Kuppalu Venkataswami and Another vs Kolla Chelammayya Naidu and Others

The appeal in first instance came up for hearing before the Hon''ble Mr. Justice Syed Qamar Hasan on 13-2-1961 and His Lordship passed the following Order:

SYED QAMAR HASAN, J.:

The above appeals are directed against the common appellate order dated 23-4-1956 of the Subordinate Judge, Nellore in A. S. Nos. 37 and 38 of 1956 confirming the common order passed by the District Munsif, Nellore respectively in E. P. 269/50 in O. S. 380/39 and E. P. 541/52 in O. S. 679/40. This judgment will similarly govern both the appeals referred to above.

The question involved in the first mentioned appeal is whether the 2nd appellant, Nagineni Ayyavaru Naidu, was entitled to execute the final decree for sale in O. S. No. 380 of 1939 in preference to the attaching decree-holder, respondent No. 2 herein. In the second appeal, the point to be considered is whether E. P. 541/52 filed by the respondent in O. S. No. 679 of 1940 was in time.

Before adverting to the facts of the case and the arguments addressed to me on behalf of the appellants, I may mention that none of the respondents have put in appearance in the appeals to which they are a party and I must thank Mr. T. Veerabhadrayya and Mr. Poornaiah for having acted in this appeal as amicus curiae on behalf of the respondents. The facts briefly stated are these: Koppolu Venkataswami; the appellant instituted O. S. No. 380 of 1939 against the mortgagors for recovery of mortgage debt and ultimately a preliminary decree was passed in his favour On 20-1-44. In the meantime Kukkapalli Pollayya, the respondent filed O. S. No. 679 of 1940 against Koppolu Venkataswamy, the decree-holder in O. S. No. 380 of 1939 and obtained a money decree. Thus there came into being two decree-holders, one of whom was a judgment-debtor to the other. In execution of his money decree, the decree-holder in O. S. No. 679 of 1940 filed E. P. 81 of 1945 to attach the preliminary decree. The attachment was made absolute on 27-9-1945 without any protest on the part of Koppolu Venkataswami. By I. A. 132 of 1947 dated 17-1-47 he sought an order for making the preliminary decree final and that prayer was granted and the decree was made final on 25-3-1947. The decree-holder in O. S. 380/39 transferred the final decree by a registered document dated 21-3-1950 in favour of Nagineni Ayyavaru Naidu, who is 2nd appellant in C. M. S. A. 23 of 1959 and as such he filed E. P. 269 of 1950 for recognition of transfer of the decree and execution thereof by sale of the hypotheca. This petition hanged fire till 1952 when the attaching creditor filed E. P. No. 542 of 1952 with the same prayer.

In his own decree in O. S. No. 679 of 1940 which has been obtained against the original decree-holder in O. S. No. 380 of 1939, Kukkapalli Polayya filed E. P. No. 541 of 1952 with a prayer for attachment of moveables belonging to the judgment-debtor. His contention was that he had filed a petition on 2-9-1941 and recovered rateables in O. S. No. 422 of 1936 and his execution petition was dismissed. Then on 20-10-1941 he filed a petition and attached the decree in O. S. No. 380 of 1939 and it was dismissed on 21-9-1942. Again he filed a petition on 14-1-1945 which was dismissed on 27-9-1945. Ever since then though no fresh E. P. was filed, the contention was that as he had been executing the decree in O. S. No. 380 of 1939 for the purpose of collecting the decretal amount, E. P. No. 541 of 1952 was not barred by limitation. The judgment-debtor in his counter pleaded the bar of limitation.

In the Courts below the argument on behalf of the decree-holders in O. S. No. 679 of 1940 was that I. A. No. 132 of 1947 in O. S. No. 380 of 1939 was a step-in-aid of execution which saved the limitation. The learned District Munsif acceded to this argument on the authority of Lachman v. Thondhi Ram, ILR 7 All 382; on appeal the learned Subordinate Judge agreed with the view of the District Munsif but on the authority of Gulappa v. Erava, AIR 1922 Bom 118.

Before me it was contended on behalf of the appellant that in order to save limitation under Art. 182(5) of the Limitation Act, step-in-aid must be in the same execution proceeding and not in any other proceeding. In that connection he relied on T.V.K. Chokkalinga Tevar Vs. Kailasa Tevar and Others,

Let me straightway say that the case AIR 1922 Bom 118 has no direct bearing on the point under consideration. In that case an application by a mortgagee decree-holder who had obtained a decree under the provisions of S. 88 of the Transfer of Property Act for execution was dismissed after coming into force of the CPC of 1908 on the ground that it had become necessary for the decree-holder to obtain a final decree. The decree-holder acting upon this wrong order, made an application to make the mortgage-decree final. It was on these facts that the learned Judges held that the application for a final decree was a step-in-aid of execution in spite of the fact that it was made in pursuance of a wrong order. It would thus appear that this authority can be of no assistance in deciding a case where the question is whether an application for final decree presented in another proceeding would be a step in aid of execution.

Of course, the decision in ILR 7 All 382 is directly in point. The facts were that the decree therein was made on 20-2-1878 by the Munsif of Muthra. On 21-11-1878 an application was put in for transfer of the decree to the Munsif of Jalesar. On 21-1-1879 an application for execution of the decree was made to the Munsif of Jalesar who thereupon issued an order for the attachment of some immovable property belonging to the judgment-debtor and also the attachment of three decrees standing in his Court in favour of the judgment-debtor. On 18-3-1882 the decree-holder applied to the Munsif of Jalesar to execute one of these decrees in his behalf and he further asked that whatever might be realised in such execution should go to the account of the decree which had been transferred and which was being executed. It was held that the application of 18-3-1882 was perfectly legal, and such a proceeding as could keep alive the decree of 20-2-1878, and that a subsequent application dated 12-4-1883 was therefore not barred by limitation because an application to execute an attached decree is a step-in-aid of execution inasmuch as its object is to obtain money in order to pay off the judgment-debtor.

The same question came up for consideration before the Calcutta High Court in the case of Gya Loan Office Co. Ltd. v. Dhirit Kundal Lal 8 Ind Cas 675. In this case a decree-holder obtained his decree in the court of the Munsif and on his application, a decree which has been passed in favour of the judgment-debtor in the Court of the Subordinate Judge was attached in execution of his decree. The decree-holder then put in an application in the Court of the Subordinate Judge under S. 273 (O. 21 R. 53) praying that that Court would execute its own decree and apply the sums realised at first in discharge of his decree obtained in the Munsif''s Court. It was held that the application in the Court of the Subordinate Judge must be taken to be a step taken in aid of execution of the decree obtained in the Munsif''s Court and that an application for execution of the decree made within three years from that application was not barred by time. In coming to that conclusion the learned Judges relied on ILR 7 All 382. Again the Allahabad High Court in Maharaja of Jaipur v. Lalji Sahai, 12 All LJ 1006: (AIR 1914 All 296) and the Lahore High Court in AIR 1931 705 (Lahore) in holding that an application by an attaching creditor in the circumstances referred to above would be a step-in-aid of execution. These authorities justify the view taken by the Courts below that the step taken by the attaching creditor was a step-in-aid of execution to save E. P. No. 541 of 1952 from the bar of limitation though such step was taken in another execution proceeding.

But the objection of the learned advocate for the appellants is that in order to constitute a step-in-aid of execution, the application must have been filed in the same execution proceeding in which the decree is sought to be executed. To support his contention he relied on the following passage in T.V.K. Chokkalinga Tevar Vs. Kailasa Tevar and Others, :

Article 182(5) of the Limitation Act definitely lays down that the application for execution or to take some step-in-aid of execution should be made in accordance with law to the proper Court. It would not be a proper Court if the intended step in aid of execution application is made to some other Court. This is what has been laid down by Venkataramanarao and Abdur Rahman JJ in Surisetti Rama Subbayya Vs. Palur Thimmiah and Others, the learned Judges observed as follows:

Applications to constitute a step in aid of execution have to be filed in the execution proceedings themselves and not in any other suit or proceeding, however intimately connected the latter might be with the proceeding of the former". That being the case, we cannot say that a request to the Court to issue cheque made in some other suit can be called a step in aid of execution. In the case of Surisetti Rama Subbayya Vs. Palur Thimmiah and Others, he bar of limitation was sought to be saved under Art. 182(5) that the suit to set aside the order of the executing Court allowing the claim was a continuation of the execution proceeding and consequently the plaint therein operated as a step-in-aid. The plea was negatived and one of the reasons given therefor was what has been extracted in T.V.K. Chokkalinga Tevar Vs. Kailasa Tevar and Others, . The correctness of the said observation appears to have been shaken if not overruled by the Full Bench case reported in Ayi Goundan and Another Vs. Solai Goundan and Another, Any how the question under discussion will have to be decided in the light of the provisions contained in Order 21 Rule 53 C. P. Code under which the preliminary decree in O. S. No. 380 of 1939 was attached to satisfy the decretal debt in O. S. No. 679 of 1940.

It would be sufficient to quote sub-rules (2) and (3) of Rule 53 of Order 21 and they are as follows:

Where a Court makes an order under cl. (a) of sub-rule (1), or receives an application under sub-head (ii) of cl. (b) of the said sub-rule, it shall on the application of the creditor who has attached the decree or his judgment-debtor proceed to execute the attached decree and apply the net proceeds in satisfaction of the decree sought to be executed.

The holder of a decree sought to be executed by the attachment of another decree of the nature specified in sub-rule (1) shall be deemed to be the representative of the holder of the attached decree and to be entitled to execute such attached decree in any manner lawful for the holder thereof.

These provisions came up for consideration before the Judicial Committee in AIR 1940 167 (Privy Council) Their Lordships held that it was clear from cl. (3) of R. 53 that the representative character of the attaching decree-holder is limited to matters in execution of the decree. This is also the inference suggested by the context of cl. (3). Immediately following the words ''representative of the holder of the attached decree'' occurring in cl. (3) are the words and to be entitled to execute such attached decree in any manner lawful for the holder thereof. The words "deemed to be" which occur in the clause suggest a fiction of a two-fold character with regard to the attaching decree-holder (1) the law regards him as the representative of the holder of the attached decree and (2) as a consequence of this fiction the law clothes him with the same right as the decree-holder has to execute the decree against the original judgment-debtor. Two things are clear from this context, that he is a representative only by a legal fiction and that too for the purpose of lawfully executing the decree, i.e., enforcing it by process of the Court and satisfying his own decree out of the proceeds of such execution. As the analogy only arises by legal fiction it must be limited to the purpose indicated by the context and cannot be given a larger effect.

In the background of this pronouncement which has been adopted in Balakrishnamma Chowdari v. Nandesam Chowdari, 1956 Andh LT 925 the first point to be considered is what position an application for making an attached preliminary decree for the sale of hypotheca final occupies in the Court which passed the attached decree. Before advent of O. 34 in the present CPC of 1908, the procedure governing suits relating to mortgages was governed by Ss. 85 to 90, 92 to 94, 96, 97 and 99 of the Transfer of Property Act. An application for passing a decree absolute, under the said Act was regarded as one for execution of the decree under S. 86 or S. 88 and was held governed for purposes of limitation, by Art. 179 of Act of 1877 corresponding to the present Art. 182. That this was so would be apparent from Abdul Majid v. Jawahir Lal, ILR 36 All 350: (AIR 1914 PC 66). Sachindra Nath Roy v. Maharaj Bahadur Singh 48 Ind App 335: (AIR 1922 PC 187) and Mallikarjunadu Setti v. Lingamurti Pantulu, ILR 25 Mad 244 (FB). It was in this state of law that in ILR 7. All 382 it was held that being execution proceeding an application for making the decree nisi absolute was a step-in-aid of execution. But after the coming into force of the extant CPC the position has changed.

Under this Code as has been held by the Privy Council in AIR 1937 163 (Privy Council) ) AIR 1940 11 (Privy Council) ) and AIR 1945 152 (Privy Council) that under the Code of 1908 the proceedings under a preliminary decree to obtain a final decree are proceedings in the suit and not proceedings in execution in the technical sense of the word as used in the Code. In this interpretation of law it is now obligatory on the part of the holder of a preliminary decree to obtain a final decree before he can proceed to execute. Such an application would be an application in the suit itself and not for execution of the preliminary decree. For the application of the provisions of Art. 182 Limitation Act, the condition precedent is the existence of an executable decree. In that view of the matter, E. A. No. 132 could not be regarded as an application for execution or as a step-in-aid in O. S. No. 380 of 1939 even if it were presented by the holder of the decree therein or by the attaching creditor as representative of the original decree-holder. Can the same become an application in execution to operate as step-in-aid for purposes of the decree in favour of the attaching creditor? This is a crucial question to be decided in this appeal, which in view of its importance, I refer to Bench with special reference to Surisetti Rama Subbayya Vs. Palur Thimmiah and Others, and T.V.K. Chokkalinga Tevar Vs. Kailasa Tevar and Others,

The second point involved in this appeal does not present any difficulty. The attachment of the decree is not tantamount to an order staying execution. Both the decree-holders will always be a livery (sic) to execute the attached decree.

Pursuant to the order of above reference the appeals came up for hearing before the Bench consisting of P. Chandra Reddy, C J. and Narasimham, J. and the following Judgement was delivered by-

NARASIMHAM, J. :

After stating the facts his Lordship proceeded:)

In these appeals, it would be convenient to refer to Kukkapalli Polayya as the attaching decree-holder, Koppolu Venkataswami as the original decree-holder, Naginei Ayyavaru Naidu as the transferee decree-holder and Kolla Chelamayya as the judgment-debtor.

The point that arises for consideration is whether I. A. No. 132 of 1947 in O. S. No. 380 of 1939 would be a step in aid of execution of the decree in O. S. No. 679 of 1940.

As has been indicated the Courts below have taken the view that it was a step in aid of execution.

Sri Krishnamurthy argues that it would not be a step in aid of execution as an application made for a final decree is a proceeding in the suit and cannot be construed as an application in accordance with law for execution of the decree contemplated under Art. 182 (5) of the Limitation Act. He seeks to rely on certain observations of this Court in 1956 Andh LT 925. We will presently refer to what was decided and observed in that case.

There has been a certain amount of verbal exegesis upon the true meaning of the phrase "step in aid of execution''''. The case-law on the subject is various. But, giving the phrase its grammatical meaning, it would indicate that the test is whether the step is calculated to promote, advance or accelerate the execution of the decree. The question whether an application is or is not a step in aid of execution must ultimately depend, upon the facts and circumstances of a particular case.

If the facts show that the proceeding has the effect of facilitating or advancing the execution to any extent or removing some obstacle from the way of execution, it may well be regarded as a step in aid of execution.

In ILR 7 All 382 the learned Chief Justice has tersely dealt with the matter in these words:

It appears to me that an application for execution of a money-decree means an application to the Court to get the money by sale of property belonging to the judgment-debtor, so that the Court may be able to pay the creditor the amount due to him. In the present case such an application was made by the judgment-creditor and the Court then took the first step in aid of the execution of the decree by attaching the debtor''s property, and the property so attached included a judgment-debt. That judgment-debt had to be sold or realised in some way, and it could only be done by applying to the Court in which the judgment was to execute it by selling the debtor''s property. It would then be necessary to make an application to the Court executing the original decree to bring the amount so received into account, and that is what was done in the present case. If I am right in the view which I take of execution of the decree, this must be "a step in aid of execution" within the meaning of Art. 179 of the Limitation Act, because the object of it was to obtain money in order to pay off the judgment-debt; and it was in execution for that reason.

Article 179 referred to of the old Limitation Act 1877 has been re-enacted with modifications as Art. 182 of the Act IX of 1908.

The aforesaid view is in accord with the observations expressed by the Judicial Committee in AIR 1945 176 (Privy Council) . In that case a decree-holder applied for execution of the decree and got certain properties attached. The judgment-debtor got the attachment raised, whereupon the decree-holder appealed against the order raising attachment. The decree-holder''s appeal was held by the Privy Council to be an application to take a step-in-aid of execution. It was accordingly held that the order of the appellate Court dismissing the appeal would constitute a fresh starting point of limitation. It was also held by the Privy Council that the appellate Court''s order was also the final order on the decree-holder''s application to execute the decree.

In the instant case a perusal of the order passed by the Court in I. A. No. 132 of 1947 after notice to the Original decree-holder and the judgment-debtors clearly reflects the nature of the application made. The order provides thus:

It is hereby ordered and decreed that the mortgaged property in the aforesaid preliminary decree mentioned or a sufficient part thereof be sold, that for the purpose of such sale the plaintiff shall produce before the Court or such officer as it appoints all documents in his possession or power relating to the mortgaged property.

And it is hereby further ordered and decreed that the money realised by such sale shall be paid into Court and shall be duly applied (after deduction therefrom of the expenses of the sale) in payment of the amount payable to the plaintiff under the aforesaid preliminary decree and under any further orders that may have been passed in the suit and in payment of any amount which the Court may have adjudged due to the plaintiff for such costs of the suit including the cost of this application and such costs, charges and expenses as may be payable under Rule 10 together with such subsequent interest as may be payable under Rule 11 of Order 34 of the First schedule to the Code of Civil Procedure, 1908 and that the balance if any shall be paid to the defendants or other persons entitled to receive the same.''''

This order clearly directs sale of the hypotheca and realization of what is due under the mortgage decree which was attached by the attaching decree-holder. From the apparent tenor of the order, it is difficult to suppose that the attaching decree-holder had applied for and obtained orders otherwise than for execution of the decree that he had attached. It may be remembered that the attachment of the hypotheca itself was effected in execution under the, provisions of Order 21 Rule 53 C. P. C and incompliance with Rule 177 of the Civil Rules of Practice.

A division Bench of the Madras High Court in (Parambath Parkum Mattole) Kunhammad Hajee and Others Vs. Chathoth Parkum Kozhuvammal and Others, has expressly ruled that the applications for final decree which were dismissed, were steps in aid of execution.

In that case, the mortgagee decree-holder was the appellant. There was a compromise decree which provided for the sale of the mortgaged properties if the decree amount was not paid within a certain time. It was also provided by the compromise decree that if the proceeds of the sale were insufficient, the judgment-debtor was to be personally liable to pay the balance to the decree-holder. After the compromise decree, thinking that a final decree was necessary, the mortgagee decree-holder applied on three occasions for obtaining a final decree. On each of those occasions, his application was dismissed. Then he made an application under Order 41 Rule 11 C. P. C. for execution of the original decree. The question of limitation was raised and the point that arose for consideration was whether the three applications for final decree could be steps-in-aid of execution.

Ruling that the applications for final decree were steps in aid of execution, the learned Judges reasoned thus: (at page 39):

The decree-holder by applying for a final decree was endeavouring to get an order which he thought at the time was necessary before executing his decree. Afterwards, due to better advice he gave up that attempt and applied for the execution of the decree without getting a final decree as that was unnecessary. This was what had happened in this case. In these circumstances we fail to see why the Court should not consider that the prior three applications were steps-in-aid of execution; for, as we have already said, the plaintiff was asking the Court to make an order which was thought necessary before taking out actual execution of the decree. As the ultimate object of these petitions was to hasten the actual realization of the decree-amount we are satisfied that they were "steps in aid of execution".

We are in respectful agreement with the rule pronounced and the reasons for the rule.

Sri Krishnamurthy has relied on certain observations of this Court in 1956 ALT 925 (936). In that case, it was held that when a judgment-debtor of an attaching decree-holder makes a payment to the attaching decree-holder whose decree is no longer in force, he must, be deemed to have done it at his own risk and therefore full satisfaction of the decree against him could not be granted. This decision renders little assistance to Sri Krishnamurthy.

26 T.V.K. Chokkalinga Tevar Vs. Kailasa Tevar and Others, cited by Sri Krishnamurthy refers to an application for execution filed more than three years after the final orders on an earlier application. The decree-holder contended that permission for private sale of some of the judgment-debtor''s land was given in another suit and out of the sale proceeds a certain sum was to be paid towards his decree, and that upon an application for the issue of charge made in that other suit, orders were passed thereon in his favour. It was urged for him that the application for cheque should be construed as a step-in-aid of execution and the order of the Court directing the issue of a cheque should be construed as a payment made by a duly authorised agent of the judgment-debtors so as to make S. 20, Limitation Act applicable. It was held that the application to issue a cheque made in some other suit could not be called a step-in-aid of execution of the decree sought to be executed

It was also held that the fact that the judge ordered issue of a cheque would not constitute him as the duly authorised agent of the debtor so as to bring the case within the ambit of S. 20 of the Limitation Act.

The said case seems to be manifestly besides the point under discussion.

We have also to notice that the applications made (I. A. No. 132 of 1947) is quite in conformity with the provisions of Order 21, Rule 11 C. P. C.

We have therefore no hesitation in holding that the Courts below have taken a right view of the matter and held that I. A. No. 132 of 1947 would constitute a step-in-aid of execution. E. P. No. 541 of 1952 was therefore rightly held to be in time.

C. M. S. A. No. 24 of 1957, therefore fails and is dismissed.

The point arising in C. M. S. A. No. 23 of 1957 is whether the attaching decree-holder could bring the property to sale in execution in preference to the transferee decree-holder.

It is seen that the transfer was subsequent to the order for the sale of the hypotheca obtained by the attaching decree-holder in I. A. No. 132 of 1947. The transferee decree-holder cannot obviously claim better rights than his transferor, the original decree-holder, as on the date of the transfer.

We have to notice that the order for the sale of hypotheca was made with notice to the original decree-holder. The original decree-holder had no objection to the same. There is an express noting of the Court to that effect. The executing Court was, therefore, justified in observing as it did that the original decree-holder had consented to the passing of the final decree for the sale of hypotheca by the attaching decree holder.

Order 21, Rule 53 C.P.C. provides inter alia for the rights of the attaching decree-holder, vis-a-vis the rights of the original decree-holder. We may read the provisions here so far as they are relevant:

Rule 53(1) Where the property to be attached is a decree, either for the payment of money or for sale in enforcement of a mortgage or charge, the attachment shall be made:

a) ........

b) if the decree sought to be attached was passed by another Court then by the issue to such, other Court of a notice by the Court which passed the decree sought to be executed, requesting such other Court to stay the execution of its decree unless and until-

i) the Court which passed the decree sought to be executed cancels the notice, or

ii) the holder of the decree sought to be executed or his judgment-debtor if he has obtained the consent in writing of the decree-holder or the permission of the attaching Court, applies to the Court receiving such notice to execute the attached decree.

The provisions make it clear that the transferee decree-holder cannot execute the decree unless in conformity with the provisions of the section that is to say, that he should obtain the permission of the attaching Court or the consent in writing of the decree-holder. Both these conditions have not been complied with by the transferee decree-holder who could claim no better rights than the original decree-holder.

In the circumstances of this case, the executing Court was quite justified in permitting the execution to proceed in E. P. No. 541 of 1952 in O. S. No. 380 of 1939.

It is seen that the executing Court has also safeguarded the interests of the transferee decree-holder by directing that the sale proceeds should be deposited into Court and further orders obtained for its disbursement and that the transferee decree-holder would be entitled to such residue as may be left after the attaching decree-holder''s, claim is satisfied. The order of the executing Court therefore fully meets the contingencies of the case. The learned Subordinate Judge was right in affirming the said order.

In the result, C. M. S. A. No. 23 of 1957 fails and is dismissed.

The respondents are ex parte. But Sri Poornayya and Sri Veerabhadrayya have assisted this Court as amicus curiae. As substantial questions were discussed in this case and this Court has been assisted by the said amicus curiae, we feel justified in directing the respondents to pay a sum of Rs. 100/- to be shared by the Amicus curiae equally.