Andhra HC (Pre-Telangana)
Kanakam Srinivasa Rao vs Ganga Venkateswara Rao And Anr. on 26 September, 2002
Equivalent citations: AIR2003AP38, 2002(6)ALD169, 2002(6)ALT201, AIR 2003 ANDHRA PRADESH 38, (2003) 2 ALLINDCAS 955 (AP), (2002) 6 ANDHLD 169, (2003) 1 ICC 347, (2002) 6 ANDH LT 201, (2002) 2 ANDHWR 567
ORDER S. Ananda Reddy, J.
1. This revision petition is filed by the 1st respondent before the lower Court, aggrieved by the order passed in EA No. 388 of 2001 in EA No. 147 of 2001 in O.S. No. 92 of 1999, dated 6th March, 2002.
2. The Petitioner herein filed a suit OS No. 92 of 1999 on the file of the Additional Senior Civil Judge, Srikakulam for recovery of certain amount against the 2nd respondent. The Petitioner also filed IA No. 463 of 1999 under Order XXXVIII, Rule 5 of the Code of Civil Procedure for attachment of term deposits of the 2nd respondent in a sum of Rs. 62,000/- and Rs. 15,000/-respectively lying with the State Bank of India, Main Branch, Srikakulam. The lower Court ordered attachment on 16-12-1999 against the said deposits and also issued prohibitory orders to the Branch Manager, State Bank of India. The said order was served on the said Branch Manager on 17-12-1999.
3. The facts also further show that the 1st respondent herein also filed OS No. 93 of 1999 on the file of the Principal Senior Civil Judge, Srikakulam. He also filed IA No. 672 of 1999 for attachment of the term deposit of Rs. 62,000/- belongs to the 2nd respondent and the said amount was got attached by an order dated 16-12-1999 and the said order was served on the Branch Manager on 18-12-1999. The 1st respondent in addition to the term deposit lying with the SBI also got attached a sum of Rs. 1,75,030/- lying with the Telecom Department, according to the 1st respondent. Subsequently, both the suits were decreed -i.e., OS No. 92 of 1999 was decreed on 4-4-2001, which was in favour of the Petitioner herein; and O.S.No. 93 of 1999 was decreed on 7-4-2001 in favour of the 1st Respondent herein. Thereafter the 1st Respondent filed EA No. 147 of 2001 for getting the attached amounts lying with the SBI, to the credit of the suit and in fact, the said amount was transmitted by the SBI to the credit of the suit. At that stage the 1st Respondent herein filed EA No. 388 of 2001, under Section 73 C.P.C., praying the Executing Court to pass appropriate orders for rateable distribution of the amount of Rs. 62,000/-. The executing Court after hearing both sides passed orders accepting the contention of the 1st Respondent and ordered for rateable distribution of the attached amount between the two decree holders. Aggrieved by that, the petitioner herein, who was the 1st respondent before the lower Court, has come up with the present revision.
4. The learned Counsel for the Petitioner contended that the provisions of Section 73 CPC have no application to the facts of the present case. According to the learned Counsel the 1st respondent has got attached a sum of Rs. l,75,030/- from the Telecom Department and in fact according to the learned Counsel it was realised. Therefore, there is no case for rateable distribution, as major part of the amount was already realised by the 1st Respondent. The learned Counsel also contended that what is lying to the credit of the suit of the Petitioner or Execution Petitioner is an amount of Rs. 62,000/-, which was transmitted by the SBI. The said amount could not be considered as an asset of the judgment debtor, which was already transmitted and lying to the credit of the execution petition filed by the petitioner against the judgment debtor. Therefore, it ceased to be the asset of the judgment debtor and therefore, the provisions of Section 73 C.P.C. have no application. Hence, the Court below was not justified in ordering for rateable distribution between the petitioner and the 1st respondent.
5. The learned Counsel for the 1st Respondent, on the other hand, supported the order of the Court below. According to the learned Counsel, the 1st Respondent did not realise any amount alleged to be tying with the Telecom department, as it was the case of the Telecom Department that no such amount was lying with the said department, which belongs to the judgment debtor. The learned Counsel also contended that though the amount was transmitted to the credit of the suit or the execution petition filed by the Petitioner, still the amount should be treated as belongs to the judgment debtor alone till the same was paid over to the decree holder. When such amount was already lying with the Court, the 1st respondent, who is one of the decree holder of the 2nd respondent, is entitled to make an application for rateable distribution and the amount lying to the credit of the execution petition continues to be that of the judgment debtor till it is paid over to any parties, who are entitled to it. Therefore, the learned Counsel for the 1st respondent sought to sustain the order of the Court below.
6. At the time of hearing, the learned Counsel for the Petitioner placed two decisions before this Court - one is that of the Rajasthan High Court in the case of Vijay Raj v. Lal Chand, AIR 1966 Raj.
194, and the another is a decision of the Kerala High Court in the case of D.C. Johar & Sons Ltd. v. Mathew, . On the other hand, the learned Counsel for the Respondent referred to the decision of the Supreme Court in the case of Lakshman Swarup Om Prakash v. Union of India, , where it was held that money lying with the Court had not ceased to be the property of the judgment debtor.
7. From the above rival contentions the issue to be considered is whether the Court below was justified in ordering rateable distribution between the petitioner and the 1st respondent, who are the decree holders and against the 2nd respondent.
8. The facts are not in dispute that both the petitioner and the 1st respondent filed suits against the 2nd respondent, which are, in fact, bears the consecutive numbers i.e., O.S.No. 92 of 1999 and O.S.No. 93 of 1999 respectively and in both the suits the amount of Rs. 62,000/- lying in Term Deposit with the State Bank of India was got attached, with almost the orders passed on the same day. In fact, the order of attachment either prior or subsequent may not make any difference, as the claims of the decree holders have to be considered only as on the date of the distribution or payment. Further, it is also clear from the facts that both the suits were decreed against the 2nd respondent. Thereafter, the 1st respondent filed the EA for transmitting the amount attached lying with the SBI to the credit of the execution petition and accordingly the amount also transmitted to the Court. At mat stage, the 1st Respondent, who is one of the decree holder, filed another application under Section 73 of the Code of Civil Procedure, seeking rateable distribution. The said application is being objected to by the petitioner on the ground that the 1st respondent has already realised certain amount, which was also got attached by him and further when the amount was transmitted to the credit of his suit or execution petition, the said amount ceased to be that of the judgment debtor. Therefore, Section 73 has no application.
9. Before proceeding further, it would be proper to refer to the provisions of Section 73(1) of the Code of Civil Procedure, which is as under: -
"73. Proceeds of execution sale to be rateably distributed among decree holders:--(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 the 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 realisation, shall be rateably distributed among all such persons."
10. Section 73 of the Code of Civil Procedure, as held by the Madras High Court in the case of Palaniappa v. Muthu Veerappa, , entitles a decree holder to rateable distribution if the following conditions are satisfied : -
(a) the applicant for rateable distribution must have obtained his decree and applied for execution of the decree to the appropriate Court;
(b) the application should have been made prior to the receipt of the assets by the Court;
(c) the assets of which rateable distribution is claimed must be assets held by the Court;
(d) the attaching creditor as well as the decree holder claiming to participate in the assets should be holders of decrees for the payment of money; and
(e) the decree should have been obtained against the same judgment debtor.
11. Similar view was reiterated by a learned single Judge of our High Court in the case of Peddireddy Ganga Raju v. K. Mangamma, AIR 1958 AP 334.
12. In the case of Manora Bai v. Sultan Bakath, , a learned single Judge of this Court held that it is not necessary that every decree holder should attach the property. It is enough if the person not attaching property applies for execution before assets are received by attaching Court.
13. However, a different view was taken by the Madras High Court in the case of VTV Chettiar v. PSP Chettiar, ATR 1973 Mad. 313, where it was held that in order to get the benefit of rateable distribution of the assets, the decree holder must make an application for execution to the same Court, which received the assets. Making an execution application to a Court other than the Court, which received the assets would not be entitled to the benefit.
14. Similar view was also expressed in the case of K. Suryavathi v. T. Suryakantham, AIR 1984 AP 277, holding that where a person obtaining a decree in one Court, though claimed rateables in another Court against the same judgment debtor before the assets were received by the latter Court, but did not file an execution petition in that latter Court nor had his decree transmitted to that Court his application for rateables would not be maintainable.
15. But, however, a Full Bench of the Hyderabad High Court in the case of C.&l. Bank v. M.S. Ali Khan, AIR 1956 Hyderabad 65, had an occasion to consider the issue under Section 371 of the (Hyderabad) Civil Procedure Code (3 of 1323F), which is in pari materia with Section 73 of the Code of Civil Procedure 1908. For convenience, it is proper to refer to Section 371 to the extent it is relevant.
"Section 371 (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 their respective 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 realisation shall be rateably distributed among all such persons.
A perusal of the above provision clearly shows that the 'said provision in pari materia with that of Section 73 C.P.C. After referring to the relevant provision, the Full Bench held as under:
"All that is required under Section 371, Hyd. C.P.C., for a rateable distribution to a decree holder is that he should have made an application to the Court for execution of the decree against the same judgment debtor and that he had not obtained satisfaction therefor.
Learned advocate for revision. Petitioner, however, cities the case of - Narhar Gopal v. Lahanu Punjaji, AIR 1937 Nag. 16 (R), following - N.M.L. Chettyar v. Official Assignee', AIR 1935 Rang 135 (S), in favour of the proposition that the execution petition should not only have been filed before the amount is received in Court, but it should have been pending execution and not have been dismissed for default as in this case. In our view this proposition is not warranted by a plain reading of Section 371.
Once an application for execution has been made it does not matter if it is dismissed and was not pending when the amount was received in Court, provided it has not been satisfied or barred by limitation. In other words, the decree in execution must be executable at the time when the amount is received in Court for rateable distribution.
This is also the view taken by the Patna High Court in interpreting Section 73 of C.P.C., which corresponds to Section 371 of Hyd. C.P.C., in - 'Bimala Nanda v. Dhirindra Nath ', AIR 1937 Pat.92 (T). In this case both AIR 1935 Rang 135 (S) & -"Tiruchittambala Chetty v. Seshayyangar, 4 Mad 383 (U) were distinguished on the ground that the execution petition had been struck off prior to the application for rateable distribution.
The decision of the Calcutta High Court in -'Byomaksh Chakrabutty v. Hemanta Kumar Biswas'. AIR 1915 Cal 16 (V), in which it was held that the dismissal of an execution petition after the application for rateable distribution did not affect the right to share in the distribution was followed.
In the Nagpur case of Narhar Gopal Kanti v. Lahanu Punjaji (R), it was held, following AIR 1935 Rang 135(S) and dissenting from -'Gopichand v. Amir Chand', AIR 1933 Pesh. 52 (W), that for the purpose of Section 73, there must be a subsisting application for execution at the time when the assets are received. This is a Single Bench case of Pollock J., in which he merely agreed with the view taken by AIR 1935 Rang 135(S) and dissented from Peshawar's case (W) without assigning any reasons therefor.
With great respect we are not in agreement with this view because a plain reading of Section 371 of Hyd. C.P.C., merely makes it necessary to file an execution petition before the assets are received in order to acquire right to obtain rateable distribution. When once that is done we think the decree holder is entitled to obtain a rateable distribution as long as his right to execute the decree is not barred by limitation.
It is equally clear on a reading of the said Section that there is no Justification for the interpretation sought to be put by the learned advocate for the Petitioner, that the decree holders must, as a sine qua non, for obtaining orders for rateable distribution, have their decrees transferred to the distributing Court and apply for rateable distribution to that Court, before the assets are received in that Court.
All that the section requires is that the decree holder in order to be entitled to the rateable distribution should have taken execution proceedings before the assets are received in the Court distributing them."
16. A similar issue was considered by the Rajasthan High Court in the case of Vijay Raj v. Lal Chand (supra). In that case, Moolraj and his sons Vijayraj and Hemraj obtained a decree in Suit No. 69 of 1951 for a sum of Rs. 6223/- on 16-12-1956 against one Narsinghdas. During the pendency of the suit, the Plaintiffs had obtained an attachment before judgment of the petrol pump belonging to Narsinghdas. Narsinghdas offered Kanhaiyalal as surety for the payment of decretal amount. On 9th July, 1951 Kanhaiyalal executed a surety bond 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 deposited a sum of Rs. 5,300/- with Kanhaiyalal presumably to cover up the risk, which Kanhaiyalal had undertaken as his surety. By the time, the suit of the Plaintiffs was decreed, on 16th December 1966, Kanhaiyalal died and his son Atma Ram represented him. When the Plaintiffs, who obtained the decree, sought to execute the same against Narsinghdas and Atma Ram, Atma Ram deposited a sum of Rs. 6223 on 15* July 1957. Against Narsinghdas, there was another money decree and the decree holder Lalchand filed an application for execution of the said decree on 4-5-1957 and claimed rateable distribution from the amount of Rs. 6233/-deposited by Atmaram. The Application for rateable distribution was rejected by the executing Court and the amount deposited by Atma Ram was paid in its entirety to Vijayaraj and Hemaraj. 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 he being the judgment debtor's property Lalchand was entitled to rateable distribution. A sum of Rs. 2454/- was claimed by way of rateable distribution. The trial Court dismissed the said suit and on appeal, the District Judge reversed the finding of the trial Court and held that the Lalchand was entitled to rateable distribution. On further appeal, the Rajasthan High Court upheld the decree passed by the District Court, holding that the amount deposited continues to belong to the judgment debtor till it is paid and therefore, the amount is liable for rateable distribution among the decree holders. Though the decision of Kerala High Court in the case of D.C. Johar & Sons Ltd. v. Mathew (supra) was cited, the Kerala High Court did not consider the issue as the same do not fell for consideration in that case. But, however, the Apex Court in the case of Lakshman Swamp Om Prakash v. Union of India (supra) considered the issue. In that case, the Income-tax Department filed an application under Section 226(4) of the Income-tax Act during the pendency of private decree holder's application under Section 73, Code of Civil Procedure for rateable distribution. The said application was rejected by the Sessions Judge, holding that the money was brought to the executing Court for the satisfaction of the decree held by the decree holders and had ceased to belongs to the judgment debtor and that being so the provisions of Section 226(4) of the Income-tax Act could not have any application. The said order was assailed by the Union of India by filing a revision before the High Court, which was allowed by the judgment dated 20-9-1989. The High Court held that until the money was disbursed and appropriated by the decree holders in accordance with law, the money held by the Court continued to be liable to be proceeded against under Section 226 (4) of the Act. The said order assailed before the Apex Court. The Apex Court upheld the view of the High Court holding that till the amount brought before the Court is distributed among the decree holders it continues to belong to the judgment debtor in the custody of the Court. Any claim supervening those of decree holders can therefore, be entertained till actual distribution or payment to decree holders.
17. In view of the above Full Bench decision of the Hyderabad High Court, which became part of our High Court, the view expressed by the learned single Judge of our High Court in the case of K. Suryavathi v. T. Suryakantham (supra) as well as the Madras High Court in the case of VTV Chettiar v. PSP Chettiar (supra) cannot be considered to have been construed the provision properly. Apart from that, it is difficult for any decree holder to get his decree transferred to another Court before receipt of the assets by that Court, as the other decree holders may not be aware of the existence of such a decree in another Court, ultimately, which called for the assets of the judgment debtor and received by it. What is contemplated under the provisions of Section 73 of the Code of Civil Procedure is the existence of more than one decree against the same judgment debtor and the decree holders have made their applications for execution of their decrees and have not been fully satisfied. Once that is the position, as soon as the assets of the judgment debtor are received by another Court, they can make an application under Section 73 for rateable distribution without getting their decrees transferred to the Court, which received the assets. As held in the above referred judgments, even the attachment of the assets of the judgment debtor, by all the decree holders is also not necessary and the requirement is only to make an application after the receipt of the assets by the Court, an application under Section 73 for rateable distribution. If such applicant fulfils the other requirements, contemplated under Section 73, he is entitled for rateable distribution. Admittedly, in the present case, all these facts were not brought on record and the Court below ordered rateable distribution on the ground that both the decree holders got the asset of the judgment debtor attached during the pendency of the suit, which is not at all relevant for the application of Section 73 of the Code of Civil Procedure.
18. Under the above circumstances, the impugned order is set aside and the matter is restored to the file of the Principal Senior Civil Judge, Srikakulam to consider the case of the petitioner in the light of the law laid down in this case.
19. The revision petition is accordingly allowed. No costs.