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PETITIONER: PANDURANG JIVAJI

       Vs.

RESPONDENT: RAMCHANDRA GANGADHAR ASHTEKAR (DEAD) BY LRS.& ORS.

DATE OF JUDGMENT29/10/1981

BENCH: MISRA, R.B. (J) BENCH: MISRA, R.B. (J) KOSHAL, A.D. ERADI, V. BALAKRISHNA (J)

CITATION:  1981 AIR 2235            1982 SCR  (1)1020  1981 SCC  (4) 569        1981 SCALE  (3)1652

ACT:      Evidenc-Section  114   of  the   Evidencc   Act-Adverse inference against  a party  for his failure to appear it the court, when can arise.

HEADNOTE:      Respondent R.G.  Ashtekar (since  dead) filed a regular suit No. 215 of 1959 for the recovery of his dues from Kamla Pictures, Kolhapur  of  which  Bapusaheb  Narayanrao  Mohite (since dead)  was the sole proprietor. On an application for an order of attachment before judgment under order 38 Rule S of the  C.P.C. a garnishee order was issued to the appellant Apte, the mortgagee of The properties. As per the directions of the  court passed on his objection he exercised his right under section  176 of the Contract Act and sold the property attached to  one  Madhusudan  Vasudeo  Bavdekar,  after  due notice to plaintiff Ashtekar and also after a public notice.      The suit  was decreed  for Rs.  9,000 in  favour of the plaintiff, who filed an application for execution and in the said proceedings  Bavdekar, the  purchaser, was impleaded so as to  seek recovery of the properties in his hands by sale, The application  was dismissed holding that the property was pledged with  Apte, who validly sold it to Bavdekar and that the attachment  before judgment itself was invalid. A second appeal before  the High  Court was  rejected  by  the  Chief Justice of  Maharashtra but he granted leave to appeal under letters patent.  The  High  Court  reversed  the  concurrent findings of fact recorded by courts below and in view of the fact that  Apte sold  the property for Rs. 46,000 as against Rs. 35,000  due to  him, the executing court was directed to ask Apte  to deposit  the excess amount of Rs. 11,000 in the executing court  in the  1st instance and in case the entire amount of  the decree  holder was  not  satisfied  then  the executing court  would call  upon the  heirs of  Bavdekar to doposit in  court the remaing amount due to Decree holder or to produce  the property attached within the time allowed by the Court  in the  event of  this failure,  - the  execution court shall  order execution  against them. Hence the appeal by appellant after obtaining special leave.      Allowing the appeal, the Court ^

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    HELD: 1:1. The question of drawing an adverse inference against a  party for  his failure  to appear  in court would arise only  when there is no evidence on the record. Absence of Apte  and Bavdekar  from the court would matter only when there was no evidence on the record on the point in issue.                                            [1026 G-H, 1025A] 1021      1:2  On the findings of fact recorded by the two courts below, which  are  final and which could not be normally set aside by  the  second  Appellate  Court,  the  decree-holder cannot compel  Apte or  Bavdekar to  produce the property as before the Court or the proceeds of the sale of the property as the amount due to Apte from judgment-debtor has not still been satisfied. [1026 G-H, 1027A]      The statement  of the judgment-debtor, the admission of the decree-holder in cross-examination also the averments in the agreement make the position clear. [1026 A]

JUDGMENT:      CIVIL APPELLATE  JURISDlCTlON: Civil Appeal No. 2069 of 1970.      Appeal by  special leave  from the  judgment and  order dated the  21st January,  1970 of  the Bombay  High Court in Letters Patent Appeal No. 60 of 1964.      S. T. Desai and Mrs. J. Wad for the Appellant.      A. G. Ratnaparkhi for Respondent No. 1.      EX-parte for Respondents No. 2 & 3.      The Judgment of the Court was delivered by      MISRA, J.  The present  appeal by  special leave arises out of  an execution  proceeding and is directed against the judgment of  the High Court of Bombay dated 21st of January, 1970 in Letters Patent Appeal setting aside the order of the Single Judge  in Second  Appeal.  The  appeal  came  up  for hearing on  September 24,  1981. After the conclusion of the arguments of  the counsel  for the  parties, we  allowed the appeal with  costs, set aside the judgment of the High Court and restored  that of  the District  Judge for reasons to be recorded later, in the following terms:           "This appeal  is allowed  with costs of this Court      and  the   decree  passed  by  the  District  Judge  is      restored. Reasons will follow later on." G      We now proceed to give the reasons.      Respondent No. 1, Ramachandra Gangadhar Ashtekar (since dead and  represented by  his legal representatives) filed a regular suit  No. 215  of 1959  for the recovery of his dues from Kamla 1022 Pictures, Kolhapur  of  which  Bapusaheb  Narayanrao  Mohite (since  dead   and  represented   by  his  heirs  and  legal representatives) was  the sole  proprietor. It  appears that after filing  the suit  the plaintiff applied for attachment of the  defendant’s properties  before judgment  under order 38, rule  5 of the Code of Civil Procedure and the following properties were attached:      (a)  Picture negative  and sound  negative of  censored           movie "Anant Fandi".      (b)  Rush prints of the above movie.      (c)  Positive prints of the above movie.      (d)  Raw positive films.      (e)  Publicity  part-posters,  litho  posters,  photos,           enlargements, photo-negatives, bookset blocks etc. The  actual   possession  of   the   defendant’s   aforesaid properties was  with Pandurang  Jivajirao Apte,  (for  short

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Apte), the appellant, at the time of attachment.      The suit  was eventually decreed for a sum of Rs. 9,000 and odd  with interest  and costs  of  the  suit.  The  said attachment was continued by the decree.      The decree  holder sought  to execute the decree by the sale of  the  property  attached.  As  stated  earlier,  the property was  in possession  of  Apte,  the  appellant.  The decree-holder, therefore,  prayed that Apte should be called upon to produce the property in Court and the same should be sold.      Notice was  issued to Apte, the garnishee, who appeared and filed  a written  statement. He  took up  the plea  that property had  already been pledged with him by the judgment- debtor for  his debt  and that  the attachment levied at the instance of the decree-holder was subject to his encumbrance on the  property. He  also alleged  that he  had raised this contention in  the suit  itself at  the time  of  attachment before judgment  and he was allowed by the Court to sell the property pledged  with him.  Accordingly, he  exercised  his right under  section 176 of the Indian Contract Act and sold the property  to one  Madhusudan Vasudeo Bavdekar (for short Bavdekar) after  due notice  to the  judgment-debtor as also after a public notice. But the proceeds of the same were not sufficient even to satisfy his 1023 Own debt.  Under the  circumstances he was not in a position to A produce the property in Court.      In view  of the stand taken by the appellant, Apte, the decree holder  filed an application for impleading Bavdekar, the purchaser,  as a party to the execution proceedings. The application for  impleadment was  allowed and  Bavdekar  was impleaded as  judgment- debtor  No. 2. No amendment claiming any relief  against him  was, however, actually incorporated in the  application for execution. Bavdekar in his turn also filed a  written statement  alleging that  the property  was pledged with  Apte who had sold it to him. He was a bonafide purchaser for  value without  notice and the purchases being effected in pursuance of the consent decree passed in Bombay City Civil  Court in  suit No. 1047 of 1959, transfer in his favour was  valid in  law. He  was, therefore, not liable in any way for the claim of the decree-holder.      The executing  court came  to the  conclusion that  the attachment before  judgment of  the property  in dispute was invalid and that the property being pledged by the judgment- debtor with the garnishee, Apte, and he having sold it under section 176  of the  Indian Contract Act with the permission of the  Court, the  same could  not be made available to the decree-holder for satisfying his debt. As the only prayer in the application  for execution  was  for  the  sale  of  the property in  question, the  executing court  disposed of the application as  unsatisfied on  the ground that the property was not  available for  satisfaction of the decretal debt of the decree  holder. The  decree-holder feeling  aggrieved by the order went up in appeal. The District Judge affirmed the order of  the executing court holding that the pledge of the property in  dispute by the judgment-debtor in favour of the garnishee was  proved, that  the  garnishee  Apte  sold  the property to Bavdekar and that the attachment of the property before judgment was invalid.      The decree-holder  undaunted by  the failures,  filed a second appeal  in the  High Court.  The appeal was summarily rejected on  4th of  May, 1963  by the  Chief  Justice.  He, however, granted  leave to  appeal under Letters Patent. The High Court  reversed the concurrent finding of fact recorded by the  two courts  below on  making a  fresh  appraisal  of

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evidence and came to the following conclusions;      (1)  Apte and Bavdekar had failed to establish that the           attachment in question was invalid. 1024      (2)  They also  failed to  establish the genuineness of           the sale alleged by them.      (3)  They  also  failed  to  establish  that  the  sale           proceeds  did   not  exceed   the  amount  due  to           appellant Apte from the judgment debtor.      (4)  From the  own admission  of Apte the attached pro-           perty was  sold for Rs. 46,000 while the charge on           the attached  property in  favour of Apte was only           for Rs.  35,000 and, therefore, it was open to the           executing c court to direct Apte to produce in the           Court the  amount exceeding  Rs. 35,000, viz., Rs.           11,000.      on these  findings the  appeal was  allowed by the High Court and  the judgments  of the  two courts  below were set aside and the case was sent back to the executing court with the directions  that (I) Apte shall deposit in the executing court Rs.  11,000 on  or before 1st of March, 1970, (2) that in case  the entire  amount due to the decree-holder was not satisfied out  of this  amount of  Rs. 11,000, the executing court shall  direct the  heirs of Bavdekar to deposit in the executing court  the remaining  amount due the decree-holder or to  produce in  that court the property attached within a reasonable time  to be fixed by the executing court, and (3) that if  Apte and  Bavdekar failed  to carry  out the  above direction, the executing court shall order execution against them for  the amount  indicated above.  Apte has now come to this Court  to challenge  the judgment  of the High Court in the Letters Patent Appeal.      The first  contention raised on behalf of the appellant is that  the High  Court had  no jurisdiction to reverse the concurrent finding  of  fact.  This  contention  was  raised before the  High Court  in Letters Patent appeal as well but the same  was over-ruled on the ground that the courts below had approached  the case from an erroneous view of law in as much as  they failed  to  raise  the  necessary  presumption against Apte  and Bavdekar  on account  of their  failure to appear before the court.      In our  opinion the  question  of  drawing  an  adverse inference against  Apte and  Bavdekar on  account  of  their absence from  the court  would arise  only when there was no other evidence on the 1025 record on  the point in issue. The first appellate court had relied A upon the admission of the decree-holder himself and normally there  could be  no better proof than the admission of a  party. The  High Court,  however, has  observed in its judgment that the decree-holder has made no admission in his evidence  which   would  justify  refusal  to  draw  adverse inference for  the failure of Apte and Bavdekar to step into the Witness box.      We have  examined the record which was placed before us by the  counsel for the appellant and the examination of the record indicates that the observation made by the High Court that the  decree- holder  has made  no such admission is not quite correct.  We may  first refer to the deposition of the decree-holder himself. In the cross-examination he admitted:           "There is  an agreement  executed between  me  and      judgment-debtor No. 1 on 29-12-58. I admit all its con-      tents.. Judgment-debtor No. 1 had told me that there is      lien of  Apte on  the prints  and  on  that  basis  our      agreement was entered into. It is true that there is an

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    agreement between  us that I am to be paid my dues only      after  dues   of  other   persons  including  Apte  arc      satisfied....It was agreed between me and Mohite that I      was to  be given  to the  film after  dues of Apte were      satisfied." In face of this clear admission of the decree-holder it does not lie  in his  mouth to say that no amount of Apte was due from the  judgment-debtor or that the agreement between Apte and the  judgment debtor  was a collusive affair. Apart from the admission  of the  decree-holder referred  to above, the judgment-debtor also stated as follows:           "I had  given full  idea  to  decree-holder  about      Apte’s lien. There is reference to it in our agreement.      Decree holder  is to  get amount only after Apte’s dues      and the debt of other persons is satisfied. Apte’s debt      could not  be satisfied. I had taken cash amount of Rs.      32,012 from  Apte. I have signed the documents at Exhs.      4711, 4714  and 47/7  to 47113. His dues had come to Rs      39,500-56.... I  had told  about it  to  decree-holder.      Apte’s full  dues are not even now satisfied by sale of      the picture to Bavdekar 1026      for Rs. 46,000. The picture was to remain in possession      of Apte till all his dues were satisfied by me." In view  of the  statement of  the judgment-debtor  and  the admission of  the decree-holder,  there is not the slightest doubt that  the dues of Apte had not been cleared off by the sale of the property in question to Bavdekar. The High Court was not justified in ignoring the statement of the judgment- debtor on  the wrong  assumption that there was no admission by the decree holder.      In the  agreement dated  December 29,  1958 between the decree-holder and  the judgment  debtor, Ext  58, there is a clear  reference  to  the  amounts  due  to  Apte  from  the judgment-debtor and  the decree-holder had full knowledge of the dues  of Apte.  Apart from  the dues  of Apte there were other dues  also to  be paid  by  the  judgement-debtor.  If according to  the judgment-debtor  himself the amount of Rs. 46,000 which  was due to Apte, had not been cleared off even by the  sale of  the property  to Bavdekar the decree-holder could not  proceed against  the property  in  the  hands  of Bavdekar. The  attachment of the property at the instance of the decree-holder  was only  subject to the lien of Apte and unless the  entire amount  due to  Apte was  cleared off the decree-holder could  not proceed against the property in the hands of  the purchaser, Bavdekar. Therefore, the conclusion drawn by  the two courts below that the amount of Rs. 46,000 and odd  was due  to Apte  from the  judgment debtor and the same had  not been  cleared off  even by  the  sale  of  the property under attachment, was based on the materials on the record  viz.,   the  admission  of  the  decree-holder,  the admission of  the judgment-debtor  and from  various letters and receipts  Ext. 47/1  to Ext.  47/13. All these documents have been  lost sight  of by the High Court which has indeed exceeded its  jurisdiction in  reversing the  finding on the assumption that  the courts  below had  approached the  case with a wrong view of law in not drawing an adverse inference against Apte  and Bavdekar  on their  failure to  appear  in court when  the question  of  loan  due  to  Apte  from  the judgment-debtor and  the sale  of  the  properties  for  Rs. 46,000 has  been amply proved by the evidence on the record. The question of drawing an adverse inference against a party for his  failure to  appear in  court would  arise only when there is no evidence on the record.      on the  findings of  fact recorded  by the  two  courts

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below, which  are final  and which could not be normally set aside by  the  Second  Appellate  Court,  the  decree-holder cannot compel Apte or 1027 Bavdekar to  produce the  property before  the Court  or the proceeds A  of the  sale of the property as l the amount due to Apte from judgment-debtor has not still been satisfied.      For the  foregoing discussion  the judgment of the High Court cannot be sustained. S.R.                                  Appeal allowed. 1028