M.A.A. Raoof vs K.G. Lakshmipathi

Venkataraman, J.—This appeal raises an interesting question of the validity of attachment of certain shares belonging to the judgment-

debtor. The decree-holder Lakshmipathi obtained a decree in O. S. No. 2344 of 1960, on the file of the City Civil Court, Madras, by consent. He

filed E. P. 1458 of 1966 to recover a sum of Rs. 8,000/- odd by attachment and sale of the shares which the judgment-debtor Raoof held in a

company called Intrac Pharmaceutical (Pte.) Ltd., Industrial Estate, Ambattur. An interim prohibitory order was issued both to the judgment-

debtor and to the company. The company did not appear and object. The judgment-debtor appeared and took time to file a counter. He did not

file the counter in time and so the attachment was made absolute. Against that order he has filed the present appeal.

The point taken on behalf of the appellant by his learned Counsel Sri K. N. Subramaniam is that, though the judgment-debtor Raoof lives within

the jurisdiction of the City Civil Court, Madras and the shares also are with him, the City Civil Court had no jurisdiction to issue the prohibitory

order, because the place of business of the company is Ambattur, outside the jurisdiction of the City Civil Court, and the dividend due on the

shares is also payable only at Ambattur. In my opinion this contention is not sound. Section 51(b) C. P. Code states that subject to such conditions

and limitations as may be prescribed, the Court may, on the application of the decree-holder, order execution of the decree by attachment and sale

or by sale without attachment of any property. Order 21, Rule 46 prescribes the mode of attachment. It is necessary to quote it in full:--

46(1). In the case of -- (a) a debt not secured by a negotiable instrument, (b) a share in the capital of a corporation, (c) other moveable property

not in the possession of the judgment-debtor, except property deposited in, or in the custody of, any Court, -- the attachment shall be made by a

written order prohibiting -- (i) in the case of the debt, the creditor from recovering the debt and the debtor from making payment thereof until the

further order of the Court; (ii) in the case of the share, the person in whose name the share may be standing from transferring the same or receiving

any dividend thereon; (iii) in the case of the other moveable property except as aforesaid, the person in possession of the same from giving it over

to the judgment-debtor. (2) A copy of such order shall be affixed on some conspicuous part of the Court-house and another copy shall be sent in

the case of the debt, to the debtor, in the case of the share, to the proper officer of the Corporation, and, in the case of the other moveable

property (except as aforesaid) to the person in possession of the same. (3) A debtor prohibited under Clause (i) of Sub-rule (1) may pay the

amount of his debt into Court and such payment shall discharge him as effectually as payment to the party entitled to receive the same"".

It is Section 51, C. P. C., which the jurisdiction to the Court to attach and sell the shares and therefore the question whether the City Civil Court

had jurisdiction to attach the shares must be determined primarily with reference to this section. Order 21, Rule 46, C. P. Code, only prescribes

the mode of attachment, though the provisions thereof may have to be borne in mind in determining the question of iurisdiction. The principle

obviously underlying Section 51(b), C. P. C., is that, if the property sought to be attached is within the limits of the jurisdiction of the Court, the

Court can attach and sell the property. That is reinforced by the provisions of Sections 39 and 46, C. P. C., which provide for the transfer of the

decree to a Court within whose limits the property sought to be attached and sold is situate, Applying this criterion, since the properties sought to

be attached and sold are the shares of the judgment-debtor and they are with him in Madras within the limits of the jurisdiction of the City Civil

Court, it would follow without furthermore that that Court had the jurisdiction to attach and sell. It is only necessary to add that there is nothing in

Order 21, Rule 46, C. P. C., to contradict this result and I might go further and say that under Order 21, Rule 46, C. P. Code, also, the criterion

would seem to be only the residence of the judgment-debtor against whom prohibitory order is to be made for transferring the shares or receiving

any dividend therefrom. That is all Sub-rule (1) of Rule 46 indicates. It may be noted that Sub-rule (2) of Rule 46 only requires that a copy of the

prohibitory order shall be affixed on some conspicuous part of the Court house and another copy to be sent to the proper officer of the

Corporation.

In other words, the, provision, which would seem to determine the question of jurisdiction, with which we are concerned, is only Sub-rule (1) it

would be sufficient if the judgment-debtor, in whose name the shares stand and to whom the prohibitory order is issued, resides within the

jurisdiction of the executing Court. Affixture of a copy of the prohibitory order on some conspicuous part of the Court house and service of the

copy of the order on the proper officer of the Corporation under Sub-rule (2) are only additional formalities to be observed by the executing

Court, but they are not determinative of the question as to which Court has jurisdiction to issue the prohibitory order,

Sri K. N, Subramaniam, the learned Counsel for the appellant, however, relies on the decision of Mockett, J., in Balusami v. Official Assignee,

Madras, 1939 MWN 573 AIR 1939 Mad 811. There some persons had been adjudged insolvents in this Court and against whom a decree had

been obtained by one Obla K. Ramaswamiar. That decree itself was attached by one C. S. Varadachariar in execution of a decree in suit O. S.

No. 97 of 1930 in the Madurai Sub-Court. The learned Subordinate Judge issued the prohibitory order to the Official Assignee of Madras

prohibiting him from paying over the dividend due in respect of the decretal debt to anybody other than the attaching decree-holder C. S.

Varadachariar. Objection was taken to this course by the Official Assignee on the ground that the Sub-Judge at Madurai had no jurisdiction to

issue such a prohibitory order against the Official Assignee not resident within his jurisdiction and in respect of the dividends payable at Madras,

which again was outside the jurisdiction of the learned Subordinate Judge. Mockett, J., upheld this objection and quoted Order 21, Rule 46, C. P.

C., laying down that the attachment should be made by a written order prohibiting in the case of the debt the creditor from recovering the debt and

the debtor from making payment thereof until further orders of the Court. It meant, according to the learned Judge, that the Court in order to have

jurisdiction must also have jurisdiction against the debtor so as to make the order prohibiting him from making the payment. In other words,

according to the learned Judge, it was necessary that the debtor should be within the jurisdiction of the Court. In that case the debtor was the

insolvent or rather the Official Assignee representing him, and he was not within the jurisdiction of the Sub-Court. No doubt the creditor (the

original decree-holder Obla K. Ramaswamier) was within the jurisdiction of the Subordinate Judge but that only satisfied the first limb of the

provision in question. Such was the reasoning of the learned Judge.

It will be seen that the provision laid down in Order 21, Rule 46, C. P. C., in the case of attachment of a share is materially different from the

provision relating to a debt. In the case of a debt, the prohibitory order should be issued both to the creditor (prohibiting him from recovering the

debt) and to the debtor (prohibiting him from making the payment) and therefore there may be reason for holding that, unless both the creditor and

the debtor reside within the jurisdiction of the executing Court, the executing Court would have no jurisdiction to issue the prohibitory order. But in

the case of attachment of a share, Sub-rule (1) requires the prohibitory order to be issued only to the person in whose name the share stands and

therefore it is enough if that person (the judgment-debtor) resides within the jurisdiction of the executing Court. It may be noted that whereas Sub-

rule (1) makes a distinction between the three classes, namely, a debt, a share and other moveable property and prescribes a separate procedure

for each, Sub-rule (2) clubs them all together in respect of the affixture or despatch of the copy of the prohibitory order. That again would seem to

indicate that Sub-rule (2) is only an ancillary provision and that the main provision is Sub-rule (1) on the question of jurisdiction.

Sri K. K. Subramaniam has not been able to cite any other decision to controvert the view which I have taken in respect of shares. Sri V.

Shvamalam, learned Counsel for the decree-holder, has not been able to cite any direct case on the point, but the case which he has cited supports

the view which I have taken. The case is the British Transport Co. Ltd. Vs. Suraj Bhan and Others, . There one Suraj Bhan had obtained a money

decree against one Sardar Singh and filed the execution petition in the Court at Agra by attaching inter alia an amount alleged to be payable to the

judgment-debtor Sardar Singh by the appellant British Transport Co. Ltd., Delhi. The British Transport Co. Ltd., Delhi had taken on lease some

buses belonging to Sardar Singh and was liable to pay for Sardar Singh''s share Rs. 4/- per day as rent. It was the total of such amounts that was

sought to be attached. It was held that the rent was payable at Agra and therefore the debt was due to the judgment-debtor at Agra. The British

Transport Co., Ltd., Delhi, however, took objection to the jurisdiction of the executing Court on the ground that they were residents at Delhi,

outside the limits of the Agra Court. Their objection was repelled by the Court and it was held that u/s 51(b), C. P. C., since what was sought to

be attached was a debt its situs alone determined the jurisdiction, and since the debt was payable at Agra it was the Agra Court, which had

jurisdiction. It was pointed out that it was not the situs of the debtor (The British Transport Co., Ltd., Delhi) that determined the question of

jurisdiction. It was observed further that the mere circumstance that under Order 21, Rule 46, C. P. C. notice had to go to the debtor (garnishee)

at Delhi outside the jurisdiction of the Court was immaterial. By way of analogy it was pointed out that even in the case of a regular suit, the Court

may be properly seized of the suit on account of the accrual of the cause of action within the Court''s limits and the defendants may be residing

outside the jurisdiction, but that would not oust the jurisdiction.

The learned Judges distinguished the Bench decision of the Calcutta High Court in Begg Dunlop and Co. v. Jagannath Marwari, I.L.R.(1912)Cal

104, as a case where the executing Court was held not to have jurisdiction because the debt due from the garnishee was itself not payable within

the limits of the jurisdiction of the executing Court besides the circumstances of the garnishee being outside the jurisdiction of the Court. Some

further Inconveniences by adopting the contrary view were also pointed out. It may be noted that the case of 1939 MWN 573= AIR 1939 Mad

811 also was similar to I.L.R.(1912) Cal 104. In that case the garnishee (Official Assignee) resided outside the jurisdiction of the Sub-Court and

the debt also was payable outside the jurisdiction of the Sub-Court. However, if an occasion should arise, we may have to consider further how

far the reasoning in British Transport Co. Ltd. Vs. Suraj Bhan and Others, is in conflict with the decision of Mockett, J., and which view is correct,

But the point on which the decision of the Allahabad High Court would seem to help us is in the proposition that Section 51(b) C. P. C, is primarily

determinative of the jurisdiction and whatever may be said about the case of a debt. the position is clear so far as a share in a company is

concerned, both u/s 51(b) and under Order 21 Rule 46 C. P. C.

Sri V. Shaymalam cited also the decision of the Andhra Pradesh High Court in Chimandas Methuram and Others Vs. Manager Mahadevappa

Firm and Others, . But as I understand that case it is an authority only on a question arising under Order 38. Rule 5, C. P. C., namely that an

attachment before judgment could be issued even in respect of property lying outside the territorial limits of the jurisdiction of the Court in a suitable

case. That is because of the special wording of Order 38, Rule 5. The decision is not an authority in respect of an executing Court in view of the

remarks in the concluding portion of the judgment stating that Section 46 C. P. C., governs only the attachment in execution of a decree and would

not be pertinent in respect of attachment before judgment. We are not dealing with an execution of a decree and Section 46 would seem to apply

and indicate that the criterion is the location of the property. But I have pointed out that even according to that criterion the City Civil Court had

jurisdiction, because the shares are in Madras.

In Dharanidhar Roy Vs. P.D. Sethi and Others, , in execution of a money decree obtained in the Court of the Sub-Judge at Asansol, an

attachment was sought to be effected of a mortgage debt due to the judgment-debtor. The judgment-debtor resided in Asansol limits and the

mortgage deed was also with him. But his mortgagor was outside the limits of Asansol and the mortgaged property also was outside those limits. It

was held that these circumstances did not affect the jurisdiction of the executing Court which had jurisdiction, because the judgment-debtor was

within the limits of Asansol and the mortgage documents were within those limits. It was pointed out that the mortgage debt was a speciality debt

and the rule applicable to a mortgage debt was that its situs was the location of the mortgage deed. It mav be said that there is some analogy

between a mortgage deed and shares in a Corporation and that the situs of the shares is the place where the shares are held by the judgment-

debtor.

The result of the discussion so far is that the executing court had jurisdiction to issue the attachment warrant.

Learned, counsel, Sri K. N. Subramaniam, finally submits that only 170 out of 220 shares attached belonged to the judgment-debtor and that

the remaining 50 shares belonged to another. If the 50 shares stand in the name of somebody else, the executing Court had no jurisdiction to attach

them as the property of the judgment-debtor. This may be brought to the notice of the executing Court in due course. Subject to this the appeal is

dismissed.