The Cannanore Bank, Limited vs Pattarkandy Arayanveettil Madhavi and Others

Alfred Henry Lionel Leach, C.J.—In order to give an answer to the question referred it is necessary to decide what is meant by an adverse

order under Order 21, Rule 63 of the Code of Civil Procedure. That rule states that where a claim or an objection is preferred the party against

whom an order is made may institute a suit to establish the right which he claims to the property in dispute, but, subject to the result of a suit the

order shall be conclusive. The order referred to in the rule is an order passed on an application which falls within the purview of Rule 58. That rule

provides that where a claim is preferred to, or an objection is made to the attachment of property attached in execution of a decree on the ground

that it is not liable to attachment, the Court shall proceed to investigate the claim or objection, provided that it may refuse to investigate when it

considers that the claim or objection was designedly or unnecessarily delayed.

In Machi Raju Venkataratnam Vs. Sri Rajah Vadrevu Ranganayakamma Zamindarini Garu and Others, , Wallis, C.J., and Oldfield and

Seshagiri Aiyar JJ., held that an order refusing to investigate a claim to attached property on the ground that there was delay in the filing of it was

an order passed against: the claimant within the meaning of Rule 63 and by reason of Article 11 of the Limitation Act the order became final unless

a suit was filed within twelve months to set it aside. In that case an application for the removal of an attachment was made, but it was filed at a late

stage and the District Munsif refused, to enter into an investigation. His order was couched in these words:

As this petition was filed late, this claim is ordered to be notified to the intending bidders.

This did not satisfy the petitioner and a fresh application was filed for the removal of the attachment. The order on this occasion was:

The allegations of the zamindarini will be notified to the bidders with the remark that the zamindarini did not take steps for her claim being enquired

into during the last ten months.

The Full Bench held that this order amounted to a rejection of the claim on the ground that it had been filed too late and therefore was an adverse

order within Rule 63, though there was no investigation and consequently no decision on the merits.

It is admitted that the judgments in that case have received the approval of all the High Courts in India, but there are numerous decisions of this

Court where a distinction has been drawn, in some cases, wrongly. The test is whether the order is ""against"" the claimant or the decree-holder, but

that does not mean that the order must involve an adjudication on the merits after investigation. Even an order of dismissal for default will fall within

the rule; so long as it remains in force it is obviously adverse to the claimant. But if the person objecting to the attachment does not ask for his claim

to be investigated and the order on the petition is merely that it be recorded, it cannot be said that this is an order ""against"" him. In such a case the

application will not fall within Rule 58. See P.R. Ayya Pattar v. Attupurath Mankkal Karnavan 1919 M.W.N. 805. Again the petition may contain

a prayer not contemplated by Rule 58, or it may have been presented after the Court has sold the attached property and therefore the Court has

no longer jurisdiction to entertain it. The dismissal of such a petition can scarcely be regarded as an adverse order. See Abdul Kadir Sahib Vs.

U.T.M. Somasundaram Chettiar, . The position is not different, if the claim is for an inquiry which is not contemplated by the rule, or the Court

while dismissing a petition expressly states that the rights of the petitioner are not prejudiced by the order. See Karri Seetaramayya v. Pappu

Subrahmanyam (1934) 68 M.L.J. 518 : ILR Mad. 936. It is not an adverse order if the petition is dismissed because the power to investigate is in

another Court. See Lakshmi Ammal Vs. Kadiresan Chettiar and Another, . But the position is very different where the application clearly falls

under Rule 58, the Court has jurisdiction and it passes an order dismissing the petition.

We will now refer to the cases which in our opinion have been wrongly decided. The first is that in Kumara Goundan v. Thevaraya Reddi

(1924) 48 M.L.T. 616 where the order passed. on the claim petition was in these words:

The contest is practically between the two claimants and the suit is inevitable. On the ground that the claims have been preferred too late and the

delay is not satisfactorily explained, I disallow the claim.

Ramesam and Venkatasubba Rao, JJ., held that this was not an order falling within Rule 63, but we consider that they erred in so doing. This case

clearly fell within the decision in Machi Raju Venkataratnam Vs. Sri Rajah Vadrevu Ranganayakamma Zamindarini Garu and Others, .

In G. Lakshminarasamma and Another Vs. Navugotla Pydanna, , Coutts Trotter, C.J., and Ramesam, J., held that where the order on a claim

petition was, ""Not pressed, dismissed"", it was not an order against the claimant within the meaning of Rule 63. The basis of this decision was

apparently the assumption that the claimant wished to abandon his claim and to have it treated as if it never had been made. If the petitioner had in

fact asked to be allowed to withdraw the petition and the Court had acquiesced in the course, it might very well be that the order would not be an

adverse order within the meaning of the rule, but we do not agree that because a claimant says to the Court that he does not press the petition and

consents to an order of dismissal it is not an adverse order. In such circumstances it would in our opinion clearly be an order against him within the

meaning of Rule 63, provided, of course, that the application was one which fell within Rule 58. Coutts Trotter, C.J., stated that he had always

been of the opinion that in the case of the withdrawal of a petition it was a mistake for the Judge to endorse on it ""dismissed"", and that it was quite

sufficient to record on it ""withdrawn."" With great respect, the CPC does not contemplate such an order. It only contemplates the allowing or the

refusal of a petition, and strictly speaking the order should be one of dismissal. Where the petitioner informs the Court that he wishes to withdraw

his petition the Court may allow him to do so and by the use of appropriate language in the dismissal order make it quite clear that it is not intended

to be an adverse order. We can sec no reason why the claim petition should not be withdrawn if the claimant wishes to withdraw it, but the order

passed in such circumstances, should be worded so as not to attract the operation of Article 11 of the Limitation Act.

In Lingama Naidu v. The Official Receiver, Madura, A. A. O. No. 85 of 1927 (1928) 110 I.C. 511 a claim petition had been filed by the

appellant who subsequently applied to be allowed to withdraw it, stating that he would file a regular suit. Thereupon the District Munsif passed an

order dismissing the petition. Kumaraswami Sastriar and Devadoss, JJ., held that this order did not fall within Rule 63 and they expressed the

opinion that the decision of the Full Bench in Machi Raju Venkataratnam Vs. Sri Rajah Vadrevu Ranganayakamma Zamindarini Garu and Others,

.

should be confined to cases where the disposal has been either on investigation or refusal to investigate on the ground that the claim is filed too late.

We consider that this opinion of the effect of the decision of the Full Bench is erroneous. Moreover the views expressed by the learned Judges are

in conflict with the wording of the rule. The rule applies to all orders which are ""against"" claims preferred under Rule 58.

The last case to which our attention has been drawn is that of the The President, Co-operative Credit Society Vs. Sanam Narasimha Rao and

Others, , which was decided by a Division Bench consisting of my learned brother Krishnaswami Aiyangar and myself. Although the principle

underlying Rule 63 was correctly stated on further consideration my learned brother and I are of the opinion that the order passed thereon is open

to objection and our learned brother Happell shares this opinion. A mortgagee presented a petition asking that properties which had been attached

should be sold subject to his mortgage. According to the petition it was filed under Rule 58. The order passed on it was this:

The mortgage is said to be collusive. Its existence and decree-holder''s allegation about it will be notified at the time of the sale which comes on

27th February, 1933.

The decision was that this order did not fall within Rule 63, but in the light of the further arguments which we have heard to-day we consider that

the case fell within Machi Raju Venkataratnam Vs. Sri Rajah Vadrevu Ranganayakamma Zamindarini Garu and Others, and therefore was

wrongly decided. The order amounted in effect to a refusal of the claim, as the petitioner''s prayer which was in terms of Rule 62 was not granted.

The order which has given rise to this reference is in these words:

Petition not pressed. It is dismissed.

If the petition is a petition which falls within Rule 58 and the petitioner has not sought permission to withdraw it without prejudice to his rights it is

obviously an order which is against him. The Court is not, however, able to answer the question because the facts are not before it. But assuming

that the facts are that the petitioner personally or through his advocate merely stated that he did not press the petition the order dismissing it would

be an adverse order, and we answer the question referred in this sense.

The costs of the reference will be made costs in the appeal.