Kissondas Premchand vs Jivatlal Pratapshi And Co. on 20 December, 1935
25. Mr. Bilimoria relies on a decision of Mr. Justice Tyabji in Mathuradas v. Raimal . It is conceded that this decision does not apply to the facts of this case, and if it did, whatever my own view of the judgment may be, I would certainly have followed it as being the judgment of a Judge of coordinate jurisdiction. But I consider myself fortunate in being free to decide the case before me without following the judgment in that case. But there are one or two observations which I should like to make with regard to that case. In that case, as appears from the recital of the facts in the report, a certain person was indebted to a trust, of which defendant No. 1 was a trustee. He then died leaving property of considerable value which, it appears, became reduced in course of administration. To secure the trust amount, the trustee (defendant No. 1) obtained from the executrix title-deeds of certain properties belonging to the estate of the deceased by way of equita-able mortgage. Then the trustee (defendant No. 1) brought a suit to enforce the equitable mortgage and obtained a final decree for sale. After this the grandsons of the deceased brought a suit for the administration of the estate, and in that suit Mr. Moos was appointed receiver. Then it appears, the plaintiffs, who were some of the creditors, brought a suit for a declaration that the mortgage in favour of the trustee (defendant No. 1) and the decree obtained by him gave him no priority over the claims of other creditors of the deceased's estate, and that all such creditors as well as the trustee (defendant No. 1) were only entitled to rateable distribution of the proceeds of the estate, which was not sufficient to meet the claims of all the creditors in full. Now, I find it rather difficult to understand how this suit was allowed to be maintained when there was an administration action pending. The very fact that the learned Judge found it necessary to go into the question of the value of the assets and to find out whether the assets were sufficient or not shows the danger of a suit of this nature, instead of allowing the rights of creditors inter se being discussed, ascertained and realised in an administration suit. Secondly, from the statement of facts it does not appear that the suit was filed in a representative capacity under the provisions of Order I, Rule 8, Civil Procedure Code. The learned Judge very rightly rejected the argument of the plaintiff that Section 323 created a trust in favour of creditors. Then the learned Judge referred to Section 359 of the Indian Succession Act, which provides that-