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Penmatsa Janikamma and anr. Vs. Atchanata Bulleyya - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAndhra Pradesh High Court
Decided On
Case NumberAppeal No. 555 of 1979
Judge
Reported inAIR1985AP234
ActsCode of Civil Procedure (CPC), 1908 - Sections 47 and 151 - Order 21, Rule 90
AppellantPenmatsa Janikamma and anr.
RespondentAtchanata Bulleyya
Appellant AdvocateK. Pratap Reddy, Adv. for ;P. Sitarama Raju and ;R. Satyanarayana Raju, Advs.
Respondent AdvocateM.B. Rama Sarma, Adv.
Excerpt:
.....47 and 151 and order21 rule 90 of code of civil procedure, 1908 - suit filed for declaration that sale held by court in execution petition is null and void - plaintiff contended that defendant had encouraged him to participate in bid without disclosing that property was encumbered and property sold was subject to mortgage - encumbrances not announced at time of auction - sale in prepared under signature of court officer contrary to sale proclamation - in view of evidence and other relevant facts trial court rightly held that sale was initiated by fraud and mistake - appeal against order of trial court's dismissed. - - c-2 clearly mentioned all the encumbrances and there is no requirement of law that the officer who conducted the sale must announce that the property is being sold..........appeal. this suit is laid by the respondent herein, the sole plaintiff for a declaration that the sale held by the court in e. p. no. 35/69 o.s. no. 127/66 on 21-7-70 is null and void or to set aside the sale and direct defendants 1 and 2 to pay the amounts withdrawn by them and also refund the amount in deposit in the court.2. the plaintiff also filed along with the suit two applications e.a. no. 164/73 in o.s. no. 127/66 under s. 17 of the limitation act and also e.a. no. 165/73 under ss. 47 and 151, c.p.c. praying alternatively to set aside the sale explaining the delay in filing the said application if the suit is held to be not maintainable.3. the plaint allegations in brief are: defendants 1and 2 obtained money decrees against defendants 3 to 7 and the1st defendant brought the.....
Judgment:

1. Defendants 1 and 2 are the appellants in this appeal. This suit is laid by the respondent herein, the sole plaintiff for a declaration that the sale held by the court in E. P. No. 35/69 O.S. No. 127/66 on 21-7-70 is null and void or to set aside the sale and direct defendants 1 and 2 to pay the amounts withdrawn by them and also refund the amount in deposit in the court.

2. The Plaintiff also filed along with the suit two applications E.A. No. 164/73 in O.S. No. 127/66 under S. 17 of the Limitation Act and also E.A. No. 165/73 under Ss. 47 and 151, C.P.C. praying alternatively to set aside the sale explaining the delay in filing the said application if the suit is held to be not maintainable.

3. The plaint allegations in brief are: Defendants 1and 2 obtained money decrees against defendants 3 to 7 and the1st defendant brought the property to sale in execution of his decree subject to three mortgages dated 6-5-60, 7-5-60 and 14-8-63 valued at Rs.12, 000/-. Rs.6, 000/- and Rs.2, 500/- respectively and the sale proclamation itself mentioned the value of the property subject to those mortgages at Rs.100/- and the same valuation was shown in the sale affidavit Ex. A-3 also but contrary to that the sale list at the time of auction showed the value of the property at Rs.15, 000/- and hence the bid was started at Rs.15, 000/- and the plaintiff was misled in thinking that the property was sold free of enumbrances as at the time of the auction the encumbrances were not announced and consequently the plaintiff participated in the bid and purchased the property at Rs.16,500/-. It is also urged that one M. Jagannadharaju who is related to the 2nd defendant present at the time of the auction encouraged the plaintiff to participate in the bid without disclosing that the property was encumbered and thus the proceedings of sale are vitiated by mistake and fraud and the same is liable to beset aside. The plaintiff also urged that this fact that the property was sold subject to mortgage came to his knowledge only when the plaint filed by one of the mortgagees was served on him, and consequently the delay in filing the application to set aside the sale is liable to be ignored as per the provisions of S. 17 of the Limitation Act if it is found that the suit is not maintainable.

4. Defendants 1 and 2 the decree-holders alone contested the suit and the other defendant remained ex parte. They contended that the sale was held in accordance with law and the same is not liable to beset aside.

5. The trial court on the relevant issues found that the plaintiff has established fraud and mistake in conducting the sale as the sale was conducted as the court called for bids free of encumbrances and the property was sold disregarding the sale proclamation which fixed the value of the property at Rs.100/- and the plaintiff came to know of this fact that the property was sold subject to the mortgage only when the plaint in O.S. No. 89/72 (the suit filed by one of the mortgagees subject to whose rights the property was sold) was served on him. The court also held that in view of the fraud committed in conducting the sale S. 17 of the Limitation Act was attracted and consequently there is no bar of limitation and the suit is maintainable and consequently decreed the suit as prayed for. Against the said judgment and decree the present appeal is filed by defendants 1and 2.

6. The learned counsel for the appellants Sri Prathapa Reddy argued that the sale proclamation Ex. C-2 clearly mentioned all the encumbrances and there is no requirement of law that the officer who conducted the sale must announce that the property is being sold subject to mortgage and the finding of the court below that the court officer while conducting the sale did not announce that the property was being sold subject to the mortgage is not correct and the mistake in the sale list is not fatal, and the part played by Jagannadharaju even assuming to be true cannot vitiate the sale proceedings once the conduct of sale is in accordance with the proclamation.

7. I have gone through the entire evidence. Each of the plaintiff's witnesses deposed that the encumbrances were not announced at the time of auction. However they were cross-examined (sic) which was denied time. Similarly the defendants' witness said in chief-examination that the encumbrances were announced by the Amin and denied the suggestion that they were not announced. Hence the evident e is equally divided on this question. However one crucial fact which is indisputably established is that the sale proclamation Ex. C-2 mentioned that the value of the property as per the plaintiff-decree holder is Rs.100/- subject to the mortgages mentioned in the sale proclamation, and the same valuation of Rs.100/- was accepted by the Amin. However the sale list Ex. C-1 clearly discloses that the value of property both as per Amin and decree-holder was Rs.15, 000/- and the bid was begun at Rs.15, 000/-. The first participant in the bid was one Seshagirirao and the next bid was that of the plaintiff at Rs.16, 000/- and thereafter on Ramarao participated and offered Rs.16, 500/- and finally the bid was knocked down in favour of the plaintiff at Rs.16, 600/-. This clearly establishes that the bid was started at Rs.15, 000/- treating it as upset price. The value mentioned in Ex. C-1 the sale list was taken as the bid amount without referring to the mortgages.

8. Hence it is argued by the learned counsel for the respondent that this circumstance is sufficient to establish the fraud or mistake committed by the court or its officer. It is urged that the court having fixed the upset price at Rs.100/- the officer began to bid at Rs.15, 000/- and this constitutes a gross error if not fraud in the conducting of the sale which vitiated the proceedings. The evidence of he Amin who was examined as D.W. 1 clearly discloses that the upset price subject to the mortgages having been fixed at Rs.100/- a gross error has crept in conducting the sale by starting the bid at Rs.15, 000/- as the sale list Ex. C-1 mentions the value of the property as fixed by the plaintiff-decree-holder at Rs.15, 000/- and also by the court Amin at Rs.15, 000/-. According to me irrespective of other allegations of fraud, this is a crucial mistake committed by the court and should not hurt the plaintiff. No doubt in a court auction the plaintiff must be vigilant and the principles of caveat emptor applies but as held by the Privy Council as early as in Kala Mea v. Harpering (1909) ILR 36 Cal 323 'in sales under the direction of the Court it was incumbent on the Court to be scrupulous in the extreme and very careful to see that no taint or touch of fraud or deceipt or misrepresentation is found in the conduct of its ministers.' In that case no doubt the representation of the court officer allowed the purchaser to think that the property was being sold free of encumbrances. There is no infirmity in the proclamation and the other proceedings. Though the auction purchaser with due diligence would have discovered that the property is being sold subject to mortgage Lord Macnaghten held that while the sale was going on, the persons are perfectly justified in relying on the statement of the officer and the exception in S. 19 of the Contract Act had no application and the fact that the purchaser has not acted with due diligence is not a ground for refusing to set aside the sale when a fraud or mistake was discovered. I think the above dicta clearly applies to the facts of this case.

9. On an occasion like this the maxim 'Actus curiae neminem gravabit' (An act of court shall prejudice no one) shall apply. The dicta of Cress Well, J. in Freeman v. Tranah (1852) 12 CB 406 = 138 ER 964 that 'the maxim 'Actus curiae neminem gravabit', is founded upon justice, and good sense; and affords a safe and certain guide for the administration of the law' is of great value. In fact Indian courts have applied this principle on many occasions when the application for execution was barred by limitation due to the mistake in drafting the decree as 16-2-1929 instead of 11-2-1929 it was held that though the court has no power to extend the time of limitation, yet the decree ought to be regarded as having been passed on 16-2-1929 on the principle 'actus curiae neminem gravabit'. Vide Nalini Kanta v. Kamaraddi, AIR 1933 Cal. 239. In Jang Singh v. Brij Lal, : [1964]2SCR145 the Supreme Court had an occasion to apply this maxim where the deposit of less than one rupee was made due to the error on the part of the office of the Court in filling up the challan. It was held 'In view of the mistake of the Court which needs to be righted the parties are relegated to the position they occupied on January 6, 1958, when the error was committed by the Court which error is being rectified by us nunc pro tunc.' Thus the act was treated as done, 'now for them'. Thus the act was treated as done, 'now for then'. In this case the sale list prepared under the signature of the court officer is quite contrary to the sale proclamation Ex. A-2 and hence it constitutes mistake committed by the court or its officer which led gross injustice to the auction purchaser and hence the court is entitled to correct the same.

10. The evidence of the Amin D.W. 1 is very halting. Having fixed the upset price at Rs.100/- subject to mortgages, the court officer permitted the purchaser to bid the property making him to believe that the valuation of the property fixed by the court is Rs.15, 000/- and he must offer above the said figure. It shocks the conscience of the court. I am satisfied that D.W. 1 cannot be said to be quite innocent about this mistake though he denied the suggestion that he did not announce the mortgages. It is inconceivable how the bid was allowed to be started at Rs.15, 000/- once the upset price was fixed at Rs.100/-. Hence I am of the opinion that the finding of the court below on issue Nos. 1 and 2 is clearly acceptable and the auction is vitiated due to the above gross material irregularity which also constitutes fraud in conducting the sale.

11. Issue No. 5 relates to the part played by Jagannadharaju and it has some significance. He was examined as D.W. 3, and it was clearly suggested that he was present and encouraged the plaintiff to participate in the bid. It is admitted that he is related to the 2nd defendant and he and his sons have obtained mortgage of suit property by the time of sale. The suggestion of his encouragement is clearly fortified when the sale list Ex. C-1 was prepared contrary to the sale proclamation and sale affidavit. It raises great doubt and I am satisfied that D.W. 3 has played some sufficient part atleast in keeping the plaintiff in dark on the date of auction. In any view once the sale was held contrary to the proclamation the court is bound to set aside the sale. Further in this case the gross injustice is pronounced as the property purchased by the plaintiff is not available to him even subject to the mortgages as the same was brought to sale by one of the mortgagees mentioned in the sale proclamation and purchased by him in execution of the decree in O.S. No. 89/72. The plaint in the suit and also the judgement were placed before the court as Exs. A-12 and A-15. Hence I am satisfied that the findings on issues 1, 2, 5 and k6 are well founded and they are liable to be accepted.

12. The next question that falls for consideration is whether the present suit is maintainable. It is necessary to consider the amendment to S. 47, C.P.C. in this regard. The Amending Act 66 of 1956 substitutes the old Explanation to the section and thus a purchaser at a sale in ex4cution of a decree is treated as a party to the suit. The Amending Act 104 of 1976 made the original Explanation I as Explanation II (a) and additional Clause (b) is added; thus setting at rest the conflict of decisions on the point whether the claim for possession by a purchaser in court auction in pursuance of execution of a decree is or is not a question relating to the execution of the decree. Further the Amending Act 104 of 1976 substituted a new rule to O.21, R.90, C.P.C. Under this amendment the purchaser is made specifically the person entitled to apply for setting aside the sale. But this amendment was not given retrospective effect under S.97 (q) of the Amending Act and hence under the provisions of the Civil Procedure Code before the Amendment by the new Amending Act 104 of 1976 the question has to be agitated by the auction purchaser under S. 47, C.P.C. the auction purchaser at a sale in execution of a decree whether he is a decree-holder or not was held to be a party to the suit for the purpose of s. 47, C.P.C. even as per the Amending Act 66 of 1956 by the Supreme Court in Harnandari v. Debidutt, : [1974]1SCR210 . Hence the objection that the suit is not maintainable and the remedy is under S. 47, C.P.C. is clearly sustainable. Fortunately the plaintiff is vigilant in filling an application under S. 47, C.P.C. seeking alternative relief as stated above and hence the relief now granted by the trial court in decreeing the suit can be granted in the application filed by the plaintiff in E.A. 165/73. Hence I am clearly of the opinion that the sale held by the court in E.P. No. 35/69 in O.S. No. 127/66 on 21-7-1970 is liable to be set aside and there shall a direction as prayed for and accordingly the decree passed by the trial court shall be treated as an order passed in E.A. No. 165/73.

13. However it is necessary to correct a minor mistake committed by the trial court in granting interest from the date of the suit till the amount is paid. It cannot be disputed till the sale is set aside the plaintiff is not entitled to he refund of the amount and hence it is just and proper that the plaintiff is entitled to interest from the date of the order of the trial court i.e., 17-4-79 till the date of realisation. With this modification the appeal fails and the same is dismissed but in the circumstances without costs. I further direct that the decree-holder is free to take steps in E.P. 35/69 for executing his decree.

14. Appeal dismissed.


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