Vibudha Priya Thirtha Swami vs Yusuf Sahib

Charles Arnold White, C.J.—For the purposes of the question to be decided in these appeals, the material facts and dates are as follow:

One Kalinga Hebbara obtained a decree against one Krishnaraya; On 5th July 1900, he attached certain property belonging to Krishnaraya and

the sale was fixed for 22nd August. Yusuf and Banubibi (the defendants in these suits) had also obtained decrees against Krishnaraya. On 19th

July, Yusuf applied for an order for rateable distribution u/s 295 of the CPC and on 27th July, an order for rateable distribution was made. On

23rd July, Banubibi applied for a similar order and on 1st August, the order was made. Meantime on 18th July, the plaintiff bought from

Krishnaraya, the judgment-debtor, the property which had been attached by Hebbara. The consideration for sale was a sum of Rs. 1,500. The

property had been mortgaged to the plaintiff by Krishnaraya. The sale-deed recites that the amount due to the plaintiff on his mortgage and certain

moneys were set off against the sum of Es. 1,500. Apparently, there was good consideration for the sale and the transaction was bona-fide. The

sale-deed also rocites the attachment by Hebbara and makes provision for payment by the plaintiff to Hebbara of the amount of his judgment-

debt, in order that the property might be freed from the attachment. On 28th July, the amount of the judgment-debt was paid into Court by the

plaintiff to be paid to Hebbara in satisfaction of his decree against Krishnaraya. On 1st August and 3rd August, the defendants obtained orders for

attachment. On 23rd August, satisfation of Hebbara''s decree was entered up. Hebbara brought the claims of the other judgment-creditors to the

notice of the Court and the order entering up satisfaction was made without prejudice to their rights to question the sale to the plaintiff. The

attachment made by Hebbara was not formally withdrawn. The plaintiff claimed the property. Yusuf and Banubibi resisted the claim on the ground

that they were entitled to execution against the property and rateable distribution. The plaintiff''s claim was rejected. The suits now under appeal

were then brought by him. The Munsif decided in favour of the plaintiff, but the District Judge held that the sale to the plaintiff was void and

dismissed his suits.

On these facts the question for determination is whether the sale to the plaintiff was void as against the defendants u/s 276 of the Code.

This depends upon whether, in the events which happened, assets were realized by sale or otherwise in execution of a decree within the meaning

of Section 295 of the Code so as to entitle the defendants to the benefit of that section. Their rights depend upon that section and if they have no

rights under that section they can have no "" claims enforceable under the attachment"" within the meaning of Section 276. In my opinion on the facts

of this case there was no realization of assets by sale or otherwise in execution of a decree. The sale was not made under any process of court. It

was made under a private arrangement between the judgment debtor and the plaintiff. No doubt at the time of sale the property had been attached,

but where moneys are realized by a private sale of attached, property by the judgment-debtor to a third party there is not, as it seems to me, a

realization of assets in execution within the meaning of Section 295. There is no doubt a realization of assets, but the realization is not in execution.

In execution"" means by execution, i.e., by some process of the court. I do not think the words ""wherever assets are realized by sale or otherwise

in execution of a decree"" can be read as if they simply meant where assets are realized for the purposes of satisfying a decree. The fact that the

amount of the judgment-debt was paid into court does not make the money so paid ""assets realized in execution.

The money was paid into court by the plaintiff on behalf of the judgment-debtor tut neither the plaintiff nor the judgment-debtor was under any

of digition to pay the money into court. Satisfaction could not have been entered up u/s 258 without the money having been paid into court. But

even if it were otherwise, I fail to see how the fact of payment into court in itself would make the money so paid "" assets realized in execution."" I

see no reason why Section 295 should not be constituted strictly as against judgment-creditors who claim rateable distribution. The effect of such a

claim, if allowed, necessarily diminishes protanto the amount available for the judgment-creditor through whose diligence the assets have been

realised.

The fact that the order of 23rd August entering up satisfaction was without prejudice to the right of the other judgment creditors to question the

alienation does not affect the legal rights of the parties. This order of course gave them no legal rights which they would not otherwise have had.

I do not think that any of the authorities are really in conflict with the view I have indicated. On the other hand there is a strong body of authority

in support of it,

In Gopal Dai v. Chunni Lal ILR 8 A.P. 67 the judgment-debtor''s property was attached but there was no sale. He paid into court a sum on

account of the judgment-debt. It was held that the money paid into court could not be regarded as ""assets realized in execution."" The fact that the

money was there paid in by the judgment-debtor himself and in the case before us it was paid in by a third party does not, as it seems to me, make

any difference. Neither does the, fact that only a portion of the judgment debt, and not, as in the case before us, the whole amount, was paid into

court. In the case of Purushotam Dass Tribhovandass v. Mahanant Surajbharthi Haribharthi ILR 6 B. 511 it was held that monies paid by a

judgment-debtor under arrest in satisfaction of a decree against him, were not assets realized by sale or otherwise, the ground of the decision being

that ""realized in execution"" meant realized by the sale by the court of the property of the judgment-debtor. In the present case there was no doubt a

sale of the debtor''s property but the sale was not by order of the court but was the outcome of a private arrangement between the debtor and a

third party. It is quite clear that an order for attachment u/s 274 is not ""realization."" There is no realization till the property is sold. If the sale is a

sale by the court, there is a realization in execution. If the sale is not by the court there is realization but not realization in execution. It seems to me

the test to apply is whether the assets were realized by sale or otherwise by a process in execution provided for by the Code. The case of Sorabji

Edulji Warden v. Govind Ramji F.N. Wadia and Anr. I.L.R., 16B. 91 satisfies this test, for there the debt due to the judgment debtor was realized

by means of an order made under. Section 268, a process in execution provided for by the code. A further ground of distinction is that, in that

case, there was no payment off of the attaching creditor by the party to whom the debt due by the Railway Company to the judgment-debtor had

been assigned. In the case of Manilal Umedram and Ors. v. Nanabhai Maneklal and Ors. I.L.R., 28 B. 264 the money was realized by a process

in execution provided for by the Code, viz. an order u/s 272. This is quite clear from a passage in the judgment of Jenkins, C.J., in page 274. The

learned judge observes: ""The Subordinate judge acting (as he appears to us to have acted) u/s 272 whether rightly or wrongly, ordered the letter to

be written to the Collector which resulted in the payment into court of this sum of Rs. 15,623-11-0. How can it with fairness be said by the present

petitioners that that money was not brought in in execution?

In the case before us the realization of the assets resulted not from the attachment of the property but from the sale of the property by the

judgment-debtor to the plaintiff. In the eases of Sew Bux Bogla v. Shib Chunder Sun I.L.R., 13 C. 225 and Prosonnomoyi Dassi v. Sreenath Boy

ILR 21 C. 809 respectively, the Court adopted the test which I think is the true one viz., that to constitute a ""realization"" within the meaning of

Section 295, there must be either a realization by a sale in execution under the process of the Court or a realization in one of the other modes

expressly prescribed by the Code. There is nothing in Mr Justice Kernan''s judgment in the case of Lakshmi v. Kuttunni I.L.R., 10 M.P. 57 where

it was held that when one decree-holder had attached land and another decree-holder against the same debtor had entitled himself to rateable

distribution, the latter was entitled to apply u/s 311 of the Code to set aside a sale, which is in conflict with the view taken in the two Calcutta cases

to which I have referred. The fact that the defendants themselves obtained orders of attachment on 1st August and 3rd August does not affect the

question whether there was a realization of assets within the meaning of Section 295.

On the facts of the present case I am of opinion that there was no realization of assets in execution within the meaning of Section 295. This being

so, it is not necessary to consider whether the words ""claims enforceable under the attachment,"" which were added to Section 276, by Act X of

1877 would include claims of judgment-creditor at whose instance the property was attached or whether as held in Manohar Das v. Bam Autar

Pande I.L.R., 25 A. p. 431 they only applied to the claims of the attaching creditor. It is also unnecessary to consider whether, having regard to

the fact that judgment-debt was paid in on 23th July although satisfaction was not certified till 23rd August, the attachment ceased to subsist on

28th July or whether it subsisted till 23rd August. The case of Kanli Moossa v. Makki I.L.R., 23 M.p. 482 would seem to be a clear authority for

holding that, at any rate, as from 23rd August, if not from 28rh July, the attachment of the property by Hebbara ceased to be operative. It is also

unnecessary to consider whether an application for rateable distribution whilst the attachment subsisted followed by an order for rateable

distribution made after the attachment ceased to be operative, constituted a claim ""enforceable under the attachment.

These questions of course only arise in the view that the case is one to which Section 290 applies.

For the reasons which I have stated I think the plaintiff is entitled to a decree I would set aside the decree of the District Judge and restore the

decree of the Munsif with costs in this Court and the Lower Appellate Court.

Davies, J.

I concur.