AI Structured Summary
Not yet generated for this judgment
Judgment
Alagiriswami, J.—The plaintiff is the appellant. He obtained a decree in O. S. 220 of 1957 against one Rajagopal Iyengar and in execution
attached 32 items of properties belonging to him on 25-3-1958. Since the properties were not sold, the execution petition was dismissed on 22-
12-1958 and the attachment was ordered to continue for three months. The defendant, an assignee decree-holder in S. C. 131 of 1957. brought
39 items of properties belonging to Rajagopala Iyengar to sale in E. P. 21 of 1958. attached them on 3-2-1958 and purchased on 28-1-1959. 20
out of those 39 items. He set off the purchase price against the decree amount and full satisfaction of his decree was entered and the attachment in
respect of the remaining 19 items was raised and the sale was confirmed on 10-3-1959. The plaintiff then filed E. P. 217 of 1959 on 19-3-1959
and applied for attachment of the properties purchased by the defendant along with some other items. The defendant filed a claim petition and that
was allowed. Thereafter the plaintiff brought the rest of the properties to sale and as there were no bidders, the execution petition was closed
Thereafter the plaintiff filed E. A. 814 of 1959 in defendant''s execution petition praying for a rateable distribution from out of the assets realised by
the defendant by the sale of 20 items already referred to. That petition was dismissed and the plaintiff was directed to seek his redress, if so
advised in a suit u/s 73(2), C.P.C. He then filed a suit, out of which this second appeal arises.
The defendant''s contention was that the plaintiff filed the suit in collusion with his judgment-debtor, who was his cousin, that he had knowledge
of the execution petition filed by the defendant and is, therefore, not entitled to any remedy, and that in any case as his claim petition was allowed,
the plaintiff had no right of suit u/s 73(2). C. P. Code. The trial court decreed the plaintiffs suit, but the lower appellate court has reversed the
judgment of the trial court and dismissed the plaintiff''s suit. The lower appellate court has held that the plaintiff has no right of suit u/s 73(2) C P.
Code and that such a suit would lie only when the assets which are liable to be rateably distributed are taken away by a person not entitled to
receive those assets and that the defendant, a rival decree-holder, cannot fall under that category because as a decree-holder, he was entitled to
receive the assets as of right. On this point, the lower appellate court is clearly wrong and the learned advocate for the respondent does not seek
to support the judgment of the lower appellate court on that ground.
The lower appellate court also took the view that the suit is the result of a collusion between the plaintiff and his judgment-debtor and. therefore,
he is not entitled to any relief. There is no evidence of any collusion between the plaintiff and his judgment-debtor. It is true that he had received
some moneys from the judgment-debtor out of court. But he had also brought the judgment-debtor''s properties to sale once in E. P. 174 of 1958
and that execution petition was dismissed after the properties were brought to sale on two occasions only because there were no bidders. Even
subsequently, he filed another execution petition, attached all the properties of the judgment-debtor and after the present defendant''s claim petition
was allowed, pursued his remedy against the other properties of the judgment-debtor and brought them to sale on 13-9-1959. That execution
petition was closed only because there were no bidders on that day. It is not necessary in order to enable a decree-holder to claim a rateable
distribution of the assets realised in execution by another decree-holder against the common judgment-debtor that he should pursue to the bitter
end his remedies against the judgment-debtor''s other assets before he can claim a rateable distribution from the rival decree-holder. Even if a
decree-holder has realised a part of his decree amount before the rival decree-holder has filed his execution petition and realised some assets he is
entitled to claim rateable distribution from the rival decree-holder in respect of the balance of the decree amount due to him.
Therefore, the fact that the plaintiff had already received some amounts from his judgment-debtor out of court does not disentitle him to claim
rateable distribution of the assets realised by the defendant Even after getting a rateable distribution of the assets realised by the rival decree-
holder, it is open to the plaintiff to pursue his remedies against the other properties of the judgment- debtor in respect of the balance that may be
due to him. It is not therefore, correct to say that just because the plaintiff''s E. P. 217 of 1959 was closed on 13-9-1959 for want of bidders, he is
not entitled to any rateable distribution from out of the assets realised by the defendant; nor would the fact that he had knowledge of the filing of the
execution petition by the defendant, disentitle the plaintiff to his remedy. That point is wholly irrelevant to the decision of the question of the
plaintiff''s rights. Therefore, the lower appellate court is not right in thinking that because the plaintiff professed ignorance about the other properties
owned by his judgment-debtor or because the defendant stated that the judgment-debtor owns a house not only in the village, but also a house
worth Rs. 6000 at Pudukottai, and that he also owns other landed properties that would disentitle the plaintiff to a rateable distribution. The
requirements of Section 73, C. P. Code are clearly satisfied in this case- When the defendant was executing his decree and realising his amount,
the execution petition of the plaintiff was pending and therefore, he is entitled to a rateable distribution. The possession of other items of properties
by the judgment-debtor is wholly irrelevant to the question of the plaintiff''s bona fides.
It is, however, urged that full satisfaction of the defendant''s decree had already been entered and he is without remedy, if the plaintiff is given the
right to claim the rateable distribution out of the assets realised by the defendant. This is not quite correct. It would be open to the defendant to
have the order entering full satisfaction set aside on rateable distribution being ordered in favour of the plaintiff and to proceed to execute his
decree for the balance due to him from out of the assets that might still be with the judgment-debtor. In any case, the fact that the full satisfaction of
the defendant''s decree was entered is no ground for denying the plaintiff''s rights.
5 The only authority which was relied upon by the defendant was the one in Gogaram v. Kartik Chunder Singh, 9 WR 514 , where it was held that
while an action will lie in the Civil Courts on behalf of one decree-holder against another for obtaining a refund of money that has been paid away
to the latter under an order passed in the execution department contrary to the provisions of Section 270 of the C. P. Code, the plaintiff in such a
suit would not under all circumstances be entitled to recover and there may be circumstances by which he may be equitably precluded from
recovering and it will be for the court which decides the suit to determine whether having regard to all the equities between the parties, the plaintiff
is entitled to recover or not. In that case, the plaintiff and the defendant were two rival decree-holders against one and the same judgment-debtor.
Certain properties belonging to the judgment-debtor having been sold in execution, the plaintiff applied to have his decree satisfied, first from out of
proceeds realised by the sale. This was refused and an appeal against that refusal succeeded; meantime money was paid to the defendant and the
plaintiff thereupon filed a suit to obtain a refund of the sale amount upon the ground that the process of attachment taken out by him being prior in
point of date to that taken by the defendant, he and not the defendant had a preferential right to the sale proceeds. It was contended that such a
suit will not lie and it was in that connection that it was held that a suit would lie. The decision was rendered under the old CPC under which only a
decree-holder who first attached the properties belonging to the judgment-debtor was to be paid the amount realised in execution and there was
no provision, as in the present Section 73, for rateable distribution in favour of a person who attaches the properties subsequently even if his
execution petition was pending at the same time as the other decree-holder''s execution petition.
The CPC has subsequently been amended under which the only requirement for claiming a rateable distribution is that the execution petition by the
decree-holder claiming rateable distribution should be pending at the time when the assets are realised. The decision relied upon by the respondent
has, therefore, really no application to the facts of this case. But it is urged that If a person, under the law as it then prevailed, was entitled to be
paid all the assets realised in execution and even In such a case there may be equities available against him, the equities should be available all the
more in a case where a person is entitled only to a rateable distribution. The judgment of the Bench of the Calcutta High Court is cryptic on the
point and does not say what are the equities that the Bench was thinking.
But it can still be understood on the basis that the provision of law under which a person who first attached was entitled to all the assets was very
hard on the other decree-holders and therefore certain equities must be allowed. Those equities cannot prevail against the express provision of the
present law which is equitable to all decree-holders. Under the express provision of Section 73, as If exists, the plaintiff is entitled to a rateable
distribution of the assets realised by the defendant and there can be no question of any equities in this case. Indeed to allow the respondents to
plead and to hold that he is entitled to all the assets realised in execution to the exclusion of other decree-holders would be to deny equities. In the
Calcutta case again there was no clear right of suit provided and that is why they had to consider the question of equities. Under the present
section, there is a clear remedy provided by way of suit. Therefore, again no question of equities can arise in this case. It follows, therefore, that the
conclusion of the lower appellate court that there was collusion between the plaintiff and his judgment-debtor is wholly unsustainable as it is one
arrived at by a wrong approach to the question, on the assumption that because the plaintiff has not proceeded against the other assets of his
judgment-debtor he is not entitled to any remedy: and this as I have shown already is clearly wrong. It follows, therefore, that the plaintiff is entitled
to succeed in his suit.
The second appeal is, therefore, allowed and the plaintiff''s suit will stand decreed. The parties will, however, bear their own costs in this court
because the defendant is placed rather in a difficult position as a result of the plaintiff''s suit. Plaintiff will however get his costs in the courts below.
No leave.