Lobo v Walji and Another (Civil Case No. 157 of 1951 (Mombasa)) [1951] EACA 341 (1 January 1951)

### ORIGINAL CIVIL

#### Before de LESTANG, J.

### JOSEPH PEDRO LOBO, Plaintiff

## MODHORAM and POPAT WALJI, Defendants

### Civil Case No. 157 of 1951 (Mombasa)

# Execution proceedings-Attachment-Settlement and release of goods attached on instructions of attaching creditor—Subsequent attachment—Section 47 Civil Procedure Ordinance.

On 26th April, there was a settlement between Lobo (the objector) by which Lobo agreed to pay Timber Trading Co. Sh. 15,000 for building material belonging to Savji Lalji attached by Timber Trading Co. The latter agreed to raise the attachment. The Court broker released the goods on 27th April on the instructions of Timber Trading Co. though the Court order raising the attachment was on 30th April. On 27th April afternoon the broker re-attached the property on behalf of the defendant decree holders.

It was found as a fact that Lobo purchased the goods on 26th April whilst still under attachment; also that Savji Lalji abandoned the goods to him on that day and possession was transferred to Lobo since he employed someone to take charge of them and continue building operations; also that when Lalji received the goods on 17th (27th?) he did so on behalf of the new owner (Lobo) to whom he had on the previous day sold the goods.

It was contended that as the goods were still under attachment when sold the sale was void against all creditors.

Held (19-6-51).—(1) That it is clear from section 47 Civil Procedure Code that a private transfer of property attached is not absolutely void but void only as against claims enforceable under the attachment.

(2) Moreover an alienation to be void must be "contrary to the attachment" and it can scarcely be argued that an alienation for the purposes of satisfying the decree under which the attachment took place is contrary to such an attachment.

(3) "Semble" on attaching creditors may raise an attachment without application to the Court.

Case referred to: Kali Kumar Saha v. Kali Prasanna Majumdar and Others, A. I. R. 1917 Cal 561.

U. K. Doshi for the plaintiff.

A. C. Satchu for the defendants.

JUDGMENT.—This is a suit by way of an originating summons wherein an objector in execution proceedings claims to be entitled to the property attached. I find the facts to be as follows:-

Savji Lalji, a building contractor by trade, had a contract with Joseph Pedro Lobo to build a house on Lobo's plot. For that purpose Savji Lalji brought machinery and materials on the plot. Subsequently while the building was in progress, Messrs. Timber Trading Co. having obtained a decree against Savji Lalji in C. S. 58/51 attached the latter's property on the building site. Soon afterwards the defendants in the present suit obtained a decree against Savji Lalji in C. S. $93/51$ but took no steps to execute it. On 26th April, two days

v.

before the property attached was due to be sold, a settlement was arrived at in which Lobo, Savji Lalji and Messrs Timber Trading Co. took part. Savji Lalji's building contract was terminated and the goods attached which were still lying on Lobo's plot were sold to Lobo for Sh. 15,000 which he undertook to pay to Messrs. Timber Trading Co. and which he in fact paid on the same day by means of five post-dated cheques which were accepted by Messrs. Timber Trading Co. In their turn, Messrs Timber Trading Co. agreed to raise the attachment. In pursuance of this settlement the Court broker was informed on the same day by the advocates of Messrs. Timber Trading Co. not to proceed further with the attachment but to collect his fees from Savji Lalji. At 4 p.m. on the same day the Court broker was given a cheque for his fees which he accepted. He did not, however, release the property under attachment immediately as he wanted to cash the cheque first. So on the morning of 27th having cashed the cheque he released the property to Savji Lalji. Meanwhile application had also been made to the Court by the advocates of Messrs. Timber Trading Co. to raise the attachment and it would appear from the record that the Court order was only made on 30th April. The broker had, however, on the instructions of Messrs Timber Trading Co. released the goods on the morning of 27th. On the afternoon of the same day at 4 o'clock the broker reattached the property again on behalf of the present defendants. It is important to note that the goods in both attachments were the same with two exceptions, viz., some timber had been removed and 40 bags of cement added when the second attachment was made.

It would appear that as soon as the settlement had been agreed on, Lobo instructed a land and estate agent by the name of H. C. Mehta to find a new contractor for him and to take possession of the goods on the building site. It was Mehta who had caused 40 bags of cement to be brought on the site. This cement had been purchased from Nathalal Visram on Lobo's account and in these circumstances it is conceded by the defendants that the cement is the property of the objector and must be released from the attachment in any case.

As regards the rest of the goods, however, I am satisfied on the evidence that they were purchased by Lobo on 26th April while they were still under attachment and that they became his property from that time. I am satisfied also that Savji Lalji abandoned the goods to him on that day and that possession was transferred to Lobo since he employed someone to take charge of them and to continue building operations for him. The removal of the timber and the addition of cement clearly show that the goods were in Lobo's possession and if necessary I am prepared further to hold that when Savji Lalji received the goods from the Court broker on the morning of the 27th he did so on behalf of the new owner Lobo to whom he had on the previous day sold the goods.

It is true that when the sale took place the goods were still under attachment and it is contended on behalf of the defendants that in such circumstances the sale is void as against all creditors of the debtor. I am unable to agree with this contention. The effect of an alienation of property attached is dealt with by section 47 Civil Procedure Ordinance in these words: -

"Where an attachment has been made any private transfer or delivery of the property attached or of any interest therein and any payment to the judgment-debtor of any debt, dividend, or other moneys contrary to such attachment, shall be void as against all claims enforceable under the attachment."

It is clear from this section that a private transfer of property attached is not absolutely void as contended but void only as against claims enforceable under the attachment. This is not the case here. Moreover an alienation to be void

must be "contrary to the attachment" and it can scarcely be argued that an alienation for the purposes of satisfying the decree under which the attachment took place is contrary to such attachment. In support of the defendant's contention, however, the case of Kali Kumar Saha v. Kali Prasanna Majumdar and others, A. I. R. 1917 Cal. 561, has been quoted to me. The head-note to that case reads as follows: $-$

"A transfer by the judgment-debtor of his property which has been attached by his judgment-creditors is not operative under section 64, Civil Procedure Code, as against a subsequent judgment-creditor who in execution of his decree wants to attach that property, even though that decree is $\cdot\,$ passed against the judgment-debtor after he has effected the transfer."

At first sight this case appears to support the defendant's contention but if one studies the short judgment which is by no means very clear one will see that there must have been in that case an attachment before judgment and it is very likely that this attachment was issued before the transfer of the attached decree to a third party had taken place. I think that this can be inferred from the fact that Order 38, rule 11, Indian Civil Provedure Rules is mentioned in the judgment and this rule concerns attachment before judgment. As I understand this case, the only point in the case was whether section 64 of the Indian Civil Procedure Code which corresponds to section 47 of our Civil Procedure Ordinance applied to attachment made before judment where at the time the decree was passed the attached property had been alienated by private contract and the head-note to the case is, in my view, very misleading. That being so the case on which the defendants rely is clearly distinguishable from the present one. It is also contended by the defendants that the raising of the attachment by the Court broker was invalid as it was done without an order of the Court. There does not appear to me to be any objection on principle to the attaching creditor releasing goods attached on his behalf under an order of the Court and there is a circular to Magistrates (No. 8/1932) in which the then Chief Justice of Kenya is quoted as saying that the raising may be done by the judgment-creditor instructing the broker direct. In the circumstances I think that an attaching creditor may raise the attachment without application to the Court. Be that as it may, even if the Court broker acted wrongly in releasing the goods the fact is that he did release them and abandoned all control over them and that when he re-attached them they had passed into the possession and ownership of Lobo. I therefore uphold the objection and find that the objector was both owner and possessor of the goods at the time of the attachment. The attachment is set aside with costs against the defendants.