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HIGH COURT OF CALCUTTA
B. C. MITRA, S. C. GHOSH
MACKINNON MACKENZIE AND COMPANY PVT. LTD. - Appellant
Versus
ANIL KUMAR SEN - Respondent
Suit 3 Of 1973
Decided On : JUNE 7, 1974
GARNISHEE - ATTACHMENT OF DEBT - DISPUTE OF LIABILITY - TRIAL OF ISSUE - DISCRETION OF COURT - ORDER 21, RULE 46-C, CIVIL PROCEDURE CODE (CALCUTTA AMENDMENT) - ORIGINAL SIDE RULES, CHAPTER XVIII, RULES 2 AND 3.
Fact of the Case:
The appellant, a shipping company's agent, was served with a garnishee notice to pay to the Sheriff a sum of Rs. 1,40,873.15 attached in its hands by an order previously made on the application of the respondent, a decree-holder, who had obtained a consent decree against the judgment-debtor for a sum of Rs. 1,90,000/-. The appellant disputed its liability to pay the judgment-debtor, claiming that it was entitled to set-off a sum of Rs. 31,500/- due to it from the judgment-debtor against the latter's claim for Rs. 1,69,746.39, which was denied by the appellant. The trial court, without raising an issue on the question of the appellant's liability, made an order directing the appellant to pay the attached amount to the Sheriff.
Finding of the Court:
The court held that the trial court erred in making an order for payment without raising an issue on the question of the appellant's liability, as the appellant had raised a real dispute with regard to the claim made by the judgment-debtor. The court observed that where there is a real dispute with regard to the debts sought to be attached, the court should raise an issue on the question of liability of the garnishee to the judgment debtor and try the same on evidence. The court further held that the appellant was entitled to set-off the sum of Rs. 31,500/- due to it from the judgment-debtor against the latter's claim for Rs. 1,69,746.39, as the claim arose out of a series of transactions under a single contract.
Issues: 1. Whether the trial court erred in making an order for payment without raising an issue on the question of the appellant's liability? 2. Whether the appellant was entitled to set-off the sum of Rs. 31,500/- due to it from the judgment-debtor against the latter's claim for Rs. 1,69,746.39?
Ratio Decidendi: 1. Where there is a real dispute with regard to the debts sought to be attached, the court should raise an issue on the question of liability of the garnishee to the judgment debtor and try the same on evidence. 2. A garnishee is entitled to set-off a debt due to it from the judgment-debtor against the latter's claim, where the claim arises out of a series of transactions under a single contract.
Final Decision: The appeal was allowed, the judgment and order of the trial court were set aside, and the matter was remanded to the trial court to be determined upon trial on evidence.
( 1 ) THIS appeal is directed against an order dated February 20, 1974, whereby the appellant was directed to pay to the Sheriff of Calcutta a sum of Rs. 1,40,873. 15 attached in its hands by an order previously made on May 22, 1973. The order was made in garnishee proceeding, the appellant being the garnishee was served with a notice dated June 25. 1973, whereby it was required to pay to the Sheriff the said sum on or before July 26, 1973. or to appear before the court on the appointed date and show cause to the contrary.
( 2 ) ON January 5, 1973, the first respondent instituted a suit in this court for a decree for Rs. 2,16,000/- as money lent and advanced together with interest and costs. In this suit an application was made by the first respondent for an injunction restraining the appellant at garnishee from paying to the second respondent, who was the defendant in the suit, any sum without leaving Rs. 2,16,000/- in its hands and on this application an ex parte ad interim order was made on January 8, 1973, This ad interim order was modified and the appellant as the garnishee was directed to pay Rs. 80,000/-to the second respondent's solicitor to be held by him as receiver. On March 6, 1973, a consent decree was passed in the suit for a sum of Rs. 1,90,000/- and the decretal amount together with interest was payable by specified instalments by the second respondent to the first respondent. There was a default clause in the decree to the effect that in default of payment of the second or the third or the fourth instalment, within the prescribed time or in default of payment of any two monthly instalments, or any two monthly instalments of interest within the prescribed time, the whole of the decretal amount then remaining due would become at once payable and be executable. The second respondent (judgment-debtor) paid the first and the second instalment and a part payment of Rs. 10,000/- for the third instalment, but failed to pay the fourth instalment and also interest subsequently due. Thereupon the first respondent (decree-holder) filed a tabular statement with a supporting affidavit affirmed by him on May 22, 1973. asking for attachment of a sum of Rs. 1,40,873. 15 out of a sum of Rs. 1,60,000/- alleged to be due from the appellant garnishee. An order for attachment was made under Order 21, Rule 46 of the Civil Procedure Code by the Master on May 22, 1973. On May 24. 1973. an order was made in the suit restraining the appellant garnishee from making any payment to the second respondent without leaving a sum of Rs. 1,00,000/- in its hands.
( 3 ) ON behalf of the garnishee an affidavit has been affirmed by Nirode Kumar Sen in which it is stated that the garnishee is the agent of a Shipping Company known as Bank Line Ltd. , at the Port of Calcutta, and the second respondent acted as the Stevedore of Ships owned and chartered by the said Shipping Company. Accounts between the second respondent and the shipping line prior to May 5, 1972, are claimed to have been settled and nothing remained due to the parties from each other. The terms and conditions of the second respondent acting as Stevedore were revised on May 5. 1972, and it acted as the Stevedore on the terms and conditions contained in a letter dated May 5, 1972. It is also claimed that In respect of several ships mentioned in paragraph 8 of the affidavit the Shipping Company advanced large sums of money to the Second respondent for working the vessels. The second respondent submitted its bills for working the vessels, and according to the appellant a sum of Rs. 31,500/- became due and payable by the Shipping Company to the second respondent.
( 4 ) ON May 14, 1973, the second respondent claimed a sum of Rupees 1,69,746. 39 on account of re-imbursement for monthly delivery of Chief Clerk/assistant Chief Clerk. On May 21, 1973, the appellant answered this demand, and stated that the claim for re-imbursement was unjustified, and invalid, but the matter
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