1955 (3) TMI 38 - SC - Indian Laws

Appeal Dismissed for Lack of Transfer as Decree-Holders Allowed Execution

JUGALKISHORE SARAF Versus M/s. RAW COTTON CO. LTD.

JUGALKISHORE SARAF Versus M/s. RAW COTTON CO. LTD. - 1955 AIR 376, 1955 (1) SCR 1369 Issues Involved:1. Transfer of decree by assignment in writing.2. Transfer of decree by operation of law.3. Application of equitable principles.4. Applicability of Section 146 of the Code of Civil Procedure.5. Procedural compliance of execution application under Order XXI, Rule 11.Detailed Analysis:1. Transfer of Decree by Assignment in Writing:The main question was whether the respondent company could claim to be the transferees of the decree within the meaning of Order XXI, Rule 16 of the Code of Civil Procedure. The rule specifies that a decree must be transferred by assignment in writing or by operation of law. The Court found that the document in question, executed on February 7, 1949, could not transfer the decree as it was passed later on December 15, 1949. The Court emphasized that a literal construction of Order XXI, Rule 16 leads to no absurdity and must be followed. The decree was not transferred by any assignment in writing executed after the decree was passed.2. Transfer of Decree by Operation of Law:The Court explored whether the respondent company could be considered transferees of the decree by operation of law. The term 'by operation of law' was discussed extensively, referencing various cases. The Court concluded that while equity might transfer the beneficial interest in the decree, this does not constitute a transfer by assignment in writing within the meaning of Order XXI, Rule 16. The equitable principle does not make the prior agreement an assignment in writing of the decree.3. Application of Equitable Principles:The Court examined the equitable principle that a contract to assign future property becomes a complete assignment when the property comes into existence. However, it was held that this principle does not convert the agreement into an assignment in writing as required by Order XXI, Rule 16. The Court found that equity alone, and not the prior agreement, transfers the beneficial interest in the after-acquired property.4. Applicability of Section 146 of the Code of Civil Procedure:The Court considered whether the respondent company could execute the decree under Section 146 of the Code of Civil Procedure, which allows proceedings by or against representatives. It was argued that Order XXI, Rule 16 does not preclude a person who claims to be entitled to the benefit of a decree from making an application under Section 146. The Court found that the respondent company, having obtained the transfer of the debt, were the real owners of the decree and could claim under the decree-holder.5. Procedural Compliance of Execution Application under Order XXI, Rule 11:An objection was raised regarding the procedural compliance of the execution application, specifically that it did not specify the mode in which the assistance of the Court was required. The Court acknowledged this defect but noted that no objection was raised at the initial stages. Furthermore, a subsequent application specifying the mode of execution was filed, curing the defect.Conclusion:The appeal was dismissed, with the Court holding that the respondent company could not claim to be transferees of the decree by assignment in writing or by operation of law within the meaning of Order XXI, Rule 16. However, they were entitled to execute the decree under Section 146 of the Code of Civil Procedure as persons claiming under the decree-holder. The procedural defect in the execution application was also deemed to have been cured by a subsequent application.