M. L. Abdul Jabhar Sahib Vs. H. V.
Venkata Sastri & Sons & Ors [1969] INSC 25 (4 February 1969)
04/02/1969 BACHAWAT, R.S.
BACHAWAT, R.S.
SIKRI, S.M.
HEGDE, K.S.
CITATION: 1969 AIR 1147 1969 SCR (3) 513 1969
SCC (1) 573
CITATOR INFO:
F 1990 SC1888 (2)
ACT:
Transfer of Property Act, 1882 (Act 4 of
1882), ss. 3, 59, 73(1) and 100-Security bond charging properties for payment
of Rs. 50,000 executed to satisfy condition for leave to defend suit under O. 7
Madras High Court Original Side Rules-S. 59 of the T. P. Act whether attracted
to charge under s. 100-Requirements of valid attestation-Security bond did not
require attestation but required registration under s. 17(1)(b) of Registration
Act, 1908 (Act 16 of 1908)Decree of court mentioning that charge created by
security bond enured for benefit of decree holder-Effect of decreeRateable
distribution when permissible-Jurisdiction of High Court-Property situate
outside limits of original jurisdiction under Letters Patent-Objection as to
jurisdiction whether could be raised in circumstances of case.
HEADNOTE:
The appellant filed suit No. 56 of 1953
against H for recovery of certain monies on the basis of promissory notes.
As the suit was under 0. 7 of the Madras High
Court Original Side Rules H was given leave to defend it on furnishing certain
security. Accordingly H executed in favour of the Registrar, Madras High Court,
a security bond charging certain properties 'for the payment of Rs. 50,000,.
The document was attested by only one witness. At the time of registration it
was signed by two identifying witnesses and the Sub-Registrar. The trial Judge
decreed the appellant's suit and the decree mentioned that the charge created
by H's security bond would enure for the benefit of the decree holder. In execution
proceedings the properties in question were sold and the proceeds deposited in
court. At this stage the three respondents who also held money decrees against
H applied to the Court for ratable distribution of the assets realised in the
execution of the appellant's decree in suit No. 56 of 1953. The trial Judge
dismissed their applications. In Letters Patent Appeals the High Court held
that in the absence of attestation by the two witnesses the security bond
executed by H was invalid inasmuch as a charge on property created under s. 100
of the Transfer of Property Act attracted the provisions of s. 59.
As to the decree passed in suit No,. 56 of
1953 the High Court held that in view of the decree holder's omission to amend
the plaint by adding a prayer for enforcement of the charge the decree should
be construed as containing merely a recital of the fact that a security bond
had been executed.
On these findings the High Court held that
the respondents were entitled to rateable distribution. Against the High
Court's orders the appellant filed appeals in this Court.
On the question of attestation he contended
that the subRegistrar and the two identifying witnesses must also be treated as
having attested the security bond.
HELD : (i) The essential conditions of a
valid attestation under s. 3 of the Transfer of Property Act are : (1) two or
more witnesses have seen the executant sign the instrument or have received
from him a personal acknowledgment of his signature; (2) with a view to attest
or to hear witness to this fact each of them has signed 'the instrument in the
presence of the executants. It is essential that the witness should have put
his signature animo attestendi, that is, for the purpose of attesting that he
has seen the executant sign or-has received from him a personal acknowledgment
of his signature. If a person puts his signature on the docu514 meat for some
other purpose, e.g., to certify that he is a scribe or an identifier or a
registering officer, he is not an attesting witness. [519 C-D] Prima facie the
registering officer puts his signature on the document in discharge of his
statutory duty under s. 59 of the Registration Act and not for the purpose of
attesting it or certifying that he has received from the executant a personal
acknowledgment of his signature.[520 B-C] In the present case the evidence did
not show that the registering officer and the identifying witnesses signed the
document with the intention of attesting it. Nor was it shown that the
registering officer signed it in the presence of the executant. The document
could not therefore be said to have been attested by these witnesses and must
be held to have been signed by one attesting witness only. [520 D] Veerappa
Chettiar v. Subramania, I.L.R. 52 Mad. 123, Girja Datt v. Gangotri, A.I.R. 1955
S.C. 346, Abinash Chandra Bidyanidhi Bhattacharya v. Dasarath Malo, I.L.R. 56
Cal.
598, Shiam Sundar Singh v. Jagannath Singh,
54 M.L.J,. 43 and Surendra Bahadur Singh v. Thakur Behari Singh, 1939 (2)
M.L.J. 762, referred to.
(ii)Section 100 of the Transfer of Property
Act does not attract the provisions of s. 59. [521 C-D] The first paragraph of
s. 100 consists of two parts. The first part concerns the creation of a charge
over immovable property which may be by act of parties or by operation of law.
No restriction is put on the manner in which a charge can be made. [521 C] When
such a charge has been created the second part comes into play. It provides
that all the provisions hereinbefore contained which apply to a simple mortgage
shall, so far as may be, apply to such charge. The second part does not address
itself to the question of creation of a charge. It does not attract the
provisions of S. 59 relating to the creation of a mortgage. The second part
moreover makes no distinction between a charge created by act of parties and a
charge by operation of law. Obviously the provision of s.
59 are not attracted to a charge by operation
of law.
Likewise the legislature could not have
intended that the second part would attract the provisions of s. 59 to a charge
created by act of parties. [521 D-E] If a charge can be made by a registered
instrument only in accordance with s. 59, the subsequent transferee will always
have notice of the charge in view of s. 3 of the Act. But the basic assumption
of the doctrine of notice enunciated in the second paragraph is that there may
be cases when the subsequent transferee may not have notice of the charge.
The plain implication of this paragraph is
that A charge can be made without any writing. [521 F-G] If a non-testamentary
instrument creates a charge of the value of Rs. 100/or upwards the document
must be registered under s. 17(1) (b) of the Indian Registration Act, 1908. But
there is no provision of law which requires that an instrument creating the
charge must be attested by witnesses. [521 G-H] The object of the second part of
the first paragraph of s. 100 is to make it clear that the rights and
liabilities of the parties in case of a charge shall so far as may be the same
as the rights and liabilities of the parties of a simple mortgage. It was not
intended to prescribe any particular mode for the creation of a charge. [522 B]
515 It followed that the security bond in the present case was not required to
be attested by witnesses. It was duly registered and was valid and operative.
[522 C] Viswanadhan v. Menon, I.L.R. [1939] Mad. 199 and Shiva Rao v.
Shanmugasundaraswami I.L.R. [1940] Mad. 306, disapproved.
Baburao v. Narayan, I.L.R. 1949 Nag. 802,
819-822, approved.
(iii)The decree in suit No. 56 of 1963 on its
true construction declared that the security bond created a charge over the
properties in favour of the plaintiffs for payment of the decretal amount and
gave them the liberty to apply for sale of the properties for the discharge of
the encumbrance. Pursuant to the decree the properties were sold and the assets
were held by the court. The omission to ask for an amendment of the plaint was
an irregularity, but that did not affect the construction of the decree. [522 DE]
(iv)The immovable properties had been sold in execution of a decree ordering
sale for the discharge of the encumbrance thereon in favour of the appellant.
Section 73(1) proviso (c) therefore applied and the proceeds of the sale after
defraying the expenses of the sale must be applied in the first instance in
discharging the amount due to the appellant. Only the balance left after
discharging this amount could be distributed among the respondents. [523 B]
(v)Since the respondents' own case rested on the assumption that the properties
were lawfully sold they could not be allowed to raise the objection that the
High Court had no territorial jurisdiction for sale of properties outside the
local limits of its ordinary original jurisdiction. [522 G] Seth Hiralal Patni
v. Sri Kali Nath, [1962] 2 S.C.R. 747, 751-52, Bahrein Petrolium Co. Ltd. v. P.
J. Pappu, [1966] 1 S.C.R. 461, 462-63 and Zamindar of Etiyapuram v. Chidambaram
Chetty, I.L.R. .43 Mad . 675 (F.B.), referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 272 to 274 of 1966.
Appeals by special leave from the judgment
and order dated July 28, 1961 of the Madras High Court in O.S.A. Nos. 65, 70
and 71 of 1956.
K.N. Balasubramaniam and R. Thiagarajan, for
the appellant (in all the appeals).
R.Gapalakrishnan, for respondents Nos. 2 to 4
(in C.A. No. 272 of 1966), respondents Nos. 1 and 2 (in C.A. No. 273 of 1966)
and respondent No. 1 (in C.A. No. 274 of 1966).
The Judgment of the Court was delivered by
Bachawat, J. On February 23, 1953 the appellant instituted C.S. No. 56 of 1953
on the Original Side of the Madras High Court under the summary procedure of
Order 7 of the Original Side Rules against Hajee Ahmed Batcha claiming a decree
for Rs. 40,556/1/2/and Rs. 8,327/12/9/said to be due under two I promissory
notes executed by Haji Ahmed Batcha. On March 9 1953, Hajee Ahmed Batcha
obtained leave to defend the suit on condition of his furnishing the security
for a sum of 516 Rs. 50,000 to the satisfaction of the Registrar of the High
Court. On March 26, 1953 Hajee Ahmed Batcha executed a security bond in favour
of the Registrar of the Madras High Court charging several immoveable
properties for payment of Rs. 50,000. The condition of the bond was that if he
paid to the appellant the amount of any decree that might be passed in the
aforesaid suit the bond would be void and of no effect and that otherwise it
would remain in full force.
The bond was attested by B. Somnath Rao. It
was also signed by K. S. Narayana Iyer, Advocate, who explained the document to
Hajee Ahmed Batcha and identified him. All the properties charged by the bond
are outside the local limits of 'the ordinary original jurisdiction of the
Madras High Court. The document was presented for registration on March 29,
1.953 and was registered by D. W. Kittoo, the SubRegistrar of Madras-Chingleput
District. Before the SubRegistrar, Hajee Ahmed Batcha admitted execution of the
document and was identified by Senkaranarayan, and Kaki Abdul Aziz. The
identifying witnesses as also the SubRegistrar signed the document. Hajee Ahmed
Batcha died on February 14, 1954 and his legal representatives were substituted
in his place in C.S. No. 56 of 1953. On March 19, 1954 Ramaswami, J. passed a
decree for Rs. 49,891/13/with interest and costs and directed payment of the
decretal amount on or before April 20, 1954. While passing the decree, he observed
:-"It is stated that the defendant has executed a security bond in respect
of their immoveable properties when they obtained leave to defend and this will
stand enured to the benefit of the decree-holder as a charge for the decree
amount.".
Clauses 3 and 4 of the formal decree provided
"(3) that the security bond executed in respect of their immoveable
properties by defendants 2 to 4 in pursuance of the order dated 9th March 1953
in application No. 797 of 1953 shall stand enured to the benefit of the
plaintiff as a charge for the a amounts mentioned in clause 1 supra;
(4).that in default of defendants 2 to 4
paying the amount mentioned in clause 1 supra on or before the date mentioned
in, clause 2 supra the plaintiff shall be at liberty to apply for the
appointment of Commissioners for, sale of the aforesaid properties." The
appellant filed an application for (a) making absolute the charge decree dated
March 31, 1954 and directing sale of the properties; and (b) appointment of
Commissioners for selling them. On April 23, 1954 the Court allowedthe
application, appointed Commissioners for selling of the properties and directed
that the relevant title deeds and security bond be handed over 5 17 to the
Commissioners. The Commissioners sold the properties on May 29 and 30, 1954.
The sales were confirmed and the sale proceeds were deposited in Court on July
2, 1954.
All the three respondents are simple money
creditors of Hajee Ahmed Batcha. The respondents Venkata Sastri & Sons
filed O.S. No' 13 of 1953 in the Sub-Court, Vellore, and obtained a decree for
Rs. 5,500 on March 27, 1953.
Respondent H.R. Cowramma instituted O.S. No.
14 of 1953 in the same Court and obtained a money decree on April 14, 1953. The
two decree-holders filed applications for execution of their respective
decrees. One Rama Sastri predecessors of respondents H.R. Chidambara Sastri and
H.R.
Gopal Krishna Sastri obtained a money decree
against Hajee Ahmed Batcha in O.S. No. 364 of 1951/52 in the Court of the
District Munsiff, Shimoga, got the decree transferred for execution through the
Court of the District Munsiff, Vellore, and filed an application for execution
in that Court. On June 7, 1954 the aforesaid respondents filed applications in
the Madras High Court for (i) transfer of their execution petitions pending in
the Vellore courts to the file of the High Court and (ii) an order for rateable
distribution of the assets realized in execution of the decree passed in favour
of the appellant in C.S. No. 56 of 1953. The appellant opposed the applications
and contended that as the properties were charged for the payment of his
decretal amount, the sale proceeds were not available for rateable distributing
amongst simple money creditors. The respondents contended that the security
bond was invalid as it was not attested by two witnesses and that the decree
passed in C.S. No. 56 of 1953 did not create any charge.
Balakrishna Ayyar, J. dismissed all the
applications as also exemption petitions filed by the respondents. He held that
the decree in C.S. No. 56 of 1953 did not create a charge on the properties.
But following the decision in Veerappa Chettiar v. Subramania(1) he held that
the security bond was sufficiently attested by the Sub-Registrar and the identifying-witnesses.
The respondents filed appeals against the orders. On March 28, 1958 the
Divisional Bench hearing the appeals referred to a Full Bench the following
question "Whether the decision in Veerappa Chettiar v. Subramania lyer
(I.L.R. 52 Mad. 123) requires reconsideration." The Full Bench held
"In our opinion, such signatures of the registering officer and the
identifying witnesses endorsed on a mortgage document can be treated as those
of attesting witnesses if' (1) the signatories are those who have seen the
execution or received a personal acknowledgment (1) I.L.R. 52 Mad. 123.
518 from the executants of his having
executed the document, (2) they sign their names inthe presence of the executants
and (3) while so doing they had the animus to attest. The mere presence of the signatures
of the registering officer or the identifying witnesses on the registration
endorsements would not by themselves be sufficient to satisfy the requirements
of a Valid attestation; but it would be competent for the parties to show by
evidence that any or all of these persons did in fact intend to and did sign as
attesting witness as well." The Full Bench held that the decision in
Veerappa Chettiar's Case(1) can be held to, be correct to this limited extent
only and not otherwise. At the final hearing of the appeals, the Divisional
Bench held that ( 1 ) a charge by act of parties could be created only by a
document registered and attested by two witnesses; (2) the security bond was
not attested by two witnesses and was therefore invalid; (3) the decree in C.S.
No. 56 of 1953 should be construed as containing nothing more than a recital of
the fact of there having been a security bond in favour of the plaintiff; and
the sale in execution of the decree must be regarded as a sale in execution of
a money decree; and (4) tie respondents were entitled to an order for rateable
distribution. Accordingly, the Divisional Banch allowed the appeals, directed
attachment of the sale proceeds and declared that the respondents were entitled
to rateable distribution along with the appellant. The present appeals have
been filed after obtaining special leave from this Court.
The following questions arise in these
appeals : (1) Is the security bond attested by two witnesses; (2) if not, is it
invalid? (3) does the decree in C.S. No. 56 of 1953 direct sale of the
properties for the discharge of a charge thereon, and (4) are the respondents
entitled to rateable distribution of the assets held by court.? As to the first
question, it is not the case of the appellant that K.S. Narayana Iyer is an
attesting witness. The contention is that the Sub-Registrar D.W. Kittoo and the
identifying witnesses Senkaranarayana and Kaki Abdul Aziz attested the
document. In our opinion, the High Court rightly rejected this contention.
Section 3 of the Transfer of Property Act
gives the definition of the word "attested" and is in these words :"Attested",
in relation to an instrument, means and shall be deemed to have meant attested
by two or more witnesses each of whom has seen the executant sign or affix his
mark to the instrument, or has seen some other person sign the instrument in
the presence and by the (1) I.L.R. 52 Mad. 123.
519 direction of the executant, or has received
from the executant a personal acknowledgment of hissignature or mark, or of the
signature of such other person, and each of whom has signed the instrument in
the presence of the executant; but it shall not be necessary that more than one
of such witnesses shall have been present it the same time and no particular
form of attestation shall be necessary." It is to be noticed that the word
"attested", the thing to be defined,. occurs as part of the
definition itself. To attest is to bear witness. to a fact. Briefly put, the
essential conditions of a valid attestation under s. 3 are :
(1 ) two or more witnesses. have seen the
executant sign the instrument or have received from him a personal
acknowledgment of his signature; (2) with a view to attest or to bear witness
to this fact each of them has. signed the instrument in the presence of the
executant. It is essential that the witness should haveput his signature animo
attestandi, that is, for the purpose of attesting that he has seen the
executant sign or has received from him a personal acknowledgment of his
signature. If a person puts his signature on the document for some other
purpose, e.g., to certify that he is a scribe or an identifier or a registering
officer, he is not an attesting witness.
"In every case the Court must be
satisfied that the names were written animo attestandi", see Jarman on
Wills, 8th ed.
137. Evidence is admissible to show whether
the witness had the intention to attest. "The attesting witnesses must
subscribe with the intention that the subscription made should be complete
attestation of the will, and evidence is admissible to show whether such was
the intention or not," see Theobald on Wills, 12th ed. p. 129. ,In Giria
Datt v. Gangotri (1)the Court held that the two persons who had identified the
testator at the time of the registration of the will and had appended their
signatures at the foot of the endorsement by the Sub-Registrar, were not
attesting witnesses. as their signatures were not put "animo attestandi".
In Abinash Chandra Bidvanidhi Bhattacharya v. Dasarath Malo(2) it was held that
a person who had put his name under the word "scribe" was not an
attesting witness as he had put his signature only for the purpose of
authenticating that he was a "scribe". In Shiam Sundar Singh v.
Jagannath Singh (3) the Privy Council held that the legatees who had put their
signatures on the will in token of their consent to its execution were not
attesting witnesses and were not disqualifled from taking as legatees.
The Indian Registration Act, 1908 lays down a
detailed procedure for registration of documents. The registering officer is;
(1) A.I.R. 1955 S.C. 346,351. (3) 54 M.L.J.
43.
(2) I.L.R. 56 Cal. 598 5 under a duty to
enquire whether the document is' executed by the person by whom it purports to
have been executed and to satisfy himself as to the identity of the executant,
s.
34(3). He can register the document if he is
satisfied about the identity of the person executing the document and if that
person admits execution, [s. 25(1)]. The signatures of the executant and of
,every person examined with reference to the document are endorsed on the
document, (s.
58). The registering officer is required to
affix the date and his signature to the endorsements (s. 59). Prima facie, the
registering officer puts his signature on the document in discharge of his
statutory duty under s. 59 and not for the purpose of attesting it or
certifying that he has received from the executant a personal acknowledgment of
his signature.
The evidence does not show that the
registering officer D.W. Kitto put his signature on the document with the
intention of attesting it. Nor is it proved that he signed the document in the
presence of the executant. In these circumstances he cannot be regarded as an
attesting witness see SurendraBahadur Singh v. Thakur Behari Singh(1).
Like identifying witnesses Senkaranarayana
and Kaki Abdul Aziz signatures on the document to authenticate the fact that
they have identified the executants. It is not shown that they put their
signatures for 'the purpose of attesting the document. They cannot therefore be
regarded as attesting witnesses.
It is common case that B. Somnath Rao
attested the document.
It follows that the document was attested by
one witness only.
As to the second question, the argument on
behalf of the respondents is that s. 100 of the Transfer of Property Act
attracts s. 59 and that a charge can be created only by a document signed,
registered and attested, by two witnesses in accordance with s. 59 where the
principal money secured is Rs. 100 or upwards. The High Court accepted this
contention following its earlier decisions in Viswanadhan v. Menon(2) and Shiva
Rao v. Shanmugasundara swami (3) and held that the security bond was, invalid,
as it was swami attested b one witness only. We are unable to agree with this
opinion. Section 100 is in these terms "Where immoveable property of one
person is by act of parties or operation of law made security for the payment
of money to another, and the transaction does not amount to a mortgage, the
latter person is said to have a charge on the property', and all the provisions
hereinbefore contained which apply to a simple mortgage shall, so" far as
may be, apply to such charge.
(1) (1939) 2 M.L.J. 762. (2) I.L.R.
[1939].Mad. 199.
(3) I.L.R. [1940] mad. 306.
521 Nothing in this section applies to the
charge of a trustee on the trust property for expenses property incurred. in
the execution of his trust, and, save as otherwise expressly provided by any
law for the time being in force no charge shall be enforced against any
property in the hands of a person to whom such property has been transferred
for consideration and without notice of the charge.
The first paragraph consists of two parts.
The first part concerns the creation, of a charge over immoveable property.
A charge may be made by act of parties or by
operation of law. No restriction is put on the manner in which a charge can be
made. Where such a charge has been created the second part comes into play. It
provides that all the provisions hereinbefore contained which apply to a simple
mortgage shall; so far as may be, apply to such charge. The second part does
not address itself to the question of creation of a charge. It does not attract
the provisions of s. 59 relating to the creation of a mortgage.
With regard to the applicability of the
provisions relating to a simple mortgage, the second part of the first
paragraph makes no distinction between a charge created by act of parties and a
charge by operation of law. Now a charge by operation of law is not made by a
signed, registered and attested instrument. Obviously, the second part has not
the effect of attracting the provisions of s. 59 to such a charge. Likewise the
legislature could not have intended that the second part would attract the
provisions of s. 59 to a charge created by act of parties. Had this been the
intention of the legislature the second part would have been differently
worded.
If a charge can be made by a registered
instrument only in accordance with s. 59, the subsequent transferee will always
have notice of the charge in view of s. 3 under which registration of the
instrument operates as such a notice.
But the basic assumption of the doctrine of
notice enunciated in the second paragraph is that there may be cases where the
subsequent transferee may not have notice of the charge. The plain implication
of this paragraph is that a charge can be made without any writing.
If a non-testamentary instrument creates a
charge of the value of Rs. 100 or upwards, the document must be registered
under s. 17 (1) (b) of the Indian Registration Act. But there is no provision
of law which requires that an instrument creating the charge must be attested
by witnesses.
Before s. 100 was amended by Act 20 of 1929
it was well settled that the section did not prescribe any particular mode of
creating a charge. The amendment substituted the words "all 522 the
provisions hereinbefore contained which apply to a simple mortgage shall, so
far as may be, apply to such charge," for the words "all the provisions
hereinbefore contained as to a mortgagor shall, so far as may be, apply to the
owner of such property, and the provisions of sections 81 and 82 shall, so far
as may be, apply to the person having such charge." The object of the
amendment was to make it clear that the rights and liabilities of the parties
in ,case of a charge shall,, so far as may be, the same as the rights, and
liabilities of the parties to a simple mortgage. The amendment was not intended
to prescribe any particular mode for the creation of a charge.
We find that the Nagpur High Court came to a
similar conclusion in Baburao v. Narayan(1). It follows that the security bond
was not required to be attested by witnesses.
It was duly registered and was valid and
operative.
As to the third question, we find that the
decree dated March 19, 1954 declared that the security bond in respect of the
immovable I properties would enure for the benefit of the appellant as a charge
for the decretal amount. This relief was granted on the ,oral prayer of the
plaintiffs.
We are unable to agree with the High Court
that in view of the omission to amend the plaint by adding a prayer for
enforcement of the charge, the decree should be construed as containing merely
a recital of the fact that a security bond had been executed. In our opinion,
the decree on its true construction declared that the security bond created a
charge over the properties in favour of the plaintiffs for payment of the
decretal amount and gave them the liberty to apply for sale of the 'properties
for the discharge of the encumbrance. Pursuant to the decree the properties
were sold and the assets are now held by the Court. The omission to ask for, an
amendment of the plaint was an irregularity, but that does not affect the
construction of the decree.
It was suggested that the decree was invalid
as the High Court had no territorial jurisdiction under clause 12 of its
Letters Patent to pass a decree for sale of properties outside the local limits
of its ordinary original jurisdiction. For the purpose of these appeals, it is
sufficient to say that the respondents cannot raise this question in the
present proceedings. If the decree is invalid and the sale is illegal on this
ground, the respondents cannot maintain their applications for rateable
distribution of the assets. They ,,can ask for division of the sale proceeds
only on the assumption that the properties were lawfully sold. It is therefore
unnecessary to decide whether the objection as to the territorial jurisdiction
of the High Court has been waived by the judgment-debtor and cannot now be
agitated by him and persons claiming through him, having regard to the
decisions in Seth Hiralal Patni v. Sri Kali (1)I.L.R. [1949] Nag.
802,1819-822., 523 Nath(1), Behrein Petroleum Co. Ltd., v. P. J. Pappu (2) ,
Zamindar of Etiyapuram v. Chidambaram Chetty(1).
As to the 4th question we find that the
immoveable properties have been sold in execution of a decree ordering sale for
the discharge of the encumbrance thereon in favour of the appellant. Section
73(1) proviso (c) therefore applies and the proceeds of sale after defraying
the expenses of the sale must be applied in the first instance in discharging
the amount due to the appellant. Only the balance left after discharging this
amount can be distributed amongst the respondents. It follows that the High
Court was in error in holding that the respondents were entitled to rateable
distribution of the assets along with the appellant.
In the result, the appeals are allowed, the
orders passed by the Divisional Bench of the Madras High Court are set aside
and the orders passed by the learned Single Judge are restored. There will be
no order as to costs.
G.C. Appeals allowed.
(1) [1962] 2 S.C.R. 747,751-2.
(2) [1966] 1 S.C.R. 461,462-3.
(3) I.L.R. 43 Mad. 675 (F.B).
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