Doorvas M.V Ramkrishna Aiyar v. Mari Goundan And Others

1. The petitioner in this case is an assignee decree-holder from one Subbier of a decree obtained by the latter in a mortgage suit, O. S. No. 100 of 1920 on the file of the first Additional Subordinate Judge's Court of Madura. On the 17th August 1921 a final decree was passed in the suit. On the 19th September 1923 Subbier was adjudicated an insolvent on a petition presented in March 1923. Respondent 4 then obtained a decree against Subbier in O. S. 248 of 1921 and pending this suit he got (in 1921) an order for attachment before judgment and attached this decree, i. e., in O. S. 100 of 1920. On the 7th July 1922 Subbier assigned this decree in O. S. 100 of 1920 to the petitioner. After respondent 4 obtained his decree in O. S. 248 of 1921 he took proceedings to execute the attached decree in O. S. 100 of 1920 and filed R. P. 53 of 1923. On the 27th June 1923 this was dismissed for default of further prosecution.

2. On the 20th February 1924 the petitioner filed the present petition to execute his mortgage decree as assignee of Subbier, The Court gave notice to the attaching decrees-holder respondent 4, and to the official receiver. Respondent 4 objected to the execution petition on the ground that he had attached the decree before judgment. The learned Subordinate Judge, in a very confused judgment which is exceedingly difficult to understand, has held that the attachment of the decree in favour of respondent 4 has not ceased by reason of the dismissal of his execution petition. R. P. 53, and that the petitioner's assignment from Subbier could, therefore, be recognized only subject to this attachment and subject also to the result of any proceedings which the official receiver might be advised to take.

3. A preliminary objection has been taken that no appeal lies because it cannot be said that the petitioner and respondent 4 are "parties to the suit or their representatives." The principle as far as one can learn it from the decided cases, seems to be that, where the dispute in execution is between the parties on the same side, so to speak, there is no appeal. As for instance as was held by Abdur Rahim, J. and myself in Yagnasami Ayyar v. Chidambaranatha Mudaliar A. I. R. 1921 Mad. 81 the persons must be opposed in interest in the suit and the contest must not be, for example, between a party to the same suit and his own representative. In Appavarsala Khan v. Mistri Khan [1916] 31 M. L. J. 44 Sadasiva Aiyar, J. was of opinion that, where the dispute relates to the rights inter se between the judgment-debtors and in the decision of which the decree-holder has absolutely no interest, in whichever way it might be decided, no question under Section 47, Civil P. C., is involved. Again in Hanumantha Rao v. Krishnamma A. I. R. 1924 Mad. 518 (Spencer and myself) it was held that disputes between co-decree-holders as to the right of one of them to execute a joint decree to the exclusion of the others are not questions arising between the parties to the suit, and in Raman Chettiar v. Chockalinga Chettiar A. I. R. 1926 Mad. 691 (Waller and Madhavan Nair, JJ.) the learned Judges held that the dispute between the parties who occupied the position of rival decree-holders was non-appealable. As against this body of opinion a case has been cited, as far as I know and as far as I can learn from the professional gentleman appearing before us, for the first time, Subbuthayammal v. Chidambaram Asari [1902] 25 Mad. 383 It is a most extraordinary thing that on objections as to appealability, purporting to be under Section 47 this case has never to this day come to light as far as reported decisions are concerned. The judgment is extremely short and relies on an unreported case printed as a foot-note (p. 384) and says that an order refusing to recognize the transferee of a decree passed under Section 232 of the Code (Order 21, Rule 16) may, contest or no contest, for purposes of appeal, be regarded as an order passed under Section 244 (Section 47) and is, therefore, appealable. The unreported case cited refers to a change in the law brought about by Act 7 of 1888. Notice was of course given to the judgment-debtor in the present case under the provisions of Order 21, Rule 16. The judgment dobtor did not appear. He can scarcely be interested as to whether the petitioner or respondent 4 executed the decree. But there is this case of Subbhathayammal v. Chidambaram Asari [1902] 25 Mad. 383 and also another case reported in Mohini Mohan Majumdar v. Surandra Chandar Day [1916] 20 C. W. N. 679 which seems to be a case on all fours with the present. The learned Judges, on the whole, held that the decision is one which comes within Section 47 (3) because notice having gone to the judgment-debtor the case becomes one in which all the parties are represented. Personally I still take leave to gravely doubt whether it is right that there should be an appeal in this case. There is the authority of Subbathayammal v. Chidambaram Asari [1902] 25 Mad. 383 which depends on the words "contest or no contest." It is a matter on which I think somewhat strongly because modern decisions are to my mind undoubtedly in favour of disallowing an appeal in a case like the present. However, I am not going to insist on my own view in the present case because I think the matter can be disposed of on the merits.

4. It is clear, as it seems to me, that the respondent is still on the record in spite of E. P. 53, provided his attachment still subsists. The attachment was ordered in execution of O. S. 248, and it is difficult to see how a dismissal of his execution petition, praying for execution of the decree in O. S. 100 of 1920, should entail the dismissal of his petition to execute the decree in O. S. 248. There is, therefore, no doubt that the execution petition in O. S. 248 still subsists and the words in Order 21, Rule 57, "application for execution" refer in this case to the application for execution in O. S. 248 as to which there has been no dismissal; Sree Prem v. Muhammed Habi Bulla [1914] 24 I. C. 795 a decision of the Allahabad High Court, which seems to me to be exactly in point in the present case. There the decree-holder applied several times for execution of the decree he had attached and his application was struck off. Subsequently the judgment-debtor in the attached decree paid some money to his decree-holder. It was held that the payment was invalid as the attachment of the decree was subsisting at the time of the payment. That the assignee has' only a permissive right to execute the decree where there is an attachment is of course established not only under the Code, but, for instance, in Musala Reddi v. P. Ramayya [1909] 7 M. L. T. 83 Thiruvengadam Pillai v. D. Subbiah [1912] 11 M. L. T. 144 and Arumuga Mudaliar v. Yogamba Bai Ammani [1912] 13 M. L. T. 227 where Mr. Justice Sundara Aiyar said the assignment, though valid as between the parties to it, is subject to the right of creditors, including both those who may have already attached the decree and other creditors who might proceed against the decree notwithstanding the assignment. Finally, does the intervention of the insolvency make any difference? In my opinion: No. The attaching decree-holder is not an insolvent and there is no contention that the official receiver can execute the decree. The insolvency of Subbier supervened in 1923, some time after Subbier had assigned to the petitioner and long after the decree in the mortgage suit was obtained. The learned Subordinate Judge has confused the effect of a mortgage- decree with the facts of this case. He seems to draw some distinction between a dismissal for default in an execution petition where a mortgage decree is in question and where another decree is in process of execution. However, I think one can read into the decretal portion of his order enough to be able to support it. The attachment of the decree in O. S. 100 by the decree-holder in O. S. 218 has not ceased by reason of the dismissal of R. P, 53 and the petitioner's assignment can only be recognized subject to this statement. The official receiver will, of course, be at liberty to take any steps with regard to the vesting of or distribution of the proceeds of the decree if and when realized. This is the meaning of the Subordinate Judge's remarks:

Subject also to the result of any proceedings which the official receiver might be advised to take in the interests of the general body of creditors to question the assignment in favour of the petitioner.

5. These remarks must be taken to refer to this and also to any steps which may be open to the official receiver under the insolvency law. This is altogether independent of any question before us now. I am, therefore, of opinion, without deciding for the present, whether this is appealable or not, that the order of the learned Subordinate Judge is right. The civil miscellaneous appeal is dismissed with costs.

Curgenven, J.

6. (After stating facts the judgment proceeded). The preliminary question has been raised whether the order is appealable, and that depends on whether it can be held to have been passed under Section 47, Civil P. C. The matter is not free from difficulty, and in the view I take of the merits of the case I propose to leave it open.

7. The substantial question upon the merits is whether at the time when the assignee made his application the attachment was still subsisting, Previous to that application the attaching decree-holder himself had applied to execute the decree under his attachment (E. P. 53 of 23). This application was dismissed for default on 27th June '1923. It is contended that, owing to this dismissal, the attachment ceased by virtue of the provisions of Order 21, Rule 57, Civil P. C. Now it appears to me clear that this rule does not apply in terms to a case of this nature. It provides that where any property has been attached in execution of a decree, and the Court dismisses the application owing to the decree-holder's default, the attachment shall thereupon cease. In the present case the attachment was effected under the decree in O. S. 248 and so far as appears in that proceeding there was no default. The default took place in another execution proceeding and in another Court. In other words, the default was committed in an application in O. S. 100, whereas the attachment was effected in O. S. 248. Mr. Varadachariar has contended that this circumstance does not prevent the application of the rule, but I am not prepared to hold that the rule was designed to apply in such circumstances. By securing his attachment of the decree in O. S. 100 the attaching decree-holder had by virtue of Order 21, Rule 53 (3) acquired the position of representative of the holder of the attached decree. He was in fact for purposes of execution in the position of the decree-holder. As such it seems to me that he was entitled to file successive execution petitions without losing this right by the termination of the attachment. It would certainly be unusual that a default committed in one Court should have the effect of terminating a state of affairs created by the order of another and entirely independent Court.

8. I see no reason, therefore, to extend the application of the rule beyond the case of a default committed in proceedings before the Court which granted the attachment. A case which directly supports this view is Sree Prem v. Md. Habi Bulla [1914] 24 I. C. 795.

9. It is true that no reasons are given for the conclusion reached, and that the attachment, though not the default, took place under the old Code. No special significance appears to follow from the latter circumstance and, following this decision and on the ground that the Code makes no provision for the lapse of attachment in a case of this nature, I would hold that the attachment was still subsisting at the time of the assignee's petition.

10. It is not disputed that as between a decree-holder and the holder of an attachment on his decree execution may be taken by either subject only to the condition that the Court upon realizing the proceeds shall apply them first in satisfaction of the attaching decree-holder's claim. The question is whether an assignee decree-holder occupies in this respect the same position as his transferrer, or whether as assignee he labours under any special disability. In some earlier cases in this Court, Musala Reddi v. Ramayya [1909] 7 M. L. T. 83 and Thiruvengadam Pillai v. D. Subbiah [1912] 11 M. L. T. 144 it was held that even in the case of an assignment anterior to the attachment, the assignee was not competent to execute the decree. But in a later case, Arumuga Mudaliar v. Bai Ammani [1912] 13 M. L. T. 227 which was an instance of an assignment made after the attachment a more liberal view of the assignee's rights was taken and it was held that subject to any objections made by the attaching creditor he could get recognition under Order 21, Rule 16, and proceed to execute the decree. I do not think that any reasons have been shown why this latter view should not be accepted. Of course, if the assignee executes, the Court on the application of the attaching creditor must apply the proceeds first to the satisfaction of his claim. It appears to me that this is in substance what the learned Additional Subordinate Judge has ordered and I can find no ground for interfering with that part of his order.

11. An additional complication has been introduced into the arguments in this case by the circumstances of Subba Ayyar's insolvency. The official receiver although, as has been said, he was served with notice of the petition, did not intervene, merely reserving the right to take proceedings under the Insolvency Act, if so advised to upset the assignment under section 53 of that act. He is not a party to this appeal. In these circumstances, I am unable to see that anything need be said regarding his rights at the present stage of the proceedings. If he chooses to intervene later on, after execution has been proceeded with, he will of course be at liberty to do so. The reservation of his rights in the order under appeal, although therefore perhaps not strictly necessary, need not be interfered with. For the reasons which I have given, I would dismiss the appeal with costs.