S.T. Pankajammal vs S. Sambandamurthi Mudaliar and Others

Subrahmanyam, J.—The dispute is between decree-holders who obtained decrees against the same judgment-debtor. The plaintiffs

obtained a decree for Rs. 640-12-9 in S.C. No. 874 of 1930 on the file of the District Munsif''s Court, Kancheepuram. The defendant obtained a

decree against the same judgment-debtor in S.C. No. 179 of 1932 on the file of the Subordinate Judge, Chingleput. The defendant filed E.P. No.

270 of 1946 on 16th December, 1946, for attachment and sale of the judgment-debtor''s properties in execution of her (the defendant''s) decree.

The plaintiffs filed E.P. No. 166 of 1946 on 6th March, 1956, for attachment and sale of the same properties. The properties were sold on 21st

March, 1949, in the execution petition filed by the defendant. Leave to bid and set-off the decree amount had been granted to the defendant. The

sale price was Rs. 2,005. Since it was less than the amount due to the defendant, set-off was allowed as to the whole of the price. The sale was

confirmed on 17th July, 1952 and part satisfaction of the defendant''s decree was recorded that day. The E.P. namely E.P. No. 166 of 1946 filed

by the plaintiffs was dismissed on 12th December, 1952, on the ground that the properties had been sold in the defendant''s execution petition. The

plaintiffs applied that the defendant be compelled to bring into Court money sufficient to satisfy the plaintiff''s claim for rateable distribution unde

Section 73, Civil Procedure Code. That application was dismissed. Consequently, the plaintiffs instituted the suit, which has given rise to this

second appeal, praying for recovery of the money due to be paid to them by way of rateable distribution. The suit was instituted on 2nd March,

1954. The learned District Munsif, who tried the suit, held that the suit was barred by time. The learned District Judge on appeal reversed that

finding and, holding that the suit was in time granted the plaintiffs a decree. The point is whether the suit is in time.

That, on the question of limitation, the suit is governed by Article 62 of the Limitation Act is conceded by both parties. Article 62 is in these

terms:

Description of Suit. Period of limitation. Time from which period

begins to run.

For money payable by the Three years .. When the money is

defendant to the plaintiff received.

for money received by the

defendant for the plaintiff''s

use.

The time from which limitation begins to run is the time when the defendant received the money. The defendant did not actually receive any money

in this case. The price which, if the purchase had been made by a third party, would have been deposited in Court, was set-off by the defendant

against the amount due to her on her decree. But permission to bid and set-off granted under Order 21, Rule 72, is always subject to the

provisions of Section 73. Therefore, since the plaintiffs were entitled to rateable distribution, the defendant should, before the sale was confirmed,

have been directed to bring into Court the money needed to satisfy he plaintiffs'' claim u/s 73, Civil Procedure Code. That was not done. But that

could not affect the plaintiffs'' right to rateable distribution; that right had to be enforced by suit. Since the money remained all the time in the

defendant''s hands, the expressions ''''money received by the defendant"" and ""when the money is received"" occurring in Columns (1) and (3) of

Article 62 of the Limitation Act, should, on the facts of this case, be read as the equivalent respectively of the expressions ""money deemed to be

received by the defendant"" and ""when the money is deemed to be received.

The defendant-appellant''s learned Counsel argues that the money must be deemed to have been received by the defendant on the date of the

sale, namely, 21st March, 1949. In support of that proposition learned Counsel relies on Sait Punnamchand Chatraban, Firm of Marwadi Bankers

Vs. Vijjapu Satyanandam, . The facts in that case were these. The decree-holder in whose execution petition the property was sold had obtained

leave to bid and set-off. Under the leave granted to him, he had set-off against the purchase money the ecree amount due to him. Later, on the

same day, but subsequent to the sale, certain other persons, who had obtained decrees against the judgment-debtor, applied for execution and

they claimed rateable distribution out of the money in the hands of the decree-holder in whose petition the property had been sold. It was held that

they were not entitled to rateable distribution. The decision turned on the interpretation of the expression ""receipt of assets"" in Section 73(1) which

enacts:

Where assets are held by a Court and more persons than one have, before the receipt of such assets, made application to the Court for the

execution of decrees for the payment of money passed against the same judgment-debtor and have not obtained satisfaction thereof, the assets,

after deducting the costs of realisation, shall be rateably distributed among all such persons.

It was held in that case that the assets had been received in the executing Court at the time of the sale and set-off and that, since those other

decree-holders had not filed an application before the sale, they were not entitled to rateable distribution. But let us suppose that those other

decree-holders had filed applications for ratcble distribution a day before the date of the sale. In that event, they would have been entitled to

rateable distribution notwithstanding that no money (other than poundage) was paid into Court by the decree-holder purchaser. u/s 73, the

question of rateable distribution arises only where assets are held by a Court. In case where a decree-holder purchaser sets-off the purchase

money against the decree amount due to him, assets are deemed to be held by the Court for the purpose of enabling other decree-holders who

have applied for execution before the date of the sale to obtain rateable distribution u/s 73 of the Civil Procedure Code. That is to say, for the

purpose of Section 73(1), money, which is in the hands of the decree-holder purchaser, he having set-off the purchase money against the decree

amount payable to him, is deemed to have been received by the Court and to be held by the Court. The point for decision in Sait Punnamchand

Chatraban, Firm of Marwadi Bankers Vs. Vijjapu Satyanandam, related to the construction of the expression ""receipt of assets"" in Section 73, that

is to say, receipt of assets by the Court. That decision is not relevant in considering the expression ""when the money is received"" in Article 62 of

the Limitation Act, which deals with the point of time when the money is received or should be deemed to be received not by the Court which sells

the property but by the decree-holder who receives the money in satisfaction or part satisfaction of his decree.

u/s 73(2), a person entitled to rateable distribution, but not granted rateable distribution in execution, may institute a suit to enforce his rights as

against a person who is not entitled to receive the sale proceeds and yet is paid the money. In this case, the decree-holder purchaser not being

entitled to receive the money, which was liable to be paid to the plaintiffs, the suit is filed by them to recover the money. In a case where a third

party purchaser deposits the purchase money, the money would not be paid to the decree-holder at whose instance the property is sold until after

confirmation of the sale ; that is to say, there would be no receipt of money by a person in the position of the defendant in this case until the date of

confirmation of the sale. The correct order to pass in the defendant''s execution petition was to call on her to bring to Court the money payable to

the plaintiffs u/s 73, CPC and to confirm the sale after she deposited the money, or, if she failed to deposit the money within the time allowed, to

set aside the sale. In the circumstances, the payment to her of the money which was payable to the plaintiffs could be said to have occurred only on

the date on which the sale was confirmed without her being called upon to deposit, for the benefit of the plaintiffs, the money to which they were

entitled u/s 73(1), Civil Procedure Code. I find that, for the purpose of Article 62 of the Limitation Act, the defendant must be held to have

received the money on the date of confirmation of the sale, namely, 17th July, 1952, and, since the suit was filed within three years from the date,

the suit was in time.

The appellant''s learned Counsel states that the plaintiffs'' E.P. No. 166 of 1946 was barred by time. That point is taken on the basis of the

statement made in the plaintiffs'' execution petition regarding the result of the earlier proceedings. The plaintiffs state in that execution petition that a

petition filed by them on 6th October, 1932, was dismissed, that the next petition filed by them on 25th October, 1935, was returned and that the

third petition filed by them on 25th October, 1938, was dismissed after notice. The appellant''s learned Counsel argues that the petition dated 25th

October, 1935, which is said to have been returned cannot be availed of for the purpose of limitation. That argument involves investigation into

facts relating to the petition, dated 25th October, 1935. No plea that the respondents'' execution petition E.P. No. 166 of 1946 was barred was

taken in either of the lower Courts. If the point were taken, the respondents might have been in a position to plead facts showing that the petition

was in time. A plea involving investigation of facts cannot be entertained in second appeal.

The second appeal is dismissed. In view of the delay on the part of the plaintiffs in instituting the suit, which has given rise to the second appeal,

the plaintiffs will bear their own costs in second appeal. No leave.