CHATURBHUJ PIRAMAL Vs. CHUNILAL OOMKARMAL

JUDGEMENT

(1.) This is an appeal from a judgment of the High Court at Bombay, in its appellate jurisdiction reversing a judgment of Kemp, J., who had made a decree in favour of the plaintiffs, the present appellants. The question is one of competing claims to a debt owed by the defendant in the action, the respondent Oomkarmal, to one Shankarrao. The plaintiffs are judgment-creditors of Shankarrao, and they claim to have effectively attached the debt; the defendant alleges that at the time of the attachment the debt had already been seized by the State of Indore. The plaintiffs do not claim that they acquired any right in respect of the debt until late on 15 May 1924, or the morning of 16 May 1924, when a warrant of attachment before judgment was served on the defendant. The material facts appear to be as follows, and have to be considered in reference to the date just mentioned:

(2.) Shankarrao was a Court official in the service of the Maharajah of Indore, a State which for the present purpose is to be considered a sovereign independent State. In March 1924 he was arrested charged with sedition and criminal breach of trust, and sentenced to seven years' imprisonment. He was said to have applied large amounts of State funds to his private purposes. The Maharajah resolved to confiscate his property towards satisfaction of the amount due to the State. Delay was considered prejudicial, and it was determined to seize the property by executive act, or act of State as it was styled by the Prime Minister of Indore, who gave evidence for the defendant. Shankarrao was resident in and a national of Indore. He had had large dealings with Oomkarmal, also a resident in and a national of Indore. Oomkarmal was an agent who bought and sold commodities on commission. His head office was in Indore. In 1930 he had traded 40 to 45 years in Indore, and about 10 years in Bombay. For about two or three years before 1924 he had done business for Shankarrao through his Indore office, and for about one and a half years also through his Bombay office.

(3.) The dealings appear to have been chiefly forward transactions in various commodities ; cotton, linseed, wheat and gold. Separate accounts were kept at Indore and Bombay. The exact course of business must be considered in more detail later on. At present it is sufficient to say that Shankarrao opened two accounts at both Indore and Bombay one in his own name, the other in that of his wife, but both were in fact his own. At the time of Shankarrao's arrest, the accounts at Indore appear to have been even; but the accounts at Bombay showed a credit of Rs. 1,44,420 on his own account and Rs. 80,462 on his wife's account. There was an outstanding purchase of 1,000 tons of linseed for the May account which involved a purchase to the amount of nearly three lacs, and was closed on the instructions of the State by 9 May at a loss of Rs. 26,385. The net sum involved in this case is therefore Rs. 1,98,497. On 12 April 1924 the Prime Minister of Indore issued an order to the Inspector-General of Police to place under attachment certain house property in Indore and : "any other properties, funds and rights belonging to Mr. Shankarrao Gawde which, after necessary inquiries, may come to his knowledge."