THANMULL SOWCAR Vs. KKRISHNASWAMI REDDIAR

JUDGEMENT

(1.) The defendant is the appellant. The second appeal arises out of a suit instituted by the plaintiff tinder Section 73(2), Civil P.C. Section 73(1), Civil P.C., relates to rateable distribution among decree-holders. Section 73(2) says: Where all or any of the assets liable to be rateably distributed under this section are paid to a person not entitled to receive the same, any person so entitled may sue such person to compel him to refund the assets.

(2.) The facts of the case are not seriously disputed. The plaintiff (respondent) is the assignee- decree-holder in O.S. No. 64 of 1917 on the file of the Sub-Court of Chingleput and he has by the assignment become the holder of a personal decree against the judgment-debtor, one Narayanaswami Reddiar. In execution of the decree he applied in the Sub-Court for the attachment of Narayanaswami Raddiar's properties on 5 March 1924 and obtained an order of attachment on 10 March 1924. The defendant (appellant) also obtained a money decree in O.S. No. 594 of 1921 against the same Narayanaswami Reddiar on the file of the District Munsif's Court, Chingleput, and he attached the same properties in the Madurantakam District Munsif's Court, and sold them on 12 March 1924 apparently ignorant of the attachment at the instance of the plaintiff in the Sub-Court. The plaintiff applied on 12 March 1924, the day of sale, to the Sub-Court to stop the sale in the Madurantakam Court or to have the sale proceeds transmitted from the District Munsif's Court to the Sub-Court. The Subordinate Judge passed an order calling upon the Munsif a Court to send the sale proceeds. This order passed on 12 March 1924 was communicated to the Munsif's Court on 13 March 1924. The District Munsif replied that a set off had been allowed in favour of the defendant and that there were no sale proceeds available to be sent to the Sub-Court. It may here be mentioned that there was some discussion at the Bar as to whether an order permitting set off had been in fact passed at the time by the District Munsif. It was assumed in the first Court in the present proceedings that such an order had been passed. But the Subordinate Judge in the course of the appellate judgment has pointed out that no such order had been made. I do not think we need attach any importance to the question whether an order had actually been or not been passed by the District Munsif at the time of the sale, for under Order 21, Rule 72(2), when a decree-holder purchases property with permission of the Court: The purchase money and the amount due on the decree may, subject to the provisions of Section 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.

(3.) This rule gives a decree-holder purchasing property with the permission of the Court the privilege to set off the purchase money and the amount due under the decree, subject to Section 73, Civil P.C. It is not disputed in this case that permission to bid had been given to the decree-holder and that as a matter of fact, a "set off" had been made. The second appeal has been heard by me on the assumption that a set off had been validly made. The decree- holder purchaser, that is, the present defendant, made a bid for the properties for Rs. 1,700. His decree was for Rs. 1,800. It appears that after allowing the set off, satisfaction was recorded in favour of the defendant to the extent of Rupees 16,00. To complete the facts, on 15 March 1924, the plaintiff put in a petition to the Munsif's Court requesting it to call upon the defendant to bring back and deposit the sale proceeds, but this was refused on the ground that the sale was held and a set off was allowed before the receipt of the communication from the Sub-Court. He then preferred a civil revision petition against this order of refusal to the High Court and it was dismissed. Subsequently he filed the present suit under Section 73(2), Civil P.C., for Rs. 1,497, being the amount due to him out of the sale proceeds in O.S. No. 504 of 1921, on the file of the District Munsif's Court of Chingleput with interest at 12 per cent per annum from 12 March 1932 up to the date of suit, claiming that he would have got this amount by way of rateable distribution if the sale proceeds had been deposited in Court. Both the lower Courts upheld the claim of the plaintiff. In second appeal it is argued that the plaintiff is not entitled to claim rateable distribution as he had not filed an application to the Madurantakam District Munsif's Court before the receipt of assets and as a set off had been allowed in the appellant's favour and there were no assets left for rateable distribution. This plea is met by the respondent with the reply that he had already applied to the Sub-Court for execution and had obtained an order of attachment on 10 March 1924 before the property was sold on 12 March 1924 by the District Munsif's Court, that he had also applied on 12 March 1924 to the Sub-Court to stop the sale, and that the set off allowed in favour of the appellant cannot improve his position inasmuch as under the Code it is always subject to the provisions of Section 73. The substantial question for determination in this second appeal is whether the plaintiff can claim to be a person entitled to rateable distribution, for it is only such a person that can institute a suit under Section 73(2), Civil P.C. Section 73(1) provides that: 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 costs of realisation shall be rateably distributed among all such persons.