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Laxman Govind Vs. Bhut Ashte Co-operative Credit Society - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtMumbai
Decided On
Case Number Second Appeal No. 601 of 1943
Judge
Reported in(1946)48BOMLR610
AppellantLaxman Govind
RespondentBhut Ashte Co-operative Credit Society
DispositionAppeal dismissed
Excerpt:
.....178 of the bombay land revenue code, 1879. even if the debtor pays up the full amount after the sale is held, the collector is not bound to set aside the sale. the collector has been given a discretion by section 179 of the code to refuse to confirm the sale, but if he does not exercise that discretion in favour of the debtor, his jurisdiction to confirm the sale is not lost. sub-sequent payment does not oust the jurisdiction of the collector to confirm the sale.;the period of limitation for bringing a suit to set aside such a sale is one year from the confirmation of the sale, under article 12(c) of the indian limitation act, 1908. - - 1, which is a co-operative credit society, and as he failed to satisfy his debt, an award was passed against him by an arbitrator under section 54..........act, 1925. it is true that if the plaintiffs were kept in ignorance of the confirmation of the sale by fraud, then the period during which they were'. so kept in ignorance would be deducted in calculating the period of limitation. the learned appellate judge held that there was no fraud on the part of the defendants. even assuming that there was any fraud as alleged, yet it is admitted that the plaintiffs were given notice of the confirmation of the sale on april 22, 1937, and they should have brought a suit to have the sale set aside at least within one year thereafter. but this suit was filed on july 1, 1938, and there is no reason to excuse the delay. the suit is not based on the ground of fraud and article 95 can have no application to the facts of this case. mr. abhyan-kar for.....
Judgment:

Lokur, J.

1. There is no substance in this appeal. Plaintiff No. 1 was indebted to defendant No. 1, which is a co-operative credit society, and as he failed to satisfy his debt, an award was passed against him by an arbitrator under Section 54 of the Bombay Co-operative Societies Act, 1925. The decree was sent to the Collector for recovering the amount of the award by sale of his property under Section 59. The property was sold by auction by the Special Recovery Officer to defendant No. 3, who was the highest bidder, on January 25, 1936. The Special Recovery Officer then made a report to the District Deputy Collector to confirm the sale on February 10,1936. Before the sale was confirmed, plaintiff No. 1 sold the property to plaintiff No. 2 on February 22, 1936, and the latter deposited the entire amount due under the award with the Co-operative Credit Society and obtained a receipt for full satisfaction of its dues on February 23, 1936. On the same day plaintiff No. 1 presented to the Special Recovery Officer an application addressed to the District Deputy Collector requesting him not to confirm the sale as the dues of the Society had been satisfied. Somehow or other the application did not reach the District Deputy Collector for two days and the sale was confirmed on February 25, 1936. A sale certificate was then issued to defendant No. 3 on April 18, 1936, and it was communicated to the plaintiffs on April 22, 1937. The plaintiffs then filed this suit on July 1, 1988, to recover possession of the property together with mesne profits and costs alleging that the District Deputy Collector had no jurisdiction to confirm the sale after the dues of the Society had been satisfied and that by such confirmation defendant No. 3 did not acquire any interest in the property since the title to it had become already vested in plaintiff No. 2. The plaintiffs also contended that the defendants had practised fraud and material irregularity and obtained the confirmation of the sale. The defendants contended that no fraud had been practised by them, that there was no material irregularity in the sale, that although the plaintiffs had paid the amount of the award into the Co-operative Society, the Deputy Collector had jurisdiction to confirm the sale, that the sale took effect not from the date of the confirmation but from the date on which it was held and that the plaintiffs' suit was time-barred. The trial Court disallowed all these contentions and decreed the plaintiffs' claim. In appeal the learned Assistant Judge held that the plaintiffs' suit was time-barred, that the sale took effect from the date on which it was held and not from the date of its confirmation and therefore plaintiff No. 2 acquired no interest in the property which had been already sold, and that there was no fraud or material irregularity in the conduct of the sale. The plaintiffs' suit was, therefore, dismissed.

2. In this second appeal it is not necessary to go into the question as to whether the auction sale took effect from the date of its confirmation or from the date when it was held, since on the face of it the suit is time-barred. Assuming that there was fraud on the part of the defendants in not communicating the fact of the payment of the dues by the plaintiffs to the Deputy Collector before he confirmed the sale, yet it is not disputed that at least on April 22, 1937, both the plaintiffs were informed of the confirmation of the sale. Article 12(c) of the first schedule to the Indian Limitation Act prescribes a period of one year for a suit to set aside the sale of property for arrears of Government revenue, or for any demand recoverable as such arrears, and the period begins to run when the sale is confirmed, or would otherwise have become final and conclusive had no such suit been brought. The learned trial Judge pointed out the distinction between the sale for Government revenue and the sale for any demand recoverable as land revenue and thought that as fraud had been committed by the defendants Article 95 would apply and the period of limitation was three years. This reasoning is wholly fallacious. Article 12(c) applies both to sales for arrears of Government revenue and to sales for any demand recoverable as such arrears. The sale in this ease was undoubtedly held for the recovery of the dues recoverable as arrears of land revenue under Section 59 {1) (b) of the Bombay Co-operative Societies Act, 1925. It is true that if the plaintiffs were kept in ignorance of the confirmation of the sale by fraud, then the period during which they were'. so kept in ignorance would be deducted in calculating the period of limitation. The learned appellate Judge held that there was no fraud on the part of the defendants. Even assuming that there was any fraud as alleged, yet it is admitted that the plaintiffs were given notice of the confirmation of the sale on April 22, 1937, and they should have brought a suit to have the sale set aside at least within one year thereafter. But this suit was filed on July 1, 1938, and there is no reason to excuse the delay. The suit is not based on the ground of fraud and Article 95 can have no application to the facts of this case. Mr. Abhyan-kar for the appellant, however, contends that the confirmation of the sale itself being without jurisdiction, it is not necessary to have the sale set aside and therefore Article 12(c) does not apply. But there is no reason to hold that the confirmation of the sale was without jurisdiction. It is pointed out that the jurisdiction to hold the sale came to an end as soon as the amount for the recovery of which the sale was held had been fully paid. The only ground on which the sale can be set aside is fraud, mistake or material irregularity in publishing or conducting the sale, provided a substantial injury is caused thereby. In such a case the debtor is entitled to have the sale set aside under Section 178 of the Land Revenue Code. But he has no such right by paying off the debt for which the sale is held, since there is no provision in that Code corresponding to Order XXI, r 89, of the Civil Procedure Code, Even if the full payment is made after the sale is held, the Collector is not bound to set aside the sale. He has been given a discretion by Section 179 to refuse to confirm the sale, but if he does not exercise that discretion in favour of the debtor, his jurisdiction to confirm the sale is not lost. If the amount had been fully paid before the sale was held, then it might be plausibly argued that the sale was held without jurisdiction, but admittedly the amount was still due when the sale was held in this case. Subsequent payment does not oust the jurisdiction of the Collector to confirm that sale. It follows, therefore, that the plaintiffs had to file a suit to get the sale set aside within one year from the confirmation of the sale as required by Article 12(c) of the first schedule to the Indian Limitation Act. The present suit is, therefore, time-barred and was rightly dismissed.

3. I dismiss the appeal with costs.


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