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Official Receiver, Guntur v. Amara Seshayya And Others
Factual and Procedural Background
This appeal and revision arise from an order of the learned Subordinate Judge of Guntur in E.P. No. 84 of 1937, connected to O.S. No. 34 of 1931. The original suit (O.S. No. 34/1931) resulted in a decree dated 14 December 1931 against the ninth defendant for Rs. 23,741-1-2 with interest and costs. The execution petition (E.P.) dated 1 March 1937 alleged that some sums had been recovered in 1936–1937 but that approximately Rs. 30,582 (plus further interest and costs) remained due.
The decree-holder sought execution against five supplemental defendants (Nos. 10–14). The tenth supplemental defendant was the Official Receiver of Guntur; the eleventh to fourteenth supplemental defendants were the minor undivided sons of K. Venkatasubba Rao (the eighth defendant), who had been adjudicated insolvent in I.P. No. 74 of 1931. The Official Receiver had sold certain joint family property for Rs. 6,555. The decree-holder claimed that he had attached the eighth defendant's properties before judgment and sought attachment of Rs. 5,244 (purportedly 4/5th of Rs. 6,555) said to represent the sons' share, and asked that the Official Receiver be ordered to deposit that sum in court to satisfy the decree. The Official Receiver and the minor sons objected; the Subordinate Judge overruled objections and made preliminary attachment absolute. The Official Receiver filed an appeal and a revision petition challenging that order.
Legal Issues Presented
- Whether the Official Receiver had the status of a representative of any party to the decree (either the judgment-debtor or the insolvent's sons) such that an appeal would lie from the Subordinate Judge's order.
- Whether the learned Subordinate Judge had jurisdiction to attach Rs. 5,244 as representing the minor sons' share (i.e., whether the decree-holder could execute against the sons' interest after partition or where attachment before judgment had earlier been effected).
- Whether an attachment before judgment (dated 11 April 1931) enabled the decree-holder to proceed against the subsequently born sons' interests despite partition having occurred.
- Whether the decree-holder was bound by the decree and directions in the partition suit (O.S. No. 372 of 1933) and thus precluded from obtaining the claimed preferential payment of Rs. 5,244.
- Whether leave of the partition court was necessary before attaching funds in the hands of the Special Receiver (the Official Receiver) arising out of the partition proceedings.
- Whether revision was an available remedy in the face of an alternative remedy by way of suit under Order 21, Rule 63, and related provisions.
Arguments of the Parties
Respondent (Decree-holder) — Mr. Govindarajachari
- Raised a preliminary objection to maintainability of the Official Receiver's appeal: contended the Official Receiver did not represent any of the decree parties and therefore had no right of appeal from the Subordinate Judge's order.
- Contended that an attachment effected before judgment (11 April 1931) of the joint family property put the decree-holder in a different position and authorized execution against the sons' interests despite subsequent events (partition and birth of sons).
- Argued against allowing revision on the ground that the Official Receiver had an alternative remedy by way of suit under Order 21, Rule 63 (relying on Full Bench authority Ittiachan v. Velappan).
Appellant (Official Receiver) — Mr. P. Satyanarayana Rao
- Maintained that the Official Receiver could be considered a representative of the insolvent's sons and thus was entitled to object and to pursue remedies available to the sons.
- Contended the learned Subordinate Judge had no jurisdiction to attach Rs. 5,244 in the Official Receiver's hands as that sum represented the sons' interests after partition and could not be pursued in execution of a decree against the father alone.
- Advanced a subsidiary contention that upon adjudication the insolvent's property vested in the Official Receiver from the date of the insolvency petition (invoking Rdghunath Das v. Sundar Das Khetri), which would affect the efficacy of an attachment before judgment.
- Argued that because the cash was in the hands of the Special Receiver appointed in the partition suit, leave of the partition court would be required before attachment (referenced Thayumana v. Ramaswami).
- Relied on the partition decree (O.S. No. 372 of 1933) to contend that the decree-holder was bound by that decree and could not claim the Rs. 5,244 as belonging to the minor sons independently of the estate's liabilities to other creditors.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Mohitosh Dutta v. Rai Satish Chandra Chaudhuri Bahadur (1931) 35 C.W.N. 971 | Illustrates that the Receiver's status as a "representative" under the Code depends on the purpose and nature of his application — no universal rule. | Quoted to show that whether the Official Receiver is a representative depends on the application’s purpose; used to support the view that the Official Receiver in this proceeding acted as a third party and was not a representative entitled to appeal. |
| Official Receiver of Kistna v. Imperial Bank of India (1934) 68 M.L.J. 78 : I.L.R. 58 Mad. 403 | Affirms that facts determine whether an Official Receiver is a representative of the judgment-debtor for purposes of execution procedure. | Relied upon to reinforce that, given the facts here, the Official Receiver was a third party objecting to attachment rather than a representative with a right of appeal. |
| Kuppan Chettiar v. Masa Goundan (1937) 1 M.L.J. 249 : I.L.R. (1937) Mad. 1004 | Holds that after partition, the interest of sons cannot be pursued in execution of a decree passed against the father alone; remedy is by separate suit if the debt binds the joint family. | Applied as the controlling principle to conclude that the decree-holder could not proceed by execution against the sons' shares after partition; this principle led to allowing the revision petition. |
| Rdghunath Das v. Sundar Das Khetri (1914) 27 M.L.J. 150 : L.R. 41 I.A. 251 : I.L.R. 42 Cal. 72 (P.C.) | Addresses vesting of insolvent's property in the Official Receiver from the date of the insolvency petition (affecting prior attachments). | Cited by the appellant as a subsidiary contention; the court observed it was unnecessary to decide that point because the petition succeeded on other grounds. |
| Thayumana v. Ramaswami A.I.R. 1925 Mad. 51 | Dealt with the necessity of court leave before attaching cash in the hands of a Receiver/Special Receiver. | Referred to by the appellant to argue that attachment required leave; the court noted the argument but did not decide it because other grounds disposed of the petition. |
| Ittiachan v. Velappan (1885) I.L.R. 8 Mad. 484 (Full Bench) | Used to support the proposition that where an alternative remedy (by suit) exists, revision may not be appropriate — the Full Bench observed "the petitioner's remedy is by suit." | The court examined and declined to treat that decision as establishing an absolute bar to revision where another remedy exists; the court held it had jurisdiction under Section 115 and allowed revision in the circumstances. |
Court's Reasoning and Analysis
The court proceeded in stages, addressing first the preliminary objection on maintainability and then the merits of the revision petition as an alternative remedy.
- Maintainability / Representative status: The court accepted the decree-holder's preliminary objection that the Official Receiver lacked the status of a representative of any party to O.S. No. 34/1931 and therefore had no right of appeal from the Subordinate Judge's order. The court relied on authority establishing that a Receiver's status as a "representative" is not fixed but depends on the purpose of the Receiver's application. On the facts, the Official Receiver was acting as a third party objecting to attachment under Order 21, Rule 58 (and thus, if dissatisfied, his remedy lay by suit under Order 21, Rule 63), not as a representative entitled to appeal. Consequently A.A.O. No. 469 of 1938 was dismissed.
- Representative of the sons / effect of partition: The court examined the argument that the Official Receiver represented the insolvent's sons by virtue of his role as Special Receiver in the partition suit (O.S. No. 372 of 1933). It found that the sons were not parties to the original decree (O.S. No. 34/1931) because they had been born after that suit was filed; the Official Receiver's appointment as Special Receiver in the partition suit did not transform his status in the present execution proceeding into that of a representative of the sons. Moreover, the Official Receiver's claim under Order 21, Rule 58 in the partition suit had been dismissed by the Subordinate Judge.
- Jurisdiction to attach Rs. 5,244 and effect of attachment before judgment: On the revision point, the court reconstructed the timeline (attachment before judgment on 11 April 1931; insolvency petition filed six days later; adjudication on 10 October 1932; partition suit commenced 14 July 1933; preliminary partition decree 14 August 1936; E.P. filed 1 March 1937). The court applied the principle (as in Kuppan Chettiar) that, after partition, the sons' interests cannot be pursued in execution of a decree against the father alone; at most the decree-holder could bring a separate suit if the debt bound the joint family. The court rejected the decree-holder's argument that an attachment before judgment altered that position, holding that the principle applies irrespective of whether attachment was before or after judgment. Crucially, the present application sought a fresh attachment of funds in the Official Receiver's hands (rather than enforcement by relying on an earlier pre-judgment attachment), and so the earlier attachment did not authorize execution against the sons' post-partition interests.
- Effect of partition decree and priority of claims: The court emphasized that the partition decree (O.S. No. 372 of 1933) had administered the insolvent's estate by directing the Special Receiver to pay debts properly binding on the estate and to distribute the remainder between the insolvent and his minor sons. The sum of Rs. 5,244 represented a portion of sale proceeds of joint family property and did not exist as the separate property of the minor sons; it was liable to discharge the insolvent's debts identified in the partition proceedings. Therefore, the decree-holder could not ignore the partition decree and claim that sum for his decree alone to the prejudice of other creditors.
- Leave to attach funds in hands of Special Receiver & alternative remedies: The court noted but did not decide the separate arguments concerning the necessity of leave to attach funds in the Special Receiver's hands (relying on Thayumana v. Ramaswami) and the legal effect of vesting on adjudication (Rdghunath Das). On the question whether revision was barred because an alternative remedy by suit was available, the court reviewed Full Bench authority cited by the respondent and declined to read it as an absolute bar. The court concluded that, having admitted the revision petition earlier and finding on the facts that the Subordinate Judge lacked jurisdiction to order the attachment, it would be an unnecessary multiplication of proceedings to require the Official Receiver now to pursue a fresh suit. The court held it had jurisdiction under Section 115 of the Code of Civil Procedure to entertain and allow the revision.
Holding and Implications
Holding:
The court dismissed A.A.O. No. 469 of 1938 (the appeal) for want of maintainability and allowed the revision petition C.R.P. No. 1427 of 1938: the order of attachment of Rs. 5,244 was set aside and E.P. No. 84 of 1937 was dismissed.
Direct implications and consequences:
- The Official Receiver (petitioner) succeeds in the revision and will recover his costs of the petition from the first respondent (the plaintiff in O.S. No. 34 of 1931) both in the High Court and in the Court below, as ordered by the court.
- The decree-holder is not permitted to execute against the minor sons' shares (or the specified portion of sale proceeds) in the partitioned estate by the attachment in the Official Receiver's hands; the decree-holder must respect the partition decree and the administration directions contained in O.S. No. 372 of 1933.
- The Official Receiver was held not to be a representative of any party to O.S. No. 34/1931 for purposes of an appeal in this proceeding; his remedy in that respect was by suit (Order 21, Rule 63) though the court, on the facts and in exercise of Section 115, permitted revision in this instance to prevent multiplicity of proceedings.
The court applied existing authorities and procedural principles to the facts before it and did not purport to lay down a new general proposition of law; the decision resolves the dispute on the specific facts and procedural posture presented.
1. This appeal and this revision petition are brought against the order passed by the learned Subordinate Judge of Guntur in E.P. No. 84 of 1937 in O.S. No. 34 of 1931. The E.P. Was dated 1st March, 1937. The suit had been decreed on the 14th December, 1931, against ninth defendant for a sum of Rs. 23,741-1-2 with interest and costs. It was alleged in the E.P. that certain sums had been recovered in execution in 1936 and 1937 and that an amount of Rs. 30,582 plus further interest and costs was still due. The prayer in the E.P. was for execution against five defendants impleaded in the E.P. as supplemental defendants 10 to 14. The supplemental tenth defendant is the Official Receiver of Guntur and defendants 11 to 14 are said to be the minor undivided sons of K. Venkatasubba Rao the eighth defendant in the suit. K. Venkatasubba Rao had been adjudicated insolvent in I.P. No. 74 of 1931 and certain items of the joint family property had been sold by the Official Receiver for a sum of Rs. 6,555. The decree-holder alleged that he had attached the properties of the eighth" defendant before judgment in O.S. No. 34 of 1931. He said that he desired attachment by means of a prohibitory order of a sum of Rs. 5,244 representing the 4/5th share of the supplemental defendants 11 to 14 (the minor sons of the eighth defendant) of the sum of Rs. 6,555. He prayed that the Official Receiver, the tenth defendant might be ordered to deposit this amount in Court so that it might be paid to him to the credit of this decree in O.S. No. 34. He prayed also for the issue of a sale notice regarding the remaining joint family properties which had been attached and for payment of 4/5th of the sale proceeds of such items to him. The Official Receiver opposed this application and the minor sons also opposed it. The learned Subordinate Judge overruled these objections and ordered that the preliminary attachment of the sum of Rs. 5,244 should be made absolute. Hence this appeal and the revision petition which are filed by the Official Receiver.
2. Mr. Govindarajachari on behalf of the respondent decree-holder raised a preliminary objection to the maintainability ability of the appeal and after hearing his arguments and the arguments of Mr. P. Satyaharayana Rao for the appellant we find ourselves obliged to accept the preliminary objection. Mr. Govindarajachari's contention was that the Official Receiver did not in this proceeding represent any of the parties to the decree and that consequently no appeal would lie from the order passed by the learned Subordinate Judge. Mr. Satyanarayana Rao attempted to show that the Official Receiver could be considered to be a representative of the sons of the insolvent eighth defendant. It has been pointed out by Rankin, C.J., in the case Mohitosh Dutta v. Rai Satish Chandra Chaudhuri Bahadur (1931) 35 C.W.N. 971, that no hard and fast rule can be Laid down regarding the position of the Receiver in insolvency in such a case as this. The learned Chief Justice observes:
It appears to me that any general statement to the effect that a Receiver is or is not a representative for the purposes of section 47 of the code is necessarily misleading. It all depends on the purpose and nature of the application made by the Receiver whether he is a representative of the judgment-debtor or not. For some purposes he would be entitled as representing the judgment-debtor to litigate matters under section 47 of the code; but where he comes to the executing Court for the purpose of saying that as the judgment-debtor's property now belongs to the Receiver the Court cannot sell for the judgment-debtor's debt that which is the property of. another person because it has vested in the Receiver for the benefit of the creditors, then, for that purpose the Receiver is not, in my judgment, a representative of the judgment-debtor. The Receiver in such a case, if he is not acting under Section 52 of the Provincial Insolvency Act but acting under the usual provisions of the Civil Procedure Code, is really a third party making a claim.
3. To the same effect is the decision of a Bench of this Court in Official Receiver of Kistna v. Imperial Bank of India (1934) 68 M.L.J. 78 : I.L.R. 58 Mad. 403. The facts of each case have to be taken into consideration in order to find out whether the Official Receiver is a representative of the judgment-debtor or not. In the present case the Official Receiver contended that all the property of the insolvent had vested in him with effect from the date of the insolvency petition. He was therefore in the position of a third party objecting to attachment under Order 21, Rule 58 of the Code of Civil Procedure and when his objection was disallowed by the learned Subordinate Judge he had no right of appeal but had the right of filing a suit under Order 21, Rule 63 of the Code of Civil Procedure.
4. As for the contention that he was a representative of the sons of the insolvent, that is based on the fact that in 1933 a suit for partition was filed against the eighth defendant on behalf of his eldest son a miner at that time who was the only son of the insolvent then in existence. That was O.S. No. 372 of 1933. Before it was decided in 1936 two other sons had been born to the insolvent. A degree was passed for partition and in that the Official Receiver was appointed as a Special Receiver with directions to pay out of the insolvent's estate all the debts that were properly binding upon the estate and to distribute the rest between the insolvent eighth defendant and his minor sons. It is however not possible to hold that in this execution proceeding the Official Receiver was representing the sons in his capacity as, Special Receiver in the partition suit. As a matter of fact the sons were not parties to O.S. No. 34 of 1931 for the simple reason that none of them had been born when that, suit was filed. They were not parties therefore to the decree. We are told moreover, that in his capacity as Special Receiver in the partition suit the Official Receiver did file a claim under Order 21, Rule 58, Civil Procedure Code, which was dismissed by the learned Subordinate Judge on the 28th March, 1938.
5. We think it is clear that in this case the Official Receiver is not a representative of any of the parties to the suit and therefore has no right of appeal. Sustaining Mr. Govindarajachari's preliminary objection we must dismiss A.A.O. No. 469 of 1938.
6. Mr. Satyanarayana Rao then proceeded to argue C.R.P. No. 1427 of 1938 which was filed as an alternative remedy. His main contention is that the learned Subordinate Judge had no jurisdiction in this case to attach the sum of Rs. 5,244 as representing the share of the insolvent's minor sons. To understand this it is necessary to mention the facts which have been very perfunctorily dealt with in the order of the learned Subordinate Judge. O.S. No. 34 of 1931 was filed on the 7th April, 1931 and the decree was passed on the 14th December, 1931. On the 11th April, 1931, the insolvent's property had been attached before judgment. Six days after that Insolvency Petition No. 74 of 1931 was filed against the eighth defendant and he was adjudicated insolvent on the 10th October, 1932. The partition suit (O.S. No. 372 of 1933) was filed as already mentioned on the 14th July, 1933 and on the 14th August, 1936, a preliminary decree for partition was passed. This E.P. was filed on the 1st March, 1937. Now it is quite clear that after partition the interest of the sons cannot be pursued in execution of a decree passed against the father alone. There are many cases in which this has been Laid down and., it is only necessary to refer to the latest decision in this Court, Kuppan Chettiar v. Masa Goundan (1937) 1 M.L.J. 249 : I.L.R. (1937) Mad. 1004. If the decree-debt is one binding on the joint family the decree-holder can have a remedy against the sons after partition by way of a separate suit but he cannot proceed by way of execution against their interest in the joint family property. Mr. Govindarajachari does not dispute this statement of the law but he contends that the attachment before judgment which was made on the 11th April, 1931, puts this case into a different category, altogether. His contention is that since the decree-holder in O.S. No. 34 attached the whole of the joint family property before judgment that attachment enables him to proceed now against the interest of the sons in spite of the fact that they were not parties to the suit. We are unable to accept this contention. The principle Laid down in the case cited and in the other cases of the same sort does not make any distinction between attachments effected before judgment and attachments attempted after judgment. It must be borne in mind that when this attachment before judgment was made no son had been born to the eighth defendant. We have been told from the Bar by Mr. Govindarajachari that the insolvent's eldest son (the first plaintiff in the partition suit) was born on the 29th October, 1931, and that therefore he must have been in gremio matrix on the date of attachment. The documents filed before us do not show the date of birth of any of the insolvent's sons. But that is a matter of no importance, because the respondent in this case was not at any time purporting to act against the shares of the sons in pursuance of the attachment effected before judgment. His application was expressly for a fresh attachment of a sum of money in the hands of the Official Receiver, For this reason it is also unnecessary to consider a subsidiary contention of Mr. P. Satyanarayana Rao that upon adjudication the whole of the insolvent's property vested in the Official Receiver with effect from the date of the Insolvency Petition, making the attachment before judgment of no avail vide Rdghunath Das v. Sundar Das Khetri (1914) 27 M.L.J. 150 : L.R. 41 I.A. 251 : I.L.R. 42 Cal. 72 (P.C.).
7. On this ground alone the revision petition must be allowed. Mr. Satyanarayana Rao for the petitioner has raised two other points. One is that this decree-holder was made a party to the partition suit (O.S. No. 372 of 1933). It is alleged that in that suit he did not claim any priority over other creditors and that he is bound by the decree in that suit. The decree provided for what was virtually an administration of the estate of the insolvent eighth defendant in O.S. No. 34 of 1931 directing the Official Receiver as Special Receiver to sell so much of the insolvent's property as was necessary to discharge all his legitimate debts and divide the surplus between the insolvent and his sons. In the present E.P. it is clear that the decree-holder in O.S. No. 34 of 1931 is attempting to get an' advantage over the other creditors of K. Venkatasubba Rao. He is trying to collect Rs. 5,244 towards his decree alone without regard to the debts of the insolvent which are binding upon his estate. It is we think quite true to say as Mr. Satyanarayana Rao says that this sum of Rs. 5,244 cannot in any sense be held to be the property of the minor sons of K. Venkatasubba Rao. It represents 4/5th of the sale proceeds of certain items of joint family property. It has no separate existence as the property of the minor sons. It is merely a part of the joint family estate and in O.S. No. 372 of 1933 it has been found that that sum is liable for the discharge of certain other debts' besides the one due to the decree-holder in O.S. No. 34 of 1931. It is impossible therefore to say that the minor sons of K. Venkatasubba Rao are entitled to this sum of Rs. 5,244. They have been declared to be entitled to their respective shares of whatever may be left after Venkatasubba Rao's debts have been discharged. This contention also we think must prevail Mr. Govindarajachari has not been able to show us any reason why the decree-holder in O.S. No. 34 of 1931 should be allowed to ignore the decree in O.S. No. 372 of 1933 to which he was a party, and to proceed in execution of his decree in a manner which is contrary to the terms of that decree.
8. Another contention of Mr. Satyanarayana Rao is that since the cash attached was in the hands of the Special Receiver in O.S. No. 372 of 1933 leave of the Court was necessary before it could be attached. He has referred us to the case Thayumana v. Ramaswami A.I.R. 1925 Mad. 51 and the case cited in that decision. It is not necessary to pronounce upon the validity or otherwise of this contention since we are satisfied that on the grounds already mentioned the petition must succeed.
9. Mr. Govindarajachari attempted to argue that revision could not be allowed in this case because the Official Receiver had a remedy by way of suit under Order 21, Rule 63. He refers us to the Full Bench decision Ittiachan v. Velappan (1885) I.L.R. 8 Mad. 484 (F.B.). In that judgment dealing with a similar revision petition (266 of 1884) the learned Judges have observed
"we have no power to interfere under Section 622, Civil Procedure Code - the petitioner's, remedy is by suit."From this we are asked to infer that the Full Bench Laid down that whenever there is a remedy by way of suit the remedy by way of revision cannot be allowed. We can only say that this decision has never been considered in this Court as laying down any such proposition. In point of fact the learned Judges do not say that because the petitioner has a remedy by way of suit therefore they have no power to interfere by way of revision. Cases in which this Court has interfered in revision in spite of the fact that the petitioner had another remedy are too numerous to be quoted. The principle that revision should not be allowed where another remedy is available is a principle which may very conveniently be applied at the stage of admission. This revision petition was admitted by Mr. Justice Varadachariar nearly two years ago and since it has been admitted we think that it would be wrong at this stage to say that it must be dismissed merely because the Official Receiver might have proceeded by way of suit. Since it is clear to us that the learned Subordinate Judge had no jurisdiction to attach this money in the hands of the Official Receiver and Special Receiver it would be an unnecessary multiplication of legal proceedings to refer the petitioner now to a suit. We are satisfied that we have jurisdiction to act under Section 115 of the Code of Civil Procedure and to allow this petition.
10. The order of attachment of the sum of Rs. 5,244 is accordingly set aside and E.P. No. 84 of 1937 dismissed. The petitioner will recover his costs of this petition from the first respondent (plaintiff in O.S. No. 34 of 1931) both here and in the Court below.
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