R KRISHNAMURTHY AYYAR Vs. PASUPULETTI MUNUSWAMI

JUDGEMENT

(1.) The petitioner is the decree-holder in S.C.S. No. 167 of 1933. The decree was against two defendants. It ordered them jointly and severally to pay a sum of money and with regard to defendant 2 it said: It is further ordered that the decree against defendant 2 shall stand stayed in case he pays on the 5 of every month commencing from 5 July 1933, at the rate of Rs. 10 per mensem until the decree is satisfied; in case of default of any instalment this stay order will cease. The stay order will also have effect only on defendant 2 furnishing security of immovable property for the decree amount and agreeing to pay interest at 9 percent, per annum on or before 5 July 1933.

(2.) A security bond was executed by defendant 2 and it referred to certain immoveable property and stated: I will be paying without default the said decree amount as per order of Court by the 5 of each month. In case of default of any instalment as aforesaid, the balance that may then be due after giving credit to payments so far made, may be recovered in one lump sum from me and from my properties described in the schedule hereunder and I can have no objection thereto. Until the aforesaid decree amount is fully realized I have kept the aforementioned property belonging to me viz., my house worth about Rs. 1,000 as security. I shall not alienate in any manner the said house until the aforesaid decree amount is fully satisfied.

(3.) In our view that surety bond and the decree clearly created a charge on the property concerned in favour of the decree-holder. Now respondent 1 filed an application for rateable distribution in this case and that was allowed by the District Munsif on the ground shortly that no charge was created on the property. The other questions raised in this revision petition were apparently not argued. It was decided on the question of charge or no charge. Mr. Srinivasathathachariar has argued that on the authority of three decisions of this High Court this property is not available for rateable distribution. We consider that proposition is amply supported by the cases he cited and there appears to be no real difference of opinion in the authorities in this High Court as has been suggested by Mr. Sampath Iyengar. Two of the cases are reported in Subramania Chettiar V/s. Raja of Ramnad AIR 1918 Mad 442, and the other, Ramiah Iyer V/s. Gopala Aiyar AIR 1919 Mad 607. At p. 327 of Subramania Chettiar v. Raja of Ramnad AIR 1918 Mad 442, a Bench consisting of Wallis, C.J. and Kumaraswami Sastri, J. considered much the same question which we have to consider now and at p. 332 the learned Judges held as follows: The effect of immoveable property being given as security is something more than attachment because it makes the property applicable solely in discharge of the judgment debt and not liable to rateable distribution among other judgment creditors, and on the facts in that case it was held that the immoveable property in question had been given as security and that a charge was therefore created upon it. In the other case at p. 1053 the position was most carefully considered by Ayling and Coutts-Trotter, JJ. Coutts-Trotter, J. in giving the judgment of the Court refers to a statement of the law as given in Subramania Chettiar V/s. Raja of Ramnad AIR 1918 Mad 442 to which we have just referred and cites that very passage obviously with approval. The effect of both these cases does not seem to be very difficult. It amounts to nothing more than this that it is a question of investigation in each case as to whether it was intended that a charge should be given on any property. If it is found that the property is charged and is security to the decree-holder, then it is not available for rateable distribution to third parties. 41 Mad 327 has been followed in another decision of this High Court in Janaki Nagaswami V/s. Ramaswami AIR 1920 Mad 409. There does not therefore seem to us to be any room for difficulty. But some difficulty has been raised in this matter by Mr. Sampath Iyengar who has argued this case on behalf of respondent 1 because he says that in a Madras decision, in Gopalaiyar V/s. Thiruvengadam Pillai AIR 1918 Mad 1158 at p. 505, the Bench, while accepting the position that money may be made security for a decree debt, queried whether the same principles may be applicable to immoveable property. At p. 505 the following appears: The case may be different, though it is not necessary to express any opinion with regard to that question, if what is furnished as security is specific property such as land. In such a case it might be possible to contend that the defendant is not in fact the owner of the property but somebody else and that the title of the real owner would not be lost. But money stands on a different footing.