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

(1) 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 of 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 1946 for attachment and sale of the same properties. The properties were sold on 21-3-1949 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. 2005. 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 17-7-1952 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 12-12-1952 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 plaintiffs'' claim for rateable distribution under S. 73 C.P.C. 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 2-3-1954. 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.

(2) That, on the question of limitation, the suit is governed by Art. 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 defendant to the plaintiff for money received by the defendant for the plaintiff''s use Three years When the money is

received

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 O. 21 R. 72 is always subject to the provisions of S.

Therefore, since the plaintiffs were entitled to ratable distribution, the defendant should, before the sale was confirmed have been directed to

bring into court the money needed to satisfy the plaintiffs'' claim under S. 73 C.P.C. That was not done. But that could not affect the plaintiff''s 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 Art. 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.

(3) 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 the 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 decree 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 S. 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 rateable distribution a day before the date of 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. Under S. 73, the question

of rateable distribution arises only where assets are held by a court.

In a 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 reteable distribution

under S. 73 C.P.C. That is to say, for the purpose of S. 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 S. 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 Art. 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.

(4) Under 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 under S. 73

C.P.C. 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 under S.

73(1), C.P.C. I find that, for the purpose of Art. 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 that date, the suit was in time.

(5) 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 plaintiff''s execution petition regarding the result of the earlier proceedings. The plaintiffs state in that execution petition that a

petition filed by them in 6th October 1932 was dismissed, that the next petition filed by them on 25-10-1935 was returned and that the third

petition filed by them on 25-10-1938 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 25-10-1935. 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.

(6) 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.

(7) Appeal dismissed.