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Chidambara Patter v. Ramasamy Patter
Factual and Procedural Background
This opinion arises from an appeal involving the attachment of debts not secured by negotiable instruments under the Civil Procedure Code. The court referred a significant question to a Full Bench before disposing of the appeal. The question concerned whether a third party can prefer a claim on such attached debts under section 278 of the Civil Procedure Code, and if an order disallowing such a claim is subject to section 283 of the Civil Procedure Code and article 11 of Schedule 2 of the Limitation Act. The issue had previously been decided negatively in Basavayya v. Syed Abbas Saheb, but the court expressed doubts about the correctness of that decision and sought to settle the matter definitively through the Full Bench.
Legal Issues Presented
- Whether a claim can be preferred by a third party on a debt not secured by a negotiable instrument attached under section 268 of the Civil Procedure Code and investigated under section 278.
- If such a claim is permissible, whether an order disallowing the claim is subject to the operation of section 283 of the Civil Procedure Code and article 11 of Schedule 2 of the Limitation Act.
Arguments of the Parties
Appellant's Arguments
- The suit is barred by limitation.
- Section 278 refers to “any property” attached in execution, and section 266 defines a debt as property.
- Sections 268 and 301 clarify how debts are attached and possession is given to the purchaser.
- Sections 278 to 283 are broad enough to cover debts.
- The Privy Council has held that the Civil Procedure Code is exhaustive in this regard (citing Gopal Chunder Bose v. Kartick Chunder Dey).
- If sections 280 to 283 did not apply to debts, it would lead to anomalies.
- The term “possession” in these sections is used in its legal, technical sense, and a creditor is deemed in possession of his debt.
- Section 855 of the Code supports this interpretation by requiring a receiver to possess all property including debts.
- Section 246 of Act VIII of 1859 was differently worded, implying a change in legislative approach.
Respondent's Arguments
- The suit is not barred by limitation.
- Article 11 of the Limitation Act does not apply because sections 280 to 283 do not apply to debts not secured by negotiable instruments.
- Sections 280 to 283 refer to possession and thus apply only to property capable of physical possession, i.e., specific movable or immovable property.
- The word “possession” in these sections is used in its popular sense of physical possession, not the legal or constructive sense.
- The Legislature specifically provided a mode of delivery for debts not secured by negotiable instruments under section 301, indicating such debts are not capable of possession in the ordinary sense.
- Applying sections 278 to 283 to debts would have serious consequences.
- They rely on precedents including Basavayya v. Syed Abbas Saheb, Mussamut Rambutty Kooer v. Kamessur Pershad, Harilal Amthabhai v. Abhesang Meru, Monmohiney Dassee v. Radha Kristo Dass, and Ibrahim Mullick v. Ramjadu Rakshit.
- Definitions from various legal dictionaries support the interpretation that possession means physical possession as per the respondent's argument.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Basavayya v. Syed Abbas Saheb | Whether claims can be preferred on debts attached under section 268 CPC and applicability of limitation provisions. | The Court doubted the correctness of the negative holding in this case and considered it erroneous. |
| Gopal Chunder Bose v. Kartick Chunder Dey | The Civil Procedure Code is exhaustive regarding attachment and execution procedures. | Supported the appellant's argument that the Code comprehensively covers debts. |
| Mussamut Rambutty Kooer v. Kamessur Pershad | Interpretation of possession in attachment cases. | Relied upon by the respondent to argue for physical possession interpretation. |
| Harilal Amthabhai v. Abhesang Meru | Interpretation of possession and attachment. | Used by respondent to support their contention on possession. |
| Monmohiney Dassee v. Radha Kristo Dass | Attachment and possession principles. | Referenced by respondent in support of physical possession meaning. |
| Ibrahim Mullick v. Ramjadu Rakshit | Legal meaning of possession. | Supported respondent's argument regarding the nature of possession. |
Court's Reasoning and Analysis
The Court answered the referred questions in the affirmative. It held that sections 278 to 281 of the Civil Procedure Code are not limited to properties capable of tangible or physical possession. The Court recognized that the term “possession” can have various meanings, including tangible possession and constructive or legal possession. Citing Webster's Dictionary and Anderson's Dictionary of Law, the Court emphasized that possession includes having or holding property in one's power or command.
The Court reasoned that restricting “possession” to mere physical possession in the relevant sections would unduly narrow the scope of section 278, which relates to claims and objections to attachment of “any property.” Since section 266 explicitly includes debts as a species of property liable to attachment, and section 268 prescribes how debts are to be attached, excluding debts and intangible property from these claim provisions lacks justification. The Court also referred to section 355 of the Code, which uses the term “possess” to include debts and intangible property.
Consequently, the Court concluded that “possess” and “possession” in the claim sections of the Code encompass constructive or legal possession of debts and intangible property. It declared the contrary decision in Basavayya v. Syed Abbas Saheb to be erroneous.
Holding and Implications
The Court held that claims by third parties on debts not secured by negotiable instruments attached under section 268 CPC can be preferred and investigated under section 278 CPC, and that orders disallowing such claims are subject to the operation of section 283 CPC and article 11 of Schedule 2 of the Limitation Act.
The direct effect of this decision is to overturn the earlier negative ruling in Basavayya v. Syed Abbas Saheb and to clarify the interpretation of “possession” in the relevant sections of the Civil Procedure Code as including constructive possession of debts and intangible property. No broader precedent beyond the facts and legal questions addressed is explicitly stated.
The Court made the following
Order of Reference to a Full Bench:— Before disposing of this appeal we wish to refer the following question for the opinion of the Full Bench, viz.:—
Whether when a debt not secured by a negotiable instrument is attached under section 268, Civil Procedure Code, a claim can he preferred by a third party, and investigated under section 278, Civil Procedure Code, and, if so, whether an order disallowing the claim is subject to the operation of section 283, Civil Procedure Code, and article 11 of Schedule 2, Limitation Act.
The question must be taken to have been decided in the negative in the case of Basavayya v. Syed Abbas Saheb (1), but we are doubtful, as to the correctness of that decision, and the, question is of such wide importance that we think it desirable that it should be settled by a Full Bench.
The case came on for hearing in due course before the Full Bench constituted as above.
C.V Anantakrishna Ayyar (for P.R Sundara Ayyar) for appellant.—The suit is barred by limitation. Section 278 speaks of “any property” attached in execution. Section 266 makes it clear that a debt is “property.” A reference to sections 268 and 301 shows how a debt is to be attached and how possession thereof is to be given to the purchaser. Sections 278 to 283 are; wide enough to cover debts. The Privy Council has decided that the Code is exhaustive (Gopal Chunder Bose v. Kartick Chunder Dey ). If sections 280 to 283 do not cover cases of debts, anomalies would follow. The word “possession” is used in these sections in its legal, technical sense. A creditor is in law seized of, or is in possession of, his debt. A mortgagor is in possession of his equity of redemption, though physical possession of the property may be with the usufructuary mortgagee. Reference may he made to other sections of the Code where the word “possession” is used, but it is submitted that section 855 is conclusive of the matter. It says that a receiver “shall possess himself of all such property” including “debts.” Section 246 of Act VIII of 1859 was differently worded.
T.R Ramachandra Ayyar and K.R Subrahmania Sastri for the respondent.—The suit is not barred by limitation. Article 11 of the Limitation Act does not apply, for sections 280 to 283 do not apply to cases where debts are attached. It is only if sections 280 to 283 Civil Procedure Code, apply to the attachment of debts not secured by any negotiable instrument, that article of the Limitation Act would apply. Sections 280 to 283 speak of possession, and so they apply only to cases of property of which there could be possession; that is, those sections apply only to cases of specific moveable or immoveable property. The word “possession” is used in these sections in its popular sense of “physical possession.” [Bhashyam Ayyangar, J.—Should it not be taken that the word is used in its legal sense? Whenever the Legislature means “physical possession, it expressly says so—see for example article 10 of the Second Schedule of the Limitation Act]. We rely on Mussamut Rambutty Kooer v. Kamessur Pershad , Basavayya v. Syed Abbas Saheb (2), Harilal Amthabhai v. Abhesang Meru (3), Monmohiney Dassee v. Radha Kristo Dass* (4), and Ibrahim Mullick v. Ramjadu Rakshit (5). The definition of the word possession in the ‘Century Dictionary’ also supports our contention. [Bhashyam Ayyangar, J., referred to the definition of the word possession, given in Anderson's ‘Law Dictionary,’ Webster's ‘Dictionary’ and Stroud's ‘Judicial Dictionary,’ and suggested that “possession” meant such possession as the nature of the thing permitted]. We submit that section 301, Civil Procedure Code, shows that the Legislature was aware that a “debt not secured by a negotiable instrument” was not capable of “possession” as ordinarily understood, and so a specific mode of delivery of such a debt is pointed out for the purpose of execution. If sections 278 to 283, Civil Procedure Code, are made applicable to all debts and other intangible things, it is submitted that the consequences would be serious. We submit that Basavayya v. Syed Abbas Saheb is rightly decided.
The appellant was not called upon to reply.
The Court expressed the following
Opinion.— Our answer to the questions put toms is in the affirmative. In our opinion sections 278 to 281 of the Civil Procedure Code are not restricted to properties, under attachment which are capable of tangible or physical possession.
The term “possession” is, no doubt, one which is used in widely different senses in dealing with different subjects, and refers sometimes to tangible or physical possession and sometimes to constructive possession, or possession in law. In Webster's. ‘Dictionary’ the legal meaning of “possession” includes “the having or holding of property in one's power or command.” See also Anderson's ‘Dictionary of law,’ page 790.
In our opinion it would be unreasonable to restrict the meaning of the word “possessed” in section 279, and of the word “possession” in sections 280 and 281 to merely tangible or physical possession. Such restricted meaning would, we think, unduly narrow the operation of section 278 which relates to claims preferred to and objections made to the attachment of, “any property attached.” Section 266 specifies a debt as one species of property which is liable to attachment, and section 268 prescribes the mode in which a debt is to he “attached. Section 301, which vests a debt sold in execution in the purchaser, refers to such transfer of the debt as “delivery” of the debt. No reason can be suggested for excluding from the beneficient operation of the claim sections of the Code debts and other species of intangible property. We may also refer to section 355 of the Code in which the word “possess” is clearly used as applicable not only to tangible property but also to debts and other intangible property.
We are therefore of opinion that the words “possess” and “possession” in the claim sections of the Code include constructive possession, or possession in law, of debts and other intangible property, and that the decision to the contrary effect in Basavayya v. Syed Abbas Saheb is erroneous.
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