Case: T.S. Swaminathaudayar Vs. The Official Receiver Of West Tanjore

1. These appeals with certificates of fitness under Art. 133 of the Constitution raise an interesting question as to the equities arising out of a partition between the erstwhile members of a joint family.        2. A suit for partition of the properties belonging to a well known Odayar family in the West Tanjore District was filed in the Court of the Subordinate Judge of Kumbakonam (being Original Suit No. 22 of 1924). Amongst the parties to that suit were defendants Nos. 3 and 6, Balaguruswami Odayar and Swaminatha Odayar respectively, the former of whom is the natural father of the latter, who went by adoption into another branch of the family. Defendant No. 6 was entitled to a 4/15th share and defendant No. 3 was entitled to a 2/15th share in the properties belonging to the joint family. A preliminary decree for partition was passed on 25th October 1924. The defendant No. 3 became insolvent during the pendency of an appeal which was taken against that preliminary decree. The Official Receiver of West Tanjore who represented the branch of the third defendant was impleaded as a party to the suit on 12th February 1929. The final decree for partition was passed on 26th September 1932, by the Subordinate Court at Kumbakonam. The defendant No. 6 carried an appeal to the High Court of Judicature at Madras being A.S. No. 60 of 1933 and the High Court ultimately passed a final decree on 9th May 1938.        3. Under the terms of this decree certain properties fell to the share of the third defendants branch and for the purpose of equalising on partition the Official Receiver of West Tanjore, representing the third defendants branch was ordered to pay a sum of Rs. 24, 257-0-8 to the defendant NoThis amount was to carry interest at 6 per cent. per annum from 26th September 1932, and there were various adjustments ordered inter se. It was further ordered that the Official Receiver of West Tanjore in whom the estate of the third defendants branch was vested should sell such portions of the estate as were not subject to the charge for the maintenance of the ninth defendant in order to pay off the amounts decreed to be paid by the third defendant and should make payments on behalf of the third defendants branch in accordance with the judgment therein.        4. The last direction was given by the High Court in C.M.P. No. 5697 of 1939 substituting the words be at liberty in para. 4 (b) of the decree in A.S. No. 60 of 1933 by the words be directed and incorporating the words third Defendants Branch wherever the third Defendant had been used in that paragraph. The occasion for the giving of this direction was that after the final decree for partition had been passed by the High Court on 9th May 1938, the parties applied to the High Court to give directions for working out their rights inter se. When these directions came to be given the Official Receiver of West Tanjore was present in Court and stated to the Court that he had no objection to sell such portions of the estate as would be sufficient to pay off the amount declared due by the third defendants branch to the defendant NoIt was in pursuance of such statement made by the Official Receiver of West Tanjore that the High Court did not declare a charge on the properties which had fallen to the share of the third defendants branch (as it was originally contemplated in the judgment) for the amount of Rs. 24, 257-0-8.        5. The Official Receiver of West Tanjore had in the meanwhile sold on 5th July 1935, certain items of properties which had fallen to the share of the third defendants branch and realised a sum of Rs. 8,250. On 25th January 1940, the defendant No. 6 who is the appellant before us filed a petition under O. 21, R. 11, sub-r. (2), Civil P.C., being E.P. No. 15 of 1940 praying that the Court should direct the Official Receiver of West Tanjore representing the third defendants branch (the respondent before us) to pay to him or to deposit into Court Rs. 8, 250, for the realization of Rs. 36, 983-9-6 which was the amount due to him from the third defendants branch inclusive of interest as per the decree of the High Court dated 9th May 1938, in A.S. No. 60 of 193respondent did not oppose this claim of the appellant at that stage. Two other decree-holders, one Thinnappa Chettiar and the other Palaniappa Chettiar had obtained decrees against defendant No. 3 and defendant No. 4 on promissory notes executed by the latter on date 14th March 1925, the decree in favour of Thinnappa Chettiar being dated 15th August 1929, and that in favour of Palaniappa Chettiar being dated 17th July 1928. On 3rd July 1935, Thinnappa Chettiar filed a petition under O. 21, Rr.11 (2), 54, 62, 66, Civil P.C., being E. P. No. 25 of 1935 praying for the realisation of Rs. 35, 224-2-6 by attachment and sale of immovable properties belonging to his judgment-debtor. On 4th July 1935 he attached the shares of the sons of the defendant No. 3, and defendant No. 4 in these immovable properties but in so far as the attachment was not levied the sales effected by the respondent on 5th July 1935, of the properties falling to the share of the third defendants branch were upheld. On 30th September 1935, Thinnappa Chettiar filed an application being E.A. No. 376 of 1935 under S. 151 of the Civil P.C., praying that a sum of Rs. 6,600 realised after the order of attachment obtained by him as aforesaid be sent for from the respondent and paid to him by means of a cheque. E.P. No. 25 of 1935 and E.A. No. 376 of 1935 were dismissed by the District Judge on 14th August 1937. Thinnappa Chettiar filed A. A. O. Nos. 349 and 350 of 1937 against these orders of the District Judge and on 10th August 1939, the High Court holding that the leave of the Insolvency Court was not necessary before these proceedings in execution had been taken, remanded both E. P. No. 25 of 1935 and E.A. No. 376 of 1935 to the District Court for disposal according to law. The learned District Judge, in order to avoid conflict of decisions and to save difficulties of multiplicity of proceedings allowed the appellant to be made a party in E.P. No. 25 of 1935 and E.A. No. 376 of 1935 and Thinnappa Chettiar was made a party to the proceedings in E.P. No. 15 of 1940. The learned District Judge passed a comprehensive order in all these three matters, viz., E.P. No. 25 of 1935, E.A. No. 376 of 1935 and E.P. No. 15 of 1940 which came up for hearing before him. He held that even though the word charge as such had not been used in the High Courts decree in A.S. No. 60 of 1933, the directions given by the High Court to the respondent, under the circumstances of the case, created a charge on the properties which fell to the share of the third defendants branch. This was the basis of the petition which had been filed by the appellant being E.P. No. 15 of 1940 and the learned District Judge observed:6. The learned District Judge accordingly directed the respondent to deposit into Court to the credit of E.P. No. 15 of 1940 the sale proceeds in question, viz., Rs. 8, 250 minus his legitimate expenses for payment to the appellant. E.A. No. 376 of 1935 was dismissed with costs of the respondent and E.P. No. 25 of 1935 was adjourned to 21st January 1942, for further proceedings with regard to other lots of properties. Thinnappa Chettiar filed appeals against these orders being A.A.O. Nos. 229, 429 and 483 of 1942 in the High Court.        7. In the meanwhile, on 9th January 1942, the respondent deposited a sum of Rs. 5,200 in Court to the credit of the appellants decree. On 5th February 1940, the learned District Judge made a further order allowing the respondent to sell the properties which he was directed to sell by the High Courts order dated 9th May 1938 in A.S. No.60 of 1933, to pay the petitioner so directed by the High Court notwithstanding the attachment as was ordered in E.P. No. 25 of 1935 and free of that attachment. On 11th May 1942, a sum of Rs. 5, 500 being the sale proceeds of certain properties belonging to the share of the third defendants branch was adjusted by the appellant and on 23rd January 1940, the respondent paid to the appellant a further amount of Rs. 26,966 adjusting a further sum of Rs. 1l for costs due by the appellant.        8. The high Court disposed of the A.A.O. Nos. 229, 429 and 483 of 1942 on 5th November 1943. It held that the procedure adopted by the learned District Judge of impleading strangers as parties to the execution petition and the execution applications before it could not be supported and ordered that the appellant and Thinnappa Chettiar should be deleted from the array of parties in E.P. No. 25 of 1935, E.A. No. 376 of 1935 and E.P. No. 15 of 1940. It also held that no charge was created by the decree dated 9th May 1938, in A.S. No. 60 of 1933 in respect of the sum of Rs. 24, 237-0-8 awarded to the appellant under the decree. It observed that It is clear from the language used that the learned Judges who disposed of A.S. No. 60 of 1933 did not intend to create a charge and the decree did not have the legal effect of creating a charge. In the result, the High Court ordered that the name of Thinnappa Chettiar should be, struck out from the array of parties in E.P. No. 15 of 1940 and the name of the appellant should be struck out from the array of parties in E.P. No. 25 of 1935 and E.A. No. 376 of 1935 and further ordered that all the three applications be remanded to the lower Court for disposal on the merits in the light of the observations contained in the order.        9. As a result of the decision of the High Court negativing the appellants claim to priority, the respondent filed on 29th July 1944, E.A. No. 182 of 1944 praying that the Court do issue a cheque for Rs. 5, 200 deposited by him on 9th January 1942. On 7th August 1944 the appellant, in his turn, filed an Application being E.A. No. 195 of 1944 praying that the Court do issue a cheque for Rs. 5,200 deposited by the respondent as due to him under the decree dated 9th May 1938. While these applications were pending, the respondent filed a petition being Execution Petition No. 35 of 1944 on 27th September 1944, under Ss. 144, and 151 and O. 21, Rr. 11 and 37, Civil P.C. praying that the Court do order payment by the appellant to him of (1) the sum of Rs. 5, 200 deposited by him in Court on 8th January 1942, and claimed by him in E.A. No. 182 of 1944; (2) sale proceeds adjusted by the appellant on 11th May 1942, together with interest thereon at 6 per cent. per annum from 11th May 1942, aggregating to Rs. 6, 283-12-0; (3) the amount paid on 23rd June 1942, by the appellant being Rs. 26, 966 and (4) the amount adjusted by the respondent for costs due by him on 23rd June 1942, being Rs. 11, items 3 and 4 aggregating to Rs. 26,977 together with interest thereon from 23rd June 1942, up to date at 6 per cent. per annum amounting to Rs. 3,722-13-6. Thus he claimed a sum of Rupees 42,183-9-6 in the aggregate from the appellant.        10. All these matters - E.A. No. 182 of 1944 and E A . No. 195 of 1944 and EP. No. 35 of 1944 were heard by the District Judge on 14th July 1945. The learned District Judge understood the order of the High Court dated 5th November 1943, to mean that the claim of the appellant to priority was still to be adjudicated upon. He stated that all that had been held by the High Court was that the decree in A.S. No. 60 of 1933 did not have, the legal effect of creating a charge in favour of the appellant and the question whether the appellant was not entitled to priority in respect of his claim was not concluded by that decision, since it depended upon the circumstances and situation of parties in the first litigation itself (i.e., O. S. No. 22 of 1924, Sub-Court Kumbakonam and A.S. No. 60 of 1933, High Court) and the reason which then led the Official Receiver, who was present when the order was made in A.S. No. 60 of 1933 to submit that he was prepared to sell such parts of the estate as might be necessary for satisfying the decree passed in favour of the appellant, On scrutinizing these facts, the learned District Judge came to the conclusion that in respect of the sums due to him under the partition decree, directed to be paid from the estate of the third defendants branch as equitable adjustment, the appellant had really a superior title and, assuming for a moment that the direction related instead to a specific item of immovable property, it was obvious that such an item would not have formed part of the estate in insolvency at all. In the result he held that the respondent was not entitled to restitution in respect of the payments made and the appellant was clearly entitled to such amounts, and also to the amount then in deposit since the estate in insolvency did not itself comprise these assets in the strict legal sense. The applications E.P. No. 35 of 1944 and E.A. No. 182 of 1944 were accordingly dismissed. E.A. No. 195 of 1944 was allowed and the appellant was declared entitled to the amount deposited in Court.        11. The respondent carried appeals to the High Court against these orders of the District Judge being A.A.O. Nos. 724, 725 and 726 of 1945. The High Court appreciated the force of the arguments advanced before it on behalf of the appellant but felt itself bound by the construction put upon the judgment and decree by the High Court on 5th November 1943, observing that even if that construction were not strictly binding on it as a decision on a pure question of law in the nature of a judicial precedent by another Division Bench of that Court would undoubtedly be, it would feel highly loath to deny it the respect to which it was entitled at its hands in the interests of judicial committee, whatever be the construction which it would have imposed upon the same, had the question arisen for the first time before it. It, therefore, held that the appellant was debarred by the principles of constructive res judicata from raising other grounds of priority of preference after remand which had no relation to the decree which was the basis of the E.P. No. 15 of 1940. The High Court also expressed the opinion that even assuming there was no res judicata in his favour, the provisions of the Provincial Insolvency Act being what they were, the appellant could claim no priority if his position as a secured creditor as defined in S. (2)(e) of the Act could not be sustained. A further argument was advanced before the High Court and it was that a provision in a partition decree for a mere payment by one cosharer to another of a sum of money for equalisation of shares per se constituted a charge by operation of law over the share allotted to the sharer made liable for the payment without any creation of charge by the Court by express language or necessary implication. The High Court refused to entertain that argument in view of the conclusion reached by it as above and also negetived the contention which was urged on behalf of the appellant before it that the provision for such payment in the partition decree was an owelty provision observing that all that was meant was equality and all that the expression owelty provision in the context implied was a provision for adjustment or equalization of shares and no more. The High Court accordingly came to the conclusion that the respondent was entitled to the restitution sought by him and allowed the appeals with costs before it and in the Court below. The order of the learned District Judge was set aside, and E.P. No. 35 of 1944 and E.A. No. 182 of 1944 were allowed and E.A. No. 195 of 1944 was dismissed.        12. The appellant applied for and obtained from the High Court certificates of fitness under Art. 133 of the Constitution and that is how these appeals are before us.

Court's reasoning:
If this was the true position as it obtained, and we are of the opinion that it was, then, the orders under appeal passed by the High Court were clearly wrong. There was no justification for the respondent to ask for a withdrawal of the sum of Rs. 5,200 which he had earlier deposited into Court on January 9, 1942, or for the restitution of the sums of Rs. 5, 500 and Rs. 26,966 and Rs. 11 together with interest thereon as claimed.These monies had been paid by the respondent in pursuance of the directions contained, in the decree dated May 9, 1938 in A.S. No. 60 of 1933 and they had been rightly paid by him and they could never be the subject-matter of any execution proceedings as initiated by him. Apart from the question whether S. 144 read with S. 151 of the Civil Procedure Code was at all applicable in the circumstances of the case, we are of the opinion that the claim made by the respondent for the aforesaid sums was absolutely unjustified. We are accordingly of the opinion that the orders passed by the High Court in A.A.O. Nos. 724, 725 and 726 of 1945 were wrong and should be reversed30. The respondent wrote on November 21, 1953, to the Registrar of this Court to say that none of the creditors had come forward to finance the defence of the appeals and the Insolvency Court, i.e., the Sub-Court, Tanjore had ordered that the matters might be left undefended as the funds in the estate were insufficient to defend the appeals at the cost of the estate. He, therefore, requested that when the appeals were heard and decided a direction might be given by this Court that there should he no order for costs against him, We do not see how, we can absolve the respondent from liability to pay the costs which must normally follow the event5. From this judgment the appellant appealed to this Court and these are the appeals now before us for hearing