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Case Number
Attorney(S)
  • Messrs H.D Bose, Ajit Ghose and Babu Sukumar Dey for the Appellants.
  • Messrs B.L Mitter (Advocate-General), G.C Biswas, Babus Hemendra Chandra Sen, Surendra Nath Bose (Sr.) and Satyendra Ch. Sen for the Respondent.
Judges
  • Mukerji
  • Graham, JJ.
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Citation Codes
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citation codes
Case Number
Attorney(S)
  • Messrs H.D Bose, Ajit Ghose and Babu Sukumar Dey for the Appellants.
  • Messrs B.L Mitter (Advocate-General), G.C Biswas, Babus Hemendra Chandra Sen, Surendra Nath Bose (Sr.) and Satyendra Ch. Sen for the Respondent.
Judges
  • Mukerji
  • Graham, JJ.
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Smart Summary

Structured Summary of the Opinion — Miscellaneous Appeal No. 318 of 1926

Factual and Procedural Background

Plaintiff-Respondent Tarubala Dasi instituted a suit for recovery of Rs. 15,000 and Rs. 1,000 as damages against the Appellants Sourendra Nath Mitra, Khoka Lal Mitra and one Parul Sundari Dasi in the Subordinate Judge's Court, Hughli, on 23 March 1926. On 30 June 1926 the Plaintiff applied for attachment of certain immovable properties specified in a schedule. The Subordinate Judge on the same day ordered the Appellants either to furnish security to the amount claimed or to show cause by 17 July 1926 and made an interim conditional order of attachment of the scheduled properties.

On 28 July 1926, after hearing the parties, the Subordinate Judge discharged the earlier attachment of the scheduled properties and passed an order attaching a specific property referred to as the "Kalachera" mehal unless security was furnished within a week: Sourendra Nath Mitra to furnish security of Rs. 10,000 and Khoka Lal Mitra Rs. 500, and the Plaintiff was to take necessary steps for attachment meanwhile.

The Appellants challenged that order by way of Miscellaneous Appeal No. 318 of 1926 and this Court issued Rule No. 851(m) in connection with the appeal. The petition for the rule had prayed only for a stay of execution pending the appeal, but the rule purported to go to the validity of the order and directed a stay on terms of furnishing security. Although the rule's terms were held to be misconceived, execution was in fact stayed once security was furnished; the appeal and the rule were heard together.

Legal Issues Presented

  1. Whether the order passed by the Subordinate Judge on 28 July 1926 was an appealable order under Order XLIII, r.1, cl. (q) read with Order XXXVIII rules 2, 3 or 6 of the Code (i.e., whether the order constituted the operative order of attachment contemplated by Order XXXVIII, r.6).
  2. Whether the Appellants' having furnished security (Rs. 16,000) pursuant to an interim stay granted by this Court affected the competency of the appeal against the Subordinate Judge's order.
  3. On the merits, whether the facts and materials before the Subordinate Judge satisfied the requirement of Order XXXVIII, r.5 (and r.6), namely whether the Defendants had acted with the requisite intent to obstruct or delay execution of any decree (clause (a) of r.5) so as to justify an order for attachment before judgment.

Arguments of the Parties

Appellants' Arguments

  • The Appellants contended that the order of 28 July 1926 was one made under Order XXXVIII r.6, and therefore was an appealable order under the provision cited (Or. 43, r.1, cl. (q)).
  • It was urged that the terms of the order meant that, upon expiry of the seven days and on the ministerial officers of the Court finding that no security had been furnished, they could proceed to draw up a writ of attachment without further judicial action—thus the order should be treated as the operative order under r.6.
  • The Appellants further relied upon the fact that they had furnished security to the extent of Rs. 16,000 pursuant to the interim stay granted by this Court, arguing that this compliance affected the matter (i.e., there was no failure to furnish security).

Plaintiff-Respondent's Position (as reflected in the record)

  • The Plaintiff's application and supporting affidavit asserted several competing claims against the Appellants' estate, including a claim by the Plaintiff herself for a stated larger amount and other creditor claims (e.g., a claim by Siris Kumar Ghose), alleged borrowings and mortgages affecting estate assets, an attachment on a Calcutta property for Rs. 50,000, and proposed or existing mortgages and promissory-note borrowings aggregating substantial sums.
  • On the basis of these facts the Plaintiff sought an order for security and attachment to protect eventual execution of any decree.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Haji Mahammaddin & Co. v. The Eastern Japan Trading & Co. Illustration that Courts sometimes combine two successive judicial orders (one calling for security and a later order for attachment) into a single order, thereby shortening procedure but causing complications. The Bench referred to this case as an example supporting the possibility that the Subordinate Judge may have intended to combine the orders in one instrument. That real possibility, and the resulting ambiguity as to whether the order of 28 July 1926 was final for the purpose of r.6, led the Court to resolve that ambiguity in favour of the Appellants (i.e., to entertain the appeal rather than dismiss it as premature).

Court's Reasoning and Analysis

The Court divided its analysis into a preliminary (competency) stage and a merits stage, addressing each in turn.

  1. Competency of the appeal (preliminary objection):

    - The Court examined whether the challenged order was made under Order XXXVIII rules 2, 3 or 6, the only subsections from which an appeal lies under Order XLIII r.1 cl. (q). It accepted that rules 2 and 3 were inapplicable. The only potentially relevant provision was r.6.

    - The Court read r.6 as contemplating an order that can be passed only after a Defendant has failed to show cause or failed to furnish the security required. On 28 July 1926 no such failure had yet been judicially established; accordingly, the proper form of order on that date would have been one simply calling for security and fixing a time for compliance, with a further judicial order being necessary on failure to comply before a writ of attachment could issue.

    - The Court emphasized that the form of the writ (specimen form No. 7 of Appendix T to the Code) presumes proof of failure to furnish security before the writ issues; thus the determination of failure is a judicial act for the Court, not a purely ministerial act for officers to undertake automatically upon expiry of time.

    - However, the Court acknowledged circumstances creating reasonable doubt that the Subordinate Judge intended the single combined operative order (supporting a final attachment). Those circumstances included: (a) information that a writ was actually drawn up on the basis of the order (later cancelled at the Appellants' attorney's request); (b) absence of any direction in the order to put the record before the Judge later for a further order; and (c) the absence of any subsequent order after expiry of the period prescribed. The Court also relied on the example cited from Haji Mahammaddin & Co. v. The Eastern Japan Trading & Co. showing such combining is not unknown.

    - Where reasonable doubt arises as to the competency of an appeal on such a technical ground, the benefit ought to be given to the Appellant. Moreover, dismissing the appeal as premature would impose additional cost and trouble on the Appellants and would be inequitable where any confusion was attributable to the Court's procedure.

    - The second branch of the preliminary objection (that the Appellants had already furnished security of Rs. 16,000 under the interim stay and therefore the Subordinate Judge's order had been complied with) was rejected on the ground that the Appellants did not intend that security to continue for the purpose of the Subordinate Judge's order; accordingly the order was not shown to have been complied with and the objection had no force.

  2. Merits — whether order was sustainable under Order XXXVIII (r.5 and r.6):

    - The Subordinate Judge's stated findings consisted essentially of a conclusion that the Defendants "have got vast properties" and "are running into debts" and that some restriction should be imposed on some of the Defendants' properties. The Bench held these findings to be inadequate to support an order under r.6.

    - Order XXXVIII r.5 requires the Court to be satisfied that the Defendant has acted as described in clause (a) or (b) of that rule "with intent to obstruct or delay the execution of any decree" that may be passed. The Court noted clause (b) was not in issue and therefore the focus was on clause (a) and the necessary intent.

    - The Court examined the materials: affidavits showed multiple claims against the estate (including a stated claim by the Plaintiff for Rs. 50,000 as set out in the affidavit), other creditor claims (e.g., Rs. 40,000 by Siris Kumar Ghose), mortgage borrowings by receivers (Rs. 40,000) and promissory-note borrowing (Rs. 10,000), an attachment of a Calcutta property for Rs. 50,000, and proposed or actual mortgages and promissory-note borrowings aggregating substantial sums (including an asserted proposal for a loan of Rs. 2,50,000 which the Appellants later said had fallen through).

    - The Court concluded these facts, taken together and in view of the value of the Appellants' properties, were insufficient to establish that the Defendants were about to dispose of their properties with the requisite intent to obstruct or delay execution of any decree. The Bench reasoned that executing a mortgage to secure debts already incurred does not necessarily indicate an intention to obstruct or delay an execution of a decree not yet passed; and where property value substantially exceeds debts and the plaintiff's claim, any mortgage may not obstruct realization because the Plaintiff could sell subject to the mortgage and still realize decretal dues.

Holding and Implications

Holding: The appeal succeeds and the order of the Subordinate Judge dated 28 July 1926 is set aside. (The Court explicitly found that the order passed by the Subordinate Judge could not be supported under the provisions considered.)

Implications for the parties:

  • The provisional attachment order made by the Subordinate Judge is quashed; no attachment order under the 28 July 1926 instrument stands.
  • As to costs, the Court declined to award costs in favour of the Appellants either in this Court or in the Court below. The Court observed that, given the relationship between the parties, it would have been reasonable for the Appellants to offer security to allay the Plaintiff's apprehensions; accordingly, each party will bear their own costs in these proceedings.

The opinion does not purport to lay down a new general precedent beyond applying existing procedural rules (Order XXXVIII and the requirement of intent under r.5). It applies those rules to the facts and resolves the appeal by setting aside the Subordinate Judge's order; no broader doctrine beyond the analysis recorded was announced.

Disposition

APPEAL ALLOWED; ORDER OF THE SUBORDINATE JUDGE SET ASIDE. EACH PARTY TO BEAR OWN COSTS.

Opinion authored by Mukerji, J.; Graham, J. concurred.

Show full summary ...

    Sourendra Nath Mitra v. Sreemati Tarubala Dasi

    The Judgment of the Court was as follows:—

    Mukerji, J.:— Miscellaneous Appeal No. 318 of 1926 has been preferred from an order passed by the Subordinate Judge, Second Court, Hughli, on the 28th July 1926, and Rule No. 851(m) has been issued by this Court in connection with the said appeal. The petition upon which the said rule has been issued only prayed for stay of execution of the aforesaid order pending the hearing of the appeal, but the rule purports to call in question the validity of the order and directs; a stay of its execution, pending the disposal of the rule, on certain terms as to furnishing of security. Evidently the rule is misconceived, or at any rate it terms;are inapposite, but the matter is of no importance now as, in point of fact, the; execution of the order was stayed on the requisite security being furnished, and the appeal and the rule are both pending and have come up for hearing together.

    The facts which led up to these proceedings are these: The Plaintiff-Respondent Tarubala Dasi instituted a suit for recovery of Rs. 15,000 together with Rs. 1,000 more as damages against the two Appellants Sourendra Nath Mitra and Khoka Lal Mitra and one Parul Sundari Dasi in the Court of the Subordinate Judge, Hughli, on the 23rd March 1926. On the 30th June 1926 she applied for attachment of certain immoveable properties of the Appellants mentioned in the schedule to the application. The Subordinate Judge on the same day ordered the Appellants to furnish security to the extent of the amount claimed in the suit or to show cause why the same should not be furnished on or before the 17th July 1926, and also passed an interim order for conditional attachment in respect of the said properties. The matter eventually came on for hearing I on the 28th July 1926 when on hearing both the parties the Subordinate Judge passed the order which is complained of in this appeal. The Subordinate Judge appears to have been of opinion that the exigencies of the case demanded an order for security and on failure to furnish the same an order for attachment before judgment, and as the Appellants' attorney suggested that if there was to be any attachment at all a certain property, which for the sake of brevity he called the Kalachera property, might be attached, the learned Judge discharged the order by which the properties earned by the Plaintiff in the schedule to her application had been attached on the 30th June 1926 as stated above, and passed, an order, the operative portion of which ran in these words:—“The mehal mentioned above, namely, Kalachera, shall be attached until further orders unless the Defendants shall furnish security, i.e, Sourendra Nath Mitra shall furnish security to the extent of Rs. 10,000 and Khoka Lal Mitra to the extent of Rs. 500 within a week from to-day. The Plaintiff shall take necessary steps for attachment of the mehal in the meanwhile.”

    Before dealing with the Appellants' contention in the appeal it is necessary to refer to a preliminary objection that has been taken as to its competency. The objection is two-fold. It is contended in the first place that the order in question is not one made either under r. 2 or r. 3 or r. 6 of Or. 38 which are the only orders in that order from which appeals lie under Or. 43, r. 1, cl. (q) of the Code. It is also contended that the Appellants have already furnished security to the extent of Rs. 16,000 in pursuance of the direction which was laid down as the condition precedent to the interim stay that was ordered by the rule. As regards the first branch of this preliminary objection I may say at once that it has a good deal of substance in it. It is not pretended that Or. 38, rr. 2 and 3 have any application here. The only rule that we need consider is r. 6. A plain reading of this rule shows that the order contemplated therein is one that can be passed only in the event of the Defendant's failure to show cause why he should not furnish security or on his failure to furnish the security required. No such thing had happened on the 28th July 1926 on which date the order in question was passed. The proper order to pass on that date would have been one calling for security, and fixing a time for furnishing the same, and on the failure of the Defendant to comply with that order, a further order of the Court would have been necessary for attachment of any property before judgment. I am unable to agree in the view which the Appellants have contended for, namely, that having regard to the terms of the order, as they are, no further order of the Court would be necessary in the present case in order to issue a writ of attachment. The form of the writ is to be found in specimen form No. 7 of Appendix T to the Code. It shows that the writ is to issue on proof of failure on the part of the Defendant to furnish the security. This failure then has to be proved before the writ can issue, and if that be the position, us I find it is, then, in my opinion, it is only the Court that can determine whether there has been failure or not. It was urged on behalf of the Appellants that on the strength of the order, such as was passed in the present case, the ministerial officers of the Court, on finding that no security was furnished, could, on the expiry of the seven days, proceed to draw up a writ, and therefore the order should be treated as one contemplated by r. 6. But could they? It is true that in the present case no security wras furnished, but to test the correctness of the proposition we may think of other cases, e.g, cases in which an extension of time is asked for by the Defendant, or some security is furnished which may not be sufficient, or, again, security is furnished but the sufficiency of it may have to be determined. In all such cases the Court will have to determine, and that judicially, as to whether there has been failure or not. A further order by the Court therefore would be necessary before the ministerial part of the work, namely, the drawing up of the writ may be taken in hand. I am therefore of opinion that the order that was passed on the 28th July 1926 is not the final and operative order of attachment that is contemplated by r. 6. On the other hand, I am not so sure that the learned Subordinate Judge did not intend that it was to be regarded as such an order. The grounds which weigh with me in entertaining this suspicion are the following:— In the first place we have been credibly informed that a writ of attachment was in fact drawn up on the basis of this order, and it was cancelled only at the request of the Appellants' attorney. Nextly, it appears that there is no direction given in the order to the effect that the records should be put up before the learned Judge on any subsequent date for another order being passed. Then again we have the fact that, as a matter of fact, no further orders were passed on the expiry of the period mentioned in the order. Added to these is the fact that it is not altogether uncommon for Courts to pass one order, in anticipation as it were, combining together what really should be two separate and successive orders, namely, one for security and the other for attachment. An order on very similar lines appears to have been passed in the case which came up on appeal before the Appellate Bench dealing with appeals from the Original Side of this Court: vide Haji Mahammaddin & Co. v. The Eastern Japan Trading & Co. (1). By thus combining two orders in one, the procedure is sometimes shortened but only for the time being, for, this shortening leads, more often than not, to endless complications. If on a question which relates to the competency of an appeal on a ground such as this a reasonable doubt arises, the benefit of that doubt should go to the Appellant. I am accordingly of opinion that this branch of the preliminary objection should be overruled. I take this view tile more readily because if we dismiss the appeal as being premature the only result would be that a further order will be passed by the Subordinate Judge and the Appellants will have to undergo the trouble and expense of a fresh appeal to this Court, and that appeal, it may also be mentioned, will have to be dealt with on the very materials that are now before us. In a case in which the Court, and not the Appellants, is to blame for what has happened, that would hardly be the right course to adopt. As regards the other branch of the preliminary objection the position appears to be this: The Appellants have furnished security to the extent of Rs. 16,000 in order to avail of the interim order of stay provided for in the rule issued by this Court. They do not mean to allow that security to continue for the purpose of the order from which this appeal has arisen, and accordingly it cannot be said that the order for security as made by the Subordinate Judge has been complied with. There is therefore no force in this objection.

    To turn now to the merits. The findings of the Subordinate Judge upon which the order is based are, to quote his own words, these:— “Therefore the Defendants have got vast properties no doubt. As they have run and are running into debts (this is apparent from the affidavits filed on either side), and without prejudicing the merits of the case I am of opinion that some sort of restriction shall be imposed upon some of the Defendants' properties.” That these findings are wholly inadequate to form the basis of an order under Or. 38, r. 6 cannot possibly be, and indeed has not been, controverted. R. 5 lays down that the Court has to be satisfied that the Defendant has acted as mentioned in cl. (a) or cl. (b) of that rule with intent to obstruct or delay the execution of any decree that may be passed against him. There is no question of cl. (b) in this case, and what we have to see is whether cl. (a) has been satisfied and the requisite intent made out. We have then to examine the materials on the record, and this I propose to do now.

    The relevant facts disclosed in the affidavit that was filed in support of the Plaintiff's application upon which the order has been passed are that there are several claims against the Appellants in respect of which suits are pending, a claim of the Plaintiff herself to the extent of Rs. 50,000, another by one Siris Kumar Ghose for Rs. 40,000, that the Receivers appointed in connection with the partition suit that is pending between the parties have borrowed on mortgage a sum of Rs. 40,000 and a sum of Rs. 10,000 on promissory notes, that one of the Calcutta properties has been attached for Rs. 50,000, that the Defendants have refused to consolidate the debts due by the estate, meaning thereby to join with the Plaintiff in acknowledging the debts now standing against her alone as the debts due by the estate, that they have borrowed Rs. 1,10,000 on promissory notes on which interest to the amount of Rs. 40,000 has accumulated and they are about to execute a mortgage in respect of this total amount of Rs. 1,50,000 and of a further loan of Rs. 2,50,000. In the affidavits that were filed on behalf of the Appellants before the learned Judge an explanation was given as to why Rs. 2,50,000 was required and in the petition upon which the rule was issued by this Court verified by the Appellants there is a statement that the proposal for the loan of Rs. 2,50,000 has fallen through. The nett result of all these then is that there are the aforesaid claims on the Appellant's estate, an attachment in respect of Rs. 50,000 on one of the Calcutta properties, and that the Appellants are about to mortgage their properties for Rs. 1,50,000 which, it is said, is due to one of the creditors. These facts taken together and in view of the value of the Appellants' properties, in my opinion, fall far short of establishing that the Defendants are about to dispose of then properties with intent to obstruct or delay the execution of any decree that the Plaintiff may obtain. An attempt to secure debts already incurred by executing a mortgage in respect of them does not necessarily indicate an intention to obstruct or delay the execution of a decree which has not yet been passed and such a mortgage will not, in a case when the value of the properties far exceeds the amount of said debts as well as the claim in the suit, necessarily obstruct or delay the execution, for the Plaintiff will be able to put up the properties to sale subject to the mortgage that may be executed and realize her decretal dues.

    I am accordingly of opinion that the order passed by the Subordinate Judge cannot be supported. The appeal therefore succeeds and the order of the Subordinate Judge is set aside.

    As regards costs I am not disposed to make any order in favour of the Appellants in these proceedings either in this Court or in the Court below as in my opinion having regard to the relation between them and the Plaintiff a more reasonable attitude for them to take up would have been to offer the security and thus allay any apprehension which she may entertain as regards difficulties in reaping the fruits of the decree that she is expecting in her favour. Each party will therefore bear his or her own costs in these proceedings.

    Graham, J.:— I agree.

    P.C

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    Comments

    Sourendra Nath Mitra v. Sreemati Tarubala Dasi
    (Jan 7, 1927)