077-NLR-NLR-V-33-EBRAHIM-v.-THIAGARAJAH-et-al.pdf
300
Bbrahim e. Thiagarajah.
1931Present: Drieberg J. and Akbar 3.
EBRAHIM v. THIAGARAJAH et al.
26 D. C■ (Inty.) Colombo, 35,982.
Sequestration before judgment—Salein execution ofdecree—Fiscal's transfer
executed—Applicationfor delivery ofpossession—Propertyunder
mortgage—Bond not reduced to decree—Application by mortgagee to staydelivery of possession—Civil Procedure Code, s. 287.
The plaintiff in an action for the recovery of an unsecured debt appliedfor andobtained a writ of sequestrationbefore judgment andseizeda
property belonging to thedefendant.Inexecution ofhis decreethe
propertywas soldand purchased by theplaintiff, in whosefavoura
Fiscal's transfer was issued.
Thereafter the plaintiff applied undersection 287 of theCivil Procedure
Code for an order of delivery of possession.
The petitioner, who helda mortgageoverthe property,which hadnot
been reduced to a decree,moved tohave delivery ofpossession tothe
plaintiff stayed.
Held, that the petitioner-mortgagee was not entitled to have delivery of possessionto plaintiff stayed.
^ PPEAL from an order of the District Judge of Colombo.
Hayley K.C. (with him Tisseverasinghe), for appellant.
t
Keuneman, for respondent.
AKBAR J.—Ebrahwi v. Thtagarajah.
301
September 10, 1981. Akbar J.—
The plaintiff sued the defendant in this case on December 19, 1929.On December 21, 1929, he obtained a mandate of sequestration, and theestate of the defendant was seized and registered on January 11, 1930.The plaintiff obtained judgment against the defendant for Rs. 4,000,with interest and costs on March 7, 1930; writ was issued on June 11, 1980,and the property in dispute in this appeal was sold on September 15,1930, to the plaintiff. The Fiscal’s transfer was signed on December 17,1930, and on December 18, 1930, plaintiff moved for an order for the deli-very of this property which was issued to the Fiscal on December 19,
The petitioner, namely, the Hong Kong and Shanghai BankingCorporation, Colombo, obtained a mortgage bond from the defendant onDecember 24, 1929, as collateral security for moneys due by the defendant,which was registered on January 3, 1930. On January 13, 1930, anothermortgage bond, unregistered, was executed for the same property bythe defendant increasing and fixing the amount secured, in favour of thepetitioner. On January 8, 1931, the petitioner intervened and appliedto the District Court of Colombo ex -parte and obtained an order stayingthe delivery of possession pending the further orders of the 6ourt tillJanuary 21, 1931. On January 15, 1930, the petitioner filed an actionon the mortgage bonds and judgment was obtained on January 18, 1930.The sale under the mortgage decree was fixed for January 20, 1931, thatis one day before the notice on the plaintiff was made returnable.Owing to this conflict of interests the plaintiff moved the Court to vacatethe order of January 8, 1931, staying deliveny of possession. Afterargument the Court confirmed the order of January 8, 1931, and directedthat the writ for the delivery of possession to the plaintiff be recalled andthe plaintiff was also ordered to pay the costs of the inquiry. The mainground on which the District Judge made his order was that the appli-cation for delivery of possession was made by the plaintiff appellant byway of a motion and that in the Judge’6 opinion it should have been-supported by an affidavit to the effect that nobody was in possessionexcept the judgment-debtor. The District Judge mentions in his judg-ment that applications for writ of possession are commonly made bymotions without any affidavit, but in spite of this fact, he ordered thatthe writ should be recalled owing, as I said, to the failure of the plaintiff- -appellant to .file an affidavit along with his motion. In the case ofAbeyedere v. Marikar1, cited before us, the facts were different to thefacts here.
In that case, when the Fiscal tried to enforce the order for the deliveryof possession, there was- obstruction by two persons. Thereupon thepurchaser filed a petition against the persons obstructing, and thejudgment-debtor.
It is true that in those proceedings, the Supreme Court mentioned thefact that the order for delivery had been irregularly obtained, but thatwas owing to the peculiar facts of that case. As the Chief Justice pointedout, the order to deliver possession that was issued to the Fiscal statedthat the boutique was in the possession of one Allia Marcar (one of the
111N. L. R. 19.
302
AKBAR ,T.—Ebrahim c. Thiagarajah.
two persons who afterwards obstructed the Fiscal and who was oneof the respondents to the petition). In view of these facts as thepurchaser must have disclosed the fact that Allia Marcar was in possessionof the boutique in question, the Supreme Court held that the motion fordelivery of possession should have been accompanied by affidavit or someother evidence. As a matter of fact it is not necessary for me to decidein ibis case the point whether an application under section 287 should besupported by an affidavit or not: but 1 may mention en passant thatthe form given in the schedule authorizes the Fiscal to put the purchaserin possession and to remove only a person “bound by the decree",i.e., bound by the order to deliver possession (see 2nd paragraph ofsection 287); therefore, probably anyone claiming by a title independentof, or created before the seizure of the property by the judgment-debtorcould not be turned out of the possession of the property. .Even if anaffidavit is insisted on in every case, in view of the- wording of section 287,it is bound to be nothing more than a formal document, because a purchaserwill always state that it is the judgment-debtor or somebody on hisbehalf who is in possession. What else can the purchaser say whenthere has-been a seizure and no claim has been made? It seems to methat sections 325, 326, &c., dealing with resistance to the execution ofproprietary decrees have an important bearing on section 287. Theformer sections are self-contained and were drafted to preserve theinterest of the purchaser as well as that of persons bona fide in possessionof the property independent of the judgment-debtor. Section 325 statesthat if the Fiscal is resisted or obstructed in giving possession of theproperty the judgment-creditor may report the resistance or obstructionto' the Court and then the Court has got power to inquire into the matterand to punish any person who resists the execution of the decree at theinstance of the judgment-debtor, by sending him to jail. But if theperson resisting claims to be in possession bona fide the judgment-creditor’spetition is to be registered and numbered as a plaint between the decreeholder as plaintiff and the claimant as defendant, and then the Courtis empowered to proceed to inquire into the matter as if it were an actionfor the property by the decree holder against the claimant. Section 328provides for a dispossessed claimant, who claims to be in possession bonafide, to bring the matter up before a Court and for the Court to inquireinto it. It is true that sections 325, 326, &c., refer to the judgment-creditor, but the second paragraph of section 287 states that a purchaserat a Fiscal’s sale trying to enforce an order under head (c) of section 217is to be considered as a judgment-creditor. So that it will be seen thatthere is ample provision, in the Civil Procedure Code for a bona fidepossessor of property, with regard to which the order for delivery ofpossession has been made, to test his right to possess against thepurchaser. .
Resistance or obstruction under section 325 does not necessarily meanthe actual use of physical violence; on the other hand a mere refusalto give up possession on the ground that the claimant holds not underthe judgment-debtor but independently of him or. by a title created byhim prior to the seizure will be sufficient (see section 287). All theseprovisions I think were inserted as I ha>e stated to meet the case not only
AKBAR J.—Ebrahim c. Thiaga rajah.
303
of a bona fide claimant, but also of a person who has been set up by ajudgment-debtor to give trouble to the judgment-creditor or to thepurchaser at the Fiscal's sale. That, I take it, is the reason why the Courtis given the power to send the obstructor to jail in certain circumstances.If an alternative procedure is to be allowed whereby instead of followingthis course, the person claiming to be in possession can seek to move theCourt, as has been done in this case, for a recall of the- writ for deliveryof possession, this will give rise to further difficulties in the executionjudgment debts. Any person who has been set up by a judgment-debtor can avoid the penalty by moving in this way and hanging up thewhole proceedings by an inquiry, followed by an appeal. Moreover, theCourt will be deprived of a valuable piece of evidence, namely, the Fiscal’sreport that the claimant was really in possession. This is an importantquestion on the procedure which it is not necessary to decide in thiscase, as I am of opinion that the reason why the petitioner moved in thisway seems to be obvious. The sale on his mortgage decree was fixedfor January 20, 1931, and very important and difficult questions of laware bound to rise ,when the plaintiff and the petitioner test their respectiveclaims to the property in a Court of law.
It would have been a serious matter to the petitioner if the plaintiffwas allowed to get into possession, because then an action ret vindicatewould have to be instituted by the petitioner against the plaintiff. Thepetitioner appears to have been doubtful himself as to the legal procedure,because when the petition was filed by him on January 8 (see paragraphs'12 and *13) certain preliminary discussions took place between the lawyerson both sides and according to paragraph 14 the petitioner claimed theright to stay the writ on the ground of equity (whatever that may mean),viz., that “ it will be inequitable to allow the plaintiff to take possessionas the value of the petitioner's security (already very inadequate) mightbe seriously depreciated thereby." It is quite obvious that his objecton January 8 was to , get time to enable him to buy the property at thesale which was fixed for January 20, 1931. In the petitioner's petition,paragraph 15, it is stated that the agents of the petitioner were, .inpossession of the property .on behalf of the petitioner and that the plaintiffwould not be prejudiced because the petitioner was willing to submitaccounts of the working * of the estate during any period for which itmay ultimately be held that the plaffitiff could have claimed the benefitof possession, and it is also stated that lie was willing to pay the profits ofthe estate during such period. In the beginning of paragraph 14 there isa virtual admission that the plaintiff is entitled to possession at leastbetween January 10 and 20, 1931. All these facts show that the petitionerwas very doubtful of hjs own legal position in the matter.
It is true that subsequently on January 19, Le.t the very day of theinquiry, he filed a further affidavit in- which he stated that he was inpossession owing to a clause in the mortgage bond; but that clause in themortgage only empowers the petitioner to get possession of the propertymortgaged if there is any breach of any of the convenants or conditionson the part of the mortgagor or if he is declared insolvent. The mortgagebond was not a usufructuary mortgage bond. Presumably the petitioner
23/33
304
Fernando t. Wickrrmesintjlie.
put in his application in this form asking for a stay of the delivery ofpossession for the sole purpose of getting time to enable the Bank topurchase the property at the sale on the mortgage decree. The petitionerhimself, it is admitted, bought this property on January 20, 1031, and adeed was executed in favour of the Bank on February 21, 1031.
It seems to me that the very equity, which the petitioner invokes tojustify his application for the stay of writ, is against the petitioner. Ineed only decide this appeal on the ground that the circumstances of thisparticular case did not justify the petitioner in moving the Court to stayexecution of the plaintiff’s order for possession. I think the appeal shouldbe allowed and the order recalling the writ should be set aside. I havehad great difficulty on the question of costs. It will be seen that ever, ifthe order for delivery of possession is put into the hands of the Fiscal,the petitioner having already bought the property mortgaged will setup this new title as against the plaintiff when the Fiscal tries to put him' in possession. The plaintiff I think is entitled to the costs of the inquiryin the Court below, but I would make no order as to the costs in this Court,because the plaintiff filed his petition of appeal on January 26, 1931, onwhich date he must have known that the property was bought by thepetitioner at the sale on the mortgage decree, and that the petitionerwas bound to claim the benefit of sections 325 and 327 of the Civil .Procedure Code. In the result the appeal is allowed with costs incurred inthe Court below but there will be no order as to the costs of this appeal.
Drieberg J.—I agree.
Appeal allowed.