RAVI CHELUR Vs. SUBRAMONIA IYER

JUDGEMENT

(1.) PETITIONERS in C.R.P.Nos.1425 and 1426 are respectively the decree -holders in O.S.Nos.19 of 1968 and 84 of 1971 and the second respondent in both the revisions is the decree -holder in O.S.No.63 of 1971,all being decrees for money of the Subordinate Judge's Court,Trichur.The first respondent in the revisions is the common judgment -debtor in the three decrees.In 1971 the second respondent had attached before judgment,certain amounts due to the first respondent from the Collector,Dharmapuri in Tamil Nadu.Subsequently in execution of their decrees,the petitioners also placed attachments on the same amounts.At the instance of the petitioner in revision 1426,the court wrote for the amounts attached.After protracted correspondence,the garnishee,the Collector,Dharmapuri,sent three drafts on the State Bank of India,Trichur for an aggregate amount of Rs.21,535.23.The drafts were received in the court on 25th April 1974 and on 27th May 1974,the petitioners made separate applications for the issue of cheques for the amounts due to them.On 3rd June 1974 the court sent the three drafts to the District Treasury,Trichur for encashment and adjustment in the C.C.D.account of the court.This was effected by the Treasury on 19th June 1974.In the meantime,on 28th March 1974,O.S.No.63 of 1971 was decreed and on 14th June 1974,the second respondent applied for execution of the decree along with an application for rateable distribution of the amounts covered by the drafts.The petitioners resisted the application contending that the assets represented by the drafts were received by the court on 25th April 1974 and that as the second respondent had applied only on 14th June 1974,subsequent to the receipt of assets he was disentitled to rateable distribution.By the order under revision,the court overruled this objection,holding that the assets could be deemed to have been received only,on 19th June 1974,when the amounts covered by the drafts were adjusted in the C.C.D.account and that the second respondent's application dated 14th June 1974 was before the receipt of assets and therefore admissible.The revisions which are directed against this order have come before us on a reference made by a learned Judge,who felt that the question involved in them is fairly important to be considered by a Bench.

(2.) THE short point in the revisions is whether the receipt of the drafts by the Subordinate Court on 25th April 1974 amounted to the receipt of assets within section 73,Code of Civil Procedure,so as to deny relief to the second respondent who made his application only on 14th June 1974.Before going into the cases cited before us,it is better to consider how the matter stands under the relevant provisions of the Code.Now between Order 21,rules 2 and 72(2)it is obvious that except where a decree -holder purchases the judgment -debtor's property at a court sale with permission and with,the incidental right of set off or where he receives satisfaction by some adjustment out of court,a decree for money has to be satisfied by payment of money.Section 73 itself applies only to decrees for payment of money and when it directs that the assets,after deducting the costs of realization,shall be rateably distributed it obviously employs the term assets in the sense of money,as it is not in the scheme of the Code,for courts to distribute anything other than money towards decree for money.The expression after deducting the costs of realization also points to this inference,as costs can be deducted from money alone.If that is the import of the expression assets in the latter part of section 73(1 ),it must,in the absence of a contrary intention,mean the same thing in the earlier part where the phrases where assets are held by a court and before the receipt of such assets occur.As the court only pays out money to holders of decree for money,the rateable distribution can relate to money alone.Should there be any payment by way of rateable distribution to a person who has no right to receive it,the person rightfully entitled,is empowered by section 73(2)to sue such person to compel him to refund the assets.This sub -section also uses the term assets and there is no reason to hold that it is in any sense different from sub -section(1 ),a conclusion which is emphasised by the word paid and more so by the word refund ;.On the language and scheme of the section we must hold that the term assets in section 73 means money.

(3.) IN Jogesh Prasad v.Lachmi Narayan 45 Calcutta W.N.674 the expression assets held by the Court in section 73 fell to be considered under the following facts:In execution of a decree in the Subordinate Judge's Court the first respondent attached an amount which was lying with the Official Receiver,who had sold the assets of the judgment -debtor during an infructuous insolvency proceeding in the District Court.The District Judge issued a cheque,which was forwarded by the Official Receiver to the Subordinate Judge,who received it on May 23,1940.The same day the first respondent prayed for endorsement of the cheque in his favour and this was done by the court.On May 23,1940,after the receipt of the cheque,the petitioners who held decrees against the same judgment -debtor presented applications for execution and praying for rateable distribution of the amount which had been attached by the first respondent.The application having been dismissed they preferred revisions before the High Court and the question arose whether by the receipt of the cheque the Subordinate Judge could be said to have received and held assets which were distributable under section 73.In the course of the judgment Mukherjea,J.observed: The expression ˜assets held by the court ™obviously implies the idea of assets realised or converted into cash,for,unless the property has been converted into some form which renders it available for immediate distribution,the court cannot be said to have received or held such assets.I am not aware of any reported case either under the present section 73 of the Civil Procedure Code or under section 295 of the old code,where it has been suggested that the expression ˜assets ™could refer to anything else than money,and the reason I think is that section 73 is applicable only when the decrees are for money and the assets upon which the court can operate under that section must necessarily be money also.The policy underlying this section seems to me to be that when a creditor had been diligent enough in realising assets for payment of his debts,the law would recognise and reward his diligence.But so long as the assets have not been realised,the other creditors are entitled to come in and participate in the distribution of the same.Nothing short of actual realisation of the money can give rise to any rights of priority.If,therefore,the assets are brought before the court in such a shape that the court can forthwith make payment in favour of the creditor,through whose efforts they were so brought,no claim for distribution by other creditors could be entertained after the assets are so received. With respect we agree with this statement of the law.The conclusion that receipt of the cheque was treated as receipt and holding of assets in that case cannot be extended beyond its facts or held to lay down any general principle for,the learned Judge himself observed that the facts in that case were some what different,that the only form of payment which the decree -holders desired was that the cheque should be endorsed over to them ;,that the Subordinate Judge was,therefore,quite competent to pay over the very moment that he received the cheque on the 23rd of May,1940 and that ˜˜it is not necessary for us to express any opinion on the general proposition as to whether in all circumstances a cheque would amount to an asset within the meaning of section 73 of the Code.