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2011 DIGILAW 829 (KER)

Govindan Master v. V. Janaki

2011-07-27

THOMAS P.JOSEPH

body2011
JUDGMENT :- The question urged for a decision is whether, if pending an application for execution filed by a person entitled to rateable distribution to the court which was holding the assets the court has disbursed the amount to the holder of decree in which case the amount was deposited, it is within the power of the executing court to direct the holder of decree who received the amount to pay the amount rateably payable to the applicant for rateable distribution? 2. Petitioner challenges Ext.P4, order dated June 30, 2010 Passed by the learned Sub Judge, Hosdurg on E.A.No.108 of 2010 In E.P.No.179 of 2009 in O.S.No.84 of 2009. Petitioner was the decree holder in the said suit. He obtained a decree for recovery of money from the defendant in O.S.No.84 of 2009 and filed E.P.No.179 of 2009 to execute that decree. Pending suit court had attached the amount in the custody of 5th respondent-garnishee, a Co-operative Bank on 24.10.2009 as per order on I.A.No.810 of 2009. On passing the decree, petitioner filed E.P.No.179 of 2009 on 28.11.2009. Pursuant to the order passed by the executing court, garnishee deposited the amount attached in the executing court. In the meantime, first respondent obtained a decree against the defendant in O.S.No.98 of 2007. He filed E.P.No.185 of 2009 in the court which passed the decree in O.S.No.84 of 2009 and where the garnishee-5th respondent deposited the attached amount. It is not disputed that in E.P.No.185 of 2009 first respondent claimed rateable distribution of the amount attached by the petitioner and deposited in court. While E.P.No.185 of 2009 was pending executing court recorded full satisfaction in E.P.No.179 of 2009 on 10.3.2010. On 20.3.2010, first respondent filed E.A.No.108 of 2010 (In E.P.No.185 of 2009) to direct petitioner make available the sum of Rupees One lakh which according to the first respondent is rateably due to him from the amount attached and which was in the custody of the court as produced by the fifth respondent. That application was allowed by the executing court as per Ext.P4, order. Learned counsel for petitioner challenging Ext.P4, order contended that first respondent filed E.A.No.108 of 2010 only on 20.3.2010 after full satisfaction was recorded in E.P.No.179 of 2009 on 10.3.2010 and thus the decree in O.S.No.84 of 2009 in favour of petitioner was fully satisfied. That application was allowed by the executing court as per Ext.P4, order. Learned counsel for petitioner challenging Ext.P4, order contended that first respondent filed E.A.No.108 of 2010 only on 20.3.2010 after full satisfaction was recorded in E.P.No.179 of 2009 on 10.3.2010 and thus the decree in O.S.No.84 of 2009 in favour of petitioner was fully satisfied. What remained thereafter was only the ministerial act of issuing cheque for the amount in favour of petitioner. Learned counsel has placed reliance on the decision of the Supreme court in Kotak & Co. v. State of U.P. ((1987) 1 SCC 455) to contend that request for rateable distribution should have been made by the first respondent when the assets were held by the executing court and not after the property in the money which was in the custody of the court has passed to the petitioner. It is also argued by learned counsel that in view of sub-sec.(2) of Section 73 of the Code of Civil Procedure (for short, “the Code”), first respondent if aggrieved by the recording of full satisfaction of the decree in E.P.No.179 of 2009 has to file separate suit against petitioner for refund of the amount. It is contended that the executing court in the circumstances ought not have passed Ext.P4, order which amounts to a review of the order recording full satisfaction in E.P.No.179 of 2009 in O.S. No.84 of 2009. 3. In response, it is argued by learned counsel for respondent that E.A.No.108 of 2010 is inconsequential so far as right of the first respondent for rateable distribution is concerned, as what was required under the law was only that first respondent should have filed the application for execution seeking rateable distribution in the court which was holding the assets. It is pointed out that first respondent filed E.P.No.185 of2009 on 13.12.2009 while the amount attached was in the custody of the court. It is also pointed out that on 10.3.2010 when full satisfaction was recorded in E.P.No.179 of 2009 (in O.S.No.84 of 2009) request for rateable distribution made by the first respondent in E.P.No.185 of 2009 was pending consideration of the executing court. The executing court was not legally correct in recording full satisfaction in E.P.No.179 of 2009 on 10.3.2010. It is also pointed out that on 10.3.2010 when full satisfaction was recorded in E.P.No.179 of 2009 (in O.S.No.84 of 2009) request for rateable distribution made by the first respondent in E.P.No.185 of 2009 was pending consideration of the executing court. The executing court was not legally correct in recording full satisfaction in E.P.No.179 of 2009 on 10.3.2010. It is pointed out that when E.P.No.185 of 2009 requesting rateable distribution was pending consideration, the executing court was bound to invoke Sec.73 of the Code and distribute the amount rateably among petitioner and the first respondent. If that was not done, it was a mistake committed by the court for which first respondent may not be penalysed. Learned counsel has placed reliance on a Division Bench decision of this Court in Boban v. Sajith Kumar (2003 (3) KLT SN Case No.176 Page No.137). It is also argued that sub-sec.(2) of Sec.73 of the Code is only an enabling provision and did not bar the executing court to correct its mistake in recording full satisfaction in the execution petition filed by the petitioner when the request for rateable distribution was pending, and direct petitioner to deposit the amount which rateably is due to the first respondent. 4. It is necessary to have a look at Sec. 73 of the Code which provides for rateable distribution of the assets of the judgment debtor among decree holders. The said provision says 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 execution of decree 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. The proviso thereunder stipulates the conditions which a person applying for rateable distribution has to comply. Sub- section (2) of Sec.73 says that where all or any of the assets liable to be rateably distributed under the said 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. 5. Sub- section (2) of Sec.73 says that where all or any of the assets liable to be rateably distributed under the said 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. 5. No doubt, full satisfaction was recorded in favour of petitioner, in E.P.No.179 of 2009 on 10.3.2010 and the first respondent filed E.A.No.108 of 2010 (calling upon petitioner to deposit the amount which according to first respondent he is rateably entitled) only on 20.3.2010. According to the learned counsel for petitioner, since E.A.No.108 of 2010 was filed only after full satisfaction was recorded in E.P.No.179 of 2009 on 10.3.2010, that application could not be entertained. 6. I am afraid, that contention does violence to Sec.73 of the Code in that what the said provision requires is only that the application for execution (of the decree) must have been filed by the person seeking rateable distribution to the court holding assets before the assets came into the custody of such court. Time and again it has been held by various binding decisions as to what are the mandatory requirements which a person applying for rateable distribution has to comply, one of which being that the application for execution should have been filed to the court which holds the assets before the assets came into the custody of the said court. This court has reiterated that in Boban v. Sajithkumar (supra). In the present case it is not disputed that first respondent filed E.P.No.185 of 2009 requesting for rateable distribution even before the assets came into the custody of the executing court. Thus that condition was satisfied by the first respondent (There is no case that any other condition was not complied by the first respondent). In M. Jambanna v. K. Honnappa (AIR 1957 Andhra Pradesh 1017), referring to Sec.73 and Order XXI, Rule 11 of the Code it is held that the important condition for applicability of S.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 M. Jambanna v. K. Honnappa (AIR 1957 Andhra Pradesh 1017), referring to Sec.73 and Order XXI, Rule 11 of the Code it is held that the important condition for applicability of S.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. Section 73 does not require a separate application for rateable distribution and there can be no objection to include a prayer for distribution of the assets in the application which is really for execution of the decree itself. The same view was taken by the Allahabad High Court in M/s. Suraj Lal v. P.R.K. Sugar Works (AIR 1961 Allahabad 371) and the Mysore High court in Shamsunder and Co. v. Sunnilal Vesaji (AIR 1961 Mysore 12). In the said decisions it is held that the decree holder who had his decree under execution prior to the executing court getting the assets of the judgment debtor in its hands, is entitled to claim rateable distribution under S.73. It is not necessary to make an application for rateable distribution by a judgment-creditor in order to enable him to get the benefit conferred by S.73 on the judgment-creditors. It is also held that there is nothing in Section 73 of the Code warranting the inference that in addition to the decree holder applying for execution of his decree, he should also have made a separate application for rateable distribution. 7. I may also refer to the decision learned counsel for petitioner has placed before me (Kotak & Co. v. State of U.P.- Supra). There, what is held by the Apex Court is the principle that application by the person claiming rateable distribution must have been made to the court which is holding the assets before such assets came to the hands of that court. The question whether the person applying for rateable distribution, apart from filing the application for execution of his decree was required to file a separate application for rateable distribution did not arise for a decision in that case. Nor was such a question decided in that case. Hence on the facts of the present case the decision of the Supreme Court (supra) has no application. Nor was such a question decided in that case. Hence on the facts of the present case the decision of the Supreme Court (supra) has no application. In view of the wordings of Sec.73 of the Code I am in respectful agreement with the views expressed in M. Jambanna v. K. Honnappa, M/s. Suraj Lal v. P.R.K. Sugar Works and Shamsundar & Co. v. Sunnllal Vesaji (supra). Hence it was not necessary for the first respondent (having filed an application to execute the decree in his favour before the assets came to the custody of the executing court) to file a separate application for rateable distribution before the executing court. Hence the fact that E.A.No.108 of 2010 was filed only after full satisfaction was recorded in E.P.No.179 of 2009 in O.S.No.84 of 2009, in my view, is inconsequential. 8. What remains for decision is whether in view of sub-sec.(2) of Sec.73, the executing court should have kept its hands off in the matter and directed the first respondent to file a separate suit. No doubt, the said provision enables the first respondent to file a suit. But no provision or binding authority is pointed out which holds that when the first respondent is entitled to file such a suit, the power of the executing court to direct the decree holder who realized the entire amount to refund the amount which is rateably payable to the first respondent is taken away or curtailed. What Sub-sec.(2) of Sec.73 says is only that a person entitled to rateable distribution “may file a suit for compelling a person who has received the amount to refund the amount”. It is only an enabling provision. That provision does not, in my view, restrict or curtail power of the executing court to direct the person who has received the entire amount notwithstanding the pendency of request for rateable distribution to refund the amount. I must also bear in mind that full satisfaction was recorded in E.P.No.179 of 2009 at a time when the request made by first respondent in E.P.No.185 of 2009 for rateable distribution was pending. That was a mistake committed by the court. If a wrong is done by the court, that shall not prejudice a party. In such circumstances, the principle “actus curiae neminem gravabit” must apply, in my view. That was a mistake committed by the court. If a wrong is done by the court, that shall not prejudice a party. In such circumstances, the principle “actus curiae neminem gravabit” must apply, in my view. The court has to correct the mistake it has done, rather than asking the affected party to seek his remedy elsewhere, by filing a separate suit and getting a decree which may or may not be successfully be executed. That position is highlighted in Suryarao v. Chalamayya (AIR (34) 1947 Madras 339). There, it is held that where a person not entitled to rateable distribution is paid wrongfully a portion of the assets, the fact that under S.73(2) of the Code a remedy by way of suit is provided is no justification for depriving a court of its inherent jurisdiction to pass appropriate orders reversing, where the ends of justice so require, its own wrong orders, though it may be a ground for the court whose inherent jurisdiction is invoked to say that it will not exercise such jurisdiction and that the party may file a suit. The same view is taken in Laxmi Narain v. Firm Ram Kumar (AIR 1971 Rajasthan 30) by a Division Bench of that Court. There, the court had erroneously disbursed the entire assets to one of the decree holders at a time when the request for rateable distribution by the other decree holders was pending consideration. It was held that the court erroneously excluding a person and paying the amount to others has the power to compel the person who received the entire amount (as against the provisions of Sec.73 of the Code) to refund the rateable amount due to the excluded decree holder. The Division Bench in that case relied on the decisions in Thanmull v. K. Krishnaswami (AIR 1935 Madras 988, Surendra Kumar v. Jamini Kumar (AIR 1936 Calcutta 723) and Simla Banking & I. Co. Ltd. V. Indo S.T. Co. Ltd. (AIR 1938 Lahore 754) in arriving at that conclusion. 9. Procedural law is meant to facilitate justice and not to defeat it. It is relevant to refer to the decision of the Supreme Court in Chinnammal v. Arumugham (AIR 1990 SC 1828). Ltd. V. Indo S.T. Co. Ltd. (AIR 1938 Lahore 754) in arriving at that conclusion. 9. Procedural law is meant to facilitate justice and not to defeat it. It is relevant to refer to the decision of the Supreme Court in Chinnammal v. Arumugham (AIR 1990 SC 1828). There it is held: “It is well to remember that the Code of Civil Procedure is a body of procedural law designed to facilitate justice and it should not be treated as an enactment providing for punishments and penalties. The laws of procedure should be so construed as to render justice wherever reasonably possible”. 10. It is not as if because Sec.73(2) enables the first-respondent to file a separate suit, the executing court is powerless to invoke its inherent power, rectify the mistake it has done and direct petitioner who has received the entire amount in violation of Sec.73 of the Code when the request for rateable distribution made by first respondent was pending decision to refund the amount rateably payable to the first respondent. The question raised for decision is answered accordingly. 11. The next question is whether on the facts of the case executing court should have exercised its inherent power. It is pointed out by learned counsel for petitioner that from another garnishee the first respondent had attached and realized some amount and that fact was suppressed from the executing court. The attachment and realization of the said amount did not satisfy the decree even rateably as claimed by the first respondent as is disclosed by Ext.P4, order when a sum of Rupees One lakh and odd is found due to the first respondent. 12. On the facts of the case I am inclined to think that by directing petitioner to refund the amount which is rateably due to the first respondent, justice could reasonably be done to the first respondent. I find no reason to interfere. Writ Petition falls. It is dismissed.