Case Summary
Citation | Jugalkishore v. Raw Cotton Co. AIR 1955 SC 376 |
Keywords | Firm, Literal rule, Summary suit, Order 22 Rule 10, Order 21 Rule 11 CPC |
Facts | Habib & Sons filed a summary suit against Jugalkishore for the recovery of Rs. 7113 with 6 % p.a. interest which was due by him to the firm. During the pendency of the suit, the business transferred to Raw Cotton Co. and all of its assets and debts. One of book debts was the subject matter of the suit, but the suit or decree to be passed in the suit was mentioned in the transfer document. The respondent did not take any step to get themselves substituted as plaintiffs in place of Habib & Sons but allowed the suit to continue in the name of original plaintiff. A decree was passed in favour of plaintiff against the appellant. The respondent filed an application for execution of the decree under 21 Rule 11. |
Issues | Whether the Respondent company can claim to be the transferees of the decree within the meaning of Order 21 Rule 16? |
Contentions | |
Law Points | Court observed that the transfer in writing of a property which is the subject matter of a suit without in terms transferring the decree passed or to be passed in the suit does not entitle the transferee to apply for execution of the decree by an assignment in writing. If by reason of any provision of law, statutory or otherwise, interest in property passes from one person to another, there is a transfer of the property by operation of law. The expression under section 146, “save as otherwise” means a person cannot make an application under section 146 if other provisions are applicable to it. Order 21 Rule 11 contemplates that actual transfer by an assignment in writing of a decree after it is passed. |
Judgement | Court held that respondent as the transferee of the debt which was the subject matter of the suit, were entitled to make an application for execution of the decree under section 146 as person claiming under the decree-holder. |
Ratio Decidendi & Case Authority |
Full Case Details
S. R. DAS J. – The facts leading up to this appeal are few and simple. Two persons named Mahomedali Habib and Sakerkhanoo Mahomedali Habib used to carry on business as merchants and pucca ‘adatias’ in bullion and cotton at Bombay under the name and style of Habib and Sons. In 1948 that firm instituted a suit in the Bombay City Civil Court, being Summary Suit No. 233 of 1948, against the present appellant Jugalkishore Saraf, (A Hindu inhabitant carrying on business at Bombay) for the recovery of Rs. 7,113-7-0 with interest at 6 percent per annum said to be due by him to the firm in respect of certain transactions in gold and silver effected by the firm as pucca ‘adatia’.
On 7-2-1949 when that summary suit was still pending a document was executed whereby it was agreed that the two partners would transfer and Messrs. Raw cotton Company, Limited, (hereinafter called the respondent company) would accept the transfer of, ‘interalia’, all book and other debts due to them in connection with their business in Bombay and full benefit of all securities for the debts and all other property to which they were entitled in connection with the said business. The respondent company did not take steps under O. 22, R. 10, Civil P. C. to get
themselves substituted as plaintiffs in the place and stead of Habib and Sons, the plaintiffs on record, but allowed the suit to be continued in the name of the original plaintiffs. On 15-12-1949 a decree was passed in the summary suit for the sum of Rs. 8,018-7-0 for the debt and interest and the sum of Rs. 410 for costs of the suit, aggregating to Rs. 8,428-7-0, and for further interest at 4 per cent. Per annum from the date of the decree until payment.
Habib and Sons being the plaintiffs on record the decree was passed in their favour.
On or about 25-4-1951 the respondent company presented before the Bombay City be an application for execution under O. 21, R. 11, Civil P.C. In the last column of the tabular statement, under the heading “The mode in which the assistance of the Court is required”, the respondent company prayed that the Court “be pleased to declare the Applicants the assignees of the decree as the decretal debt along with other debts had been transferred by the plaintiffs to the Applicants by a deed of assignment dated 7-2-1949. There was, in that column, no specification of any of the modes in which the assistance of the Court might be required as indicated in Clause (j) of O. 21, R. 11 of the Code. On 10-5- 1951 the Bombay City Civil Court issued a notice under O. 21, R. 16 of the Code to Habib and
Sons, who were the decree-holders on record, and Jugalkishore Saraf, who was the defendant judgment-debtor, requiring them to show cause why the decree passed in the suit on 15-12- 1949 in favour of the plaintiffs and by them transferred to the respondent company, should not be executed by the said transferees against the said defendant judgment-debtor. The defendant judgment-debtor showed cause by filing an affidavit affirmed by him on 15- 6-1951. Amongst other things, he denied that the document in question had been executed or that the document transferred the decree to the respondent company. The Principal question urged before us is as to whether the respondent company can claim to be the transferees of the decree within the meaning of O. 21, R. 16, Civil P. C.
Order 21, R. 16, Civil P. C., omitting the local amendments which are not material for our present purpose, provides-
“16. Where a decree or, if a decree has been passed jointly in favour of two or more persons the interest of any decree-holder in the decree is transferred by assignment in writing or by operation of law, the transferee may apply for execution of the decree to the Court which passed it; and the decree may be executed in the same manner and
subject to the same conditions as if the application were made by such decree-holder:
Provided that, where the decree or such interest as aforesaid, has been transferred by assignment, notice of such application shall be given to the transferor and the judgment-debtor, and the decree shall not be executed until the Court has heard their objections (if any) to its execution:
Provided also that, where a decree for the payment of money against two or more persons has been transferred to one of them, it shall not be executed against the others.” The first thing that strikes the reader is the sequence of events contemplated by this rule. It postulates, first, that a decree has been passed and, secondly, that that decree has been transferred (i) by assignment in writing or (ii) by operation of law. The cardinal rule of construction of statutes is to read the statute literally, that is by giving to the words used by the legislature their ordinary, natural and grammatical meaning. If, however, such a reading leads to absurdity and the words are susceptible of another meaning the Court may adopt the same. But if no such alternative construction is possible, the Court must adopt the ordinary rule of literal interpretation. In the present case a literal construction of the rule leads to no apparent
absurdity and, therefore, there can be no compelling reason for departing from that golden rule of construction.
It is quite plain that if O. 21, R. 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 7-2-1949 but the decree was passed subsequently on 15- 12-1949.
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 decree also. In this connection it is significant that the residuary item covered “All properties to which the vendors ‘are’ entitled” and not all properties to which they might in future become entitled. Reference may also be made to the provisions of the Transfer of
Property Act. Under S. 8 of that Act the transfer of property passes to the transferee all the interest which the transferor is ‘then’ capable of passing in the property and in the legal incidents thereof, and if the property transferred is a debt or actionable claim, also the securities therefore.
It is urged that as the respondent company thus became entitled, by virtue of this document read in the light of S. 8, to all the rights and remedies including the right to prosecute the pending suit and to obtain a decree the decree that was eventually passed automatically and immediately upon its passing must be taken as having been transferred by this very document. This argument appears to me to really amount to a begging of the question.
The transfer of the debt passed all the interest which the transferors were ‘then’ capable of passing in the debt and in the legal incidents thereof. There was ‘then’ no decree in existence and, therefore, the transferors could not ‘then’ pass any interest in the non-existing decree. Therefore, S. 8, T. P. Act, does not assist the respondent company. Upon the assignment of the debt the respondent company undoubtedly became entitled to get themselves substituted under O. 22, R.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 decreed 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 be passed. It is significant that there was, in the document, no provision purporting in terms to transfer any future decree.