Rajasthan High Court - Jaipur
Vijay Raj And Anr. vs Lal Chand And Anr. on 14 October, 1965
JUDGMENT B.P. Beri, J.
1. This is a defendants second appeal directed against the judgment and decree of the District Judge, Jodhpur. dated the 9th July. 1962, in a suit for recovery of money under Section 73 of the Code of Civil Procedure.
2. The facts which give rise the present controversy are practically undisputed. They are that Moolraj and his sons Vijayraj and Hemraj obtained a decree in suit No. 69 of 1951 for a sum of Rs. 6223 and odd on 16th December, 1956 against Narsinghdar. During the pendency of the suit the plaintiff had obtained an attachment before judgment and the petrol pump belonging to Narsinghdas was attached. Narsinghdas offered Kanhaiyalal as a surety for the payment of decretal amount. On 9th July. 1951 Kanhaiyalal executed a surety bond Ex 4 in favour of the Court which had issued the order of attachment before judgment and consequently the property Attached was released. On the same date Narsinghdas sold the petrol pump and deposit-ed a sum of Rs 5300 with Kanhaiyalal presumably to cover up the risk which Kanhaiyalal had undertaken as his surety. On 16th December, 1956 a decree in the sum of Rs. 6228 inclusive of interest and costs was passed against Narsinghdas. Meanwhile Kanhaiyalai had died. His son Atma Ram represented him. Moolraj and his sons Vijayraj and Hemraj sought execution of the decree against Narsinghdas and Atma Ram. Atmaram deposited a sum of Rs. 6223 on 15th July, 1957. Against Narsiaghdas there was another money decree and the decree-holder Lalchand filed an application for execution of the said decree on 4th May 1957 and claimed rateable distribution from the amount of Rs. 6223 deposited by Atmaram. The application for rateable distribution was rejected by the executing Court and the amount deposited by Atmaram was paid in its entirely to Vijayraj and Hemraj. Under the provisions of Section 73(2) of the Code of Civil Procedure Lalchand instituted a suit in the Court of the Civil Judge on the ground that the money deposited by Atmaram actually belonged to Narsinghdas and it being the judgment-debtor's property Lalchand was entitled to a rateable distribution. A sum of Rs. 2454 was claimed by way of rateable distribution. The trial Court dismissed the suit. Lalchand preferred an appeai before the District Judge, who reversed the finding of the trial Court and held that Lalchand was entitled to rateable distribution Vijayraj and Hemraj. Moolraj having already died have now come up in second appeal.
3. Mr. Purohit the learned counsel for the appellants, has urged that the words "assets are held by a Court" in Section 73 of the Code of Civil Procedure do not cover money deposited for a specific purpose. He placed reliance on Lalchand Radhakisan v. Ramdayal Ramnarayan. AIR 1939 Bom 112 and D C. Johar and Sons Ltd. Mathew, AIR 1962 Ker 106. His next contention if that Kanhaiya lal's son Atmaram was a surely and, therefore, a judgment-debtor within the meaning of section 2(10) read with Section 145 of the Civil Procedure Code. The judgment-debtor Narsinghdas being a different judgment-debtor from Atmaram no question of rateable distribution under Section 78 arose. He placed reliance on Khagendra Nath v. P. C. Rai. AIR 1942 Oudh 491 and Sakha ram Lahanuji v. Mahadeo Venkat. AIR 1940 Nag 79. He lastly urged that when money was deposited for a specific purpose a case of equitable lien arose and only Hemraj and Vijayraj were exclusively entitled to enforce that lien and Lalchand could not claim any rateable distribution therein. He placed reliance on Gouranga Behari Basak v. Manindra Nath Das Gupta, AIR 1933 Cal 626 and Seena Vana Ramiah Ayyar v. Gopala Ayyar. 49 Ind Cas 20: (AIR 1919 Mad 607)
4. Mr. S. T. Porwal. learned counsel for the respondent No 2. the judgment-debtor Narsinghdas. contended that the amount was deposited for specific purpose and it was not available for rateable distribution.
5. Mr. S. C. Bhandari. learned counsel for the respondent No. 1, urged that the expression "assets are held by a Court" as employed in Section 73 of the Code of Civil Procedure after its amendment in 1908 is of wider Import and the Bombay case relied upon by the learned counsel for the appellants which proceeded on an earlier decision of the same Court decided according to the language of the Code of Civil Procedure, 1882 was not correctly decided The High Courts of Calcutta, Madras. Patna and even the Bombay High Court have not agreed with the view taken in Lal-chand's case. AIR 1939 Bom 112. He placed reliance on Satnarain Prasad v. Mahabir Pra-sad. AIR 1939 Pat 392, Ghisulal v. Todurmull. AIR 1922 Cal 19: Peddireddi Ganga Raju v. Kandula Mangamma. AIR 1958 Andh Pra 334; Ramanath Panda v Damodar Sahu, AIR 1950 Orissa 230. and Noor Mahomed Dawood v. Bilasi Ram Thakursidas. AIR 1920 Cal 785. He further contended that according to the definition contained in Section 2(10) of the Code of Civil Procedure a surety was not a judgment-debtor. He was merely a party and that too for a limited purpose of appeal as envisaged by Section 145 of the Code of Civil Procedure. He placed reliance on Ranamal v. Firm Bachraj Chuniram. ILR (1963) 13 Raj 1003: (AIR 1964 Raj 1). and urged that it was erroneous to say that Atmaram was a judgment-debtor In any case no decree was passed against Atmaram as envisaged by Section 73, CPC. On the question of equitable lien he urged that in Gouranga Behari Basak's case. AIR 1933 Cal 625, money never came to be held by court and the provisions of Section 73 were not considered and Seena Vanaramiah Ayyar's case. 49 Iml Cas 20: (AIR 1919 Mad 607). was a case arising out of some insolvency proceedings
6. The material portion of Section 73 of the Code of Civil Procedure 1908 reads as follows.
"73. (1) Where assets are held by a Court and more persons than one have, before the receipt of such assets, made application to the Court for the execution of decrees for the payment of money passed against the same judgment-debtor and have not obtained satisfaction thereof, the assets, after deducting the costs of realization, shall be rateably distributed among all such persons.
The sheet-anchor of the first contention raised by the learned counsel for the appellants is the case decided in AIR 1939 Bom 112. In this Bombay case the plaintiff had obtained an ex parte decree against the defendanl The plaintiff applied for execution of the decree. The defendant's application for stay of the execution was granted on condition of his furnishing security The surety bond was there upon executed by which the surety undertook to pay a certain sum in case plaintiff suffered on account of the staving of the execution. Subsequently the ex parte decree was set aside but a decree inter partes was passed The plaintiff again applied for execution and the surety paid the agreed amount in Court Other decree-holders who had previously obtained decrees against the same judgment-debtor applied for rateable distribution of the amount so paid by the surety. Beaumont C. J. held that the other creditors were not entitled to rateable distribution because the Court having received the amount in terms to be applied towards the payment of the plaintiff's debt the amount could not be applied towards payment of anybody else's debt as well as the plaintiff's debt. The reason which persuaded the learned Chief Justice to take this view was that the words 'assets held by a Court' as used in Section 73 must be assets received in execution. This expression does not apply to moneys paid into Court where no execution was applied for. The learned Chief Justice followed an earlier case of his own Court reported in (1912) ILR 36 Bom 156 Sorabji Covarji v. Kala Raghu Nath.
In Noor Mahomed Dawood's case, AIR 1920 Cal 785 Rankin, J. (as he then was) took a view contrary to the one taken in (1912) ILR 36 Bom 156. The learned Judge said that the words of the old Code having been changed it was not "sound to hold that because the latter words 'after deducting the costs of realization' have been allowed to remain, the word 'assets' must be taken to mean 'assets held in the process of execution' in such a narrow sense as would be equivalent to the former words." He further observed that rateable distribution under the Code clearly applies where one decree-holder takes out execution, and others, though they have applied for it, do not. The money paid in a Court in execution amounts to assets which are available under Section 73 for rateable distribution In Ghisulal's case AIR 1922 Cal 19, Richardson J. considered a case where in a suit for money certain property belonging to the judgment-debtor was attached (under Order XXXVIII Rule 5), before judgment, but the same was released on two persons standing as sureties, and they paid the amount in court just after a holder of another money decree applied for execution and called for rateable distribution. It was held that the money so deposited is 'assets held by a court' within the meaning of Section 73 and are, therefore, liable to be rateably distributed. The decision in (1912) ILR 36 Bom 156 was dissented from. I might mention in passing that the circumstances of this case also of the Bombay case are practically on all fours with the case before me.
Another case which I might notice in this context is the judgment of the Patna High Court AIR 1939 Pat 392. Fazl All, J., (as he then was) interpreting the words "assets are held by a Court" in Section 73 observed that the Legislature had considerably enlarged the scope of the Section and it was no longer permissible to hold that rateable distribution must be confined only to those cases where assets were realized by sale or by some other process of execution The words of the new section are wide enough to cover not only the money which a judgment-debtor is compelled to pay, but also money voluntarily paid into Court by him to satisfy a decree under execution. The words 'assets held by a Court' obviously mean any fund in possession of a Court or at its disposal which may be applied by it for the payment of a judgment-debtors debt. The learned Judge also held that Section 78 is imperative, and it was obligatory upon a Court to distribute rateable the asset held by it (irrespective of how they came into its hands) among all the creditors who were entitled to the benefit of the Section.
7. The emphasis of the learned counsel for the appellants is that according to Lalchand s ease, AIR 1939 Bom 112 if the assets come into the hands of a Court for the discharge and satisfaction of a particular decree the sum so received becomes specifically marked for the satisfaction of that decree and no other and, therefore, it is not open for rateable distribution between the other creditors of the judgment-debtor. The question is whether the terms of Section 78 are capable of bearing such an interpretation. When analysed Section 73 provides that there must be assets held by a court; that more persons than one have before the receipt of such assets made application to the Court for the execution of decrees for the payment of money passed against the same judgment-debtor; and that such persons have not obtained satisfaction of their claims, then the assets after certain deductions shall be rateably distributed among all such persons. The narrow question, therefore, is [bat when money is deposited in a Court for the discharge and satisfaction of a particular decree then will that decree-holder alone be en-titled to receive the money so received notwithstanding the fact that there are other decree-holders whose application for the satisfaction of their money decrees are pending before that Court, Differently put the question is whether the expression 'assets held by a Court' should be given any limitation such as 'not intended for a particular decree' The preponderance of opinion is that the language of this section does not warrant such an interpretation and I am in respectful agreement with it. As I have already noticed one of the conditions for the applicability of Section 73 is that there must be assets in the hands of a Court and this does not admit of any such limitation as has been strenuously suggested by the learned counsel. With great respect I am unable to agree with the Bombay decision and I prefer to adopt the interpretation given by Fazl Ali, J. in AIR 1939 Pat 392 and also in Calcutta cases. AIR 1920 Cal 785 and AIR 1922 Cal 19.
8. The next contention of the learned counsel is that Atmaram himself became a judgment-debtor and he being a different judgment-debtor than Narsingh Das Section 73 is not applicable. It is correct that for the applicability of Section 73 the decrees for the payment of money must be passed against the same judgment-debtor and not against different judgment-debtors The simple question which arises for consideration is whether Atmaram can be correctly called a judgment-debtor within the meaning of 8. ft (10) of the Code of Civil Procedure. The definition clause of the judgment-debtor reads as follows:
"Section 2(10) 'Judgment-debtor' means any person against whom a decree has been passed or an order capable of execution has been made."
No decree was passed against Kanhaiyalal whom Atmaram represents. Therefore, on the plain grammatical meaning it will not be possible to say that Atmaram is a judgment-debtor in the strict sense of the term. Reference in this connection may be made to Section 145 of the Code of Civil Procedure which provides that where any person has become liable as surety for the performance of any decree or any part thereof the decree or order may be executed against him, to the extent to which he has rendered himself personally liable, in the manner herein provided for the execution of decrees, and such person shall for the purposes of appeal, be deemed a party within the meaning of Section 46. The object of Section 145 is to provide a summary remedy for the enforcement of the liability of a surety who has given security for any of the purposes indicated in the section. The liability of the surety in the circumstances of the case before me only arose when the judgment debtor Narsinghdas failed or neglected to discharge the claim against him.
In this context the learned counsel had cited before me a decision of the Oudb High Court in Khagendra Nath's case, AIR 1942 Oudh 491. This case follows Lal Chand's case, AIR 1939 Bom 112 of the Bombay High Court in preference to Ghisulal's case. AIR 1922 Cal (9 of the Calcutta High Court. Sakharam's case. AIR 1940 Nag 79 of the Nagpur High Court laid down that the liability of the surety is coextensive with that of the of the judgment-debtor, that is the surety must be deemed to be a Judgment-debtor and the assets obtained in execution of a decree from the surety of the judgment-debtor cannot be rateably distributed to the holder of another decree against the judgment-debtor as the surety is not the judgment-debtor of such a decree-holder. Both these cases came to be considered in Peddireddi's case, AIR 1958 Andh Pra 334 of the Andhra Pradesh High Court, wherein the learned Judge expressed the opinion that the liability sought to be enforced against a surety is only by reason of the decree having been passed against the same judgment-debtor, and dissented from the view taken by the Nagpur and Oudh High Courts. I am in respectful agreement with this view. It is impossible to think of any independent liability of Kanhaiyalal and Atmaram without any liability against Narsinghdas I am unable to hold that it was a distinct and a separate liability and that the surety of the judgment-debtor is a different judgment-debtor to whom the provisions of Section 73 would not apply. In this connection it will be relevant to make reference to ILR (1963) 13 Raj 1003: (AIR 1964 Raj 1) wherein the learned Judges have expressed the opinion that a surety becomes a party for the limited purposes under Section 47 and not for all purposes.
9. The last argument of the learned counsel for the appellants was that the assets held by the Court in the instant case provided an equitable lien to the specific decree-holders, namely. Vijayraj and Hemraj. In this connection reference was made to Manindra Nath's case. AIR 1933 Cal 625 of the Calcutta High Court This case arose in altogether different circumstances. A sum was deposited by the defendant with the plaintiff's pleader under an order of the Court: that deposit was to he a part of satisfaction of the money decree to which the plaintiff may become eventually entitled. The plaintiff was held to be entitled to be paid out of the sum forthwith in preference to the other creditors represented by the official assignee. In the first place no assets were held by the Court and the provisions of Section 73 were therefore, not required to be considered in that case. In the Madras case. 49 Ind Cas 20: (ATR 1919 Mad 607) money was paid into Court by a defendant arrested before judgment under the provisions of Order XXXVIII Rule 2, Civil Procedure Code. On the insolvency of the defendant before a decree was passed in the suit it had not the effect of converting the deposit into the defendant's property for the benefit of his creditors. This again was not a case where Section 73 directly applied
10. No other point has been pressed before me.
11. The result is that this appeal fails and is dismissed with costs.
12. The learned counsel for the appellants prays for leave to appeal. Leave is allowed.