K.N. Sampath Mudaliar vs Sakunthala Ammal

Jagudisan, J.—This civil miscellaneous second appeal arises out of execution proceedings, and it serves as an illustration of the difficulties of a judgment-creditor, who, after the decree in his favor, finds himself from the frying pan to the fire. The elaborate provisions of the CPC in the execution chapter are designed to prevent the decree-holder from snatching the property of the judgment-debtor, but in actual operation, they have the unintended effect of keeping the decree-holder at bay and away from the fruits of his decree. Not unoften, the process of execution occupies more time than the duration of the suit, the reason being that it is the last ditch for the judgment-debtor to offer resistance and that the Statute gives him full assistance in that endeavor. But that is law, and the duty of the Court is only to administer it.

The following facts bring out the present contest between the parties. One Somasundara Mudaliar, who was the owner of an item of property, forming the subject-matter of this appeal, filed a suit against the present Appellant, Sampath Mudaliar, and two others, for recovery of possession on the footing that the Appellant was a tenant of that property. The Appellant was imp leaded as the third Defendant in that suit, which is Original Suit No. 630 of 1941, on the file of the District Munsif''s Court, Poonamallee. The suit ended in a compromise, which took the shape of a joint endorsement made by the parties. A decree in terms of the joint endorsement followed. The decree was that the first Defendant in that suit should deliver possession of the property to the Plaintiff, that he should pay the arrears of rent, and, damages for use and occupation claimed by the Plaintiff, and that the Appellant and the second Defendant in that suit should be given six months'' time to vacate the property. It appears that, notwithstanding the fact that Somasundara had an executable decree in his favor for recovery of possession, the Appellant-third Defendant continued to be in possession. Somasundara, however, agreed to convey the property in favour of a certain Sakunthalammal, the Respondent herein, for consideration. Sakunthalammal instituted a suit, Original Suit No. 202 of 1955, on the file of the District Munsif''s Court, Poonamalle claiming specific performance of the contract in her favour, and eventually obtained a decree. That was also a decree based upon compromise between the parties. Somasundara undertook to execute and register a sale-deed in favor of Sakunthalammal, conveying the property. Actually, Somasundara executed a registered conveyance on 24th February 1960, in favor of Sakunthalammal. The sale deed expressly mentioned that the vendee (Sakunthalammal) should get herself impleaded as a party in the proceedings in Original Suit No. 630 of 1941, and get possession by delivery through Court. Thereafter, Sakkunthalammal filed Miscellaneous Petition No. 1095 of 1960, in Original Suit No. 630 of 1941, praying for delivery of possession, on the ground that she had become entitled to execute the decree by virtue of the sale-deed in her favor. The executing Court, impleaded her as a party in that suit and directed delivery of possession. No notice of that proceeding was, however, given to the third Defendant in that suit, namely, the Appellant herein. This order was passed on 8th August 1960. But Sakunthalammal appears to have been unable to take possession of the property. The Appellant filed Execution Application No. 1756 of 1961, in Original Suit No. 630 of 1941, an application purporting to be u/s 47, Section 151 and Order XXI, Rule 16 of the Code of Civil Procedure, praying for cancellation of all the execution proceedings commencing from the imp leading of the Respondent as a party and for other appropriate reliefs. He contended that the order imp leading the Respondent as a party to the execution proceedings in Original Suit No. 630 of 1941 was illegal, if not null and void, as such an order has been passed without notice to him. He pointed out that the application of the Respondent was, in substance, one under Order XXI, Rule 16, and that provision was quite mandatory in stating that notice should go not merely to the original decree-holder but also to the judgment-debtor. He, further, contended that he must be deemed to be a tenant entitled to the benefits of the Madras Buildings (Lease and Rent Control) Act, and that he could not be evicted through process of Court in execution proceedings, as the proper authority to order eviction would only be the statutory authority under the special enactment. This application was resisted by the Respondent, who submitted that the earlier proceedings were not under Order XXI, Rule 16, CPC but were only u/s 146 of the Code of Civil Procedure, that there was no relationship of landlord and tenant between her and the Appellant, that, therefore, the Buildings and Rent Control Act could not be invoked, and that the application should be dismissed. Both the learned District Munsif of Poonamalle, the executing Court, and the learned District Judge at Chingleput have now concurrently held that the contentions raised by the Appellant are without substance and are not well-founded. Hence this civil miscellaneous second appeal by the aggrieved judgment-debtor in Original Suit No. 630 of 1941.

I may at once state that there is no substance in the contention that the Appellant can be evicted only under the machinery of the Buildings Rent Control Act and not by levy of execution. I am clearly of opinion that the terms of the joint endorsement, that Defendants 2 and 3 do pay Plaintiff, rupees 3 per mensem from today for their occupation for the six months and, the same will be recovered in execution of this decree, do not constitute the rural relationship of landlord and tenant, which is the first essential requisite for calling in aid the Act. This contention was rightly overruled by the Courts below.

The important question, however, is whether it can be said that Miscellaneous Petition No. 1095 of 1960, filed by the Respondent seeking relief by way of delivery of possession can be deemed to be an application u/s 146 of the CPC and not one under Order XXI, Rule 16. The relevant provisions are as follows:

Section 146: Save as otherwise provided by this Code or by any law for the time being in force, where any proceeding may be taken or application made by or against any person, then the proceeding may be taken or the application may be made by or against any person claiming under him.

Order XXI, Rule 16: Where a decree or, if a decree has been passed jointly in favor of two or more persons, the interest of any decree-holder in the decree is transferred by assignment of writing or by operation of law, the transferee may apply for execution of the decree to the Court which passed it; and the decree may be executed in the same manner and subject to the same conditions as if the application were made by such decree-holder:

Provided that, where the decree or such interest as aforesaid, has been transferred by assignment, notice of such application shall be given to the transferor and the judgment-debtor and the decree shall not be executed until the Court has heard their objections (if any) to its execution:

(The second proviso omitted).

Order XXI, Rule 16 of the CPC is a special provision which enables an assignee decree-holder to step into the shoes of the original decree-holder and to execute the decree. A person can become an assignee of a decree either by operation of law or as a result of transfer in his favor by assignment in writing from the transferor, namely, the original decree-holder. There cannot be a transfer inter vivos of a decree except by an instrument in writing. The subject-matter of the transfer must also be a decree, which must, of course, be in existence on the date of the transfer. An assignee who falls within the terms of Order XXI, Rule 16 can only proceed under that provision to work out his rights in respect of the decree, and he cannot circumvent it by resorting to any general provision under the Code. Section 146 is certainly a comprehensive provision which enacts that proceedings that may be taken by anybody may also be taken by a person claiming under him. It must be remembered that Section 146 significantly uses the words, save as otherwise provided by this Code. This Court has always taken the view that the word decree-holder in Order XXI, Rule 16 means the actual decree-holder on the date of the assignment and not a person, who may, after the so-called assignment, get a decree in his favor (Basroorvittil Bhandari v. Ramachandra Kamthi (1907) 17 M.L.J. 391 and Kangati Mahanandi Reddi Vs. Panikalapati Venkatappa and Another, ; The Calcutta High Court has also taken the same view (Mathurapore Zamindary Co. Ltd. v. Bhasaram Mandal ILR (1924) Cal. 703 and Prabashinee Debi v. Rasiklal Banerj I.L.R (1931) Cal. 297. The Bombay High Court has, however, taken a contrary view (Purmananddas Jiwandas v. Yallabdas Wallji ILR (1887) 11 Bom. 506 and Chimanlal Hargovinddas v. Shaikh Gulam Nabi ILR (1946) Bom. 276. The Bombay High Court followed the equitable principle laid down by Jessel M.R. in Collyer v. Isaacs (1881) 19 Ch. D. 342 in (Isaacs), these terms:

A man cannot in equity, any more than at law, assign what has no existence. A man can contract to assign property which is to come into existence in the future, and when it has come into existence, equity, treating as done that which ought to be done, fastens upon that property, and the contract to assign thus becomes a complete assignment.

A proper and harmonious construction of these two provisions of the Code of Civil Procedure, the one general, and the other special, would, in my opinion, be that, while Order XXI, Rule 16 applies to a case of a transfer by assignment in writing or by operation of law of an actual existing decree, Section 146 would apply to a case, where mere rights are transferred before they culminate and merge into a decree in favor of the transferor. If, at the time of the transfer, the subject-matter is only a right over property, the transferee gets transferred to him that, right absolutely in his favor together with the future rights which may accrue to the transferor in respect of that property. After the transfer, the transferor is effaced, and the transferee is substituted in his place. The benefits attaching to the transferred right, which include future benefits also automatically fasten upon the subject-matter of the transfer, and should enure only in favor of the transferee. Section 146, actually embodied on equitable principle that equity treats that as done which ought to be done, and that a person clothed with certain rights would not merely be free to enjoy those rights, as they stood on the date of the transfer, but also the future incidents or consequences of those rights.

I do not feel called upon to discuss the question as regards the precise scope and ambit of these two relevant provisions at any great length, in view of the decision of the Supreme Court in Jugalkishore Saraf v. Raw Cotton Co. Ltd. (1955) 1 M.L.J. 220, 236. The Courts below have, no doubt, referred to this decision, but have, in my opinion, not correctly understood its clear import. The facts in that case were these. Two Muslims, Mahomedali Habib and Sakerkhaneo Mahomedali Hahib, were carrying on business as merchants and pucca adatvas in bullion and cotton in Bombay under the name and style of Habib and Sons. In 1948, that firm instituted a suit in the Bombay City Civil Court against the Appellant before the Supreme Court, Jugalkishore Saraf, who was himself a merchant in Bombay, for recovery of Rupees 7,113 and odd. On the 7th of February 1949, when that suit was still pending, a document was executed whereby it was agreed that the partners of Habib and Sons would transfer all the assets and liabilities of the firm to a company called the Raw Cotton Company Ltd., (Respondent before the Supreme Court). The transferees thus got assigned to them all book-debts due to the firm of Habib and Sons with the full benefit of all the securities as regards those debts. The Company did not take steps to get itself impleaded in the pending suit. That suit proceeded to trial, and eventually ended in a decree in favor of Habib and Sons. The two partners of the firm, thereafter, migrated to Pakistan and their property vested in the Custodian of Evacuee Property. On 15th December 1949, a decree was passed in the suit. On the 11th December 1950, the Custodian of Evacuee Property informed the Respondent-company that he had confirmed the transaction of transfer of the business effected by Habib and Sons. On the 25th April 1951, the Respondent-company filed an execution petition in the Bombay City Civil Court, seeking to execute the decree in favor of Habib and Sons. Notice was issued to the judgment-debtor Jugalkishore and he raised a congest. The only substantial question raised by him was whether the Respondent-company was a transferee of the decree within the meaning of Order XXI, Rule 16. The learned Judges of the Bombay High Court answered the question in the affirmative, on the authority of the previous decisions of that Court. On a certificate, having been granted under Article 133(1)(e) of the Constitution, the matter was heard by the Supreme Court. The Supreme Court held that there was no bar to the transferees of the debt making an application for execution u/s 146, if they satisfied the other requirement of that section, namely, that they were claiming under the decree-holder. What is to be specially noted is that that was a case where the transfer was not of a subsisting decree but was only of a debt which had been sued upon. The decree was passed long after the transfer of the debt. It was under those circumstances that Their Lordships of the Supreme Court held that the case would rather be governed by Section 146 and not by Order XXI, Rule 16. Learned Counsel for the Respondent drew my attention to the following passage, in the judgment of the Supreme Court and contended that the transferee could obtain the benefit of the decree without being an actual assignee of that decree:

A person may, conceivably become entitled to the benefits of a decree without being a transferee of the decree by assignment in writing or by operation of law. In that situation the person so becoming the owner of the decree may well be regarded as a person claiming under the decree-holder and so it has been held in Sitaramaswami v. Lakshmi Narasimha ILR (1918) Mad. 510, although in the earlier case of Dost Muhammad v. Altaf Husain Khan and Ors. (1912) 17 I.C. 518, it was held otherwise. The case of Kangati Mahanandi Reddi Vs. Panikalapati Venkatappa and Another, , also held that the provisions of Order XXI, Rule 16 did not prevent execution of the decree u/s 146. In that case it was held that the applicant could not execute the decree under Order XXI, Rule 16, but they could execute the same u/s 146.

In my opinion, there is not the slightest doubt that the Supreme Court did not hold, that, after the passing of a decree, any transfer, though not in form a transfer of the decree, would yet enable the transferee to proceed u/s 146 by-passing the provisions of Order XXI, Rule 16. I may refer to the following observation of Das, J. (as he then was) at page 233:

When on a true construction of the deed it actually operates to transfer a decree then in existence no equitable principle need be invoked, for in that case the transfer is by the deed itself and as such is by an assignment in writing. It is only when the deed does not effectively transfer the decree, because, for instance the decree is not then in existence, but constitutes only an agreement to transfer the decree after it is passed that the invocation of the equitable principle becomes necessary and it is in these circumstances that equity fastens and operates upon the decree when it is passed and effects a transfer of it.

The true principle is that a decree cannot be executed by anybody other than the decree-holder, except by an assignee who satisfies the requirements of Order XXI, Rule 16. Section 146 of the CPC cannot have the effect of overriding the provisions of Order XXI, Rule 16. If that were to be the correct position, any assignee of a decree can ignore Order XXI, Rule 16 and execute the decree without notice to the original decree-holder and without notice to the judgment-debtor. A person may allege to claim under a decree-holder, but he may be a fraudulent claimant. Can he behind the back of the decree-holder realize the fruits of the decree, keeping the decree-holder in the dark? It seems to me that such a position is inconceivable. Where rights are transferred at a point of time when there is no actual decree qua those rights, it may be that the transferee does not fall within the rigor of Order XXI, Rule 16, for the simple reason that it is not a transfer of the decree as such; but he would be entitled to the benefits of the decree, as a result of the antecedent transfer of rights which later on converge into a decree. I am satisfied that, in the present case, the conveyance operates as an assignment in writing and that, therefore, the only mode by which the Respondent could save proceeded to levy execution was under Order XXI, Rule 16. That not having been done, the order for delivery in her favor has to be set aside. The result may be unfortunate, but it cannot be helped. Though the Appellant has managed to continue in possession for a long number of years despite a decree against him and though his resistance to execution may not be justified, he is yet entitled to invoke the statutory provisions in his favor without any relaxation in favor of the decree-holder.

In the result, the civil miscellaneous second appeal is allowed, and the orders of the Courts below are hereby set aside. The ex parte delivery order in favor of the Respondent is also cancelled. Miscellaneous Petition No. 1095 of 19G0, filed by her should be restored to file and be treated and dealt with as a substantive application under Order XXI, Rule 16 of the Code of Civil Procedure. The execution petition in which Miscellaneous Petition No. 1095 of 1960, has been preferred will also be revived, so that if ultimately the Respondent were to satisfy the Court that she is entitled to come on record as an assignee under Order XXI, Rule 16, there may not be any further difficulty in the way of her getting delivery of the property. The parties will bear their respective costs in all the Courts. No leave.