Ratable distribution in drt matter u/sec 73 of c.p.c

Querist : Anonymous (Querist) 25 January 2012 This query is : Resolved
Hi all, "A" is a Govt of India enterprise has obtained judgment and decree in a money suit against "B" in a District court, subsequelntly E.P is filed for attachement of immoveable property of "B".

"C" is a Private Bank (ING), has filed a case before the Debt Recovery Tibuanal(DRT) against "B" referred above for Recovery of Money under Mortagage of same Immoveable Property of "B" as "B" deposited the title deeds of the said property with "C" bank, and the said Case was ended in faovr of "C" Bank Ex parte and as on date whereabouts of "B" i.e Jdr in both the aforesaid cases is not known.

While matter stood thus though "A" filed E.P for attachment of property of "B" stated above, "A" could not attached the same at earliest point of time and as on date the said E.P is Pending.

Meanwhile "A" came to know through paper publication issued by "C" bank for conducting the open auction of said property of "B" on a particular date and prior to the auction date mentioned in the paper publication, "A" govt enterprise filed Claim Petition before the Recovery Officer, Debt Recovery Tribunal, for reatable distribution of the auction amount to it, though the First charge over the property of "B" is lying with the "C" bank. Now My question is

Whether the claim petitioner "A"i.e the Govt of India Enterprise is entitiled for Ratable Distribution as contemplated under Section 73 of C.P.C in the auction amount to be received by the "C" bannk, since no surplus amount is available after adjusting claim of "C" bank.

Whether C.P.C is applicable to the aforesaid Proceedings for ratable distribution?

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Raj Kumar Makkad (Expert) 25 January 2012
No. There is no application of criminal procedure code in the given case and thus A is not entitled to claim rotable distribution of the proceeds received by way of auction of the property of B.

Querist : Anonymous (Querist) 26 January 2012
Sir Makkadji, I am sorry to say, but above quiery is not related to Cr.P.C(Criminal Procedure code), but related to Civil Procedure code(C.P.C), Kindly rectify the same and I need a case law in the above quiery as I am contesting a case on similar set of facts. thanking you in advance. Happy republic day to one and all.

Raj Kumar Makkad (Expert) 26 January 2012
Thanks author! I was in a sleepy mood when I replied your query. Sorry it is Civil Procedure Code and not criminal Procedure Code as I thought and replied.

Raj Kumar Makkad (Expert) 26 January 2012
though the following citation is not directly applicable over your facts but this is definitely helping for you.

Madras High Court
Vayi Ramakrishna Chettiar ... vs Kasi Viswanatha Chettiar on 1 May, 1935
Equivalent citations: 159 Ind Cas 501, (1935) 69 MLJ 711
Author: P Row

JUDGMENT

Pandrang Row, J.

1. The petitioners in these petitions obtained decrees against two sons of the deceased Periaswami Goundan in respect of debts contracted by him. The respondent had obtained a decree against Periaswami Goundan himself in O.S. No. 514 of 1930 and after his death the same two sons of his were brought on record as his legal representatives and the family properties were sold in execution, and the sale proceeds were in the custody of the executing Court. The respondent had also obtained three other decrees against the same two sons in respect of debts contracted by their father. All the decrees, i.e., those obtained by the petitioners and those obtained by the respondent, were executable against the family properties of the deceased and his sons. The respondent applied for rateable distribution in respect of three decrees obtained by him against the sons, and his applications were allowed by the Court; but when the petitioners applied for rateable distribution in respect of the exactly similar decrees obtained by them against the same two sons, the respondent opposed their applications on the ground that they had not obtained decrees against the father, Periaswami Goundan, and his objection was upheld by the same Court and the applications were dismissed. The revision petitions are directed against the order dismissing the petitioner's applications for rateable distribution.

2. The question for determination in these petitions is whether in the circumstances mentioned above the petitioners are entitled to rateable distribution. The only objection made to the claim for rateable distribution is that the decrees obtained by the petitioners were not passed against the same judgment-debtor as in the decree in O.S. No. 514 of 1930 in execution of which the assets were realised. It is admitted that all the decrees are executable in the same way and against the same properties, but stress is laid on the difference in the names of the judgment-debtors in the decrees as originally passed and it is contended that this difference in names, though otherwise immaterial, makes all the difference so far as the claim to rateable distribution is concerned. I see, however, no good reason for accepting this contention which is based on a narrow construction of the words 'the same judgment-debtor' in Section 73, Civil Procedure Code. As observed by Strachey, C.J., in Bithal Das v. Nand Kishore (1900) I.L.R. 23 All. 106 at 110:

The object of the section is two-fold. The first object is to prevent unnecessary multiplicity of execution proceedings, to obviate, in a case where there are many decree-holders, each competent to execute his decree by attachment and sale of a particular property, the necessity of each and every one separately attaching and separately selling that property. The other object is to secure an equitable administration of the property by placing all the decree-holders in the position I have described, upon the same footing, and making the property rateably divisible among them, instead of allowing one to exclude all the others merely because he happened to be the first who had attached and sold the property.

3. A similar contention based on the amendment of Section 73, Civil Procedure Code by inserting the word 'passed' which was put forward in Dwarkadas Marwari v. Jadab Chandra Ganguly (1924) I.L.R. 51 Cal. 761 was repelled by Mukerjee, J., on the ground that if the legislature had intended to effect any alteration of the principle enunciated in the Full Bench decision in Gonesh Das Bagria v. Shiva Lakshman Bhakat (1903) I.L.R. 30 Cal. 583 (F.B.) it would have expressed it in terms more clear and specific. The learned Judge referred also to the objects of Section 73, Civil Procedure Code as stated by Strachey, Chief Justice In Bithal Das v. Nand Kishore (1885) I.L.R. 12 Cal. 294 and observed that those objects "would not be furthered, but rather defeated, by putting upon the rule the interpretation which the respondent asks us to adopt". In the order of reference in Gonesh Das Bagria v. Shiva Lakshman Bhakat (1903) I.L.R. 30 Cal. 583 (F.B.) MacLean, C.J., expressed the opinion that the view taken in the earlier Calcutta case, Deboki Nundun Sen v. Hart (1885) I.L.R. 12 Cal. 294 placed too narrow a construction on the expression "the same judgment-debtor", and observed as follows:

If the language of the section be absolutely clear, the circumstance that such a construction as was put upon it in that case may lead to injustice or to anomaly or to hardship, could not prevent us from putting such construction upon it. But looking at the whole of Section 295 (of the old Code) and especially to that portion of it which deals with the distribution of the assets, where it speaks of 'the judgment-debtor', not using the expression 'the same judgment-debtor' and to the equitable distribution which is aimed at by the section, I am disposed to think that the construction put upon it by the case of Deboki Nundun Sen v. Hart (1885) I.L.R. 12 Cal. 294 is too narrow.

4. These observations were subsequently affirmed by the Full Bench, and I respectfully adopt them as a safe guide in the endeavour to determine the true construction of the expression "the same judgment-debtor" found in Section 73, Civil Procedure Code.

5. A different view was taken in Govind Abaji Jakhadi v. Mohoniraj Vinayak Jakhadi (1901) I.L.R. 25 Bom. 494 which was followed in Srinivasa Aiyangar v. Kanthimathi Ammal (1910) I.L.R. 33 Mad. 465. In neither of these two cases was any reference made to the objects of Section 73, Civil Procedure Code; in the latter case Abdul Rahim, J., while referring to the fact that the two decrees were to be realised out of the family property was of opinion that this fact was not decisive of the question against whom the decrees are made. The earlier Madras cases, Grant v. Subramanian (1898) I.L.R. 22 Mad. 241 : 9 M.L.J. 179 and Ramanathan Chettiar v. Subramania Sastrial (1902) I.L.R. 26 Mad. 179 do not appear to have been considered by the learned judge; in both these cases the fact that both the decrees were to be realised out of the family property was regarded as deciding the question whether the decrees were against the same judgment-debtor. In Nilmani Dey v. Hiralal Das (1917) 27 C.L.J. 100 the fact that both the decrees were capable of execution against the same estate was held to-be a sufficient reason for concluding that the decrees may, without unduly straining the language of Section 73, Civil Procedure Code be regarded as passed against the same judgment-debtor, though they were not really passed against the same persons and the learned judges added that they were not disposed to put a narrow construction upon the terms of Section 73, Civil Procedure Code so as to defeat the ends of justice.

6. It is obvious that a strict literal construction of the expression 'the same judgment-debtor' cannot be adopted, in the sense that the decrees must be against the same persons eo nomine; it has been held in a series of cases that all the judgment-debtors in each of the several decrees need not be identically the same, and that it is sufficient if there is one judgment-debtor common to all the decrees, and this proposition is not denied by the learned advocate for the respondent in these petitions. It has also been held, and here too there is no dispute, that even though the person against whom the decrees were passed is the same in name, Section 73 will not apply unless that person occupied the same character in all the decrees; for instance, where one decree was passed against A in his personal capacity and another against him as heir of P, the two decrees are not against the same judgment-debtor. It would therefore seem that the eo nomine construction cannot be the right one, and that the expression 'the same judgment-debtor' is not so simple and clear in its meaning as to dispense with any reference to the general intention of the section in which it is found. About that intention there can be no doubt, and a construction which defeats that intention no less than the ends of justice should be avoided if the provisions of law are to be interpreted in a reasonable manner. The weight of authority appears to be in favour of the more liberal construction of the expression 'the same judgment-debtor', and I would therefore accept that construction and hold that the petitioners in these petitions are entitled to rateable distribution.

7. It follows that the petitions should be allowed with costs in Civil Revision Petition No. 1685 to be shared by all the petitioners.

Horace Owen Compton Beasley, Kt., C.J.

8. I agree.

Cornish, J.

9. I think these Revision Petitions should be allowed. There is, in my judgment, nothing illogical in describing as 'the same judgment-debtor' the legal representative against whom a decree has been passed in respect of a claim against the deceased and the deceased person against whom a decree was passed in his lifetime but which is sought to be executed against his legal representative. The purpose of bringing the legal representative on record is to enable a suit against a person deceased to be maintained or continued or to enable a decree obtained against the deceased before death to be satisfied by execution out of his estate. And that estate can only be reached for the satisfaction of a legal claim or judgment-debt through the interposition of the legal representative of the deceased. The claim against the deceased becomes by reason of his death a claim against his estate in the hands of the legal representative. The legal representative appears solely as legal representative, and if the suit is decreed, the decree must be against him in that character only. His liability under the decree, whether he has been brought on record before decree or whether execution is made after the judgment-debtor's death, is limited to the extent of the deceased's assets which have come into his hands and which have not been duly distributed by him. The notion underlying these principles is that the legal representative takes the place of the deceased, and is under the obligation which lay upon the deceased of paying lawful claims against the deceased out of the deceased's assets. This view is in accord with Nilmani Dey v. Hiralal Das (1917) 27 C.L.J. 100. It was held in that case that executors A and B and executors B and C of the same testator against whom two separate decrees had been passed in respect of claims against the estate could be regarded as the same judgment-debtor within Section 73. I think it may be said that the language and the intention of the section equally cover the circumstances of the present case where the decrees are all executable against the heirs as legal representatives of the deceased.

prabhakar singh (Expert) 26 January 2012
DRT HAS IT OWN RULE OF EXECUTION BORROWED FROM INCOME TAX EXECUTION RULES AND CPC IS NOT APPLICABLE AT ALL.SO IT IS A CRYSTAL CLEAR MATTER.IN ADDITION BANK HAS FIRST FULL CHARGE.