Baddepudi Narasareddi vs Bandu Satyanarayana Reddi and Others

Ramachandra Rao, J.—The plaintiff-decree holder is the appellant in this Letters. Patent Appeal. The facts leading up to the case are shortly as follows:

The appellant filed a suit O. S. No. 35/52 in the Subordinate Judge''s Court, Ongole against the 1st respondent for recovery of certain amount due on a promissory note. Along with the plaint, he filed I. A. No. 433/52 for attachment before judgment of certain moveable (gogulu) and immoveable properties of the judgment-debtor. The 1st respondent appeared by counsel and it was represented that meanwhile, the ''gogulu'' sought to be attached, were alienated to respondents 2 and 3. On 10-4-53, the appellant filed another petition I. A. No. 452/52 attachment of ''gogulu'' said to have been stored in the field of respondents 2 and 3 under Order 21, Rule 46 and attachment was ordered on 12-4-52. The pro-order was served on respondents 2 and 3 prohibiting them from delivering the ''gogulu'' to any person whatsoever.

On 18-4-52, respondents 2 and 3 filed an application I A. No. 487/52 praying for an amendment of the pro-order served on them by prohibiting them only from delivering the property to the judgment-debtor. This application was allowed on the same day. On 18-4-52, respondents 2 and 3 also filed a claim petition, I. A. No. 489/52 to raise the attachment of ''gogulu'' under Order 38, Rule 8 C. P. C. Along with this petition, they also filed in court a security bond for Rs. 4,000/- towards the value of ''gogulu'' undertaking to pay the same to the appellant in case it was found by the court that the ''gogulu'' belonged to the 1st respondent. In para 6 of that affidavit, filed in support of the claim petition, they stated that:

They are advised to furnish security to the value of the property that is attached if ultimately the court holds that the property attached belonged to the 2nd respondent on the date of attachment.

This claim petition was ultimately dismissed on 19-6-52 as the same was not pressed. It may also however be noted that no suit under O. 21, Rule 63 to establish the right of the respondents 2 and 3 to the said ''gogulu'' was filed.

Respondents 2 and 3 not having filed any counter to the application for attachment viz. I. A. No. 452/52, the said attachment was made absolute on 26-6-1952. In the meanwhile, a commissioner was also appointed to inspect and report as to the place where the ''gogulu'' were stored and whether they were removed from the possession of the judgment debtor subsequent to the filing of the suit. The Commissioner filed a report on 10-4-52 stating that the ''gogulu'' had been so removed.

The appellant, who subsequently got a decree filed Execution Petition No. 141/53 praying for the issue of notice to the sureties, respondents 2 and 3 to deposit the ''gogulu'' into court and to sell the same or to deposit the amount of sale proceeds of ''gogulu'' in accordance with the terms of the security bond given by them. This application was contested by respondents 2 and 3, who questioned the right of the appellant to proceed against them without his obtaining a declaration that the ''gogulu'' belong to the judgment-debtor. They further contended that the ''gogulu'' were already sold by them, and that therefore they were not available to be produced. In the end, they denied their liability to bring the sale proceeds into court.

The learned Subordinate Judge held that the effect of the dismissal of the claim petition was that the attached ''gogulu'' do not belong to respondents 2 and 3, but to the judgment debtor from whose field, according to the decree-holder, they were removed to the field of respondents 2 and 3 which fact received considerable support from the report of the Commissioner. He held that, in the circumstances, the attached ''gogulu'' belonged to the judgment debtor arid that as the same were attached in the hands of respondents 2 and 3, they were bound to produce them whenever called upon to do so into court. It was held that the respondents 2 and 3 had obtained the amendment to the original order of attachment and also produced the security bond with a view to enable themselves to dispose of the property, and that they cannot be allowed to defeat the decree debt. It was also held that it is not open to respondents 2 and 3, after having sold the ''gogulu'' and being bound by the attachment of the same in their hands, to contend that in the absence of proof that the ''gogulu'' belonged to the judgment-debtor, they were not bound to produce the ''gogulu'' or deposit their value in the court. In the end, respondents 2 and 3 were called upon to deposit a sum of Rs.4,000/- on or before 24-4-1954 in default of which execution was ordered to be proceeded, against their properties. This order was taken in appeal to the District Judge, Guntur.

The only contention which was urged before the learned District Judge was that the decree-holder should first establish the right of the judgment-debtor to the ''gogulu'' for which they gave security and removed. The learned District Judge however held that the respondents 2 and 3 having allowed their claim petition to be dismissed and having stood as sureties and got the moveables released, it was not open to them to deny the title of the judgment-debtor or set up their own title in view of the failure of their claim. In the result the order of the learned Subordinate Judge was confirmed.

Respondents 2 and 3 took up the matter in appeal to this court in C. M. S. A. No. 35 of 1955. Before our learned brother Justice Seshachalapati, it was contended that Rules 58 to 63 of Order 21, C. P. C. would not apply to the case on hand and as such that no finality can be attached to the order dismissing their petition. Our learned brother has overruled this contention and rightly in our opinion. That view is assailed before us. It was argued by the learned Counsel that his clients had unnecessarily filed I. A. No. 489/52 and therefore no adverse inference could be drawn from their failure to file a suit. In support of his contention, he relied upon a decision in Atmakuru Butchayya Chetty Vs. Chakram Krishnamachari,

That was a case where a garnishee, who denied the debt allege to. be due to the judgment-debtor, filed an application under Order 21, Rule 58 C. P. C. and that application having been rejected, he did not file a suit under Order 21, Rule 63. The money not having been brought into court the decree-holder got himself appointed as a receiver and filed a suit for the recovery of the money. The question that fell for decision was whether a garnishee who had not filed a suit under Order 21 Rule 63i could agitate the question again in the suit and contend that there was no debt at all due. It was observed by Burn and Menon, JJ. that

According to him, the property in dispute namely, the debt, or the obligation on his part is non-existent. Therefore it is not possible for him to claim any right to such non-existing property. In these circumstances, we are of the opinion that the objection that, the debt does not at all exist and orders of the executing court, if any, consequent on such objection, do not come within the purview of Rules 58 to 63, O. 21.

The learned counsel for the respondents has cited before us the case in Tayabali Gulam Husein Vs. Atmaram Sakharam Vani, and Subbier Vs. Moideen Pitchai and Others, where the existence of the debt was admitted by the garnishee and his claim was that the judgment-debtor had assigned it to a third party. These cases have been noticed in Atmakuru Butchayya Chetty Vs. Chakram Krishnamachari, and have been distinguished on the ground that they are cases of existing debts. In our opinion, the decision in Atmakuru Butchayya Chetty Vs. Chakram Krishnamachari, has no application to the facts of the present case where the moveables are admittedly existing and the claim is made by respondents 2 and 3 that they belonged to them and not to the judgment-debtor.

The contention of Sri Venkatesam that Rules 58 to 63 of Order 21 can have no application to the facts of the present case, where the moveable property belonging to the judgment-debtor but in the possession of a third party was attached under Order 21, Rule 46(1) (c) read with sub-rule (iii), is not correct. The decisions cited by him do not support the contention raised. We therefore agree with the conclusion of our learned brother that the effect of the order of dismissal of the claim petition is that the claim of respondents 2 and 3 to the property in the moveables has been negatived and the title of the judgment-debtor thereto is affirmed.

The learned Judge however allowed the appeal preferred by respondents 2 and 3, on the ground that the terms of Order 21, Rule 46 C.P.C. do not provide for a machinery to compel a garnishee to pay into court even a debt admitted. According to the learned Judge, in cases where a garnishee admit, the debt, clause 3 of Rule 46of Order 21 gives him the option to pay the debt and with regard to the moveables, there is not even such a clause. The learned counsel cited a case in Maharajadhiraj Sir Kameshwar Singh Bahadur Vs. Kuleshwar Singh and Others, , where a Bench of the Patna High Court held that there is nothing in Order 21, Rule 46 which authorises the court to pass an order by which the judgment debtor''s debtor can be compelled to deposit the amount into court. It was for this reason that some of the High Courts framed rules providing for the adjudication of claims by or against a garnishee and passing enforceable and executable orders against them. No such rules have been framed by the Madras High Court prior to July 1954 or by the Andhra High Court or the Andhra Pradesh High Court thereafter which would enable the court to compel a garnishee to pay the debt or deliver the moveables even in cases where the debt or the moveables are admitted or held to belong to the judgment debtor.

Finally, the learned Judge also held that no specific orders have been passed accepting the security bond and that as such the bond was unenforceable. For these reasons, the learned Judge set aside the order passed, against respondent,; 2 and 3. That view has no parallel here. We, however, think that in the peculiar circumstances of this case, the respondents 2 and 3 should be directed to pay the decree amount. In the first place, the property in their hands having been attached, the court has the power to call upon them to bring the property into court at any time for the purposes of being sold. This is what the decree holder actually prayed for, but the respondents 2 and 3 contend that they had already sold the property and realised the sale proceeds. They contend that the only order of the court as against them was that they should hot deliver the property to the judgment debtor and that they have not disobeyed the terms of the order.

This argument seems to us to be wholly fallacious. A party who has been prohibited from delivering the moveable property to the judgment debtor cannot escape his liability to produce the same into court for the purposes of being sold, by merely saying that he has already sold it away and that he has not transgressed the letter of the prohibitory order by delivering the goods to the judgment-debtor. The object of prohibiting a person from delivering the moveable property to the judgment debtor is to enable the court to secure its possession at a later date, should the decree holder bring it to sale. This object could not be frustrated by the party so prohibited by dealing with that moveable property and later on urging that he had not broken the letter of the prohibitory order. The test certainly is whether he has or has not violated the spirit of the order or the substance underlying it

The learned counsel has cited to Us the judgment in AIR 1925 98 (Nagpur) where it was held that under the terms of Order 21, Rule 46, sub-rule (3) the executing court cannot compel the garnishee to deposit the debt into court if he denies it an informs the Court to that effect. It was also held that the court has no inherent powers under Sec. 151 to call upon the third party to pay the decree amount. That was however a case where the garnishee came to the court at the earliest moment and apprised the court of the alleged debt being non-existent at the date of the order. It was observed there that the court could sell the debt. That established the position that it was open to the court to sell the property in regard to which an order under order 21, rule 46 was issued.

In the present case it was precisely this procedure that was sought to be adopted. But by himself selling the property he made it impossible for the court to sell it. In our opinion, the court has got inherent power under Sec. 151 C.P.C. to pass such an order in a case where the moveables belonging to the judgment debtor did in fact exist and were attached while in the possession of a third party. Such an order is, in our opinion, necessary in the ends of justice to prevent an abuse of the process of the court and the causing of incalculable mischief and the perpetration of justice.

We also think that there are special circumstances in this case. Respondents 2 and 3 induced the court to amend the prohibitory order which was originally passed against them not to deliver the property to any person whatsoever into an order not to deliver to the judgment-debtor alone, by filing the security bond and also praying that the court should investigate into their claim for the moveable property. Therefore, by not choosing to press their claim at a later date and not inviting the court to: decide upon their claim to the moveables, they cannot be permitted to appropriate the sale proceeds of the moveables, by pointing out to the court that they have not disobeyed the strict letter of the prohibitory order as amended. To say the least, this conduct of theirs is highly reprehensible and would amount to flouting solemn undertakings given to the court. In such circumstances the court is not helpless and in the interests of justice, it can call upon the respondents 2 and 3 either to bring back the moveables into the court or their value.

Mr. Venkatesam, further contended that without an investigation into the claim of his clients, they should not be called upon to pay the value of the moveables. We think that his clients are solely responsible for not having their claims adjudicated in the manner required by law. In our opinion, they cannot have a fresh opportunity at this stage in the face of the finality of the order on the claim petition.

In our opinion, this appeal should be allowed and the order of the Subordinate Judge, Ongole in E.P. No. 141 of 1953 dated 13-4-1954 restored with costs throughout.