TMI Blog1974 (6) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... t at garnishee from paying to the second respondent, who was the defendant in the suit, any sum without leaving ₹ 2,16,000/- in its hands and on this application an ex parte ad interim order was made on January 8, 1973, This ad interim order was modified and the appellant as the garnishee was directed to pay ₹ 80,000/-to the second respondent's solicitor to be held by him as receiver. On March 6, 1973, a consent decree was passed in the suit for a sum of ₹ 1,90,000/- and the decretal amount together with interest was payable by specified instalments by the second respondent to the first respondent. There was a default clause in the decree to the effect that in default of payment of the second or the third or the fourth instalment, within the prescribed time or in default of payment of any two monthly instalments, or any two monthly instalments of interest within the prescribed time, the whole of the decretal amount then remaining due would become at once payable and be executable. The second respondent (judgment-debtor) paid the first and the second instalment and a part payment of ₹ 10,000/- for the third instalment, but failed to pay the fourth instalm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated the second respondent's services as Stevedore of the Shipping Company with immediate effect. This termination was confirmed by the Shipping Company by its letter dated May 15, 1973. According to the appellant the second respondent failed to perform its obligations and to discharge the duties as Stevedore. Particulars of negligence and/or breach of duty are set out under paragraph 11 of the petition. The appellant claims that it has suffered loss and damages by reason of negligence, and breach of duty by the second respondent and such loss and damages according to the appellant ran into a very large sum of money, which had not yet been determined, but is due and payable by the second respondent. It is claimed on behalf of the appellant that the Shipping Company is entitled to adjust the sum of ₹ 31,500/- due to the second respondent against the losses and damages suffered by the Shipping Company. It is also claimed that after such adjustment nothing will be due and payable to the judgment-debtor by the Shipping Company. According to the appellant nothing is due and payable by it to the second-respondent. 5. Mr. B. K. Bachawat, Counsel for the appellant contended th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not enough, according to Mr. Ghose, merely to make vague and bare denial of the claim of the judgment-debtor against the garnishee. In our view there is good deal of force in this contention of counsel for the respondents It is not necessary in our view for the decree-holder to positively specify and state on oath that certain sum of money is due from the garnishee to the judgment-debtor. But the question is if the garnishee denies that any sum of money is due to the judgment-debtor, is it open to the court to hold the garnishee liable for the claim made by the judgment-debtor without raising and trying an issue on the question of such liability? 8. This question has been answered in the affirmative by the trial Court and its conclusion appears to be based on admission of the garnishee regarding submission of statement of the bill of the judgment-debtor on May 14, 1973. and also on the assumption that there is no dispute to the claim made in the said bills. We do not think that on the materials on record it was open to the court to conclude that there was any admission of the claim made by the judgment-debtor in the bill for ₹ 1,64.746.39 nor was there any justification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which enables a judgment-creditor to obtain satisfaction of his claim in a summary proceeding is a matter of procedure, similar in scope as in the case of a judgment on admission under Order XII, Rule 6 of the Civil Procedure Code or the summary procedure in suits to recover debts or liquidated demands as prescribed in Chapter XIII-A of the Original Side Rules. This procedure can be availed of by a decree-holder where either the debt is not disputed or the dispute appears to the Court to be frivolous and without any substance. It is of no avail in a case where there is a substantial bona fide dispute with regard to the debts sought to be attached. 11. Let us see what would be the result if the matter is allowed to be decided summarily on affidavits. A judgment-creditor makes a claim against the garnishee, who disputes the same. If a garnishee order is made in such a case, the garnishee without getting an opportunity of contesting and refuting the claim of the judgment-creditor is required to pay the money to the Sheriff. The result would be that in one single summary proceeding there would not only be adjudication of a disputed claim but there would be a levy of execution, atta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Shipping Company terminated the services of the judgment-debtor as Stevedore and in that letter it is alleged that the judgment-debtor's failure to load cargo in time resulted in loss to the Shipping Company by way of both delay and shutting out of cargo. In the letter of May 15, 1973. from the Shipping Company, the latter in confirming the termination of the judgment-debtor's engagement, reserved to itself its right to claim loss and damages caused by stoppages which the ships suffered at Calcutta as a result of negligence on the part of the judgment-debtor. In a letter dated April 28, 197.3, written by the garnishee to the Master Stevedore Association it is alleged that there was non-payment by the judgment-debtor of the dues of the Dock Labour Board, which directly affected the working of the vessel Tweed Bank and this was a very grave offence. On April 11, 1973, the garnishee wrote to the judgment-debtor that 314 tonnes of cargo meant for the vessel Tweed Bank was shut out and of this 267 tonnes were ready and that this shutting out could have been avoided if the judgment-debtor worked two shifts on Sunday April 8, 1973, and one shift on the following Monday. The let ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Bank called at the Calcutta Port in April 1971, and April 1972, respectively but all accounts regarding the working of these vessels according to the garnishee were settled and nothing remained due. So far as the vessel Tweed Bank is concerned, which called at the Calcutta Port in May, 1973. the accounts between the parties were also settled and adjusted and nothing remained due from either party to the other. It was argued that this being the allegation in the affidavit-in-opposition there would be no question of set-off of the judgment-debtor's dues against the alleged claim for loss and damages of the Shipping Company. It was contended that in any event the alleged loss and damage not having been quantified there could be no set-off with regard to the admitted claim of ₹ 31,500/-. It was further argued that equitable set-off could be claimed in respect of the same transaction or same series of transactions, but in this case each contract for working a particular vessel was a separate contract and it could not be said that the claim for damages arose out of the same transaction or the same series of transactions. The arrangement between the parties prior to May 5, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a client with the solicitor for a special purpose so that the solicitor had no lien on the money and as the special purpose failed, a trust arose immediately for repayment of the money to the client. The solicitor claimed that he was entitled to certain costs from his client and it was held that these costs could not be set-off against the claim under the trust for repayment of the deposit. It was observed that the claim arose out of building contracts in which the plumbing company, the judgment-debtor had been employed as sub-contractors and had not done the work well, the claim against the garnishee arose in respect of the work alleged to have been done by the judgment-debtor. It was further observed that it was contrary to justice to order that a garnishee should pay out money which it appeared probably would not be due from him at all as no proceeding had been taken by the judgment-debtor against the garnishee and no order ought, to be made for payment of money which on the face of it appeared not likely to be due. Relying on this decision Mr. Bachawat argued that in this case there was a total denial of the claim made by the judgment-debtor and it was clearly stated in the af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t-debtor at all, and if so to what amount. On this question reliance was placed on a decision of the House of Lords, Frederick John Vinall v. Ernest Depass 1892 AC 90. In that case an application for garnishee order was made under Order 45. Rule 1 of B. S. C. The garnishee in his affidavit denied that he owed the particular debt sought to be attached but he declined to deny that he owed any debt. It was in these facts that it was held that the garnishee order was rightly made but in making that order Lord Halsbury observed that the garnishee proceeding is a procedure for giving the judge the power to determine the question whether a garnishee order could be made and that it was a fallacy to hold that the judge was called upon to make an order for payment and that if there was a denial that there was any other debt due from the garnishee and this denial was duly verified an issue ought to be directed. This decision again is of no assistance to the respondents in this case as it is denied on affidavit by the appellant that any sum is payable by the garnishee to the judgment-debtor. This is not a case where a particular debt sought to be attached has been disputed and there is refusal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f law at all but a question of fact which is to be proved, namely, whether any amount is due by the garnishee to the judgment-debtor. 17. On the question as to what the decree-holder should prove in order to get a garnishee order counsel for the appellant relied upon Spence v. Coleman (1901) 2 KB 199 in which it was held that the first thing which the judgment-creditor had to establish was that there was a debt due from the garnishee to the judgment-debtor. In that case the surplus assets of a company in liquidation belonging to a share-holder who could not be traced, was in compliance with statutory provision, paid by the liquidator into a particular account with the Bank of England. A decree-holder who had obtained a decree against the share-holder sought to attach this fund in the Bank of England. It was held that the sum paid into the bank was not a debt due to the share-holder and it could not be attached by the judgment-creditor by a garnishee order under the Rules of the Supreme Court. This decision is of no assistance to the appellant because the question was whether surplus due to a share-holder could be treated as a debt liable to be attached in a garnishee proceeding. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent-debtor. It has disputed the validity of the claim and the judgment-debtor's right to recover the same. It has further said that owing to the default and negligence of the judgment-debtor in discharging his duties as the Stevedore it has suffered loss and damages in a very large sum of money. It has claimed to set-off a sum of ₹ 31,500/- which according to it is due to the judgment-debtor against such claim and it has said that after such set-off nothing will be due and payable to the judgment-debtor by the garnishee. The dispute raised by the garnishee with regard to the claim made by the judgment-debtor cannot in our view be said to be frivolous and without substance. Some of the particulars of negligence and default on the part of the judgment-debtor have been set out in the letters addressed by the appellant to the second respondent. It is true that a charge of negligence and default is a matter of proof. But the garnishee ought not to be deprived of the opportunity to substantiate its claim by producing evidence in support of its claim. 20. It is to be borne in mind that if a claimant seeks to recover a sum of money for any reason whatsoever in an action, he wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibiting the garnishee from making any payment to the judgment-debtors. On June 25, 1973, a notice was issued upon the garnishee to pay to the Sheriff the said sum of ₹ 1,40,873.15 P. or to appear in Court and show cause to the contrary. The respondent Garnishor in column 10 of the Tabular Statement filed by him prayed for attachment of the sum of ₹ 1,40,873.15 P. out of the sum of ₹ 1,60,000/- stated to be lying with the appellant and payable to and receivable by the judgment-debtor from the appellant. Thereupon the above mentioned notice was issued upon the garnishee and notice of prohibition mentioned above was served upon it. 23. In answer to the above mentioned notice the garnishee showed cause by an affidavit of Nirode Kumar Sen affirmed in August 1973. In paragraph 8 of the said affidavit the garnishee admitted that a sum of ₹ 31,500/- became due and payable by the Garnishee's Principal Bank Line Ltd., to the judgment-debtor but the said sum was not nor is payable by the garnishee, inasmuch as the judgment-debtor was liable to pay damages to the Garnishee's Principal for having acted negligently as stevedores of the said Bank Line Ltd. Parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank Lines their principals in the matter of loading of cargo to the said motor vessel and in taking unreasonably long time to load cargo on board the said vessels and/or to procure sufficient labour for doing the same. The acts of negligence resulted in shutting out of the cargo of the garnishee's principals and resulted in loss and damage to the principals in the shape of demurrage charges on account of detention of the said vessels in the port of Calcutta and damages for failure to load cargo. 25. The garnishee claims a set-off in respect of the losses and damages suffered by the Bank Line Ltd., mentioned above as against the said sum of ₹ 31,500/- and states that no sum after such set-off would be payable to the judgment-debtor. 26. From the affidavit evidence on record and specially the terms and conditions contained in the abovementioned letter dated May 5, 1972, appearing at page 12 of the paper book, it appears to me that the judgment-debtor had been acting as the stevedore under a single contract in respect of vessels belonging to or chartered by the Bank Line Ltd., calling at the port of Calcutta. The right to set-off has been granted by Rule 6 of Order 8 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hee. This notice was served under Rule 1 of Chapter XVIII of the Rules of the Original Side of this Court. Rules 2 and 3 of the said chapter are relevant for the purpose of the instant appeal. It should be noted that Rule 46 of Order 21 of the Civil Procedure Code provides for attachment of debt, share and other property not in the possession of the judgment-debtor. Calcutta High Court has added Rules 46-A to 46-H after Rule 46 of Order 21 of the Civil Procedure Code by way of amendment. Rule 46-B and Rule 46-C are in identical terms as Rules 2 and 3 of Chapter XVIII of the Original Side Rules. 30. After the alleged debt in the hands of the garnishee was attached in accordance with the provisions of Rule 46 of Order 21 Chapter XVIII of the Rules of the Original Side became applicable to the instant proceeding. The said rules read as follows, to wit: 2. Where the garnishee does not forthwith pay or deliver to the Sheriff the amount due from or the property deliverable by him to the judgment-debtor, or so much as may be sufficient to satisfy the decree and the costs of execution, and does not dispute his liability to pay such debt or deliver such moveable property, or where he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no substantial dispute until some real answer or defence is set up. It is true that in the said case the garnishee disputed the liability to pay the debt on the ground that the debt had already been attached by another court. It was found that the said attachment was void and did not have the effect of attaching the debt in the hands of the garnishee and thus the garnishee had really no defence to the writ of attachment in the said case. Be that as it may, the said facts do not in my opinion nullify the effect of the observation of Willes, J., in construing Section 64 of Common Law Procedure Act 1854. 35. In the case of (1901) 2 KB 199 it was held that the judgment-creditor must establish first that there was debt due from the garnishee to the judgment-debtor. In the said case the controversy between the party was as to whether surplus assets of a company in liquidation payable to a share-holder could be said to be a debt due to the said share-holder after the said surplus asset had been paid into a particular account by the liquidator with the Bank of England. It was held that the surplus deposited in the Bank of England could not be said to be a debt due to the share-holder. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e denied that he owed the said debt to the judgment-debtor. But did not however, deny that he owed any other debt to the judgment-debtor. It was held by the House of Lords that the garnishee did not however, deny that he owed any other debt to the judgment-debtor. It was held by the House of Lords that the garnishee did not dispute his liability and accordingly the order for payment to the garnishor was rightly made. At page 95 of the said report Lord Halsbury in his speech observed that if he (meaning the garnishee) makes the judge to understand that there is a real dispute upon the subject, the judge will direct an issue and will allow that issue to be tried in due course of law. 40. Besides (1858) 140 ER 1153 mentioned in the earlier part of the judgment Mr. Dipankar Ghose and after him Mr. Kapoor relied on various authorities to show that the garnishee must disclose facts in his affidavit in showing cause against the order proposed to be made as contained in the notice served upon him to show that he was not indebted to the judgment-debtor. The garnishee in my opinion must make out a prima facie case before an issue as to his liability may be ordered to be tried under Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Ghosh on the basis of (1889) 22 QBD 249. That was also the decision of the House of Lords in (1892) AC 90. 47. The existence of the debt alleged to be due to the judgment-debtor by the garnishee has to be proved by an affidavit. In any event on the basis of information and belief of the garnishor In (1889) 22 QBD 249, the application for the garnishee order for the attachment of the debt was made by an affidavit by the solicitor to the judgment-creditor, who had stated that he had been informed and verily believed that the garnishee was indebted to the judgment-debtor, 48. In (1892) AC 90. the affidavit in support of the application for tile garnishee order stated that the debt existed according to the information and belief of the deponent. It was held that the deponent need not swear positively as to the existence of the debt due from the garnishee to the judgment-debtor. It was sufficient if he states on information and believes that the debt existed, 49. In the instant case a tabular statement was filed verified by an affidavit of garnishor Anil Kumar Sen affirmed on May 22, 1973 for attachment of a sum of ₹ 1,40,843.15 P. out of a sum of ₹ 1,60,000/- lyi ..... 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