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2002 DIGILAW 723 (AP)

JAGADISH VALSHNAV v. FARPOS LEADING CATERER

2002-06-14

B.SUDERSHAN REDDY

body2002
B. SUDERSHAN REDDY, J. ( 1 ) THIS Civil Revision Petition filed under sec. 115 of C. P. C. is directed against the order dt. 10-3-1997. made in S. R. No. 327 of 1997 in O. S. No. 34 of 1996 and O. S. No. 232 of 1995 on the file of the learned Additional subordinate Judge, Rajahmundry. ( 2 ) BEFORE adverting to the question as to whether the impugned order suffers from any jurisdictional error or any infirmity, it is necessary to briefly notice the relevant facts leading to filing of this Civil Revision petition. ( 3 ) THE petitioner is the decree holder in O. S. No. 227 of 1995. The suit is decreed on 25-1-1996. He filed E. P. No. 65 of 1996 on 20-6-1996 for attachment of the monies of the judgment-debtor which are lying with the garnishee. The second respondent in this c. R. P. is the decreeholder in O. S. No. 234 of 1995 and whereas the third respondent is the decreeholder in O. S. No. 34 of 1996. The judgment-debtor in all the suits is the same. ( 4 ) THERE is no dispute whatsoever that all the four decreeholders including the parties in this C. R. P. at the relevant time got attached the amounts of the Judgment- debtor which were lying with the O. N. G. C by way of attachment. The attachment was effected in all the four suits. However the attachment before Judgment petition filed by the petitioner herein (decreeholder in o. S. No. 227 of 1995) had been dismissed while decreeing the suit for whatever reasons. ( 5 ) THE decreeholders among themselves contended before the trial Court that the decree holders in O. S. Nos. 227 of 1995 and 34 of 1996 are not entitled to claim rateable, since they have not filed Execution Petitions. The decreeholder in O. S. No. 34 of 1996 is claiming rateable distribution of the amounts among all the decreeholders. The contention of the decreeholders in o. S. No. 227 of 1995 and 232 of 1995 is that the decreeholder in O. S. No. 234 of 1995 and 34 of 1996 are not entitled to claim rateable distribution. The decreeholder in O. S. No. 34 of 1996 is claiming rateable distribution of the amounts among all the decreeholders. The contention of the decreeholders in o. S. No. 227 of 1995 and 232 of 1995 is that the decreeholder in O. S. No. 234 of 1995 and 34 of 1996 are not entitled to claim rateable distribution. ( 6 ) THE trial Court after an elaborate consideration of the matter came to the conclusion that all the decreeholders are entitled to rateable distribution of the amounts which are lying to the credit of o. S. Nos. 232 of 1995 and 234 of 1995. ( 7 ) IN this C. R. P. Sri M. S. K. Sastry, learned senior Counsel appearing on behalf of the petitioner contends that the other decreeholders are not entitled for any rateable distribution of the amounts for the reason that they did not file the execution petition under Order 21 Rule 11 of C. P. C. as is required in law. In nutshell, it is the submission of the learned senior counsel that the other decreeholders are not entitled for the benefit of Sec. 73 of the C. P. C. ( 8 ) BEFORE adverting to the question as to whether the decreeholders other than the petitioner herein are not entitled for the benefit of the distribution of the assets and as to whether they are not entitled for the benefit of Sec. 73 of C. P. C. it may be necessary to notice Sec. 73 of the C. P. C. Section 73. Proceeds of execution sale to be rateably distributed among decree holders: (1) Where assets are held by a Court and more persons than one have, before the receipt of such assets, made applications 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 rateably distributed among all such persons: provided as follows: (a) where any property is sold subject to a mortgage or charge, the mortgagee or incumbrancer shall not be entitled to share in any surplus arising from such sale; (b) where any property liable to be sold in execution of a decree is subject to a mortgage or charge, the Court may with, the consent of the mortgagee or incumbrancer, order that the property be sold free from the mortgage or charge, giving to the mortgagee or incumbrancer the same interest in the proceeds of the sale as he had in the property sold; (c) where any immovable property is sold in execution of a decree ordering its sale for the discharge of an incumbrance thereon, the proceeds of sale shall be applied first, in defraying the expenses of the sale; secondly, in discharging the amount due under the decree; thirdly, in discharging the interest and principal moneys due on subsequent incumbrances (if any); and fourthly, rateably among the holders of decrees for the payment of money against the judgment-debtor, who have, prior to the sale of the property, applied to the Court which passed the decree ordering such sale for execution of such decrees, and have not obtained satisfaction thereof. (2 ). . . . . . . . . . . . . . . . . (3 ). . . . . . . . . . . . . . . . . . ( 9 ) THE learned Senior Counsel obviously would contend that the requirement under sec. (2 ). . . . . . . . . . . . . . . . . (3 ). . . . . . . . . . . . . . . . . . ( 9 ) THE learned Senior Counsel obviously would contend that the requirement under sec. 73 (1) is that where the 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 realization, shall be rateably distributed among all such persons, unless such execution petitions are filed before the receipt of such assets, no decreeholder is entitled for the benefit of sec. 73 of the C. P. C. It is the submission of the learned Senior Counsel that only such of the decreeholders who have made application to the Court for the execution of the decrees for the payment of money alone is entitled for the benefit of Sec. 73 of the code. It is submitted that before the receipt of the assets by the Court, execution petitions must have been filed to claim the benefit of Sec. 73. ( 10 ) IT is further contended that more application for attachment before Judgment or such ancillary applications taken in aid of execution cannot be equated to that of an execution petition. It is contended that an application to the court for the execution of the decree within the meaning of Sec. 73 of the Code is only such application filed under order 21 Rule 11 of C. P. C. Unless an execution petition under Order 21 Rule 11 c. P. C is pending even before the receipt of the assets by the Court, the benefit under sec. 73 cannot be given to the decreeholder. ( 11 ) IN the instant case there is no controversy that the petitioner decreeholder alone filed an execution petition under order 21 Rule 11 of C. P. C. But there is also no controversy whatsoever that the other decreeholders have already filed applications for attaching the amounts even before the decree and Judgments were passed by the court. ( 11 ) IN the instant case there is no controversy that the petitioner decreeholder alone filed an execution petition under order 21 Rule 11 of C. P. C. But there is also no controversy whatsoever that the other decreeholders have already filed applications for attaching the amounts even before the decree and Judgments were passed by the court. ( 12 ) LEARNED senior counsel would place reliance upon the Judgment of this Court in moka Jambanna v. Kopparam Honnappa in support of his submission that the important condition for the applicability if Sec. 73 is that the party seeking rateable distribution should have filed an application for execution of the decree for the payment of money before the receipt of assets. In that particular case, the learned District Munsif dismissed the application on the ground that the application filed by the petitioner therein was not an execution petition as contemplated under Order 21 Rule 11 of c. P. C. and therefore, the necessary condition laid down under Sec. 73 was not complied with. The court having examined the application filed by the petitioner therein found that the application was in fact filed under Order 21 Rule 11 of C. P. C. In the circumstances, the court held that the petitioner therein satisfied the requirement as is provided under Sec. 73 of the Code to have the benefit of rateable distribution amongst themselves. The case is not an authority for the proposition that the parties seeking rateable distribution should have filed an application for execution under order 21 Rule 11 of C. P. C. alone only. The case is not an authority for the proposition that the parties seeking rateable distribution should have filed an application for execution under order 21 Rule 11 of C. P. C. alone only. No doubt in the said case the learned District munsif misconstrued the application filed by the decreeholder therein and held that it was not filed under Order 21 Rule 11 of c. P. C. This court reversed the view of the learned District Munsif and found that in fact it was an application filed under order 21 Rule ll of C. P. C. ( 13 ) ON the other hand, a Full Bench of the Madras High Court in K. Abdul Salam Saheb v. B. Virabhadm Raju in categorical terms held that "the purpose of that section obviously is that there should be an equitable distribution of assets between those creditors who have been diligent enough to obtain decrees and put in execution applications before the time such assets have been received, and we must in this case look rather to the substance than to the form of the application in order to administer the equity which the law provides. Agreeing, therefore, with the view of Devadoss,j. , we allow this appeal. The decree of the lower Court is set aside and the district Munsif will pass a decree in conformity with the provisions of Sec. 73. " the sole question that had arisen for decision is whether the application for attachment of an amount in the trial Court put in by the plaintiff, the appellant therein, is a sufficient application to that Court for the execution of a decree within the meaning of Sec. 73 of C. P. C. The sum which he got attached was the proceeds of a sale under an attachment before judgment. The plaintiff himself obtained decree on 16th June 1922 and on 30th June following he put in the application, asking for an order of attachment and an order was passed attaching the fund which had been paid into court to the credit of the defendant s suit. The court noticed that admittedly there were certain defects in the application, a lack of certain particulars which are required under order 21 Rule 11, for a proper formal execution application under that rule. The court noticed that admittedly there were certain defects in the application, a lack of certain particulars which are required under order 21 Rule 11, for a proper formal execution application under that rule. ( 14 ) THE court having noticed the defects and having found that it was not strictly an application filed under Order 21 Rule 11 of c. P. C. held that Sec. 73 of C. P. C. provides equity in order to provide an equitable distribution of assets between those creditors who have been diligent enough to obtain decrees and put in execution applications before the time such assets have been received. It is under those circumstances, the Full Bench of Madras high Court took the view that one must look to the substance rather to the form of the application in order to administer the equity which the law provides. In my considered opinion, the ratio and the principle laid down by the Full Bench is fairly applicable to the facts situation on hand. ( 15 ) THERE is no dispute whatsoever that the decree holders other than the petitioner have also filed applications in the respective suits filed by them and got the amounts attached. In such view of the matter, all the decreeholders have substantially complied with the requirement of Sec. 73 and accordingly entitled for the benefit of rateable distribution of the amounts. Any other view would defeat the very object of sec. 73 of the C. P. C. The petitioner alone cannot be allowed to walk away and realise the fruits of the decree depriving the other decreeholders of their legitimate right for realisation of the decretal amount. ( 16 ) THAT apart, it may have to be noticed that Rule 46-A has been introduced into order 21 by the amendment to the C. P. C. in 1976 which provides that where the garnishee pays in the Court the amount due from him to the judgment-debtor or so much thereof as is sufficient to satisfy the decree and the costs of the execution, the court may direct that the amount may be paid to the decreeholder towards satisfaction of the decree and costs of the execution. The formality of filing an application under Order 21 Rule 11 of C. P. C. in such a situation is dispensed with. The formality of filing an application under Order 21 Rule 11 of C. P. C. in such a situation is dispensed with. It is not as if even in such a situation where the garnishee pays in the Court the amount due from him to the judgment-debtor or so much thereof as is sufficient to satisfy the decree the same can be paid to the decree- holder only after filing of an appropriate execution application under Order 21 rule 11 of C. P. C. ( 17 ) VIEWED from any angle, it is not possible to accept the submission made by the learned Senior Counsel that the decreeholder shall have no benefit of rateable distribution as provided for under sec. 73 of the C. P. C. unless an execution application as such is filed under Order 21 rule 11 of C. P. C. Such an interpretation would amount to giving weight to the formality rather than the substance. ( 18 ) FOR the aforesaid reasons, I do not find any error to have been committed by the trial court in ordering rateable distribution of the amounts. ( 19 ) I do not find any merit or substance in this Civil Revision Petition. The same shall stand accordingly dismissed. There shall be no order as to costs.