069-NLR-NLR-V-09-SUPRAMANIAN-CHETTY-v.-SIRIWARDANA-et-al.pdf
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1906.October 9.
Present: The Hon. Mr. A. G. Lascelles, Acting Chief Justice, andMr. Justice Middleton.
SUPRAMANIAN CHETTY v. SIRIWARDANA et al.
D. C., Colombo, 14,570.
Seizure—Private sale after seizure—Subsequent judgment-creditors—Claims enforceable under theseizure"—Concurrence—Civil
Procedure Code, ss. 283 and 352.
The plaintiff in this case having obtained judgment . against thedefendants on a promissory note in May, 1904, seized the life-interest ' ofthesecond defendant, ina certain propertyon17th
June, 1904,andregistered the seizureon 20th June, 1904.On28th
June, -.1904, the second defendant and her co-owners, with thesanction oftheCourt obtained underOrdinance No. 1 11of1876,
sold their interests in the property to D. F. & Co., who claimed theinterests of the second defendant when under seizure under plaintiff’swrit; their claim having been upheld, the plaintiff instituted an actionunder- section 247 of the Civil Procedure Code, and obtained judg-ment in February, 1905 (affirmed in appeal in July, 1905) declaring{he interests of the second defendant executable under his writ.
(1) 2 K. & J. 79.
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M. S.. obtained judgment against the second defendant in thisease in action, No. 19,955 on a promissory note, in September, 1904,and issued writ in January, 1906.
The interest of the second defendant was sold by the Fiscal onthe writ? of the plaintiff in this case on 24th April, 1906, and waspurchased by the plaintiff himself, who was allowed to set offIBs judgment debt against the purchase amount under section272 of the Civil Procedure Code.
In an application by M. S. to have the purchase money broughtinto Court and for a rateable proportion thereof under section 362of the Civil Procedure Code,—
Held, that he was so entitled, inasmuch as the sale to D. F. & Co.,was void as against his claim under section 238 of the Civil Pro-cedure Code, it being a claim enforceable under the seizure by theplaintiff in 14,570, by virtue of section 352 of the Code.
Middleton J.—The claims of those execution creditors who,under section 295 of the Civil Procedure Code, are entitled to claimthe benefit of a distribution of the fruits of a seizure ought to betreated as falling within the words “ all claims enforceable underthe seizure ” in section 238.
Sorabji v. Govind (1) followed.
fJlHE facts and arguments sufficiently appear in the judgments.
H. Jayeioardene (with him A. St. V. Jayewardene and Batuwantu-dawe), for the appellant (plaintiff in 19,955).
Schneider, for the respondent (plaintiff in 14,570).
Cur. adv. vult.
9th October, 1906. Middleton J.—
This was an appeal against an order disallowing an application bythe appellant, who is plaintiff in action D. C., Colombo, 19,955, thatthe respondent, who is plaintiff in this case, should be called upon tobring into Court the sum of Rs. 1,400 realized by the sale of the pro-perty of their common debtor for rateable distribution under section352 of the Civil Procedure Code.
The facts, which I mostly take from the judgment of the DistrictCourt, were that the respondent got judgment in the present actionin May, 1904, seized the property in question on 17th June, 1904,the seizure feeing registered on the 20th June, 1904. On the 18thJuly, 1904, Messrs. Delmege, Forsyth & Co. claimed the land undera deed of transfer dated 28th June, 1904. The land was subject toa fidei commissum in' favour of the second defendant here and others,the children of Norman Rajapakse, and in case No. 87 (special) theDistrict Court had authorized the sale of the land to Delmege,
(1) I. L. R. 16 Bom. 91.
1906.
October 9.
1006.Ootober 9.
Mxsdlston
J.
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Forsyth & Co. under the Entail and Settlement Ordinance of 1876.The claim of Delmege, Forsyth & Co. was upheld, but"the respondenthere instituted case No. 20,591 against them and obtained a decreein February, 1905, confirmed in appeal on 26th July, 1905, declaringthe land liable to be seized and sold in execution of his decree,.
The appellant got a decree in action No. 19,955 against the seconddefendant here on 17th September, 1904, and a writ was issued inJanuary, 1906, and counsel for the appellant says seizure was madein April, 1906; the District Judge, however, says that the writ wasin the hands of the Fiscal when the second defendant’s properly inquestion was put up for sale and purchased by the respondent on24th April, 1906, for Rs. 1,400, who was allowed under section 272to set' off part of his judgment debt against the sale price.
The District Judge dismissed appellant’s claim for concurrence onthe ground that, when. petitioner’s writ went into the hands of theFiscal, the property in question belonged at law to Delmege, Forsyth& Co. subject only to the respondent’s right to have his debtor’sinterest in it sold in satisfaction of his decree.
The appellant now argues that this is a claim enforceable under theseizure by the respondent according to section 238, and applies forrateable distribution under section 352 of the Civil Procedure Code.
It may be prefaced here that section 352 of our Civil ProcedureCode is practically the same as section 295 of the Indian Code, andsection 238 of our Code the same as section 276 of the Indian Code.
Neither by section 352 nor any other section of our Civil ProcedureCode does it appear to be necessary that a decree-holder seekingconcurrence should have made a. seizure or even have issued a writ.The conditions precedent to his right to share proportionately arethat assets should have been realized in execution of a decree, thatmore persons than one of whom he is one have applied to the Courtby which the assets are held prior to realization for execution, andthat he has not obtained satisfaction.
If these conditions are fulfilled by any persons they becomeentitled to divide rateably the assets realized.
The existence of assets realized by sale or otherwise in executionpresupposes a seizure under a writ of execution at the suit of onejudgment-creditor at least.c
I think, therefore, in the words of Lord Wensleydale in. Grey v.Pearson (1), quoted in 16 Bombay, p. 100, that the claims of thoseexecution-creditors who under section 295 are entitled to claim thebenefit of a distribution of the fruits of the attachment ought to betreated as falling within the words “ all claims enforceable under the
(1) 6 H. L. Cos., at p. 106.
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attachment, ” and substituting seotion 352 for section 295 and theword “ seizure’” for attachment renders the ruling entirely applicablehere. This was the ruling oi Telang J. in Sorabji «. Qovind (1)under sectidn 295 of the Indian Code.
Insthe present case one other question arose, whether the assetswere realized by sale or otherwise in execution of a decree.
The judgment-creditor, the respondent here, was permitted undersection 272 to become the purchaser. According to that seotion thecreditor may bid for and 6uy the properly at the Fiscal’s sale andset off against his debt the amount for which he buys the property.
The amount bid is realized by the sale in execution and is exigiblefrom and payable by the purchaser unless he be acting under section272, and, being property which may be used to satisfy debts ordemands, is therefore an asset within the legal meaning of that word.
I cannot think that the fact that the amount bid is not convertedinto money makes it any less an asset of the debtor. See on thisquestion Sorabji v. Govind (1), Chunilal Mdliji v. Rampratap (2), Tir-thaswami v. Yusuf Sahib (3). By many decisions of the BombayCourt quoted at page 102 of 16 Bombay, p. 91, it has been held thata creditor in the position of the respondent here cannot be allowed aset off as against execution-creditors who are entitled to come inunder section 295 of the Indian Code for a share of the realization.
There is no pretension for saying that the side of the property toDelmege, Forsyth & Co. was anything but a private sale between theparties to it carried out solely at their own initiative, though theassent of the Court was necessary under the Entail Ordinance.
Counsel for the respondent contends, however, that the propertyhad become in law that of Delmege, Forsyth & Co., and was not theproperty of the judgment-debtor when appellant applied for execu-tion.
The answer to that seems to be that that sale was void ipso factounder section 238 as being a private sale.
The respondent then contended that under his seizure the propertybecame earmarked, and that by his judgment in the action underseotion 247 it became liable to be sold in execution for the decree inhis favour only. The answer to that is that appellant has a claimenforceable qnder the seizure and is therefore entitled to come inunder section 352.
With some reluctance, .therefore, I feel that I must yield .to thecontention of counsel for the appellant, and hold that he is entitledunder section 352 to share rateably, subject to the payment of his 1
(1) /. L. R. 16 Bom. 91.(2) 6 Bom. Law Reporter 376.
(3) I. L. R. 28 Mad. 380.
190ft.October 9.
ilmoLxrov
J.
1900.
October 9.
Midbubtoh
J.
share of the costs of realization, in the amount realized under thesale to the respondent.'
I would, therefore, allow the appeal in the terms of the petitionand set aside the order of the learned District Judge wit'll costs.
Lasoelles A.C.J.—
I have come to the same conclusion. The main question is whetherthe claims of subsequent execution-creditors under section 852of the Civil Procedure Code to share rateably the proceeds of the saleare claims " enforceable under the seizure ” within the meaning ofsection 238. The Indian decisions on the corresponding sections ofthe Indian Code are conflicting, but the case of Sorabji v. Govind (1),which was decided after a very full consideration of all the cases,supports the appellant’s contention.
The reasoning on which this decision is based coupled with thenatural meaning of section 238 in my opinion turns the scale in favourof the appellant.