IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 27/11/2003 CORAM THE HONOURABLE MR.JUSTICE N.DHANAKAR AND THE HONOURABLE MR.JUSTICE A.KULASEKARAN O.S.A.No.175 OF 1998 AND C.M.P.Nos.14624 OF 1998, 14828 TO 14830 OF 1998, 2565 & 2566 OF 1999 AND 981 AND 1174 OF 2003 Petromarine Products Ltd., Company incorporated under the laws of Cyprus, having its registered office at Libra Towers, 23,Olympian Street, Limassol, Cyprus, rep.by Constituted Attorney .. Appellant -Vs- 1.Ocean Marine Services Co.Ltd., rep.by its Power of Attorney Agent, Mr.T.Satakopan, 16, I Floor, Errabalu Chetty Street, Chennai-600 001. 2.Owners and Other parties interested in the vessel m.v.ELENI, rep.by its Master, now lying at the Port of Madras. 3.Compass Shipping & Trading Pvt.Ltd., 46, Rajaji Salai, III Floor, Chennai-600 001. 4.Sea Traffic, 30, Errabalu Chetty Street, Chennai-600 001. 5.Mr.V.Ramajegadeesan, Advocate Commissioner, No.280, Lloyds Road, Royapettah, Chennai-600 014. 6.The Board of Trustees of the Port of Madras, Rajaji Salai, Chennai-600 001. ... Respondents For appellant : Miss. Ferishte Setana For respondent 1:Mr.S.Vasudevan For respondent 3:Mr.Srinivasa Raghavan For respondent 4:Mr.M.B.Gopalan Respondent No.5 :Mr.V.Ramajegadeesan, Advocate Commissioner. Appeal against the order dated 06.10.1998 made in Application No.121 7 of 1997 in C.S.No.97 of 1997 on the file of this Court. :J U D G M E N T A.KULASEKARAN,J. In this appeal, the appellant has challenged the order dated 06.10.1998, passed by the learned single Judge of Original Side in Application No.1217 of 1997 in C.S.No.97 of 1997. 2. Before the appeal being dealt with, it is relevant to look into the dates and events of the case admitted by both sides. The first respondent herein has filed the suit in C.S.No.97 of 1997, for recovery of US $ 22,705.84 against the second respondent herein on 26.02.1997 . Along with the suit, the first respondent filed Application No.750 of 1997, praying for an order of arrest of the vessel, which has arrived at Port of Madras, and the same was ordered on 27.02.1997 as prayed for. The appellant herein filed a suit in A.S.No.27 of 1997 on the file of the Bombay High Court, for recovery of amount of US $ 39.7 12.97. At the instance of the appellant, the Bombay High Court ordered arrest of the vessel m.v.ELENI on 19.03.1997. On 17.04.1997, the Madras High Court ordered sale of the said vessel. On 21.04.1997, M/s.Erricson and Richards were appointed as Court Surveyor to value the vessel, by the Madras High Court. On 25.04.1997, terms and conditions for sale were approved by the Madras High Court. From 30.04.1997 to 06.05.1997, publications were effected in respect of the sale of the said vessel in Lloyds List, Indian Express, The Hindu, Express Newsline and Financial Express. The Madras High Court received a tender from M/s.Jansee Steel Industry Pvt.Ltd. on 26.05.1997. On 04.08.199 7, order of confirmation was made in favour of M/s.Jansee Steel Industry Pvt.Ltd. by the learned single Judge. The said order was challenged by one M/s. Bancorex in O.S.A.No.15 of 1998. The same Bancorex filed another O.S.A.246 of 1997, challenging the order passed in Application No.906 of 1997. O.S.A.No.246 of 1997 was disposed of on 28.08 .1997, directing the parties to agitate before the learned single Judge. On 11.09.1997, the Bombay High Court decreed the suit filed by the appellant for a sum of US $ 50,081.74 with interest etc. On 25.09.1997, the appellant wrote a letter to the advocate commissioner, appointed by the Madras High Court, informing the decree passed in their suit. On 30.09.1997, the advocate commissioner requested the appellant herein to send certified copies of the decree and other related papers. On 21.10.1997, the Sheriff of Mumbai wrote a letter to the advocate commissioner, informing him of the condemnation of the ship ELENI. On 24.10.1997, the learned single Judge of Original Side of the Madras High Court confirmed the sale in favour of M/s.Jansee Steel Industry Pvt.Ltd. On 24.01.1998, the decree, transmitted by the Bombay High Court, was received by the Madras High Court. On 10.02.1998, the appellant filed Execution Application No.98 of 1998 before the Bombay High Court. On 17.03.1998, the Bombay High Court issued a notice under Order 21 Rule 52 of the C.P.C., requesting the Madras High Court to hold the decretal sum in an aggregate amount of US $ 58,325.64 from and out of the funds deposited by M/s.Jansee Steel Industries. O.S.A.No.15 of 1998 was allowed on 23.04.1998, setting aside the confirmation of sale made in favour of M/s.Jansee Steel Industry Pvt.Ltd. and the matter was remanded to the learned single Judge to ensure that the best possible price is secured. On 01.09.1998, the learned single Judge of Original Side of the Madras High Court accepted the only bid of M/s.Jansee Steel Industry Pvt.Ltd. for a sum of US $ 4,70,000 and directed to pay the balance consideration within three weeks, failing which the earnest money, deposited by them, shall stand forfeited. The learned single Judge also directed the advocate commissioner to deposit the entire amount to the credit of the suit. On 07.09.1998 , the Registry of Madras High Court noted the attachment made by the Bombay High Court in the suit register. On 22.09.1998, payment of sale consideration was made to the advocate commissioner. On 25.09.1998 , the Bombay High Court requested the Registrar of the Madras High Court to remit the funds, lying attached. On 03.10.1998, the appellant informed the Registry of the Madras High Court the actual amount of Rs.24,80,006.21 to be remitted by the Madras High Court. The learned single Judge of Madras High Court confirmed the sale made in favour of M/s.Jansee Steel Industry Pvt.Ltd. on 05.10.1998 and ordered reimbursement of cost of sale, payment to the crew and charges to the statutory authorities. On 06.10.1998, the advocate commissioner filed a memo, stating the details of disbursement made as per order dated 05 .10.1998. On 06.10.1998, the learned single Judge of the Madras High Court directed to deposit the balance amount in the Court to the extent of Rs.12,38,164/-. On 07.10.1998, delivery of possession of ship was made to the purchaser and sale certificate was also issued. On 07.10.1998, Bombay High Court makes a further order in favour of the appellant. Thereafter, the appellant herein filed the present O.S.A. on 12.10.1998. The Registry of Bombay Hig h Court sent letters dated 28.01.1999, 09.03.1997 and 11.03.1999, requesting the Registrar of the Madras High Court to give reply for non-remittance of the attached funds. On 03.09.1999, Bombay High Court gave liberty to the appellant, to obtain suitable orders from the Madras High Court and closed the Execution Application. 3. The appellant herein filed C.M.P.No.14624 of 1998, seeking leave to file the O.S.A. A Division Bench of this Court directed the registry to register the appeal, keeping open the question of maintainability, by an order dated 13.10.1998; C.M.P.No.14828 of 1998 is filed by the appellant, seeking for order of attachment; C.M.P.No.14829 of 19 98 is filed to direct that the petitioners are in priority to the entitlement of the amount; C.M.P.No.14830 of 1998 is to direct the respondents 3 to 4, to deposit or re-deposit into the Court a sum of US $ 60,000; C.M.P.No.2565 of 1999 is filed, seeking permission to amend the date of the impugned order as 05.10.1998 instead of 06.10.1998; C.M.P.No.2566 of 1999 is to direct the remittance of sum of Rs.12,38,16 4/-, lying in this Court to the credit of the suit C.S.No.97 of 1997, pursuant to the order of attachment passed in E.A.No.98 of 1998 on the file of the Bombay High Court; C.M.P.No.981 of 2003 is to implead M/s.Jansee Steel Industry Pvt.Ltd as seventh respondent in the O.S.A. and C.M.P.No.1174 of 2003 is filed, seeking permission to raise additional grounds. 4. Miss. Ferishte Setana, learned counsel appearing for the appellant submitted that the Bombay High Court issued notice of attachment under Order 21 Rule 52 CPC on 17-03-1998 and on service of notice, the appellant is entitled to the decree amount absolutely; on 25-09-1998, Bombay High Court passed an order for payment out, while so, under no circumstance, the amount attached ought not to have been disbursed to third parties; that the amount disbursed to third parties without notice to the appellant/ attaching creditor is illegal; that the custody court namely the Madras High Court has no authority to make rateable distribution. Counsel for the appellant added that the appellant is a decree holder, hence, it should have been accorded absolute priority. The learned single Judge failed to note that the parties who have received monies from the advocate commissioner are not decree holders. The sum lying in the Court together with accrued interest to be remitted to the Bombay High Court forthwith for the benefit of the appellant and the balance of amount, for which the appellant is entitled to to be recovered from the parties who have received the same and prayed for setting aside the order passed by the learned single judge. 5. The learned counsel appearing for the appellant relied on the following decisions in support of her case:- i) (T.H. Ismail Hassan Vs. T.S. Haji Moosa & Co) AIR 1930 Madras Page 538 wherein it was held thus:- "The principle of those decisions is this that the charge-decree holder is entitled to the benefits of his charge-decree in execution of the decree, and any other person who refuses to be bound by the decree on whatsoever ground it may be, has got to file a regular suit for the proper relief. In the present case, the respondents attaching creditors would all be entitled to file suits or they may jointly file a suit alleging that the claims of plaintiff and defendant 1 in C.S. No. 160 of 1927 are bogus claims and if they proceed they will be entitled to recover the full amounts of the decree out of the amounts now to be drawn by the plaintiff and defendant 1 in execution of C.S. No. 160 of 1927; but, until such a suit is filed by them and it is found in their favour, the charge, decree must have its course." ii) (Kamini Kumar Choudhuri Vs. Sasanka Sekhar Choudhuri and others) AIR 1933 Calcutta 814 wherein it was held thus:- "This rule, should, in my opinion, succeed. The Court of the 3rd munsif of Chittagong was only a custody Court and being a custody Court, under Order 21 Rule 52 Civil P.C., it had no authority to make any rateable distribution. Under that rule it could only determine the question of priority and thereafter act under the instructions of the attaching court. The case of Thakurdas Motilal V. Joseph Iskender (1 ) no doubt appoves of a rateable distributing made by a custody court. But in that case the custody court happened to be the attaching Court as well." iii) (Athivarapu Venkatarami Reddi Vs. Kotamreddi Rami Reddi) AIR (3 7) 1950 Madras 589 wherein it is held in para-7 thus:- "7. ......I am satisfied that, as the Law stands in this State, a Court which has passed the decree can despite its having transferred it for execution to another Court and not having received it back with a non-satisfaction certificate, entertain an application by the decree-holder for transfer of the decree to a third Court, or an application for simultaneous execution, which can only be ordered by the Court passing the decree." iv) (Bisheshar Das and others Vs. Ambika Pershad) AIR 1915 Allahabad 275 wherein it is held thus:- "..... The effect of the attachment before judgment is only to prevent the debtor from dealing with the property, but the property still continues to be his. Therefore, the plaintiffs in the present case were entitled to attach the money which was in Court, being the proceeds of the sale of the property attached before judgment. As the Court made an order on the 23rd February 1912, directing the money attached to be paid over to the plaintiffs, the plaintiffs were entitled to receive that money and the Court or the Defendant Ambika Prasad could not deprive them of their right to get the money. Had Ambika Prasad alredy obtained a decree on the date on which the money was ordered to be paid to the plaintiffs and had he applied for execution, different equities might arise...." v) (Uma Venkataraman & Co., Vs. Methewala Adamji Usman & Co) AIR 191 9 Madras 1616 wherein it was held thus:- "..... It is true that S.270 of the Code of 1859, by which the attaching creditor was entitled to be paid first out of the proceeds of the property sold under his attachment, was not re-enacted in 1882 or 1 908. But that provision did not in terms affect the attachment of a fund and there is no reason for assuming that its disappearance, whatever its effect in cases to which it was applicable affected the application of the English rule conferring a priority to which Bakewall, J., has referred. The material point is that, a fund attached under Order 1 Rule 52 requires no further realisation and that in the absence of creditors entitled to apply under S.73, there can, from the moment that the attachment is laid on it, be no obstacle to its payment to the attaching creditor. This is recognised by the procedure authorised by the Civil Rules of Practice Nos. 179, 180, under which, after (if necessary) his decree has been transferred to the Court, where the fund is the attaching creditor is entitled to be paid as if he were an assignee of the judgment debtor. vi) (E.M. Visvanadham Chetti and others Vs. Arunachalam Chetti) AIR 1921 Madras 218 wherein the Full Bench of this Court held thus:- "Money deposited in Court to the credit of a judgment debtor before any decree holder applies in execution to have it paid towards the satisfaction of his decree should not be dealt with on a system of priority when several decreeholders afterwards come in and apply to the same Court to have it attached but it should be rateably distributed among them. The fact that money was lying in Court to the credit of the judgment debtor in a suit other than in which the attachments were made does not make it assets 'held by a Court' within the meaning of S.73 which clearly refers to assets levied in execution or paid into Court in satisfaction of the decree under execution and not to assets lying in the same Court to the credit of the judgment debtor in another suit. When the attaching Court and the custody Court are the same an order should be made by the Court as attaching Court for transferring the money from the suit in which it came into Court to the suit in which the attachments took place. It is only when this is done that the Court as attaching Court can properly be said to have received the assets and to hold it within the meaning of Sec.73; and decree holders who have attached prior to that are entitled to rateable distribution." 6. Mr. Vasudevan, learned counsel appearing for the first respondent submitted as follows:- The appeal is not maintainable since the order dated 06-10-1998 do not affect the right of any parties, including the appellant herein. The first respondent has filed the suit along with an application for arrest of the vessel on 26-02-1997, this Court ordered arrest of the vessel on 27-02-1997. The warrant of arrest was served on 28-02-199 7 on the agent and on the vessel on 03-03-1997 since, the vessel was at the outer anchorage. The sale of the vessel was confirmed by the learned single Judge for a price of US Dollars 7,90,000 which was challenged by one of the intervenors namely M/s. Bancorex in O.S.A. No.1 5 of 1998, which was allowed on 23-04-1998 setting aside the order of sale and remanded back the matter to the learned single Judge to consider afresh from among the bidders who have already approached this Court. Though the original price of US Dollars 7,90,000 was offered by one Jansee Steel Private Limited, it was reduced by them to 4,50,00 0 US Dollars. At no point of time, the amount of US Dollars 4,50,000 was deposited to the credit of the suit in the name of the Registrar, Madras High Court. When monies were not available in the Court, the appellant herein obtained an exparte decree dated 11-09-1997 and transmitted the same to this Court for execution. The said facts were brought to the notice of the learned Single Judge on 09-01-1998 and the learned single Judge considered the same and has given his finding in order dated 24-01-1998 stating that the appellant herein was entitled to work out his remedy in the execution of the decree. Even at that point of time, no amount was lying to the credit of the suit. The appellant herein filed Execution application before the Bombay High Court and obtained an order dated 12-03-1998 for attachment of sale proceedings of US Dollars 7,90,000 or any other sum in the hands of the Registrar of High Court, Madras which was communicated to this Court on 17-03-1998, however, the Registrar of this Court communicated that the order of attachment was effected on 07-10-1998 to the Bombay High Court. At that time also, no funds were available in the hands of the Registrar to the credit of the suit CS No. 97 of 1997. The learned counsel also pointed out that a memo dated 12-12-1997 was filed by the counsel for the appellant informing the transmission decree from the Bombay High Court to Madras High Court for execution. From that day onwards, the counsel for the appellant was aware that no amount was lying to the credit of the suit with the Registrar, Madras High Court, though communications were exchanged. The learned Single Judge has directed the advocate commissioner to open a personal account and deposit the sale proceeds by order dated 22-09-1998. In so long as no funds are available at the hands of the Registrar, Madras High Court, the attachment made is unsustainable. Anticipatory attachment is not valid in the eyes of Law. Under Order 21 Rule 52 CPC, the Madras High Court is competent to disburse the amount to the creditors, who were before it. By order dated 05-10-1998, the learned single Judge directed to disburse of the amount to the persons who have approached it and accordingly the same was disbursed by the advocate commissioner. After disbursement the balance amount available namely Rs.1 2,38,164/- was ordered to be deposited into the Court for the benefit of other creditors. After disbursement is made, nine claimants, including the appellant herein are there, but the funds available is only Rs.12,38,164 with accrued interest. The learned single Judge of original side of Madras High Court is competent to determine priorities among the creditors and priority of the appellant can only be decided after issuing notice to the said persons who are interested in the available funds. The appellant herein failed to file intervening petition soon after the sale of the vessel was made by this Court. Though the learned single Judge by order dated 06-10-1998 acknowledged the receipt of the order of attachment from Bombay High Court has not passed any orders to transfer the remaining funds for the obvious reason that there are number of claimants who are already filed intervening petitions. The appellant has participated in the proceedings before this Court but allowed it to be terminated as such there is no right for the appellant to challenge the order dated 06-10-1998. Under Admirality practice, this Court is vested with the power to sell the vessel and to decide priorities of the parties and the same was rightly decided by this Court. The order of attachment passed by the Bombay High Court is not valid in Law since the decree is in rem, which can be executed only against the vessel and not by resorting to Order 21 CPC which is applicable only to the cases of decree in personam. The appeal is liable to be dismissed for non-joinder of necessary parties namely the other creditors and prayed for dismissal of the appeal. 7. Mr. Vasudevan, learned counsel appearing for the 1st respondent relied on the below mentioned judgment. i) (Tulaji Fatesing Raje Bhosle Vs. Balabhai Lakhmichand) I.L.R. Volume XXII Page No.39 wherein the Court held that "at the date of attachment on 06-04-1895, there was no money in the hands of the Postmaster at Pune. The money sought to be attached did not reach his hands until 13-04-1895 and so it could not be attached on 6th April 1895. Section 272 does not, in my opinion allow of an anticipatory attachment of money expected to reach the hands of a public officer, but applies only to moneys actuall in his hands." ii) (Maharaja Sree Maharaja Saheb Meharban Dostan Sree Maharaja Sri Honourable Rao Venkata Swetachalapati Ranga Rao Bahadur, the Maharaja of Bobbili Vs. Sree Raja Narasaraju Peda Baliar Simhulu Bahadur Garu and another) ILR Volume XXXVII Page 232 wherein it was held thus:- "The Court to which a decree is sent for execution is the only Court which has ceased of the execution proceedings, and it retains its jurisdiction to execute the decree till it certifies under Section 41, CPC, to the Court which passed the decree, the fact of execution, or if it fails to execute the decree, the circumstances attaching such failure. In such a case the Court which passed the decree has no jurisdiction to entertain an execution proceedings unless concurrent execution had been ordered or proceedings in the Court to which the decree was sent had been stayed for the purpose of executing the decree in the former Court. "In Krishtobishore Dutt Vs. Roopal Dass (2), also there was an order by the Court which passed the decree for simultaneous execution. These decisions are authorities for the proposition that decrees may be executed simultaneously in more than one Court, but in all those cases, there were orders allowing such execution and the consideration that I have already set out would seem to indicate the necessity of an order permitting concurrent execution before such execution proceedings can be carried out. In the present case, after the decree was transferred for execution to the Parvatipur Munsif's Court that Court had ceased of the execution proceedings and it was bound to carry them on until execution was obtained or further execution became impossible. There was no order of the District Court of Visagapatnam staying execution in that Court, for the purpose of executing the decree in the Visagapatnam Court itself. I am therefore of opinion that the Judge is right in holding that the application for sale in 1997 should have been made to the Parvatipur Munsif's Court and that the District Court was not therefore the proper Court to entertain such an application" iii) The decision cited supra was upheld on appeal by the Privy Council in the decision reported in (Maharajah of Bobbili Vs. Naasaraju Peda Baliara Simhulu Bahadur) ILR Volume 39 Privy Council Page No. 640 holding that "As the decree of the 5th April 1904 had by order of the Court of the District Judge been sent on the 30th September 1904 to the Court of the Munsif of Parvatipur for execution by the latter Court and as the copy of the decree with the non-satisfaction certificate was not returned to the Court of the District Judge until the 3rd August 1910, and as the position of the 13th December 1907 was for execution of the decree by sale of the immovable property of the respndents which was within the local limits of the jurisdiction of the Munsif Court, their Lordships, having regard, particularly to Sections 223, 224, 228 and 230 of the Code of Civil Procedure, 1882, are satisfied that when that position of the 13th December 1907 was presented to the Court of the District Judge that Court was not the proper Court to which the application