1. The question that arises for decision is whether a person who purchased the judgment-debtor's property under an agreement of sale is entitled to file an application under Order 21 Rule 89 C.P.C. to set aside a Court sale. The facts giving rise to CMA No. 336/62 are as follows:
2. The appellant herein obtained an agreement of sale dated 19-5-1958 from the Judgment debtor, paid a part of the purchase money and took possession of the property. Subsequently, the property of the vendor was sold on 28-8-1961 in a court sale in execution of a money decree against the appellant's vendor. The appellant also demanded the performance of the agreement by issuing registered notices dated 22-6-1958 and 31-8-1960 showing his readiness and willingness to complete the sale. The appellant filed an application E A 198/61 in E P No. 18/60 in OS. No. 17 of 1956 on the file of the District Court, Rajahmundry under Order 21 Rule 89 to set aside the court sale on making the necessary deposits as required by the Rule.
The application having been dismissed by the lower Court on the ground that he had no interest in the property, the appellant filed the present appeal before this Court.
3. Order 21, Rule 89 C.P.C. corresponds to Section 310-A of the Civil Procedure Code of 1882 which merely referred to 'any person whose immovable property had been sold'. This provision was subsequently widened in the Code of 1908 which inserted the words 'any person, either owning such property or holding an Interest therein by virtue of a title acquired before such sale'. The rule was subsequently amended in Madras in 1936 and is now applicable to Andhra Pradesh. It runs as follows:--
'Where immovable property has been sold in execution of a decree, the judgment-debtor, or any person deriving title from the judgment-debtor, or any person holding an interest in the property may apply to have the sale set aside on his depositing in Court..'
It appears from the above amendment that the words 'by virtue of a title acquired before such sale' have been omitted. The expression 'person holding an interest' has been considered in various decisions which I propose to refer to in the order of date. In Mahadeo v. Vasudev Kirtikar, (1899) ILR 28 Bom 181, it was held that a person having only an agreement of sale in his favour cannot be said to be the owner of the land and hence not entitled to apply under Section 310-A of the Civil P.C. of 1882. To a similar effect is the case in Subba Reddi v. Vasireddi Jayaramayya, AIR 1923 Mad 659, where it was held that a person having only a contract for the purchase of immovable property has no locus standi to apply under Order 21, Rule 89. But in Potti v. Suppammal, AIR 1924 Mad 723, Venkatasubba Rao, J., held that even a trespasser who was in possession of the property sold in a Court auction and who has not yet prescribed his title by adverse possession is a person having an interest in the property entitling him to apply under Order 21, Rule 89, on the ground that his possession is good against everybody except the real owner and that he is entitled to protect his own property by getting the sale set aside under Rule 89. This view of Venkatasubba Rao J., was not, however, shared by the other learned Judge. Nevertheless, the view of Venkatasubba Rao J. was supported by various English authorities cited by the learned Judge in order to come to the conclusion that possessory title, whether lawful or unlawful, creates a sufficient interest !n the person in possession enabling him to protect such possession.
In Viranna v. Sattiraju, AIR 1927 Mad 445, even a mortgagee of the judgment-debtor's property was held to be entitled to apply under Rule 89 for setting aside a Court sale. This ruling also emphasizes the prinRule that the applicant under Order 21, ule 89, need not be the full owner of the property. In Adenna v. Chinna Ramayya, AIR 1928 Mad 1191, it was held that a lessee of the property sold in auction has got sufficient title enabling him to apply under Order 21, Rule 89, indicating thereby that it is not necessary that a person should be the complete owner of the property. The Patna High Court in Mundrika Singh v. Nand Lal Singh AIR 1941 Pat 204, considering the scope of Order 21, Rule 89, as amended on terms similar to those of the Madras rule, held that a person in possession of the property under an agreement of sale from the judgment-debtor is a person having an interest in the property entitling him to apply for setting aside the sale under Order 21, Rule 89. The same High Court in Deopati Kuer v. Maliabir Prasad, AIR 1947 Pat 293, held that where the purchaser obtained a sale deed but which was not registered by the date of his application, does not acquire any title to the property and hence not entitled to apply under Order 21. Rule 89, Civil P.C.
It may be noted that the earlier case in AIR 1941 Pal 204 was not cited before the learned Judges. It also appears from the facts that, except the execution of the sale deed, no consideration seems to have been paid or possession delivered in lavour of the purchaser. Though the reasoning in the said judgment is open to objection, it is not necessary for me to express my opinion as regards the correctness of the said decision having regard to the facts of the said case. In Katti Koolathil Mammu v. Vinavaka Kamath. AIR 1951 Mad 815, it was held that the words 'holding any interest' in Order 21, Rule 89, should be given a more beneficial and wider meaning so as to enable even an attaching creditor to apply under Order 21 Rule 89. The Calcutta High Court in Rabindranath v. Harendrakumar, : AIR1956Cal462 , dealing with the application of a person who entered into an agreement of sale from the judgment-debtor, held that the word 'title' in Order 21, Rule 89, includes not merely a completed and perfected title but a title in the process of maturity and followed the ruling in AIR 1941 Pat 204.
In the latest case of lladha Raman v. Gulab Thakur, : AIR1959Pat50 , the Patna High Court, following AIR 1941 Pat 204 and : AIR1956Cal462 , but without referring to the case in AIR 1947 Pat 293, held that the word 'interest' in Order 21, Rule 89, has got a very wide import and should be construed very liberally so that any inchoate right which a party may have over a property can be sufficient interest to enable him to apply under the rule and accordingly upheld the application of a person whose claim under Order 21, Rule 38, was dismissed. Again in Balakrishna v. Amrithavalli Ammal, : AIR1959Mad526 the Madras High Court went to the extent of holding that a wife in possession of the property of her husband who was missing is also a person having an interest in the property and entitled to have a sale set aside under Order 21, Rule 89, following the view of Venkatasubba Rao, J. in AIR 1923 Mad 723.
4. From the above rulings it follows that the person entitled to apply under Order 21, Rule 89, is not the owner of the property alone but includes the following persons, viz., a person having lesser interest like a lessee or a mortgagee or any other parson with an inchoate title to the property, or any person who is interested in protecting the property on account ot his being in possession or otherwise in pursuance of an incomplete transfer ot properly.
5. At this stage I would like to dispose of the argument of the learned counsel for the respondent, Sri C. Pnrnaiah, namely, that under Section 54 of the Transfer of Property Act, an agreement of sale does not create any interest in the property and that a person claiming only under an agreement of sale cannot apply under Order 21, Rule 89. The last paragraph of Section 54 of the Transfer of Property Act which defines 'sale' states that a contract of sale does not of itself ereate any interest in or charge on such property. In the context of the definition, the definition means that ownership is transferred only by a conveyance under a registered document and that such a transfer of ownership is not effected by a mere contract ot sale. The words 'any interest' referred to therein must be taken to refer to the words 'transfer of ownership' contained in the definition. Moreover, the said clause in Section 34 was specifically enacted with a view to abolish the English doctrine that a contract of sale transfers an equitable estate to the purchaser because the law in India docs not recognise equitable estates. Moreover, the said clause states that the con-Itraet of itself does not create any interest in such property. It means that the mere execution of contract on a piece of paper without anything more does not create any interest in the properly. But if we read Section 55(6)(b) of the Transfer of Property Act, we find that where is a part-payment of the purchase price, there is a charge created for such portion of the money which was paid and certainly the charge is an interest in immovable property. We may also note from the provisions of Section 10 of the Transfer of Property Act that a purchaser under a contract of sale of land possesses a well-defined right which, though not amounting to an interest in immovable property, is annexed to the ownership of such property because under the said provision a purchaser under a contract of sale of land is entitled to the benefit of of an obligation arising out of that contract and it further provides tliat such obligation may be enforced against a transferee with notice.
It will thus be seen that the last clause ot Section 54 of the Transfer of Property Act is intended only to point out that no interest in the nature of ownership passes to the purchaser whereas the expression 'interest in the property' used in Order 21, Rule 89, is intended to show that such interest need not be equivalent to ownership. The object of Order 21, Rule 89, is to save the property from being lost in a Court sale and in the said context any person who is interested in protecting his property, whatever be the nature of his interest, will be entitled to apply under the said rules. It may also be noted that a person in possession of the property like the present appellant who has parted with part of the consideration has certainly an interest in the property and is entitled to protect such interest by filing the application to set aside the sale. It may also be noted that a person in possession of property in pursuance of an agreement of sale is entitled to rely upon his possession by setting up the plea of part-performance in defence to an action by his transferor or any person claiming from him. For all these reasons. I hold that a person in possession of the property under an agreement of sale is a person having an interest in the property sold so as to enable him to apply under Order 21, Rule 89, Civil P.C., to set aside the Court sale.
6. Another point raised by Sri Purnaiali, the learned counsel for the respondent, is that the Court sale was in respect of 3.00 acres of land and that the agreement of purchase was in respect of 2.00 acres only and that tha application is, therefore, not maintainable. In support of this argument, he relied on a decision in Koppaka Chandrayya v. Robertson, 52 Ind Cas 641= (AIR 1919 Mad 183 (2) J. In the said ruling it was pointed out that the petitioner who was a purchaser of a part of the property which was sold in Court auction and who has paid only his portion of the decree amount cannot be allowed to apply under Order 21, Rule 89, and contend that the balance of the decree amount was paid by the other purchasers. But in the present case, tha appellant who applied for setting aside the sale, himself paid the entire amount as required by Rule 89 and hence the said ruling has no applicability to the facts of the present case.
7. For the above reasons, I allow C.M.A. No. 336 of 1962 with costs throughout.
C.M.As. Nos. 392 qt 1965 and 393 ot 1965. -- These appeals arise out of applications under Order 21, Rule 100, for redelivery of properties after the auction-purchaser took delivery of the same. In view of the fact that I have allowed C.M.A. No. 336 of 1962, I dis miss these appeals as unnecessary; but with out costs.
8. The respondent-auction-purchaser in C.M.A. No. 336 ot 1962 can apply in the lower Court for appropriate directions con sequent on the setting aside of the sale.