Venkatarama Aiyar and Another vs Essumsa Rowthen and Others

Arnold White, Kt., C.J.—I have read the judgment which my learned brother is about to deliver and I concur with regard to the question

whether the plaintiff has a lien on the money in deposit in the Munsif''s Court. It seems to me, on further consideration, that the view taken in the

judgment of this Court to which I was a party in Singaravelu Udayan Vs. Ramayer, was wrong, and that it is not supported by the decision in

Gunney v. Seppings (1846) 15 L.J. 385 to which reference is made in the judgment.

I think the decree of the Courts below should be modified in the manner indicated in the judgment of my learned brother, and that the

respondents should pay the appellants'' costs throughout.

Krishnaswami Aiyar, J.

The 1st defendant mortgaged the decree in O.S. No. 254 of 1891, against defendants Nos. 2 to 9 on the file of the District Munsiff of

Mannargudi, to the plaintiff. The mortgage deed is dated the 3rd of November 1904., The 10th defendant who had obtained a Small Cause

decree against the 1st defendant on the file of the Subordinate Judge''s Court of Tanjore attached the decree in O.S. No. 254 of 1891 u/s 273 of

the CPC of 1882. This order of attachment was received by the Mannargudi Munsiff on the 3rd of November, i.e., the same day as the date of the

mortgage. Defendants Nos. 11 and 12, other decree-holders against the first defendant, attached the (said decree subsequently to the plaintiff''s

mortgage, in execution of their respective decrees. The 10th defendant having afterwards withdrawn the attachment, the 1st defendant executed his

own decree in O.S. No. 254 of 1891 and realised the sum of Rs. 801 which was kept in deposit to the credit of that cause in the District Munsiff''s

Court of Mannargudi. The plaintiff''s suit is for the recovery of his mortgage amount from the amount in deposit. Both the Courts below have

concurred in dismissing the suit, as against the money in deposit. The 1st question for decision is whether Section 244 of the CPC of 1882 bars the

suit.. It is contended for the respondent that the plaintiff is the assignee of the decree-holder in O.S. No. 254 of 1891 and is bound therefore to

apply in execution of that decree for the realisation of the amount due under it and cannot institute a separate suit. It is unnecessary to consider for

the purposes of this case whether a mortgagee of a decree is an assignee within the meaning of Section 232 of the Code of Civil Procedure, 1882.

There can be no doubt, however, that as mortgagee he can sue his mortgagor for the sale of the mortgaged property (see A.A.O. Nos. 107 to

109 of 1906) and the purchaser may then proceed to execute the decree which he has purchased. The present suit, it must be remembered, is not

for the realisation of the amount due by the judgment-debtors of the 1st defendant but for recovery of the plaintiff''s claim from the amount in

deposit to the credit of the 1st defendant in O.S. No. 254 of 1891. The questions arising between the plaintiff and the 1st defendant or those

arising between the plaintiff and the 10th, nth and 12th defendants are not questions arising between the parties to the suit No. 254 of 1891 or their

representatives. Section 244 of the Code of Civil Procedure, 1882, cannot therefore bar the present suit.

It is again urged for the respondent that on the date of the mortgage to the plaintiff execution of the decree in O.S. No. 254 of 1891 had

become barred u/s 230 of the Code of Civil Procedure, 1882, and that, therefore, no interest passed to the plaintiff under his mortgage. This

contention is clearly untenable. In the first place the decree in O.S. No. 254 of 1891 was then under execution, an application for execution being

pending which had been preferred within twelve years from the date of the decree. The plaintiff as mortgagee of the decree was certainly entitled to

the benefit of the execution. In the second place, assuming that a fresh application by the plaintiff would become barred, the plaintiff is not seeking

to execute any decree more than twelve years old but only proceeding to recover by suit the amount due to him from moneys realised by the 1st

defendant. It is difficult to see how Section 230 of the CPC of 1882 can affect the plaintiff''s right.

It is next contended that the plaintiff''s mortgage is subsequent to the 10th defendant''s attachment and that the plaintiff is postponed to the 10th

defendant and also to the nth and 12th defendants who, though their own attachments were later than the plaintiff''s mortgage have, it is said, valid

claims enforceable under the 10th defendant''s attachment. The same attachment of the 10th defendant was as already stated, on the same date as

that of the plaintiffs'' mortgage. u/s 273 of the Civil Procedure Code, 1882, it only takes effect on the receipt of the notice by the Court whose

decree is attached. At all events a private alienation by the holder of the decree attached is void u/s 276 of the Civil Procedure Code, 1882, only if

made during the continuance of the attachment, "" duly intimated and made known"" in the manner provided by Section 273. It is plain that a

transaction which is prima facie valid, can only be invalidated by the attaching decree-holder showing to the satisfaction of the Court that the

alienation was made during the pendency of the attachment--Satya Charan Mukerji v. Madhub Chunder Karmakar (1905) 9 C.W.N. 693. The

10th defendant has clearly failed to show it. It is argued that the receipt of the notice by the Mannargudi Munsif was a judicial act, and must be

presumed to have been done at the earliest point of time on the 3rd of November, while the alienation in favour of the plaintiff being a private

transaction he is bound to show the actual time at which the transaction was concluded. Reliance is placed upon the decisions in Wright v. Mills

(1859) 4 H. & N. 488 and Clarke v. Brad-laugh (1881) 8 Q.B.D. 63. These decisions do not support the respondent''s contention. In the latter

case a writ of summons was held not to be a judicial act and the legal fiction, assuming it was applicable to judicial acts without qualification, as to

which doubts were expressed, was held inapplicable to a writ of summons. It is impossible to suppose that the receipt by the Mannargudi Munsif

of the notice of attachment issued by the Subordinate Judge of Tanjore was a judicial act to which such a fiction could be applied. It follows,

therefore, that the defendant has not shown that the alienation in favour of the plaintiff was during the pendency of an attachment.

Section 276 of the Civil Procedure Code, 1882, cannot then, in my opinion, invalidate the mortgage. But assuming the above view to be

erroneous, the attachment of the 10th defendant was withdrawn by Exhibit J. It was strenuously argued by the learned vakil for the respondents

that Exhibit J was not an absolute withdrawal of the attachment but conditional on the money realised by the 1st defendant in execution of his

decree being kept in deposit. But the condition having been fulfilled the withdrawal of the attachment must take effect according to the terms of

Exhibit J. No attachment of the money in deposit was substituted in place of the attachment of the decree. It is difficult to hold that notwithstanding

the terms of Exhibit J the attachment continued as before so as to invalidate the alienation in the plaintiff''s favour under the terms of Section 276 of

the Civil Procedure Code, 1882. Defendants Nos. 11 and 12, however, stand in a distinctly worse position. Their attachments were later than the

mortgage. They are prima facie postponed to the mortgagee. The money realised was not realised in execution of the decrees of any of the

attaching decree-holders. The 1st defendant executed the decree in O.S. No. 254 of 1891. Defendants 11 and 12 would not, therefore, be

entitled to any rateable distribution u/s 295, Civil Procedure Code, 1882, out of moneys realised by the 1st defendant in execution of his decree,

after the 10th defendant had withdrawn his attachment. It is essential to a valid claim for rateable distribution that the assets should have been

realised by the 10th defendant executing the 1st defendant''s decree by way of executing his own decree. If we are to assume that under Ex. J the

10th defendant entered into a special arrangement with the 1st defendant for making the money realised by the 1st defendant in execution, available

to the 10th defendant to the extent of his claim, such an arrangement cannot avail the 11th and 12th defendants who can only put forward claims

enforceable under the 10th defendant''s attachment as entitled to priority against the plaintiff''s mortgage. In the view here expressed it is

unnecessary to consider the conflicting views propounded by the Bombay High Court in Sorabji Edulji Warden v. Gobind Ramji F.W. Wadia and

Anr. ILR (1891) B. 91 and by the Allahabad High Court in Manohar Das v. Ram Antar Pandi ILR (1903) A. 431 as to the meaning of the phrase

claims enforceable under the attachment"" in Section 276 of the Civil Procedure Code, 1882.

There is yet another argument advanced by the respondents which remains to be noticed. It is contended by Mr. Venkatarama Sastry that the

decree in O.S. No. 254 of 1891 being no longer in existence by reason of the decree amount having been realised in execution, the plaintiff''s

mortgage is at an end and the plaintiffs has no lien on the moneys in deposit in the Munsif''s Court of Mannargudi but only against the 1st

defendant. The decision in Singaravelu Udayan Vs. Ramayer, is cited in support of this view. With great respect to the learned Judges who

decided this case, I am unable to follow this decision. Gurney v. Seppings (1848) 15 L.J. Ch. 385 cited therein, does not appear to support the

view expressed in that case. The Lord Chancellor allowed the mortgagee to proceed with his action against the mortgagor on condition of his

depositing the money realised in Court as security for the sub-mortgagee. Relying on this case, COOTE observes at page 880, Vol. II (seventh

Edition) of his Law of Mortgages : ""If the debt is got in by the original mortgagee he is bound to apply it. in discharge of the sub-mortgage."" See

also Fisher on Mortgages, page 854. No reference is made in Singaravelu Udayan Vs. Ramayer, to Section 73 of the Transfer of Property Act

and to the principle underlying that section. There are numerous authorities in support of the position that the mortgagee is entitled to a charge upon

the property which through no fault of the mortgagee, has taken the place of the mortgaged property. It is well-known that the money or the

property given by Government in substitution for the lands taken up under the Land Acquisition Act is charged in favour of the mortgagee who had

his claim upon the property so taken. See Vira Ragava v. Krishnasami ILR (1882) M. 344 Jotoni Chowdhurani v. Amor Krishna Saha () 13

C.W.N. 351. The charge upon the proceeds of a sale of mortgaged property for arrears of revenue or of rent declared by Section 73 of the

Transfer of Property Act is recognised in Gosto Behary Pyne v. Shib Natt Dut ILR (1892) C. 241 in Beni Prosad Sinha v. Rewat Lall ILR (1897)

Cal. 746 and Kamalakanh Sen v. Abdul Barkat ILR (1899) C. 180 Where an undivided share in property is mortgaged and the mortgagor gets

specific property in lieu of the share on partition, it has been held that the mortgage is a valid encumbrance on the substituted property-- (1874)

L.R. 1 I.A. 106 (Privy Council) Hem Chunder Ghose v. Thako MonI Debt ILR (1893) C. 533 Joy Sankari Gupta v. Bhata Chandra Bardian ILR

(1895) C. 533 Lakshman v. GopaL ILR (1899) C. 434 Amolak Ram v. Chandan Singh ILR (1895) B. 385 and Section 44 of the Transfer of

Property Act. The puisne mortgagee is on the same principle entitled to a charge on the surplus sale proceeds on a sale under the first mortgage--

Bhamdeo Pershad v. Tara Ckand I.L.R (1902) A. 483. It would be difficult indeed to hold that so far as the 1st defendant (the mortgagor) is

concerned he would be at liberty to realise his decree and deal with the proceeds to the prejudice of his mortgagee, the plaintiff. As regards

defendants Nos. 10, 11 and 12 if there be any force in their contention it affects them quite as much as the plaintiff for they merely attached the

decree of the 1st defendant and not the amount realised in execution of it and they, not having therefore any lien upon the amount in deposit, are

not entitled to raise any objection to the plaintiff obtaining a decree against the 1st defendant and the amount which stands to his credit. As already

observed, however, I am inclined to hold that the plaintiffs have a valid charge on the amount in deposit in the Munsif''s Court at Mannargudi. I

would modify the decrees of the Courts below and declare that the plaintiffs are entitled to a lien for the amount decreed, on the amount in deposit

in the District Munsif''s Court at Mannargudi to the credit of the 1st defendant in O.S. No. 254 of 1891 and that the plaintiffs are entitled to draw

that sum from that Court in execution of this decree. The respondents will pay the appellant''s costs throughout on the amount decreed by the

Courts below.