STATE Vs. BANK OF COCHIN LTD

JUDGEMENT

(1.) The order passed by the District Judge of Anjikaimal on 11.2.1125/27.9.1949 in the course of the execution proceedings in O.S. No. 122/1123 on the file of that Court, has given rise to this revision petition. The decree in that case is in favour of the Bank of Cochin Ltd. On the strength of the execution petition No. 258/1123 filed by the decree holder, a sum of Rs. 3900 out of a total amount of Rs. 36,250 stated to be available with the Excise Commissioner of the former State of Cochin as belonging to the 2nd defendant judgment debtor was attached. The attachment was made on 1.11.1123. Subsequently on 14.2.1124 the decree holder filed another petition M.P. 251/1124 praying that the attached amount may be brought to the Court for disbursement in satisfaction of the claim under the decree. The Court accordingly sent a communication to the Excise Commissioner directing that the amount may be sent to the Court. The Excise Commissioner, representing the State, entered appearance by the Government Pleader and filed an objection petition contending that no amount was available with the State as belonging to the 2nd defendant V. T. Thomas and that the State is therefore not in a position to produce before Court any amount on the strength of the attachment order issued at the instance of the decree holder. These objections were overruled by the lower Court by its order dated 11.2.1125 and the State was directed to remit the attached amount into Court. The State, whose position in these proceedings is only that of a garnishee, has challenged the legality of that order on the ground that the lower Court has acted in excess of its jurisdiction in passing it.

(2.) In order to understand the real nature of the dispute between the decree holder and the garnishee, it is necessary to state the relevant facts. In respect of certain arrack shops the 2nd defendant V. T. Thomas was the licensee for the year 1123 and the amounts due from him in that connection had to be remitted by him into the State Treasury in specified instalments. Before the expiry of the period of this license, the auction of the arrack shops for the year 1124 was conducted by the State towards the close of the year 1123 and the aforesaid licensee participated in the auction and became the highest bidder in respect of 57 arrack shops. By way of advance payment, he deposited a total amount of Rs. 36,250 with the State in two instalments of Rs. 22,270 on 8.9.1123 and Rs. 13,980 on 10.11.1123. But it happened that the auction was not confirmed by the State. On the other hand, a reauction was ordered and in the reauction that was thus conducted on 17.11.1123 this licensee could get only a lesser number of shops than before. The ten percent of the auction amount that he had to deposit in respect of these shops confirmed in his name came to Rs. 12,690 and the same was available out of the sum of Rs. 36,250 which was already standing to his credit. After appropriating the sum of Rs. 12,690 towards the initial deposit due from him, the balance was repayable to him. But by that time a large amount had accrued due to the State from him by way of arrears of kist as well as tree tax in connection with the other shops which he was running as the licensee for the year 1123 ie., Rs. 31,664-2-8 by way of arrears of kist and Rs. 5304 by way of arrears of tree tax, the total coming to Rs. 36,968-2-8.

(3.) The contentions put forward by the garnishee were sought to be met by the decree holder by maintaining that the claim of the State against the judgment debtor was only an outstanding claim even on the date of the attachment in question and that therefore the State could, if at all, have that claim satisfied only by way of set off in appropriate legal proceedings. The argument is that a set off could be effected only in the manner contemplated by R.6 of O.8, Civil P.C. That rule only prescribes the conditions under which the defendant in a suit could claim a set off of a debt due to him from the plaintiff against the debt claimed from him by the plaintiff. There is nothing in that rule to indicate that there could be no set off independent of the conditions laid down and the procedure prescribed by that rule. That this rule is not intended to cover all categories of set off is clear from another provision in the same Code. R.19 of O.20 deals with the nature of the decree in suits where a set off is claimed or pleaded. Clause (3) of this rule states that "the provisions of this Rule shall apply where the set off is admissible under R.6 of O.8 or otherwise." In view of this provision there can be no doubt that a plea of set off could be entertained and given effect to even independent of R.6 of O.8. This position is also well settled by judicial decisions. In Bhagat Panda v. Bamdeb Panda ((1885) ILR 11 Cal. 557) it was ruled that the provisions of the Code of Civil Procedure do not take away from the parties any right of set off, whether legal or equitable, which they would have had independently of the Code. It was further pointed out that,