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Virupaxappa Appa Mahajan Vs. Shankar Mallappa Kavare and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil;Property
CourtMumbai
Decided On
Case NumberFirst Appeal No. 108 of 1947
Judge
Reported inAIR1950Bom260; (1950)52BOMLR294
ActsCode of Civil Procedure (CPC) , 1908 - Sections 68 and 70
AppellantVirupaxappa Appa Mahajan
RespondentShankar Mallappa Kavare and anr.
Appellant AdvocateK. B. Sukhthankar, Adv.
Respondent AdvocateS. R. Parulekar, Adv.
DispositionAppeal dismissed
Excerpt:
.....- sale of mortgaged property--order for stay of sale by executing court day before date fixed for sale--sale by collector in absence of communication of stay order--whether sale illegal and void--civil procedure code (act v of 1908), order xxi, rule 92.;in execution of a mortgage decree against the plaintiff the defendant filed a darkhast for sale of the mortgaged property. the papers were transferred to the col-lector for execution and the date for holding the auction sale was fixed. a day before the auction sale was to take place the plaintiff deposited the amount in court and obtained from the executing court an order for stay of the sale. the order did not reach the mamlatdar in time and he held the auction sale on the date fixed and sold the property. on the question whether by..........thereupon the present suit was filed on 31st october 1946, (1) for a declaration that the auction sale held on 25th january 1944, was void and did not extinguish the plaintiff's right in the property, and (2) for a perpetual injunction restraining the defendant from obstructing him in the possession and enjoyment of the property, or if he had bean in fact dispossessed, for getting back possession of the property.3. defendants l and 2 resisted the suit on more or less identical grounds. they contended that the sale held by the collector was legal and valid, and that the price realised was adequate. they said that there were no material irregularities in the conduct of the sale proceedings, and that the present suit was barred under order 21, rule 93, civil p. c. it was further contended.....
Judgment:

Rajadhyaksha J.

1. This is an appeal by the original plaintiff against an order dismissing the suit passed by the Civil Judge, Senior Division, Satara, in Special civil Suit No. 42 of 1945. The few facts that are necessary to state for the purpose of this appeal are these:

2. Defendant 1 had obtained a mortgage decree against the plaintiff in Suit No. 290 of 1940 in the Court of the Civil Judge at Islampur, and an order was made for the payment of Rs. 2,600 and odd and costs payable by the plaintiff in instalments. There was a provision in the decree that in default of payment of any two instalments the whole amount was to be recoverable at once. There were defaults for the years 1941 and 1942 and thereupon defendant 1 filed a darkhast, No. 915 of 1942, in the Court of the Civil Judge at Islampur for recovering the whole amount by sale of the mortgaged property. On 7th October 1942, the papers were transferred to the Collector for execution under Section 68, Civil P. C. 25th January 1944 was fixed as the date for holding the auction sale. On 31st January 1944, i. e. four days before the auction sale was to take place, the plaintiff applied to the executing Court for relief against the default clause and deposited Rs. 200 in cash. He deposited a further sum of Rs. 300 on 24th January 1944, thus paying the whole amount for which he was in arrears. Thereupon on the same day, i. e. on 24th January 1944, the Court addressed a yadi to the Collector for staying the sale and for recalling the proceedings. It appears that this order did not reach the Mamlatdar in time, and the Mamlatdar held the auction sale, as originally announced, on 25th January 1944. The property was sold for Rs. 3,210 and was purchased by defendant 2. Defendant 2 deposited the required 23 per cent, of the auction price on the date of the auction sale, and the balance of the remaining 75 per cent, of the amount was to be deposited within 15 days thereafter. It appears that on 4th February 1944, when the auction purchaser (defendant 2) proceeded to deposit the remaining amount of the auction bid, it was brought to the notice of the Mamlatdar that an order had been passed by the Court on 24th January 1944, staying the auction sale and recalling the papers. On 18th February 1944, the papers were in fact sent back to the Court. Later on, the Court decided that the plaintiff should not be given relief against the default clause and sent back the papers to the Collector. On 25th October 1944, the plaintiff applied for setting aside the sale under Order 21, Rule 90. This application was rejected on 9th July 1945, and thereupon the present suit was filed on 31st October 1946, (1) for a declaration that the auction sale held on 25th January 1944, was void and did not extinguish the plaintiff's right in the property, and (2) for a perpetual injunction restraining the defendant from obstructing him in the possession and enjoyment of the property, or if he had bean in fact dispossessed, for getting back possession of the property.

3. Defendants l and 2 resisted the suit on more or less identical grounds. They contended that the sale held by the Collector was legal and valid, and that the price realised was adequate. They said that there were no material irregularities in the conduct of the sale proceedings, and that the present suit was barred under Order 21, RULE 93, Civil P. C. It was further contended that the suit was also barred on the principles of res judicata by reason of the orders in darkhast No. 915 of 1942.

4. The learned trial Judge, after deciding that the suit had bean properly filed, and that the Court had jurisdiction to entertain the suit, raised three preliminary issues : (1) whether the suit was not barred under Order 21, Rule 92, Civil P. C. (2) whether it was proved that the auction sale was illegal and void ab inito, and (3) was the suit barred by res judicata by reason of orders on Exs. 11 and 13 in the darkhast proceedings. He held that the suit was not barred by res judicata and that the auction sale was not illegal or void ab initio. He was also of the opinion that inasmuch as the sale was not illegal and void, the suit was barred under Order 21, Rule 92, Civil P. C. Accordingly the learned Judge dismissed the suit with costs. Against that order the plaintiff has come in appeal.

5. It was conceded by Mr. Sukthankar who appeared for the appellant that if the auction sale was not illegal and void ab initio, then the suit would be barred under Order 21, Rule 92, Civil P. C. He therefore confined his argument to only one contention, viz., that by reason of the order passed by the executing Court staying the proceedings of the Collector and recalling the papers the subsequent auction sale of the suit property was void and of effect. His principal argument was that the moment the executing Court passed an order staying the sale and recalling the papers, the Collector ceased to have jurisdiction in the matter, and all the subsequent proceedings were without jurisdiction, irrespective of the consideration whether the Court's orders staying the sale and recalling the papers did or did not reach the Collector before the actual auction took place. In support of his contention the learned advocate has invited our attention to the case of Sant Lal v. Umrao-Un-Nissa 12 ALL. 96 : 1899 A. w. N. 201. In that case also, the Court executing the decree had passed an order postponing the sale in execution, but the order failed to reach the officer conducting the sale, and the sale was consequently held. On an application made by the judgment-debtor to have the sale set aside as void, it was held that the effect of the Court's order for postponement of the sale was to deprive the officer of all legal authority to hold it on the date previously fixed; that his not being aware of the order was not material; and that the defect in the sale amounted to an illegality and not merely to an irregularity. Following this decision of the Allahabad High Court, it has been held by a single Judge of the Nagpur High Court in Zibal Ishwara v . Muka , that the transfer of a decree to the Collector does not oust the jurisdiction of the civil Court in all matters. In that case also, after the transfer of the decree to the Collector the judgment-debtor made an application to the Court which passed the decree, for payment of the decree by instalments under Section 11, Central Provinces Money-lenders Act. The Court entertained the application and ordered the stay of the proceedings before the Collector. The stay order, however, was not communicated to the Collector, with the result that the Collector held the sale and confirmed it. The Court held that although the order of the civil Court was one staying further proceedings, it must be construed as an order recalling the decree and the Collector ceased to have jurisdiction to sell or to confirm the sale after the Court passing the decree recalled it. Consequently, the Collector's power to proceed with the case was suspended by virtue of the order made by the Court passing the decree. On the question as to whether the order took effect from the date of passing the decree or from the date of its communication to the Collector, the learned Judge held that the civil Court's order recalling the decree by its own force deprived the Collector of his power to execute the decree and the order came into effect as soon as it was passed so as to suspend the Collector's power to proceed with the sale. There is another decision of the Allahabad High Court which also supports Mr. Sukthanker's argument, viz, Kadhey Mal v. Murtza Ali : AIR1937All550 . In that case also the decree for sale on a mortgage had been transferred to the Collector for execution under Section 68, Civil P. C. The sale was held by the Collector but before it could be confirmed, the judgment-debtor made an application to the Court under Section 5, United Provinces Agriculturists' Relief Act and prayed that the execution proceedings may be recalled from the Collector. The Court entertained the application and sent an order to the Collector staying further proceedings for confirmation of the sale. The Collector, however, confirmed the sale, and a sale certificate was issued to the auction purchaser, who thereafter applied to the Court for delivery of possession. It was held:

'that alter the order of the Court staying further proceedings, . . . . the Collector had no jurisdiction left to confirm the sale. Accordingly, such confirmation of sale or the issue of the sale certificate could not confer any valid title on the auction-purchaser.'

And, lastly, there is one ruling of the Rangoon High Court, viz., Ma Ti v. Ma Thit 11 Ran. 410 : A. I. R 1933 Ran 416, in which it was held:

'that where the executing Court has passed on order for staying the sale of attached property, and the officer of the Court conducting the sale sells the property by auction in ignorance of the stay order and before the order is communicated to him, the sale is null and viod.'

In deciding this case, the learned Judges purported to follow the case of Sant Lal v. Umrao Un-Nissa 12 ALL. 96 : 1899 A. W. N. 201, to which I have already referred.

6. As against this view, there is a steady current of authorities with regard to the effect of an order passed by an appellate Court staying execution of the decree of the lower Court and it has been consistently held that the order staying execution passed by an appellate authority takes effect not from the date on which the order is passed, but from the date on which the order is communicated to the lower Court or the executing Court. In a Full Bench decision of the Madras High Court in Venkatachalapati Rao v. Kameswaramma 41 Mad. 151 : A.I.R 1918 Mad, 391 it has been held

'that an order of an appellate Court staying execution is in the nature of a prohibitory order to the lower Court which becomes effective only on communication. Till it is communicated the steps in execution taken by the lower Court must be treated as legally valid.'

The same view was expressed by a Full Bench of the Allahabad High Court in Purusotam Saran v. Barhma Nand 50 ALL. 41: A. I. R 1927 ALL. 40l. There also the date fixed for the sale in execution was 21st January 1924. On that very day. the judgment debtor on the strength of his having filed an appeal against the order of the lower Court, put in an application for stay of the sale fixed for the same day. Apparently the attention of the learned Judge was not drawn to the fact that the sale was going to held on the same day on which he was passing the order. The stay wag granted till the disposal of the rule that was issued. The sale advertised for 21st January 1924, took place in due course, and the purchaser was a person other than the decree-holder, The judgment-debtor applied to the executing Court for setting aside the sale on the ground that the sale was a nullity, and it wag held that:

'Where a subordinate Court want on with the execution of a decree and sold certain property in ignorance of the fact that on order for stay had been passed by the High Court and the property was purchased by a third party, . . . the sale must stand.'

So far as the Calcutta High Court is concerned, there has been a conflict of decisions, and these conflicting decisions were brought to the notice of the Court in Jatish Chandra v. Kshirode Kumar : AIR1943Cal319 . In Hukum Chand v. Kamalanand Singh 33 Cal. 927 : 3 C. L. J. 67, it had been held:

'that as soon as an order was passed by the appellate Court, the powers of the subordinate Tribunal were automatically suspended from the moment the stay order was passed, and till it was discharged, with the result that if the subordinate Court did an act in contravention of the stay order, even in ignorance of the same, the act would be utterly without jurisdiction and so null and void.'

This view was definitely in conflict with the earlier derision of this High Court in Bissessur v. Horro Sundar 1 C. W. N. 226 where it had been held that:

'a sale held in contravention of an uncommunicated order for stay issued by the appellate Court, was not a nullity, and so could not be ignored in a latter suit for possession.'

The learned Judges who decided Jatish Chandra v. Kshirode Kumar : AIR1943Cal319 , after pointing out this conflict of decisions referred to the Full Bench decisions of the Madras and Allahabad High Courts to which I have already referred and to the Rangoon High Court decision in Ma Ti v. Ma Thit 11 Ran. 410 : A. I. R 1933 Rang. 416, and they concluded by saying that although in the view they were taking, it was not necessary to decide which of the aforesaid views was correct they thought that the reasoning given by Mukerjee in Parsotam's case : AIR1927All401 , was the more acceptable one. No decision of our High Court has been brought to our notice except the one in Rudrappa Virappa v. Bashettappa 52 Bom. 290 : A. I. R 1928 Bom. 189, which has some bearing on the point which we have to decide and to which 1 shall presently refer.

7. Now, so far as the decisions which help the appellant are concerned, it has to be noticed that decision in Sant Lal v. Umrao-un-Nissa 12 ALL. 96 : 1899 A. W. N. 201, has not been approved by the Full Bench of the same Court in the case of Parsotam Saran v. Barhma Nand : AIR1927All401 , The learned Judges observed (p. 49):

'In this case, it is not necessary to say whether Sant Lal's case 12 ALL. 96 : 1899 A. W.N. 201 was rightly decided. But if it were necessary to decide the point I should hold, with respect, that it did not lay down good law.'

The decision in Kadhey Mal v. Murtaza Ali : AIR1937All550 does not refer to the earlier Full Bench decision of the Allahabad High Court in Parsotam Saran v. Barhma Nand : AIR1927All401 . The case of Zibal Ishwara v. Muka , is a decision of a. single Judge and purports to follow the decision in Sant Lal v. Umrao-un-Nissa 12 ALL. 96 : 1899 A. w. N. 201, which as I have already stated, has been disapproved by a subsequent Full Bench decision of the Allahabad High Court. Mr. Sukthankar for the appellant argued that there was some distinction between the communication of an order by an appellate Court staying execution and the communication of an order by an executing Court addressed to the Collector in respect of stay of an auction sale. We are of the opinion that in principle no such distinction could be drawn. In deciding the Full Bench case in Parsotam Saran v. Barhma Nand : AIR1927All401 , the Allahabad High Court proceeded to consider as to whether the stay order could take effect on the date of its passing or from the date of its communication to the lower or executing Court. On this point they held that in spite of the filing of an appeal, the trial Court could proceed to execute the decree under Order 41, Rule 5, and that being so, until the jurisdiction of the trial Court was withdrawn by an order from an appellate Court, the trial Court had full authority to execute the decree. In considering the matter from this point of view, they made the following observations (p. 48):

'Oar law does not take away the jurisdiction of the Court of first instance to execute its own decree, on the ground that an appeal hag been filed. On the other hand, it positively affirms the provisions that such a jurisdiction subsists. The question has, therefore, to be decided on general principles and on a common sense view of things.'

At page 46 they say:

'When an appellate Court orders stay of execution it gives a direction to somebody. The execution is not in the hands of the appellate Court. It has to tell the Court of first instance that it is to stay its band in the execution of its decree. It necessarily follows that if the lower Court has no information of the order of the appellate Court it cannot stay execution and the execution must proceed. What principle, then is there on which we are bound to hold that what was done in perfect good faith and in possession of clear jurisdiction becomes null and void solely because, unknown to the Court below, an order had been passed?'

We are of opinion that this reasoning is equally applicable to an order passed by an executing Court in respect of the stay of execution by the Collector. When the proceedings are transferred to the Collector under Section 68, Civil P. C., the Collector gets jurisdiction to proceed with the sale in accordance with the directions contained in Schedule III, Civil P. C. He is perfectly within his authority in proceeding with the execution so long as the proceedings are not withdrawn from him by an order of the executing Court. It is only when an order of the executing Court, withdrawing the proceedings is communicated to the Collector, that he would cease to have jurisdiction to proceed with the matter.

8. Another argument which weighed with the Allahabad High Court was the contention based on the principles of the law of agency. At p. 49. the learned Judges observed:

'It is undoubtedly true that the sale officer derives his authority to sell from the Court. But so do all agents from the principal. But who has ever heard that the principal is not bound by the agent's act, if the agent is unaware of the fact that his authority has been revoked? A sale officer acts on behalf of the Court and is, to the extent of his duties clearly defined, the Court's agent. If, then, it is urged that the mere fact that a stay order (uncommunicated) was made, made the sale Illegal, some better reason must be found than that the officer became functus officio without his knowing this.'

In our opinion the same argument would apply to an order passed by the executing Court in respect of execution transferred to the Collector under Section 68, Civil P. C.

9. The third argument which impressed the learned Judges of the Allahabad High Court was one based on fairness to an innocent purchaser to whom obvious injustice would be done if the proceedings of the executing Court became ineffective merely because an order had been passed by a superior Court staying the execution; proceedings. At p. 47, the learned Judges say as follows :

'The Court (i.e. the executing Court) does nothing beyond selling the judgment-debtor's property on behalf of the judgment-debtor. It only carries out what the judgment-debtor is morally bound to do. When a sale proclamation is made, it is announced to the world that on such and such day, such and such property will be sold to the highest bidder. The public are invited to come and bid. If an innocent third party makes the purchase, will there be any moral justification for the Court to say, later on, that he would not have his money's worth, although he took so much trouble to procure the money, to come to the place of sale and to bid, simply because there was an unknown order passed before the sale? On moral grounds such a procedure will have to be condemned.'

These remarks, in our opinion, apply with equal force to a sale held by the Collector in ignorance of an order passed by the executing Court staying the sale proceedings. It is true in Ma Ti v. Ma Thit 11 Ran 410: A. I. R 1933 Ran. 416, a distinction was sought to be drawn between a case in which an executing Court passed an order for staying the sale of attached property and a case in which an appellate Court passes an order for stay in exercise of its powers under Order 41, Rule 6, Civil P. C. But in our opinion in principle no such distinction can be drawn as the consequences in either event are precisely the same.

10. There is one decision of our own High Court to which I have made a reference in an earlier part of the judgment, and that is the case in Rudrappa Virappa v. Bashettappa Chenbasappa 52 Bom. 290: A. I. R 1928 Bom. 189. The facts in that case are almost exactly similar to the facts of the case with which we are concerned. There also a decree obtained by the plaintiff was transferred to the Collector for execution, and the sale of the immovable property of the judgment debtor was fixed for 28th March 1925. On that day, the judgment-debtor deposited Rs. 300 in the Court of the Subordinate Judge who passed the decree and applied for stay and obtained it. But before this order of stay could be transmitted in the same town to the Mamlatdar who was holding the sale, the property was sold for Rs. 2,000. On 6th April 1925, the appellant applied for setting aside the sale on the ground that, the stay having been obtained before the sale actually took place, the sale was void. The auction purchaser was not made a party to that application. An argument wag advanced that the sale having taken place after the order of stay was passed the sale was void and illegal. In considering this argument, the learned Judges observed at p. 293 of the report:

'It appears to us that it is difficult to lay down a principle as to the moment of operativeness or otherwise of the order by an appellate Court and whether the operativeness of the order dates from the time it is signed or from the time it is communicated. We are indebted to the learned pleader for the appellant for inviting our attention to the recent Full Bench case of the Allahabad High Court, Parsotam Saran v. Barhma Nand : AIR1927All401 . It is difficult to evolve any definite principle from the decided cases. It appears to us that a great deal depends on the nature of the order, the question of good faith and other facts. If for instance, an order of stay was obtained in time from a competent Court or authority, but was dishonestly delayed in transmission by the action of the decree-holder, the sale would hardly be confirmed. It on the other hand the order was obtained too late for transmission, the risk would be the judgment-debtor's and he would find it difficult to have the sale set aside.'

They again addressed themselves to this point and stated that (p. 294):

'In regard to the question as to when the order operates, it is to be noticed that the difference of opinion depends to a considerable extent upon the nature of the order and the reason for the delay in its transmission.'

After noticing the conflict of decisions, the learned Judges said that in the case with which they had to deal, there was no question of delay or irregularity on the part of any one except perhaps the judgment-debtor himself. Being aware that the sale was to be held on 28th March he took no steps up to that very day, almost till the very hour of the sale, rendering it impossible to transmit the order in time. Although the Court did not definitely decide as to whether the order of stay takes effect from the date it is signed on from the date it is communicated the view of the learned Judges seems to have been that the order did not take effect at the moment it was passed. If it was otherwise, and the order took effect from the date when it was signed, all the questions as regards the nature of the order and the reasons for the delay in transmission would appear to be irrelevant. In our opinion, the view taken by the Allahabad High Court with regard to the orders of the appellate Court being effective from the date on which they are communicated to the lower Court is correct, if we may say so with respect, and should apply with equal force to the orders passed by an executing Court in respect of proceedings held before the Collector, and it should be held that they take effect from the date on which they are communicated to the Collector.

11. Even applying the principles laid down in Rudrappa Virappa v. Bashettappa Chenbasappa 52 Bom. 290 : A. I. R 1923 Bom. 189, it seems to us that in the case before us the judgment-debtor has to thank himself for the difficulty in which he found himself. According to the view taken in the case referred to above, the question to be considered is whether the judgment-debtor has acted in such a way as to render it impossible for the Court to transmit its own order to the Collector in time. In this case, the sale was to be held on the 25th, and it was not till the 24th, i e. till the day preceding the sale, that the judgment-debtor deposited the amount in Court and obtained an order for stay. The order was passed by the executing Court at Islampur, and the property was to be sold at Ashte. The usual procedure is that the order passed by the Court is sent to the Collector, and the Collector transmits it to the Mamlatdar, who holds the auction sale. By going to the Court so late as 24th, the judgment-debtor made it impossible for the Court to follow this procedure. No steps were also taken by the judgment-debtor to see that the Court's order was transmitted to the Mamlatdar by telegram or by special messenger so as to reach him before the sale actually took place. Therefore, even applying the principles laid down in Rudrappa v. Bashettappa Chenbassappa. 52 Bom. 290: A. I. R 1928 Bom. 189, it seems to us that the judgment-debtor cannot challenge the sale which has taken place in the absence of the communication of the stay order of the executing Court, an unfortunate situation in which the judgment-debtor found himself primarily due to his own latches. On this ground also we are of opinion that it is not open to the judgment-debtor to challenge the sale as being illegal and void.

12. That being so, we must hold that the view taken by the lower Court is correct, and we accordingly dismiss the appeal with costs.


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