Sankaralinga Mudaliar (dead) and Others vs The Official Receiver of Tinnevelly

Madhavan Nair, J.—This is an appeal against the order of the District Judge of Tinnevelly in C.M.P. No. 566 of 1918 on his file in which

the Official Receiver of Tinnevelly was the petitioner. The appellants, who were respondents 1 to 3 in the Lower Court, had brought a suit, O.S.

No. 106 of 1913, in the District Munsif''s Court of Ambasamudram against seven defendants, all members of a joint Hindu family. Pending the suit

they applied for and got an attachment before judgment of the joint family properties. The suit was compromised and a razi decree, Ex. I, was

passed on the 23rd of September, 1914, which provided that the defendants therein should pay into Court Rs. 2,100 with interest within the 15th

of April, 1915, and that, in default, the attached properties might be sold and the amount realised. It also provided that the attachment before

judgment which had already been made would continue until the amount fixed by the decree was paid. Defendants 1 and 7 in that suit died

subsequent to the decree. After their deaths an execution application was filed in the District Munsif''s Court by the decree-holders, the present

appellants, and an order for sale of the attached properties was made. Defendants 2 to 6 in the suit were also ordered as the legal representatives

of the deceased defendants 1 and 7. A petition for adjudicating defendants 2 to 6 as insolvents was presented to the District Court of Tinnevelly on

the 31st of January, 1917, and they were adjudged insolvents by order of that Court dated the 23rd of March, 1917. The attached properties

wore sold in Court auction on the 28th of June, 1918, in pursuance of the orders of the District Munsif and were purchased by the 4th respondent

in the Lower Court. The Official Receiver, who was not a party to the sale proceedings, filed the petition out of which this appeal arises, saying

that, as the insolvent''s assets had vested in him on the order of adjudication, the subsequent sale is not valid and binding on him and that the sale

should, therefore, be set aside. There was also an alternative prayer to the effect that, if for any reason the sale could not be set aside, the decree-

holders should be compelled to refund to him the amount they realised in execution.

The District Judge on the first occasion held that he, sitting as a Judge exercising insolvency jurisdiction, had no power to examine the validity or

otherwise of an execution sale held by another Court and, therefore, dismissed the petition. On appeal, however, by the Official Receiver to this

Court (C.M. A. No. 128 of 1919), this decision was set aside and the petition was remanded to the Lower Court for fresh disposal. The District

Judge has now held that the sale itself could not be set aside as the auction purchaser, 4th respondent in the Lower Court, purchased the property

bona fide and was, therefore, entitled to the protection given to bona fide purchasers by Section 34(3) of the Provincial Insolvency Act (III of

1907), but he has granted the alternative prayer referred to above, i.e., he directed the decree-holders, the present appellants, to refund to the

Official Receiver, the respondent before us, for the benefit of the whole body of creditors the sum of Rs. 3,153-2-0 realised by them in execution.

He also gave them leave to rank as unsecured creditors in the subsequent insolvency proceedings before the Official Receiver. Against this order

of the District Judge the decree-holders have filed the present appeal; the Official Receiver has filed a memorandum of objections stating that the

sale should also have been set aside as the auction-purchaser could not in the circumstances of this case be considered to be a bona fide

purchaser.

Two points have been urged before us by Mr. S.T. Srinivasa Gopalachariar, the learned Counsel for the appellants, viz., (1) that on a proper

construction of Ex. I, the razi decree, a charge has been created on the attached properties in his clients'' favour and that, therefore, the properties

vest in the Official Receiver only subject to his clients'' rights under the decree, and (2) that even if there is no such charge, inasmuch as two out of

seven judgment-debtors had died after the attachment before judgment and also after the decree, such prior attachment followed by the decree

prevents the shares of the two deceased co-parceners from surviving to the rest and that, therefore, those shares do not vest in the Official

Receiver on the insolvency of the remaining co-parceners as they had never vested in the insolvents themselves. He urges, therefore, that the

Official Receiver had not rights at least as regards two-sevenths of the properties sold and that his clients were entitled to retain at least two-

sevenths of the purchase-money realised.

As regards point No. 1, Ex. 1 only states that the defendants should pay into Court within a prescribed time the decree amount with interest and

that, in default of payment, the plaintiffs should recover the amount "" from the defendants and also by the sale of the properties now under

attachment before judgment by the Court without having any necessity for re-attachment and from the defendants'' other properties, and that the

attachment before judgment should continue in force until the whole amount is paid according to this compromise decree. "" These provisions do

not, in our opinion, constitute a charge on the properties and do not confer on the decree-holders any higher rights than those of money decree-

holders who have effected an attachment of those properties for executing their decrees.

As regards point No. 2, the learned Counsel for the appellants has strongly relied upon a decision of the Privy Council reported in Suraj Bunsi

Koer v. Sheo Pershad Singh ILR (1879) C 148. in support of his argument that the attachment before judgment in this case followed as it was by

the decree prevented the shares of the deceased co-parceners from surviving to the rest. As it appears to us that the answer to the question now

raised depends really upon a correct understanding of the principle laid down by the Privy Council in the above case, it is necessary to consider the

exact scope of that decision and to examine how the principle indicated therein has, been understood and applied in subsequent decisions. In that

case the father had executed a mortgage of properties belonging to the joint family consisting of himself and his two sons. The mortgage brought a

suit on his mortgage against the father and got a decree ordering the sale of the property. In execution of the decree the property was attached and

an order to carry out the sale was made. Subsequent to this, but before the date fixed for the sale, the father died and the execution proceedings

were thereafter continued against the sons who objected to the sale putting forward their claims as co-parceners under the Mitakshara Law. The

executing Court referred them to a separate suit and the properties were sold. In the suit by the sons to set aside the sale it was found that the

nature of the debt was such as not to be binding on them. The Privy Council set aside the sale as regards the sons'' two-thirds share but sustained

the sale to the extent of one-third which on a partition in his lifetime would have fallen to the share of the father. It may be stated that the reason for

upholding the sale with regard to the one-third share was not that the mortgage executed by the father could be held to be binding on the estate to

the extent of his own share because their Lordships expressly leave this point open. In their Lordships'' own words the reason for the decision was

that "" at the time of Adit Sahai''s (father''s) death, the execution proceedings under which the mouza had been attached and ordered to be sold had

gone so far as to constitute, in favour of the judgment-creditor a valid charge upon the land, to the extent of Adit Sahai''s undivided share and

interest therein, which would not be defeated by his death before the actual sale. "" It is true that in the Privy Council case there were not only a

decree and an attachment in execution of the decree but also an order for sale of the properties before the death of the judgment-debtor; but in the

very next sentence their Lordships state that "" they are aware that this opinion is opposed to that of the High Court of the North-Western

Provinces, in the case of Goor Pershad v. Sheodeen (1872) 4 NWPR 137."" In that case there was only a decree and an attachment in execution

of the decree but no order for sale before the judgment-debtor''s death and it was held that the judgment-debtor had no property in the house in

suit available after his death in execution of decree for the satisfaction of the judgment debt. The Privy Council in expressly dissenting from this

decision must, we think, be considered to have in effect held that an attachment in execution of a decree before the judgment-debtor''s death

would prevent his share from surviving to his other co-parceners though no order for sale had been made prior to his death. That this is the true

scope of the Privy Council decision has been recognised by more than one decision of this Court [vide B. Krishna Rao v. Lakshtnana Shanbhogue

ILR (1881) M 302, and Thadi Ramamurthi v. Moola Kathiah (1914) 16 MLT 123. It may be mentioned that in B. Krishna Rao v. Lakshtnana

Shanbhogue ILR (1881) M 302, also there was not only an attachment in execution of the decree but an order for sale before the judgment-

debtor''s death but the learned judges indicate that the decision of the Privy Council would cover even a case where there was no such order, for

they state at page 307, "" in declaring that the ruling they were pronouncing was opposed to that of the High Court in the case cited, the Privy

Council in effect pronounced that the interest of the judgment-debtor had, by the attachment, been brought under the control of the Court for the

purpose of executing the decree so as to preclude the accrual of a title by survivorship in the event of the death of the judgment-debtor before an

order for sale was made. In the case before the Court it appears the order for sale was made before the death of the judgment-debtor, but,

whether this be so or not, we feel ourselves bound by the ruling of the Privy Council."" In Thadi Ramamurthi v. Moola Kamiah (1914) 16 MLT

there was only an attachment in execution of the decree but no order for sale before the judgment-debtor''s death. The Lower Court in that

case had dismissed the suit on the ground that, as the judgment-debtor who was an undivided co-parcener died before the order for sale was

made, his interest survived to the defendant and was not available to the plaintiff for sale. The High Court in allowing the second appeal refers to

Suraj Bunsi Koer v. Sheo Pershad Singh (1879) ILR 5 C 148 (PC). B. Krishna Rao v. Lakshmana Shanbhogue ILR (1881) M 302 and

Lakshmana Aiyar Vs. Srinivasa Aiyar, and states that the question was concluded by authority. Regarding the Privy Council case the learned

Judges observe thus:

In the case before the Privy Council it is true that not only was there an attachment but also an order to carry out the sale before the death of the

coparcener. But in the course of their judgment the Judicial Committee expresses their dissent from a judgment of the North-West Provinces High

Court id which it was held that, while the co-parcener bad died after his interest in the property was attached but before an order for sale was

made, there remained no interest in the judgment-debtor which could be brought to sale.

In Muthusami Chetty Vs. Chinnammal, it is stated that

It has been repeatedly decided by this Court that attachment alone without an order for sale precludes the accrual of the title by survivorship in the

event of the death of the judgment-debtor after attachment and before the no interest in the judgment-debtor which could be brought to sale.

It has been brought to our notice that the learned Judges in Zamindar of Karvetnagar v. Trustee of Tirumalai, Tirupati, etc., Devasthanam ILR

(1909) M 429. state that the decision in B. Krishna Rao v. Lakshmana Shanbhogue ILR (1881) M 302 and Lakshmana Aiyar Vs. Srinivasa

Aiyar, . cannot be relied upon in view of the decision of the Privy Council in Moti Lal v. Karrabuldin (1897) ILR 25 C 179 (PC) to the effect that

an attachment merely prevented alienation and did not give title. They also state that the same view was taken in Sankaralinga Reddi v.

Kandaswami Tevan ILR (1907) M 413. These observations have been noticed and commented upon in two later cases of this Court reported in

Murugaiya Mudaliar V. Ayyathoi Mudaliar (1910) 9 MLT 96 and Thadi Ramamurthi v. M''Pola Kamiah (1914) 16 MLT 123. These decisions,

with which we respectfully agree, render it unnecessary for us to discuss the matter afresh. In Thadi Ramamurthi v. Maola Kamiah (1914) 16 MLT

which has already been noticed above, the learned Judges state in Sankaralinga Reddi v. Kandaswami Tevan ILR (1907) M 413. the

decision in B. Krishna Rao v. Lakshmana Shanbhogue ILR (1881) M 302. was not dissented from, but it was expressly pointed out that under

that decision the attachment has the effect of preventing the property passing by survivorship, and the fact that the attaching creditor does not, by

attachment'', create such a charge on the property as to acquire priority over other creditors coming in is in no way opposed to this view. This also

is what was decided in Zamindar of Karvetnagar v. Trustee of Tirumalai, Tirupati, etc., Devasthanam ILR (1909) M 429. wherein it was held that

no charge was created by the attachment in favour of the creditor as against a subsequent creditor. There is no doubt an observation in Zamindar

of Karvetnagar v. Trustee of Tirumalai, Tirupati, etc., Devasthanam ILR (1909) M 429. that the decision in B. Krishna Rao V. Lakshmana

Shanbhogue ILR (1881) M 302. is opposed to this view. But whether that is so or not, no dissent was expressed from the decision to the effect

that the attachment precludes the accrual of title by survivorship. The observation of their Lordships of the Privy Council in Moti Lal v. Karrabuldin

(1897) ILR 25 C 179 (PC) relied upon in Zamindar of Karvetnagar v. Trustee of Tintmalai, Tirupati, etc., Devasthanam ILR (1909) M 429. has

no reference to this question. That such is the effect of this decision seems to be borne out by the judgment in Murugaiya Mudaliar v. Ayyathorai

Mudaliar (1910) 9 MLT 96. in which the learned Judges say that the casie in Zamindar of Karvetnagar v. Trustee of Tirumalai, Tirupati, etc.,

Devasthandm ILR (1909) M 429. had reference to the question whether in the circumstances of that case the judgment-creditors who had

obtained orders of attachment were in a stronger position than those who had not obtained such orders."" In the light of the above remarks, the

observation in Subrao Mangesh v. Mahadevi ILR (1913) B 105. that the proposition laid down in B. Krishna Rao v. Lakshmana Shanbhogue ILR

(1881) M 302. has no longer the support of the Madras High Court is not correct. In this connection we would only add that, having regard to the

decision of the Privy Council in Moti Lal v. Karrabuldin (1897) ILR 25 C 179 (PC) it must now be taken that the word ""charge"" used by their

Lordships in Su.raj Bunsi Koer v. Sheo Pershad Singh (1879) ILR 5 C 148 (PC). in the passage extracted by us must be understood only in a

general and not in the strictly legal sense (see also Mayne''s Hindu Law, paragraph 332, 9th Edition).

Thus it will be seen that the decision in Suraj Bunsi Koer v. Sheo Pershad Singh (1879) ILR 5 C 148 (PC) and the later decisions of this Court

establish the position that an attachment in execution of the judgment-debtor''s interest in joint family property will, in the event of his death

subsequent to such attachment, preclude the accrual of title by survivorship as against the attaching creditor.

In the present case the attachment was before judgment. The judgment-debtor died after the decree but before any order for sale was made.

The question is whether the fact that the attachment was before judgment makes any difference as regards the application of the above principle.

There is a direct authority in Muthusami Chetty Vs. Chinnammal, . that it does not make any difference. In that decision it was held that an

attachment before judgment has the effect of preventing the interest of the deceased judgment-debtor from passing by survivorship in a case where

the judgment-debtor dies after the decree. The reason is thus stated by the learned Judges:

When a decree is passed subsequently it is unnecessary to attach the property again and the prior attachment renders the property available for

sale in execution. An attachment followed by a decree, therefore, precludes the accrual of the title by survivorship for the same reasons as an

attachment after decree.

It has, however, been argued by the learned vakil for the respondent that the decisions in Subrao Mangesh v. Mahadevi ILR (1913) B 105

and Sunder Lal v. Raghunandan Prasad ILR (1923) Pat 250. take a contrary view and that they should be followed in preference to the, Madras

cases. Subrao Mangesh v. Mahadevi ILR (1913) B 105 is no doubt a direct decision in his favour, but with all respect we feel unable to follow

that decision. In that case the learned Judges begin their judgment by stating that the determination of the case before them depends on the correct

construction of the Privy Council judgment in Suraj Bunsi, Koer v. Sheo Pershad Singh (1879) ILR 5 C 148 (PC) They then distinguish that case

by saying that there, there had been not a mere attachment before judgment but an attachment in execution and an order for sale. They also seem

to think that their Lordships of the Privy Council use the word ""charge"" in the passage extracted by us in its strict legal significance--vide page 107.

We have already stated that, in our opinion, their Lordships in effect held that an order for sale was not essential for defeating the survivorship and

that it is not right to understand the word "" charge "" as having been used in the strict legal sense. The learned Judges seem to deduce from the Privy

Council decision that some step should be taken in execution which will have the effect of defeating the survivorship, but what that step exactly is,

in a case where there has already been an attachment before judgment and a decree following it prior to the judgment-debtor''s death, they do not

state. If as we have shown above a mere attachment in execution is, according to the Privy Council, enough to defeat the survivorship and if in a

case where there has been an attachment before judgment and a decree following it there need not be any further attachment after the decree vide

Order 38, Rule 11 of the Code of Civil Procedure--we fail to see what further step such a decree-holder should take in order to bring matters to

the stage where a mere attachment in execution has been made. The learned Judges then rely on a decision of this Court in Ramanayya v.

Rangappayya ILR (1893) M 144. for the position that an attachment before judgment has not the effect of defeating the survivorship and observe

that though in that case the defendant had died before the decree, it does not make any difference whether he dies before or after the decree. This

observation does not seem to us to be sound. It is true that, until a decree is passed an attachment before judgment could not operate to render the

attached property available for sale in execution, but if a decree is also passed before the defendant''s death, it is unnecessary to attach the

property again and the prior attachment renders the property available for such sale. The decision in Ramanayya v. Rangappayya ILR (1893) M

has been referred to and distinguished in a later case in Muthusami Chetty Vs. Chinnammal, . which has not been noticed by the Bombay

High Court. In Ramanayya v. Rangappayya ILR (1893) M 144 it self the learned Judges clearly indicate that an attachment before judgment

would become operative as soon as a decree is passed and that, if the defendant had died subsequent to the decree, they would have held that

such prior attachment would defeat the survivorship.

We might also notice that it has been held in Ganu Singh v. Jangi Lal ILR (1899) C 531. that the effect of an attachment of property under the

CPC whether made before or after decree is the same, provided that in the former case a decree is made for the plaintiff at whose instance the

attachment takes place,--see page 534. In the same judgment it has been observed that "" the main object of an attachment before judgment is to

enable the plaintiff to realise the amount of the decree supposing a decree is eventually made, from the defendant''s property.

For the above reasons we must hold, dissenting from Subrao Mangesh v. Mahadevi ILR (1913) B 105 and following Muthusami Chetty Vs.

Chinnammal, that an attachment before judgment followed by a decree prior to the judgment-debtor''s death has the effect of precluding the

accrual of title by survivorship as against the attaching-creditor in the same way as an attachment after decree. This, however, should not be

interpreted to mean that the operation of survivorship is altogether stopped by reason of the attachment whether before or after decree for, if the

attaching-creditor does not execute his decree, or if the entire property is not needed to satisfy the decree, then the property or the surplus, as the

case may be, will go to the other co-parceners. The decision discussed above should, in our view, be only taken to mean that the other

coparceners take the property subject to the claims of the attaching-creditor.

With regard to the decision in Subrao Mangesh v. Mahadevi ILR (1913) B 105 it might also be mentioned that, while discussing the Privy

Council case, the learned Judges seem to make a point of the fact that in the case before them there was no actual sale of the property even after

the judgment-debtor''s death and seem to indicate that, if there was such a subsequent sale, the prior attachment might preclude the operation of

survivorship--vide page 109. We do not think that the Privy Council decision justifies the drawing of such a distinction, but, in view of the fact that

in the present case there has been an actual sale after the judgment-debtor''s death, it is not necessary to discuss the matter any further.

The other case relied upon by the respondent is the one in Sunder Lal v. Raghunandan Prasad ILR (1923) Pat. 250. which follows Subrao

Mangesh v. Mahadevi ILR (1913) B 105. In that case it was found as a fact that there was no attachment before judgment and also that the

defendant died just after the hearing of the suit and before the judgment--see page 256. The occasion, therefore, for considering the question as

regards the effect of an attachment before judgment in a case like the present did not actually arise though the learned Judges state that an

attachment before judgment does not rank in the same position as an attachment after judgment. They simply follow the decision in Subrao

Mangesh v. Mahadevi ILR (1913) B 105 and this case, therefore, does not carry us any further.

In the result the Lower Court''s decree will be modified by a direction that the appellants are entitled to retain two-sevenths of the purchase-

money realised by the sale of the properties and are bound to refund only the balance to the Official Receiver. For the amount that they have thus

to refund and for any further claims that they may have as regards interests and costs they will rank as unsecured creditors in the insolvency

proceedings before the Official Receiver. The parties will receive and pay proportionate costs throughout.

Wallace, J.

I am in general agreement with my learned brother as to the conclusion to be properly deduced from the case-law quoted before us, viz., that

an attachment before judgment, when followed by a decree passed prior to the death of the judgment-debtor co-parcener, prevents, as against the

rights of the attaching creditor, the accrual of the survivorship right to the surviving co-parceners. But I should like to say, though it is not necessary

for the present disposal of this case, that I consider that the language used in B. Krishna Rao v. Lakshmana Shanbhogue ILR (1881) M 302.

Thadi Ramamurthi v. Moola Kamiah (1914) 16 MLT 123 and Muthusami Chetty Vs. Chinnammal, cases, on which we rely, is too broad, if

interpreted literally. I do not think that these cases intended to lay down more than that so far as concerns the attaching decree-holder''s right, to

hold the share of the deceased co-parcener liable for his debts it is not defeated by the survivorship right, and not any general principle that

whenever there is an attachment of co-parcenary property followed by, or preceded by, a decree, the survivorship right of co-parceners to that

property is barred. Obviously, for example, if the attaching decree-holder''s debt, and the debts of other decree-holders who are entitled in law to

take advantage for themselves of the attachment made by another decree-holder, are satisfied, and there remains a surplus out of the share of the

deceased judgment-debtor co-parcener, that surplus will accrue by survivorship to the other co-parceners. The proposition that an attachment plus

decree will in all cases and until the cessation of the attachment prevent the accrual of the survivorship right does not, I think, necessarily follow

from the cases quoted and is a proposition which will lead to many practical difficulties in partition and other proceedings. I think the correct way

of stating the law is that the accrual of survivorship is not prevented but operates subject to the prior rights of the attaching decree-holder and other

decree-holders who are entitled to take advantage of his attachment to have their decree debts satisfied in execution proceedings against what was

the share of the deceased judgment-debtor co-parcener. The control over that share which the Court has by virtue of the attachment will be used

by it for that end, and will not be relaxed until the end is attained. It is this exercise of this control, which, in my view, constitutes the ""valid charge

over the property of which the Privy Council speaks in the Suraj Bunsi Koer v. Sheo Pershad Singh (1879) ILR 5 C 148 (PC). case which

charge "" must spring out of the attachment Which puts the property under control of the Court, and not out of any subsequent step in execution;

only the attachment, if before judgment, must have been followed up by a decree passed before the death of the judgment-debtor co-parcener,

since it is the decree which declares the extent of the right which the attaching creditor has against the property.

I agree in the order proposed by my learned brother.