NILKANTHA RAI Vs. GOSTA BEHARI CHATTERJEE

JUDGEMENT

(1.) This Rule raises a question of the relative rights of two rival decree-holders to participate in the sale-proceeds of the property of their common judgment-debtor. The petitioner obtained a decree for money against his judgment debtor in the Court of the Subordinate Judge on the 17th March 1916. At his instance, writ of attachment was issued and served. A claimant appeared on the scene, but his objection was over-ruled. The claimant then sued for cancellation of the order and obtained an injunction restraining the petitioner from proceeding with execution of his decree till the suit had been decided. The Subordinate Judge thereupon stayed the sale and proceeded to dismiss the execution case. It appears to have been erroneously assumed that the effect of this order was, under Rule 57 of Order XXI of the Code, to cancel the attachment effected by the petitioner. The execution case was discontinued, not by reason of default on the part of the decree-holder, but at the instance of an unsuccessful claimant who had instituted a suit to contest the validity of the order in the claim case. In these circumstances, we must assume that the attachment effected at the instance of the petitioner is still in force. Meanwhile, proceedings had been taken, by the opposite party, another creditor of, the same judgment-debtor, for realisation of his dues. The sale at his instance was fixed for the 20th April 1917. The petitioner applied to the Subordinate Judge and prayed that he might communicate with the Munsif with a view to get the sale stayed. The letter was sent, but reached the Munsif after the sale had already been held in his Court. The petitioner then asked the Subordinate Judge to attach the sale-proceeds deposited in the Court of the Munsif and to distribute them rateably. This application was dismissed. The petitioner now contends that the assets should be rateably distributed by the Subordinate Judge amongst all persons qualified under Section 73, Code of Civil Procedure, inclusive of himself.

(2.) The petitioner is not entitled to rateable distribution under Section 73, which provides that where assets are held by a Court and more persons than one have, before the receipt of such assets, applied 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 realization, shall be reateably distributed among all such persons. In this case, the petitioner did not apply for execution of his decree to the Court which held the assets. Indeed, he was not competent to make such an application, as the decree obtained by him in the Court of the Subordinate Judge could not possibly be executed by the Munsif. Nor has he been able to obtain the benefit of the principle recognized in Section 63, which provides that where property, not in the custody of any Court, is under attachment in execution of decrees of more Courts than one, the Court, which shall receive or realise such property and shall determine any claim thereto and any objection to the attachment thereof, shall be the Court of the highest grade or, where there is no difference in grade between such Courts, the Court under whose decree the property was first attached. If the petitioner had been able to apply in time to the Subordinate Judge under this section, the sale might have been held in his Court. That event, however, has not happened. The sale has actually been held by the Munsif, and is a valid sale, as is clear from Section 63 (2), which provides that nothing in the section shall be deemed to invalidate any proceeding taken by a Court executing one of such decrees. The position thus is that in the events which have happened, neither Section 63 nor Section 73 applies.

(3.) The question next requires consideration, whether, in the actual circumstances of the case, it is still possible for the Court to give relief to the petitioner. The Legislature undoubtedly contemplated that, where, as here, the same property has been attached in execution of two decrees, one passed by a Court of superior grade and the other by a Court of inferior grade, the sale should be held by the Court of superior grade. Here, however, the Court of lower grade has actually held the sale in ignorance of the fact that proceedings in execution had already been taken in the Court of higher grade and that the property brought to sale was subject to a legally subsisting attachment effected in that Court. But the true intention of the Legislature may still be carried out in substance, if the course pointed out in Bykant Nath Shaha v. Rajendro Narain Rai 12 C. 333 at p. 338 : 6 Ind. Dec. (N.S.) 227 is adopted. There, the same property was sold in execution successively by a Munsif and by a Subordinate Judge, and the question arose as to the validity of the title acquired by the subsequent purchaser. The Court observed that the Subordinate Judge, instead of holding a second sale, should rather have accepted the sale held by the Munsif and have required a transfer of the deposit in his Court of the assets realized, so that they might be rateably distributed amongst all the decree-holders. The same view was adopted in Patel Naranji Morarji v. Haridas Navalram 18 B. 458 : 9 Ind. Dec. (N.S.) 815 where Sir Charles Sargent, C.J., observed in similar circumstances that the petitioner might have applied to the District Judge to transfer the proceeds realized by the sale held by the second class Subordinate Judge to the Court of the first class Subordinate Judge. If we compare the observations in the two cases just mentioned, it becomes obvious that Sir Charles Sargent pointed out the correct procedure to be followed in cases of this character, namely, the Subordinate Judge is not to direct the Munsif to transmit the proceeds to his Court, but should move the District Judge to have the proceeds so transferred. If this procedure is adopted, full effect is given to the intention of the Legislature. The Subordinate Judge in essence adopts the sale held by the Munsif as if it were a sale held by himself and the sale-proceeds are then rateably distributed in accordance with the provisions of the Code We feel no doubt that the Court has inherent power to adopt the procedure we have described to effectuate the ends of justice and that this course should have been followed in the present case.