Basheer Ahmed Sayeed, J.
1. This appeal arises out of the order passed by the learned District Judge of North Arcot in Execution Application No. 19 of 1950, in Execution Petition No. 15 of 1948, in Original Suit No. 71 of 1927, on the file of the Sub-Court, Vellore. The Appellant is the first Respondent in Application No. 19 of 1950. The first of the two Respondents in the appeal before us was the Petitioner in the lower Court.
2. The first Respondent in his petition filed under Section 47, Code of Civil Procedure, prayed to the District Court that the properties described in his petition which are comprised in schedule A to the execution petition, should be exonerated from liability under the decree in execution on the ground that the second Respondent Kanniappa Mudaliar had no saleable interest in the suit properties and that the first Respondent was entitled to the same by virtue of his purchase in court-auction held in Execution Petition No. 2 of 1943, in Original Suit No. 71 of 1927, on the file of the Sub-Court, Vellore. Original Suit No. 71 of 1927, was a suit for partition by two Plaintiffs as against ten Defendants. A preliminary decree was passed on the 4th August 1930, and against that decree an appeal was filed by the first Defendant in the suit. The appeal was Appeal Suit No. 330 of 1930, on the file of the High Court. The first Defendant in the suit also filed an application for staying of further proceedings in the suit which was Civil Miscellaneous Petition No. 3514 of 1930, and he prayed for staying the passing of the final decree as well on condition that the Petitioner therein, namely, the first Defendant, furnished security for Rs. 12,000 to the satisfaction of the Sub-Court, Vellore. Further proceedings in the suit and the passing of the final decree appears to have been actually stayed on the acceptance of the security offered by Defendants 1 and 2 and another. Meanwhile, both the first Plaintiff and the first Defendant died and Plaintiffs 2 to 4 were impleaded as legal representatives of the first Plaintiff. Similarly the second Defendant was recognised as the representative of the first Defendant. A final decree was passed on the 1st November 1941, in which various sums were decreed to be paid by the second Defendant to Plaintiffs 2 to 4 as one group and to Defendants 3 and 4 forming the second group. The direction in the decree material to the present appeal was the creation of a simultaneous charge over the shares of the second Defendant in the immovable properties for payments of the amounts decreed to Plaintiffs 2 to 4 and Defendants 3 and 4 respectively.
3. Thereafter Plaintiffs 2 to 4 filed Execution Petition No. 2 of 1943, for recovery of a sum of Rs. 25,958-13-0 as against the second Defendant and their surety by sale of the charged properties as well as the properties covered by the security bond already referred to and prayed for other reliefs as well. Notice of this execution application was issued to the second Defendant and to the 12th Defendant who was the representative of the surety. Objections raised against the execution petition were heard and overruled by the Judge. The twelfth Defendant would appear to have deposited on the date of sale, namely, 11th September 1944, a sum of Rs. 12,000, in Court and consequently the sale of his properties which were offered as security appears to have been averted; but the other properties covered by the execution application were sold and the first Respondent-Petitioner who is a stranger third party, purchased them for Rs. 15,500, at the court-auction. This sale was duly confirmed and a certificate of sale was issued on the 21st December 1944. Under this sale certificate, the auction-purchaser took possession of the properties and has been in enjoyment.
4. Thereafter the present Appellant before us who was the first Respondent in the lower Court, obtained an assignment of the decree from the fourth Defendant by a registered deed, dated 26th January 1948. He became entitled to recover the sum due under the decree by virtue of this assignment and, therefore, he filed Execution Petition No. 15 of 1948, for recovery of a sum of nearly Rs. 60,000, from the second Defendant and sought the sale of the properties. The second Defendant-judgment-debtor did not object to the recognition of the assignment in favour of the Appellant and the transfer was accordingly recognised and the Court ordered execution of the decree to be proceeded with.
5. Thereupon the first Respondent impleaded himself in the execution petition, namely, No. 2 of 1943, and filed Execution Application No. 19 of 1950, out of which the present appeal has arisen. In his application as already stated, he claimed that the properties purchased by him in court-auction and which were in his possession and enjoyment should be exonerated from being proceeded with in execution. In his petition he raised three grounds in support of his prayer. The first ground was that he had a priority of charge since his charge really arose out of the security bond executed by Defendants 1 and 2 and the surety covered by exhibit A-3 and that it was intended to operate only in favour of the Plaintiffs in whose footsteps he had entered as auction-purchaser. His point was that the preliminary decree was only in favour of the Plaintiffs and though the final decree created charges in respect of the sums payable to the Plaintiffs and also to the Defendants 3 and 4, the charge of the Plaintiffs had a priority under the circumstances. The second ground urged by the first Respondent was that the Appellant was estopped by conduct and notice of exhibit P-2 in which the first Respondent became the auction purchaser. He also urged that the Appellant's assignor, the fourth Defendant in the suit, was aware of the execution petition filed by the Plaintiffs and that the Appellant who became the assignee of the fourth Defendant, was himself conducting the litigation on behalf of the Plaintiffs, that the fourth Defendant also filed an execution petition No. 8 of 1945, for delivery of possession of the properties allotted to him under the decree when Execution Petition No. 2 of 1943, in which the sale was held was pending. The first Respondent also urged that the fourth Defendant and the present Appellant accepted the Court sale by applying for rateable distribution of the assets in Execution Application No. 164 of 1946. The third and the most important ground which is material for the purpose of this appeal was that, where properties are sold in the enforcement of a single indivisible charge created under a decree, even though the sale was for the amount due to one party alone, the property passed free of encumbrances to the court-auction purchaser and the charge, if any, in favour of another creditor became extinguished by such sale and that the remedy of any other interested party entitled under the charge would be only against the moneys realised by the sale by rateable distribution.
6. The learned District Judge did not accept the first two grounds urged by the first Respondent and held that the first Respondent was not entitled to any priority and that the final decree created a simultaneous charge not merely in favour of Plaintiffs 2 to 4 but also Defendants 3 and 4. The learned District Judge also held that, notwithstanding the fact that it might be said that the fourth Defendant was aware of the execution petition and that he also applied for rateable distribution of the assets in Execution Application No. 164 of 1946, which was dismissed, if the properties were still liable to be proceeded by way of enforcement of the charge, it was no defence to contend that there was some kind of estoppel by conduct because the Appellant-first Respondent must be deemed to have acquiesced in the court sale. The learned Judge also held that actually in Execution Petition No. 2 of 1943, no notice of the application was issued to Defendants 3 and 4 though the fourth Defendant was impleaded in the proceedings before him as legal representative of the third Defendant who died. But on the third question, the learned District Judge, however, held that the first Respondent was entitled to succeed on the principle of law governing mortgages and held that the properties having been sold for full value to third party in enforcement of the single indivisible charge at court-auction, the court-auction purchaser took them free of any further liability under that very charge and therefore allowed the petition. The first Respondent, the assignee of the decree in favour of Defendants 3 and 4, has preferred this appeal against the said order of the learned District Judge.
7. Mr. N.R. Raghavachari, appearing on behalf of the Appellant, urged that the principle of the extinguishment of mortgage rights when properties are brought to sale in execution of mortgage decrees cannot apply to charges created by a decree of Court and that the rule laid down in Section 100 of the Transfer of Property Act does not apply to such charges created by decrees of Court. The first part of Section 100 relating to the charges is to the following effect:
Where immovable property of one person is by act of parties or operation of law made security for the payment of money to another and the transaction does not amount to a mortgage, the latter person is said to have a charge on the property, and all the provisions here in-before contained which apply to a simple mortgage shall, so far as may be; apply to such charge.
The second part of Section 100 is to the following effect:
Nothing in this section applies to the charge of a trustee on the trust property for expenses properly incurred in the execution of his trust and save as otherwise expressly provided by any law for the time being in force, no charge shall be enforced against any properly, in the hands of a person to whom such property has been transferred for consideration and without notice of the charge.
8. Relying on this section it is that the learned Counsel for the first Respondent vigorously contends that, since the auction purchaser, the first Respondent, had paid consideration and since the sale has taken place in the enforcement of a single indivisible charge, the charge cannot be enforced against the properties in the hands of the auction purchaser, as the section lays down that all the provisions which apply to simple mortgages also apply to such charges. It is true that the auction purchaser has paid full consideration for the property which he has purchased in court auction but that does not mean that he has paid also the value of the charge in favour of Defendants 3 and 4. But even granting that Section 100 applies to a charge created by a court decree, it is difficult to see how merely because the auction purchaser has paid consideration towards the enforcement of one charge, which had no relation or reference to the other charge, the property could not be proceeded against in the enforcement of the other charge in favour of Defendants 3 and 4 whose assignee the present Appellant is. Many other conditions will have to be satisfied before the auction purchaser could claim immunity in respect of the properties purchased by him. In the first place he must be a purchaser without notice of the charge. In this case by no stretch of imagination could it be said that the auction purchaser purchased the property without notice of the charge in favour of Defendants 3 and 4. For the very decree in execution of which the property has been brought to sale by the assignors of the first Respondent creates a charge not merely in favour of his assignors but also in favour of the assignors of the Appellant. As has been pointed out by the learned District Judge, the proclamation of sale itself appears to have restricted the scope of the sale only to the charge in favour of the first Respondent's assignors and no auction purchaser could be heard to say that he purchased the properties in court auction without the knowledge of even the very decree itself under which the properties were brought to sale. It is clear, therefore that this important requirement, namely, want of notice, which will entitle the auction purchaser to get the properties purchased by him exonerated, has not been complied with; for he must be deemed to have had notice of the charge created by the decree in the execution of which he was purchasing.
9. In the second place, the charge created by the final decree in favour of Defendants 3 and 4 is admittedly simultaneous with the charge created in favour of Plaintiffs 1 and 2. By no means could it be said to be a subsequent charge in. point of time as in the case of a subsequent puisne mortgagee, in order to give any priority or any greater right to the first Respondent herein. The effect of this simultaneous charge in favour of two sets of parties under the same decree is not that one charge is prior and the other is later and the learned District Judge has therefore rightly rejected the contention of the first Respondent that he has any priority, which claim, the first Respondent wanted to buttress by reason of the preliminary decree as also the security bond and other circumstances. When a simultaneous charge is created in respect of two different sets of parties, it means that two charges are created, one in favour of each set and especially so, when the parties are different. Again when the charges created are also in respect of two different amounts payable by the judgment-debtor, it cannot be said that the charge is one and the same or that it is single and indivisible. It is but reasonable, on the other hand, to construe the simultaneous charge as two charges created in respect of two different sets of individuals and in respect of two different amounts. Consequently, though the creation of a charge may be simultaneous, under the same decree, the contention that the charge is one single indivisible charge seems to carry no meaning in the circumstances of this case. When two charges are created in respect of two different amounts, it means that the two sets of individuals are entitled to enforce the charge created in their favour separately and independently, though it may be against one and the same judgment-debtor and in respect of the self-same properties. The learned District Judge has laboured hard on the point that, since the charge is simultaneous, it is single and indivisible and therefore once such a charge is enforced, it amounts to an enforcement of the charges in their entirety, the party purchasing the property sold in enforcement of the charges takes the entire property without its being in any way subject to the other charge created in respect of the other individuals which has not, however, been yet enforced. It is impossible to understand how when there existed two charges, one of which alone was sought to be enforced and the properties brought to sale in enforcement of the charge, the other charge also gets extinguished though the party entitled to that charge has not sought to enforce it, nor any property brought to sale in execution of that charge.
10. In this case, the matter has been made worse by the fact that the other charge-holders, namely, Defendants 3 and 4, the assignors of the Appellant, have not been given any notice of the enforcement of the charge by the assignors of the first Respondent. The case is different in the case of a simple mortgage; if a subsequent puisne mortgagee is given notice and is made a party, the mortgage right that exists in favour of the puisne mortgagee gets extinguished, when the mortgaged properties are brought to sale in execution of the mortgage decree, to which the puisne mortgagee has been made a party. But in this case, as the learned District Judge has held that no notice was given to Defendants 3 and 4, so the enforcement of the charge by the Plaintiffs cannot in any way prejudice or take away the right of Defendants 3 and 4 to enforce the charge created in their favour. The charge, therefore, subsists and it may be enforced at any time. Naturally their assignee also will not be affected by any enforcement of the charge in favour of the Plaintiffs 2 and 3. The enforcement of the charge cannot ipso facto make the other charge become non-existent unless it is done in a legal manner.
11. Mr. Raghavachari for the Appellant, however, urged that so long as the charge created in favour of the Appellant's assignors subsists without having been enforced or disposed of by any other means known to law, any purchase in execution of the charge in favour of Plaintiffs 1 and 2 would also be affected by the law of lis pendens for though the charge created in favour of Defendants 3 and 4 has been simultaneous, still it being a separate and an independent charge created in respect of a different sum payable by the second Defendant to Defendants 3 and 4, any sale of the property in enforcement of the charge in favour of the Plaintiffs would only be still subject to the charge which remains yet to be enforced by the other charge-holders. The mere sale of the properties with the distinct statement in the proclamation of sale that it is being sold for the enforcement of the charge in favour of only the Plaintiffs without making mention of the other charge under the self-same decree, cannot by any means put an end to the charge in favour of the other charge-holder, and cannot assure the purchaser a title free from all encumbrances in the property sold: He cannot be said to have purchased the property free of the charge. A single charge as distinct from a simultaneous charge in favour of more than one party for different amounts stands on a different footing. A single charge ever a property in favour of a creditor can become extinguished if the property is sold in execution of the decree creating the charge, but the same cannot be said to be the result, when one of the two simultaneous charges is enforced and the property is sold in the course of such enforcement. The analogy of charges created for maintenance appears to be apposite in this case, for when a charge is created for maintenance payable to any decree-holder, if for arrears of such maintenance, the charge is sought to be enforced and property is sold in the course of such enforcement, any purchaser who buys the property, does not buy the same to the complete extinction of the maintenance charge. On the other hand, so long as the decree for maintenance is a charged decree in respect of the property, any purchaser who buys the property in execution of the decree for arrears of maintenance will only buy that property subject to the charge which still subsists in respect of future maintenance. The liability in respect of future payments of maintenance always remains even after one or two sales have taken place after the realisation of the arrears payable under the decree. It cannot be argued that the effect of the sale of the property to satisfy the claim for the arrears extinguishes the charge completely and once for all. It is only a sale to satisfy the particular claim for the arrears and not to satisfy the maintenance decree as a whole, even as the charge for future maintenance still remains attached to the property and the auction purchaser gets the property only subject to the charge. So also when there are more charges than one in respect of the same property, if it is sold in the enforcement of one charge, it cannot amount to the extinguishment of the other charge which has not been enforced.
12. The more important and substantial point urged by the learned Counsel for the Appellant and which remains to be considered is that the principle enunciated in Section 100 does not apply to the charges created by decrees of Court. Even at the outset, it may be mentioned that what the section specifically mentions, is only the charge created by the act of parties or by operation of law. Obviously the charge now in question was not one created by the act of parties nor could it be said to be a charge created by operation of law. It is difficult to see how rights created by virtue of directions under a decree could be the same as those created by operation of law. Even so, liabilities created under a decree of Court cannot be the same as liabilities created by operation of law. As against the two categories of rights or obligations created by act of parties and those by operation of law, it is easily conceivable that rights or obligations created by directions contained in decrees or orders of Court form a distinct and different category altogether. It is not necessary for us in this appeal to go into the numerous instances of rights and obligations created by the operation of law, as distinct from rights and obligations created under decrees or orders of Court. Suffice it to say that the rights of the Government or any public body to recover its dues by way of taxes or other fees in respect of properties, trades or professions or other transactions which become payable by virtue of sections of the law enacted by the State Legislature are always distinct and different from what the parties are awarded and become entitled to recover or enforce by virtue of decrees or orders of Court. Such being the case, even on a consideration of the language of Section 100 itself, it seems to be reasonable to hold that Section 100 of the Transfer of Property Act, does not include within the scope of the phrase by 'operation of law' what is brought into existence by reason of orders or decrees of Court.
13. The question whether a charge created by a decree is within the scope of this section or not seems to have been a subject of conflicting decisions. One view appears to be that, where a decree incorporates a compromise creating a charge upon some immovable property of the judgment-debtor it should be considered to be a charge within the meaning of Section 100 of the Transfer of Property Act. The argument advanced in support of this view is that, since the charge is the outcome of a compromise, it should be classified as a charge created by act of parties. The underlying principle being that the compromise is a contract and when it is embodied in a decree, it does not cease to be a compromise. Another view appears to be that a charge created by a decree based upon an award will be treated as a charge created by operation of law. This is based on the view that the expression 'operation of law' means working of the law. A third view is the one which we have already referred to, namely, that a charge created by a decree is not a charge within the meaning of this section. There are numerous decisions in support of each one of the views set forth above. As already indicated we are inclined to hold the view that the scope of Section 100 of the Transfer of Property Act is limited only to charges created by act of parties or by operation of law. If it were otherwise, the section would not have left out charges created under a decree of Court from being included within the scope of the section. We are not also convinced that a charge created by a decree would be considered to be a charge by operation of law. The reasonable view, in our opinion, to take will be that the Legislature did not intend to include charges created by decrees to come within the scope of Section 100. The distinction furnished between transfer by operation of law and that by or in execution of a decree by a competent Court would afford sufficient indication that the Legislature could not have intended to bring within the scope of the expression 'operation of 1aw' what is sought to be done by decrees or orders of Court. In our opinion the charge created by operation of law must be understood to be distinct and different from a charge created by decree and the former cannot include the latter.
14. In Durga Prasad v. Mt. Tulsa Kuar A.I.R. 1939 All. 579, where a decree for future maintenance in favour of a Hindu widow had declared a charge for future maintenance on the property in possession of the husband's family, it was held that the immovable property has not been made security for the payment of money by the act of parties or by operation of law, but it was only by virtue of a decree that a charge has been created on certain specified immovable properties and therefore, Order XXXIV, Rule 14 was not a bar in her way. On the analogy of maintenance charge created by decree which is enforceable every time the maintenance fell into arrears without the charge being extinguished by one or more, sales of the property on prior occasions, we think that the second charge created simultaneously by virtue of a decree cannot come within the scope of Section 100 so as to have the effect of the same being extinguished by reason of a prior sale in execution of the first charge.
15. In Ghasiram v. Kundanbai A.I.R. 1940 Nag. 163, and Debentra Nath v. Trinayani Dasi A.I.R. 1945 Pat. 278, which are again cases of maintenance decrees creating charge on certain properties of the judgment-debtor entitling the decree-holder to realize the same by taking out execution without the necessity for fresh suits after every default in the payment of the decree, it was held that the decree was in the nature of a composite decree which is not one single decree but comprised as many decrees for payment and realization of the properties charged as and when there were defaults and that the purchase by the decree-holder in any previous execution of one of the items of the properties charged could not attract the operation of Section 60 when a fresh execution was taken for realization of the further maintenance accrued due by the default of the judgment-debtor. It was further held that a charge created by a decree of the Court was neither the charge created by the act of parties nor one created by operation of law and that therefore Section 100 could not apply.
16. To similar effect is the decision in Prem Kuer v. Ram Lagan A.I.R. 1948 Pat. 199. The Bench in this decision held that a charge created by a decree of the Court is neither a charge created by act of parties nor created by operation of law and that such a charge did not fall under Section 100.
17. In Gowswami Maheshpuri v. Ramachandra Sitaramji A.I.R. 1944 Nag. 1, however, it has been held that when a charge is created by a decree, there is no privity of estate between the charge-holder and the judgment-debtor and, therefore, the judgment-debtor is free to deal with the property and a person taking bona fide without notice of such a charge ought to be protected. But there is also an obiter dictum in that decision that there is no difference in principle between a charge created by a decree and also created by a contract and that if a charge does not create any interest in the immovable property, it should make no difference whether it is created by act of parties or by terms of a decree. In our opinion, this decision does not help the Respondent to any extent.
18. In Basumati Kuer v. Harbansi Kuer A.I.R. 1941 Pat. 95, it was held that, where a particular right is charged on specific immovable property to be a decree of Court, such right cannot be enforced against a subsequent transferee for valuable consideration and without notice of the charge. It was also held that a charge created by a decree in pursuance of an agreement between the parties would be a charge created by act of parties and consequently one contemplated under Section 100. We do not think that this decision has any application to the facts of the present case for the charge in the present case has not been created by agreement between the parties, but it was one created by a final decree passed by the Court.
19. In Venkatachala Pillai v. Rajagopal Naidu (1945) 2 M.L.J. 388 , Bell, J., has held that the words 'operation of law' occurring in Section 100 of the Transfer of Property Act included a charge brought into being by a decree of a competent Court. We are not inclined to agree with the learned Judge that Section 100 included within its scope charges created by decrees of Court.
20. On a consideration of the conflicting decisions that we have referred to above, we do not think that we shall be justified in holding that the charge created by a decree is one that comes within the scope of Section 100 of the Transfer of Property Act. In our view, it cannot be a charge created either by act of parties or by operation of law. It is altogether a different category not contemplated by Section 100 of the Transfer of Property Act and the Respondent, therefore, cannot take advantage of his purchase of the property sold in enforcement of the charge created by the decree to the detriment of the other charge created by the same decree but which is still subsisting and which is yet to be enforced by the party in whose favour it was created.
21. The learned Counsel for the Respondent also raised a further point, namely, that the application Execution Application No. 164 of 1946, made by assignors of the present Appellant for rateable distribution had the effect of extinguishing the charge in favour of the said Defendants 3 and 4. His argument was that since the Court held that the assignee of Defendants 3 and 4 was not entitled to rateable distribution of the proceeds brought into Court by virtue of the sale of the property in the enforcement of the charge held by the Plaintiffs, the Appellant cannot once again re-open the question and that the order also acted as res judicata. We do not think we can agree with the learned Counsel for the Respondent on this point. If anything, the order refusing rateable distribution to the assignee of the Defendants 3 and 4 meant only that he was entitled to enforce his charge independently of the prior execution in enforcement of the charge. In other words, the order merely had the effect of confirming the right of the assignee of Defendants 3 and 4 to enforce his charge and not to claim any rateable distribution out of the moneys brought into Court as a result of the enforcement of the charge held by the Plaintiffs, that is to say, the assignee of Defendants 3 and 4 was not entitled to claim the money which did not belong to him because it was not brought into Court in execution of his charge on the properties. The money in Court did not really represent the value of the proceeds of both the charges that the parties were entitled to and out of which only one was enforced. We are not convinced that the order in Execution Application No. 164 of 1946 in any way precludes the Appellant from enforcing his charge which still subsists in his favour and which, in our opinion, has not been extinguished by the enforcement of the charge in favour of the Plaintiffs.
22. In the result, we set aside the order of the learned District Judge and remand the application to the lower Court with a direction that the decree-holder may be made a party to it and ordered to bring into Court the sale proceeds which will be dealt with in accordance with law either by returning the sale proceeds to the auction purchaser and ordering a fresh sale making all interested persons as parties or by confirming the sale and distributing the sale proceeds among the charge-holders ratably.
23. No costs.