1924. Present: De Sampayo J. and Garvin A. J.

APPUHAMY v. RAMANATHAN.

 37-D. C. Kegalla, 5,186.

Insolvency-Seizure of decree in favour of debtor in execution- of decree against him-Subsequent adjudication of insolvency of debtor- Rights of seizing creditor to proceeds of execution-Insolvency Ordinance, s. Ill-Civil Procedure Code, ss. 254 and 339.

A seized in execution of his decree against his judgment-debtor B a mortgage decree in favour of B. A few days thereafter B was adjudicated an insolvent. A however proceeded with the execution, and realized a stun of which was only sufficient to satisfy A's decree in part. The District Judge refused A's application to draw this sum on the ground that the proceeds should be paid to the credit of the insolvency proceedings.

Held, that A was entitled to draw the money.

By virtue of section 254 of the Civil Procedure Code, B in effect ceased to be the decree-holder when it was seized, and the decree was no part of B's estate when B was adjudicated insolvent.

It is impossible to apply to A the provisions of section 111 of the Insolvency Ordinance, and to hold that he only seized the decree and did not sell it before B's adjudication, as in the case of a seizure of a decree in execution there is no sale' of a decree. Under section 339 of the Civil Procedure Code all that the seizing creditor does is to apply for execution of. the decree for his own benefit and to execute it accordingly.

THE facts are set out in the judgment.

Samarawickreme (with him Wijewardene), for the applicant.

H. V. Perera, for first respondent.

Keuneman, for second respondent.

June 2, 1924. DE SAMPAYO J.-

In this case an interesting and somewhat difficult point has arisen for decision out of the following facts. The plaintiff Carolis Appu-hamy sued the defendant Ramanathan Chetty on a mortgage bond and obtained judgment for a large sum of money. Carolis Appuhamy himself was sued by the appellant in case D. C. Colombo, No. 289, and judgment was entered against him. The appellant as judgment-creditor in the Colombo action seized in execution the decree in Carolis Appuhamy's favour in this action. This was on March 18,1921. It appears that Carolis Appuhamy was adjudicated an insolvent on March 22, 1921, in D. C. Kalutara, No. 170. The appellant, however, proceeded with his execution in this case, and realized a sum of Rs. 4,504 by sale of the defendant Ramanathan's property in May and June, 1921. This sum of money would only partly" satisfy the appellant's decree in the Colombo action. The first respondent, on this appeal, appears to be another judgment-creditor of Carolis Appuhamy, and the second respondent is the petitioning creditor in the insolvency case. On July 26, 1921, the appellant moved to draw the said sum of Rs. 4,504, and was opposed by the first and second respondents. The District Judge refused the motion, and hence this appeal.

The ground of the District Judge's order is that " the money which was realized after Carolis Appuhamy was adjudicated an insolvent becomes an asset of the insolvent's estate, and should be paid to the credit of the insolvency proceedings at Kalutara." Even if this were so, the respondents had no status in the matter. The only person who could have opposed the appellant and claimed the money on behalf of the insolvent estate was the assignee in insolvency. As a matter of fact, on a previous occasion when the appellant sought to draw the money, the assignee appeared and stated he had no cause to show against the appellant's application, except that he suggested that the claim of the appellant as Carolis Appuhamy's judgment-creditor in the Colombo case, No. 289, had been fully paid off, and he stated that he would take steps in the Colombo case. The assignee then made himself a party in the Colombo case, and the District Judge made an inquiry as to the alleged satisfaction of the decree. The Di