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1973 Supreme(Mad) 281

High Court of Judicature at Madras
KAILASAM & N.S. RAMASWAMI
K. Balachandran
Versus
A.M. Muthyyan Mudaliar
S.A. No. 595 of 1970
Decided On :Decided on: 25-04-1973

Advocates Appeared:
For the Petitioner:R. Gopalaswamy Iyengar, Advocate.
For the Respondent:P.S. Ramachandtan, Advocate.

The attaching creditor can waive the benefit of the attachment as against a private alienation. S. 64, C.P.C. does not render private alienations void against the whole world, but only voidable at the option of the attaching creditor or persons whose claims are enforceable under the attachment.

Headnote:

ATTACHMENT - WAIVER OF BENEFIT - ATTACHING CREDITOR - PRIVATE ALIENATION - S. 64, C.P.C. - INTERPRETATION AND EFFECT - ATTACHING CREDITOR CAN WAIVE BENEFIT OF ATTACHMENT AS AGAINST PRIVATE ALIENATION - PRIVATE ALIENATION NOT VOID AGAINST WHOLE WORLD BUT VOIDABLE AT OPTION OF ATTACHING CREDITOR OR PERSONS WHOSE CLAIMS ARE ENFORCEABLE UNDER ATTACHMENT.

Fact of the Case:

Respondent obtained a money decree and attached the suit property belonging to the judgment debtors. While the attachment was subsisting, the respondent took a mortgage of the suit property from the judgment debtors for a sum of Rs. 1,500, but this mortgage was not in discharge of the money decree. Subsequently, the judgment debtors effected two other mortgages in favor of third parties. The property was brought to sale in pursuance of the money decree and the appellant purchased it. The proclamation for the sale mentioned that the mortgage in favor of the respondent was subsisting and the proposed sale was subject to the said mortgage. The respondent filed a suit to enforce his mortgage.

Finding of the Court:

The court held that the mortgage in favor of the respondent was not binding on the appellant. The court found that the respondent had waived the benefit of the attachment by taking a mortgage of the suit property from the judgment debtors for a sum other than the decree amount. The court also held that S. 64, C.P.C. does not render private alienations void against the whole world, but only voidable at the option of the attaching creditor or persons whose claims are enforceable under the attachment.

Issues: 1. Whether the respondent had waived the benefit of the attachment by taking a mortgage of the suit property from the judgment debtors for a sum other than the decree amount? 2. Whether S. 64, C.P.C. renders private alienations void against the whole world?

Ratio Decidendi: 1. The court held that the respondent had waived the benefit of the attachment by taking a mortgage of the suit property from the judgment debtors for a sum other than the decree amount. The court relied on the decision in Gangayya v. Venkataramayya, where it was held that the attaching creditor can waive the benefit of the attachment as against a private alienation. 2. The court held that S. 64, C.P.C. does not render private alienations void against the whole world, but only voidable at the option of the attaching creditor or persons whose claims are enforceable under the attachment. The court relied on the decision in Anund Lossdass v. Jullodhur Shaw, where it was held that the object of S. 64, C.P.C. is to make the sale null and void, so far as it might be necessary to secure the execution of the decree, relates only to alienations which would affect the creditor who obtained the attachment.

Final Decision: The second appeal was dismissed with costs.

Judgment :-

(N.S. RAMASWAMI, J.):—

1. This second appeal is before us on a reference made by Ismail, J. The question raised before the learned Judge was regarding the construction and effect of S. 64, C.P.C. The respondent in the second appeal obtained a money decree in O.S. No. 516 of 1952 on the file of the court of the District Munsif, Tindivanam, and after the decree was transferred to the court of the District Munsif, Nagapattinam, he attached the suit property belonging to the judgment debtors in that case. The attachment was effected on 4th December 1959. While the attachment was subsisting, the money decree holder (respondent in the second appeal) took a mortgage of the suit property from the judgment debtors in the money decree for a sum of Rs. 1,500, but this mortgage was not in discharge of the money decree that he had obtained in O.S. 516 of 1952, but in discharge of several other debts due to him.

2. Subsequent to the abovesaid mortgage in favour of the respondent, the judgment debtors in the money decree effected two other mortgages; one, dated 5th August, 1962 and the other dated 15th August, 1962, in favour of third parties.

3. The property was brought to sale in pursuance of the money decree in O.S. No. 516 of 1952. The proclamation for the sale was made on 8th June 1966 and it was ultimately sold on 25th July, 1966, the auction purchaser being the appellant before us. In the proclamation it is mentioned that the mortgage dated 19th January, 1961 in favour of the respondent herein is subsisting and the proposed sale in court auction was only subject to the said mortgage. It is further mentioned that the two subsequent mortgages, one dated 5th August 1962 and the other dated 15th August 1962, are invalid as they have been effected after the attachment.

4. The present second appeal arose out of the suit filed by the present respondent on the mortgage dated 19th January 1961. He impleaded not only the two judgment debtors in the earlier money decree but also the mortgagees under the two subsequent mortgages, one dated 5th August, 1962 and the other dated 15th August, 1962, as well as the court auction purchaser of the property, the 5th defendant in the suit who is the appellant before us. The question before the courts below was whether the mortgage was binding on the appellant or not. The trial court found that it was not binding, but on appeal, he learned District Judge, East Tanjore at Nagapattinam, held that it was binding on the appellant.

5. When the second appeal came up before Ismail, J., the contention on behalf of the appellant was that once the attachment was effected, continued and in pursuance of the attachment the court sale took place, full effect must be given to S. 64, C.P.C., and there is no question of the decree older waiving the benefit resulting from the attachment, since the benefit of the attachment is not available only to him but is available to all the persons claiming under the attachment. The contention on behalf of the respondent (the decree holder mortgagee) was that the attachment is for the benefit of the attaching decree holder and therefore it is open to him to waive the benefit and take a private alienation of the property from the judgment-debtors and the auction purchaser who comes on the scene subsequently and purchases the property with the knowledge of the private alienation cannot question the same. As there is no direct authority on this point, the learned Judge felt that it was desirable that the question should be decided by a Bench and that is how the second appeal is before us.

6. The earliest case throwing light on this question is Anund Lossdass v. Jullodhur Shaw 14 M.I.A. 543. That was a case arising under S. 240 of Act VIII of 1859 corresponding to S. 64 of the present C.P.C. S. 240 was in the following terms:—

“After any attachment shall have been made by actual seizure, or by written order as aforesaid, and in case of an attachment by written order after it shall

















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