Tuesday, 8 November 2016

Whether decree holder can execute decree against other judgment debtors if proceeding is stayed against one judgment debtor?

There a joint Hindu family firm consisting of father and son was sued and the father alone being served with summons, a decree was obtained against the firm. Execution was taken out against the father and son. The son raised the objection that execution could not be granted against him in view of Order 21, Rule 50. This objection was upheld by this Court.
The objection as to limitation is sought to be met on the ground that by reason of the order dated 3rd May 1926, staying execution, the decree-holder would, under Section 15, Limitation Act, be entitled to exclude the period from that date till 3rd February 1936, when the insolvency case was finally disposed of. But the effect of the order staying execution was to prevent the decree-holder from executing the decree as against Nandji, the insolvent.
11. The decree-holder was still at liberty to execute the decree against the present objectors. As against them the order dated 3rd May 1926, did not interpose any bar so as to stop the running of time. The present execution therefore is barred both under Article 182 of Schedule 1, Limitation Act, and under Section 48, Civil P.C.
 Citation : AIR 1940 Pat 149
IN THE HIGH COURT OF PATNA
Decided On: 29.08.1939
Nathuni Prasad and Ors.
Vs.
Firm Radha Kishun Dutt Rai
Coram:
Chatterji and Rowland, JJ.




1. This appeal arises out of an execution proceeding. The decree under execution which is a money' decree was obtained by the respondent on 12th December 1925, in the Munsif's Court at Benares against a firm named Ajodhyaram Nandji. This firm, according to the decree-holder, was a joint Hindu family firm consisting of Nandji and his sons and nephew: the nephew has since died leaving a widow. In the suit Nandji was the only person who was served with the summons. The decree-holder got the decree transferred to the Munsif's Court at Siwan and presented in that Court an application for execution on 6th February 1926, which was registered as execution case No. 36 of 1926. This execution was directed against the firm. On 24th April 1926, Nandji filed an application for insolvency; on the same day he made an application in the execution case praying for stay of further proceedings till the disposal of the insolvency case.
2. The prayer was allowed by order dated 3rd May 1926. It appears however that no injunction was passed in the insolvency case staying the execution. Nandji was adjudicated an insolvent on 25th May 1926. The execution case was ultimately struck off on 31st January 1927, as neither party took any steps. The insolvency case was finally disposed of on 3rd February 1936, when Nandji was granted discharge.
In the course of the insolvency proceedings the decree-holder proved his debt and made attempts to realize it by sale of the joint family properties of Nandji and his sons and nephew.
3. He succeeded in selling the interest of Nandji alone in those properties as the sons and nephew of the latter took the objection that their interest could not be sold by the receiver. This objection was accepted by the Court by its final order, dated 3rd February 1936. The decree-holder thereafter filed the present application for execution on 23rd December 1937, for recovery of the decretal amount less what was realized by sale of Nandji's share in the insolvency proceedings. In the application in the column of judgment-debtors are mentioned, besides Nandji, his four sons and three widows of the family, one of whom is the brother's widow of Nandji. The four sons of Nandji and his brother's widow came up with objections under Section 47, Civil P.C., alleging that they were not judgment-debtors under the decree sought to be executed, that the execution was barred by limitation and that they were not liable for the debt of Nandji.
4. The learned Munsif substantially accepted these objections and dismissed the execution case. On appeal the learned District Judge has reversed his decision and ordered execution to proceed. He has found that the objectors are not judgment-debtors, but they are liable for the payment of the decree against Nandji to the extent of their shares in the joint family property. He has also overruled the plea of limitation. This appeal has been preferred by the four sons and the brother's widow (of Nandji).
On behalf of the appellants, three points have been urged by Mr. Mitter. (1) That Nandji's debt was extinguished by reason of the provisions of Section 44(2), Provincial Insolvency Act; (2) that having regard to the provisions of Order 21, Rule 50, Civil P.C., execution cannot be granted against the objectors because they never appeared in the suit as partners, nor were they individually served as such with summons in the suit; and (3) that the execution is barred by limitation both under Section 48, Civil P.C., and under Article 182 of Schedule 1, Limitation Act. In my opinion all these contentions must prevail.
5. As regards the first contention, there can be no doubt that if the decree was against Nandji alone, the effect of the order of discharge was to extinguish the debt. Section 44(2), Provincial Insolvency Act, is decisive on the point. It lays down that "save as otherwise provided by Sub-section (1) an order of discharge shall release the insolvent from debts provable under the Act." For the present purpose the provisions of Sub-section (1) are not relevant and need not be referred to. Mr. Mukherji on behalf of the respondent suggests that though by virtue of the provisions of Section 44(2), Provincial Insolvency Act, the debt payable by Nandji might be extinguished, the sons' pious obligation nevertheless remained. This is a proposition which it is difficult to understand.
6. The sons' pious obligation arises on account of the existence of the father's debt. If the debt itself is extinguished, the very foundation of the pious obligation is gone.
Mr. Mukherji's main contention however is that the decree was not against Nandji alone but against the joint family firm, in other words, against the other co-parceners as well. But neither of the Courts below has found as a fact that the firm Ajodhyaram Nandji is the joint family business of Nandji and his co-parceners. The sons specifically denied that it was their joint family business. The learned District Judge seems to have accepted the position that the judgment-debtor under the decree was Nandji and Nandji alone.
7. If however it is assumed that Nandji's sons and nephew also were judgment-debtors under the decree, the institution and continuance of the insolvency proceedings did in no way prevent the decree-holder from proceeding to execute the decree as against them. Consequently, the present execution is hopelessly out of time. It is contended by Mr. Mukherji that in the insolvency proceedings the decree-holder was throughout attempting to realize his decree by sale of the entire joint family properties and therefore so long as those proceedings were in progress, it was not open to him to take out execution.
8. But in the insolvency proceedings the only remedy which the decree-holder could, and did pursue was to realize the debt so far as it was payable by the insolvent. The liability of the other judgment-debtors in respect of the decree was not in any way affected by the insolvency proceedings.
As regards the second contention, I do not see how the decree-holder can escape from the clear provisions of Order 21, Rule 50, Civil P.C. That rule provides that where a decree has been passed against a firm, execution may be granted (a) against any property of the partnership; (b) against any person who has appeared in his own name under Rule 6, or Rule 7 of Order 30 or who was admitted on the pleadings that he is, or who has been adjudged to be, a partner; (c) against any person who has been individually served as a partner with a summons and has failed to appear.
9. It is clear that execution cannot be granted against the objectors, unless it is shown that the requirements of Clauses (b) and (c) have been satisfied. There is nothing on the record to show that this has been done. Consequently execution cannot proceed against the objectors. It is contended by Mr. Mukherji that Order 21, Rule 50 does not apply to a joint Hindu family firm. But here again he is assuming that the firm Ajodhyaram Nandji is a joint family firm which has not been found as a fact. However assuming that it is a joint family firm, there is no reason why the provisions of Order 21, Rule 50, should not be applied. In Satchidanand v. Prayag Sah Sabeh Ram MANU/BH/0293/1929 : AIR (1930) Pat 205 a similar question came up for decision before a Division Bench of this Court.
10. There a joint Hindu family firm consisting of father and son was sued and the father alone being served with summons, a decree was obtained against the firm. Execution was taken out against the father and son. The son raised the objection that execution could not be granted against him in view of Order 21, Rule 50. This objection was upheld by this Court.
The objection as to limitation is sought to be met on the ground that by reason of the order dated 3rd May 1926, staying execution, the decree-holder would, under Section 15, Limitation Act, be entitled to exclude the period from that date till 3rd February 1936, when the insolvency case was finally disposed of. But the effect of the order staying execution was to prevent the decree-holder from executing the decree as against Nandji, the insolvent.
11. The decree-holder was still at liberty to execute the decree against the present objectors. As against them the order dated 3rd May 1926, did not interpose any bar so as to stop the running of time. The present execution therefore is barred both under Article 182 of Schedule 1, Limitation Act, and under Section 48, Civil P.C. In the view I take it is unnecessary to decide the question that was raised before us as to whether Section 48, Civil P.C. is controlled by Section 15, Limitation Act. The result is that the appeal should be allowed and the execution case be dismissed. The appellants will be entitled to costs throughout: hearing fee Rs. 16 in each Court.
Rowland, J.
12. I agree.

Print Page

No comments:

Post a Comment