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Judgment
Ramesam, J.—The facts out of which this appeal arises are these : Defendants 1 to 4 are a firm of merchants trading in Madura, Defendant
5 and his undivided son, defendants, are merchants carrying on business in Tiruvalur. The plaintiffs are cloth merchants in Conjeeveram.
Defendants 1 to 4 became indebted to the plaintiffs and various other creditors to the extent of nearly Rs. 45,000. They had outstandings due to
them to the extent of Rs. 12,000 and their stock in trade amounted to Rupees 30,000. Under these circumstances they entered into an
arrangement with defendant 5 according to which defendant 5 should take over the stock in trade of defendant 1, put on his own signboard and
carry on the business. Ganpathy Ayyar, defendant 5''s brother, should also remain in the shop to see that everything is properly done and only
Ganapathi Iyer should be in charge of collecting the outstandings due to defendant 1 and defendant 5 undertook to realise Rs. 30,000 by sale of
the stock by 9th December and as the sums are being collected he undertook to pay up the creditors of defendant 1. This arrangement is
embodied in Ex. IX. This document also shows that practically it is a sale of the stock-in-trade by defendant 1 to defendant 5 because if by 9th
December he is not able to collect Rs. 30,000 defendant 5 should pay the difference to defendant 1 with interest and if more is collected it should
be retained by defendant 5.
Now it appears from the documents earlier than Ex. IX such as Exs. II, III and IV that this arrangement was really arrived at after consultation
with the creditors particularly the plaintiffs. Ex. IX-a is a counterpart of Ex. IX. A month after this arrangement, that is, on 31st July 1924, Ex. B
was written by defendant 5 to the plaintiff. In this he refers to the fact that the prior arrangement was arrived at after consultation with the plaintiff''s
agent and clerk Doraiswami Mudaliar. Then defendant 5 proceeds to say that he was able to raise Rs. 10,000 and to pay it to the most pressing
and worrying among the creditors of defendant 1, that he was not able'' to collect further amounts to pay to the plaintiff on account of his illness
and because the times are bad and money is-not available.'' Then he says that he expected to realise more money within a week. He says:
As soon as I get the said amount if you ask me to send it to Conjeeveram I shall send it by registered post. I have also written to your clerk that I
would either send the money to him to Madura or he may on his return halt at Tiruvalur and take the money that I may collect here.
Finally he says:
I shall return the amounts due to you in course of time.
We think on a construction of Ex. B taken with all the surrounding circumstances that it amounts to a promise by defendant 5 to pay the
plaintiff''s debt. We are not concerned here with other creditors. The plaintiff''s debt was only about Rs. 7,000. Seeing that defendant 5 undertook
to raise Rs. 30,000 by sale of the stock-in-trade and has already raised Rs. 10,000 there is nothing improbable in this conclusion, namely that
defendant 5 promised to pay off the plaintiff''s debt. It is clear from the prior correspondence that the plaintiff was not in a mood to wait unless he
is given some kind of security or assurance that his debt will be easily forthcoming. But for the promise of defendant 5 it seems to us unlikely that
he would have waited so long as more than a year and four months, the suit having been actually filed in October 1925. When defendant 1
afterwards failed to pay, the plaintiff was addressing letters both to defendant 1 and defendant 5 : see Exs. VIII, VI, VIII-d, VIII-g, VIII-a, and I.
Finally in Exs. V and VII the plaintiff complains to defendant 5 that money was not realised and paid and he was looking forward to him for seeing
that the money is properly paid. No doubt the parties might have made it more definite. But taking all these circumstances we think that there was a
promise by defendant 5 to the plaintiff. In this view the decision in Rajuchettiar v. Shukkur & Co. 1927 Mad. 179 does not help the appellants.
That merely follows the principle in Tweeddle v. Atkinson (1861) 1 B & S 393 which of course is correct law and against which we have to say
nothing. The facts of this case are distinguishable. The result is that the appeal fails and is dismissed with costs.
In C.M.A. 98 of 1930 the appellant''s learned Advocate admits that after the decision in the main appeal there is nothing to press in this appeal.
It is dismissed with costs. The petitioner in Civil Revision Petition No. 1005 of 1930 is another decree-holder against defendant 5 in the first
appeal just disposed of. He obtained his decree before the District Munsif''s Court of Salem. He got a transfer of that decree to the District
Munsif''s Court of Madura Town. He applied for attachment of the house of defendant 5 on 8th April 1929. The attachment was effected and the
fact was reported by 19th June 1929. Meanwhile the plaintiff in the first appeal obtained attachment of the same house in July 1928 and brought it
to sale on 16th December 1929. On 20th December 1929 the petitioner applied for rateable distribution. The sale by the respondent was effected
after an order giving him permission to set off the purchase money against his decree amount. But at that time the attachment in execution of the
petitioner''s decree had already been obtained and he was not a party to that order. In these circumstances the question arises whether the
petitioner is entitled to rateable distribution or whether he should be held bound by the order permitting the sale with a set off. Two decisions have
been cited before us, Civil Revn. Petn. No. 586 of 1926 and Dandayutha Pani Devasthanam v. Muthayanswami Chetti 1930 Mad. 699.
In these cases it was held that where one Court not only realised assets but actually distributed them in ignorance of the existence of attachment
in another Court it is too late to rectify the error. In the present case, it is true that when the order permitting the sale with a set off was passed on
19th December the Sub-Court was ignorant of the existence of another attachment in the District Munsif''s Court of Madura Town. But this is not
a case where any amount has been actually realized and distributed, so that the principle of the decisions does not apply. If no other execution
creditor intervenes no doubt the sale obtained by the respondent will stand on the terms he has obtained, namely with the permission to set off. But
now there is another execution creditor who comes to the Sub-Court praying for rateable distribution; seeing that he obtained his attachment so
long ago as 29th June long before the order of 19th December, there is no reason why the error should not be rectified because no actual
payments have been made. If that attachment had been known the order permitting the sale with a permission to set off would not have been
made, and if made, it would be erroneous. In Punnamchand Chatraban v. Satyanaadum 1933 Mad. 804 and in the decision in Krishna Rao v.
Sundar Shiva Rao 1931 P.C. 109 there was no application for execution prior, to sale. The only applications that were made there were on the
date of sale and after the order directing to set off which was therefore a proper order. Those cases do not help the respondent. There is nothing
to prevent us from adjusting the rights of the parties on the correct footing. The only other question to be discussed in this case is whether the
application for execution not being pending in the Sub-Court of Madura Section 73 does not apply. This point has been considered by Wallis, J.
and Bakewell, J. in a decision in Narasimhachariar v. Krishnamachariar 1914 Mad. 454. All the authorities then existing were reviewed. We agree
with that decision. It deals with the general effect of Sections 63 and 73.
It has also been since followed in other cases and though there are one or two differing judgments of other Courts we do not see any reason
why we should depart from that decision now. As all the facts and dates are clear there is no purpose in referring the petitioner to a regular suit and
not interfering now. Such a course has been followed by this Court in cases of this kind : see Shree Krishana Doss v. Chandookchand (1909) 32
Mad. 334. The result will be the petition is allowed. There will be a rateable distribution of the amount realised in the sale, i.e., the effect of this will
be the respondent will pay the proportionate amount due to the petitioner. He need not bring in his own proportion of the amount as he is still
entitled to set off. The Sub-Court will determine the actual amount to be paid by the respondent to the petitioner. The petitioner will have costs of
this petition in the High Court only. No order as to costs in the lower Court.
This case having been set down to be spoken to this day, the Court made She following:
ORDER
The vakalat filed for the respondent after judgment is accepted and the decree will be drafted on the footing that the respondent was
represented at the time of the argument.