LYALLPUR BANK LIMITED Vs. RAMJI DAS

JUDGEMENT

(1.) THE points involved in this appeal turn upon the true construction of Section 73 (1) of the Code of Civil Procedure (Act V of 1908), which is in the following terms: Where assets are held by a Court and more persons than one have, before the receipt of such assets, made application to the Court for the execution of decrees for the payment of money passed against the same judgment-debtor and have not obtained satisfaction thereof, the assets after deducting the coats of realisation, shall be rateably distributed among all such persons. It is common ground that at all material times there was held by the District Court, Unao, assets of one Shanti Lal amounting to a sum of Rs. 49,166 or thereabouts, and that before the receipt of those assets various decree-holders had made applications to the Court for the execution of decrees for the payment of money passed against the said Shanti Lal and had not obtained satisfaction thereof. THEy accordingly claimed to be entitled to a rateable distribution of the said sum under the said section. THEir claims (were allowed by the District Judge, Unao, who by an order dated August 6, 1936, ordered that the balance of the amount in deposit (after satisfying in full a claim of the Secretary of State for India) should be rateably distributed among the holders of seventeen decrees.

(2.) THE appellant here had made an application for execution of the order hereinafter mentioned, and had not obtained satisfaction thereof. It accordingly claimed a share in the rateable distribution, its claim being based upon an order which had been made in its favour under Section 186 (1) of the Indian Companies Act (VII of 1913) which runs thus: THE Court may, at any time after making a winding up order, make an order on any contributory for the time being settled on the list of contributories to pay, in manner directed by the order, any money due from him or from the estate of the person whom he represents to the company exclusive of any money payable by him or the estate by virtue of any call in pursuance of this Act. THE appellant's claim was disallowed by the District Judge on the ground that its application for the execution of the said order was not an application for the execution of a decree for the payment of money, and that therefore the appellant could not share in the rateable distribution. An appeal to the Chief Court of Oudh was dismissed on the same ground. It is from this dismissal that the present appeal is brought.

(3.) FROM any point of view this result, if right in law, would appear strange. It would mean that a company resorting to the short and simple procedure against a contributory which Section 186 invites it to adopt, would be depriving itself of an effective method of enforcing its claim which would have been available had it resorted to the longer and more elaborate procedure of a suit.