Ayyappa Naicker vs Thayammal and Others

Varadachariar, J.—The appellant-plaintiff purchased the suit properties in 1924 in execution of the decree in O.S. No. 48 of 1915 on the

file of the Sub-Court of Tuticorin. The defendant was the decree-holder in O.S. No. 55 of 1922 on the file of the Additional Sub-Court of

Tinnevelly, and himself became the purchaser of the properties in execution in March 1926. That suit (O.S. No. 55 of 1922) had been instituted on

a mortgage (Ex. L) executed some time in 1917; but, prior to the date of Ex. L, the decree-holder in O.S. No. 48 of 1915 had entered into an

arrangement with the mortgagor who was also the judgment-debtor in O.S. No. 48 of 1915 and that arrangement is embodied in Ex. F. The

principal question for decision in this second appeal is whether, under Ex. F a charge had been created for the amount due under the decree in

O.S. No. 48 of 1915 so as to postpone the title of the purchaser in O.S. No. 55 of 1922 to that of the purchaser in execution of the decree in

O.S. No. 48 of 1915.

To understand the true effect of Ex. F it is necessary to state a few facts that led up to it. The decree in O.S. No. 48 of 1915 was for a

considerable sum of money out of which some portion had been paid and for the balance execution proceedings were started by E.P. No. 102 of

1916 (Ex. E). In the course of that execution, several properties belonging to the judgment-debtor were attached and were about to be brought to

sale. There was another decree in the discharge of which the decree-holder in O.S. No. 48 of 1915 as well as the judgment-debtor were

interested and the decree-holder desired to. enable the judgment-debtor to discharge that decree also. It was therefore arranged that some of the

properties which had been attached under Ex. E-1, in O.S. No. 48 of 1915, should be released from attachment and the judgment-debtor should

also be given time to pay up the balance due in O.S. No. 48 of 1915 by four instalments. As is natural in the circumstances the decree-holder was

anxious to safeguard his position by retaining a hold on the properties which were not to be released from attachment. The arrangement, so far as it

related to O.S. No. 48 of 1915, is provided for in Clauses 4 and 5, Ex. P. To complete the narrative it is only necessary to add that Ex. E was

presented to the Court as a razinama entered into by both parties during the execution proceedings and the Court granted permission to

compromise the suit and stated that a decree will be passed in terms of this compromise. It is not possible to say from the record whether a revised

decree in these terms was in fact drawn up or not, but some of the execution petitions filed in the case refer to some such decree. I presume that

this order of Court must have been really made under Order 20, Rule 11, Sub-clause (2), Civil P.C. as otherwise the terms of the original decree

cannot be varied by the substitution of the provision for instalments.

On the basis of the razinama decree, applications for execution were made from time to time. It is sufficient to mention Exs. I, II, K, K-I and K-

2, K-2 being the last of the applications under which the properties were actually brought to sale and purchased by the plaintiff. Ex. 1 was only for

one instalment, and as that amount was paid soon after the execution petition was filed it was found unnecessary to proceed further with that

petition. But Exs. II, K and K-1, were filed in respect of the remaining two instalments and on both these occasions the proceedings were

discontinued merely because the decree-holder did not want to pursue the matter and not because his claim was satisfied. This will have a material

bearing upon one of the questions raised in the case, namely that covered by issue 2 as to the cessation of the attachment. Order 20, Rule 11(2) of

the Code provides that when a judgment-debtor is given an indulgence by way of instalment payments, the Court may grant that indulgence on

such terms as to attachment of property or taking of security from him or otherwise as it thinks fit. This only carries, out the probable intention of

the parties when the decree-holder is willing to oblige the debtor by postponing the payment. It has no doubt unfortunately happened in this case

that by reason of the facts to be dealt with under issue 2 the attachment has ceased to be in force before the sale under Ex. K-2 took place. But

looking at the probable intention of the parties and the position as it stood at the date of Ex. F, I see no particular reason to think that the parties

would have preferred such protection as the creation of a security would have afforded to the advantages, arising from a continuance of the

attachment which had already been made. The language of Ex. F must be construed with reference to the circumstances as they stood at the date

of Ex. F and cannot be strained to meet the altered situation arising from the fact that by some blunder of the decree-holder the attachment has

afterwards, proved unavailing.

From this point of view, the language of Ex. F is very significant. The argument that Indian documents are ill drawn can scarcely have much force

now, 50 or 60 years after it was used by the Privy Council, and certainly not much force in the present case, because the document has

undoubtedly been very carefully drawn up, apparently with the help of the legal advisers, three of whom have signed Ex. F. Para. 5, Ex. 5

specifically refers to the attachment already made and provides that the attachment, shall continue to remain in force. It then goes on to say that if

the installments are not duly paid, the decree-holder will be entitled to recover the full amount as per the terms of the decree by bringing the

properties to sale-without fresh attachment. Having given my most careful consideration to the arguments of Mr. T.M. Krishnaswami Ayyar, on

behalf of the appellant, I am unable to say that this reference to the previous attachment, to the continuance of that attachment and the sale of the

property in the future without fresh attachment can all be ignored and a mere general idea of creating a security on the property substituted

therefor. Mr. T.M. Krishnaswamy Ayyar referred to two other provisions in Ex. F, viz. Clauses 6 and 6-a, which state that the properties have not

been alienated by the defendant and that if necessary the plaintiff may get this razinama registered at his cost. I am free to admit that on either

hypothesis I am not able to think of a very satisfactory reason for the insertion of these clauses.

The provision for registration is optional and the option may be either due to the fact that no charge was created or due to the fact that even if a

charge was created the arrangement was going to be embodied in the decree and no registration was therefore necessary. That clause accordingly

gives one very little help. As regards the clause as to non-alienation, the transaction is not in the nature of a sale in which such a covenant is

ordinarily found. The properties have undoubtedly been under attachment some time before and therefore what exactly was sought to be served by

that clause, I am not able to say. But a provision for sale through Court without a fresh attachment is for reasons already stated quite intelligible on

the footing of the continuance of the attachment already made and does not require to be justified on the theory that a security was intended to be

created. This being my view as to the construction of Ex. F, it will be sufficient to refer to a few of the authorities cited before me; for they all

recognize that the question in each case is whether the particular document, read in the light of surrounding circumstances, shows an intention to

create a security for the payment of money. It may be conceded that ordinarily when parties refer in a document to particular properties, as the

source from which a debt is to be paid or by the sale of which a debt is to be realized, there is some indication of an intention to make the property

more directly liable than on a mere enforcement of a personal liability. For instance, in maintenance cases where in the absence of a specific

agreement the maintenance will only be a kind of indefinite charge upon the family property even a slight indication of intention to convert it into a

definite charge may suffice.

That I think is the explanation for th decisions of the Privy Council in Ahmad Hussain Khan v. Nahaluddin Kahan (1883) 9 Cal. 945 and Rajah

of Rammad v. Sundara Pandiyaswami Tevar 1918 P.C. 156. This will a fortiori be so in a case where'' the party claims to be entitled to succeed

to or to share in a certain property and that claim is settled by a provision for maintenance payable out of that property. Again where a property is

already subject to a mortgage and a later document between the same parties relating to a fresh advance provides, as often happens, that the

previous mortgage shall not be redeemed before the later debt is also repaid, Courts may easily come to the conclusion that the parties must have

intended that the security under the first mortgage should be available for the fresh advance as well : cf. Janardan v. Anant (1908) 32 Bom. 386

and Aditya Prasad v. Ram Ratan Lal 1930 P.C. 176. Cases of equitable assignment or direction or promise to pay out of particular funds are

explicable on the same principle : cf. Navajee v. Administrator-General of Madras 1914 Mad. 281. Again when parties entering into a partition

arrangement say that if the parties thereto do not carry out their respective obligations, any loss incurred by one of them shall be recovered out of

the properties of the other, there is no difficulty in implying a connexion between the properties and the enforcement of the liability, and no other

connexion can be reasonably thought of except that the properties are intended to be security.

Where however, as in the present case, the facts recited in the document itself clearly show why the document refers to particular properties,

and it also appears in what manner the properties are to be made available for the obligations arising under the document, it will not be right to

ignore these circumstances and imply a kind of general intention to create security. As stated already there was a pre-existing attachment on a

number of properties; some of them had to be released and as regards the rest the attachment had to be continued; hence the necessity for

specification of the properties; and as to their availability, the document itself provides that the attachment shall continue in force and that the

properties are liable to be sold -without fresh attachment. It seems to me that the document is self-contained and there is no reason to import any

general idea of the creation of security. Amongst the reported cases, the decision in Sankaralinga Mudaliar v. Official Receiver Tinnevelly 1926

Mad 72, deals with a document which probably comes nearest to Ex. E in the present case. Not only is that decision binding upon me as that of a

Division Bench, but I respectfully agree with it ao far as the construction of the document in question is concerned. But as the discussion on this

point in that case is very brief and as the question has been fully argued before me on behalf of the appellant, I have thought it right to give my

reasons in fuller detail. I am therefore unable to hold that Ex. P provides for anything more than the continuance of the attachment already made as

regards the properties specified in it.

In this view, it becomes material to decide whether or not the attachment continued to subsist on the date of the plaintiff''s purchase. With

reference to what happened at the time of Ex. II K and K-1 (as already stated), the attachment must be deemed to have ceased to exist, because

these execution petitions were dismissed by reason of the decree-holder''s default in proceeding with them. Mr. T.M. Krishnaswami Ayyar

contends that Order 21, Rule 57, Civil P.C., ought not to be applied to this case, because this is an attachment created by the compromise decree

itself. I am not able to follow this argument. The original decree was a money decree and attachment had been made in pursuance of it; all that the

compromise provides is that though the decree-holder was not prepared to proceed with the execution application Ex. F, the attachment shall

nevertheless be allowed to remain in force. The order of the Court on this Razinamah petition must, as already stated, be taken to have been

passed under Order 20, Rule 11, Sub-clause (2), Civil P.C. Though the order speaks of it as a decree, it is clear from the pro visions of Sub-

clause (2), Rule 11, Order 20 that it is merely an order by which the Court directs that the payment of the amount decreed shall be postponed or

shall be made by instalments and one of the terms on which that order was made was that the attachment already made shall continue to remain in

force. The attachment thus continued is not the less an attachment in execution of a decree. The result of the order no doubt is that as long as the

instalments are running, the attachment will continue because Order 57, Order 21 must be read consistently with Rule 11, Sub-clause (2), Order

20 and it will be unreasonable to say that because no proceedings were taken upon Ex. E itself, the attachment ceases to exist. But if after the

instalments had wholly fallen due and execution proceedings were initiated in conformity with the terms of the Razinamah, the decree-holder by his

default allowed the new execution petition to be dismissed, I see no reason to hold that the case will not be governed by the terms of Rule 57. In

this view if is unnecessary to deal with certain other questions discussed in the judgments of the Courts below. The second appeal fails and is

dismissed with costs.

Mr. T.M. Krishnaswami Iyer finally mentioned that the decree in O.S. No. 55 of 1922 and the mortgage on which it was based are the subject

matter of another suit, O.S. No. 47 of 1929 on the file of the Sub-Court of Tuticorin, and appeal 109 of 1931 pending here. It would appear that

one of the persons interested in the mortgaged property who was a minor at the time of Ex. 1 is questioning the binding character of the mortgage

and the decree thereon as against his share. It is unnecessary for me to say more than to state that my decision in the present second appeal cannot

decide, and is not intended to decide how the rights of parties will be affected by anything that may transpire as a result of that litigation. All that I

can decide is that so long as and to the extent to which the purchase in execution of the decree in O.S. No. 55 of 1922 stands, the rights of the

parties to the present litigation are as declared by the decree of the lower Court. How they will be affected by anything that may happen in O.S.

No. 47 of 1929 or appeal 109 of. 1931 is a matter that I am not concerned with at this stage. But at Mr. Krishnaswami Ayyar''s request I refer to

this aspect of this matter only to make it clear that that question remains open.