P L D 1963 (W (PLP)

Further "A security of this kind must be either floating or fixed. While it is a floating security the company has a right, not a mere licence, to carry on its business until the debenture holder intervenes, and when the debenture-holder does inter vene he must do so with the intention of making his security a fixed security. In my opinion it is a breach of contract on the part of the debenture-holder to interfere in the conduct of the business so long as his security is only a floating security . . . . . ." (pp.997-998).

11. Now it is clear from the two preceding paragraphs that the money deposited by the defendant with the garnishee is not the property of the garnishee and that the garnishee has no interest in any portion of the money so long as the floating security has not assumed the character of a fixed or specific security. It is possible in a particular case that the character of the security has changed but accounts are yet to be gone into to discover the change and the exact amount of the fixed charge. The equities of such a situation will demand that a reasonable time be allowed to the depositary or garnishee to settle the account. But the burden will be on the depositary or garnishee to establish the amount of that charge. There is judicial authority in support of this allocation of the burden of proof but section 102 of the Evidence Act is the highest authority in support of it. It is also obvious that the garnishee cannot demand indefinite or unreasonable time for settling the account.

12. Complications do sometimes arise owing to the respon sibility of the garnishee as a bailee towards the bailor because the bailee or depositary is to protect the deposited money like a man of ordinary prudence who is entrusted with the custodv of others' property. The consequences of this responsibility are C often disputed but they cannot be disputed in this case because the liability of the bailor himself towards the plaintiff is being enforced against the bailee. Moreover, the title of the plaintiff in this case is superior to that of the bailor. Here I may quote the following passage from page 396 of G. W. Paton's book on Bailment In the Common Law : because it summarises the general principles conveniently "The bailee is not protected by the mere fact that he has surrendered the res under an order of the Court at the suit of a third party. If he is sued, it is his duty to give notice to the bailor so that the latter may defend the action and see that the Court is apprised of the true facts. If he neglects to give this notice, the Bailee is protected only if the third party's claim could have been sustained against any defence which the bailor might have raised. The defence is not eviction by order of the Court, for a proceeding in personam binds only the parties to it-the defence is eviction by title paramount which means that the title of the third party could have been conclusively proved even if the bailor had proved the true facts."

13. What can be then the nature of valid resistance by the garnishee? The answer is fairly obvious and it is that the garnishee cannot refuse to pay the money into Court for the plaintiff on account of its contract with the defendant ; nor can it do so on account of the defendant's interest in the money, but it can resist the plaintiff's claim on the basis of its own right. The next question which arises from the answer is : what is the garnishee's own right in or over the deposited amount ? Before answering this question I should re-call that in terms of 'rule 3(iv), the garnishee has the first lien on the deposited amount for payments that may have to be made by the defendant by virtue E of "Forward Settlement". This lien, I should further re-call, amounts to a floating security as explained above and does not constitute a specific charge on the deposit. Moreover, there is no allegation that any payment has become due or, in other words, that the security has become specific for any amount. The allegation merely is that claims have been made by two or three persons but they are not alleged to have arisen from "Forward Settlement". Had they arisen from a "Forward Settlement", the actual dues would have been known a long time ago. The fact that they are only claims as yet should, according to the ordinary course of forward business, be taken as not to have arisen from "Forward Settlement". The defendant is, therefore, apparently right in alleging in his counter-affidavit dated 15-10-1962, that there is no claim against her regarding forward transactions. The answer to the second question therefore is that the garnishee has no interest in the money but it has only a right to possess it as a floating security.

14. This right to possess being dependent entirely on the contract that created floating security and the equities of the' transaction, the contract and the equities determine its scope

1. Rules 16 and 17 lay down that the contract of more than Rs. 2,500 which the garnishee may retain is controlled by the volume of the depositors' business, but the garnishee has not even mentioned its volume. This omission alone reduces the retainable amount to Rs. 2,500 only ; therefore, the rest of the money which is Rs. 12,500 is refundable in terms of rule

17. Whatever equities there are can thus attach to the retainable amount only .and not more, but the equities present no great problem because the retainable amount can be attached subject to such equities as may be shown to exist. Since no equities have been shown to be attached, as explained in the preceding paragraph the retainable amount as well as the other amount is available for the plaintiff.

15. The above is my appreciation of the provisions that govern this case, but Mr. Munshi has approached the problem by citing judgments to direct my mind to a different conclusion. He has cited (1) Syud Tujjazzool Hossein Khan v. Rughoo Nath Pershad .14 Moo. I A 1871 ; (2) Hutt v. Shaw (1887) 3 T L R 354 ; (3) Hari Das Acharjee Chowdhury v. Baroda Kishore Acharjee Chowdhury (1899-1900) 4 C W N 87 ; (4) Bahadurmull v. Tricumdas A I R 1925 Cal. 561 ; (5) Gajraj Sheokarandas v. Sir Hukamchand Sarupchand A I R 1939 Bom. 90 ; (6) In re : Louis Thomas Pinto A I R 1941 Sind 193 ; Dissenting views have been expressed in these judgments from the views expressed in- (7) S. N. Dass v. Muthia Cherry A I R 1920 L B 46 ; (8) Jetha Devjl & Co. v. Durgadutt Ramnivas A I R 1927 Bom. 365 ; (9) Karuthan v. Subramanaya (1886) 1 L R 8 Mad. 203 ; (10) Jagdish Narain Singh v. Mst. Ramsakal Kuer (1929) I L R 9 Pat. 478.

16. In the first case the decision was that the decree-holder could not attach a claim of the judgment-debtor which was yet in arbitration because it was merely an "expectancy and a mere right of suit". This judgment is not relevant.

17. In the second judgment the decision was that an amount deposited by a stock-broker is a security for the moneys that may become due ; which means that it is not repayable to the stock-broker on demand. So much of that amount as was free from any existing claim against it could be repaid only if the transactions of the depositor's business had been closed, but the depositor who only could close them, had not in fact done so and the plaintiff could not intervene to compel him to do this. The report shows that the decision was given under Order XLV. I do not know what precisely that provision of the law was in England in 1886-87. The present Order XLV, rule 1, as reproduced in Vol. I of the Annual Practice (1959, London) shows that it deals with the attachment of "debts owing or accruing" from third person but the provision applicable to the case now before me is Order XXI, rule 46 of our C. P. C. which is different. It is as under "46.-(1) In the case of- (a) a debt not secured by a negotiable instrument, (b) a share in the capital of a corporation, (c) other movable property not in the possession of the judgment-debtor, except property deposited in, or in the custody of, any Court, the attachment shall be made by a written order prohibiting,- (i) in the case of the debt, the creditor from recovering the debt and the debtor from making payment thereof until the further order of the Court ; (ii) in the case of the share, the person in whose name the share may be standing from transferring the same or receiving any dividend thereon ; (iii) in the case of the other movable property except as aforesaid, the person in possession of the same from giving it over to the judgment-debtor. (2) A copy of such order shall be axed on some conspicuous part of the Court-house and another copy shall be sent in the case of the debt, to the debtor, in the case of the share, to the proper officer of the Corporation, and, in the case of the other movable property (except as aforesaid), to the person in possession of the same. (3) A debtor prohibited under clause (i) of sub-rule (1) may pay the amount of his debt into Court, and such payment shall discharge him as effectually as payment to the party entitled to receive the same."

18. Our provision is much wider than Order XLV, rule 1 of the Supreme Court Rules of England in at least two respects, which are that it is not restricted to a debt that is "owing and accruing" and includes movable property ; yet the English judgment has influenced many decisions made under Order XXI, rule 26, C. P. C. It has been cited and followed in the 4th, 5th and 6th of the above-mentioned ten judgments: The emphasis in the English judgment on the inability of the garnishee to close the transactions should also be discounted because the doctrine of frustration of contract has fully developed after it during the last two World Wars.

19. The 3rd and 4th judgments are concerned mainly with the consideration as to whether the debts sought to be attached were perfected or not, The decision in the 3rd judgment is that future maintenance is not such a debt and the decision in the 4th judgment is that the money did not form a part of .the considera tion of sale, therefore the defendant had no interest in it. These judgments are not helpful in these proceedings.

20. The 5th is the most important of the ten judgments. It deals under Order XXI, rule 46, C. P. C., with the attachability of Rs. 5,000 that were deposited by a member of the East India Cotton Association and were liable to forfeiture in certain events as well as subject to certain liens. Beaumont, C. J., and Rangnekar, J., have held that the deposit was not attachable on three grounds : firstly, that it was not property in terms of Order XX1, rule 46 (c) which required that tangible property capable of possession and of being deposited in Court only could be attached under it and that the interest of the depositor did not possess these qualities ; secondly, that on the one hand the Association could under its rules invest the money as its own and on the other hand there was no evidence that any movable property was available to be attached ; thirdly, on the principles of the above-mentioned second English judgment in Hutt's case there was no debt until the transactions were closed because the money was re-payable subject to the contingency of the closure of transactions.

21. With utmost respect and in all humility I shall attempt to comment on these three arguments in so far as Mr. Munshi has sought to use them in this case. The second argument is not applicable to this case because no rule has been brought to my notice under which the garnishee may use the deposited money as his own. On the contrary, the above quoted rules point to the contrary intention of the depositor and the deposi tary. The third argument is a reproduction of the English view without emphasis on the difference in the Indian Law, which is our law also. Under Order X XI, rule 46 (a), C. P. C. any debt "not secured by a negotiable instrument is attachable". If a debt is contingent then in terms of this provision, it is attachable subject to the contingencies provided that the contingencies are not such as to deprive it of the character of a "debt"-a debt simpliciter and not a debt which is "owing and accruing" in terms of Order XLV, rule 1 of the Rules of the Supreme Court of England. But neither uncertainty of the amount, nor the contingency of deferred payability changes the character, as explained in O'Driscoll v. Manchester Insurance Committee ((1915) 3 K B 499) even under the English provision. The conclusion, therefore, is that the money deposited by the defendant is an attachable debt under our law, although it may be subject to the equities explained above (paragraph 11).

22. Actually no equities come in the way of the plaintiff because, as already explained (paragraph 14), no facts have been disclosed to show as to what was the volume of the defendant's business. There is, therefore, no obstacle in terms of rule 16 in the re-payment of Rs. 12,

500. This means that this part of Rs. 15,000 is to be repaid under that rule on "request within 24 hours". As to the balance of Rs. 2,500, rule 17 prescribes that this amount can be withdrawn on production of proof by the depositor that no dues are outstanding and that forward business has been stopped by him, but this situation can be met by the plaintiff by pointing out that the defendant had suspended her business vide the notice marked `C' ; that the garnishee has claimed nothing in terms of rule 3 (iv) as due on account of "Forward Settlement", lastly, that the plaintiff is not bound to carry out the terms of the contract that was made between the defendant and the garnishee. The liability of the garnishee is also discharged owing to eviction by title paramount of the plaintiff, the establishment of jus tertii and frustration of the contract.

23. The above considerations, however, do not apply at all if the amount deposited by the defendant is taken to have been attached under Order XXI, rule 46 (c), C. P. C., as `movable property not in the possession of the judgment-debtor " and not "deposited in or in the custody of any Court". The defendant had deposited Rs. 15,000 which was movable property. But on this aspect the learned Judges of the Bombay High Court have held (first argument paragraph 20. above) that the rupees deposited by the judgment-debtor ceased to be movable property because the depositor could not lay hand on the same rupees which were deposited by him. They have observed at page 91 that "The judgment-debtor handed over Rs. 5,000 to the Associa tion, but those particular rupees he has no right to recover. He has a right in certain events to receive a sum of Rs. 5,000, but there is no property at the present moment representing those particular Rs. 5,

000. The learned Advo cate-General has argued that `movable property' in sub rule (c) must be given the wide meaning attributed to it in the General Clauses Act, 1897, that is to say, all property which is not immovable, but definitions in the General Clauses Act are all subject to anything repugnant thereto, and here it seems to me that the sub-rule predicates that the movable property referred to must be capable of being in the possession of the judgment-debtor, and must, therefore, be property of a tangible character. This is further empha sized by the exception of `property deposited in or in the custody of any Court'." (Italics are mine).

24. The emphasis on the expressions "capable of being in possession", "deposited" and "custody" in the above quotation with reference to the definition of the term "movable property" is perhaps not as important a part of the argument as the view, expressed by the italicised words, that where rupees are not returnable in specie, they only represent a right, cease to be property, and that therefore there can be no attachable money. This is a hard proposition to accept, because pieces of paper or of metal do not constitute money. In a society like ours, anything is money that is coined or stamped by the authority of the State to serve under the law as a unit of wealth as well as the medium of exchange. In the language of the American Jurisprudence, Vol. 36, page 459 "Money is in its nature severable, and our coin or note has the same essential qualities of value possessed by any other of like denomination. Consequently, under a statute requiring a public officer to pay out the same money that he receives, it has been held that he does so within the meaning and intention of the statute when the public creditors receive directly from his hands or from banks or his drafts money having the same value or essential qualities as that paid to him." The same idea is expressed at page 5 of Vol. 27 of Halsbury's Laws of England (3rd Ed.) as follows "Where English law is the proper law of the contract under which a debt is payable, the mode in which the debt is to be discharged (in the absence of express provision of another mode) is by payment in whatever at the time and place of payment is, according to the law of that place, legal currency and legal tender."

25. Moreover, there is a difference between the attachment of "movable property" and that of "specific movable property" ; the latter property is attached under Order XXI, rule 31, C. P. C.,1 but under Order XXI, rule 46 (c) "movable property" is attached. G If the garnishee has money, which the defendant can demand on account of the money deposited by her, then that money is movable property and the plaintiff can get it attached irrespec tive of whether it consists of those particular notes or coins which she had deposited or not. The garnishee could contend that the attached money was wholly or partly its own property but then the objection would not be to the attachability of the money but to the adverse effect on its interest in the money.

26. Proceeding now to the last five judgments, mentioned above (paragraph 15), a glance through them will show that it is not necessary to discuss them after the detailed consideration in the foregoing paragraphs of the basic ideas which impress me against the stand of the garnishee. I can, therefore, draw here the final conclusion that follows, which is that garnishee should deposit Rs. 15,000 in Court.

27. I, accordingly, reject the objections of the garnishee and order that the amount be deposited within 15 days' time. K. M. A./A. H. Petition rejected.