1936 (8) TMI 3 - HC - Indian Laws

Appeal Dismissed, Costs Awarded to Respondent

The appeal was dismissed, upholding the lower court's decision for rateable distribution among decree holders. Costs were awarded to the respondent who ... Constitution of Additional Judges as part of the District Court - presentation to court officer and effect on limitation - jurisdiction of the Court of highest grade to determine claims in respect of property under attachment - reading of Sections 63 and 73 of the Code of Civil Procedure together for rateable distribution - right to follow - attachment enuring to proceeds after conversion of property into moneyConstitution of Additional Judges as part of the District Court - Whether the Additional District Judge at Ellichpur constitutes a separate Court or is part of the District Court at Amraoti. - HELD THAT: - The Central Provinces Courts Act, 1917 contemplates a single District Court for the civil district. The Local Government may appoint Additional Judges to any District Court who are subject to the control of the District Judge and exercise jurisdiction of the District Court subject to executive distribution of business. A mere curtailment of powers by executive orders does not create an independent Court; only the Legislature can create Courts. Therefore the Additional District Judge at Ellichpur is attached to and forms part of the District Court at Amraoti and does not constitute a separate Court for the purposes of presentation of appeals. [Paras 6, 7, 8, 10, 11]The Additional District Judge at Ellichpur is part of the District Court at Amraoti and not an independent Court.Presentation to court officer and effect on limitation - Whether an appeal presented to and accepted by an officer of the District Court (or to an officer who holds himself out as able to accept it) can be treated as a valid presentation for limitation purposes when subsequently sent to the appropriate Judge. - HELD THAT: - Order XLI, Rule 1 contemplates presentation to the Court or to an officer appointed by it. Where an officer appointed to receive appeals accepts one by mistake, the appellant cannot be penalised for that mistake. Presentation to an officer of the District Court who holds himself out as the proper person to accept the appeal and actually accepts it is not an illegal presentation. Given that the Additional Judge is part of the District Court and that the appeal was duly admitted and notices issued before transfer, the appeal was rightly admitted despite the subsequent transfer which rendered it apparently beyond time at the new judge's hearing. [Paras 2, 3, 9, 10, 11]The appeal was rightly admitted and the period between initial presentation and the taking up by the Judge at Ellichpur cannot be disallowed; the appellant is not penalised for acceptance by a Court officer.Jurisdiction of the Court of highest grade to determine claims in respect of property under attachment - reading of Sections 63 and 73 of the Code of Civil Procedure together for rateable distribution - Whether the Court of the Subordinate Judge, First Class (the Court of highest grade in the matter) was the proper forum to receive the sale proceeds and determine claims to them, and whether Sections 63 and 73 must be read together so that a separate second application for execution in the Court of highest grade is unnecessary. - HELD THAT: - Section 63 vests the power to receive or realize property and determine claims in the Court of highest grade where property not in the custody of any Court is under attachment in execution of decrees of more Courts than one. The Court of highest grade therefore was the proper forum to receive the money and adjudicate claims. The majority view of several High Courts holds that Sections 63 and 73 must be read together: the Court of highest grade empowered under Section 63 includes the power to decide claims for rateable distribution under Section 73 so that no second application for execution in that Court is required. Consequently the Subordinate Judge, First Class was competent to determine the claim for rateable distribution when the money reached that Court. [Paras 15, 16, 17, 23, 24]The Subordinate Judge, First Class was the correct Court to receive the money and determine claims; Sections 63 and 73 are to be read together so that no separate second application in the Court of highest grade was necessary for rateable distribution.Right to follow - attachment enuring to proceeds after conversion of property into money - Whether the attachment effected by the sixth defendant (Nathusa) on the field continued and attached to the sale proceeds after the Tahsildar's sale, entitling him to rateable distribution. - HELD THAT: - The doctrine of the right to follow permits a party's rights in attached property to continue despite conversion of the property into money. Authorities applying this principle extend beyond narrowly fiduciary contexts. Applying this doctrine, Nathusa's attachment of the field enured to the proceeds realised by the Tahsildar's sale; his attachment fastened on to the money and his rights remained unaffected by the conversion, thus entitling him to rateable distribution. [Paras 18, 19, 20, 21]Nathusa's attachment continued against the sale proceeds and he is entitled to rateable distribution.Reading of Sections 63 and 73 of the Code of Civil Procedure together for rateable distribution - Whether attachment by other creditors was necessary to claim rateable distribution, or whether an application for execution sufficed so that creditors who had not specifically attached the field or sale proceeds were nevertheless entitled to participate in rateable distribution. - HELD THAT: - Section 63 determines which Court shall decide claims when property is under attachment in execution of more decrees than one, but it does not restrict the nature of claims that Court may consider to only those made by persons who effected the particular attachment. Section 73 does not require prior attachment by every claimant; an application for execution is the essential requirement. Reading Sections 63 and 73 together, claimants who had applied for execution before the money reached the Court were entitled to rateable distribution even if they had not effected a physical attachment of the specific field or its proceeds. [Paras 23, 24, 25]Prior attachment of the specific property is not necessary; claimants who made an application for execution were entitled to rateable distribution.Final Conclusion: The appeal is dismissed. The Additional District Judge at Ellichpur is part of the District Court at Amraoti and the appeal was rightly admitted; the Subordinate Judge, First Class properly adjudicated claims to the sale proceeds, Sections 63 and 73 are to be read together for rateable distribution, Nathusa's attachment enured to the proceeds entitling him to rateable distribution, and other claimants who had applied for execution were also entitled to rateable distribution. Costs of this appeal are awarded to Nathusa alone. Issues Involved:1. Timeliness of the appeal filing.2. Jurisdiction of the Additional District Judge at Ellichpur.3. Rateable distribution of sale proceeds among multiple decree holders.4. Applicability of Sections 63 and 73 of the Code of Civil Procedure.5. Continuation of attachment after conversion of property to money.6. Availability of assets for rateable distribution.7. Necessity of prior attachment for rateable distribution.Detailed Analysis:1. Timeliness of the Appeal Filing:The plaintiff contended that the appeal filed by the respondents was beyond time. The appeal was initially filed within time on January 29, 1934, before the Additional District Judge at Amraoti but was later transferred to the Additional District Judge at Ellichpur, where it was taken up on February 8, 1934, by which time it was beyond the prescribed period.2. Jurisdiction of the Additional District Judge at Ellichpur:The court examined whether the Additional District Judge at Ellichpur constituted a separate court or was part of the District Court at Amraoti. The judgment clarified that under the Central Provinces Courts Act of 1917, there is only one District Court in each Civil District, and Additional Judges are part of this District Court, not separate entities. Hence, the appeal was rightly admitted initially.3. Rateable Distribution of Sale Proceeds:The case involved multiple decree holders, including the appellant and the respondents, who had obtained decrees against the same judgment-debtor. The respondents claimed a right to rateable distribution of the sale proceeds of the judgment-debtor's fields, which were attached and sold for arrears of land revenue.4. Applicability of Sections 63 and 73 of the Code of Civil Procedure:Section 63 states that the court of the highest grade shall receive or realize the property under attachment and determine any claims thereto. Section 73 deals with rateable distribution among decree holders. The court held that these sections must be read together, and the Court of the Subordinate Judge, First Class, was the appropriate court to decide on the claims for rateable distribution.5. Continuation of Attachment After Conversion of Property to Money:The court addressed whether the attachment of the property by the sixth defendant, Nathusa, continued after the property was converted into money through a sale. It was held that the attachment continued and fastened onto the money, entitling Nathusa to rateable distribution. The court referenced the doctrine of the right to follow, extending it beyond fiduciary relationships to prevent unjust enrichment.6. Availability of Assets for Rateable Distribution:The court rejected the argument that the assets were not available for rateable distribution because they were not realized 'by sale or otherwise in execution of a decree.' It was held that the term 'assets' in Section 73 is not confined in this manner, and the money was available for rateable distribution.7. Necessity of Prior Attachment for Rateable Distribution:The court clarified that prior attachment is not necessary for rateable distribution under Section 73. All that is required is an application for execution before the assets are received by the court. The respondents had made such applications, and thus, they were entitled to rateable distribution.Conclusion:The appeal was dismissed, and the court upheld the lower Appellate Court's decision for rateable distribution among the decree holders. The court also awarded costs to Nathusa, the only respondent who appeared in the appeal.