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Smart Summary

Factual and Procedural Background

In 1931, the applicant's father secured a money decree for Rs. 36,000 against a judgment-debtor. On 27th September 1932, villages belonging to the judgment-debtor were sold in execution for Rs. 60,000 to two outside purchasers, who paid one quarter of the amount on the sale date and the balance by 2nd November 1932. The sale was initially set aside on 16th September 1933 under Order 21, Rule 90, but this decision was reversed on appeal on 27th November 1935.

At the time of the sale, four other decrees against the same judgment-debtor were under execution by persons who are the opposite parties in this case. Prior to the sale, in August 1932, these opposite parties applied under Section 73 of the Civil Procedure Code (CPC) for rateable distribution of the sale proceeds. While applications from opposite parties 3 and 4 were unopposed, opposite parties 1 and 2 raised objections on the ground that their execution petitions had been dismissed for default in August 1935, before the assets became available for distribution on 27th November 1935.

Following confirmation of the sale, the learned Subordinate Judge ordered rateable distribution in favor of all applicants, including opposite parties 1 and 2, which prompted the present application challenging that order as it related to these two parties.

Legal Issues Presented

  1. Whether opposite parties 1 and 2 were entitled to share in the rateable distribution of sale proceeds under Section 73 of the CPC despite their execution petitions being dismissed for default before the distribution occurred.
  2. The interpretation and application of Section 73 CPC regarding the timing of pending execution petitions relative to applications for rateable distribution.

Arguments of the Parties

Applicant's Arguments

  • Opposite parties 1 and 2 lost entitlement to rateable distribution because their execution petitions were dismissed for default prior to the date when the assets became available for distribution.

Court's Observations on Opposite Parties' Position

  • Opposite parties 1 and 2 had applied for rateable distribution before the assets were received by the Court and while their execution petitions were still pending.
  • The dismissal of their execution petitions after the application for rateable distribution does not affect their right to share in the distribution.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
18 CWN 1311 Dismissal of execution petition after application for rateable distribution does not affect the right to share in distribution. Supported the view that opposite parties 1 and 2 retained their right to share despite dismissal of their execution petitions after applying for rateable distribution.
4 Mad 383 Execution petition must be pending and unsatisfied at the time of application for rateable distribution. Distinguished on facts as in this case execution petitions were pending at the time of application, unlike in this precedent.
13 Rang 514 Execution petition must be pending and unsatisfied at the time of application for rateable distribution. Distinguished on facts; in this case, executions were pending at application time, unlike in the precedent where they were struck off prior.

Court's Reasoning and Analysis

The Court examined the wording of Section 73 CPC, which mandates rateable distribution of assets among all persons who have made applications for execution before the receipt of such assets and whose decrees remain unsatisfied. The Court found that opposite parties 1 and 2 had applied for rateable distribution before the assets were received by the Court and while their execution petitions were pending. The subsequent dismissal of their execution petitions for default before distribution did not negate their entitlement.

The Court distinguished precedents where execution petitions were dismissed prior to the application for rateable distribution, noting that those cases did not fulfill the timing requirements of Section 73. The Court also noted that the dissent in the Rangoon case did not consider the distinguishing fact that in this case the execution petitions were dismissed after the application for rateable distribution.

Accordingly, the Court upheld the order of the Subordinate Judge allowing rateable distribution in favor of opposite parties 1 and 2.

Holding and Implications

The application challenging the rateable distribution order in favor of opposite parties 1 and 2 is dismissed with costs.

The direct effect of this decision is to affirm the entitlement of opposite parties 1 and 2 to share in the rateable distribution of the sale proceeds despite the dismissal of their execution petitions after their applications for distribution. The Court did not establish any new precedent but applied existing principles to the facts at hand.

    (Kaviraj) Bimala Nanda Tarakatirtha v. Dhirendra Nath Chandra And Others Opposite Parties.

    Madan, J.:— The facts of this case are that in the year 1931 the applicant's father obtained a money decree for the sum of Rs. 36,000, and that on 27th September 1932, villages of the judgment-debtor were sold in execution for the sum of Rs. 60,000 and were purchased by two outside persons. The purchasers deposited one quarter of the purchase money on the sale date and the balance on 2nd November 1932. The sale was set aside on 16th September 1933 on an application filed under O. 21, R. 90, but it was confirmed on appeal on 27th November 1935. At the time of the sale four other decrees were under execution against the same judgment-debtor at the instance of persons who are the opposite party in this case. In August 1932, which was prior to the sale, these persons applied under Section 73 of the CPC for rateable distribution of the sale proceeds. The applications of two of the decree-holders, namely opposite party 3 and 4 were not opposed, but in the case of opposite party 1 and 2, objection was raised on the ground that on 27th November 1935, when the assets in the hand of the Court became available for distribution, their execution petitions were no longer pending, having been dismissed for default in August 1935. After the confirmation of the sale the learned Subordinate Judge passed an order allowing rateable distribution in favour of all the persons who had applied, and this application has been filed against that order so far as it relates to opposite party 1 and 2.

    2. Sir Sultan Ahmad for the applicant contended that opposite party 1 and 2 were no longer entitled to rateable distribution on the ground stated above, but this argument appears to be contrary to the wording of S. 73 itself which runs as follows:

    Where assets are held by a Court and more persons than one have, before the receipt of such assets, made application to the Court for the execution of decrees for the payment of money passed against the same judgment-debtor and have not obtained satisfaction thereof, the assets, after deducting the costs of realization, shall be rateably distributed among all such persons.

    3. In this case the opposite party had applied for rateable distribution prior to the dates, when the assets were received by the Court, namely 27th September and 2nd November 1932, and their own applications for execution were pending on that date. They had therefore done what was required of them by the law, and it became the duty of the Court to see that the rateable distribution was effected. The fact that opposite party 1 and 2 allowed their own pending execution to be dismissed for default before the rateable distribution was actually made seems to me to be immaterial. The same point arose in 18 CWN 1311,1 where it was held that the dismissal of an execution petition after the application for rateable distribution did not affect the right to share in the distribution. In 4 Mad 3832 and in 13 Rang 514,3 it was held that in order to entitle a creditor to apply for rateable distribution his own application for execution must be pending and unsatisfied at the time. In both these cases, however, the executions had been struck off prior to the application for rateable distribution, which is not the case here, and it was for this reason that the requirements of Section 73 were held not to have been fulfilled. In the Rangoon case it was pointed out that if it were held otherwise the result would be that a person whose application for execution would otherwise be time-barred under Article 182 of the Lim. Act, could still apply for rateable distribution, but, as I have already pointed out, the facts of the present case are different.

    4. It is true that in the Rangoon case, the Calcutta decision cited above was dissented from, but with all respect to the learned Judges who decided that case, I do not find from their judgment that the distinguishing feature of the Calcutta case was brought to their notice, namely that in that case the execution was dismissed after the application for rateable distribution. In my opinion the order passed by the learned Subordinate Judge in this case was correct and there is no reason to interfere. I would therefore dismiss this application with costs.

    5. Hearing-fee two gold mohurs to each of the opposite party 1 and 2.

    Mohamad Noor, J.:— I agree.

    P.R/A.L

    6. Application dismissed.

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    Comments

    (Kaviraj) Bimala Nanda Tarakatirtha v. Dhirendra Nath Chandra And Others Opposite Parties.
    (Oct 19, 1936)