Thiraviyam Pillai and Another vs Lakshmana Pillai

Plaintiff and first defendant obtained decrees against one Thoppiah Pillai. Plaintiff applied for execution and an order was made for the

attachment of the judgment-debtor''s property. The first defendant also applied for execution and the same property was again attached at his

instance. When the property was about to be sold, the judgment-debtor applied under Order XXI Rule 83 of the Code of Civil Procedure, for

permission to raise money by private alienation. The District Munsif gave him permission. Why he granted it when there was an attachment at the

instance of the first defendant, and why he accepted the payment by the judgment-debtor of monies which could only have covered the amount

due to the plaintiff have not been explained. It seems to us that the permission should not have been accorded, but as the judgment-debtor is not

before us, we shall not deal with that question any further. In accordance with the permission, the judgment-debtor executed a mortgage on the

property and the mortgagee paid into Court money just enough to cover the plaintiff''s decree. The District Munsif divided this amount rateably

between the plaintiff and the first defendant. Thereupon this suit was instituted to contest that order. The Courts below have held that the money

should entirely be given to the plaintiff apparently on the ground that it was deposited in Court by virtue of the permission obtained in the

proceedings taken by the plaintiff. We are unable to agree with them.

Mr. Venkatrama Sastriar, vakil for the respondent in his able argument took us through the various analogous provisions contained in Order

XXI and argued that the money paid by the judgment-debtor must be taken to have been ear-marked for the benefit of the plaintiff. A significant

change has been made in the language of Section 73 of the present Civil Procedure Code. In the old Code, the words were "" whenever assets are

realized by sale or otherwise in execution of a decree."" In the present Code, the words are ""where assets are held by a Court."" The change was

apparently intended to set at rest the question whether the word realization should not be. restricted to what is paid in by virtue of process taken in

executions but apparently the legislature has not succeeded in the object. There can be no question that the language of the present Code is wide

enough to cover cases where monies are in the hands of the Court by whatever process the same has been realized. It is true that the learned

Judges of the Bombay High Court hold that even under the new Code, the money to be held by the Court must have reached its hands in

execution. See Sorabji Coovarji v. Kala Raghunath I.LR. (1912) 36 Bom. 156. An observation of Mr. Justice Bakewell in Kathun Saheba v.

Hajee Badsha Saheb ILR (1915) Mad. 221 lends support to this proposition. It is not necessary to express any opinion on this question, as we

are of opinion that when permission is granted under Order XXI, Rule 83, to raise money by private alienation the money is paid under a pending

execution application. The further point which Mr. Venkatrama, Sastriar pressed before us was that the money should be taken to have been paid

solely to the credit of his client''s decree. The learned vakil asked us to apply the analogy of Order XXI, Section 55. In that rule, three classes of

payments are indicated. We are prepared to concede that if money is paid outside the Court and the decree-holder certifies the payment, it cannot

be said that it is an asset held by the Court. It may be that in such a case, as the attachment would cease to subsist, rival decree-holders can have

no remedy, but if money is paid into Court by the other modes mentioned in E. 55, we are not satisfied that this money cannot be regarded as an

asset held by the Court. If Sorabji Coovarji v. Kala Baghunath I.LR. (1912) 36 Bom.156 lays down this proposition we are not prepared to

accept it. It must be remembered that an attaching creditor acquires no lien upon the proceeds of the sale because he procured the attachment and

we fail to see why the fact that the attachment is raised in consequence of the payment made into Court should take the money out of the

expression ""assets held by the Court."" As regards Golstrum v. Woomes Chandra Bannerjee ILR (1917) Cal. 789 that waa under Order XXI,

Rule 89, That order distinctly provides for payment to the decree-holder or to the purchaser, consequently the payment must be taken to be ear-

marked.

The learned vakil for the respondent conceded that where monies are realized by process of Court solely at the instance of one of the attaching

decree-holders he does not obtain, apart from getting his expenses paid, any higher right than the other decree-holders who have before payment

applied for execution. This being so, we fail to see on what principle the fact that the money was paid into Court by virtue of the provision granted

to raise money privately should give a larger right to the person in execution of whose decree permission was so granted. The policy of the

legislature seems to be to bring all monies realized at least in process of execution to the hotchpot to be shared by all the decree-holders. It is

analogous to distribution on an insolvency. The language of Order XXI, Rule 72, shows that even when monies are not actually paid into Court, as

in cases where the decree-holder is given permission to purchase property and the sale-proceeds are applied to the satisfaction of his decree, the

legislature specifically provided for the money being regarded as assets held by the Court. The intention of the legislature is to afford every creditor

equal opportunities of obtaining a rateable advantage in the available assets of the judgment-debtor. Therefore unless there is something clear in the

language of the provisions of the Code to exempt a payment from being applied to the benefit of all the creditors, Court should incline to the view

that monies in the hands of the Court should be shared by all decree-holders rateably.

In this view, we must reverse the decrees of the Courts below and dismiss the plaintiff''s suit with costs throughout. The memorandum of

objections is dismissed. There will be no order as to costs.