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1995 Supreme(Mad) 773

High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE SRINIVASAN
Udayakumar - Appellant
Versus
Muruganandham and Another - Respondents
C.R.P. No. 2369 of 1995
Decided On : 19 September 1995

Appearing Advocates: For

Assignment of a decree does not depend on recognition by the Court. The Court is bound to pass an order recognizing the assignment of the decree in favor of the petitioner when the transferor and judgment-debtor were served and remained ex parte.

Headnote:

ASSIGNMENT OF DECREE - RECOGNITION - ORDER 21, RULE 16, C.P.C. - ASSIGNMENT OF DECREE DOES NOT DEPEND ON RECOGNITION BY COURT - COURT BOUND TO PASS ORDER RECOGNIZING ASSIGNMENT WHEN TRANSFEROR AND JUDGMENT-DEBTOR SERVED AND REMAINED EX PARTE.

Fact of the Case:

Petitioner filed an execution petition for executing the decree passed in O.S. No. 206 of 1990, claiming to be the assignee decree holder. The executing Court failed to recognize the petitioner as the assignee decree holder and dismissed the petitioner's application for sending the sale amount from another execution proceeding to the credit of the suit in O.S. No. 206 of 1990 for ratable distribution.

Finding of the Court:

The Court held that the assignment of a decree does not depend on the recognition of the transfer by the Court. The Court is bound to pass an order recognizing the assignment of the decree in favor of the petitioner when the transferor and judgment-debtor were served and remained ex parte.

Issues: Whether the assignment of a decree is effective without recognition by the Court.

Ratio Decidendi: The Court relied on the Supreme Court decision in Dhani Ram Gupta v. Lal Sri Ram, which held that the property in a decree passes to the transferee under a deed of assignment when the parties to the deed and assignment intend such property to pass. It does not depend on the recognition of the transfer.

Final Decision: The Court allowed the Civil Revision Petition, set aside the order of the Subordinate Judge, and directed the Subordinate Judge to recognize the petitioner as the assignee decree holder and consider the petitioner's application for sending the sale amount from another execution proceeding to the credit of the suit in O.S. No. 206 of 1990 for ratable distribution.

Judgment :-

Heard both sides. The order of the learned Judge is unsustainable. The petitioner has filed execution petition in H.P.R. No. 80 of 1995 for executing the decree passed in O.S. No. 206 of 1990. He has stated in that petition that he got assignment of the decree from the plaintiff decree holder on 28-10-94 for proper consideration. There is a prayer in the said petition under Order 21, Rule 16, Code of Civil Procedure, for recognising him as assignee decree holder. He has also prayed for further reliefs in the execution petition. Notice was ordered in the said petition by the executing Court returnable by 2-4-1995. On 3-4-1995 the matter was taken up. The Court recorded that service had been effected and it was sufficient. The respondent in the execution petition viz., the original decree holder and the judgment-debtor remained absent. They were set ex parte. The matter directed to be called on 7-4-1995. The executing Court ought to have ordered on that day itself the prayer recognising the petitioner herein as the assignee decree holder. But, without doing so, the executing Court adjourned the matter. It was thereafter adjourned from time to time.

2. E.A. No. 88 of 1995 is a petition filed by the petitioner herein for passing an order to send for the entire sale amount, which was with the District Munsif Court, Pollachi, in pursuance of the sale held in H.P.R. No. 101 of 1993 as per the decree in O.S. No. 356 of 1991 to the credit of the suit in O.S. No. 206 of 1990 for ratable distribution of the assets of the judgment-debtor. The Court in which the execution proceedings in O.S. No. 206 of 1990 is pending, is a superior Court. In the said application, the judgment-debtor in the suit and the decree holder in O.S. No. 356 of 1991, are impleaded as respondents. H.A. No. 89 of 1995 is for stay of further proceedings in execution of the decree till the disposal of I.A. No. 88 of 1995.

3. In these applications notice was ordered to the respondents therein. On 3-4-1995, the Court reported that service on the 1st respondent in the said application, i.e. the judgment-debtor in the suit was sufficient and that he was absent. He was not ex parte. The 2nd respondent, who is the decree holder in O.S. No. 356 of 1991, entered appearance through an Advocate by name C. Venkatachalapathy. He took time for filing counter. The matter was adjourned to 10-4-1995 on which date, it was heard. On 17-4-1995, the Court passed the order, which is impugned in this Civil Revision Petition.

4. The said order is one of dismissal of H.A. No. 88 of 1995 on the ground that the petitioner herein was not recognized as the assignee decree holder in the execution proceedings. The learned Subordinate Judge has observed that no notice was issued to the decree holder in O.S. No. 206 of 1990 and no order has been passed accepting the assignment of the decree in favour of the petitioner herein. The said observation is clearly erroneous. The entries in the certified copy of the execution petition and the orders passed therein show that the decree holder in O.S. No. 206 of 1990 was served and he remained absent and was set ex parte by the executing Court. In those circumstances, the Court ought to have passed an order recognising the assignment. Even if such an order is not passed, it is open to the executing Court to recognise the assignment and proceed further to consider the prayer made by the petitioner herein.

5. In Dhani Ram Gupta v. Lal Sri Ram, the Supreme Court has held the property in a decree passes to the transferee under a deed of assignment when the parties to the deed and assignment intend such property to pass. It does not depend on the recognition of the transfer. Order 21, Rule 16, C.P.C. neither expressly nor by implication provides that assignment of a decree does not take effect until recognised by the Court. It is true that while Order 21, Rule 16 enables a transferee to apply for execution of the decree the first proviso to Order 21, Rule 1





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