Madras High Court
M.A.A. Raoof vs K.G. Lakshmipathi on 9 July, 1968
Equivalent citations: (1968)2MLJ634, AIR 1969 MADRAS 268, 1981 MADLW 634 (1968) 2 MADLJ634, (1968) 2 MADLJ634
ORDER K.S. Venkataraman, J.
1. This appeal raises an interesting question of the validity of attachment of certain shares belonging to the judgment-debtor. The decree-holder Lakshmi-pathi obtained a decree in O.S. No. 2344 of 1960 on the file of the City Civil Court by consent. He filed E.P. No. 1458 of 1966 to recover a sum of Rs. 8,000 odd by attachment and sale of the shares which the judgment-debtor Raoof held in a company called Intrac Pharmaceutical (Private) Limited, Industrial Estate, Ambattur. An interim prohibitory order was issued both to the judgment-debtor and to the company. The company did not appear and object. The judgment-debtor appeared and took time to file a counter. He did not file the counter in time and so the attachment was made absolute. Against that order he has filed the present appeal.
2. The point taken on behalf of the appellant by his learned Counsel Sri K. N. Subramanian is that, though the judgment-debtor Raoof lives within the jurisdiction of the City Civil Court, Madras and the shires also are with him, the City Civil Court had no jurisdiction to issue the prohibitory order, because the place of business of the company is Ambattur, outside the jurisdiction of the City Civil Court, and the dividend due on the shares is also payable only at Ambattur. In my opinion this contention is not sound. Section 51 (b), Civil Procedure Code, states that subject to such conditions and limitations as may be prescribed, the Court may, on the application of the decree-holder, order execution of the decree by attachment and sale or by sale without attachment of any property. Order 21, Rule 46 prescribes the mode of attachment. It is necessary to quote it in full:
46 (1). In the case of:
(a) a debt not secured by a negotiable instrument, (b) a share in the Capital of a corporation,
(c) other moveable property not in the possession of the judgment-debtor, except property deposited, in, or in the custody of, any Court, the attachment shall be made by a written order prohibiting:
(i) in the case of the debt, the creditor from recovering the debt and the debtor from making payment thereof until the further order of the Court ;
(ii) in the case of the share, the person in whose name the share may be standing from transferring the same or receiving any dividend thereon ;
(iii) in the case of the other moveable property except as aforesaid, the person in possession of the same from giving it over to the judgment-debtor.
(2) A copy of such order shall be affixed on some conspicuous part of the Court-house and another copy shall be sent in the case of the debt, to the debtor, in the case of the share, to the proper officer of the Corporation, and, in the case of the other moveable property (except as aforesaid) to the person in possession of the same.
(3) A debtor prohibited under Clause (i) of Sub-rule (1) may pay the amount of his debt into Court and such payment shall discharge him as effectually as payment to the party entitled to receive the same.
3. It is Section 51, Civil Procedure Code, which gives the jurisdiction to the Court to attach and sell the shares and therefore the question whether the City Civil Court had jurisdiction to attach the shares must be determined primarily with reference to this section. Order 21, Rule 46, Civil Procedure Code, only prescribes the mode of attachment, though the provisions thereof may have to be borne in mind in determining the question of jurisdiction. The principle obviously underlying Section 51 (6) ,Civil Procedure Code, is that, if the property sought to be attached is within the limits of the jurisdiction of the Court, the Court can attach and sell the property. That is reinforced by the provisions of Sections 39 and 46, Civil Procedure Code, which provide for the transfer of the decree to a Court within whose limits the property sought to be attached and sold is situate. Applying this criterion, since the properties sought to be attached and sold are the shares of the judgment debtor and they are with him in Madras within the limits of the jurisdiction of the City Civil Court, it would follow without further more that that Court had the jurisdiction to attach and sell. It is only necessary to add that there is nothing in Order 21, Rule 46, Civil Procedure Code, to contradict this result and I might go further and say that under Order 21, Rule 46, Civil Procedure Code, also, the criterion would seem to be only the residence of the judgment-debtor against whom prohibitory order is to be made from transferring the shares or receiving any dividend therefrom. That is all Sub-rule (1) of Rule 46 indicates. It may be noted that Sub-rule (2) of Rule 46 only requires that a copy of the prohibitory order shall be affixed on some conspicuous part of the Court house and another copy to be sent to the proper officer of the Corporation. In other words, the provision, which would seem to determine the questions of jurisdiction, with which we are concerned, is only Sub-rule (1) it would be sufficient if the judgment-debtor, in whose name the shares stand and to whom the prohibitory order is issued, resides within the jurisdiction of the executing Court. Affixture of a copy of the prohibitory order on some conspicuous part of the Court-house and service of the copy of the order on the proper officer of the Corporation under Sub-rule (2) are only additional formalities to be observed by the executing Court, but they are not determinative of the question as to which Court, has jurisdiction to issue the prohibitory order.
4. Sri K. N. Subramaniam, learned Counsel for the appellant however, relies on the decision of Mockett, J. in Baluswami v. Official Assignee of Madras (1939) M.W.N. 573. There some persons had been adjudged insolvents in this Court and against whom a decree had been obtained by the Obla K. Ramasamier. That decree itself was attached by one C. S. Varadachariar in execution of a decree in suit O.S. No. 97 of 1930 in the Maclurai Sub-Court. The learned Subordinate Judge issued the prohibitory order to the Official Assignee of Madras prohibiting him from paying over the dividend due in respect of the decretal debt to anybody other than the attaching decree-holder C. S. Varadachariar. Objection was taken to this course by the Official Assignee on the ground that the Sub-Judge at Madurai had no jurisdiction to issue such a prohibitory order against the Official Assignee not resident within his jurisdiction and in respect of the dividends payable at Madras, which again was outside the jurisdiction of the learned Subordinate Judge. Mockett, J., upheld this objection and quoted Order 21, Rule 46, Civil Procedure Code, laying down that the attachment should be made by a written order prohibiting in the case of the debt the creditor from recovering the debt and the debtor from making payment thereof until further orders of the Court. It meant, according to the learned Judge, that the Court in order to have jurisdiction must also have jurisdiction against the debtor so as to make the order prohibiting him from making the payment. In other words, according to the learned Judge, it Was necessary that the debtor should be within the jurisdiction of the Court. In that case the debtor was the insolvent or rather the Official Assignee representing him, and he was not within the jurisdiction of the Sub-Court. No doubt the creditor (the original decree-holder Obla K. Ramasamier) was within the jurisdiction of the Subordinate Judge but that only satisfied the first limb of the provision in question. Such was the reasoning of the learned Judge.
5. It will be seen that the provision laid down in Order 21, Rule 46, Civil Procedure Code, in the case of attachment of a share is materially different from the provision relating to a debt. In the case of a debt, the prohibitory order should be issued both to the creditor (prohibiting him from recovering the debt) and to the debtor (prohibiting him from making the payment) and therefore there may be reason for holding that, unless both the creditor and the debtor reside within the jurisdiction of the executing Court, the executing Court would have no jurisdiction to issue the prohibitory order. But in the case of attachment of a share Sub-rule (1) requires the prohibitory order to be issued only to the person in whose name the shares stand and therefore it is enough if that person (the judgment-debtor) resides within the jurisdiction of the executing Court. It may be noted that whereas Sub-rule (1) makes a distinction between the three classes, namely, a debt, a share and other moveable property and prescribes a separate procedure for each, Sub-rule (2) clubs them all together in respect of the affixture or despatch of the copy of the prohibitory order. That again would seem to indicate that Sub-rule (2) is only an ancillary provision and that the main provision is Sub-rule (1) on the question of jurisdiction.
6. Sri K. N. Subramaniam has not been able to cite any other decision to controvert the view which I have taken in respect of shares. Shri V. Shyamalam, learned Counsel for the decree-holder has not been able to cite any direct case on the point, but the case which he has cited supports the view which I have taken. The case is The British Transport Company Limited, Delhi v. Suraj Shan and Ors. I.L.R. . There one Suraj Bhan had obtained a money decree against one Sardar Singh and filed the execution petition in the Court at Agra by attaching inter alia an amount alleged to be payable to the judgment-debtor Sardar Singh by the appellant British Transport Company Limited, Delhi. The British Transport Company Limited, Delhi had taken on lease some buses belonging to Sardar Singh and was liable to pay for Sardar Singh's share Rs. 4 per day as rent. It was the total of such amounts that was sought to be attached. It was held that the rent was payable at Agra and therefore the debt was due to the judgment-debtor at Agra. The British Transport Company Limited, Delhi, however, took objection to the jurisdiction of the executing Court on the ground that they were residents at Delhi, outside the limits of the Agra Court. Their objection was repelled by the Court and it was held that under Section 51 (b), Civil Procedure Code, since what was sought to be attached was a debt its situs alone determined the jurisdiction, and sines the debt was payable at Agra it was the Agra Court, which had jurisdiction. It was pointed out that it was not the situs of the debtor (The British Transport Company Limited, Delhi) that determined the question of jurisdiction. It was observed further that the mere circumstance that under Order 21, Rule 46 Civil Procedure Code notice had to go to the debtor (garnishee) at Delhi outside the jurisdiction of the Court was immaterial. By way of analogy it was pointed out that even in the case of a regular suit, the Court may be properly seized of the suit on account of the accrual of the cause of action within the Court's limits and the defendants may be residing outside the jurisdiction, but that would not oust the jurisdiction. The learned Judges distinguished the Bench decision of the Calcutta High Court in Begg. Dunlop and Company v. Jagannath Marwari (1912) I.L.R. 39 Cal. 104 as a case where the executing Court was held not to have jurisdiction, because the debt due from the garmishee was itself not payable within the limits of the jurisdiction of the executing Court besides the circumstances of the garmishee being outside the jurisdiction of the Court. Some further inconveniences by adopting the contrary view were also pointed out. It may be noted that the case of Baluswami v. Official Assignee of Madras (1939) M.W.N. 573 also was similar to Begg. Dunlop and Company v. Jagannath Manaari (1912) I.L.R. 39 Cal. 104. In that case the garmishee (Official Assignee) resided outside the jurisdiction of the sub-Court and the debt also was payable outside the jurisdiction of the Sub-Court. However, if an occasion should arise, we may have to consider further how far the reasoning in The British Transport Company Limited, Delhi v. Suraj Bhan and Ors. I.L.R. is in conflict with the decision of Mockett, J., and which view is correct. But the point on which the decision of the Allahabad High Court seems to help us is in the proposition that Section 51 (b), Civil Procedure Code is primarily determinative of the jurisdiction, and whatever may be said about the case of a debt, the position is clear so far as a share in a company is concerned, both under Section 51 (b) and under Order 21, Rule 46, Civil Procedure Code.
7. Sri V. Shyamalam cited also the decision of the Andhra Pradesh High Court in Jhimandas Mathuram v. Mahadevappa Firm . But as I understand that case it is an authority only on a question arising under Order 38, Rule 5, Civil Procedure Code, namely that an attachment before judgment could be issued even in respect of property lying outside the territorial limits of the jurisdiction of the Court in a suitable case. That is because of the special wording of Order 38, Rule 5. The decision is not an authority in respect of an executing Court in view of the remarks in the concluding portion of the judgment stating that Section 46, Civil Procedure Code, governs only the attachment in execution of a decree and would not be pertinent in respect of attachment before judgment. We are now dealing with an execution of a decree and Section 46 would seem to apply and indicate that the criterion is the location of the property. But I have pointed out that even according to that criterion the City Civil Court had jurisdiction, because the shares are in Madras.
8. In Dharanidkar Ray v. P. D. Sethi (1933) I.L.R. 60 Cal. 782 in execution of a money decree obtained in the Court of the Sub-Judge at Asansol, an attachment was sought to be effected of a mortgage debt due to the judgment-debtor. The judgment-debtor resided in Asansoi limits and the mortgage deed was also with him. But his mortgagor was outside the limits of Asansol and the mortgaged property also was outside those limits. It was held that these circumstances did not affect the jurisdiction of the executing Court, which had jurisdiction, because the judgment-debtor was within the limits of Asansol and the mortgage documents were within those limits. It was pointed out that the mortgage debt was a specialty debt and the rule applicable to a mortgage debt was that its situs was the location of the mortgage deed. It may be said that there is some analogy between a mortgage deed and shares in a Corporation and that the situs of the shares is the place where the shares are held by the judgment-debtor.
9. The result of the discussion so far is that the executing Court had jurisdiction to issue the attachment warrant.
10. Learned Counsel Sri K. N. Subramanian finally submits that only 170 out of 220 shares attached belonged to the judgment-debtor and that the remaining 50 shares belonged to another. If the 50 shares stand in the name of somebody else, the executing Court had no jurisdiction to attach them as the property of the judgment-debtor. This may be brought to the notice of the executing Court in due course. Subject to this the appeal is dismissed.