Anandrao vs Motilal

M.A. Razzaque, J.—The applicant decree holder Anandrao has filed this revision u/s 115 of the Code of Civil Prodecure to revise the order dated 16-8-1960 passed by the Civil Judge Class IT, Kasaravad, in Execution Case No-103/60 arising out of Civil Suit No. 13/57, where by he held that the non-applicants decree-holders in execution cases Nos. 113/60, 13/60, 102/60 and 109/60 are entitled to rateable distribution u/s 73 of the Code of Civil Procedure.

The question for our decision in this case is that when the custody Court and the executing Court are the same, then which is the exact point of time when assets should be considered to have been received by the executing Court within the meaning of Section 73 of the CPC so as to entitle the other decree holders to claim rateable distribution. Counsel for the parties are agreed that other ingredients of Section 73 are fulfiled in the case and the dispute is only about the time when the assets should be considered to have been received.

The facts are that non-applicant No.6 judgment-debtor Shankar had agree to sell his property to the applicant Anandrao but as he failed to do so, Anandrao filed Civil Suit No. 13/67 for specific performance of agreement to sell. The suit was decreed on 11-4-1960 and the applicant was ordered to deposit Rs.1983/- as sale price and thereafter further proceedings regarding the sale-deed and its registration were to be taken. In that suit, the judgment-debtor Shankar was ordered to pay applicant''s costs amounting to Rs.408. 88np. In pursuance of the said decree, the applicant deposited Rs. 1983/- on 14-4-1960 in that Civil Suit for payment to the judgment-debtor Shankar.

Next day, i. e. on 15-4-1960, the applicant decree-holder filed his execution application to re-cover the said amount of costs from the judgment-debtor and he prayed therein that out of Rs.1983/- deposited in Civil Suit No. 13/57. the amount of costs be attached and paid to him. This is Execution Case No. 103/60.

On 15-4-1960 the executing Court ordered for a report regarding the correctness of the petitioner''s execution application and also directed that the amount be attached and fixed the case for 20-4-1960. The order sheet dated 20-4-1960 shows that the execution application was correct and that the amount was attached. This means that the cost amount was attached after 15th and on or before 20th April 1960. It is important to note that after the attachment no further orders were passed by the custody Court either to transfer the attached amount to the executing Court nor the executing Court passed any order for payment of this attached amount to the applicant decree-holder and the final order regarding disposal of the amount attached as well as the remaining amount was passed on 16-8-1960. The reasons for this would be found in the various order-sheets of the original suit after 16-4-1960, the execution case No. 103/60 and the other execution cases strarted by the non-applicants decree-holders. The reasons, in short, were that the other decree-holders had applied for rateable distribution, that the judgment-debtor had not executed the sale-deed and therefore the order of payment of the amount was delayed till the sale-deed was executed and registered which was finally executed by the Court and registered on or about 16 8-1960.

The other decree-holders claiming rateable distribution had filed their execution application for various amounts against the same judgment-debtor on various dates as shown below:-

u/s 73 if in execution of a decree in one suit assests are held by a Court and more person than one applied to the Court for the execution of the decree for payment of money passed against the same judgment-debtor before the receipt of such assets, they are entitled to rateable distribution of these assets. In other words, there must be assets held by one executing Court and the applications for execution of other decrees must be made before the assets were received by the executing Court. If these two conditions are satisfied, the new decree-holders would be entitled to the benefit of Section 73.

In the instant case, decree-holder of execution case No. 13/60 had filed his execution application on 6/12-1-1960. Similarly decree-holder in execution case No. 102/60 had filed his application on 15 4-1960. Whatever may be the date of the receipt of assets in applicant''s execution application which was filed on 15-4 1960, that date would undoubtedly be after 15-4-1960. Accordingly the decree-holders in these two execution applications, namely No. 13/60 and No 102/60, would be entitled to rateable distribution because they had applied before the receipt of the assets.

The difficulty arises in the case of decree-holder in execution Case No. 113/60 who had filed his execution application on 25-4-1960 and execution Case No. 109/60 in which the execution application was filed on 22-4-1660. In other words both these execution applications were filed after the amount was attached by the applicant and I have already said that the attachment must have taken place after 15-4-1960 and on or before 20-4-1960 It is here that we have to determine the exact point of time when the assets should be considered as received by the executing Court within the meaning of Section 73 of the Code of Civil Procedure.

On behalf of the petitioner it was urged that this date of receipt of assets would be the date on which the amount was attached by the petitioner but for this he cited no authority. On behalf of the non-applicants it was urged that the material date on which the Court must be taken to have received the assets was 16-8-1960 when the order for payment was made by the executing Court and for this reliance was placed on Narayan Ganesh Varde Vs. Fatma Daud Taraporwala and Another, and The Imperial Bank of India Vs. Balasubramania Pandia Tevar and Others, .

In the Bombay case, the facts were that A obtained a money decree against Bon 23-1-48. On 27-1-48 A filed an application for execution praying for payment of the amount lying to the credit of his suit as a result of attachment before judgment and sale of B''s movable property pending suit. C another creditor, also obtained a money decree against B on 19-2-1948 front the same Court after attaching before judgment movable property of B. On 19-2-1948 C applied for rateable distribution of the amount lying to the credit of A''s suit. On 20-3-1948 the Court Ordered the payment of the entire amount to A. Held that the material date which on the Court must be taken to have received the assets was 20-3-1948 when the Court ordered payment of the amount to A in execution. Hence C who had applied for rateable distribution prior to this date was entitled to claim rateable distribution of the amount along with A. This Bombay case relied on the principle enunciated in Nachiappa Chettiar Vs. Subbier (46 Mad. 506 FB) and The Imperial Bank of India Vs. Balasubramania Pandia Tevar and Others, , already quoted.

In The Imperial Bank of India Vs. Balasubramania Pandia Tevar and Others, in which 46 Mad 506 was relied, the observations were as under:-

If the executing Court and the custody Court are different, the amount lying in the custody Court can be got at by the decree holder executing his decree in another Court by attaching the amount in the custody Court in the manner provided under Order 21 Rule 52. After levying the attachment in the manner laid down in that Section further orders would be passed by the executing Court requesting the custody Court to send so much of the money as is necessary for payment to the decree-holder. The money would then be received by the executing Court and that would be the time when the assets are received for the purpose of Section 73. If the two Courts had been different and the money had been received by the executing Court from the custody Court, there would be no difficulty in finding the exact time before which the persons claiming rateable distribution must apply for execution of their decree.

But in a case where the executing Court and the custody Court are the same there is considerable difficulty in determining this point of time. In such a case reliazation of assets u/s 73 takes place when the Court as the custody court passes an order transferring the amount standing to the credit of one suit to the creditor of the decree under execution. Even if there is no formal order by the custody Court transferring the amount to the credit of one the of the suit under execution, if payment out is ordered by the executing Court, money is impliedly transferred by the custody Court to the credit of the decree in which payment out is ordered. Before assets may be said to have been received, two things must take place, first the custody Court must come to the conclusion that there was no objection to transfer the amount necessary to pay the decree-holder at whose instance the fund was attached, second there must be an order by the custody Court transferring the amount to the credit of the first attaching creditor''s suit which it is engaged in executing. It is only then that there can be said to be receipt of assets within the meaning of Section 73.

Now let us apply the above principles to the facts of the present case. We have seen above that the amount was attached in the petitioner''s execution application after 15th and on or before 20th April 1950 and it continued in that state of things until 16-8-1960 when the payment out order was made. After the attachment of the amount no order transferring the said amount to the credit of the decree under execution was made by the custody Court. Even if there was no formal order by the custody Court transferring the amount to the credit of the executing Court, the executing Court, also did not pass any payment out order for about four months and such payment out order was finally passed only on 16-8-1960. In the circumstances there fore it must be held that the assets were received by the executing Court on 16-8-60 with in the meaning of Section 73. The two decree holders in execution cases Nos. 113/60 and 109/60 who had applied on 25-4-1960 and 22-4-1960, respectively, i. e. long before 16-8-60, would also be entitled to reteable distribution.

The contention of petitioner''s counsel that the assets must be deemed to have been received by the executing Court from the custody Court on the date the petitioner got them attached had no substance. An attachment does not create any interest in the property attached. It does not create any lien in favour of the attaching creditor. It only prevents alienation of the property on the part of the judgment-debtor, so that if the judgment debtor alienates the property contrary to attachment then the alienation becomes void as against all claims enforceable under the attachment u/s 64.(vide, Narayan Ganesh Varde Vs. Fatma Daud Taraporwala and Another, . In other words, mere order of attachment of the fund does not of itself effect a transfer to the credit of the suit in which the attachment is made so as to constitute a receipt of assets within the meaning of Section 73. Accordingly I reject this contention.

It would therefore be found that all the decree-holders in the four execution applications, namely Nos. 113/60, 13/60, 102/60 and 109/60, are entitled to reteable distribution The learned Judge of-the lower Court observed that the assets would be considered to have been received by the executing Court on the day on which the sale-deed was rejected i.e. 16-8-1960, and as the new decree-holders had applied before this date, they were entitled to reteable distribution. I do not agree with this reasoning. But as we have found above, the order has to be maintained though for different reasons.

In the result, the revision fails and it is dismissed. The order of the lower Court is confirmed. The petitioner shall pay the costs of the non applicants decree-holders and bear his own. Counsel''s fee Rs.20. for each side, if certified. The non-applicants decree-holders will get only one set of costs as only one counsel appeared for them all.