034-NLR-NLR-V-11-LETCHIMANEN-CHETTY-v.-ABDUL-RAHIMAN.pdf
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Present: The Hon. Sir Joseph T. Hutchinson, Chief Justice,and Mr. Justice Wendt.
LETCHIMANEN CHETTY v. ABDUL RAHIMAN.
Ex parte Muttusamy Pillai, Appellant.
D. C., Colombo, 24,694.
Sequestration ■ of goods by one creditor—rApplieation to sell by anothercreditor—Rights of party sequestering the goods—Civil ProcedureCode, ss. 653 and 660.
Where goods belonging to a debtor are sequestered under a.mandate of sequestration issued under section . 653 of the Civil. Procedure Code, any other judgment-creditor of the debtor, whohas obtained judgment before or after such sequestration, is entitledto have the said goods sold in execution of his decree.
A
PPEAL from a judgment of the Acting District Judge ofColombo (F. R. Dias, Esq.) refusing to order the sale by the
Fiscal of certain goods.
Bawa (with him H. A. Jayewanlene), for the applicant, appellant.
Sampayo, K.C. (with him F. M. de Saram), for the plaintiff,respondent.
Fan Langenbetg, for the defendant.
1908.April 16.
Cur adv. vult.
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1808. April 16, 1908. Hutchinson C.J.—
April 10.
——This is an "appeal by Muttusamy Pillai, judgment-creditor in
action 24,798 in the District Court of Colombo, in which the defend-ant is the same as in this action, against an order of the DistrictCourt in this action made on August 12, 1907, refusing to order asale of the defendant’s goods under writ of execution in action 24,798.
The plaintiff in this action obtained a mandate of sequestration ofthe goods under section 653 of the Civil Procedure Code, under whichthe Deputy Fiscal of Kalutara seized the goods on March 16, 1907.On June 6, 1907, an agreement was made between the plaintiffand the defendant in this action and a claimant to the goods bywhich the defendant and the claimant sold and transferred the goodsto the plaintiff, and the plaintiff agreed to a dismissal of his action.This Court has held, however, that the sale and transfer were void asagainst the present appellant (judgment-creditor in action 24,798).This action has not yet been dismissed in pursuance of the agreement,and the goods are still in the hands of the Deputy Fiscal under thesequestration.
The appellant issued writ of execution under his decree in No.24,798, and instructed the Deputy Fiscal to seize the goods underthe writ. The Deputy Fiscal having refused to sell the goodsbecause of the sequestration, the appellant applied to the DistrictCourt for an order for sale, which was refused, and this is an appealfrom the refusal.
Section 660 enacts that sequestration before judgment shall notaffect the rights, existing prior to the sequestration, of persons notparties to the action, nor bar any person holding a decree againstthe defendant from applying for a sale of the property undersequestration in execution of the decree. The respondent contended,and the District Judge held, that the “ decree ” there referred toonly means a decree existing at the date of the sequestration,Under section 653 sequestration may be obtained where the plaintiffsatisfies the Judge that he has a sufficient cause of action againstthe defendant, and that he has no adequate security, and that thedefendant is fradulently alienating his property with intent toavoid payment of the plaintiff’s claim, or that he has with suchintent quitted the Island; and the Fiscal is to detain or secure theproperty to abide the further order of the Court. There seems tobe no other enactment as to the effect of a sequestration. Themarginal note to section 660, “ effect of sequestration on_ priorrights, ’’ is not conclusive. The inference which I draw fromsections 653 and 660 is that the object was not to alter the positionof the plaintiff with reference to third parties, nor to give him anypriority which he would not otherwise have over them, but only to
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protect him against the fraud of the defendant. In my opinion the1908■
appellant is entitled to the order for which he aslcs, and file order Aprilappealed from should be set aside and an order made lor the sale. Hutchinson
C.J.
Wendt J.—
am of the Bame opinion. A preliminary objection to the hearingof the appeal was taken by Mr. Van Langenberg for the defendant,on file ground that plaintiff must be held to his agreement towithdraw this action. The agreement between plaintiff anddefendant, however, cannot prejudice the appellant, who hadseized the goods (or, which amounts to file same filing, required theFiscal, who liad the goodft in his custody, to seitfe them) before thedate of the alleged agreement. We, therefore, decided to hear theappeal.
As to the construction of section 660 of the Code, the effect ofupholding plaintiff’s contention would be to give him a greaterprivilege than he would have enjoyed if he had seized the goods on afinal decree against the.defendant. In that case he'would have nopreference, but would, under section 352 of the Code, be obliged toshare file proceeds with all other decree-holders who had appliedfor execution prior to the realization of those proceeds, that is tosay, irrespective of whether their decrees bore date earlier or laterthan plaintiff’s seizure. There is nothing in chapter XLVH. which,in my opinion, contemplates such a preferential right. The objectof the sequestration, as of file “ attachment before judgment ” ofthe Indian procedure, is merely to prevent defendant’s dealing withthe property so as to defeat his creditors’ rights, and to secure thatit shall be forthcoming when required by the Court. The expression“ any person holding a decree ’’ is used in section 660 as theequivalent of “ any decree-holder. ” Had the Legislature intended toconfer the special privilege, amounting to a primary mortagage, nowcontended for, it would, I think, have added after the word“ decree ” the phrase previously used to qualify the rights of persons .not parties to the action, viz., " prior to the sequestration. ” Thedecisions in India on section 489 of the Indian Code, which is exactlythe same as our section 660, are against the preference claimed byplaintiff, and the enactments in the two Codes are sufficiently aliketo entitle those decisions to weight on the questions of construction.
I therefore agree that the appeal should be allowed with costs inboth Courts.
Appeal allowed.