up as I have stated. I think it would be desirable that the order, before it is finally settled, should be submitted to the learned Counsel appearing on both sides and if necessary they will have liberty to apply. The applications on behalf of the respondent and of the appellant in respect of the attachment and payment out must be put in writing before half past four to-day, as stated by the learned Counsel, and those applications when put in will be granted and our order will be that this fund must be distributed amongst the three creditors rateably with regard to their respective debts. For this purpose it is agreed by the parties that the money in Court will be paid out to Messrs. Morgan & Co., who will distribute the whole amount, the money which is already in their hands and the money so paid out of Court, amongst the three creditors in accordance with our judgment, less poundage.

13. With regard to costs, we think that the appellant has succeeded materially upon this appeal, and has in fact got the judgment of Mr. Justice Chaudhuri set aside. We direct that Mr. Das's client do pay the costs of Mr. Sarkar's client in this appeal, and that Chuni Lal Johurry do pay his own costs in this appeal, and that as regards the costs in the Court of first instance each party do pay his own costs.

Mookerjee, J.

14. The facts material for the determination of the question in controversy may be briefly stated. In execution of a mortgage-decree obtained by Sreenath Roy against Kally Churn Sett, the hypothecated properties were sold on the 11th December 1915 for Rs. 1,63,500. The purchaser, on that date, brought into Court Rs. 41,000 : the balance was deposited on the 24th January 1916. The decree-holder was paid his due and the surplus Rs. 29,894 was, on the 16th February, transferred by the Registrar to the Account-ant-General. Kally Churn Sett, it appears, had a number of unsecured creditors of whom three are now before this Court---one as appellant, the other two as respondents. Of these three, Thakurdas Motilal held a decree for money, dated the 14th August 1915. On the 26th January 1916 he applied to execute his decree and obtained an order for attachment on the 15th February following. Chuni Lal Johurry had obtained a decree for money on the 24th August 1915. He applied for execution on the 11th February 1916, and the attachment at his instance was effected on the 29th February 1916. Joseph Iskendar obtained his decree on the 16th December, 915. His application for execution was presented and the attachment at his instance effected on the 13th January 1916. The Court is now invited to decide the relative rights of these three creditors in respect of the surplus fund in Court.

15. It is plain that no question of rateable distribution under Section 73 of the Code of Civil Procedure of 1908 arises as amongst these creditors. Section 73 (1) provides that 'Where assets are held by a Court and more persons than one have, before the receipt of such assets, made application to the Court for the execution of decrees for the payment of money passed against the same judgment-debtor and have not obtained satisfaction thereof, the assets, after deducting the costs of realization, shall be rateably distributed among all such persons.' If this sub-Section were held applicable, it would have to be shown that the applications for execution had been made before the receipt of assets. In the case before us, this condition is not fulfilled, as the assets must be deemed to have been received on the 24th January 1916. Maharaja of Burdwan v. Apurba Krishna Roy 10 Ind. Cas. 527, 11 C. L. J. 50 : 15 C. W. N. 372. On the other hand, under Clause (c) of the proviso to Section 73, which is applicable to this case, it is plain that the point of time for consideration is the date of the sale of the property. Here the sale took place on the 11th December 1915 and as none of the creditors had applied for execution prior to that date Section 73 has no application, as was erroneously assumed by one or other of the parties at an earlier stage of the proceedings. The real question then reduces to this, was there a valid attachment effected of this fund by any of the three creditors? There is no room for controversy that the attachment effected at the instance of Chuni Lal Johurry on the 29th February 1916 was valid and operative in law. But as regards the attachment alleged to have been effected by Thakurdas Motilal and Joseph Iskendar, the question arises, whether steps were taken by them in conformity with Rule 52 of Order XXI of 'Where that Rule Provides that Where the property to be attached is in the custody of any Court or public officer, the attachment shall be made by a notice to such Court or officer, requesting that such property, and any interest or dividend becoming payable thereon, may be held subject to the further orders of the Court from which the notice is issued.' In the case before us, the attachments were effected by both these creditors on the assumption that there was a fund in the hands of the Accountant-General of this Court But on the dates when the attachments were effected, there was no such fund in the hands of the Accountant-General Consequently neither of the attachments would be valid and operative, unless it was held that the Rule allows of an anticipatory attachment of money expected to reach the hands of a public officer. A reference to the terms of Form 21 of Appendix E to the Code, however, makes it manifest that the Rule does not allow of an anticipatory attachment of money expected to reach the hands of a public officer and is limited in its application only to money actually in his hands. This was the view adopted by this Court in the case of Padmanand Singh v. Rama Prosad (1) where the Court followed the earlier decision of the Bombay High Court in Tulaji v. Balabhai 22 B. 39 : 11 Ind. Dec. (N. S.) 607. The principle of the rule, as concisely stated by Mr. Justice Beaman in Umabai Shankar Godbole v. Amritrao Anant 28 Ind. Cas. 18: 39 B. 80 at p. 85: 17 Bom. L. R. 133. is that what is attached must be something in existence and not merely in the future. The same view has been recently adopted by the Madras High Court in Tiruvangadial v. Thiruvangadih 24 Ind. Cas. 617 : 26 M. L. J. 364. There is consequently no escape from the conclusion that the attachments on the basis whereof Thakurdas Motilal and Joseph Iskendar seek relief are not operative in law.

16. The question finally arises, what is the relative situation of the three creditors. Thakurdas Motilal and Joseph Iskendar have now prayed for the immediate attachment of the fund in Court and that application we have decided to grant. Consequently the position at the present moment is that there is an attachment effected by Chuni Lal Johurry on the 29th February 1916, as also two other attachments effected at the instance of Thakurdas Motilal and Joseph Iskendar on the 3rd January 1917. As between these two attaching creditors no question of priority can arise; but the question remains, whether Chuni Lal Johurry is entitled to precedence by reason of the priority of his attachment. He claims such priority and relies upon the decision in Thiruvangadih v. Thiruvangadih 24 Ind. Cas. 617 : 26 M. L. J. 364. which does support his contention. The contrary view, however, has been taken by the Madras High Court itself in Suikeena Katum v. Mahomed Abdul Aziz 29 Ind. Cas. 239 : 38 M. 221. We are in this Court free to decide the question on first principles, and when the matter is so regarded, it seems fairly clear that no question of priority can arise on the basis of the successive attachments. As was pointed out by the Judicial Committee in Moti Lal v. Karrabuldin 25 C. 179 : 24 I. A. 170 : I. C. W. N. 639 : 7 Sar. P. C. J. 222 : 13 Ind. Dec. (N. S.) 121. and Raghunath Das v. Sundar Das Khetri (4)******, attachment does not create any title in the attaching creditor; it creates no charge or lien upon the attached property; the attaching creditor does not acquire the status of a secured creditor. Attachment is effected by a Court for the benefit of the execution creditor by prevention of private alienation by the judgment-debtor of property cut of which the creditor seeks relief. This view was adopted by this Court in the cases of In re Soobul Chunder Law, Soobul Chunder Law v. Russick Lal Mitter 15 C. 202 : 12 Ind. Jur. 307 : 7 Ind. Des. (N. S.)719. and Frederick Peacock v. Madan Gopal 29 C. 428 : 6 C. W. N. 577 Consequently we must apply the principle that where a fund in Court has been attached by several creditors of the judgment-debtor, none of the attaching creditors is entitled to preferential treatment by reason of the priority of his attachment; as the attachments create no charge or lien upon the fund, it is obvious that so long as the fund is in the custody of the Court, the Court is bound to apply the rules of justice, equity and good conscience in the determination of the relative rights of creditors who wish to proceed against the fund in custodia legis for the satisfaction of their dues. In such circumstances, the fund, if insufficient to meet in full the claims of the creditors, should be rateably distributed amongst them. On these grounds, I hold that the order now under appeal cannot be supported and must be set aside.


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