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Issues Involved:
1. Attestation of the security bond. 2. Validity of the security bond. 3. Interpretation of the decree in C.S. No. 56 of 1953. 4. Entitlement to rateable distribution of assets. Issue-wise Detailed Analysis: 1. Attestation of the Security Bond The primary issue was whether the security bond executed by Hajee Ahmed Batcha was attested by two witnesses as required by law. The appellant contended that the Sub-Registrar D.W. Kittoo and the identifying witnesses Senkaranarayana and Kaki Abdul Aziz attested the document. However, the High Court and the Supreme Court rejected this contention. According to Section 3 of the Transfer of Property Act, attestation requires that witnesses see the executant sign the instrument or receive a personal acknowledgment of his signature and sign the instrument in the presence of the executant with the intention (animo attestandi) to attest. The evidence did not show that the Sub-Registrar or the identifying witnesses signed the document with the intention to attest. Therefore, only B. Somnath Rao was considered an attesting witness, making the document attested by one witness only. 2. Validity of the Security Bond The respondents argued that the security bond was invalid because it was not attested by two witnesses as required by Section 59 of the Transfer of Property Act. The High Court accepted this argument, but the Supreme Court disagreed. Section 100 of the Transfer of Property Act does not prescribe any particular mode for creating a charge. The second part of Section 100, which applies the provisions of a simple mortgage to a charge, does not attract the provisions of Section 59 relating to the creation of a mortgage. The Supreme Court held that the security bond, being duly registered, was valid and operative despite being attested by only one witness. 3. Interpretation of the Decree in C.S. No. 56 of 1953 The decree dated March 19, 1954, declared that the security bond would enure for the benefit of the appellant as a charge for the decretal amount. The High Court construed this as merely a recital of the fact that a security bond had been executed. The Supreme Court, however, interpreted the decree as declaring that the security bond created a charge over the properties in favor of the appellant for payment of the decretal amount and gave the appellant the liberty to apply for the sale of the properties. The properties were sold pursuant to this decree, and the assets are now held by the Court. 4. Entitlement to Rateable Distribution of Assets The respondents sought rateable distribution of the assets realized from the sale of the properties. The Supreme Court found that the properties were sold in execution of a decree ordering sale for the discharge of the encumbrance in favor of the appellant. According to Section 73(1) proviso (c) of the Civil Procedure Code, the proceeds of the sale must first be applied to discharge the amount due to the appellant. Only the balance, if any, can be distributed among the respondents. Therefore, the High Court erred in holding that the respondents were entitled to rateable distribution of the assets along with the appellant. Conclusion The Supreme Court allowed the appeals, set aside the orders passed by the Divisional Bench of the Madras High Court, and restored the orders passed by the learned Single Judge. There was no order as to costs.
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