011-NLR-NLR-V-35-CHETTIAR-v.-COONGHE.pdf
Chettiar v. Coonghe.
1933
Present: Dalton A.C.J. and Koch AJ.CHETTIAR v. COONGHE.
172—D. C. Negombo, 5,733.
Registration of seizure—Previous gift of land unregistered—Adverse interestfor valuable consideration—Priority—Ordinance No. 23 of 1927, s. 7 (I).The registration of a notice of seizure does not create an adverseinterest in land for valuable consideration within the meaning of section7 (1) of the Registration of Documents Ordinance so as to avoid aprevious unregistered deed of gift affecting the land.
HIS was an action under section 247 of the Civil Procedure Code.
The plaintiff sued the administratrix of the estate of one Coonghein D. C. Negombo, 5,058, and in execution of the judgment entered inhis favour seized the property in suit. The second defendant-appellantclaimed the property and his claim was upheld. The appellant’s claimwas based on a deed of gift from Coonghe dated October 19, 1928, a fewdays before his death. The deed of gift was not registered while theplaintiff’s seizure was duly registered. The learned District Judge heldthat the registration of the seizure avoided the deed of gift.
H. V. Perera (with him E. B. Wikramanayake and D. W. Fernando), torsecond defendant, appellant.—It is true that a seizure is an instrumentaffecting land. But an instrument affecting land is not the same as aninstrument on which one can claim title. Before the RegistrationOrdinance such a point could not have been taken. Under the Code ifa seizure was registered only subsequent alienations were void. Theattempt is to make a registered seizure affect not only subsequentalienations but also prior alienations. A seizure does not give a person aninterest in the property. (Jayawardene on Registration 177; Moti Lai v.Karrabuldin1; Peacock v. Madar Gopal ) Nor is it an instrument forvaluable consideration. There is a fallacy in the argument of Jaya-wardene A.J. in Eminona v. Mohideen ’ that there is valuable considera-tion because the creditor gets an advantage. The consideration mustbe given by the creditor. Section 7 (1) is operative in respect of a seizure.An earlier instrument need only affect land. But a later instrumentmust create an interest in land and for valuable consideration. Underthe Code there was no question of a seizure being registered in the wrongfolio. But now a seizure may be registered in the wrong folio. In sucha case any subsequent private alienation registered in the right folio willbe valid. At the date of seizure we had title. The deed conveyed title.Non-registration does not matter. Registration only comes in whenthere are competing deeds. (Silva v. Nono Hamine', Abubucker v. TikiriBanda °.)
Hayley, K.C. (with him Weerasooria), for respondent.—The legislaturehas expressly changed the law. One must give effect to the plain wordsof the legislature. The change was to remedy an important defect in the
' 26 Cal. 170.3 32 N. L B. U6.
3 29 Cal. 42S.1 10 N. L. li. 44.
3 29 .V. {.. li. 132.
4—XXXV.
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DALTON A.C.J.—Chettiar v. Coonghe.
registration of seizures. Before the new Ordinance, when a creditorseized, made known and registered his seizure, the registration tookeffect as from the date of seizure. In the gap between seizure andregistration an alienation by the judgment-debtor was possible but suchalienation would be defeated by the registration of the seizure. Thatwassa defect which needed a remedy. The new Ordinance was to curethat defect. It placed the seizure in the same position as a conveyance.The question then becomes purely a question of registration as betweencompeting deeds. Even in the case of two competing deeds the vendor,when he sells the second time, has really not title to convey. But by thefiction of the law the prior registration by the second vendee gives himtitle. Section 6 gives priority by registration to any instrument affectingland. A notice of seizure is an instrument affecting land. (Sections 8 (b)and 9 (1).
[Dalton A.C.J.—Who is the party who on a seizure is a party claimingan adverse interest on valuable consideration?]
The judgment-creditor. The consideration is the debt due to him.Certainly he claims an adverse interest. The word interest here meansan interest affecting land. (Jayewardene on Registration 190.) Under theterm “ deed ” in Ordinance Np. 3 of 1907 was included a notice of seizure.
July 26, 1933. Dalton A.C.J.—
This is an action under section 247 of the Civil Procedure Code. Theadministratrix of one Anthony Coonghe had been sued by the plaintiffin D. C. Negombo, No. 5,058, and judgment had been entered againsther on January 23, 1931. Plaintiff took out a writ and seized theproperty the subject of this action. The second defendant (appellant)in the present action claimed the property, his claim was upheld, andthe plaintiff instituted this action on August 10, 1931.
The appellant claimed the property on a deed of gift of October 19,1928, executed by Anthony Coonghe a few days before his death. Thelearned Judge is satisfied that that was no alienation in fraud of creditors.The deed of gift however was not duly registered, whereas the seizureby the judgment-creditor was duly registered. Plaintiff on that groundasked for a declaration that the lands were liable to be sold under his writby reason of the prior registration of his seizure notice. The decision of
W. Jayewardene A.J., in Eminona v. Mohideen,1 is cited in support ofhis contention.
Under the provisions of the Registration of Documents Ordinance,1927, a notice of seizure issued under section 237 of the Code is aninstrument affecting the land seized. In order, however, to make outa case that an unregistered instrument is void against a subsequentregistered instrument, plaintiff must establish as provided by section7 (1) of the Ordinance that the subsequent instrument is in respect of aninterest in the land obtained on valuable consideration. It was held inthe case relied upon, that a notice of seizure created an interest adverseto a previous transfer for valuable consideration, and that section 7 (1)applies to registered seizures, thus giving registered seizures priority overprevious deeds that are not rgeistered. I regret I am quite unable to
' 32 K. L. R. 145.
KOCH AJ.—Chettiar v. Coonghe.
91
agree with that conclusion. Even accepting the correctness of theargument that a registered notice of seizure, as a document affectingland, is therefore a document creating an interest in land (with whichargument, I would add, I do not feel able to agree) I am quite unable tosee how that interest can be said to be created and claimed on valuableconsideration. In that event it is impossible to bring a registered seizureiwithin the provisions of section 7 (1).
The learned trial Judge, althought he was of opinion that the case citedhad been in wrongly decided,- was correct in holding that the decision wasbinding upon him. Following that decision, he held the interests of thedeceased, with which he had parted by deed P 5 in 1928 were neverthelesssubject to be seized and sold under the writ in D. C. No. 5,058. As Ihave stated, the decision which he was bound to follow cannot in myopinion be supported. The plaintiff’s action should therefore, in viewof his conclusions on the other issues, have been dismissed. The appealis allowed. The decree entered will be set aside and plaintiff’s actionwill be dismissed with costs. Appellant will have his costs of this appeal.
Koch A.J.—
I am in entire agreement with the judgment of my Lord the ActingChief Justice, and would wish to add that the fundamental fact that hasto be ascertained in an action under section 247 of the Civil ProcedureCode, when instituted by a judgment-creditor, is whether the propertyseized was liable to be sold under the writ of the plaintiff. This woulddepend on whether the judgment-debtor had a seizable interest in theproperty at the moment of seizure—section 247 of the Civil ProcedureCode. The institution of an action under section 247 follows on theresult of a claim -inquiry under sections 242, 243, 244, and 245. Theclaim investigated under these sections is made under section 241, whichprovides for such “a claim being preferred against a seizure”. Theclaim made is the “ objection ” to the seizure being effected; so that therights of parties have to be ascertained at a period of time immediatelyanterior to the act of seizure.
This view is supported by the decisions of this Court in Abubacker v.TikiH Banda,' which followed a judgment of a Bench of three Judges inSilva v. Nona Hamine.'
In this case the legal title to the property seized was by virtue of thedeed of gift of October 19, 1928, clearly in the appellant (claimant) at themoment of seizure, and the judgment-debtor had no saleable interest inthe property at that period of time.
I am therefore of opinion that for this additional reason also the appealshould succeed.
Appeal allowed.
1 29 N. L. R. 132.
– 10 ‘N. L. R. 44.