TMI Blog1957 (3) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... r partition was passed on October25, 1924 The defendant No. 3 became insolvent during the pendency of an appeal which was taken against that preliminary decree. The Official Receiver of West Tanjore who represented the branch of the 3rd Defendant was impleaded as a party to the suit on February 12, 1929. The final decree for partition was passed on September 26,1932 by the Subordinate Court at Kumbakonam. Defendant No. 6 carried an appeal to the High Court of Judicature at Madras being A. S. No. 60 of 1933 and the High Court ultimately passed a final decree on May 9, 1938. Under the terms of this decree certain properties fell to the share of the 3rd Defendant's branch and for the purpose of equalising on partition the Official Receiver of West Tanjore, representing the 3rd Defendant's branch was ordered to pay a sum of Rs., 24,257-0-8 to the Defendant No. 6. This amount was to carry interest at 6 per cent. per annum from September 26, 1932, and there were various adjustments ordered inter se. It was further ordered that the Official Receiver of West Tanjore in whom the estate of the 3rd Defendant's branch was vested should sell such portions of the estate as were no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecrees against Defendant No. 3 and Defendant No. 4 on promissory notes executed by the latter on date March 14, 1925, the decree in favour of Thinnappa Chettiar being dated August 15, 1929, and that in favour of Palaniappa Chettiar being dated July 17, 1928. On July 3, 1955, Thinnappa Chettiar filed a petition under 0.29. r. 11(2) 54, 62, 66 of, the Civil Procedure Code being E. P. No. 25 of 1935 praying for the realisation of ₹ 35,224-2-6- by attachment and sale of immovable -properties belonging to his judgment-debtor. On July 4, 1935, he attached the shares of the sons of the Defendant No. 3 and Defendant No' 4 in these immovable properties but in so far as the attachment was not levied the sales effected by the respondent on July 5, 1935, of the properties falling to the share of the third Defendant's branch were upheld. On September 30, 1935, Thinnappa Chettiar filed an application being E. A. No. 376 of 1935 under section 151 of the Civil Procedure Code praying that a sum of ₹ 6,600 realised after the order of attachment obtained by him as aforesaid be sent for from the respondent and paid to him by means of a cheque. E. P. No. 25 of 1935 and E. A. No. 376 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to the credit of the appellant's decree. On February 5, 1940, the learned District Judge made a further order allowing the respondent to sell the properties which he was directed to sell by the High Court's order dated May 9, 1938, in A. S. No. 60 of 1933, to pay the petitioner as directed by the High Court :notwithstanding the attachment as was ordered in E. P. No. 25 of 1935 and free of that attachment. On May, 11, 1942, a-sum of Rs, 5,500 being the sale proceeds of certain properties belonging to the share of the 3rd Defendant's branch was adjusted by the appellant and on January 23, 1940, the respondent paid to the appellant a further amount of ₹ 26,966 adjusting a further sum of ₹ 11 for costs due by the appellant. The High Court disposed of the A. A. 0. Nos. 229, 429 483 of 1942 on November 5, 1943. It held that the procedure adopted by the learned District Judge of impleading strangers as parties to the execution petition and the execution applications before it could not be supported and ordered that the appellant and Thinnappa Chettiar should be deleted from the array of parties in E.P. No. 25 of 1935, B.A. No. 376 of 1935 and E.P. No. 15 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d E.P. No. 35 of 1944 we're heard by the District Judge on July 14, 1945. The learned District Judge understood the order of the High Court dated November 5, 1943, to 'mean that the claim of the appellant to priority was still to be adjudicated upon. He stated that all that had been held by the High Court was that the decree in A.S.-No. 60 of 1933 did not have the legal effect of creating a charge in favour of the appellant and the question whether the appellant was not entitled to priority in respect, of his claim was not concluded by that decision, since it depended upon the circumstances and situation of parties in the first litigation itself (i.e., O.S. No. 22 of 1924, Sub- Court, Kumbakonam and A.S. No. 60 of 1933, High Court) and the reasons which then led the Official Receiver, who was present when the order was made in A.S. No. 60 of 1933 to submit that he was prepared to sell such parts of the estate as might be necessary for satisfying the decree passed in favour of the appellant. On scrutinizing these facts, the learned District Judge came to the conclusion that in respect of the sums due to him under the partition decree, directed to be paid from the estate -o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by operation of law over the share allotted to the sharer made liable for the payment without any creation of charge by the Court by express language or necessary implication. The High Court refused to entertain that argument in view of the conclusion reached by it as above and also negatived the contention which was urged on behalf of the appellant before it that the provision for such payment in the partition decree was an owelty provision observing that all that was meant was equality and all that the expression owelty provision in the context implied was a provision for adjustment or equalization of shares and no more. The High Court accordingly came to the conclusion that the respondent was entitled to the restitution sought by him and allowed the ;appeals with costs before it and in the Court below. The order of the learned District Judge was set aside, and E. P. No. 35 of 1944 and E. A.No. 182 -of 1944 were, allowed and E. A. No. 195 of 1944 was dismissed. The appellant applied for and obtained from the High Court certificates of fitness under Art. 133 of the Constitution and that is how these appeals are before us. The principal question which arises for our dete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... veyances by the parties of their respective interests. Owelty of partition may be awarded to equalize the shares of the parties, and may be decreed to be a lien on the excessive allotment. Though only when necessary to a fair partition, and it should be employed as little as possible. This position has been summarized in Freeman's Cotenancy and Partition (1886 Edition) page 676, para. 507, under the caption of Owelty :- Owelty : When an equal partition cannot be otherwise made, courts of equity may order that a certain 'sum be paid by the party to whom the most valuable purpartly has been assigned. The sum thus directed to be paid to make the partition equal is called owelty . It is a lien on the' purparty on account of which it was granted. The law cannot contemplate the injustice of taking property from one person and giving it to another without an equivalent, or a sufficient security for it. The lien for owelty has precedence over prior mortgages and other liens existing 'against the cotenant against whom the owelty was awarded. It is significant to note that this provision for owelty is construed as a lien which the co-sharer who is awarded owelty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art to pay owelty out of the properties allotted to his share and a corresponding lien in favour of the members to whom such owelty is awarded on the properties which have fallen to his share. Not only is this the normal position on a partition decree where there, is an unequal distribution of properties among the members of the joint family but even where an encumbrance has been created on a member's share before the partition is effected, the encumbrancer is postponed to the member to whom such owelty is awarded under the partition decree. A lien or a charge created in favour of a member in regard to such owelty obtains precedence over an encumbrance and, there are authorities to show that such lien or charge has priority over an earlier mortgage. The following passage from Mitra on the Law of Joint Property Partition in British India, Second Edition, page 414, enunciates the above position: You will note that sums directed to be paid for the purpose of equalizing the values of the shares are in legal language called owelty. The Commissioners have no authority without express authorization by the Court to award this compensation. (See Rule 14, 0. XXVI, C. P. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made in a partition decree, the member in whose favour that provision has been made is entitled to a lien or a charge over the property which has fallen to the share of the member to whom property of a higher value has been allotted. If such a lien or a. charge is expressly declared, so far so good but even if it is not so expressly declared, there is by necessary implication the creation of a lien or a charge in his favour for the amount of such owelty. This case was followed in Poovanalingam Servai v.Veerai A.I.R. (1926) Madras 166 where Phillips J. observed as follows: There can be no doubt that in a partition suit all equities between the members of the coparcenary should be worked out allotting to each member the share to which he is equitably entitled. After quoting the passage from Freeman's Co-tenancy Partition set out above, the learned Judge further observed: Even if there is nonlegal charge,in the present case, yet on equitable principles such a, charge can be enforced and when. it comes to partitioning the property between two co- tenants, this equity should in my opinion be enforced. The High Court in passing the order dated November 5, 1943, ini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tile learned Dist. Judge when he passed orders in favour of the appellant on July 14, 1945. The following passage from his judgment, in our opinion, truly reflects the position as it obtained between the appellant and the respondent: When we scrutinise these facts, the conclusion is inevitable that the claim of the Respondent to the present amounts stands even higher than on the basis of 'the priority of a charge created in insolvency administration, whether by virtue of a security , a charge created by an act of Court or a lien arising from the operation of any law or statute. In fact, it Could be contended with, great force that the estate in insolvency which vested in the hands of the Official Receiver consisted of certain immovable properties minus the. sum directed to be paid to the present Respondent by the sale of available portions of the estate as undertaken by the Official Receive I r himself. This was because 0. S. No. 22 of 1924 on the file of the Kumbakonam Sub-Court was a suit of partition in which the present Respondent was a sharer and partner,, exactly as the 3rd Defendant's branch represented another share. In decreeing the suit, equities arose fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ask for a withdrawal of the sum of ₹ 5,200 which he had earlier deposited into Court on January 9, 1942, or for the restitution of the sums of ₹ 5,500 and ₹ 26,966 and ₹ 11 together with interest thereon as claimed. These monies had been paid by the respondent in pursuance of the directions contained in the decree dated May 9, 1938, in A. S. No. 60 of 1933 and they had been rightly paid by him and they' could never be the subject-matter of any execution proceedings as initiated by him. Apart from the question whether a. 144 read with s. 151 of the Civil, Procedure Code was at all applicable in the circumstances of this case, we are of the opinion that the claim made by the respondent for the aforesaid sums was absolutely unjustified. We are accordingly of the opinion that the orders passed by the High Court in A. A. 0. Nos. 724, 725, add 726 of 1945 were wrong and should be reversed. The respondent wrote on November 21, 1953, to the Registrar of this Court to say that none of the creditors had come forward to finance the defence of the appeals and the Insolvency Court, i.e., the Sub-Court, Tanjore had ordered that the matters might be left undefended, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion was passed by the learned Subordinate Judge to whom the matter had come back after the disposal of the appeal from the preliminary decree. The appellant before us was not satisfied with the final decree and he preferred an appeal from it to the High Court at Madras. That Appeal was marked A.S. No. 60 of 1933. The High Court passed its judgment and decree in that appeal on May 9, 1938, varying the decree of the lower court. It is necessary to refer to portions of this decree of the High Court because the question in this appeal will turn on them. The decree made the following provisions among others: (1)The Official Receiver of West Tanjore as representing the branch of Balagurusami, the 3rd defendant do pay ₹ 24,257- 0-8 to the appellant, the 6th defendant with interest at 6 per cent. per annum from September 26, 1932. (2)The Official Receiver of West Tanjore in whom the 3rd defendant's estate is vested be directed to sell portions of it in order to pay off the amounts decreed to be paid by the 3rd defendant's branch and shall make payments on behalf of the 3rd defendant's branch in accordance with the judgment herein. Sometime prior to the passing o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 13, 1941, made -certain orders whereby the appellant was made a party to the two applications by Thinnappa and Thinnappa was made a party to the application by the appellant. The three applications thereafter came up for hearing together and were disposed of by one judgment passed by the learned District Judge of West Tanjore on December 23, 1941. It appears to have been contended before the learned District Judge on behalf of the appellant that he was entitled to the whole of the sale proceeds as the final partition decree of May 9, 1938, had created a charge in his favour on the properties which had been allotted under it to the Official Receiver as representing Balagurusami's branch while it appears to have been contended on behalf of Thinnappa that he had the first right to the sale proceeds by virtue of his attachment. The learned District Judge came to the conclusion that the decree of May 9, 1938, created a charge in favour of the appellant and in that view of the matter, he made an order directing the Official Receiver who was a party to all the three applications, to deposit into court to the credit of the appellant the said sale proceeds amounting to ₹ 8,2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The High Court further held that the decree of May 9, 1938, did not create any charge on the properties of Balagurusami's branch in favour of the appellant. In this view of the matter the High Court made an order striking out the name of Thinnappa from E.P. No. 15 of 1940 and the name of the appellant from E. P. No. 25 of 1935 and E.A. No. 376 of 1935, and remanding all the three applications to the lower court for disposal on the merits in the light of the observations contained in the order. In view of the aforesaid finding of the High Court that the appellant did not have the charge claimed by him, the Official Receiver felt that he was entitled to restitution from the appellant of the sum of ₹ 32,477 paid to him as earlier mentioned as a result of the finding of the learned District Judge of December 23, 1941, of the existence of the charge and also to withdraw the sum of ₹ 5,200 deposited in court to the credit of the appellant in similar circumstances. He, thereupon, on July 29, 1944, made an application, marked E.A. No. 182 of 1944, for an order that the sum of ₹ 5,200 deposited by him in court on January 9, 1942, to the credit of the appellant may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant had no charge over the properties allotted to the branch of Balagurusami, might not be binding as a judicial precedent, but it had to be given effect to in the interests of judicial comity-and that it had to be held that the appellant was not entitled to a charge. The High Court also held that the judgment dated Novem. ber 5, 1943, did not leave it open to the appellant to urge any other claim of priority as he had not done so on the earlier occasion in his application, being E. P. No. 15 of 1940. Therefore, the High Court came to the conclusion that the appellant was not entitled to any priority. The High Court further held that in view of the provisions of the Provincial Insolvency Act, the Appellant could claim no priority if his claim to a charge under the decree of May 9, 1938, failed and that such claim failed as it bad been rejected by the earlier judgment of the High Court dated November 5, 1943, which judgment had to be accepted for reasons already stated. Lastly, the High Court held that the reasoning of the District Judge of West Tanjore that what vested in the Official Receiver were certain immovable properties of the insolvent minus the sums directed by the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vent, including the appellant. The finding by the High Court in its judgment of November 5,1943, that the appellant was not entitled to a charge and the acceptance of that finding by the judgment from which these appeals arise make no difference, for the right of the appellant to receive the monies or to retain what has been paid to him does not depend on the existence of a charge in his favour but on the existence of the decree. It is not necessary to decide the question whether the appellant has such a charge and I do not feel called 'Upon to make any observation with regard to it. I wish, however, to say that the decision of November 5, 1943, has no operation by way of resjudicata in favour of the appellant and against the Official Receiver. That decision was between Thinnappa and the appellant. Though the Official Receiver was a party to the proceeding in which the decision was given, the issue as to whether there was a charge in favour of the appellant or not was not between him and either the appellant or Thinnappa, nor was it necessary to decide an issue between the Official Receiver and the appellant as to the existence of the charge in order to give Thinnappa or the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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