GOURI DUTT Vs. AMAR CHAND

JUDGEMENT

(1.) This is an appeal on behalf of the first defendant in an action for recovery of money, commenced by the plaintiffs under the penultimate paragraph of Section 295 of the Code of Civil Procedure of 1882. There is no controversy between the parties as to the circumstances under which the claim has been put forward. The plaintiffs allege that they themselves as well as the first, fourth and fifth defendants, held decrees for money against the second defendant, that the latter also held a decree for money against the third defendant, and that in execution of their decrees they have attachad the decree held by the second defendant against the third defendant. The Court thereupon directed rateable distribution of the assets that might be realised in execution under Section 295 of the Code of 1882. Effect was given to this order, a certain sum was realised and distributed according to law. It appears, however, that although the plaintiffs as well as the first, fourth and fifth defendants had attached the decree held by the second defendant against the third defendant, it was the first defendant alone who had taken steps to execute that decree. It will be observed that the effect of an attachment of a decree for money under Section 273 of the Code of 1882 was to stay execution of that decree till the Court which passed the decree sought to be executed cancelled the notice or the holder of the decree sought to be executed applied to the Court receiving such notice to execute its own decree. The only one amongst the execution-creditors of the second defendant who had taken the necessary steps was, as we have already stated, the first defendant. He got his name substituted in the decree held by the second defendant against the third defendant and consequently occupied a position of advantage. The third defendant then sold to the first defendant some immoveable property which he possessed and which had not been attached in execution. The consideration-money was paid into the hands of the third defendant who gave a portion thereof to his creditor, the second defendant. The second defendant then privately made a payment to the first defendant. This transaction took place on the 26th July 1903. On the 27th August 1904, it was intimated to the Court, on behalf of the second defendant that his claim against the third defendant had been satisfied out of Court. The first defendant also at the same time notified to the Court that his claim against the second defendant had been satisfied by payment out of Court. Thereupon on the 16th August 1907, the plaintiffs commenced this action to compel the first defendant to have a rateable distribution of the money appropriated by him; in other words, they claimed that assets had been paid to the first defendant unlawfully in contravention of the provisions of Section 295, and that, therefore, he could be compelled to refund the assets. 1 he Courts below have concurrently made a decree in favour of the plaintiffs. Upon appeal, the learned Vakil for the first defendant has contested the validity of that decision on the ground that the sum received by him was not liable to be rateably distributed amongst himself, the plaintiffs and the fourth and fifth defendants, because it was not assets realised by sale or otherwise in execution of a decree within the meaning of Section 295 of the Code of 1882. In support of this proposition, reliance has been placed upon the cases of Sew Bux Bogla v. Shib Chunder Sen 13 C. 225 Prosonnomoyi Dassi v. Sreenanth Roy 21 C. 809; Purshotamdass v. Mahanant Suraj Bharthi 6 B. 588 and Gopaldai v. Chunni Lall 8 A. 67. These cases show that to constitute a realisation within the meaning of Section 295 of the Code of 1882, the sum must be realised either by sale in execution under process of the Court or in one or other of the modes expressly prescribed by the Code. The learned Judges of the Madras High Court have even gone further and held, in the case of Vibudhapriya Tirthaswami v. Yuzuf Sahib 28 M. 380 : 15 M.L.J. 202 that the words "assets realised by sale or otherwise in execution of a decree," mean that the assets must be realised by some process of Court in execution, and, therefore, can cover only sales held by the Court and could not be extended to private sales by the judgment-debtor of properties attached. In the case before the learned Judges of the Madras High Court, the money had in fact been paid into Court in satisfaction of the debt of the attaching creditor. It was ruled that that circumstance did not make any difference and that the money could not be treated as assets realised under Section 295 of the Code. It is not necessary for the purposes of this case to go as far as the learned Judges of the Madras High Court have done. The present case, in our Opinion, is reasonably free from difficulty. Here the money has not been brought into Court. The payment has been made privately by the third defendant to the second defendant and by the latter to his creditor, the first defendant. It cannot be contended that this money was in any sense assets realised by sale or otherwise in execution of the decree. We may point out that it has been ruled by this Court, in the cases of Hart Sundart v. Shasi Bala 1 C.W.N. 195; Bihari Lall Paul v. Gopal Lal Seal 1 C.W.N. 695 and Roshun Lall v. Ram Lall 30 C. 262 that money deposited under Section 174 of the Bengal Tenancy Act or under Section 310A of the Code of 1882 cannot be treated as assets realised in execution of a decree within the meaning of Section 295. The learned Vakil for the respondent ha3, however, contended that the acceptance of this view enables the first defendant to defeat the provisions of Section 295 of the Code. In our opinion, there is no force in this contention. The plaintiffs might have protected themselves if they had taken steps to execute the decree attached by them and in execution thereof had attached the property which was transferred by the third defendant to the first defendant. If such attachment had been effected, the first defendant would have taken the property subject to the lien imposed thereon by the other execution- creditors of the second defendant. If they now find themselves in a difficulty, it is due entirely to lack of diligence on their part.

(2.) We may add that it has been contended by the learned Vakil for the respondent that this appeal is incompetent because it is in contravention of the provisions of Section 102 of the Code of 1908. The learned Vakil for the appellant has, on the other hand, pointed out that the suit is not cognizable by a Court of Small Causes by reason of Clause 26 of the second Schedule of the Small Cause Courts Act. The learned Vakil for the respondent, however, has suggested in reply that as the plaintiffs are found not to be entitled to any relief under Section 295, it ought to be held that the suit is not one under the penultimate paragraph of that section. This argument is obviously fallacious. The plaintiffs have commenced the suit on the ground that they are entitled to relief under Section 295 of the Code of 1882, the mere circumstance that they are ultimately found to be not entitled to succeed on the merits, does not alter the nature of their suit. It follows, therefore, that the appeal is competent.

(3.) The result is that this appeal is allowed, the decree of the Court of appeal below set aside, and the suit dismissed with costs in all the Courts.