Ambica Prasad Singh And Another v. Ram Charitar Singh And Another

Reuben, J.:— This appeal by the executing decree-holders is directed against an order of the Subordinate Judge at Gaya allowing an application under Section 47 of the CPC.

2. The decree under execution was obtained by one Puran Dai, proprietress of village Kathar, against Jagmohan Singh and twenty three others for arrears of rent for the years 1338 to 1343 Fasli in respect of a mokarrari tenure in the village. The decree was for an amount of Rs. 9774. After realising Rs. 7000 out of this Sum by execution Mt. Puran Dai, on 8-7-1943, sold her milkiat interest in the village and the balance of the decretal dues to Ambica Prasad Singh, appellant 1, Mahesh Pandey, appellant 2 and one Adit Singh. The shares of these vendees are specified in the sale deed as being 0-5-6 pies, 0-6-6 pies and 0-4-0 annas respectively. Execution was taken out by the two appellants in the year 1946 under O. 21, Rr. 15 and 16 of the CPC. It was sought against only three of the judgment-debtors, who are residents of Mauza Jarao, the other judgment-debtors being residents of Kathar. The objection under S. 47 filed by two of these judgment-debtors has succeeded on two grounds: (1) that twelve annas of the decretal dues have been transferred to one or other of the judgment-debtors and, therefore, an application for their recovery by execution does not lie under proviso 2 to O. 21, B. 16, and (2) that, as to the remaining four annas share, the appellant Ambica Prasad is legal practitioner and, therefore, is debarred by Section 136 of the Transfer of Property Act, from enforcing by execution a decree obtained by him by assignment. The correctness of the decision is challenged in respect of both these grounds.

3. As regards the first ground, the challenge has been somewhat half hearted, the reason, being that the case of the applicant judgment-debtors is practically conceded by the execution, petition itself. It seems to have been admitted before the Subordinate Judge that, subsequent to the transaction by which Puran Dai transferred her interest to Ambica Singh and others, there have been several transactions by which Mahesh Pandey and Ambica Singh have transferred portions of their interest to either the judgment debtors or to close relatives of the judgment-debtors, the resulting distribution being that from Ambika Singh the daughter-in-law of Odai Nath Singh judgment-debtor has got a share of one and a half annas, and from Mahesh Pandey, Mahabal Singh judgment debtor, the wife of Basudeo Singh judgment-debtor, the mother of Matukdhari Singh judgment debtor, daughter-in-law of Jagmohan Singh judgment-debtor and the wife of Ramdeo Singh judgment-debtor have got respectively the shares of ten dams, fifteen dams, fifteen, dams one anna and one anna making a total of four annas thus leaving Mahesh Pandey with a share of two and a half annas. We find in the execution petition that all these purchasers are named as pro forma judgment-debtors, that is to say, judgment-debtors against whom no relief is sought in the execution proceeding. Further among the judgment-debtors, we find Adit Singh and in the explanation given in the execution petition, there is a note that he is the farzidar of the wife of Gariban Singh another of the judgment-debtors. The inclusion, of all these persons as judgment-debtors clearly supports the case of the appellant-petitioners that these purchases were benami purchases by the judgment-debtors themselves. As regards, the two and a half annas share remaining with Mahesh Pandey, the case of the applicant-judgment debtors is that he is the farzidar of the judgment-debtors Chhabinath, whose son-in-law he is. The relationship was denied, but the evidence strongly points to the correctness of the Subordinate Judge's conclusion that he is, in fact, so related. Direct evidence to this effect was given by Ram Charitar applicant (A.W 2) and Jhako Singh (A.W 3). The applicant judgment-debtors took the hold course of examining as a witness on their behalf one of the judgment-debtors belonging to village Kathar, in respect of whom the allegation of farzi purchase had been made, namely, Ramdeo Singh. Naturally, the witness did not support the story of the alleged relationship, but instead of a direct denial, he said that he did not know if there is any such relationship. An equal uncertainty was shown by Balbhadar Singh, witness 1 for the executing decree-holders, who began by a statement that Chhabinath is not the father-in-law of Mahesh Pandey, went on to the pretence that, though Chhabinath is his co-villager and his uncle he does not know if Chhabinath has or has not one daughter and ended by saying that he “cannot deny if Mahesh Pandey is the son-in-law of Chhabinath.” This assumption of ignorance, which cannot but be false, speaks for itself, and, if we take this behaviour and consider the purchase in the name of Mahesh along with the numerous purchases in the names of close relatives of the judgment-debtors and relating to small portions of the decree, there can be little doubt that the purchases were, in fact, on behalf of the judgment-debtors. Apparently, the judgment-debtors by a series of purchases are trying to apportion between themselves the liability for satisfying the decretal dues, and execution has been taken out in the present case against the judgment-debtors who belonged to another village and, apparently, have not come into this scheme of adjusting the liability by private transactions. In connection with the plea of farzi purchase by the judgment-debtors, it has been suggested to us that the Subordinate Judge was under a mistake as regards the nature of the interest purchased by Mahesh Pandey and Adit Singh and transferred by the former to the persons named above. The fact is, we were told, that the purchase of these two persons was confined to the milkiat interest alone and that the decretal dues were entirely purchased by Ambica Singh. This was not the case of the executing decree-holders before the Subordinate Judge and is contradicted by the execution petition itself, since Mahesh Pandey is included as an executing decree-holder. This case has not been made out in the memorandum of appeal to this Court, and it is not open to the appellants to take this ground now.

4. I come now to the second point. Section 136 of the Transfer of Property Act, provides that no Judge, legal practitioner or officer connected with any Court of Justice shall buy or traffic in, any share of or interest in any actionable claim, and no Court of Justice shall enforce at his instance, any actionable claim so dealt with by him as aforesaid. It is urged that decretal dues are not an actionable claim within the meaning of this section. In support of this contention reference is made to Afzal v. Ramkumar, 12 Cal. 610, Dagadu v. Vanji, 24 Bom. 502 : (2 Bom. L.R 414) and Krishnaswami Naidu v. Andi Chetti, 51 Mad. 681 : (A.I.R (15) 1928 Mad. 478). Of these decisions, only the first is a reasoned judgment. Their Lordships gave four reasons for their holding that a decree is not an actionable claim, firstly, that what is intended by this term is an actionable claim and not a claim which has already passed into a decree, secondly, that the Code of Civil Procedure, which was passed in the same year as the Transfer of Property Act, distinguishes between debts and decrees, thirdly, that in Section 232 of the CPC there is special provision regarding the transfer of decrees and the notice necessary to be given in such cases and, fourthly, that S. 233 of the Code lays down the same rule in the case of decree as is prescribed by Section 137 of the Transfer of Property Act, in the case of debts. The decision in Dagadu's case, 24 Bom. 502 : (2 Bom. L.R 414) merely follows the authority of the Calcutta decision. Krishnaswami's case, 51 Mad. 681 : (A.I.R (15) 1928 Mad. 478) follows these two decisions and cites also Govindarajulu Naidu v. Ranga Rao, 40 M.L.J 124 : (A.I.R (8) 1921 Mad. 113), which merely decides that a judgment debt is property and that a transfer of it by the guardian of a minor does not require the Court's consent under O. 32 R. 7 of the CPC. Analysing the reasons given by their Lordships in the case of Afzal, 12 Cal. 610, they do not by themselves appear conclusive. The first ground seems to be plausible enough, but it is based on a mere consideration of the meaning of the words “actionable” and “claim” that is to say, a claim in respect of which an action lies is an actionable claim, and one in respect of which action has been taken and has fructified in a decree is not an actionable claim. It may be true that the Code of Civil Procedure makes a distinction generally between debts and decrees. But there is necessarily a difference between the two independent of the question as to whether decrees are or are not actionable claims. A debt may arise in various ways; a decretal debt is a particular form of debt in which the liability of one party to another has been determined and fixed by a Court. The two are, therefore, not the same thing, although one is included in the other. Section 232 of the CPC of 1882 corresponds to O. 21, R. 16 of the present Code. It provides for the execution of a decree at the instance of the transferee, where the decree has been transferred by assignment in writing or by operation of law. It requires as a condition precedent to execution, that where the transfer is by assignment, notice in writing of the application shall be given to the transferor and the judgment-debtor. These provisions merely specify the conditions requisite for a transferee to obtain execution of the transferred decree. They do not necessarily indicate that the Legislature regarded a decree, as outside the category of actionable claims and not affected by the provisions of the Transfer of Property Act relating thereto. Section 137 of the Transfer of Property Act, enacts that the person to whom a debt or a charge is transferred shall take it subject to all the liabilities to which the transferor was subject in respect thereof at the date of the transfer. Section 233 of the CPC makes an equivalent provision in respect of decrees. This may have been done ex majore cautela, the idea being that a judgment-debt, being ascertained by a Court, might be treated as carrying greater weight than an ordinary debt and, therefore, being likely to be regarded as over-riding equities.

5. The decisions in the above mentioned cases may at first sight be justified by the definition of an actionable claim in Section 130 of the Transfer of Property Act, as originally enacted:

“a claim which the civil Courts recognise as affording ground for relief is actionable whether a suit for its enforcement is or is not actually pending or likely to become necessary.”

The mention of the pendency of a suit in the latter part of the definition suggests that the word “actionable” is used with reference to the possibility of the debt being sued for. Some doubt on this interpretation is cast, however, by cl. (d) of S. 135 as originally enacted:

“Where an actionable claim is sold, he against whom it is made is wholly discharged by paying to the buyer the price and incidental expenses of the sale, with interest on the price from the day that the buyer paid it. Nothing in the former part of this section applies…

(d) where the judgment of a competent Court has been delivered affirming the claim, or where the claim has been made clear by evidence and is ready for judgment.”

6. Some doubt arose as to the meaning of this clause. It was interpreted by the Calcutta and Bombay High Courts to mean that the transferee of an actionable claim could recover the whole amount due if he succeeded subsequently to the transfer in obtaining a decree for this sum. The Allahabad High Court, however, held that the clause referred to the state of things existing at the time of the assignment, that, is to say, the claim had already become fixed by a judgment of a competent Court or had been made clear by evidence and ready for judgment at the time of the assignment. The latter view was accepted and, in my opinion, rightly by a Full Bench of the Madras High Court in Nilalcanta v. Krishnasami, 13 Mad. 225 (FB). On this interpretation, it would appear to follow that a judgment-debt is an actionable claim.

7. In the course of argument before us, several other decisions were referred to as authorities for the proposition that a judgment-debt is not actionable claim. Venkatarama Aiyar v. Ramasami Aiyer, 44 Mad. 539 : (AIR (8) 1921 Mad. 56), Prasanno Kumar v. Ashutosh Roy, 18 Cal. W.N 450 : (A.I.R (1) 1914 Cal. 60) and Hari Prasad v. Kodo Marya, 1 Pat. L.J 427 : (A.I.R (3) 1916 Pat. 10) are merely authorities that a decree for the ascertainment of mesne profits is not a “right to sue” within the meaning of cl. (e) of Section 6 of the Transfer of Property Act. There is no reason for thinking that the words “right to sue” connote the same thing as the words “actionable claim.” The terms “sue” and “suit” are well understood in India. They occur in the Code of Civil Procedure and have acquired a technical meaning. In cl. (e) of S. 6, there is, therefore, a distinct reference to a right on the basis of which a suit can be brought. Had the Legislature intended that the terms “actionable claim” should have a similar meaning, it seems unlikely it would have used the word “actionable” rather than a word derived from the terms “suit.” The difference in language between Section 6, clause (e) and the provisions of chap. 8 of the Transfer of Property Act, therefore, suggest that there was no intention on the part of the Legislature to exclude judgment-debts from the category of actionable claims. Ganpat Rai v. Sarupi, 1 All. 446, which has also been cited, is merely an authority that the purchaser of a simple mortgage decree does not acquire a lien on the property mortgaged.

8. Coming to the Transfer of Property Act, as it now stands, it is doubtful whether Afzal v. Ram Kumar, (12 Cal. 610) (ante) can be regarded as an authority for the proposition for which it is cited. Actionable claim is now defined as,

“a claim to any debt, other than a debt secured by mortgage of immovable property or by hypothecation or pledge of movable property, or to any beneficial interest in moveable property not in the possession, either actual or constructive of the claimant, which the civil Court recognise as affording grounds for relief, whether such debt or beneficial interest be existent, accruing, conditional or contingent.”

The reference to the pendency or otherwise of a suit which occurred in the previous definition has been omitted. The definition has been brought into accord with the concept in English law of a chose in action, vide Halsbury's Laws of England, second Edn., vol. 4 at p. 418:

“The expression ‘chose in action’ or ‘thing in action’ in literal sense means a thing recoverable by action, as contrasted with a chose in possession, i.e, a thing of which a person has not only ownership, but also actual physical possession. The meaning of the expression has varied from time to time, but it is now used to describe all personal rights of property which can only be claimed or enforced by action, and not by taking physical possession. It is used in respect of both corporeal and incorporeal personal property which is not in possession.” The term “chose in action” appears to be very elastic and Halsbury mentions that it includes claims which are not enforceable in Court but which depend for their reduction into possession, if they are so reducible at all, upon a variety of conditions (ibid, Article 782). The distinction in English law appears to be between a chose in action and a chose in possession. The former term indicates a claim in respect of which some action is necessary before it comes into possession of the person entitled thereto. This action is not confined to something indicated by the word “action” in a technical sense, and as just mentioned, no legal proceeding may be possible for reducing it into possession. Further it is clear that the term “action” covers proceedings in execution, and that judgment debts are regarded as chose in action (ibid, Article 786). They seem also to have been treated as choses in action in the Supreme Court of Judicature Act of 1873, 36 and 37 Vict. ch. 66: Forster v. Baker, (1910) 2 K.B 636 : (79 L.J.K.B 664) and in the Law of Property Act, 1925, vide Halsbury's Laws of England, Second Edn., Vol, 4. Article 794).

9. In the case of choses in action, therefore, there is no reason for interpreting the word action in a technical sense so as to exclude a judgment-debt. Still more in India, where the word “action” is not used in a technical sense, there is no reason to interpret it in this manner. I am supported in this conclusion by Section 130 of the Transfer of Property Act, as it now stands, which provides in sub-s. (2) that the transferee of an actionable claim, may upon the execution of a proper instrument of transfer, “sue or institute proceedings” for the same in his own name without obtaining the transferor's consent to such “suit or proceedings.”

10. I may further cite in support of this conclusion Govardhan Das v. Friedmans Diamond Trading Co. Ltd., A.I.R (26) 1939 Mad. 543 : (188 I.C 878) which unfortunately gives no reason, and Digambar v. Satish Chandra, A.I.R (26) 1939 Cal. 717 : (185 I.C 368) which, however, is based on some special facts. I may also refer to Vythilingam Padayachi v. Sitharam Ayyar, 23 Mad. 449 : (10 M.L.J 77) where the decree in question was the decree of a foreign Court.

11. In the result, I must hold that the Subordinate Judge has decided correctly on both the grounds and this appeal has no merits.

12. The appeal will, therefore, be dismissed with costs.

13. Sinha, J.:— I agree.

G.M.J

14. Appeal dismissed.