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1968 Supreme(AP) 126
Andhra Pradesh High Court
Judges : B.P.JEEVAN REDDY, M.N.RAO
Sammac Enterprises, a registered firm rep.by its Managing Partner - Appellant
Versus
RAVULA VEERA RAGBAVA RAO - Respondent
Decided On : 07-26-68
Attachment levied by one creditor will not enure to the benefit of other non-attaching creditors of the judgment-debtor who apply for execution before realization of the assets of the judgment-debtor.
Headnote:
ATTACHMENT - ENURES FOR BENEFIT OF OTHER CREDITORS - SCOPE OF EXPLANATION UNDER SECTION 64 CPC - ATTACHMENT BY ONE CREDITOR - BENEFIT TO OTHER CREDITORS - SECTION 64 CPC - INTERPRETATION - RATABLE DISTRIBUTION - SECTION 73 CPC - APPLICABILITY - MORTGAGEE - PRIORITY - SECTION 73 TRANSFER OF PROPERTY ACT - APPLICATION - PRIVATE ALIENATION AFTER ATTACHMENT - VOID - SECTION 64 CPC - EXPLANATION - CLAIMS ENFORCEABLE UNDER ATTACHMENT - RATABLE DISTRIBUTION - SECTION 73 CPC - ATTACHMENT - NECESSITY - SECTION 64 CPC - APPLICABILITY - REVISION PETITION - MAINTAINABILITY - EXECUTION APPLICATION IN EXECUTION PROCEEDINGS - PROCEDURAL IRREGULARITY - IGNORANCE - ORAL REQUEST FOR LEAVE TO APPEAL TO SUPREME COURT - REJECTION - ORAL REQUEST FOR SUSPENSION OF JUDGMENT - GRANT FOR TWO MONTHS.
Fact of the Case:
Attachment of a property at the instance of one creditor enures for the benefit of other subsequent creditors of the judgment-debtor who apply for execution before realization of the assets of the judgment-debtor by the attaching court. The scope of the explanation appended under section 64 of the Code of Civil procedure falls for examination and determination.
Finding of the Court:
Attachment levied by one creditor will not enure to the benefit of other non-attaching creditors of the judgment-debtor who apply for execution before realization of the assets of the judgment-debtor. If so, the claims of the secured creditors (mortgagees) must prevail over the claims of the unsecured creditors who took no care to attach the properties themselves. The rights of these secured creditors (petitioners herein) are subject only to the rights of Krishna Kumari, the attaching creditor-D. H.
Issues: 1. Whether attachment of a property at the instance of one creditor enures for the benefit of other subsequent creditors of the judgment-debtor who apply for execution before realization of the assets of the judgment-debtor by the attaching court? 2. Whether the scope of the explanation appended under section 64 of the Code of Civil procedure falls for examination and determination? 3. Whether under Section 64 of the code of Civil Procedure the attachment levied by one creditor will not enure to the benefit of other non-attaching creditors of the judgment-debtor who apply for execution before realisation of the assets of the judgment-debtor? 4. Whether the claims of the secured creditors (mortgagees) must prevail over the claims of the unsecured creditors who took no care to attach the properties themselves? 5. Whether the rights of these secured creditors (petitioners herein) are subject only to the rights of Krishna Kumari, the attaching creditor-D. H?
Ratio Decidendi: 1. Section 64 CPC is of no avail to a party who has not levied attachment, since the enforceability of the claims under the section are inextricably interlinked with the attachment being levied. 2. Under Section 64 of the code of Civil Procedure the attachment levied by one creditor will not enure to the benefit of other non-attaching creditors of the judgment-debtor who apply for execution before realisation of the assets of the judgment-debtor. 3. If so, the claims of the secured creditors (mortgagees) must prevail over the claims of the unsecured creditors who took no care to attach the properties themselves. 4. The rights of these secured creditors (petitioners herein) are subject only to the rights of Krishna Kumari, the attaching creditor-D. H.
Final Decision: Both the revision petitions are allowed, but in the circumstances without costs. The petitioner in crp No. 5063/78 is entitled to receive payment from out of the surplus sale proceeds lying with the court below only after the claims of the prior mortgagee, the petitioner in CRP no. 227/81 are satisfied. Of course, krishna Kumari, the attaching decreeholder s claim shall be satisfied in the first instance and before anybody else.
( 2 ) PLACE the papers before the honourable the Acting Chief Justice for posting these two revision petitions before a Division Bench. These petitions Coming on for hearing before the Bench consequent upon the older of the Court Dt. 3-9-1985 referred to above. The court delivered the following : judgment (Judgment of the Bench delivered by M R. Rat), J.)
( 3 ) THESE two revision petitions concern with Section 64 of the Civil procedure Code and they have come before us on a reference by our learned brother Ramanujulu Naidu, J The order of reference reads : "in these two revision petitions the question raised is whether attachment of a certain property at the instance of one creditor enutes for the benefit of"other subsequent creditors of the judgment debtor who apply for execution before reallsation of the assets of the judgment debtor by the attaching Court so as to defeat the rights of the intervening mortgaged. In other words, the scope of the explanation appended under section 64 of the Code of Civil Procedure falls for examination and determination. As the question raised before me is of frequent occurrence and the executing Courts are invariably called upon to deal with the claims arising under section 64 of the Code of Civil Procedure I am of the opinion that an authoritative pronouncement on this question by a division Bench of this Court is necessary. "
( 4 ) BOTH the civil revision petitions arise out of a common order made by the learned I Addl. Subordinate Judge vijayawada in a batch of applications disposed of on 17-8-1978 For the sake of convenience the parties are referred to as arrayed in CRP 5063/78. The 3rd respondent obtained a decree on 30-8-1962 in 0 S No. 30/61 on the file of the Sub Court, Bapatla, against the first respondent for Rs 4,000/ -. She levied attachment before judgment in respect of a building belonging to the first respondent. Subsequent to the decree the property was brought to sale on 24-2-1975 and sold for Rs. 1,30,000/- the sale was confirmed on 14-8-1975. The first respondent judgment debtor executed a simple mortgage subsequent to the attachment bafore judgment, in respect of the building in question, in favour of the State Bank of Hyderabad, vijayawada the 2nd respondent. 0 S no. 58/73 was the suit filed by the state Bank of Hyderabad in the court of the Subordinate Judge, Vijayawada in which a decree was granted against the first respondent judgment debtor. Subsequent to the said mortgage in favour of the Stata Bank of Hyderabad, the first respondent-judgment debtor executed two mortgage deeds in favour of the revision petitioner in respect of the same building : one on 25-6-71 for rs. 45,000/- and the other on 28-6-71 for Rs. 25,000/- The revision petitioner filed O S No 119/75 on the file of the sub-Court, Vijayawada and obtained a decree on 5-8-75 for Rs. 1,24,291/- besides the aforesaid two creditors, some other persons including respondents 4, 5 and 6 obtained simple money decrees against the Judgment-debtor. E P 334/73 was the execution petition filed by the 3rd respondent (attaching judgment creditor) to realise the decretal amount of Rs. 4,000/- in O S No. 30/61. Afte
