T.H. Ismail Hassam vs T.S. Haji Moosa and Co. and Others

Ramesam, J.—The facts out of which these appeals arose may be stated as follows : A suit was filed (C. S. No. 160 of 1927) to recover

Rs. 1,722-10-0 with interest by the plaintiff Ismail Hassam against two defendants on the following allegations. The amount claimed was due to the

plaintiff primarily by the 2nd defendant. But the 2nd defendant being also indebted to the 1st defendant, he sent 19 bales of piece goods to the 1st

defendant instructing him to pay off the amount due to the plaintiff and out of the balance of the amount to pay himself. But the 1st defendant has

not paid the money or sent any bales equivalent in value to the amount claimed by the plaintiff. This suit was decreed by Beasley, J., as he then

was, on 28th January, 1928. In the meantime a Commissioner was appointed to take charge of the goods and afterwards he was directed to sell

the goods. A certain amount was realised and is now in Court. Meanwhile certain other creditors of the 2nd defendant, about five of them,

obtained decrees in various Courts and obtained orders of attachment against the goods on dates beginning from 27th May, 1927 onwards. They

now claim to be paid the amounts of their decrees from out of the amount in Court representing the sale proceeds of the bales. The plaintiff and the

1st defendant in the suit want to be paid their amounts out of the sale proceeds, because they hold first and second charges over the goods under

the decree of Beasley, J. These other creditors of 2nd defendant allege that the claims of the plaintiff and 1st defendant and their charges are bogus

claims, a matter which of course has not been gone into, and cannot be gone into, without a regular suit in which both sets of parties are impleaded.

The only question that now arises is what is the order that should be passed and who should be referred to a regular suit in which the substantial

question between the parties should be tried, namely, how far the claims of plaintiff and 1st defendant are bogus claims. Our brother Waller, J.,

passed an order directing that the surplus amount that may remain after deducting the sums due to the plaintiff and the 1st defendant should be,

paid to the various decree-holders from it. He also observed that the plaintiff and the 1st defendant should prefer claim petitions before the

attaching Court. The present appeals before us are filed against this order of Waller, ]., and the second part of the order is particularly attacked

before us. Now the plaint in C.S. No. 160 of 1927 mentions the main facts relating to the charge of the 1st defendant over 19 bales and paragraph

5 may be taken to be an allegation that the plaintiff himself has got a charge over some bales, the value of which is equivalent to his claim. The

prayer is not worded as one claiming a charge decree. But the decree awarded by Beasley, J., expressly declares that the 1st defendant has got a

first charge on the amount realised by the sale of the goods under the two security letters of his, dated 1st July, 1926 and 21st October, 1926. It

also declares that the plaintiff will have a second charge on the sale proceeds on another ground which it is unnecessary to set forth in detail. We

must take it that Beasley, J., construed the plaint in C.S. No. 160 of 1927 to be a plaint alleging a charge in favour of plaintiff subject to a charge

of 1st defendant and acting on that basis he has awarded a charge decree. Now it is an established principle that no person who is not a party to a

suit on a mortgage praying for a sale, whatever the nature of the right he might claim, can intervene in the execution of that decree. He may be a

person claiming a paramount title to the property mortgaged and he may allege that the mortgage or charge does not bind him, or such a person

may be a creditor of the mortgagor who alleges that the mortgage is a bogus mortgage as in this case. But, whatever the nature of the ground on

which he wishes to resist the mortgage decree, he cannot intervene in the execution of that decree. In support of this principle it is enough to refer

to Deefholts v. Peters I.L.R.(1887) C. 631 and Sanwal Das v. Bismillah Begam I.L.R.(1897) A. 480. The principle of these decisions is this : that

the charge decree-holder is entitled to the benefits of his charge decree in execution of the decree and any other person who refuses to be bound

by the decree, on whatsoever ground it may be, has got to file a regular suit for the proper relief. In the present case the respondents, attaching

creditors, would all be entitled to file suits or they may jointly file a suit alleging that the claims of plaintiff and 1st defendant in C.S. No. 160 of

1927 are bogus claims and if they succeed they will be entitled to recover the full amounts of the decrees out of the amounts now to be drawn by

the plaintiff and the 1st defendant in execution of C.S. No. 160 of 1927; but, until such a suit is filed by them and it is found in their favour, the

charge decree must have its course. We, therefore, think that the order of our brother, Waller, J., refusing to pay down the amounts to the plaintiff

and 1st defendant cannot be sustained. Full effect must be given to the decree of Beasley, J., or, in other words, the amounts claimed by the

plaintiff and 1st defendant must be paid out of the amounts lying in Court. So far as the balance of course is concerned, there can be no question

that it can be paid to the respondents. But in view of the allegations of the respondents we think that we ought to make the payment of the amount

conditional on the plaintiff and the 1st defendant giving security. They will give security for the amounts they draw to the satisfaction of the Registrar

according to the usual practice. The respondents will file their suit within three months after this date, and, if such suit is not filed, the order directing

the plaintiff and. 1st defendant to give security will be vacated and they will retain the amounts drawn unconditionally. But if such a suit is filed, the

security will enure to the benefit of the respondents'' creditors, until that suit terminates in their favour. We modify the order of the learned Judge

accordingly. In each of the appeals the contesting creditors-respondents who obtained money decrees will pay the costs of the appellants

proportionate to the interest they claim. We make no order as to costs in the original Court.