T.S. Swaminathaudayar vs The Official Receiver Of West Tanjore

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeals Nos. 251 to 253 of 1953

Decision Date: 27 March 1957

Coram: Natwarlal H. Bhagwati, Syed Jaffer Imam, A.K. Sarkar

In this matter, the Supreme Court of India heard an appeal titled T.S. Swaminathaudayar versus The Official Receiver of West Tanjore, decided on 27 March 1957. The judgment was authored by Justice Natwarlal H. Bhagwati, who was seated on a bench together with Justice Syed Jaffer Imam and Justice A.K. Sarkar. The petitioner in the case was identified as T.S. Swaminathaudayar and the respondent as the Official Receiver of West Tanjore. The official citation of the decision is 1957 AIR 577 and 1957 SCR 775, and the case concerned the provisions of the Partition Suit Act relating to a decree for owelty, the absence of an express declaration of charge, and the question of whether a charge may be created by necessary implication and, if so, what priority such a charge would enjoy. The headnote, recorded as per the observations of Justices Bhagwati and Imam, explained that a decree ordering one co‑sharer to pay owelty money to another in a partition suit, even when the decree does not expressly mention a charge, nevertheless creates an implied charge in favour of the receiving co‑sharer or in respect of the property allotted to the paying co‑sharer. The headnote further stated that such an implied lien‑type charge takes precedence over any prior mortgagees who may have an interest in the same property. The judgment referred to the earlier authorities Shahebzada Mohommed Kazim Shah v. R. S. Hill, I.L.R. (1907) 35 Cal. 388 and Poovanalingam Servai v. Veerai, A.I.R. (1926) Mad. 166, as supporting precedent for the principle that an implied charge may arise from the terms of a partition decree.

The Court then applied the foregoing principle to the facts before it, noting that the final decree in the partition suit, which had been upheld by the High Court on appeal, required one co‑sharer to pay owelty money to another and that the estate of the paying co‑sharer had subsequently vested in the Official Receiver in insolvency. The Court observed that, instead of expressly declaring a charge, the decree authorised the Receiver to satisfy the owelty obligation from the sale proceeds of the property in question. Consequently, the Court held that the co‑sharer who was the judgment‑creditor for the owelty could not claim any priority over other creditors, because the decree had not created a specific charge that would have given him such priority. The High Court, having taken an erroneous view of the law and having relied upon an earlier judgment of that Court in the creditor’s appeals, had set aside, on the Receiver’s application, the orders of the District Judge that refused to refund the sale‑proceeds deposited with the Court to the credit of the decree‑holder co‑sharer and that had denied restitution under section 144 of the Code of Civil Procedure for monies actually paid by the Receiver under the partition decree. The Supreme Court, per Justice Sarkar, examined whether the final decree had, by necessary implication, created a charge over the insolvent’s share for the sums directed to be paid by the Receiver, and concluded that even if such a charge existed, it could not affect the Receiver’s liability to pay under the decree. Moreover, while the decree remained operative, the Receiver was not entitled to claim restitution of the monies he had disbursed on the ground that no charge had been created or that no other claim to priority existed. The Court further explained that the rights of a co‑sharer who is a decree‑holder and who obtained the decree against the Receiver himself stand on a different footing from those of a ordinary creditor of the insolvent; the co‑sharer cannot be compelled to accept a dividend on the distribution of the insolvent’s assets in the same manner as a normal creditor. Accordingly, the Supreme Court set aside the orders of the High Court and restored the decisions of the District Judge, thereby affirming that the co‑sharer’s claim to priority under the partition decree could not be sustained. The judgment was recorded as a Civil Appeal under appellate jurisdiction of the Supreme Court.

Nos. 251 to 253 of 1953 were appealed from the judgment and order dated 8 February 1950 of the Madras High Court in A. A. 0, Nos. 724 to 726 of 1945. The appeal challenged the orders dated 14 July 1945 of the Court of the District Judge, West Tanjore in E. P. No. 35 of 1944 and E. A. Nos. 195 and 182 of 1944 respectively in E. P. No. 15 of 1940, which were recorded on S. No. 22 of 1934 on the file of the Court of Sub‑Judge, Kumbakonam. Counsel for the appellant, N. S. Chonpakesa Aiyangar and S. Subramanian, appeared, while the respondent did not appear before the Court. The judgment was delivered on 27 March 1957 by Justice Bhagwati. These appeals, each supported by a certificate of fitness under Article 133 of the Constitution, raised the question of the equities that arise out of a partition among the former members of a joint family.

A suit for the partition of property belonging to a well‑known Odayar family of West Tanjore District was instituted in the Court of the Subordinate Judge of Kumbakonam as Original Suit No. 22 of 1924. The parties to that suit included defendants numbered 3 and 6, namely Balaguru A S M I Odayar and Swaminaths Odayar. The former was the natural father of the latter, who had been adopted into another branch of the family. Under the decree the plaintiff‑defendant 6 was allotted a share of four‑fifteenths of the joint family property, while defendant 3 was allotted a share of two‑fifteenths. A preliminary decree of partition was pronounced on 25 October 1924. During the pendency of an appeal against that preliminary decree, defendant 3 became insolvent. Consequently, the Official Receiver of West Tanjore, representing the insolvent branch, was impleaded as a party to the suit on 12 February 1929. The Subordinate Court at Kumbakonam issued the final decree of partition on 26 September 1932. Defendant 6 pursued an appeal to the Madras High Court, recorded as A. S. No. 60 of 1933, and the High Court rendered a final decree on 9 May 1938. That decree assigned certain properties to the branch of the third defendant and, for the purpose of equalising the partition, ordered the Official Receiver, acting for the third defendant’s branch, to pay a sum of Rs 24,257‑0‑8 to defendant 6, with interest at six per cent per annum from 26 September 1932, together with various inter‑se adjustments. The decree further directed the Official Receiver, in whose custody the estate of the third defendant’s branch was vested, to sell those portions of the estate not subject to a charge for the maintenance of the ninth defendant, to satisfy the amounts decreed payable by the third defendant, and to make payments on behalf of that branch in accordance

The High Court, in C.M.P. No. 5697 of 1939, issued a final direction altering the wording of paragraph 4(b) of the decree in A.S. No. 60 of 1933. It replaced the phrase “be at liberty” with “be directed” and inserted the words “third Defendant’s Branch” wherever the phrase “third Defendant” had previously appeared. This direction was prompted because, after the final decree for partition dated 9 May 1938, the parties had applied to the High Court for directions to settle their respective rights among themselves. When the Court was ready to give those directions, the Official Receiver of West Tanjore appeared and informed the Court that he had no objection to selling portions of the estate sufficient to satisfy the sum adjudicated as payable by the third Defendant’s Branch to Defendant No. 6. Relying on that statement, the High Court chose not to impose a charge on the properties allotted to the third Defendant’s Branch, which had originally been contemplated in the judgment, for the sum of Rs 24,257‑0‑8. Meanwhile, the Official Receiver of West Tanjore had, on 5 July 1935, sold certain portions of the property that belonged to the third Defendant’s Branch and had realized Rs 8,250 from that sale. On 25 January 1940, Defendant No. 6, now the appellant, filed a petition under Order 21 Rule 11 sub‑rule (2) of the Civil Procedure Code, identified as E.P. No. 15 of 1940, seeking a direction that the Official Receiver of West Tanjore, representing the third Defendant’s Branch, should either pay to the appellant or deposit with the Court Rs 8,250, the amount already realized, toward the total sum of Rs 36,983‑9‑6 that was owed to the appellant by the third Defendant’s Branch, including interest as specified in the High Court decree of 9 May 1938 in A.S. No. 60 of 1933. The respondent did not raise any objection to the appellant’s claim at that time.

In addition, two other decree holders, namely Thinnappa Chettiar and Palaniappa Chettiar, had secured decrees against Defendant No. 3 and Defendant No. 4 based on promissory notes executed by the latter on 14 March 1925. The decree in favour of Thinnappa Chettiar was dated 15 August 1929, while the decree in favour of Palaniappa Chettiar was dated 17 July 1928. On 3 July 1955, Thinnappa Chettiar filed a petition under Order 29 Rule 11(2), Rules 54, 62, 66 of the Civil Procedure Code, identified as E.P. No. 25 of 1935, seeking to realise Rs 35,224‑2‑6 by attaching and selling immovable property owned by his judgment debtor. On 4 July 1935, he attached the shares of the sons of Defendant No. 3 and Defendant No. 

In the proceedings concerning certain immovable properties, the Court observed that the attachment on those properties had not been effected; consequently, the sales carried out by the respondent on 5 July 1935 of the properties that formed part of the share of the third defendant’s branch were upheld. On 30 September 1935, Thinnappa Chettiar filed an application, designated as E.A. No. 376 of 1935, invoking section 151 of the Civil Procedure Code and requesting that the sum of Rs 6,600, which had been realised following the order of attachment obtained by him, be transferred by the respondent to him by way of a cheque. Both E.P. No. 25 of 1935 and E.A. No. 376 of 1935 were subsequently dismissed by the District Judge on 14 August 1937. Dissatisfied with those dismissals, Thinnappa Chettiar instituted appeals, recorded as A.A. Nos. 349 and 350 of 1937, challenging the District Judge’s orders. On 10 August 1939 the High Court examined the matter and held that the leave of the Insolvency Court was not a prerequisite before initiating the execution proceedings; accordingly, it remanded both E.P. No. 25 of 1935 and E.A. No. 376 of 1935 to the District Court for disposal in accordance with law.

The learned District Judge, seeking to prevent contradictory rulings and to avoid the complications of multiple parallel proceedings, permitted the appellant to be made a party to both E.P. No. 25 of 1935 and E.A. No. 376 of 1935, and likewise incorporated Thinnappa Chettiar as a party to the proceedings identified as E.P. No. 15 of 1940. He then issued a comprehensive order covering all three matters—E.P. No. 25 of 1935, E.A. No. 376 of 1935 and E.P. No. 15 of 1940—after they were heard before him. In his reasoning, the Judge noted that although the term “charge” was not expressly employed in the High Court’s decree in A.S. No. 60 of 1933, the directions given by that decree to the respondent, considering the circumstances of the case, effectively created a charge on the properties belonging to the share of the third defendant’s branch. This finding formed the basis of the petition that had been filed as E.P. No. 15 of 1940. He further observed that the direction must be deemed to have been made in favour of the sixth defendant so that the amount decreed in his favour could be paid by a Court Official who had possession of the properties, and that the High Court likely considered it unnecessary to state explicitly that a charge had been created over those properties.

Accordingly, the District Judge directed the respondent to deposit with the Court, to the credit of E.P. No. 15 of 1940, the sale proceeds amounting to Rs 8,250, after deducting the respondent’s legitimate expenses, for payment to the appellant. The application E.A. No. 376 of 1935 was dismissed with costs awarded against the respondent, and the matter of E.P. No. 25 of 1935 was adjourned to 21 January for further proceedings.

The proceedings continued in 1942 concerning additional parcels of property. During that year Thinnappa Chettiar lodged appeals against the earlier orders, identifying the appeals as A.A. Nos. 229, 429 and 483 of 1942 before the High Court. While those appeals were pending, the respondent placed a sum of Rs 5,200 into the court’s deposit on 9 January 1942, allocating it to the decree in favour of the appellant. Subsequently, on 5 February 1940, the learned District Judge issued an additional direction that authorised the respondent to sell the properties which the High Court had previously ordered to be sold by its order dated 9 May 1938 in A.S. No. 60 of 1933. The district judge’s order required that the proceeds of that sale be applied to satisfy the petitioner as directed by the High Court, and that the sale be carried out notwithstanding the attachment ordered in E.P. No. 25 of 1935, with the proceeds to be free of that attachment. On 11 May 1942, a sum of Rs 5,500, representing the sale proceeds of certain properties belonging to the branch of the third defendant, was adjusted by the appellant. Later, on 23 January 1940, the respondent paid the appellant an additional amount of Rs 26,966 and also adjusted a further sum of Rs 11 towards costs payable by the appellant. The High Court finally disposed of the three appeals, A.A. Nos. 229, 429 and 483 of 1942, on 5 November 1943. In that decision the Court held that the district judge’s practice of impleading strangers as parties to the execution petition and to the execution applications could not be sustained. Accordingly, the Court ordered that both the appellant and Thinnappa Chettiar be removed from the list of parties in E.P. No. 25 of 1935, B.A. No. 376 of 1935 and E.P. No. 15 of 1940. The Court further found that the decree dated 9 May 1938 in A.S. No. 60 of 1933 did not create a charge over the sum of Rs 24,257‑0‑8 awarded to the appellant, observing that “it is clear from the language used that the learned judges who disposed of A.S. No. 60 of 1933 did not intend to create a charge and the decree did not have the legal effect of creating a charge.” Consequently, the High Court directed that the name of Thinnappa Chettiar be struck out from the array of parties in E.P. No. 15 of 1940, that the appellant’s name be struck out from the array of parties in E.P. No. 25 of 1935 and E.A. No. 376 of 1935, and that all three pending applications be remanded to the lower court for disposal on the merits, taking into account the observations contained in that order.

Following the High Court’s ruling, which negated the appellant’s claim to priority, the respondent filed an application on 29 July 1944, identified as E.A. No. 182 of 1944, requesting that the Court issue a cheque for the Rs 5,200 that had been deposited by the respondent on 9 January 1942. In response, the appellant lodged his own application on 7 August 1944, recorded as E.A. No. 195 of 1944, seeking relief in the same matter.

In this dispute the respondent sought a court order for the issuance of a cheque for the sum of Rs 5,200, which he claimed to have deposited and which he asserted was due to him under the decree dated 9 May 1938. While the applications concerning this demand were still pending, the respondent instituted an execution petition, identified as Execution Petition No 35 of 1944, on 27 September 1944. The petition was filed under sections 1414 and 151 and Order 21 Rule 11 as well as Rule 37 of the Civil Procedure Code. In that petition the respondent prayed that the court direct the appellant to pay him the following amounts: first, the Rs 5,200 that the respondent had deposited in the court on 8 January 1942 and which he had claimed in Application E.A. No 182 of 1944; second, the proceeds of a sale that the appellant had adjusted on 15 May 1942 together with interest calculated at six per cent per annum from 12 May 1942, the total of which amounted to Rs 6,283‑12‑0; third, an amount of Rs 26,966 that the appellant had paid on 23 June 1942; and fourth, an amount of Rs 11 that the respondent had adjusted for costs due on 23 June 1942. Items three and four together summed to Rs 26,977, and the respondent also claimed interest on that combined amount at six per cent per annum from 23 June 1942 up to the date of the hearing, which he calculated to be Rs 3,722‑13‑6. In total the respondent therefore claimed a sum of Rs 42,183‑9‑6 from the appellant. The matters raised in Applications E.A. No 182 of 1944, E.A. No 195 of 1944 and Execution Petition No 35 of 1944 were all heard by the District Judge on 14 July 1945. The learned District Judge interpreted the High Court order dated 5 November 1943 to mean that the appellant’s claim to priority remained a matter for further adjudication. He noted that the High Court had held only that the decree in A.S. No 60 of 1933 did not, by itself, create a charge in favour of the appellant, and that the question of whether the appellant was entitled to priority in respect of his claim had not been finally determined by that decision. The District Judge observed that the determination of priority depended on the factual circumstances of the earlier litigation, namely O.S. No 22 of 1924 in the Sub‑Court of Kumbakonam and A.S. No 60 of 1933 in the High Court, and on the reasons given by the Official Receiver, who had been present when the order in A.S. No 60 of 1933 was made, to state that he was prepared to sell parts of the estate as necessary to satisfy the decree in favour of the appellant. After examining these facts, the District Judge concluded that, with respect to the sums due under the partition decree and directed to be paid from the estate of the third defendant’s branch as an equitable adjustment, the appellant possessed a superior title. He further reasoned that, even assuming the direction concerned a particular immovable property, such property would not have formed part of the insolvent estate. Consequently, the District Judge held that the respondent was not

The Court held that the respondent was entitled to restitution for the payments that had been made and that the appellant was clearly entitled to those amounts, as well as to the sum then held on deposit, because the estate in insolvency did not, in the strict legal sense, comprise those assets. Consequently, the applications identified as E. P. No. 35 of 1944 and E. A. No. 182 of 1944 were dismissed. In contrast, the application identified as E. A. No. 195 of 1944 was allowed, and the appellant was declared entitled to the amount that had been deposited with the Court.

The respondent filed appeals before the High Court against the orders of the District Judge, citing appeals numbered A.A. 0. Nos. 724, 725 and 726 of 1945. The High Court recognised the persuasive force of the arguments presented on behalf of the appellant, but it felt bound by the construction previously placed upon the judgment and decree by the High Court on 5 November 1953. The High Court observed that even if that construction did not constitute a strictly binding precedent on a pure question of law, the Court would be reluctant to deny the respect due to that earlier decision in the interests of judicial comity, irrespective of whatever construction the Court might have adopted had the question arisen for the first time before it.

Accordingly, the High Court held that the appellant was debarred by the principles of constructive res‑judicata from raising any other grounds of priority or preference after remand, where such grounds bore no relation to the decree that formed the basis of E. P. No. 15 of 1940. The Court also expressed the opinion that, even assuming no res‑judicata applied in the appellant’s favour, the provisions of the Provincial Insolvency Act, as they stood, would prevent the appellant from claiming any priority if his status as a secured creditor, as defined in section (2)(e) of the Act, could not be sustained.

A further argument was advanced before the High Court, contending that a provision in a partition decree for a mere payment by one co‑sharer to another, intended to equalise shares, created by operation of law a charge over the share allotted to the paying co‑sharer, without any express or implied creation of a charge by the Court. The High Court refused to consider this argument, relying on its earlier conclusion, and also rejected the appellant’s contention that the provision for such payment in the partition decree constituted an “owelty provision.” The Court observed that the term merely signified a desire for equality and, in the context, implied only a provision for adjustment or equalisation of shares and nothing more.

Having reached these conclusions, the High Court determined that the respondent was entitled to the restitution he sought and consequently allowed the appeals, awarding costs to the respondent.

In the appeals, the Court set aside the order of the learned District Judge, allowed the applications identified as E. P. No. 35 of 1944 and E. A. No. 182 of 1944, and dismissed the application identified as E. A. No. 195 of 1944. The appellant had obtained certificates of fitness from the High Court under Article 133 of the Constitution, and on that basis the present appeals came before the Court. The principal issue that required determination was the nature of the rights that the appellant had acquired with respect to the payment of Rs 24 257‑0‑8 together with interest, which the respondent was to make as representative of the third Defendant’s branch, in accordance with the term of the decree dated 9 May 1938 in A.S. No. 60 of 1933. It was necessary to recall that the decree at issue was a decree for the partition of the properties belonging to a joint family, of which the third Defendant and the appellant were both coparceners. In effecting such a partition it was not possible to divide the properties strictly by metes and bounds, because a division of equal physical portions would inevitably assign property of differing values to the various members. Consequently, a member receiving property of a larger value would be required to make a monetary adjustment to the member receiving property of a smaller value so that the respective shares would be equalised. This legal adjustment had long been recognised and was described as a “provision for owelty or equality of partition.” The Court referred to the passage from Story on Equity (Third Edition), page 277, paragraph 6541, which explained that in partition proceedings the jurisdiction of courts of equity extended beyond a simple division of land. The equity courts were not limited, as courts of law were, to a mere allocation of real estate according to each party’s interest and the true value thereof; instead, equity courts could, in order to achieve a more convenient and fair partition, decree a pecuniary compensation to one party for owelty or equality of partition, thereby preventing an injustice or avoidable inequality. The Court also quoted Lawrence on Equity Jurisprudence (1929), Volume I, pages 1227‑1228, section 1147, which stated that the ordinary method of partition was a physical severance of the separate interests, with sale authorised only when a fair partition was otherwise impossible or would be prejudicial. The passage further clarified that there was no power of judicial sale at common law, and that a court ordering a physical partition could make its decree effective by compelling the parties to convey their respective interests mutually. Moreover, owelty of partition could be awarded to equalise the shares of the parties, and such an award could be incorporated into the decree.

The Court explained that an owelty operates as a lien on the portion of land that is allotted in excess to a co‑sharer. The lien is intended only where it is necessary to achieve a fair partition, and the Court emphasized that it should be used sparingly. This principle was summarized in Freeman’s “Cotenancy and Partition” (1886 edition), page 676, paragraph 507, under the heading “Owelty.” The text there states that when an equal division of property cannot be accomplished by physical division, a court of equity may order the party who receives the more valuable portion to pay a sum to the other party. The sum required to equalize the partition is termed “owelty,” and it creates a lien on the party who receives the benefit of the award. The commentary further observes that the law cannot allow one person to receive property from another without providing an equivalent or sufficient security, and that the owelty lien takes priority over any prior mortgages or other encumbrances that may exist against the co‑tenant against whom the owelty is awarded.

The Court noted that this provision treats owelty as a lien that the co‑sharer who is awarded the amount acquires with respect to the excessive allotment granted to the other co‑sharer. The concept of owelty and the associated lien is also described in Corpus Juris Secundum, volume 68, section 15. Section 15 discusses owelty and the lien that may arise from it. It explains that parties to a voluntary partition may agree to pay owelty in order to equalise the shares allotted. Owelty is the difference paid or secured by one co‑owner to another for the purpose of equalising a partition. Historically, the power to award owelty has been regarded as necessary to the act of partitioning property; parties may agree to such payment, and where the partition is delegated to commissioners, those commissioners also possess the power to award owelty as a necessary incident to the partition.

The section further addresses liens, stating that an agreement for owelty in a voluntary partition of land ordinarily creates a lien or charge on the land resulting from the partition. Such a lien may arise from an express agreement between the parties or may be implied when no explicit agreement exists. Consequently, when owelty is awarded to a member to equalise shares following an excessive allotment of immovable property to another member of a joint family, the award ordinarily creates a lien or charge on the land taken under the partition. This lien may be created expressly by the terms of the partition decree, thereby establishing a legal charge in favour of the member who receives the owelty. However, the Court observed that if the decree does not expressly create such a charge, the lien may still arise by implication from the terms of the partition.

In this case the Court explained that a lien in favour of a co‑sharer may arise even when the partition decree does not contain an express provision creating such a lien. The lien is deemed to be implied by the very terms of the partition because the decree seeks to equalise the shares of the joint family members. Accordingly, a member who receives an excessive allotment of property on the partition cannot assert that he obtains the allotted share free of any duty to pay owelty to the other members. The share he receives is subject to the obligation to pay the owelty, and the law necessarily imposes on him the duty to satisfy the owelty out of the properties allotted to his share. By implication, a corresponding lien attaches to those properties in favour of the members to whom the owelty is awarded. The Court further observed that this position is the ordinary rule when a partition decree results in an unequal distribution of property among the members of a joint family. The rule also applies where an encumbrance, such as a mortgage, had already been created on a member’s share before the partition was effected. In such circumstances the encumbrance is postponed to the member who is designated as the recipient of the owelty under the partition decree. A lien or charge created in favour of that member in respect of the owelty therefore takes precedence over the earlier encumbrance. The Court cited authority that confirms that a lien or charge for owelty enjoys priority over a prior mortgage.

The Court reproduced the authoritative statement from Mitra on the Law of Joint Property and Partition in British India, Second Edition, page 414, which explains the principle. The passage notes that sums ordered to be paid for the purpose of equalising the values of the shares are legally described as “owelty,” and that the Commissioners have no power to award this compensation unless the Court expressly authorises it, referring to Rule 14 of Order XXVI of the Code of Civil Procedure. The passage further provides that when a partition suit results in a decree directing one co‑sharer to pay owelty to another, the Court may direct that the sum be treated as a charge on the share allotted to the paying co‑sharer. If, prior to the partition, the co‑sharer had created a mortgage over his undivided interest, the charge for owelty will rank ahead of that mortgage. The Court quoted the decision in Shahebzada Mohammed Kazim Shah v. R. S. Hill (1907) I.L.R. Cal. 388, which affirms this rule. A similar principle appears in Mulla’s Transfer of Property Act (4th Edition), page 211, where the author states that the lien of a co‑sharer for owelty on partition is entitled to precedence over prior mortgagees of the property allotted to the co‑sharer liable to pay owelty. The Court described the facts of the Shahebzada Mohammed Kazim Shah case: the appellants were awarded owelty sums of Rs 37,000 and Rs 9,500 on partition, and at the time of partition a mortgage subsisted on a portion of the property that formed the subject‑matter of the partition, as reported in I.L.R. (1907) 35 Cal. 388, 392, 393. The judgment concluded that the owelty charge had priority over the existing mortgage.

In the case under discussion, the Court examined whether the sums awarded as owelty on partition should have priority over existing mortgagees. The judgment of Maclean C. J. stated that the question of priority required identification of the substituted property that the mortgagor acquired through the partition. He observed that the mortgagor received only the house numbered 52‑2 Park Street, and that this property remained subject to the charges of Rs 37,000 and Rs 9,500 in favor of the appellants. Consequently, the Court held that the mortgagees known as the Roy mortgagees could rank only as mortgagees of that house, and only subject to the charges created by the decree. Judge Stephen J., delivering a short but concurring opinion, added that it was clear that the appellant’s claim, which constituted a charge on the property, represented a deduction from the property's corpus and was not affected by any possession‑related dealings on which the first‑instance judge’s decision was based. The facts of the case left no doubt that a charge had been expressly created in favor of the co‑sharer who had been awarded owelty, yet the Court expressed that this fact did not alter the legal position. The Court explained that whenever a partition decree contains a provision for owelty, the member for whose benefit the provision is made acquires a lien or charge over the property allotted to the member who received a higher‑valued share. The Court further clarified that if such a lien or charge is expressly stated, it exists; even when it is not expressly stated, the provision necessarily implies the creation of a lien or charge in favor of the entitled member for the amount of the owelty. This principle was subsequently applied in Poovanalingam Servai v. Veerai, where Phillips J. affirmed that all equities between members of a coparcenary must be worked out by allocating to each member the share to which he is equitably entitled. Citing Freeman’s Co‑tenancy & Partition, the learned judge observed that even an equitable charge, though not a legal one, may be enforced on equitable grounds, and that such an equitable charge should be upheld when partitioning property between co‑tenants. The High Court, in its order dated 5 November 1943, initially erred by holding that no charge was created in favor of the appellant under the decree dated 9 May 1938 in A.S. No. 60 of 1933. The Court noted that the legal advisers of the appellants were responsible for inviting the Court to interpret the decree as creating an express charge, a conclusion the High Court correctly rejected because the decree did not contain an express charge. Nevertheless, the High Court should have considered whether the owelty provision in the decree necessarily implied a lien or charge in favor of the appellant for the sum of Rs 24,257‑0‑8 and interest, a point on which the High Court erred.

In the earlier judgment the Court correctly observed that the decree dated 9 May 1938, filed in A.S. No. 60 of 1933, did not contain any express charge in favour of the appellant; consequently the High Court was right to hold that no such express charge was created. However, the High Court should also have examined whether, by virtue of the provision for owelty that was included in the terms of that decree, a lien or a charge was necessarily implied in favour of the appellant for the payment of the sum of Rs 24,257‑0‑8 together with interest, to be drawn from the properties that formed the share of the third Defendant’s branch. The High Court failed to consider this point and therefore erred. The same error was repeated when the High Court passed the orders that are now under appeal in A. A. O. Nos. 724, 725 and 726 of 1945. The question that the High Court ought to have asked itself was whether, despite the absence of an express charge under the decree, the provision for owelty created, by necessary implication, a lien or a charge on the properties belonging to the third Defendant’s branch for the payment of Rs 24,257‑0‑8 and interest. Even if no express charge existed, equity imposed a lien or a charge on those properties, and the third Defendant’s branch could not acquire its share on partition without first satisfying the obligation to pay that sum out of the same property. Accordingly, the appellant was, in our opinion, entitled to receive the amount of Rs 24,257‑0‑8 with interest from the properties that comprised the third Defendant’s branch share at the time of partition, which had come into the possession of the respondent as a result of Defendant No. 3’s insolvency. This view was correctly adopted by the learned District Judge when he issued orders in favour of the appellant on 14 July 1945. The following passage from his judgment accurately reflects the situation 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 Receiver himself.”

In this case the Court observed that the estate that fell into the possession of the Official Receiver was composed of certain immovable properties, from which a sum had to be deducted because the Official Receiver himself was to sell the available portions of the estate in order to pay the amount that the present Respondent was directed to receive. The source of this situation was O.S. No. 22 of 1924, which was a partition suit pending in the Kumbakonam Sub‑Court. In that suit the present Respondent was a sharer and partner, while the branch of the third Defendant represented another share. When the Court decreed the partition, it found that equities required adjustment among the several sharers. The decree held that the branch of the third Defendant was liable to the present Respondent for certain over‑drawals made by the third Defendant during the Respondent’s minority and for certain lease amounts that were due. Because insolvency had subsequently arisen, the Official Receiver represented the branch of the third Defendant in the appeal. The Court noted that the difficulty would disappear if the decree were assumed to have dealt with actual sums of money rather than with immovable property. In that hypothetical situation the estate that would have vested in the Official Receiver after the appellate decree, for administration under the insolvency law, would consist of the monetary amounts assigned to the branches of the third Defendant and to the plaintiff at the time of partition, after deducting the amounts payable to the other co‑sharers, including the present Respondent. The Court emphasized that the mere fact that the estate actually comprised immovable property, and that the present Respondent’s claim for an equitable adjustment was expressed as a direction to pay by selling a necessary portion of that estate, does not alter the central fact. Consequently, the present Respondent could not be regarded as a creditor of the insolvent branch. Regarding the sums that the partition decree directed to be paid from the estates of the plaintiff and the third Defendant as an equitable adjustment, the Respondent possessed a superior title. Even if, for the sake of argument, the direction had related to a specific immovable item, such an item would not have formed part of the estate in insolvency. The Court also recorded that counsel for the Official Receiver, Mr T S Krishnamurthi Ayyar, conceded that a well‑known principle in partition suits is that shares are initially assigned on a simple basis for administrative convenience, with inter‑share claims being worked out by specific payment directions. Nevertheless, the shares that the parties actually derive are those that are subject to or qualified by the adjustment directions. If this was indeed the factual position, as the Court believed, then the orders under appeal issued by the High Court were plainly erroneous. Moreover, there was no justification for the Respondent to seek the withdrawal of the sum of Rs 5,200 that he had deposited.

The respondent had previously deposited money with the Court on 9 January 1942 and had also claimed restitution of the sums of Rs 5,500, Rs 26,966 and Rs 11 together with the interest due on those amounts. Those monies had been paid by the respondent in compliance with the directions contained in the decree dated 9 May 1938, which was issued in appeal A.S. No. 60 of 1933. The Court observed that the payments had been made correctly by the respondent and that, because they were made pursuant to a valid decree, they could never become the subject‑matter of any execution proceedings that the respondent might later initiate. The Court further considered whether Order A.144 read with Section 151 of the Civil Procedure Code could apply to the present circumstances. After examining the question, the Court concluded that the claim made by the respondent for the aforesaid sums was wholly unjustified. Consequently, the Court held that the orders passed by the High Court in appellate applications numbered A.A.O. Nos. 724, 725 and 726 of 1945 were erroneous and ought to be set aside.

In a letter dated 21 November 1953 addressed to the Registrar of this Court, the respondent informed that none of the creditors had offered to finance the defence of the appeals. The Insolvency Court, identified as the Sub‑Court at Tanjore, had ordered that the matters might be left undefended because the estate possessed insufficient funds to meet the costs of defending the appeals. The respondent therefore requested that, when the appeals were heard and decided, the Court issue a direction that no order for costs be made against him. The Court explained that it could not free the respondent from the liability to pay costs that ordinarily follow such proceedings. Accordingly, the Court ordered that the appeals be allowed, that the execution petition No. 35 of 1944 and the appeal No. 182 of 1944 be dismissed, that appeal No. 195 of 1944 be allowed, and that the respondent be required to pay the appellants’ costs incurred in these proceedings both in this Court and in the subordinate courts. This separate judgment was delivered by Justice Sarkar. The appeals under consideration arose from a judgment of the Madras High Court which had set aside a judgment of the District Judge of West Tanjore. That district judge had disposed of three applications in certain execution proceedings. The factual background to those applications was as follows: a suit for the partition of the property of a family of Odayars, designated Suit No. 22 of 1924, was filed before the Subordinate Judge of Kumbakonam. Numerous parties were involved in that suit, but the Court’s attention was focused on two of them—Balagurusami, who was Defendant No. 3, and Swaminathaudayar, who was Defendant No. 6 and who is the appellant before this Court. On 25 October 1924, the Subordinate Judge issued a preliminary decree for partition in the suit. One of the parties to the suit appealed against that preliminary decree to the Madras High Court, and while that appeal was pending before the High Court, the subsequent proceedings unfolded as described in the judgment.

During the pendency of the appeal before the High Court, Balagurusami was declared insolvent, and consequently all of his assets, including his share in the properties that formed the subject of the partition suit, became vested in the Official Receiver of West Tanjore. The Official Receiver therefore became the respondent in the present appeals. On 12 February 1929 the High Court, while hearing the appeal that was pending, issued an order that added the Official Receiver as a party to the partition suit. The appeal was subsequently disposed of, and the matters relating to the preliminary decree will not be addressed further because the present appeals do not concern that decree.

After the appeal from the preliminary decree was decided, the matter returned to the learned Subordinate Judge, who on 26 September 1932 passed a final decree for partition. The appellant, who is the present petitioner, was dissatisfied with that final decree and therefore filed an appeal to the High Court at Madras, which was recorded as A.S. No. 60 of 1933. The High Court delivered its judgment and decree on 9 May 1938, in which it altered the decree of the lower court. The High Court decree contained several important provisions that are decisive for the issues raised in the present appeal. First, it directed that the Official Receiver of West Tanjore, acting on behalf of the branch of Balagurusami, the third defendant, should pay to the appellant, the sixth defendant, the sum of Rs. 24,257‑0‑8 together with interest at the rate of six per cent per annum calculated from 26 September 1932. Second, it ordered that the Official Receiver, in whose possession the estate of the third defendant was vested, should sell portions of that estate in order to satisfy the amounts ordered to be paid by the third defendant’s branch, and that the Official Receiver should make the payments on the branch’s behalf in accordance with the judgment.

Before the High Court’s final decree of 9 May 1938 was pronounced, a creditor of Balagurusami named Thinnappa, who had obtained a money decree against Balagurusami in 1929, filed an execution application seeking attachment and sale of the shares of the sons of the third defendant in the joint‑family properties. This application, recorded as E.P. No. 25 of 1935, was filed on 3 July 1935. An order for attachment in favour of Thinnappa was subsequently issued, and the attachment was effected on certain properties on 6 July 1935. Meanwhile, on 5 July 1935 the Official Receiver sold some of the properties belonging to Balagurusami’s branch as part of the insolvency administration and received Rs. 2,100, and a further payment of Rs. 6,150 was received on 18 July 1935. On 30 September 1935 Thinnappa filed an application, marked E.A. No. 376 of 1935, requesting that the Official Receiver be ordered to bring into court for payment to him the sum of Rs. 6,600 out of the sale proceeds that the Official Receiver had earlier received.

The learned District Judge of West Tanjore dismissed the two applications filed by Thinnappa on the ground that no leave had been obtained to proceed against the Official Receiver from the court managing the insolvency proceedings. Thinnappa appealed this dismissal to the High Court at Madras, and the High Court set aside the dismissal and ordered that the applications be heard on their merits. The High Court held that leave to proceed against the Official Receiver was not required because the execution sought was against the sons of the insolvent. This order was dated 10 August 1939. Before the District Judge could rehear the two applications, the present appellant filed, on 25 January 1940, an application requesting that the Official Receiver deposit into court the sum of Rs 8,250, which represented the entire sale proceeds of certain properties belonging to Balagurusami’s branch that had previously been received by the Receiver. The application was recorded as E.P. No. 15 of 1940. The District Judge considered that the three applications – the two of Thinnappa, E.P. No. 25 of 1935 and E.A. No. 376 of 1935, and the appellant’s E.P. No. 15 of 1940 – would be best dealt with together. Accordingly, on 13 September 1941 he issued orders joining the parties: the appellant was made a party to Thinnappa’s two applications and Thinnappa was made a party to the appellant’s application. The three matters were then heard jointly and a single judgment was delivered on 23 December 1941.

During the hearing, counsel for the appellant contended that the appellant was entitled to the whole of the sale proceeds because the final partition decree dated 9 May 1938 had created a charge in his favour on the properties that had been allotted to the Official Receiver as representing Balagurusami’s branch. Counsel for Thinnappa argued that Thinnappa’s attachment gave him a prior right to the sale proceeds. After considering the arguments, the District Judge concluded that the May 9 1938 decree indeed created a charge in favour of the appellant. Consequently, the Judge ordered the Official Receiver, who was a party to all three applications, to deposit the sale proceeds amounting to Rs 8,250 into court to the credit of the appellant, after deducting the expenses of the sale. The Judge also dismissed Thinnappa’s application E.A. No. 376 of 1935, which sought an order directing the Official Receiver to pay him Rs 6,600 out of the sale proceeds.

The Court recorded that the application of Thinnappa identified as E. P. No. 25 of 1935 had been postponed until 21 January 1942 for further consideration of other properties, and that, following the learned District Judge’s earlier decree, the position on 23 December 1941 was that the appellant possessed a charge over the properties allotted to the Official Receiver as representing Balagurusami’s branch for the amount specified in the decree of 9 May 1938. Consequently, on 9 January 1942 the Official Receiver deposited in Court a sum of Rs. 5,200, crediting it to the appellant; this amount represented the proceeds of the sale of the properties over which the appellant had been found to have a charge. Relying upon the finding of a charge in his favour, the appellant filed an application on 19 March 1942, recorded as E. A. No. 34 of 1942, seeking an order directing the Official Receiver to sell the properties belonging to the Balagurusami branch of the insolvent so that the decree‑specified sum could be satisfied from the sale proceeds. On 5 February 1942 an order was issued on that application granting leave to the Official Receiver to sell the properties and to pay the appellant his decretal amount out of the proceeds. Thereafter, during May and June 1942, the Official Receiver made various payments to the appellant, either in cash or by adjustment, amounting in total to Rs. 32,477, to satisfy the amount due under the decree. Thinnappa, however, remained dissatisfied with the District Judge’s decision of 23 December 1941 and appealed that decision to the Madras High Court. Because the order covered three separate applications, Thinnappa filed three distinct appeals, recorded as A.A. No. 229, 429 and 483 of 1942. On 5 November 1943 the High Court delivered its judgment, allowing all three appeals. The High Court held that the procedure adopted by the learned District Judge in making the appellant a party to Thinnappa’s two applications (E. P. No. 25 of 1935 and E. A. No. 376 of 1935) and in making Thinnappa a party to the appellant’s application (E. P. No. 15 of 1940) could not be sustained. Moreover, the High Court concluded that the decree of 9 May 1938 did not create any charge on the properties of the Balagurusami branch in favour of the appellant. Accordingly, the High Court ordered that Thinnappa’s name be struck out of E. P. No. 15 of 1940, that the appellant’s name be struck out of E. P. No. 25 of 1935 and E. A. No. 376 of 1935, and that all three applications be remitted to the lower court for disposal on their merits in light of the observations contained in the High Court’s order. In view of the High Court’s finding that the appellant did not possess the alleged charge, the subsequent proceedings concerning restitution and the recovery of the sums previously deposited and paid were set to be addressed.

Because the High Court had concluded that the appellant did not possess the charge he claimed, the Official Receiver believed he was entitled to recover from the appellant the sum of Rs 32,477 that had been paid to him earlier. This payment had been made following the learned District Judge’s finding dated 23 December 1941 that a charge existed. In the same vein, the Official Receiver also sought to withdraw the sum of Rs 5,200 that had been deposited in court to the appellant’s credit under similar circumstances. Consequently, on 29 July 1944 the Official Receiver filed an application numbered E.A. No. 182 of 1944, requesting an order that the Rs 5,200 deposited by him in court on 9 January 1942 to the appellant’s credit be returned to him. A few weeks later, on 27 September 1944, he lodged a second application, numbered E.P. No. 35 of 1944, seeking a decree that the appellant repay the Rs 32,477 that had been paid in cash and by adjustment, together with interest, bringing the total claim to Rs 36,983/9/6. In response, the appellant filed his own application on 8 August 1944, identified as E.A. No. 195 of 1944, asking that the Rs 5,200 deposited by the Official Receiver on 9 January 1942 be paid to him. All three applications were considered together by the learned District Judge of West Tanjore, who delivered a single judgment on 14 July 1945. In that judgment the Judge observed that the High Court’s decision of 5 November 1943—issued in the appeals numbered A.A.O. Nos. 229, 42429 and 483 of 1942—had held that the final partition decree dated 9 May 1938 did not legally create a charge in favour of the appellant. However, the High Court had not resolved whether the appellant was entitled to any priority with respect to his claim. Addressing the priority issue, the Judge found that the estate in insolvency vested in the Official Receiver by the May 9 1938 decree consisted only of certain immovable properties, reduced by the sums that were ordered to be paid under the decree. Because the estate did not, in a strict legal sense, include the monies that the Official Receiver had paid to the appellant or the amount deposited in court, the Official Receiver was not entitled to restitution of those payments. Accordingly, the Judge dismissed the Official Receiver’s application for a refund of Rs 32,477 (E.P. No. 35 of 1944) and also dismissed the application for the return of the Rs 5,200 deposited in court (E.A. No. 182 of 1944). He granted the appellant’s application for payment of Rs 5,266 that had been deposited in court (E.A. No. 195 of 1944). The present appeals arose out of those three applications. The Official Receiver subsequently appealed the judgment of 14 July 1945 to the High Court at Madras.

These appeals were recorded as A.A.0. Nos. 724, 725 and 726 of 1944. The High Court examined them and issued its judgment on 8 February 1950. In that judgment the Court observed that the earlier finding dated 5 November 1943, which held that the appellant did not possess a charge over the properties allocated to the branch of Balagurusami, could not be treated as a binding precedent in a strict sense. Nevertheless, the Court said that, in the interest of judicial comity, the earlier finding must be respected and consequently the appellant could not be said to have a valid charge. The Court also noted that the 5 November 1943 decision left no room for the appellant to press any alternative claim of priority, because he had not raised such a claim in his earlier application, namely E. P. No. 15 of 1940. On that basis the High Court concluded that the appellant was not entitled to any priority. Further, relying on the provisions of the Provincial Insolvency Act, the Court held that the appellant could claim no priority if his alleged charge under the decree of 9 May 1938 failed, and that the charge indeed failed because it had been rejected by the earlier High Court judgment of 5 November 1943, a judgment that the Court was required to accept for the reasons already explained. The Court then turned to the reasoning of the District Judge of West Tanjore, which had described the estate of the insolvent that vested in the Official Receiver as consisting of certain immovable properties reduced by the sums ordered to be paid by the 9 May 1938 decree. The High Court found that description to be overly artificial and unsustainable. Accordingly, the Court held that the Official Receiver was entitled to obtain a refund from the appellant and to recover the monies that had been deposited in court, and that the appellant had no entitlement to the sum in question. In light of these findings, the High Court allowed the appeals marked A.A.0. Nos. 724, 725 and 726 of 1945. From that judgment the appellant proceeded to file an appeal before this Court, and those appeals are now before us for determination.

The present Court reasoned that the decree dated 9 May 1938, issued by the High Court, expressly directed the Official Receiver to pay a sum of money to the appellant. Such a decree is binding upon the Official Receiver, who is obligated to obey it. The Official Receiver complied with the decree; he paid the amount stipulated to the appellant and, in addition, deposited a sum of Rs 5,200 in court to the appellant’s credit. The Official Receiver cannot now claim that the monies he paid ought to be returned to him on the ground that no charge was created over the insolvent’s estate or that the appellant lacked any other basis for priority in payment. Whether a charge was created, or whether any right to priority existed, is irrelevant to the present question. It is sufficient that a valid decree exists ordering the Official Receiver to make the payment, and that the Official Receiver has performed his statutory duty by making that payment. Consequently, the Official Receiver has no right to recover the monies he has already paid, and the appellant is not required to refund them. The Court therefore concluded that the appeals should be allowed, confirming that the decree remains effective and the Official Receiver’s actions were proper and final.

In the present case the Official Receiver had complied with his statutory duty by making the payment that the decree of the High Court required him to make. That decree remained in force and had never been varied or set aside, and consequently the Official Receiver possessed no legal ground to demand the return of the sums that had already been paid. The Official Receiver had applied for a refund order invoking section 144 of the Code of Civil Procedure. However, the court observed that section 144 was intended to apply only where payments were made under a decree that had subsequently been altered or reversed. That situation did not obtain here, because the payments were made in full compliance with a decree that continued to stand and had never been attacked. Moreover, the court noted that the matter was not one in which the appellant could claim merely a dividend arising from the distribution of the insolvent’s estate. Such a situation would have arisen only if the appellant were a creditor of the insolvent estate itself. In this case, the appellant was a creditor of the Official Receiver, not of the insolvent estate. Accordingly, the Official Receiver could not argue that the appellant should repay the amounts he had received so that those sums, together with the other assets of the insolvent estate, might be shared proportionately among all creditors, including the appellant.

The court further held that the earlier judgment of the High Court dated 5 November 1943, which had found that the appellant was not entitled to a charge, and the subsequent acceptance of that finding in the judgment from which the present appeals arose, did not affect the appellant’s right to retain the monies already paid. The appellant’s entitlement derived from the existence of the decree itself, not from whether a charge existed in his favour. Consequently, the court found it unnecessary to resolve the question of whether a charge existed, and it refrained from commenting on that issue. The court also clarified that the 5 November 1943 decision did not operate as res judicata against the Official Receiver, because that decision concerned the dispute between Thinnappa and the appellant. Although the Official Receiver had been a party to the proceedings in which the decision was rendered, the specific issue of the existence of a charge was never litigated between the Official Receiver and either Thinnappa or the appellant, nor was it required to determine the relief sought by those parties. For these reasons, the appeals were allowed with costs throughout, and the court issued the corresponding order, concluding that the appeals were allowed.