1. The decree-holder in O.S No. 29 of 1974 on the file of the Sub Court, Pathanamthitta, is the appellant. He obtained a decree on 18-12-1974 against the judgment-debtor for Rs. 5,848/- interest and costs. Even before judgment, he had applied for and obtained an order of attachment of certain amounts due to the judgment-debtor from the Divisional Forest Office. Ranni, being the amounts due to the judgment debtor in respect of the security deposit and all amounts due on account of a contract work executed by him in the Pampini Coupe. After obtaining the decree he applied by E.P No. 64 of 1975 for realisation of the decree amount from out of the amounts attached. It is at this stage that a petition E.A No. 61 of 1976 was filed by a third party claimant to release the attachment on the ground that by virtue of an agreement between the judgment-debtor and the claimant, the contract on the basis of which amounts are due to the judgment-debtor from the Divisional Forest Office, Ranni, was itself assigned to him, that he had provided for the security deposit made, the contract work had been executed by him, and that there was an irrevocable power of attorney executed by the judgment-debtor in his favour authorising him to execute the contract and realise all amounts due from the Divisional Forest Office for the work done. The Divisional Forest Officer also filed E.A No. 97 of 1976 to vacate the attachment in respect of the amounts due to the judgment-debtor on the ground that the amounts due to the judgment-debtor can be settled only after all accounts between him and the State are also settled.

2. It is further stated that the work has been completed by the claimant and part payment also has been made to him. The claimant alleges that since the judgment-debtor found it impossible to carry out the work he approached the claimant who advanced the deposit amount of Rs. 7,000/- and undertook to carry on the work at his expense and risk and did in fact execute and complete the work. An irrevocable power of attorney which has been marked as Ext. X1 dated 12-8-1971 was executed by the judgment-debtor in his favour. The claimant alleges collusion between the decree-holder and the judgment-debtor and according to him, the suit and the attachment are all only a method adopted to realise the money due for the work done and the deposit advanced by the claimant on behalf of the judgment-debtor. The decree-holder had filed a counter alleging collusion between the claimant and the judgment-debtor. Both the courts below found that there was an assignment of the contract which is marked as Ext. X9 dated 28-1-1971 between the judgment-debtor and the Forest Department. Ext. XI irrevocable power of attorney executed by the judgment-debtor in favour of the claimant authorises him to realise all amounts due from the Department This amounts to an equitable assignment of all amounts due on completion of the contract and hence the decree-holder is not entitled to realise the decree from out of the amounts due from the Divisional Forest Office, Ranni. The claim was accordingly allowed by the executing court and confirmed in appeal A.S No. 111 of 1978 of the District Court, Quilon. It is against this that the decree-holder has filed the above second appeal.

3. The plea of collusion raised by the decree-holder against the claimant and the judgment-debtor was apparently not pressed before the courts below, as no such question is seen considered in the judgment of the executing court or of the appellate court. The claimant also does not appear to have pressed the plea of collusion between the decree-holder and the judgment-debtor that he had raised in his claim petition. No evidence is adduced by either party in respect of the plea of collusion raised by them. No arguments were also advanced before me by either side in support of the plea of collusion.

4. Ext. X1 is the irrevocable power-of-attorney executed by the judgment-debtor on 12-8-1971 in favour of the claimant. Power-of-attorney was registered by the notary for Quilon District. Ext. X1 is in the following terms:

“POWER OF ATTORNEY

KNOW BY THESE PRESENTS, that I Thomas Varghese aged 48, son of Thomas Kottakkattothu Veedu, Narayanam Moozhi Post, Perunadu (Ranny) who has been entrusted with the work of simply coupe in pampany at Vadasserikara Range, Ranny Division as per agreement dt. 28-1-1971 with the Division Forest Officer Ranny on behalf of His Excellency the Governor of Kerala, do hereby authorise and appoint Shri K.P Ramachandran, aged 38, son of Narayanan Palpu, Vrindavanara Estate (Plot No. 12 Rubber Plantation) Maniyar Post, Vadasserikara, Pathanamthitta to execute the work as per the instructions of the departmental Officers as my Attorney forme and in my name and to receive and collect all payments due to me under the above said work by way of cheques from the State Government and security deposits and retention made in my name with Department. I hereby also declare that these presents and all powers hereby granted are and shall be irrevocable.

IN WITNESS WHEREOF I have set my hand to this POWER OF ATTORNEY this 12th day of August one thousand Nine hundred and seventy one.

THOMAS VARGHESE

(executant)

Witnesses:

1. K. Thyagarajan, Vineeth Bhavan, Chittar Post.

2. N. Mytheen Kunju, Mullakkal Padinjattathil, Neeravil, Perinad, Quilon.

Typed matter.

Officer of the Notary for Quilon District, Quilon dated 12-8-1971.

5. Ext. X2 Certificate issued by the Divisional Forest Officer shows that the Department had accepted the power-of-attorney Ext. X1 and that part payment had been made to the claimant who had executed the contract work and that the security deposit and retention amount due to him are pending to be released as the accounts relating to the work are not finally settled. Ext. X3 cheque dated 18-5-1971 produced by the State Bank of Travancore, Vadasserikkara on summons issued to it shows that the claimant had advanced Rs. 5,000/- to the judgment-debtor to provide funds for the security deposit to be made in respect of the contract, Ext. X9. It is the case of the claimant that the balance amount of Rs. 2,000/- for the security deposit was also provided for by him. The claimant as C.W 1 has deposed that the entire contract work was carried out and completed by him at his expenses and risk. There is no contra evidence by the judgment-debtor or the decree-holder or any other person on their behalf. The courts below were therefore right in holding that all the rights and liabilities under the contract Ext. X9 were really made over by the judgment-debtor to the claimant as per the irrevocable power-of-attorney Ext. X1 There can be no doubt that Ext. X1 creates an agency coupled with interest within the meaning of S. 202 of the Indian Contract Act. A similar document was considered in the decision reported in Seth Loon Karan v. I.E John (AIR. 1969 SC. 73) and the Supreme Court held that the power-of-Attorney amounts to an equitable assignment of the rights under the contract in favour of the holder of the power-of-attorney. The question of law is discussed in parapraphs 5, 7, 8 and 9 of the decision of the Supreme Court as follows:

“5. There is hardly any doubt that the power given by the appellant in favour of the Bank is a power coupled with interest. That is clear both from the tenor of the document as well as from its terms. S. 202 of the Contract Act provides that where the agent has himself an interest in the property which forms the subject-matter of the agency, the agency cannot, in the absence of an express contract, be ter minated to the prejudice of such interest. It is settled law that where the agency is created for valuable consideration and authority is given to effectuate a security or to secure interest of the agent, the authority cannot be revoked. The document itself says that the power given to the Bank is irrevocable. It must be said in fairness to Shri Chagla that he did not contest the finding of the High Court that the power in question was irrevocable.

6. xxxx

7. This takes us to the question whether the power given to the Bank amounts in equity to an assignment of the decree or any portion thereof, to the Bank. From the power of attorney it is clear that the amount under the decree was specifically earmarked for discharge of the debts due to the Bank. It was constituted as a special fund for the said purpose. The power to realise that fund was made over to the Bank with the further authority to set off the amount realised towards the debts due to it. In other words, the power of attorney is an engagement to pay out of the particular fund the debt due to the Bank and hence the same constitutes an equitable assignment of the amount due under the decree or so much of that amount as is necessary for discharging the debts due to it. That rule is recognised in Watson v. Duke of Wellington (1830) 39 ER. 231. Therein the plaintiff, executors of Mr. Sims, had advanced a large sum of money to Marquis of Hastings on the joint bond of the Marquis and a surety. The sum due on the bond exceeded £9,000. Towards the end of 1825, the Marquis having returned from India to England, the plaintiffs made repeated applications to him for payment of the debt. The Marquis represented that he was about to receive a large share of the Deccan prize-money; promised that their demand should be paid out of that fund: and begged that, in the meantime, no proceedings might be taken against him or the assets of his surety. On February 6, 1826, Mr. Allen, the solicitor of the plaintiff, again waited on the Marquis, who then stated that he had directed Col. Francis Doyle, whom he had empowered to receive his share of the prize-money, to pay the debt and costs due to the executors of Mr. Sims; and at the same time the Marquis wrote and delivered to Mr. Allen a letter addressed to Col. Doyle directing him that the executors of Mr. Sims were claimants on that fund for a bond debt with interest. From these facts the court of Chancery came to the conclusion that there was an equitable assignment in favour of the executors of Mr. Sims of a portion of the prize-money sufficient to meet the debts due to the estate of Mr. Sims by the Duke of Wellington. To the same effect is the decision in Burn v. Carvalho (1839) 41 ER. 265. Therein the Court of Chancery held that in equity, an order given by a debtor to his creditor upon a third person having the assets of the debtor to pay the creditor out of such fund is a binding equitable assignment of so much of the fund.

8. The courts in India, which administer both law as well as equity, have followed the rule laid down in the above decisions. In this connection reference may be made to the decision of the Bombay High Court in Jagabhai Lalluhhai v. Rustamji Nasarwamji (1885) ILR. 9 Bom. 311, and of the Patna High Court in Prahlad Pd. Modi v. Tikaitni Faldani Kumari, AIR. 1956 Pat. 233. In the latter case, the Patna High Court held that a transaction similar to the one we are concerned in this case, in substance amounted to allocation of fund to be appropriated towards the debt and therefore it is an equitable assignment. No decision taking a contrary view has been brought to our notice. We think that the rule laid down in the above decisions is a sound rule as it advances the interest of justice. We accordingly adopt that rule.

9. There was great deal of controversy as to whether on the strength of the equitable assignment in its favour, the Bank could execute the decree, even when the decree-holder (appellant) does not want that it should be executed. Shri Chagla argued that an executing, court cannot go behind the decree; it has to execute the decree as it stands; so far as that court is concerned, the only person who can execute the decree is he whose name is shown in the decree as the judgment-creditor; unless the decree has been transferred, and the transfer in question recognised under Order 21, Rule 16 of the Code of Civil Procedure, the court has no power to execute the decree when the judgment creditor does not want it to be executed. He urged that as the decree was not transferred to the Bank either in writing or by operation of law, nor was there any recognition by court of such a transfer, the Bank was incompentent to execute the decree in its own right. He was emphatic that the only method by which an assignee of a decree can execute the decree is by having recourse to Order 21, Rule 16. As the Bank cannot avail of that provision the execution cannot be proceeded with. In support of those contentions Shri Chagla invited our attention to various decisions. It is not necessary for us to go into those controversies in view of the decision of this Court in Jugulkishore Saraf, (1955) 1 SCR. 1369 : (AIR. 1955 SC. 376). Therein this Court held that an equitable assignee of a decree who cannot have the benefit of Order 21, Rule 16 can still execute the decree under S. 146 of the Code of Civil Procedure. Shri Chagla contested the correctness of that decision and desired that the question of law should be reconsidered by a larger Bench. We are bound by that decision and no compelling circumstances were made out for its reconsideration.”

6. The same view was expressed in another decision of the Supreme Court in Bharat Nidhi Ltd. v. Takhatmal (dead) by his L. Rs. (AIR. 1969 SC. 313). At page 315 it is held as follows:

“2………The obvious intention of the parties was to provide protection for the lender and to secure repayment of the loans. With that object in view the lender was authorised to receive payment of the bills and to appropriate the receipts towards repayment of the loans. As the lender had an interest in the funds the power of attorney was expressed to be irrevocable. On a proper construction of the document the conclusion is irresistible that there was an agreement between the lender and the borrower that the debt owing to the lender would be paid out of a specific fund of the borrower in the hands of the Government authorities. The power of attorney coupled with the endorsement on the bill dated July 19, 1948 was a clear engagement by Malbotra to pay the appellant Bank out of the monies receivable under the bill and amounted to an equitable assignment of the fund by way of security.”

7. I have no doubt in my mind that all the rights of the judgment-debtor under Ext. X(9) contract have vested in the claimant who had advanced the amounts for the security deposit and had also completed the work as per the contract with the Forest Department.

8. The learned Counsel for the appellant has cited a passage from Halsbury's Laws of England, Vol. 1, IIIrd Edition, at page 531 in support of his argument that Ext. X1 power-of-attorney does not amount to an agency coupled with interest. He has also relied on certain Text Books relating to powers-of-attorney. In the light of the two decisions of the Supreme Court mentioned above, it is unnecessary for me to consider the passages cited from the Text Books by the learned Counsel for the appellant.

9. The question of law raised at the time of admission of the second appeal is as to what are the rights created under Ext. X1 in favour of the claimant for the reasons already stated, I hold that Ext. X1 evidences not merely an agency coupled with interest but also an equitable assignment of all the rights of the judgment-debtor under the Contract Ext. X9 with the Forest Department in favour of the claimant.

10. The Second Appeal fails and is dismissed, in the circumstances, without any order as to costs.

11. Dismissed.