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HIGH COURT OF CALCUTTA
H. K. Bose
KUVER BANK LTD. (IN LIQUIDATION) - Appellant
Versus
STATE OF WEST BENGAL - Respondent
Matter 388 Of 1957
Decided On : JANUARY 14, 1958
EXECUTION OF DECREE - CONSENT DECREE - VALIDITY - SUIT AGAINST FIRM - DECREE AGAINST FIRM ASSETS - ATTACHMENT OF DEBT DUE TO FIRM - VALIDITY - JURISDICTION OF EXECUTING COURT - SCOPE - CONSENT DECREE - VALIDITY - CHALLENGE IN EXECUTION PROCEEDINGS - LIMITATION.
Fact of the Case:
The petitioner, Kuver Bank Ltd., obtained a consent decree against K. G. Ahmed and Co., a partnership firm, in Suit No. 2393 of 1947. The decree declared that the stock-in-trade and all assets of the business carried on under the name and style of K. G. Ahmed and Co., including its book debts and claims and demands against various departments of Government in respect of works done and/or goods or labour supplied or otherwise and also against other public and private bodies and individuals would stand charged with the repayment of the decretal amount. The Patuakhali Bank Ltd. claimed priority over the petitioner's claim based on an alleged attachment of a sum of Rs. 26,000/- lying with the Controller of Finance, Civil Supplies Department, in favour of K. L. Khabir and Kazi Giasuddin Ahmed, partners of K. G. Ahmed and Co., made on 3rd September 1947. The Income-tax Department also claimed a sum of Rs. 3812/8/- from the State of West Bengal, which was payable to K. G. Ahmed and Co.
Finding of the Court:
The court held that the attachment made by the Patuakhali Bank Ltd. was not valid as the decree obtained by the bank was not against the partnership firm but against the partners in their individual capacities. The court also held that the consent decree obtained by the petitioner was a valid decree against the partnership firm and that the executing court could not go behind the decree to challenge its validity except for certain limited purposes, such as want of jurisdiction. The court further held that the petitioner was entitled to the sums lying in the hands of the Government departments in pro tanto satisfaction of its claim.
Issues: 1. Whether the attachment made by the Patuakhali Bank Ltd. was valid? 2. Whether the consent decree obtained by the petitioner was a valid decree against the partnership firm? 3. Whether the executing court could go behind the decree to challenge its validity? 4. Whether the petitioner was entitled to the sums lying in the hands of the Government departments in pro tanto satisfaction of its claim?
Ratio Decidendi: 1. The attachment made by the Patuakhali Bank Ltd. was not valid as the decree obtained by the bank was not against the partnership firm but against the partners in their individual capacities. (Order 21, Rule 49 (2) of the Code of Civil Procedure) 2. The consent decree obtained by the petitioner was a valid decree against the partnership firm as the suit was intended to be a suit against the partnership firm and the decree was also intended to be a decree against the assets of the partnership. (Order 30, Rule 1 of the Code of Civil Procedure) 3. The executing court could not go behind the decree to challenge its validity except for certain limited purposes, such as want of jurisdiction. (Gora Chand Haldar v. Prafulla Kumar, ILR 53 Cal 166: (AIR 1925 Cal 907) (FB)) 4. The petitioner was entitled to the sums lying in the hands of the Government departments in pro tanto satisfaction of its claim as the petitioner had stepped into the shoes of the judgment-debtor and was therefore entitled to claim the amounts lying in the Government departments.
Final Decision: The court ordered that the petitioner be paid a sum of Rs. 24,576/3/9, Rs. 5798/5/- out of Rs. 12,067/5/-, and Rs. 5370/11/-. The Patuakhali Bank Ltd. was ordered to pay the costs of the petitioner including fees of two counsel. The State of West Bengal was ordered to retain a sum of Rs. 6019/- due to it out of the sum of Rs. 12,067/5/- in their hands. The Union of India was granted liberty to add their costs including fee of the counsel to their claim.
( 1 ) THIS is an application for an order directing the Court Liquidator and certain other parties to pay certain sums of money which are lying in their hands, for appropriating the said sums towards satisfaction of the claim of the petitioner in respect of a decree which the petitioner obtained in Suit No. 2393 of 1947 which was filed in this Court and which sums the petitioner claims to be entitled in priority to the claims put forward by certain other persons.
( 2 ) THE facts which give rise to this application are as follows:
( 3 ) ON the 22nd of August 1947 the petitioner, Kuver Bank Ltd. filed a suit in this Court being Suit No. 2393 of 1947. In this suit as originally filed, three persons namely Kazi Latful Khabir, Kazi Giasuddin Ahmed and one Sushil Kumar Sen were impleaded as defendants and they were described in the cause title as carrying on business in co-partnership under the name and style of K. G. Ahmed and Co. In paragraph 4 of the plaint it was alleged that the defendants agreed in writing that all their partnership assets including the book debts would remain charged with repayment of the dues which are referred to in earlier paragraphs of the plaint. In the prayers of the plaint there was a prayer asking for a declaration that the stock-in-trade and all the assets of the business carried on under the name and style of K. G. Ahmed and Co. be charged with the repayment of the plaintiff's claim. There was also a prayer for sale of the partnership assets and appropriation of the sale proceeds in protanto satisfaction of the plaintiff's claims and there was a further prayer of appointment of a Receiver, if necessary, to realise the book debts of the partnership. There were certain other prayers also.
( 4 ) ON the 18th November 1947, a decree was passed in the said suit by consent of parties. Prior to the passing of the said decree Messrs, Bengal Pioneers Ltd. , a private limited company was added as a party defendant to the suit. The said decree, inter alia, provided as follows: (a) There would be a decree in favour of the plaintiff Bank against all the defendants for a sum of Rs. 2,78,651/4/7 with interest at 6 per cent per annum from the date of the decree and for costs, settled at Rs. 1,000/ -. (b) It was declared that the stock-in-trade and all assets of the business carried under the name and style of Messrs. K. G. Ahmed and Co. , including its book debts and claims and demands against various departments of Government in respect of works done and/or goods or labour supplied or otherwise and also against other public and private bodies and individuals would stand charged with the repayment of the decretal amount. (c) Mr. S. K. Chakravarty, the managing director of the plaintiff bank was appointed Receiver of all stock-in-trade, book debts and also of all claims submitted to the Civil Supplies and other Depts. of Govt. etc. , with powers to the said Receiver to get in and collect all such bills and claims of the said Messrs. K. G. Ahmed and Co. and/or its partners or in both from the Government Departments or private and public bodies or individuals and upon such collection the Receiver was to forthwith pay to the plaintiff bank the decretal amount and costs.
( 5 ) ON the 4th February 1952 Mr. S. K. Chakravarti was discharged from further acting as Receiver and the Official Receiver was appointed Receiver and by order of this Court dated 1-4-1955, the Court Liquidator was appointed Receiver in place and stead of the Official Receiver. In the meantime, on 29-8-1947, a Bank known as the Patuakhali Bank Ltd. , filed a suit in this Court being Suit No. 2480 of 1947 on an overdraft account and Guarantee against a private limited company known as Ujjala Match Factory Ltd. which was impleaded as defendant No. 1 and against the Bengal Pioneers Ltd. which was made defendant No. 2 and against K. L. Khabir and Kazi Giasuddin Ahmed who were impleaded as defendants 'nos. 3 and 4. In the plaint which was
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