RAMCHANDRA YESHWANT SHRINGARPURE Vs. DIGAMBAR TEJIRAM PARDESHIU

JUDGEMENT

(1.) "Whether an order for set-off passed under Order XXI, Rule 72, can be called upon to pay in Court the amount of set off so as to make it available for rateable distribution amogst all holders of decrees against the same judgment debtor under the provisions of S. 73 of the Code . In consultation with the learned Advocate for all the parties, we have, therefore, reformulated the question for our decision as under: "Whether by reason of sub-sec, (2) of S. 63 of the Code of Civil Procedure, a set-off allowed by a Court under order XXI, Rule 72 dto a decreeholder who has purchased the property of his judgment -debtor, can affect the right under S. 73 ti rateable distribution of the purchase money of another decree-holder, who had applied for execution of his decree to another Court and had got the same property attached before the date of its sale?"

(2.) The provisions with regard to rateable ditribution are contained in S. 73. Sub Section (1) of this section provides that, where assets are held by a Court and more persons than one have, before the recdeipt of such assets. made applications 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 deduecting the costs of realization, shall be rateably distributed amongst all such persons. There is a proviso to this Section with which we are not concerned in this case. Sub-section (2) of tghis Section states that, where all or any of the assets liable to be rateably distributed amongst all such persons. There is a proviso to this Section with which we are not concerned in this case. Sub-Section (2) of this Section states that, where all or any of the assets liablew to be rateably distributed amongst all such persons. There is a proviso to this Section with which we are not concerned in this case. Subsection (20 of this section states that, where all or any of the assets lioable to be rateably distributed under this section are paid to a person not entitled to receive the same, any person so entitled may suesuch personto compel him to refund the assets. This secton provides for rateable distribution of the assets realised by a Court amongst decree-holders, who have made applications to the same cour for execution of their decrees. Where,in execution of decree, the Court sells a property belonging to the judgment-debtor the assets become available to the court and can, thereofre, be said to be held by the court as soon as the property is sold. (Navaj Bhavdu V. Totaram Govind, 33 Bom LR 503: (AIR 1931 Bom 252). If therefore, the property, bel;onging to a jugment-debtor, is sold in execution of a decree passed against him, another creditor will not be entitled to rateable distribution of the sale proceeds, unless he has also applied for execution of his decree before the date of sale.

(3.) Order 21, Rule 72, which is one of the rulesd beginning with rule 64 relating to sale, provides that no holder of a decree in execution of which property is sold shall, without the exp[ress permission of the Court, bid for or purchase the property. Sub-rule(2) of this rule states that,. where a decree holder purchases with such permission, the purchase-money and the amount due on the decree may, subject to the provisions of S. 73, be set-off against one another and the Court executing the decree shall enter up satisfaction of the decree in whole or in part accordingly. This sub-rule which allow a decree-holder to set-off against the purchase pri6ce the amount due to him on his decree. Instead of his having to deposit the entire amount of purchase money, he may then deposit only the excess if anmuy of the purchase money over the decretal amount. The effect of this sub-rule to use the words of Vivian Bose J., - in Kesheorao v. Mulchand, AIR 1937 Nag 383, is that, instead of the Court actually taking the money in cash from the decree-holkder and handing it back to him again, it treats this as having been done and its order amounts to what would be a credit and debit entry in a book of account. There are what have been called in some cases a notional receipt of the purchase amount by thre Court and a notional payment of the decretal amount to the decree-holder. This connection, which is given to a decree-holdercannot, however affect the rights of other parfties in respect of execution of their decrees. This is specifically provided in the sub-rule, which states that the set-off is subject ot the provisions of section 73. If , therefore, a decree-holder has been allowed a set off, e ven though the applications for the execution of decrees made by the pother decreeholders were pending at the same time the former will have to make available the amount, which he has set-off, soi that it might be rateabkly distributied. He takes the amount by way of set-oiff subject to he rights of other decree-holdersunder s.73. There ius, therefore, an obligation upon him to refund the amount if the other decree-gholders who are entitled to rateable distribution,. under S. 73, have mnade appications for execution of their decrees before the date of sale.