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Narayan Vasudevacharya Katti Vs. Amgauda Malagauda Patil - Court Judgment

LegalCrystal Citation
SubjectCivil;Contract
CourtMumbai
Decided On
Case NumberSecond Appeal No. 742 of 1919
Judge
Reported inAIR1921Bom169; (1921)23BOMLR455
AppellantNarayan Vasudevacharya Katti
RespondentAmgauda Malagauda Patil
DispositionAppeal allowed
Excerpt:
civil procedure code (act v of l908), order xxi, rule 89 -decree-execution-sale-application to set aside sale on payment of decretal amount-setting aside of sale-voluntary payment-refund of money-no refund can be allowed-indian contract act (ix of 1872), section 72.;a payment made under order xxi, rule 19, of the civil procedure code 1908, to set aside a sale held in execution of a decree, is voluntary. no suit can lie for a refund of the money so paid to the decree-holder when the sale has already been set aside. - - it is well settled that there is no such obligation in the case of a voluntary payment by a of b's debt......to get rid of the wale rather than resist the purchaser and involve himself in litigation. money paid under protest would not, as a rule) be paid out to the decree-holder until the legality of the protest had been decided.18. but there is another question, which is the most important, whether it was ever intended that a person applying to the court under rule 89 to set aside a sale could satisfy the conditions of the rule by paying in money under protest.19. the money deposited is earmarked (a) for payment to the purchaser of a sum equal to five per cent, of the purchase money;20. (b) for payment to the decree-holder of the amount specified in the proclamation of sale as that for recovery of which the sale was ordered less any amount received by the decree-holder since the.....
Judgment:

Norman Macleod, Kt., C.J.

1. The plaintiff filed this suit to recover from the defendant the sum of Rs. 1,207 which he paid into Court in the following circumstances.

2. In Suit No. 347 of 1909 in the Court of the Subordinate Judge at Athni the defendant obtained a mortgage decree against one Shivgouda Deogouda Patil, which directed the recovery of the mortgage amount by sale of the present plaint land. In Darkhast No. 608 of 1914 filed by the present defendant to execute his decree the property was sold. The present plaintiff then paid into Court, under Order XXI, Rule 89, the decretal amount of Rs 1,207 and Rs. 63 being five per cent, of the purchase money for payment to the auction purchaser, before the sale was confirmed, and got the sale set aside.

3. The present defendant-then plaintiff-was the auction purchaser. As such auction purchaser the Rs. 63 was paid to him and as decree-holder the Rs. 1,207 were also paid to him.

4. The plaintiff alleged that the property sold belonged to him, that it had never belonged to Shivgouda, that Shivgouda had mortgaged the property to the defendant in fraud of the plaintiff's rights, and that as the plaintiff had been obliged to pay the money to get the sale set aside he was entitled to have the amount refunded.

5. Thus a question has been raised which, be far as we have been able to discover, has never hitherto come before the Courts for decision.

6. The issues in the trial Court were:-

1. Whether the payment made by the plaintiff was u voluntary one?

2. Whether the defendant could be held liable to refund the amount to the plaintiff ?

7. The learned trial Judge held that the payment was voluntary. It would only be an involuntary payment if there was an obligation implied or express to repay or authority express or implied from the defendant to pay and neither of those circumstances were alleged in the case.

8. It appears that the plaintiff had objected to the sale taking place, and that the Collector had noted his objections and made them known to intending purchasers.

9. Accordingly the suit was dismissed with costs.

10. In first appeal it was held that the payment by the plaintiff was not voluntary.

11. If that were correct the question would obviously arise whether the plaintiff was a person entitled under Rule 89 to apply to the Court to set aside the sale.

12. But the learned appellate Judge for some reason which is not apparent did not consider himself bound to consider that question or express any opinion thereon and decreed the plaintiff's claim with costs throughout.

13. It is quite clear that that decision cannot stand. Assuming that the plaintiff had no interest in the property and yet in contravention of the provisions of Rule 89 was allowed to pay into Court the necessary sums of money for getting the sale set aside, he could not be considered to have acted in any other capacity than a volunteer.

14. Now a person whose property in his opinion has been wrongfully attached has various remedies at his disposal. He can make a claim that the property attached belongs to him and not to the judgment-debtor. Such a claim will be investigated under Rule 58 and under Rule 59 the claimant must adduce evidence to show that at the date of the attachment he had some interest in or was possessed of the property attached. If the claim is disallowed the claimant may file a suit to establish his claim. But the claimant may pay into Court under protest the amount of the decree holder's claim in order to get the attachment removed at once from the property. There can be no doubt that such a payment would be involuntary and a suit would lie for its recovery, the question for decision being the same, whether the plaintiff could prove his title to the property which had been attached: Kanhaya Lal v. National Bank of India : (1913)15BOMLR472 . and Bhicoobai v. Hariba Raghuji : (1917)19BOMLR650 .

15. There is a third course open to the person in possession of immoveable property which is attached. He may content himself with giving notice that the property attached belongs to him, so that all intending purchasers will know that the successful bidder will have to fight him for possession. If the purchaser is resisted or obstructed he can apply to the Court under Rule 97, complaining of such resistance or obstruction, and the question who is entitled to the property will then be decided.

16. The present plaintiff, though he gave notice before the sale that he claimed the property as his own, did not wait to resist or obstruct the purchaser but paid the decretal amount into Court in order to get the sale set aside.

17. We have not got the proclamation of sale before us, but assuming that the Collector was a person of ordinary prudence he would have sold the right, title and interest, if any, of the judgment-debtor in the property, and not the property itself. If, then, the plaintiff, to suit his own convenience, got rid of the sale of the judgment-debtor's right, title and interest in the property by paying the decretal amount into Court, it is quite clear that he could not recover the amount as having been involuntarily paid. But assuming that the property itself was sold there may be a Amoauda difficulty in distinguishing between a payment made under protest to get rid of an attachment and a payment made under protest to get a sale after attachment set aside. But we do not even know whether the payment was made under protest. Again it may have suited the plaintiff's convenience to get rid of the wale rather than resist the purchaser and involve himself in litigation. Money paid under protest would not, as a rule) be paid out to the decree-holder until the legality of the protest had been decided.

18. But there is another question, which is the most important, whether it was ever intended that a person applying to the Court under Rule 89 to set aside a sale could satisfy the conditions of the rule by paying in money under protest.

19. The money deposited is earmarked (a) for payment to the purchaser of a sum equal to five per cent, of the purchase money;

20. (b) for payment to the decree-holder of the amount specified in the proclamation of sale as that for recovery of which the sale was ordered less any amount received by the decree-holder since the proclamation of sale.

21. It has been held that there could be no rateable distribution under Section 275 of the Code of 1882 of money deposited under Section 31OA as it was not money realised by sale or otherwise in execution of a decree but money to which the decree-holder was solely entitled: Hari Sunduri Dasya v. Shashi Bala Dasya (1896) 1 C.W.N. 195.; Roshun Lal v. Ram Lal Mullick (1903) 7 C.W.N. 841; and Roshun Lal v. Ram Lal Mullick I.L.R. (1903) Cal. 262. In Sorabji v. Kala Raghunathn I.L.R.(1911) Bom. 156; 13 Bom. L.R. 1193. it was decided that in spite of the alteration in the wording of Section 73 of the Code of 1908 money paid into Court under Order XXI, Rule 55 was not liable to rateable distribution and though the correctness of that decision has been doubted by Mr. Mulla, who is also of opinion that money paid into Court under Rule 89 would be liable to rateable distribution, it seems to me that when it is expressly provided that the money should be paid in for a particular purpose such money could not bo treated as assets held by a Court.

22. I should say that it was the intention of the Legislature in framing Section 310A of the Code of 1882 to enable judgment debtors, whose property had been sold at an undervalue, to recover it if they could pay the decretal amount and five per cent. on the purchase price into Court before the sale was confirmed. For the first time by Rule 89 a person, jointly interested in the property sold by virtue of a title acquired before the sale, was enabled to get rid of the common ownership of the auction purchaser, leaving it for future decision whether he could recover the amount by enforcing a lien or otherwise from the judgment-debtor. But I think it was also intended that once the property had been sold the price paid by the purchaser should be available for the decree-holder, leaving it to the purchaser to make what he could out of his purchase, and that if the sale was set aside by payment into Court under Rule 891 the money should go to the decree-holder in execution of whose decree the property was sold. In other words, that once property has been sold, the sale could not be set aside by a payment into Court under protest' The auction purchaser is entitled to the benefit of his purchase whatever it may amount to, and it is only under certain conditions that he can be deprived of that benefit, namely, that he gets five per cent, for the loss of his bargain, and the decree-holder gets the benefit of his execution sale. If the Legislature had intended that sales could be set aside if payment was made into Court conditionally, then it would have said so. It is a, mere accident that in this case the decree-holder purchased the property himself. If the true owner allows the attachment to continue t and the property to be sold as belonging to the judgment-debtor, he can treat the sale as a nullity and resist the auction purchaser' There is no necessity for him to get rid of the sale of what in his opinion does not exist. The attachment of the property itself is a different matter, that may seriously inconvenience him, but if he is the true owner the sale of a non-existent interest in it does not affect him. If he pays in money to get that sale set aside it can only be treated as a voluntary payment.

23. There is a further consideration, that if a decree-holder could be deprived in this way of the money which in effect resulted from the sale in execution of property alleged to belong to his judgment debtor, he might be deprived of any further opportunity of realizing the fruits of his decree. He is entitled to what the auction purchaser has paid and it makes no difference to him whether or not the auction purchaser gets anything tangible in return for his money. If he does not get what has been paid or agreed to be paid by the auction purchaser he is entitled to get that which is paid to get rid of the auction purchaser.

24. In my opinion the appeal should be allowed and the suit dismissed with costs throughout.

Second Appeal No. 742 1919, from the decision of F. Boyd, District Judge of Belgaum, in Appeal No. 25 of 1919, reversing the decree passed by R.G. Shirali Subordinate Judge at Athni, in Civil Suit No. 201 of 1917.

Second Appeal No. 742 1919, from the decision of F. Boyd, District Judge of Belgaum, in Appeal No. 25 of 1919, reversing the decree passed by R.G. Shirali Subordinate Judge at Athni, in Civil Suit No. 201 of 1917.

Shah, J.

25. I need not recapitulate the facts which have given rise to this second appeal. The question is whether the deposit made by the present plaintiff under Rule 89 of Order XXI of the Code of Civil Procedure for payment to the present defendant as the decree-holder in order to have the sale set aside can be recovered back from him. It is urged that the payment must be taken to have been made by the plaintiff under coercion and that he is, therefore, entitled to recover the amount under Section 72 of the Indian Contract Act. This contention cannot be allowed.

26. Having regard to the terms and scope of Rule 89 it is clear that the amount must be taken to have been deposited for payment to the decree-holder voluntarily and unconditionally. The sale to be set aside would be the sale of the- right, title and interest of the judgment-debtor in the property in question There was no obligation upon the present plaintiff, who claimed to be the owner of the property to make any application under that rule. But when an application to set aside the sale is made under that rule and the amount required by the rule is deposited, it is obligatory upon the Court to set aside the sale, as provided by Rule 92, Sub-rule (2). The result of setting aside the sale is generally speaking in favour of the judgment-debtor. This result can be ensured by any person interested in the property by satisfying the claims of the decree-holder and the auction purchaser according to the provisions of the rule. I do not see how a person can be allowed to go back upon his own act and to claim the amount back from the decree-holder after he has secured the benefit of having the sale set aside. The Legislature has in effect provided that on condition that the decree-holder is paid the amount mentioned in the proclamation, he shall not be allowed to insist upon the sale being upheld. It is necessarily implied that the party seeking to take advantage of the rule shall not be allowed to deprive the decree-holder of the benefit which is secured to him under the rule as a substitute for the sale proceeds, which have been realised for the satisfaction of his decretal claim.

27. If such a claim for refund as is now made by the plaintiff were allowed, the decree-holder would be deprived of the benefit, without being necessarily placed in his former position with reference to the judgment-debtor under the decree, It is clear that the payment to the decree-holder of the amount deposited under Rule 89 would mean satisfaction of the decree to that extent. He could not be justly deprived of this benefit unless he could be restored to his original position under the decree. This may not be always possible at the date of the claim for refund; and that appears to me to be a valid ground for holding that the claim for refund is not admissible The' deposit under the rule is in its very nature unconditional and voluntary.

28. Mr. Gumaste for the plaintiff haw relied upon the decisions in Dooli Chand v. Ram Kishen Singh1 and Seth Kanhaya Lal v. National Bank of India Limited in support of his contention that the payment made by his client is not voluntary. After a careful consideration of these decisions and of the observations of their Lordships of the Privy Council, I have come to the conclusion that a payment made under protest to get rid of an attachment or to prevent a sale in execution stands on a different footing and that the ratio decidendi of these cases cannot be applied to a payment made under Rule 89 in support of an application to set aside a sale of the right, title and interest of a third party held in execution of the decree. No decision directly bearing on the point, which we have to decide, has been cited to us; and in the absence of any clear authority, I am unable to extend the doctrine of these decisions to the case of a payment made under a specific rule for a specific purpose. It seems to me that the observations in Ram Tuhul Singh v. Biseswar Loll Sahoo (1875) L.R. 21 A. 131 favour this view. The facts in that case were different; but as pointed out in that case ' the question is not to be determined by nice considerations of what may be fair or proper according to the highest morality. To support such a suit there must be an obligation express or implied to repay. It is well settled that there is no such obligation in the case of a voluntary payment by A of B's debt. Still less will the action lie when the money has been paid...against the will of the party for whose use it is supposed to have been paid.'

29. On the whole I am of opinion that it would be unjust and contrary to the scheme and scope of Rule 89 to admit a claim for the refund of the payment made under that rule after the person making the payment has had the benefit of the rule. It is a matter for him to consider before making an application under Rule 89 whether under the circumstances it is to his benefit to have the Bale set aside. But if he chooses to apply under that rule, I do not me why the payment should not be treated as having been voluntarily made.

30. I concur in the order proposed by my Lord the Chief Justice.


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