GOMATHY SHESHADRI vs T.C.XAVIER

THE above appeal is filed by the opposite party garnishee against the order in E.P. No. 1254 of 1992 of the District Forum, Kottayam.

THE appellant''s case is that the respondent/complainant filed O.P. No. 1254 of 1992 and obtained an order against M/s. A. Madhavan and Samuel Thomas, Managers of Thapoban Housing Finance Ltd. Complainant''s allegation was that he had deposited Rs. 10,800/-as security with Thapoban Finance Ltd. who had promised to grant him housing loan amounting to four times of the deposit. THE promise was not fulfilled by the Company and the Company is not functioning at present. Under the order passed by the District Forum he was entitled to refund of the deposit amount with 15% interest from 22.8.1991 alongwith the compensation of Rs. 1,000/- and a cost of Rs. 200/-. As the Company is not functioning, the complainant is not able to execute the order even though he filed the E.P. He reliably understood that the appellant herein is a debtor to the Company to the tune of about a lakh of rupees. Hence he filed the petition in the E.P. categorising the appellant as garnishee and praying that an order may be passed against the garnishee to make good the decree debt. The garnishee who is the appellant before us, appeared and filed objection denying liability. She submitted before the Forum that the Housing loan was granted to hereby Thapoban Housing Finance Ltd. on the basis of an equitable mortgage of deposit of title deeds of her property. She also submitted that in order to obtain the loan she had deposited with the Company a total amount of Rs. 13,325/- under various heads and had also executed promissory notes and signed blank cheques as collateral security. She contended that she had also paid two instalments and her liability is only to the Company. It was argued by her before the District Forum that in no sense she can be termed as garnishee when she was not even a party to the complaint. According to her even so many other depositors had also approached her and some have issued notices claiming amounts as they are creditors to the Company. By a crisp order the District Forum held that as she is a debtor to the Company and to meet the ends of justice she can be ordered to pay Rs. 6,000/- to the decree-holder in ten equal monthly instalments.

It is from the said order dated 15.10.1996 the so called garnishee has come in appeal.

WE perused the records and heard the Counsel. The respondent/complainant had filed an objection reiterating his claim and detailing the facts of the case before us. On a consideration of all aspects we are of the view that the finding of the District Forum that an order may be passed against the garnishee to make good the decree debt. According to Order 21, Rule 46(A) of the Code of Civil Procedure it is provided that the Court may in die case of the debt due to the judgment-debtor or any movable property in which he has an interest, but not in his possession, which has been attached upon the application of the attaching creditor issue notice to any person liable to pay such debt or deliver an account for such movable property calling upon him either to pay or deliver into Court the debt due from or the property delivered by him to such judgment- debtor or so much thereof as may be sufficient to satisfy the decree and costs of execution or to appear and show cause why he should not do so. It is also provided under Rule 46(c) that where the garnishee disputes his liability the Court may order that any issue or question necessary for the determination of the liability shall be tried as if it were an issue in a suit and upon determination of such issue make such order as may seem just. In the present case the appellant (garnishee) has disputed her liability. She has contended among other things that the debt due to the Company is secured by an equitable mortgage and she has also executed promissory notes by way of collateral security. In such a case the provisions of Order 21, Rule 46(a) grants an exemption. The provisions do not apply to secured debts by a mortgage charge or negotiable instruments. It is not clear from the order as to whether the appellant has produced proof before the Forum regarding the mortgage or the execution of promissory notes. The District Forum has not at all considered this aspect. It is also to be ascertained as to what is the amount due from her to the Company. It is also not clear how the District Forum fixed the liability of the appellant (garnishee) at Rs. 6,000/-. Evidence is required on all the above aspects especially in view of the contentions raised by the appellant garnishee.

IN the circumstances, we allow the appeal, set aside the order of the District Forum and remit back the matter to the District Forum for fresh disposal. The parties are directed to bear their respective costs. Appeal allowed.