Chokkammal and Others vs Sambandam Chetty and Another

Krishnaswami Nayudu, J.—This reference raises a question of some importance which comes up frequently for consideration on the

Original Side of the High Court.

In and by the decree in C. S. No. 423 of 1949, the applicant herein, who is the third plaintiff in the suit, became entitled to a sum of Rs.

3800/10/- out of the entire sum standing to the credit of that suit. He asked for payment out of a sum of Rs. 3,753-2-0 being the balance he was

entitled to, after retaining a sum of Rs. 47-8-0 being the cost of stamps for engrossing the decree. On the 20th April 1951, the learned Master

passed an order ordering payment out. An order of attachment of the moneys standing to the credit of the applicant in this suit was issued by the

Court of Small Causes in execution of a decree obtained by one Krishnamruthi Ayyar against the applicant in Small Cause Suit No. 361 of 1951,

and the said order of attachment was received in this Court on 26th April 1951. Attachment was effected by this Court, and the original order was

returned after service. Though the attachment was subsequent to the order for payment out, a cheque was issued in favour of the applicant in

pursuance of the order of the learned Master dated 20th April 1951 after deducting the amount for which the attachment was issued. Objection

having been taken to the matter is posted before me for orders.

The contention on behalf of the applicant is that once an order has been made for payment out there is no fund in Court available for attachment

and that the order of attachment must have been returned with the endorsement that there is no fund in Court available for attachment. In support

of this contention, the view expressed by Kumaraswami Sastri J. on 27th January 1926 in C. S. No. 774 of 1923, in almost similar circumstances

is cited which is as follows;

I think the correct rule is that, where a Court orders payment to be made, that order must be treated as if the payment had actually been made at

the date of the order so as to prevent subsequent attachment on the money in Court. There is always a certain interval between the passing of the

order and its issue and the payment being made on the strength of that order and I do not think that the party should be prejudiced simply because

there is delay. When he has actually got the order, the proper course is to treat the order of payment as an actual payment so far as the rights of

third persons to attach are concerned.

A different view was taken by Rajagopalan J. in application ''No. 794 of 1951, in C. S. No. 181 of 1948'', by his order dated 26th February

1951. In that case, in pursuance of a decree passed on 30th January 1951 in terms of the memorandum of compromise certain payments were

directed to be made out of the funds in Court to the parties to the compromise decree. Subsequent to the date of the decree, two attachments

were received on 7-2-1951. A similar reference was made to Rajagopalan 3 and the learned counsel for the applicant in whose favour payment

out order had been made relied upon the judgment of Kumaraswami Sastriar J. in ''C. S. No. 774 of 1923 dated 27th January 1926 The attaching

decree holder in C. S. No. 181 of 1948 took out application No. 794 of 1951 for directions to retain the attached amount viz., Rs. 1,604-4-0 and

send it to the transmitting Court. With reference to the respective contentions of the applicant in whose favour payment out has been ordered and

the attaching decree-holder, the learned Judge observed as follows:

From the records I find that there was an order of attachment issued by the Registrar. Court of Small Causes, to attach a sum of Rs. 1,604-4-0

and that the attachment was executed and the warrant returned. Mr. D. R. Krishna Rao for the respondent contends that since there was an order

passed by this Court that the amount including this amount of Rs. 1,604-4-0 should be paid over to the Respondent and since that order was long

prior to the attachment effected at the instance of the applicant, the money vested in the respondent on the date of the order of this Court, and that

there was therefore nothing still in the custody of the Court which could be attached under Order XXI, Rule 52, Civil P. C. But I cannot be called

upon to pronounce upon the soundness of this contention or otherwise in these proceedings. The attachment was ordered by the Court of Small

Causes, and the validity of that attachment will be for the Court of Small Causes to decide. It is perfectly open to the respondent to move the

competent Court to decide whether the attachment which had been ordered to be effected and which has been effected in pursuance of that order

is valid or not. If the attachment is set aside by the attaching Court, then the money will be available for payment out to the respondent. But I am

unable to accept the contention of Mr. D. R. Krishna Rao for the respondent, that it is for this Court to decide whether the order of attachment

issued by the Court of Small Causes was validly executed or not."" This view of Rajagopalan J. apparently proceeds on the language of the proviso

to Order XXI, Rule 52, Civil P. C. which provides that: ""Where such property is in the custody of a Court any question of title or priority, arising

between the decree-holder and any other person, not being the judgment-debtor, claiming to be interested in such property by virtue of any

assignment, attachment or otherwise, shall be determined by such Court."" The proviso to Order XXI, Rule 52 comes into operation only after

there has been an attachment of the fund in Court. Only when there is a fund in Court which would be available for attachment in pursuance of an

order issued by another Court, the claim relating to the fund attached should properly be raised before the Court which issued the order of

attachment. Could it, however, be said in the present case that, after an order for payment out had been made on the 20th April 1951, there was

any fund in Court available for attachment under the order issued by the Court of Small Causes? Under Order XXI , Rule 52, if the property to be

attached is in the custody of any Court the attachment shall be made by a notice to such Court requesting that such Court may hold the property

subject to further orders of the Court from which the notice is issued.

The sum of Rs. 3753-2-0 ordered to be paid out was no doubt in the custody of the Court on 26th April 1951 when the order of attachment

was received. But it is not sufficient if the property (here money) was in the custody of the Court. It must have been in the custody of the Court to

the credit of the judgment-debtor, i.e., the third plaintiff-applicant, or it must be shown that the money was held on his behalf. In view of the order

for payment out made on the 20-4-1951, from the date of the order the money must be deemed to have been held on behalf of the person in

whose favour the order for payment out has been made. Further, once an order for payment out has been made, it must be treated that the

property in these moneys has passed to the person in whose favour the order has been made; and from that date of the order, the person, who,

has got the payment out order in his favour, becomes the owner of the moneys, notwithstanding that he may not have got actual possession of the

same, As was observed by Kumaraswami Sastriar J. once an order for payment out has been made, it must be treated that payment out has been

actually made and whatever amount that was ordered to be paid out, belonged to him and it cannot be made available to the claim of third parties

to that amount. There can therefore be no valid attachment of these moneys subsequent to the order for payment out. On the passing of the order

which is the judicial act, the property is transferred to the person in whose favour the order is made and the issue of a cheque, or payment of the

money is a ministerial act, and any delay in the performance of which could not prejudice the right of the person who has obtained the order for

payment out. For instance suppose an immovable property has been in the possession of a receiver appointed by Court, it must be treated to be in

the Court''s custody. If during the possession of the property in the hands of the receiver, an order for sale is made by the Court and the sale in

favour of any purchaser is confirmed and if after such confirmation and before actual delivery of possession of the property by the receiver to the

purchaser an attachment order of the property is received, it cannot be said that the property could be validly attached. The circumstance that the

possession continued to be with the receiver notwithstanding that the sale in favour of the third party has been confirmed, would not be sufficient to

treat the property as the property of the parties on whose behalf the receiver was appointed. The correct and also the reasonable view that could

be taken in such cases is that when once an order for payment out is made, there cannot be any subsequent attachment of the moneys, even though

the moneys continue to remain in Court and no cheque has been issued to the party.

In the present case the difficulty, however, arises in view of the judgment-debtor in the Small Cause suit against whom an order for attachment

has been made and the applicant in whose favour the order for payment out has been made are one and the same person viz., the third plaintiff. If

the applicant in the application for payment out is a third party, the principle that is now laid down will be applicable and the third party -- applicant

would be en titled to the amount once the order for payment out is made, notwithstanding any order of attachment subsequently received on the

ground that the funds in Court ceased to be held on behalf of the judgment-debtor under the order of attachment. It is, however, stated by Mr. E.

R. Krishnan, learned counsel for the applicant, that the two persons are different, the decree in the Small Cause Court being against the 3rd plaintiff

in his capacity as the executor of Chokkammal, while the payment out order here was in his favour. But a reference to the decree in this Court

shows that he was added as an executor of the 1st plaintiff Chokkammal and the payment out order could only be in his capacity as executor of

Chokkammal, who is the 1st plaintiff in this suit. There is certainly therefore no difference between his position in this suit and his position in the

Small Cause suit. So, in this case, the property, though ceases to be in the custody of the Court, does not cease to be held by the Court on behalf

of the judgment-debtor in the Small Cause suit, who is the very same person as the applicant. The amount would therefore stand to the credit of

the applicant--3rd plaintiff. It cannot there fore be contended that the judgment-debtor who is the third plaintiff-applicant has ceased to have any

interest in the amount and there fore the amount cannot be attached. I am of the opinion that in this case the attachment must be given effect to and

the payment out could only be in respect of such amount that is available after deducting the amount mentioned in the warrant of attachment.