(1) This second appeal arises out of original suit no. 160 of 1956 of the district munsif's court, eluru, instituted by the appellants under order 21, rule 63 of the code of civil procedure. Defendants 1 to 4 obtained a money decree dated 27th november, 1950 in o. S. No. 80 of 1950 of the subordinate judge's court, eluru, against defendants 5 and 6. In execution the decree - holders attached the suit property belonging to the eluru municipality, on 11th march, 1955. The plaintiffs preferred a claim under order 21, rule 58, civil procedure code, objecting to the attachment on the ground that their firm, of which the fifth defendant was one of the partners, was the successful bidder of the suit property at an auction held by the eluru municipality which owned the property and that in pursuance of the successful bid, a portion of the price had been paid to the municipality out of the partnership fund". The executing court by its order dated 27th june 1956 held that the puchase at the auction was made by the fifth defendant in his individual capacity and dismissed the claim. Thereupon the plaintffs instituted the suit under order 21, rule 63 on 18th july, 1956. In the plaint their case was that, the plaintiffs and the fifth defendant constituted a partnership firm, that the fifth defendant bid at the auction held by the municipality for and on behalf of the partnership and paid part of the price out of the partnership funds, that subsequently on 10th october, 1949, the fifth defendant relinquished his interest in the partnership in favour of the plaintiffs for a consideration of rs. 1,500 and that therefore the fifth defendant had no manner of right or interest in the suit property on 11th march, 1955, when the attachment was levied. The decree - holders - defendants resisted the suit on the ground inter alia that the suit property was bid for at the auction by the fifth defendant for his own benefit and not on behalf of any partnership and that the plaintiffs had no manner of right or interest in it. They also pleaded that the alleged relinquishment of the fifth defendant's interest in the firm was not true or bona fide.

(2) It is well to mention here that the plaintiffs preferred the claim for and on behalf of the partnership and objected to the attachment of the suit property by defendants 1 to 4 on the basis that it was the exclusive property of the 5th defendant. The plaintiffs did not claim that on the date of the attachment the ownership of the suit property vested in them or in their firm.

(3) When the suit was pending, the plaintiffs obtained a sale deed dated 18th october, 1956, from the municipality to whom they duly paid the balance purchase money. Thereupon they sought to amend the plaint asking for a declaration that they became the owner of the property and that the decree - holders were not entitled to attach it in execution of a money decree obtained against the fifth defendant in his individual capacity. It appears that subsequently, during the pendency of the suit, the property was brought to court sale and was purchased by the 7th defendant who is the son - in - law of the decree - holder - third defendant. But this sale does not appear to have yet been confirmed by the court.

(4) The trial court held that the alleged relinquishment by the fifth defendant of his interest in the partnership on 10th october, 1949 was not true and bona fide and that the plaintiffs and the fifth defendant continued to constitute a partnership firm. On its appreciation of the evidence, the trial court further held that the successful bid for the suit property made by the fifth defendant at the auction held by the municipality was for his own benefit and not for the benefit of the partnership and that the part - payment towards price made by the fifth defendant was with his own money and not with partnership money. It however considered that the subsequent payment of the balance of the purchase money by the plaintiffs to the municipality came out of the partnership funds. It therefore, directed the 7th defendant - auction - purchaser to pay one half of this amount to the plaintiffs. Subject to this, it dismissed the suit. The plaintiffs and the 7th defendant preferred separate appeals to the district court at eluru. The district judge allowed both the appeals and declared that the plaintiffs were entitled to one half of the suit property. The other moiety, according to the learned district judge, fell to the share of the fifth defendant. The ground for holding so is that, the fifth defendant and the plaintiffs continue to be partners of a firm, the fifth defendant having an eight - anna share in it. As the share of the fifth defendant must be held to have been attached and purchased at the execution sale by the 7th defendant, the other half of the suit property must be held to have passed to the 7th defendant as auction - purchaser. The plaintiffs, who are aggrieved by this decision, have approached this court in second appeal. The learned counsel for the respondents has raised, what may be called, a preliminary objection to the maintainability of the appeal. He urged that the rights of the parties have to be determined with reference to the date of the attachment, viz. , 11th march, 1955. On that date, the plaintiffs had not obtained any interest in the suit property and that therefore their claim as well as their suit was not maintainable. The argument is that, so long as the plaintiffs had not obtained a sale deed from the municipality on the date of the attachment, they did not acquire any right, title or interest in the suit property to sustain the claim under order 21, rule 58, civil procedure code, or the suit under order 21, rule 63, civil procedure code, which followed it. In other words, the contention is that, it is only a person who has an estate or interest in the attached land in the sense in which it is understood under the provisions of the transfer of property act that can successfully maintain a claim under order 21, rule 58 or a suit under order 21, rule 63, civil procedure code. In support of this contention, reliance is placed on section 54 of the transfer of property act which says in express terms that,

"a contract for the sale of immovable property does not, by itself, create any interest in or charge on such property"

(5) As the successful bid at the auction held by the municipality did not, of itself, pass any interest or title to the suit property, the argument runs, the plaintiffs were not entitled to put forward any claim under order 21, rule 58, against the attachment of the property by the respondents - decree - holders.

(6) I do not think this contention is at all tenable. There is nothing in order 21, rule 58, which requires that a claimant should have an interest in the attached immovable property in the sense in which the expression 'interest' is used in the last paragraph of section 54 of the transfer of property act. The words in order 21, rule 58, are of wide amplitude to cover other interests which a claimant may have in respect of the property attached. The existence of a valid and pre - existing contract in favour of the claimant for the sale of the property brought under attachment clothes him with sufficient right an interest to enable him to intervene in execution with a claim under order 21, rule 58, civil procedure code. In veeraraghavayya v. Kamala devi, 1934 68 mlj 67: air 1935 mad 193 venkatasubba rao, j. , following a previous division bench ruling of the same high court in venkata reddi v. Vellappa chetti, 38 ic 107 : air 1917 mad 4 said :

"but then it is argued that under order 21, rule 59, the claimant is bound to show that at the date of the attachment he has some interest in the property, attached which interest, it is contended, means an estate in land. I cannot agree that the interest referred to in this rule is necessarily an interest in land in the sense that expression is used in section 54, t. P. Act. The civil procedure code and the transfer of property act are not in pari materia and there is no reason to suppose that it was within the contemplation of the legislature that the interest referred to in order 21, rule 59, should exclude all rights which are not interests in land. On the contrary, the very next rule shows beyond a possibility of doubt that the word 'interest' is used in a wider sense, for, that rule provides, inter alia, that the property shall be released from attachment if the court is satisfied that though it was in the possession of the judgment - debtor he held it not in his own account but in trust, for some other person : order 21, rule 60. A party in whose favour there is a contract of sale, can enforce specific performance of that contract as stated above against a transferee with notice. The illustration to section 40, t,p. Act, runs thus : 'a contracts to sell sultanpore to b. While the contract is still in force, he sells sultanpore to c, who has notice of the contract. B may enforce the contract against c to the same extent as against a. ' in the face of this, it seems unreasonable to hold, that the rights of the purchaser will not prevail against the claims enforceable under the attachment."

(7) The principle was reiterated by varadachariar, j. , who delivered the judgment in diravyam v. Veeranan ambalam, ilr 1939 mad 853 : 1939 2 mlj 822 : air 1939 mad 702. Which was a case of competition between an auction - purchaser on the one hand and a vendee subsequent to the attachment but in pursuance of an anterior agreement to sell. The division bench held that the subsequent sale by private treaty in performance of a previous contract for sale which was anterior to the attachment in execution prevailed over the court auction sale.

(8) In view of these decisions, it does not seem to be tenable to contend that a person in whose favour there is a prior agreement to sell has no interest whatsoever to prefer a claim or object to the attachment under order 21, rule 58, when the property he has contracted to purchase is subsequently attached in execution of a money decree against a third person. The claimant in such a case has a legal right to purchase the property in pursuance of the prior contract in his favour. A subsequent attachment and sale of the property by a thir person would certainly create obstruction in the way of his purchasing the property in performance of the preexisting agreement and would, to some extent, cast a cloud on the title which he would acquire under that purchase. He is, therefore, interested in guarding against such a contingency. This he could effectively do by intervening in execution proceedings by preferring objection to the attachment, under order 21, rule 58. That would also have the merit of fixing the decree - holder with notice of an antecedent agreement to sell in his favour and thereby obviate a possible embarrassing future litigation as to the acquisition of title to the property. It does not therefore appear to me valid to contend that a person entitled to the benefit of a pre - existing agreement for sale of the property in his favour is not entitled to prefer a claim under order 21, rule 58, civil procedure code, against the subsequent attachment of the property in execution of a money decree.

(9) Furthermore, in the instant case, the plaintiffs as partners were not only the successful bidders of the property but also paid a portion of the purchase money to the vendor - municipality. They have, therefore, a charge on the property for this amount. This is recognised in section 55 (6) (b) of the transfer of property act. In whitbread and co. , ltd. V. Watt, l. R. 1901 1 ch 911 at 913 - 14. Farwell, j. , quoted with approval the following passage from robbins on mortgages, volume 2, page 1376 :

"if a purchaser advances all or any part of the money to the vendor, and the contract is broken off, an implied contract arises, by which the purchaser has a lien on the land ; and if the purchaser properly declines to complete, he has a lien for the deposit and interest on unpaid purchase money, and for interest on the payments, and also for the costs of a suit by himself or the vendor to compel performance of the contract, and thislien attaches on the deeds. If the purchase goes off through the fault o f the purchaser, of course, he has no lien for what he has paid."

(10) Then he relied upon a decision of the house of lords in rose and others v. Watson, 10 hlc 672 at 683. Where lord cranworth put the matter thus :

"there can be no doubt, i apprehend, that when a purchaser has paid his purchase - money, though he has got no conveyance, the vendor becomes a trustee for him of the legal estate, and he is, in equity, considered as the owner of the estate. When, instead of paying the whole of his purchase - money, he pays a part of it, it would seem to follow, as a necessary corollary, that, to the extent to which he has paid his purchase - money, to that extent the vendor is a trustee for him ; in other words, that he acquires a lien, exactly in the same way as if upon the payment of part of the purchase - money the vendor had executed a mortgage to him of the estate to that extent."

(11) Thus the principle in english law (shorn of its conceptions of legal and equitable estates) is the same as in indian law, namely, that when a vendee has paid a part of the sale price, he will have a charge for that amount on the property intended to be sold, provided the contract does not fail on account of any misconduct or default on his part. This lien or charge the vendee will have although the vendor fails to execute a sale deed in his favour. In the present case, there does not appear to have been any misconduct or default on the part of the plaintiffs' firm in respect of per formance of their part of the contract to purchase the property from the municipality. Therefore, they can be said to have had a charge on the property in question, for, a part - payment of the sale price was made by them to the vendor. This is another ground for holding that the plaintiffs were entitled to maintain a claim under order 21, rule 58, and also to institute a suit under order 21, rule 63, civil procedure code, consequent on the rejection of their claim. The objection of a preliminary nature raised by the learned counsel for the respondents, therefore, fails.

(12) The court below has found, as a fact, that the 5th defendant bid at the auction held by the eluru municipality for and on behalf of the partnership and that a part of the sale price was paid by him to the municipality out of the partnership funds. The other firm finding of the court below is that, the alleged relinquishment on 10th october, 1949, by the fifth defendant of his share in the assets of the partnership set up by the plaintiffs is not true and that the fifth defendant continued to be a partner with the plaintiffs. The benefit of the fifth defendant's auction bid and part - payment of price enured to the firm of the plaintiffs and the fifth defendant. That was the position when the attachment of the suit property was made by the defendants - decree - holders in execution of a money decree obtained by them against the fifth defendant in his individual capacity. Neither the fifth defendant, nor the partnership for that matter, had obtained a sale deed of the suit property from the municipality when the attachment was levied on it by the decree - holders. The attachment was made on the basis that the fifth defendant was the owner of the property in suit. That was plainly an untenable position. On the date of attachment, eluru municipality was unquestionably the owner of the suit property and the municipality was not a party to execution proceedings. Indeed, it was not a judgment - debtor. Even if it be assumed that part of the purchase money which was paid to the municipality long prior to the attachment in question belonged exclusively to the fifth defendant, i am unable to see any valid ground or justification for the decree - holders to have attached the suit property in execution of a decree against the fifth defendant. The decree - holders could perhaps have proceeded against the money paid by the fifth defendant to the municipality in part payment of the price of the suit land. But this they did not do. Even the right of a vendee in the circumstances, to a charge on the property could not be enforced by an attachment of the security de hors the debt. The only course for the decree holders would have been to attach the debt. The security would then have followed the debt. But to seek to take the security in execution while leaving the debt itself severely alone does not seem to have even a semblance of justification in law. In the present case, the suit property was attached under order 21, rule 54, civil procedure code, as though it belonged to the fifth defendant - judgment - debtor. This, the decree - holders did with full knowledge that the fifth defendant only bid at an auction in pursuance of which he paid a portion of the bid money to the municipality. It is not, therefore, a case where the decree - holders can be said to have been misled by lack of knowledge of true facts. All the facts were brought to their notice in the claim proceedings under order 21, rule 58. Despite this, the decree - holders thought fit to attach the suit property under order 21, rule 54. The reason for this is not far to seek. They appear to have thought that sooner or later, the balance sale price would be paid and the municipality would execute a sale deed in favour of the vendee. They deliberately had in view the somewhat ambitious step of trying to get at the property as and when the sale deed come to be executed by taking their stand on the attachment and the consequent execution sale. It is significant in this context that the auction - purchaser is the son - in - law of the third defendant - decree - holder.

(13) The learned counsel for the respondents argued in this second appeal that the benefit of the subsequent sale by the municipality to the plaintiffs in pursuance of the previous bid at the municipal auction would enure to the benefit of the auction purchaser at the execution sale (7th defendant). This claim is sought to be rested on the principle of estoppel feeding the grant embodied in section 43 of the transfer of property act. I wholly fail to see how this principle can emerge in the present case. By the english law of estoppel,

"where a grantor has purported to grant an interest in land which he did not at the time possess, but subsequently acquires, the benefit of his subsequent acquisition goes automatically to the earlier grantee, or as is usually expressed, feeds the estoppel."

But the case on hand is one of involuntary sale. The judgment - debtor did not purport to grant any interest in land to the decree - holder or the auction - purchaser.

(14) Nor is this a case where the judgment - debtor can be said to have fraudulently or erroneously represented to the decree - holder or the auction - purchaser that he was authorised to transfer the suit property and professed to transfer it for consideration. I do not think it is necessary to labour this point. It is much too obvious that application of neither the terms of section 43 of the transfer of property act nor the equitable rule of estoppel feeding the grant can possibly arise in the present case. The outstanding fact is that, the property of the eluru municipality was attached in execution of a money decree obtained against the fifth defendant. This step itself was divorced from bonafides. It is perhaps yet another step in the same direction to invoke section 43 of the transfer of property act against the plaintiffs in the present action.

(15) Much of what i have stated above is on the assumption that the ' purchase' of the suit property at the auction sale held by the municipality and the payment of a portion of the bid money were all made by the fifth defendant in his individual capacity and for his own benefit. But in view of the finding of fact recorded by the court below, which has not been challenged in this second appeal, all this was done for the partnership and with partnership funds. The interest in and the benefit under the transaction vested in the partnership. Therefore, the decree - holders could have proceeded against the suit property in execution only in accordance with rule 49 of order 21, even assuming that it belonged to the partnership at that time. It is common ground that the decree in question was not "against the firm or against the partners in the firm as such". It was only against the fifth defendant in his individual capacity and against his wife who was not a partner. Therefore, the decree - holders were bound to adhere to the procedure prescribed by rule 49, the observance of which is obligatory. But they deliberately disregarded this rule which is intended for the protection of firms. Non - compliance with the provisions of rule 49 made execution against the suit property invalid, apart altogether from any other reason. The utter disregard of the provisions of rule 49, taken along with the circumstance that the suit property which undoubtedly belonged to the municipality was attached under rule 54 as if the fifth defendant was the owner of it, points to an abuse of the processs of court which has caused considerable embarrassment and difficulties to the plaintiffs and perhaps also opened up a vicious source of wateful future litigation. As i already stated, the decree - holders so acted despite their knowledge of true facts. This aspect of the matter only deepens their mala fides. It seems to be clear that the executing court was misled into directing attachment and sale of the suit property. The question is whether in the circumstances, the court is helpless to remedy the situation. I think it is not. It has been pointed out by chairns, l. C. , in rodger v. The comptoir d' escompte de paris, l. R. 3 p. C. 465 at 475.

"one of the first and highest duties of all courts is to take care that the act of the court does no injury to any of the suitors and when the expression'the act of the court" is used, it does not mean merely the act of the primary court, or of any intermediate court of appeal, but the act of the court as a whole from the lowest court which rentertains jurisdiction over the matter up to the highest court which finally disposes of the case. "

(16) This decision was rendered on an appeal to the privy council from the supreme dourt of hongkong. But the principle stated is of universal application. It was followed by the board in jai berham v. Kedar nath, l. R 1922 49 ia 351 : 44 mlj 735 : air 1922 pc 269, which was an appeal from a judgment of the patna high court. I think the proper course in a case like this, which if quietus is not given to the problem now, is likely to prove a veritable springboard for cantankerous future litigation, is to set aside the attachment and subsequent proceedings in execution which the court wrongly directed at the instance of the decree - holders who chose to act unfairly and illegally.

(17) But it is argued for the respondents that after all, the learned district judge has allowed the auction - purchaser only one half of the suit property and has permitted the plaintiffs to have the other half. This argument is devoid of merit, for, the judgment of the court below giving one half of the suit property to the auction - purchaser cannot be sustained in law. It thought that as the fifth defendant has an eight - anna share in the partnership, one half of the suit property could be given to the auction - purchaser who purchased it in execution of a money decree against the fifth defendant. This view appears to have proceeded on the assumption that every partner of a firm is entitled to a defined share in every item of immovable property belonging to the partnership, and that such share can, at a given point of time, be taken in execution by the creditor of an individual partner as exclusively belonging to his debtor. This notion is repugnant to partnership law.

(18) In addanki narayanappa v. Bhaskara krishtappa, 1959 1 an. W. R. 300 (f. B.) a full bench of this court has clearly pointed out the law on the subject. No doubt, the main question that arose there was whether some of the partners could relinquish their share in the immovable properties of the partnership by an unregistered document. In deciding that question, the entire law bearing on the subject was elaborately gone into by the full bench. It held :

"so far as english law is concerned it may be taken to be settled that a partner has no interest in 'partnership realty' as distinguished from the money arisingfrcm its sale. The share of a partner, therefore, is nothing more than his proportionate share of the partnership assets after they have been turned into money and applied in liquidation of the debts of the partnership. Further, in equity whether the assets of a partnership consist of lands or not the share in a partnership must be deemed to be personal and not real estate. It may be stated that the rule adopted by english courts is that, real estate intended by the partners to constitute a part of the partnership property, or treated by them as belonging to the partnership, is regarded in equity as converted into personality for all purposes, and also for the settlement of the claims of the partners inter se. The law in india is not different. Sections 14 and 15 of the indian partnership act, 1932, speak about what would constitute the property of a firm and declare that such property shall be held and utilised for the purposes of the partnership thereby indicating that so long as the partnership continues no part of the assets of a partnership could be regarded as belonging to any individual partner. Further, no part of the partnership assets could be utilised for a purpose other than that of the partnership. A partner, therefore, seeking to get his share could not get his share in specie in the movable and immovable properties but only after the assets have been converted into money, debts and liabilities discharged and it is only in the residue that he could get his proportionate share. The statute enjoins this process being gone through before a partner gets a share in the assets of the partnership and it is governed by sections 46, 48, 49 of the partnership act. It would, therefore, follow that a partner cannot predicate of a definite share in immovable property which he could transfer or give up."

(19) Lindley in his work on partnership (edition 10, page 416) stated the legal position in the following words :

"what is meant by the share of a partner is his proportion of the partnership assets after they have been all realised and converted into money, and all the partnership debts and liabilities have been paid and discharged. This it is, and this only, which on the death of a partner passes to his representatives, or to a legatee ofhis share ; and which on his bankruptcy passes to his trustee."

(20) It is, therefore, not legally possible for the creditor of an individual partner to seize upon a particular item of immovable property belonging to the partnership and claim it to belong to his debtor. The position is the same whether the property is purchased at an execution sale or in some other mode. The debtor - partner himself cannot claim any specified item of immovable property or any specified share therein as his exclusive property. A purchaser at a sale in execution of a money decree against the partner in his individual capacity cannot certainly be in a better position. The decision of the lower appellate court that the fifth defendant - partner owned one half of the suit property, therefore, plainly contradicts the well established position of law.

(21) The 7th defendant - auction - purchaser cannot, therefore, be held to have acquired one half of the suit property wrongly supposea to fall to the share of the judgment - debtor - partner. Reference may be made in this connection to the decision of a full bench of the lahore high court in ajudhia pershad ram pershad v. Sham sunder, 229 ic 307: air 1947 lah 13 (f. B.) in dealing with the rights of a person ' buying an interest in a partnership under order 21, rule 49, civil procedure code, it stated thus :

"it is evident that a transferee under section 29, indian partnership act, and by analogy, a person buying an interest in a partnership under order 21, rule 49, civil procedure code, does not acquire any interest in tangible assets of any kind. It is not until dissolution that his interest takes concrete shape. Up to that time, his sole right is to receive a share in the profits of the partnerhip in the running of which, he has no share whatsoever ; he is not permitted even to question the correctness of the amount offered to him. In an extreme case it is conceivable that the entire partnership assets may be devastated under his very nose and he will be powerless to prevent the injury to his rights. He cannot even move for dissolution of the firm himself. A reference to section 44, clause (e) , partnership act, will show that in a case where the share of a partner has been charged or sold under order 21, rule 49, civil procedure code, any of the remaining partners may sue for dissolution, but the right is not conferred upon the transferee of such share. Moreover, as has already been seen, dissolution involves liquidation of the entire assets, and the transferee willeven in such a case, receive nothing but liquidated assets as his share."

(22) It is not necessary to multiply citation to bring out a proposition of law so firmly settled. It is clear therefore that the decision of the court of appeal below that one half of the suit property belonged to the fifth defendant (partner) and that it passed to the 7th defendant as auction - purchaser in execution against the fifth defendant is wrong. The true position irresistibly appears to be that the entire procedure adopted in execution was vitiated by illegality, that the executing court was misled by the omission on the part of the decree - holders to bring correct facts to its notice, that the suit property could not have been attached on 11th march, 1955 as belonging to the judgment - debtor, that the plaintiffs were justified in objecting to the attachment and that from more than one point of view that objection ought to have been upheld by the executing court. It must be left to the decree - holders to take fresh proceedings in execution of the decree in accordance with law. The attachment in question has to be held to be invalid and raised. A decree to this effect has to be passed. The subsequent proceedings in execution which followed attachment will fall to the ground as a direct result of this decree. This second appeal is allowed to the extent indicated above with costs throughout against the decree - holders and contesting respondents. The cross - objections which raise substantially the same points also fail and are dismissed, but without costs. No leave. Appeal allowed; attachment and sale set aside ; cross - objections dismissed.