Case: Jugalkishore Saraf Vs. Raw Cotton Co. Ltd

Bom. 691) and also in Bhagwant Balajirao and others v. Rajaram Sajnaji & others(A.I.R. 1947 Bom 157) appears to have been the only justification for making the application in the manner which the respondents did. That defect however according to the very same decision in Bhagwant Balajirao and others v. Rajaram Sajnaji & others(A.I.R. 1947 Bom 157) was purely technical and might be allowed to be cured by amendment of the application. As a matter of fact Order XXI, rule 17 lays down the procedure on receiving applications for execution of a decree and enjoins upon the Court the duty to ascertain whether such of the requirements of rules 11 to 14 as may be applicable to the case have been complied with and if they have not been complied with the Court has to reject the application or allow the defect to be remedied then and there or within a time to be fixed by it. When the application for execution in the present case was received by the City Civil Court, the Court should have scrutinised the application as required by Order XXI, rule 17(1) and if it was found that therequirements of rules 11 to 14 as may be applicable were not complied with as is contended for by the Appellant, the Court should have rejected the application or allowed the defect to be remedied then and there or within a time to be fixed by the Court. Nothing of the kind was ever done by the City Civil Court nor was any objection in that behalf taken on behalf of the Appellant at any time until the matter came before this Court.57. On the 27th March, 1952 however a further application for execution was filed by the Respondents in the City Civil Court specifying in column J the mode in which the assistance of the Court was required and it was by ordering attachment and sale of the moveable property of the Appellant therein specified. This further application for execution was a sufficient compliance with the provisions of Order XXI, rule I 1 (2) (j) and was sufficient under the circumstances to cure the defect, if any, in the original application for execution made by the Respondents to the City Civil Court on the 25th April, 1951. This objection of the Appellant therefore is devoid of any substance and does not avail him.58. The appeal accordingly fails and is dismissed with costs.IMAM J.-59. I have had the advantage of perusing the judgments of my learned brethren. I agree that the appeal must be dismissed with costs and in the view expressed by them that the respondent should be permitted under the provisions of section 146 of the Code of Civil Procedure to execute the decree passed in favour of Habib & Sons, as one claiming under the latter.60. The document under which the respondent claimed to execute the decree was treated as a deed of transfer in the courts below and not merely as an agreement to transfer. By this document there was a transfer of all the book and other debts due to Habib & Sons in connection with the Indian business and the full benefit of all securities for the debts. The document, however, neither in terms, nor by any reasonable inter-pretation of its contents purported to transfer any decree which Habib & Sons may obtain in the future. It seems to me, therefore, that the respondent cannot claim to be a transferee of the decree, which was subsequently obtained by Habib & Sons, by an assignment in writing within the meaning of Order XXI, rule 16 of the Code of Civil Procedure.61. Order XXI of the Code of Civil Procedure relates to execution of decrees and orders. Rule 1 of that Order relates to payments under a decree which has been passed. Rules 4 to 9 relate to the transfer of an existing decree for execution. The normal rule is that a decree can be executed only by the person in whose name it stands and rule 10 enables him to do so, while rule 16 of Order XXI, enables the transferee of the decree to execute it in the same manner and subject to the same conditions as an application for execution made by the decree-holder. It seems to me, therefore, that there must be a decree in existence which is transferred before the transferee can benefit from the provisions of rule 16. The ordinary and natural meaning of the words of rule, 16 can carry no other interpretation and the question of a strict and narrow interpretation of its provisions does not arise. The position of an assignee, before a decree is passed, is amply safeguarded by the provisions of Order XXII, rule 10, which enables him to obtain the leave of the Court to continue the suit. Thereafter the decree, if any, would be in his name which he could execute. I agree with my learned brother Das, J., that the provisions of Order XXI, rule 16 contemplate the actual transfer by an assignment in writing of a decree after it is passed and that while a transfer of or an agree- ment to transfer a decree that may be passed in future may, in equity, entitle the intending transferee to claim the beneficial interest in the decree after it is passed, such equitable transfer does not render the transferee a transferee of the decree by assignment in writing within the meaning of Order XXI, rule 16. In this respect the decisions of the Madras High Court in Basroovittil Bhandari v. Ramchandra Kamthi((1907] 17 M.L.J. 391)and of the Calcutta High Court in Mathurapore Zamindary Co. Ltd. v. Bhasaram Mandal and Prabashinee Debi v. Rasiklal Banerji are correct.62. As at present advised, I would like to express no opinion as to whether the expression "by operation of law" can be given the interpretation suggested by my learned brother Das, J., as it is unnecessary to do so in the present appeal.63.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]It is quite plain that if .Order XXI, rule 16 is thus construed the respondent company cannot possibly contend that the decree now sought to be executed by them was, after its passing, transferred to them by an assignment in writing within the meaning of that rule, for the document in question was executed on the 7th February 1949 but the decree was passed subsequently on the 15th December 1949. Whether they can claim to have become the transferees of the decree after it was passed by operation of law within the meaning of this rule or to have otherwise become entitled to the benefit of it is a different matter which will be considered later on. For the moment it is enough to say that there had been no transfer of the decree to the respondent company by any assignment in writing executed after the decree was passed, as contemplated and required by Order XXI, ruleis to be noted that to attract the application of this equitable principle there must be an agreement to transfer the decree to be passed in future. As soon as the decree is passed equity fastens upon it and, by treating as done what ought to be done, that is by assuming that the transferor has executed a deed transferring the decree to the transferee as in all conscience he should do equity regards the transferee as the beneficial owner of the after-acquired decree. The equitable principle we are considering only implements or effectuates the agreement of the parties. This equity does not, however, take upon itself the task of making any new agreement for the parties either by filling up the lacunas or gap in their agreement or otherwise. If, therefore, there is no agreement between the parties to transfer the future decree the equitable principle referred to above can- not come into play at all. In order, therefore, to test the propriety of the application of this equitable principle to the facts of the present case we have to enquire whether there was here any agreement between the parties to transfer the decree to be passed in the then pendingHigh Court has held that the decree to be passed was also included in this document. The reasoning appears to be this: Clause 1 of the document comprised six several items of properties. Each of these items referred to "the said Indian business". The Fourth item was "All the book and other debts due to the vendors in connection with the said Indian business and the full benefits of all securities for the debts" and the last and residuary item was "All other property to which the vendors are entitled in connection with the said Indian business". One of the book debts was the subject-matter of the pending suit. The decree that the plaintiff would obtain in, that suit would, therefore, be property or right "in connection with the said Indian business". Therefore, as they were transferring all property in connection with their business they must have intended to transfer the future decree also. Therefore, it must be regarded as covered by the document. I am unable to accept this line of reasoning. It cannot be overlooked that there was no mention in that document of any suit or decree to be passed in that suit as one would have expected if the parties really intended to transfer the future decreethe assignment of the debt the respondent company undoubtedly became entitled to get themselves substituted under Order XXII, rule 10 as plaintiffs in the pending suit but they did not choose to do, so and allowed the transferors to continue the suit and a decree to be passed in their favour. The true position, therefore, is that at the date of the transfer of the debt to the respondent company the transferors could not transfer the decree, because the decree did not exist. On a true construction of the document the transferors agreed only to transfer, besides the five items of specified properties, "All other properties to which the vendors are entitled", that is to say, all properties to which at the date of the document they were entitled. At the date of the document they had the right to proceed with the suit and to get such relief as the Court by its decree might award but no decree had yet been passed in that suit, and, therefore, property to which they were then entitled could not include any decree that might in future bethere is a contract for the transfer of property which is not in existence at the date of the contract, the intending transferee may, when the property comes into existence, enforce the contract by specific performance, provided the contract is of the kind which is specifically enforceable in equity. It is only when the transferor voluntarily executes a deed of transfer as in all conscience he should do or is compelled to do so by a decree for specific performance that the legal title of the transferor in that property passes from him to the transferee. This transfer of title is brought about not by the prior agreement for transfer but by the subsequent deed of transfer. This process obviously involves delay, trouble and expenses. To obviate these difficulties equity steps in again to short circuit the process. Treating as done what ought to be done, that is to say, assuming that the intending transferor has executed a deed of transfer in favour of the intending transferee immediately after the property came into existence, equity fastens upon the after- acquired property and treats the beneficial interest therein as transferred to the intendingis true that that agreement makes the application of the equitable principle possible or I may even say that it sots the equity in motion but, nevertheless, it is equity alone which denudes the transferor of his interest in the after-acquired property and passes it to the intending transferee. That being the true position, as I think it is, the after acquired property cannot, logically and on principle, be said to have been transferred to the intending transferee by the agreement in writing. I do not see on what principle this transfer can be said to relate back to the previousappellants have a right in equity to have the performing rights assigned to them and in that sense are equitable owners of those rights; but they are not assignees of the rights within the meaning of the statute. This contention, therefore, fails",The above observations, to my mind, completely cover the present case. On a parity of reasoning the respondent company may have, by operation of equity, become entitled to the benefit of the decree as soon as it was passed but to say that is not to say that there has been a transfer of the decree by the document of the 7th February 1949. And so it has been held in several cases to which reference may now beplaintiff claiming to be the assignee by way of mortgage of that decree instituted this suit against two defendants. The defendant No. 1 was the plaintiff in the earlier suit who had mortgaged to the plaintiff the decree to be passed in that suit and the defendant No. 2 was a person who claimed to be a transferee of the same decree under a conveyance subsequently executed in his favour by the first defendant. The judgment-debtor under the decree in the first suit was not made a party defendant in this suit. The first defendant did not contest this suit and it was only contested by the second defendant. One of the points raised by the contesting defendant was that this subsequent suit which was one for a, pure declaration of title was bad under section 42 of the Specific Relief Act inasmuch as the plaintiff did not pray for consequential relief in the shape of a permanent injunction restraining him, the contesting defendant, from executing theHigh Court allowed the appeal and by its decree declared that Wahed was in his lifetime and those who became his heirs were entitled to recover the properties in suit. Abedoonissa applied for execution of the decree for herself and for one Wajed who was said to be the posthumous son of Wahed born of her womb. Objection was taken, inter alia, that Wajed was not the legitimate son of Wahed. This objection was overruled and it was held that Abedoonissa was entitled to execute the decree for herself and as the guardian of Wajed. Then the judgment-debtor Abdool died. Abdools widow Ameeroonissa filed a suit for a declaration that Wajed was not the legitimate son of Wahed and for setting aside the last mentioned order. Abedoonissa took the point that the matter was concluded by principles of res judicata. To that Ameeroonissas reply was that the proceeding in which the question of the legitimacy of Wajed was decided was wholly incompetent so far asWajed was concerned because, the decree being in favour of Abedoonissa, Wajed was not a transferee of the decree within the meaning of section 208 of Act VIII of 1859 corresponding to Order XXI, rule 16 of the present Code and could not apply for execution and that being so any adjudication on his status in such proceeding was not binding attransfer of property is not by any assignment in writing executed by the transferor in favour of the transferee but is brought about by the operation of the statutory-provisions relating to and governing execution of decrees. Thus this Privy Council decision itself shows that transfers "by operation of law" were not intended by it to be confined to the three cases of death, devolution or succession.More often than not transfers "by operation of law" will be found to be brought about by the operation of statutory law. Thus when a person dies testate there is a devolution of his properties to his legal representatives by operation of the law of testamentary succession which is now mainly statutory in this country. When a person is adjudged insolvent his properties vest in the official assignee and that transfer is brought about by the operation of the insolvency laws which have been codified. Court sale of property in execution of a decree vests the right, title and interest of the judgment-debtor in that property in the auction-purchaser thereby effecting a transfer by operation of the law embodied in the Code of Civil Procedure. Likewise, statutes in some cases provide for the forfeiture of property, e.g. property in relation to which an offence has been committed, namely, illicit liquor or opium, etc., and thereby effect a transfer of such property from the delinquent owner to the State. It is neither necessary nor profitable to try and enumerate exhaustively the instances of transfer by operation of law. Suffice it to say that there is DO warrant for confining transfers "by operation of law" to transfers by operation of statutory laws. When a Hindu or a Mohammaden dies intestate and his heirs succeed to his estate there is a transfer not by any statute but by the operation of their respective personal law. In order to constitute a transfer of property "by operation of law" all that is necessary is that there must be a passing of one persons rights in property to another person by the force of some law, statutory oris difficult to appreciate the implication of the first proposition. When on a true construction of the deed it actually operates to transfer a decree then in existence, no equitable principle need be invoked, for in that case the transfer is by the deed itself and as such is by an assignment in writing. It is only when the deed does not effectively transfer the decree because, for instance, the decree is not then in existence, but constitutes only an agreement to transfer the decree after it is passed that the invocation of the equitable principle becomes necessary and it is in those circumstances that equity fastens and operates upon the decree when it is passed and effects a transfer of it. If, however, the learned Judges meant to say that if on a true construction of the deed it did not cover the decree then the equitable principle would not come into play at all and in that case the principle of transfer by operation of law could not be invoked, no exception need then beanswer is that those words are not meaningless but have effect in some cases. Take, by way of an illustration, the second proviso to Order XXI, rule 16 which provides that where a decree for payment of money against two or more persons has been transferred to one of them it shall not be executed against the others. This is a provision which forbids one of the judgment-debtors to whom alone the decree for payment of money has been transferred from making an application for execution and, therefore, he cannot apply under section 146 as a person claiming under the decree-holder. As the respondent company do not fall within Order XXI, rule 16 because the document did not cover the decree to be passed in future in the then pending suit that rule cannot be a bar to the respondent company making an application for execution under section 146 if they satisfy the other requirement of that section, namely, that they can, be said to be claiming under thethe premises, in the eye of the law, the position of the transferors, vis-a-vis the respondent company, was nothing more than that of benamidars for the respondent company and when the decree was passed for the recovery of that debt it was the respondent company who were the real owners of the decree. As between the respondent company and the transferors the former may well claim a declaration of their title. Here there is no question of transfer of the decree by the transferors to the respondent company by assignment of the decree in writing or by operation of law and the respondent company cannot apply for execution of thedecree under Order XXI, rule 16. But the respondent company are, nonetheless, the real owners of the decree because it is passed in relation to and for the recovery of the debt which undoubtedly they acquired by transfer by the document under consideration. The respondent company were after the transfer, the owners of the debt which was the subject matter of the suit and the legal incidents thereof and consequently were the real owners of the decree. The respondent company derived their title to the debt by transfer from the transferors and claimed the same under the latter. When the respondent company be, came the owner of the decree immediately on its passing they must, in relation to the decree, be also regarded as persons claiming under the transferors. The respondent company would not have become the owner of the decree unless they were the owners of the debt and if they claimed the debt under the trans- ferors they must also claim the relative decree under the transferors as accretions, as it were, to their original right as transferees of the debt. In my opinion, the respondent company are entitled under section 146 to make the application for execution which the original decree- holders couldresult, therefore, is that this appeal must be dismissed withassignee of a decree could only make one application for execution under Order XXI, rule 1 1 of the Code of Civil Procedure specifying therein the mode in which the assistance of the Courtwas required and it was only after such application had been made to the Court which passed the decree that the Court would issue notice under Order XXIL rule 16 to the transferor and the judgment debtor and the decree would not be executed until the Court had heard their objections if any to its execution.