Section 186. Proceeds of sale to be distributed rateably to all judgment creditors.
Where assets are realised by sale or otherwise in the execution of an order or judgment and more persons than one have, prior to the realisation attached the property from which those assets have been realised in execution of an order or judgment for the payment of money against the same judgment debtor and have not obtained satisfaction thereof, the assets after deducting the costs of the realisation, shall be distributed rateably among all the judgment creditors provided that-
(a) where any property is sold subject to a charge, the chargee shall not be entitled to share in any surplus arising from the sale;
(b) where any property liable to be sold in execution of an order or judgment is subject to a charge, the Court may, with the consent of the chargee order that the property be sold free from the charge, giving to the chargee the same right against the proceeds of sale as he had against the property sold; and
(c) where any immoveable property is sold in execution of an order or judgment ordering its sale for the discharge of an encumbrances thereof, the proceeds of sale shall be applied in the following order:
(i) in defraying the expenses of sale;
(ii) in discharging the principal sum due on the encumbrance;
(iii) in discharging the principal sum due on subsequent encumbrances, (if any);
(iv) rateably among the holders of order or judgment for the payment of money against the judgment debtor who have prior to the sale of the said property, applied to the Court which made the orders or judgments and have not obtained satisfaction thereof.
(2) Where all or any of the assets liable to be rateably distributed under this section are paid to a person not entitled to receive the same, any person so entitled may sue that person to refund the assets.
(3) Nothing in this section shall defeat or postpone any claim which under any written law ought to be paid in priority.