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A.L.A.R Arunachalam ... v. Ry. Pratapasimha Raj...
Structured Summary of the Opinion
Factual and Procedural Background
The opinion concerns an order passed by the District Court of West Tanjore arising out of the Tanjore Palace Estate suit, an interpleader action brought by the Receiver to determine rightful ownership. A preliminary decree dated 1 July 1918 awarded a 3/4 share to the group of defendants referred to as the Mangalavilas defendants (originally defendants 4 to 11). Appeals were preferred to the High Court. While those appeals were pending, Krishnan, J., by an order dated 7 November 1919, allowed the Mangalavilas defendants to withdraw monies deposited in the Lower Court up to the amount of their shares subject to security for return if the High Court reduced their shares. Various sums were withdrawn under that order.
The High Court rendered its preliminary decree on 21 January 1924, reducing the Mangalavilas defendants' share to 3/7, creating an excess withdrawal situation that required refund. Prior to the High Court decree, on 29 January 1923, certain Mangalavilas defendants sold half their interest (which then represented 5/32 of the property) to the appellant; by the High Court decree this share was reduced to 5/56. After remand, the District Court added the appellant as the 31st defendant on 27 March 1925. On 16 September 1925 the District Court passed an “interim final decree” allocating shares. On 21 September 1925, a successful appellant applied for restitution of the overdrawn amounts; instead of ordering payment into Court the District Court by its order of 25 November 1925 directed that the shares allotted to the Mangalavilas defendants be made subject to a charge for the overdrawn amounts and further directed that the half share bought by the 31st defendant be subject to the charge. That direction was embodied in the final decree dated 27 February 1926.
The 31st defendant (the appellant) challenged the order of 25 November 1925 by way of a Civil Miscellaneous Appeal and a civil revision petition on grounds of error in law and on the merits. The respondents raised a preliminary objection that a Civil Miscellaneous Appeal did not lie.
Legal Issues Presented
- Whether the District Court had jurisdiction to impose a charge on shares while the suit stood between the preliminary decree and the final decree (i.e., whether the Court could, in working out a preliminary decree, impose a charge on allotted shares).
- Whether the order imposing the charge was ultra vires if regarded as a separate order under Section 144 (i.e., whether Section 144 applies only to matters in execution).
- Whether a personal obligation of the Mangalavilas defendants could be converted into a charge on their shares by an interlocutory order.
- Whether the Court should have refrained from imposing a charge until remedies by enforcement of the security (given when funds were withdrawn) had been exhausted.
- Whether the charge, being dated 25 November 1925, could affect property sold to the appellant on 29 January 1923 (i.e., the temporal effect of the charge as against a pendente lite purchaser).
- Whether a Civil Miscellaneous Appeal lies against the order as drawn (i.e., the preliminary objection on appealability), or whether the proper remedy is an appeal from the final decree once the order is embodied in it.
Arguments of the Parties
Appellant's Arguments
- The Court, at the stage between preliminary and final decree, was limited to working out the preliminary decree and could not go beyond it; the interim final decree and the order imposing a charge are proceedings unknown to law.
- If the order is regarded as a separate order under Section 144, it is ultra vires because Section 144 applies only to matters in execution.
- The Court could not convert a mere personal obligation of the Mangalavilas defendants into a charge on their shares by an interlocutory order.
- The Court was wrong to impose a charge before the remedy by enforcing the security given for withdrawals had been exhausted (and no attempt to enforce that security had been made).
- The charge, effective only from 25 November 1925, cannot affect the property transferred to the appellant on 29 January 1923.
Respondents' Arguments
- The respondents raised a preliminary objection that a Civil Miscellaneous Appeal did not lie against the order as drawn.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Poovanalingam Servai v. Veerayi (1925) 22 L.W. 782 | Illustrates that in an ordinary partition suit the Court, while working out a preliminary decree, may give one coparcener a charge over another's share instead of making an actual division. | The Court relied on this to show that imposing a charge when adjusting shares is an established remedial device and to analogize the present interpleader-turned-partition context to a partition suit. |
| Rajah of Vizianagram v. Rajah Setrucherla Somasekhararas (1903) I.L.R. 26 M. 686 : 13 M.L.J. 83 (F.B.) | Ratio decidendi supporting the principle that a charge may arise in the course of allotting shares (as part of working out a preliminary decree). | Cited to reinforce the proposition that charges can spring from the court's obligation to allot proper shares when working out a decree. |
| Jai Berham v. Kedarnath Marwari (1922) L.R. 49 I.A. 351 : I.L.R. 2 Pat. 10 : 44 M.L.J. 735 (P.C.) | Held that the power of restitution is inherent in the Court and should be exercised when necessary to do justice. | Relied upon to support the proposition that restitution (and attendant remedial measures) can be ordered by the Court even at stages between preliminary and final decrees; used to answer the contention about the limited scope of Section 144. |
| Ounniah Mudali v. Rangaswami Mudali (1918) 35 M.L.J. 361 | An example where this Court exercised the restitution principle in a suit at a stage between preliminary and final decree. | Cited as a domestic example of the Court exercising inherent restitution power between preliminary and final decree, reinforcing the permissibility of remedial adjustment at that stage. |
| Jogodishury Debea v. Kailash Chindra Lahiry (1897) I.L.R. 24 C. 725 (F.B.) | Authority for the proposition that a party can attack an interlocutory order passed preparatory to a final decree. | The Court acknowledged this authority but distinguished the present case on the basis that the impugned order had been embodied in the final decree; thus the proper mode of attack is by appeal from the final decree rather than an independent interlocutory appeal. |
| Bharat Indu v. Yakub Hasan (1913) I.L.R. 35 A. 159 | Support for the procedural proposition about how interlocutory orders embodied in final decrees should be attacked. | Used to bolster the Court's conclusion that, because the order was to be and was embodied in the final decree, the appropriate remedy is appeal from the final decree, and not an independent Civil Miscellaneous Appeal. |
Court's Reasoning and Analysis
The Court first addressed the merits rather than the preliminary objection on appealability. It identified that although the original action was an interpleader suit, after the preliminary decree was passed the character of the litigation, for practical purposes and as regards the appellant, became that of a partition suit because shares had to be allocated among claimants and some vendors did not include all members of the Mangalavilas group. The Court applied established principles from partition jurisprudence, observing (by reference to Poovanalingam Servai v. Veerayi and Rajah of Vizianagram) that while working out a preliminary decree the Court may use reasonable methods to adjust shares, including imposing a charge on one party's allotted share in favour of another, instead of physically depriving a party of property.
Viewing the impugned order broadly and in context, the Court concluded that the District Court intended the charge as a method of adjusting allocations in preparation for the final decree. The Court observed a petition for final decree had been filed well before the 25 November 1925 order and that the charge was made in the course of proceedings to determine the final decree. For these reasons the District Court's exercise of discretion in imposing the charge was proper: the charge served to compensate other defendants for amounts drawn under the earlier order of Krishnan, J., and was within the scope of the suit and the Court's jurisdiction to adjust shares.
On whether such a charge would bind purchasers, the Court concluded that a charge imposed as part of working out the final decree would bind alienees who purchased pendente lite (i.e., the 31st defendant who purchased on 29 January 1923).
The Court briefly addressed the technical contention about Section 144: it rejected the narrow view that Section 144 applies exclusively to execution matters. It relied on the Privy Council decision in Jai Berham v. Kedarnath Marwari to affirm that the power of restitution is inherent in the Court and may be exercised to do justice, and it cited a local decision (Ounniah Mudali) where the Court exercised such power between preliminary and final decrees. The Court also observed that, if the monies had been taken out under Krishnan, J.'s order by way of “execution” of that order, restoration could likewise be provided for by way of execution of an order in the suit or by provision in the final decree.
Regarding the procedural objection on appealability, the Court analyzed the form and substance of the impugned order. Although the decretal form of the order had been phrased as if it were an independent order, the judgment form and the order in O.S. No. 3 of 1919 showed that the relief was to be embodied in the final decree and would only come into force once the final decree was drawn up. Because the order was not independent of the final decree but was to be embodied in it, the Court held that any attack should properly be by appeal from the final decree. The Court noted Jogodishury Debea as authority that interlocutory orders preparatory to a final decree may be attacked, but emphasized that when such an order is embodied in the final decree the correct method of challenge is to appeal from the final decree; the 31st defendant had not done so.
Holding and Implications
The Civil Miscellaneous Appeal and the civil revision petition are dismissed. The Court ordered dismissal of both the appeal and the revision petition and awarded costs against the appellant in the appeal.
Direct effects on the parties:
- The charge as directed by the District Court (to be embodied in the final decree) stands as a permissible method for adjusting the shares to account for amounts overdrawn under the earlier order.
- The charge will bind the alienees who purchased pendente lite, including the 31st defendant (the appellant) who bought on 29 January 1923.
- The appropriate procedural route to challenge the charge, as embodied in the final decree, was an appeal from the final decree; the appellant did not pursue that remedy.
The Court did not announce that it was creating a new legal principle; rather it applied and relied on established authorities and principles (as cited) to uphold the District Court's exercise of discretion in working out the final decree and to determine the proper mode of attack on an order embodied in a final decree.
End of summary. This summary reflects only the information expressly stated in the provided opinion.
1. This appeal and the civil revision petition relate to the same matter, an order passed by the District Court of West Tanjore. The civil revision petition is put in by way of caution in case this Court holds that the Civil Miscellaneous Appeal does not lie. The respondents have in fact taken a preliminary objection that the Civil Miscellaneous Appeal does not lie,, but the discussion on that point is more easily set out if we deal first of all with the case on the merits.
2. The facts necessary for disposal are: The parties to these proceedings are some of the parties to what is known as the Tanjore Palace Estate suit, an interpleader suit filed by the Receiver of the Estate to determine who were the rightful owners. The chief contesting respondents before us are the defendants known as the Mangalavilas defendants, originally defendants. 4 to 11. A preliminary decree in that suit was passed on the 1st of July, 1918. It awarded 3/4th share to these defendants. Appeals were preferred to the High Court. While these were pending a stay petition was put in by one of the other defendants, and in his order thereon passed on the 7th of November, 1919, Krishnan, J., at the request of the Mangalavilas defendants, allowed these latter to withdraw monies deposited to the credit of the Estate in the Lower Court up to the limit of the shares due to them under the preliminary decree, but subject to security being given for the return of these monies if the High Court decree diminished their shares. Various sums of money were then drawn out under these conditions. The High Court's preliminary decree was passed on the 21st January, 1924, and it reduced the share of the Mangalavilas defendants to 3/7th. The Mangalavilas defendants had drawn monies in excess of this share under Krishnan, J.'s order and, therefore, had to refund. Now, on the 29th of January, 1923, before the preliminary decree of the High Court was passed, defendants 8, 9, 11, 25 and 26, the two latter being the legal representatives of the 7th defendant; who are some of the Mangalavilas defendants, sold a half of their right, title and interest in the property to the present appellant. At the time of the sale that half share represented 5/32 of the property. By the High Court decree that was reduced to 5/56. After the High Court decree, the suit was sent back to the District Court for final decree. In that Court, on the 27th of March, 1925, the appellant was on his application made a party to the suit as the 31st defendant. On the 16th of September, 1925, the District Court passed what it called an interim final decree, apparently on some agreement between the parties allotting his proportionate share to each. On the 21st of September, 1925, the 2nd defendant, one of the successful appellants in the High Court, applied in I.A. No. 346 of 1925 for restitution of the amounts overdrawn by the Mangalavilas defendants under the order of Krishnan, J. Instead of ordering restitution or payment back into Court, the District Court on the 25th of November, 1925, directed that the shares allotted to the Mangalavilas defendants be made subject to a charge for the overdrawn amounts, and directed further that the half share bought by the 31st defendant be also subject to this charge. This charge has been embodied in the final decree of the District Court, dated the 27th of February, 1926. It is against the order of the 25th of November, 1925, this civil miscellaneous appeal and the civil revision petition are preferred by the 31st defendant on the ground that the order errs both in law and on the merits.
3. The main arguments are: (1) that if the order imposing a charge at that stage of the trial of the suit, namely, between the preliminary decree and the final decree, is to be regarded as an order in the suit itself, it is beyond the powers of the Court, whose duty after the preliminary decree has been passed is only to work out the preliminary decree and not to go beyond it, that its duty is limited to delivering the shares to which the preliminary decree has declared the parties entitled, that this interim final decree and the order under appeal are proceedings unknown to law, that the Court cannot by way of an interlocutory order in the suit engraft on the preliminary decree a decision on the matter of a charge which, as being a matter concerning the rights of the parties inter se can only be lawfully decided before the passing of the preliminary decree, (2) that, if this order is to be regarded as a separate order under Section 144, as indeed it purported to be, it is ultra vires, since Section 144 applies only to matters in execution, (3) that, however the order be regarded, it has imposed a charge for the recovery of what was a mere personal obligation on the part of the Mangalavilas defendants and that the Court has no right so to convert a personal obligation into a charge by a mere interlocutory order, (4) that the Lower Court was wrong in imposing a charge until the remedy offered by the security had been exhausted, it being admitted that no attempt to enforce that has yet been made, and (5) that in any case the charge will take effect only from the date of the order, the 25th of November, 1925, and, therefore, cannot affect the property transferred on 29th January, 1923, to the 31st defendant.
4. As to the power of the Court to impose such a charge by order or by final decree in the suit itself, it is not disputed that in an ordinary partition suit the Court may, in working out its preliminary decree for the purpose of adjusting shares, instead of making an actual division of all the property, give one coparcener a charge over the share of another for any difference' in favour of the former. See Poovanalingam Servai v. Veerayi (1925) 22 L.W. 782 and the ratio deddendi of Rajah of Vizianagram v. Rajah Setrucherla Somasekhararas (1903) I.L.R. 26 M. 686 : 13 M.L.J. 83 (F.B.). In such a case it is obvious that the charge was not created by the preliminary decree but springs out of the obligation of the Court to allot each coparcener his proper share. That, it appears to us, is what the District Court has really done in this case. It is true that this was not a partition suit but was an interpleader suit. But when the preliminary decree was passed the suit became to all intents and purposes a partition suit, and, so far as the appellant is concerned, it could be nothing else, since his vendors did not include all the Mangalavilas people. Therefore, even if the Mangalavilas defendants had been entirely successful, there still had to be a partition between them.
5. Clearly, in the working out of a preliminary decree which declares certain parties entitled to certain shares, the Court is entitled to employ all reasonable methods in adjusting those shares, especially measures which will entail the least amount of trouble to all concerned, and if the imposition of a charge is, in the opinion of the Court, a suitable alternative to depriving a coparcener of some property in order to adjust the shares, the Court has discretion to impose a charge. That the order under appeal was in the course of the preparation of the final decree is clear. A petition for final decree had beep put in by the 1st defendant on the 26th of March, 1925, long before the order now appealed against and it was in the course of the proceedings, to determine the final decree that the order appealed against was passed. Viewing, the order broadly, we think this is what the Lower Court intended to do and has done. In working out for the final decree the manner in which the property should be adjusted according to the theoretical allotments under the preliminary decree, by what is called an interim final decree, the Court decided that the imposition of such a charge was a reasonable method by which the excess amounts overdrawn should be recovered. That seems to us a proper discretion. Amounts had been drawn by virtue of the preliminary decree and under an order passed while the suit was pending. The situation created by that order had to be adjusted by the final decree in the suit. When the 31st defendant took his sale, the suit had clearly assumed the character of a partition suit, and the Court had jurisdiction to impose a charge on the share of the Mangalavilas defendants for the amounts overdrawn in order to compensate the other defendants for the amounts subtracted thereby from their rightful shares. The imposition, of such a charge being within the scope of the suit' and within the jurisdiction of the Court, any such charge imposed on the shares of the Mangalavilas defendants will bind their alienees who purchased pendente lite.
6. This is sufficient to decide the matter and we need not deal at length with the other points. As to the contention that the charge will have effect only from its date, that is answered by what has been already said, namely, that the imposition of a charge is within the scope of the suit and the 31st defendant's sale was pendente lite. As to the technical argument that the order is erroneous, because it purports to have been passed under Section 144 and that that section will not apply because no decree has been varied or reversed, we are not satisfied that the principle of Section 144 is confined exclusively to matters in execution. The Privy Council has in Jai Berham v. Kedarnath Marwari (1922) L.R. 49 I.A. 351 : I.L.R. 2 Pat. 10 : 44 M.L.J. 735 (P.C) laid down that the power of restitution is inherent in the Court and should be exercised when necessary in order to do justice. This Court has so exercised that principle in a suit at a stage between the preliminary decree and the final decree in a case Ounniah Mudali v. Rangaswami Mudali (1918) 35 M.L.J. 361. In any case, if the money was taken out under Krishnan, J.'s order by way of "execution" of that order in the suit, if that phrase may be used, it must follow that it should also be restored by way of "execution" of an order in the suit, that is, by provision in the final decree. As to the argument that the Court should not have imposed a charge until the remedy by way of enforcing the security had been exhausted, there were risks in that procedure. It might for example be held, as in fact this Court has held in a correlated matter, A.A.O. No. 263 of 1926, that Krishnan, J.'s order enures only for the benefit of that single defendant who applied for the stay.
7. As to the preliminary objection that no appeal lies at all, we are inclined to hold that it is a good objection, although the appellant has cause to complain about the manner in which the Lower Court phrased its order. The order has been unnecessarily drawn up in a decretal form as well as in a judgment form. In the judgment form the District Judge has recorded it in the following terms:
Relief (9) has been granted in the order just passed in O.S. No. 3 of 1919, the main suit.
8. In the decretal form this has been recorded as follows:
That relief (9) be granted (vide order passed in O.S. No. 3 of 1919).
9. A reference to the order passed in O.S. No. 3 of 1919 shows that the order was:
When the restitution amounts payable to defendants 1 and 2 are determined, the final decree will provide for a charge on the shares of defendants 8 to 11, 25, 26, 28 and 29 in immoveables under the final decree (evidently interim final decree), dated 16th September, 1925, enforceable in execution in addition to their personal liability; and the charge will bind the 31st defendant.
10. It is clear from this that the order was not an order independent of the final decree but that the order was to be embodied in the final decree, and, therefore, not until the final decree was drawn up did it come into force. This was in accordance with what the Lower Court had power to do and was entitled in its discretion to do. The office in drawing up the decretal form of the order wrongly phrased it as if it were an order independent of the final decree. In the view we take, any attack on this order ought to be put forward only by way of an appeal against the final decree and the 31st defendant has not put in any such appeal. The ruling in Jogodishury Debea v. Kailash Chindra Lahiry (1897) I.L.R. 24 C. 725 (F.B.) is no doubt an authority for the position that a party can attack an interlocutory order passed preparatory to a final decree, but where the order complained against has been embodied in the final decree, the method of attack is not by an independent appeal but by an appeal against the final, decree. See also Bharat Indu v. Yakub Hasan (1913) I.L.R. 35 A. 159.
11. For reasons given this appeal and the civil revision petition must fail. We dismiss them with costs in the appeal.
Jackson, J.
12. I agree.
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