Jugalkishore v. Raw Cotton Co. AIR 1955 SC 376

JUGALKISHORE V. RAW COTTON CO.

ISSUE:

Whether the respondents can claim to have become the transferees of the decree by operation of law within the meaning of Order XXI, Rule 16, or otherwise be entitled to its benefit?

RULE:

The cardinal rule of construction of statutes is to read the statute literally, that is by giving the words their ordinary, natural and grammatical meaning. If such a reading leads in absurdity and an alternative interpretation is possible, the Court may adopt it. Failing that, the ordinary rule of literal interpretation must be applied.

FACTS:

Mahomedali Habib and Sakerkhanoo Mahomedali Habib, partners in Habib & Sons, carried on business as merchants and pucca adatias in bullion and cotton at Bombay.
In 1948, they filed a suit in the Bombay City Civil Court against the present appellant Jugalkishore Saraf, a Hindu inhabitant carrying on business at Bombay, for recovery of Rs. 7,11,370 with 6% interest per annum due from certain transactions in gold and silver.
On February 7, 1949, while the suit was pending, the partners executed a document transferring all book and other debts due to them in connection with their business in Bombay and full benefit of all securities for the debts and all other property to which they were entitled in connection with the said business to Messrs Raw Cotton Company, Limited, (the Respondents).
The Respondents did not seek substitution under Order XXII, rule 10 of the Code of Civil Procedure, to get themselves substituted as plaintiffs in the place of Habib & Sons, the plaintiffs on record, but allowed the suit to be continued in the name of the original plaintiffs.
The two partners later migrated to Pakistan, and their properties were vested in the Custodian of Evacuee Property.
On the 15th December 1949, a decree for the sum of Rs. 8,42,870, including debt, interest, and costs of the suit, was passed in favour of Habib & Sons, with further interest at 4 per cent per.
On 11th December 1950, the Custodian of Evacuee Property, Bombay, confirmed “the transaction of transfer” of the business of Habib & Sons to the respondents.
On 25th April, 1951, the respondents presented before the Bombay City Civil Court, an application for execution under Order XXI, Rule 11 of the Code of Civil Procedure, seeking to be recognized as the assignees of the decree.
The High Court granted leave to the Respondents to execute the decree against the judgment-debtor.

HELD:

The document under which the Respondents sought to execute the decree was treated by the Courts as a deed of transfer of all the books, other debts and securities to Habib & Sons, but not as a transfer of any future decree.
The document did not, either explicitly or by reasonable interpretation, transfer any future decree that might be obtained by Habib & Sons.
Therefore, the respondent could not claim to be transferees of the decree under Order XXI, Rule 16 of the Code of Civil Procedure, which pertains to the execution of decrees and orders.
Rule 16 of Order XXI, enables the transferee of the decree to execute it in the same manner and subject to the same conditions as an application for execution made by the decree-holder.
The Court held that there must be a decree in existence which is transferred before the transferee can benefit from the provisions of rule 16.
The ordinary and natural meaning of the words of Rule 16 can carry no other interpretation and the question of a strict and narrow interpretation of its provisions does not arise.
The provisions of Order XXII, Rule 10, safeguard the rights of an assignee before a decree is passed, enabling them to obtain leave of the Court to continue the suit in their name.
Once a decree is passed, it must be in the transferee’s name for execution.
Order XXI, Rule 16 requires a written assignment of a decree after it is passed.
An agreement to transfer a future decree may grant a beneficial interest in equity, but does not constitute a legal assignment under Order XXI, Rule 16.
The appeal was dismissed.