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Amar Nath Vs. Firm Chotelal Durgaprasad and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAllahabad
Decided On
Reported inAIR1938All593
AppellantAmar Nath
RespondentFirm Chotelal Durgaprasad and anr.
Excerpt:
- - the first court held that the decree could not be executed because the execution application was not maintainable, and did not decide other issues, and on the second appeal before a bench of two judges of this court the bench has stated that as there were conflicting rulings of this court the matter should be referred to a full bench, and accordingly a bench of three judges was constituted, the bench of three judges stated that there was likely to be a difference of opinion between them and recommended a larger bench, and accordingly the present bench of five judges was constituted to dispose of the second appeal. 3. we are not concerned with the method of this interesting calculation but only with the question of whether there can be any execution at all of the decree against the.....bennet, ag. c.j.1. this is an execution second appeal by one amar nath who was a surety and against whom the lower appellate court has held that the decree of the firm b. chhote lal durga prasad against the firm manohar das ram narain could be executed, without deciding other issues. the application for execution was by the imprisonment and arrest of amar nath, the surety. the first court held that the decree could not be executed because the execution application was not maintainable, and did not decide other issues, and on the second appeal before a bench of two judges of this court the bench has stated that as there were conflicting rulings of this court the matter should be referred to a full bench, and accordingly a bench of three judges was constituted, the bench of three judges.....
Judgment:

Bennet, Ag. C.J.

1. This is an execution second appeal by one Amar Nath who was a surety and against whom the lower Appellate Court has held that the decree of the firm B. Chhote Lal Durga Prasad against the firm Manohar Das Ram Narain could be executed, without deciding other issues. The application for execution was by the imprisonment and arrest of Amar Nath, the surety. The first Court held that the decree could not be executed because the execution application was not maintainable, and did not decide other issues, and on the second appeal before a Bench of two Judges of this Court the Bench has stated that as there were conflicting rulings of this Court the matter should be referred to a Full Bench, and accordingly a Bench of three Judges was constituted, The Bench of three Judges stated that there was likely to be a difference of opinion between them and recommended a larger Bench, and accordingly the present Bench of five Judges was constituted to dispose of the second appeal. The facts of the present case are as follows : In O.S. No. 754 of 1922 there was a decree for the plaintiff on 8th November 1922 for Rupees 538-14-0, and this was upheld on a miscellaneous appeal on 15th December 1932 On 24th March 1927, there was the attachment of a house of the judgment-debtor firm which at that time belonged to Barr, Narain and a compromise was made by which Rs. 10 was to be paid per month by him, and Amar Nath, the present appellant, stood surety for Ram Narain to the extent of the decretal amount, on the date of that compromise, 24th March 1927. On 29th August 1927 Ram Narain died. On 2nd August 1929 there was an execution application for sale of the house as the installments had not been paid. On 14th February 1930 Mt. Basanti Bibi made an objection claiming a portion of the house under Order 21, Rule 58. Her claim was based on the following pedigree:

MANOHAR DAS||------------|--------------|Ram Narain Ram Ratan Ram Dban| = Mt. BasantiChhedi. Bibi.

2. The objection of Mt. Basanti Bibi the she as a Hindu widow was entitled to a share in the house was dismissed on 17th February 1930. The decree-holder was therefore aware that there was this objection by Mt. Basanti Bibi and that she had a period of one year within which she could file a suit under Order 21, Rule 63. Nevertheless when the house was put up for sale on 18th February 1930 the decree-holder bought the house for Rs. 570. In the sale proclamation it was represented that the decretal amount due at that time was Rupees 589. An objection was made to the sale by the judgment, debtors, the sons of Ram Narain deceased, but that objection was dismissed and the sale was confirmed on 11th March 1930 under Order 21, Rule 92, and the decree, holder had certified satisfaction of his decree by the sale to the amount of his bid, Rs. 570. The matter therefore closed between the decree-holder and the judgment-debtor by that order of confirmation of sale on 11th April 1930. On 25th July 1931 Mt. Basanti Bibi who had brought a suit on her claim got a decree for possession of the northern part of the house. She valued her claim at Rs. 400 in her plaint. The decree declared that she was entitled to possession of that portion of the house and that the judgment-debtor had no interest in that portion. On 2nd October 1933, the decree-holder applied for execution of the balance of his decree making the following claim:

That there was a mistake by him in calculating the decretal amount due on the date of the sale, 18th February 1930, and instead of Rs. 589 there was only Rupees 423-8-0 due to him. His bid was Rs. 570 which he takes to be the value of the whole house. Mt. Basanti in her plaint valued her claim at Rs. 400 and therefore he calculates the portion decreed to her as worth Rs. 400 and the portion remaining with him as worth the difference Rs. 170. Having got satisfaction for Rs. 170 only out of the Rs. 423-8-0 due on the date of sale he claims now for the difference Rs. 253-8.0 and costs.

3. We are not concerned with the method of this interesting calculation but only with the question of whether there can be any execution at all of the decree against the surety on the ground that subsequent to the confirmation of the auction-sale there has been a decree in favour of a stranger to the suit holding that that stranger has title to a portion of the house sold and that the judgment-debtor has no title to that portion. It is to be noted that in the present case there was not a total failure of consideration but only a partial failure.Now turning to the Civil Procedure Code, Order 21 allows applications to be made to set aside a sale under Rules 89, 90 or 91 and, in particular Rule 91 provides:

The purchaser at any such sale in execution of a decree may apply to the Court to Bet aside the sale, on the ground that the judgment-debtor had-no saleable interest in the property sold.

4. If the auction, purchaser makes the objection under Rule 91, Rule 92(2) provides that the Court, if it allows the objection, shall make an order setting aside the sale, and Rule 93 provides that in that case the auction-purchaser is entitled to an order for repayment of his money with or without interest against any person to whom it has been paid. The period of making an application to set aside a sale in execution of a decree' is thirty days from the date of sale. The decree-holder auction-purchaser did not make any such application within the period of 30 days and on the contrary he opposed the application of the judgment-debtor and the sale was confirmed as already stated for Satisfaction to the extent of Rs. 570. That amount is now admitted to be greater than the amount due, Rupees 423-8-0, and therefore unless the order confirming the sale is set aside the decree-holder has no right to ask for further execution of his decree because it has been satisfied in full and some balance more realized from the property of the judgment-debtor. The question before us is whether there are any circumstances in the present case under which the decree-holder can claim to execute his decree further without setting aside the sale which has been confirmed. All that the decree-holder has done is to make another application for execution and the argument of learned Counsel for the decree-holder is; that by merely applying in execution and setting forth the fact that there has been this decree in favour of a stranger for part of the property the decree, holder is now entitled to obtain a further execution of his decree. It is necessary to see on what principle this claim can be based. The case before us has been argued in regard to the following propositions:

(1) Is there a right of an auction-purchaser to receive back his purchase money from the decree-holder when after confirmation of the sale there has been a decree in favour of a third party for the property auctioned on the ground that the judgment-debtor had no interest in the property sold and therefore a failure of consideration? and (2) Has the decree-holder who purchases at auction sale a right to further execution of his decree under such circumstances

5. It is obvious that there would be no advantage for the decree-holder in proving to the Court the first proposition because being himself the auction-purchaser he could not as auction-purchaser claim against himself as decree, holder. But his counsel states that he argues this proposition because the contrary would be an obstacle to him in arguing the second proposition. The first point to consider is the rule of English Common law. In Broom's Legal Maxims, Edn. 8, p. 604, it is stated that there was a warranty of title implied on the part of the vendor of land in Roman Civil Law, but the English Common law was different:

With us however the above proposition does not hold, and it is laid down, that, 'if a man buy land whereunto another hath title, which the buyer knoweth not, yet ignorance shall not excuse him.' By the civil law, as observed by Sir E. Coke, every man is bound to warrant the thing that he sells or conveys, albeit there be no express warranty; but the common law binds him not, unless there be a warranty, either in deed, or in law; for 'caveat emptor qui ignorare non debuit quod jus alienum emit' - let a purchaser, who ought not to be ignorant of the amount and nature of the interest which he is about to buy, exercise proper caution.

6. As there was no warranty of title implied at Common law, conveyances always set out covenants of good title and right to convey. Later, by statute the Conveyancing Act of 1882 and the Law of Property Act of 1925 provided that covenants of title are implied in a conveyance in England. Similarly in India the Transfer of Property Act, Act 4 of 1882, provides in Section 55(2):

The seller shall be deemed to contract with the buyer that the interest which the seller professes to transfer to the buyer subsists and that he has power to transfer the same.

7. There are certain rulings which have been quoted, some of them of their Lordships of the Privy Council, and these rulings have been the subject of much subsequent discussion and interpretation in later rulings. It is desirable therefore to examine these rulings with some care. In Sowdamini Chowdrain v. Krishna Kishor Poddar (1869) 4 Beng. L.R. 11 there was a suit by an auction.purchaser when after confirmation of the sale a third party had obtained a decree that the property sold did not belong to the judgment-debtor and therefore there was a total failure of consideration. The auction-purchaser sued the decree-holder and others for recovery of the auction price. It was laid down on page 16:

There is a great distinction between the case of a purchaser being evicted by title paramount, and that of the conveyance by the vendors being set aside. In the one case the owner of the land recovers notwithstanding the conveyance, because it was a conveyance of his land by a person who had no right to convey it; in the other case, where a sale has been set aside, the purchaser usually has a right to recover back his purchase money, because it would be inequitable that the vendor should retain the purchase money when there are grounds for setting aside the sale by which the contract is put an end to. But a Court of equity does not set aside a conveyance, simply because the conveying party had no title to the property. There must be something more, such as fraud or the like, to induce the Court to interfere in that manner. A purchaser at a sale in execution knows that all that he purchases is the right and title of the judgment-debtor. He knows that no one guarantees to him that the judgment-debtor has a good title, and he purchases the property with his eyes open, and regulates the price which he bids for the land with reference to the circumstances under which he is purchasing, and the risk he runs.

8. In Ram Tuhul Singh v. Biseswar Lall (1875) 2 I.A. 131 the appellant was a registered share-holder of an estate which was sold for arrears of Government revenue and a surplus remained in the hands of the Collector. The appellant sued that the sale was irregular and obtained a final decree in his favour and the sale was set aside and the estate restored to him. Prior to this one Sheo Prasad Shukul, a judgment-creditor for Rs. 8000 and the appellant had attached his interest in the surplus and that interest was sold by auction sale to the representative of the respondents for Rs. 8000. The appellant then petitioned for the reversal of the sale but his objection was dismissed and the sale was confirmed and Sheo Prasad Shukul withdrew some of the money and other judgment-creditors divided the balance. After the High Court had made a final decree setting aside the sale, the respondents instituted the suit under appeal for recovery of the Rs. 8000 with interest against the appellant as heir of Sheo Prasad Shukul, the judgment-creditor, and other judgment-creditors of the appellant who had shared in the Rs. 8000. The trial Court dismissed the suit but the High Court of Calcutta made a decree for the recovery of the amount claimed by the respondents against the appellant as representative of Sheo Prasad Shukul, the judgment-creditor. This therefore was a decree in favour of an auction-purchaser against a decree-holder where subsequent to the confirmation of sale it had been held in a suit by a third party that the judgment-creditor had no interest in the property at the time. The judgment of the Privy Council was delivered by Sir James Col vile and on p. 142 it is stated:

What was the real nature of their purchase at the execution sale? What did they buy? They bought the appellant's interest in the surplus proceeds, subject to the contingency of his succeeding in his suit to set aside the revenue sale, in which event that interest would become nil. They did this with their eyes open, since at least before the sale was confirmed, they had notice that his suit had been commenced. There was no warranty or contract on his part. The sale was had under proceedings in invitum and indeed against his express protest.

9. On page 143 it is stated:

But even if this were true, it is not in every case in which a man has benefited by the money of another, that an obligation to repay that money arises. 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. Their Lordships can find no ground on which the legal liability of the appellant can satisfactorily be rested. The case seems to them to fall within the principle of that reported in Sowdamini Chowdrain v. Krishna Kishor Poddar (1869) 4 Beng. L.R. 11. The fact that in this case the worthlessness of the subject purchased was a consequence of the success of the judgment-debtor in his own suit, and not of a recovery by a third party under a superior title, does not appear to them in the circumstances of this case to afford a distinction which ought to prevent the application of that principle.

10. Their Lordships therefore allowed the appeal and held that the auction-purchasers bad no right of suit against the decree-holder. In Dorab Ally Khan v. Executors of Khajah Moheeooddeen (1877) 3 Cal. 8096 the facts are stated as follows:

In this case the Sheriff of Calcutta, to whom a writ of fieri facias had been issued by the High Court directing him to execute a decree of the late Supreme Court, seized and sold landed property in a province not within the territorial jurisdiction of the said Courts, and handed over the proceeds of the sale to the judgment-debtor. The purchaser at the Sheriff's sale, being afterwards evicted by the execution-debtor, brought an action for money had and received against the judgment-creditor, under whose authority and by whose express direction he alleged that the Sheriff had acted. The question of law raised in the case was as to whether the plaint filed disclosed a good cause of action.

11. The judgment of the Privy Council delivered by the same learned Judge, Sir James Colvile, sets out at p. 809 that the case of the plaintiff appellant was tried only upon the first and preliminary issue as to whether or not a good cause of action was disclosed in the plaint on the allegations and that the High Court of Calcutta had held that no case lay on those allegations and dismissed the suit without trial of other issues. On p. 813 Sir James Colvile states:

Now it is of course perfectly dear that when the property has been so sold under a regular execution, and the purchaser is afterwards evicted under a title paramount to that of the judgment-debtor, he has no remedy against either the Sheriff or the judgment-creditor. This however is because the Sheriff is authorized by the writ to seize the property of the execution-debtor which lies within his territorial jurisdiction, and to pass the debtor's title to it without warranting that title to be good.

12. Learned Counsel for the respondents has argued that this passage merely refers to an execution by the Sheriff or a High Court of original jurisdiction and would not apply to an execution by ordinary Civil Courts. I see no reason for this assumption. The judgment proceeds on page 814:

The Sheriff however, if he acts ultra vires, cannot invoke the protection which the law gives to him when acting within his jurisdiction. He is in the position of an ordinary person who has sold that which he had no title to sell. And it appears to their Lordships that his responsibility in respect of the sale must be governed by the law relating to the sale of chattels, rather than by that relating to the sale of real estate.

13. After quoting various rulings on the question of implied warranty of title in chattels, the judgment states on p. 815:

Their Lordships think that, upon a similar principle, the Sheriff may be held to undertake by his conduct that he has seized and put up for sale the property sold in the exercise of his jurisdiction; although when he has jurisdiction he does not in any way warrant that the judgment-debtor had a good title to it, or guarantee that the purchaser shall not be turned out of possession by some person other than the judgment-debtor. In the present case the subject-matter of the sale was the estate of the execution debtor, so that if the Sheriff had had jurisdiction his conveyance would have passed the title. It was solely because he was acting beyond his territorial jurisdiction that the sale became inoperative, and wholly ineffectual. The High Courts have assumed that if the defendant is to be treated as a principal in the transaction (and their Lordships think he ought to be so treated), the case must be governed by the ordinary rules relating to vendors and purchasers upon voluntary sales of immovable property. This view does not appear to their Lordships to be correct. The defendant directed the Sheriff to sell in his character of Sheriff. He did not profess to sell, nor could he have sold, as for himself. He intended the sale should be, as in fact it was, a sale by the Sheriff as Sheriff, and with the incidents attaching to such a sale. For the above reasons their Lordships are of opinion that the action cannot be properly determined without further investigation into the facts, as they cannot say that the plaint and the other documents on the record do not disclose a prima facie case for some relief against the defendants.

14. Their Lordships accordingly remanded the ease for trial upon the other issues stating:

They only decide that the plaintiff has not wholly failed to disclose a good cause of action on the face of the record; and that the cause ought to be tried upon the other issues that have been, or may be, raised in it.

15. Now it appears that this ruling lays down a general principle that in a general case of an auction-sale where the purchaser is subsequently evicted under a title paramount, he has no title of suit against the judgment-debtor. This is the principle which was laid down by Sir James Colvile in his previous rulings three years earlier in Ram Tuhul Singh v. Biseswar Lall (1875) 2 I.A. 131. The ruling further laid down that in the particular case before their Lordships the Sheriff had no territorial jurisdiction in regard to a sale of landed property in Oudh because that province was not within the territorial jurisdiction of the Sheriff or of the High Court of Calcutta. Because of that defect of territorial jurisdiction the case required a further trial and could not be dismissed on the ground that no cause of action was disclosed in the plaint. This ruling has been misinterpreted in later rulings by Courts in India to mean that Sir James Colvile was laying down a principle in regard to execution sales which was contrary to the principle which he had laid down in his earlier ruling in Ram Tuhul Singh v. Biseswar Lall (1875) 2 I.A. 131. There is no reason whatever for such a conclusion and if Sir James Colvile and the other learned Judges of the Privy Council had intended to alter the law as laid down in the earlier ruling they would have said so clearly.

16. I now come to certain rulings on the provisions of the Civil Procedure Code, Act 8 of 1859. In Hira Lal v. Karim-un-nisa (1878) 2 All. 780 there was a case where a sale of land took place in 1875 under the provisions of Act 8 of 1859. A stranger subsequently established that he had a right to the property against the judgment-debtor and obtained a decree setting aside the sale. The auction-purchaser sued the decree-holder to recover the purchase money alleging the failure of consideration. It was held that as the sale had not been set aside under the provisions of Sections 257 and 258 of the Act the auction-purchaser could not recover his purchase money. Those provisions are similar to the present Order 21, Rules 92 and 93 in the Code of 1908. This was also held in Ram Narain v. Mahtab Bibi (1878) 2 All. 828. In the earlier ruling a claim was made that the provisions of Section 315 of the later Civil Procedure Code, Act 10 of 1877, should be applied and it was held that they could not have application to a sale which took place before that Act. In Act 10 of 1877, reproduced in Act 14 of 1882, there was a new Section introduced for the rights of an auction-purchaser which is as follows:

315. When a sale of immovable property is set aside under Section 312 or Section 313, or when it is found that the judgment-debtor had no saleable interest in the property which purported to be sold, and the purchaser is for that reason deprived of it, the purchaser shall be entitled to receive back his purchase money (with or without interest as the Court may direct) from any person to whom the purchase-money has been paid.

The repayment of the said purchase money and of the interest (if any) allowed by the Court may be enforced against such person under the rules provided by this Code for the execution of a decree for money.

17. Paragraph 1 states that the sale may be set aside under certain Sections of the, Code. That clearly refers to the setting aside by the execution Court. The next paragraph did not mention the Sections of the Code and therefore a question arose whether that paragraph contemplated that a suit could be brought and that the same result would follow from a decree passed in such a suit. If this paragraph did not refer to a suit then it would merely repeat the provisions of Section 313 which also deals with a sale being set aside on the ground, that the judgment-debtor has no saleable interest. Apparently therefore the paragraph did refer to a suit. It was so held in a Full Bench ruling of five Judges of this Court in Munna Singh v. Gajadhar Singh (1883) 5 All. 577. It was pointed out at p. 587 by Oldfield, J. that under Act 8 of 1859 the decree-holder

did not guarantee that the judgment-debtor had any right or interest in the property sold, and his not having any interest in it was in consequence no ground for setting aside the sale, or allowing a, refund of the purchase money, so far as the right to that relief rested on any obligation arising out of a guarantee of interest by the decree-holder and apart from other considerations,

and for this he referred to the two rulings of the Privy Council and the ruling of the Calcutta High Court already quoted and he stated:

The present Civil Procedure Code, by Sections 313 and 315, has, in addition to the relief allowed to an auction-purchaser by Order 258, Act 8 of 1859, empowered him to apply to have a sale set aside on the ground that the person whose property purported to be sold had no saleable interest therein, and to recover his purchase money with or without interest when the sale has been set aside on that ground, or when it is found that the judgment-debtor had no saleable interest in the property which purported to be sold, and the purchaser is for that reason deprived of it.

18. At p. 583 Straight J. mentioned his referring order and stated : 'it would serve no useful purpose to recapitulate the same matters here.' In his referring order on pp. 578 and 580 he had set out the points quoted from Oldfield J. and had further added:

It is to be observed that an unusual course has been adopted in this latter paragraph of introducing into a Code regulating procedure a novel and somewhat startling declaration of substantive law.

19. This indicates therefore that the introduction of the right of the auction, purchaser to sue for the return of his money when the judgment, debtor was found to have no saleable interest in the property was an addition by Para. 315 of the Code of the substantive law. Learned Counsel for respondent has argued that this was a mere recognition by the Code of an existing right. No learned Judge in the ruling in question appears to have taken the view advanced by respondent, and it has been treated as a change in the law introduced by the new Acts. The present Code, Act 5 1908, states in 8. 156 that the enactments mentioned in it are repealed to the extent specified in Schedule 5 which states 'Act 14 of 1882, the whole Act'. Accordingly therefore the provisions of Section 315 of that Act were repealed in 1908 and whatever rights were granted by that Section to an auction-purchaser no longer exist. The rights of an auction-purchaser now under the Code of 1908 do not include any provision similar to Para. 2 of Section 315 of Act 14 of 1882. Those rights under the Code are contained in Rule 91 as follows:

The purchaser at any such sale in execution of a decree may apply to the Court to set aside the sale, on the ground that the judgment-debtor had no saleable interest in the property sold.

20. It will be noted here that the application has to be made to the execution Court and the period under Article 166, Limitation Act, is 30 days from the date of the auction sale, and where the auction-purchaser makes no such application and the sale is confirmed under Rule 92, then the Code gives him no further right and on this point differs from Section 315 of Act 14 of 1882. The argument for respondent is that the right of suit always existed and that Section 315 of the Code of 1882 merely recognized that right. There are two difficulties in the way of this argument, firstly on what is the right based, as it is not based on Common law and has never been granted by statute to an auction-purchaser; and secondly it is not an invariable rule that substantive rights are never granted in a Code of Procedure and there is no reason to suppose that the provision in Section 315 in the Code of 1882 did not grant a substantive right of suit. The view of the Full Bench in Munna Singh v. Gajadhar Singh (1883) 5 All. 577 appears to have been that the Code laid down a certain right and there was no provision in the Code forbidding that right to be exercised by suit and therefore it could be exercised by suit.

21. For a full summary of the law of execution from the period of Regn. 7 of 1825 I may refer to Nagendra Nath Ghosh v. Sambhu Nath Pandey (1925) 12 A.I.R. Pat. 106 where it was held that under the present Code the auction-purchaser has no right to sue for the return of the purchase money on the ground that the judgment-debtor had no saleable interest other than the right given by Order 21, Rule 91. The view of the Patna High Court was further confirmed by a Full Bench of that Court in Surendra Kumar Singh v. Srichand Mahata (1936) 23 A.I.R. Pat. 97. In that case it was held on pages 319 and 320 as follows:

(a) A sale of immovable property in which the judgment-debtor has no interest at the date of the sale is not a nullity in the sense of being beyond the jurisdiction of the executing Court or void as between the judgment-debtor and the deoree-holder or auction-purchaser, and

(b) the decree-holder, if he purchases the property, cannot successfully maintain an application for the revival of the execution proceedings on the ground that the sale has not in fact satisfied his decree to the extent of the sale price, unless he has the sale set aside by applying under Order 21, Rule 91.

22. It will be noted that the proposition (b) covers a claim similar to that made by the decree-holder in the present case that he can further execute his decree without having the sale set aside under Order 21, Rule 91. In Muthukumaraswami Pillai v. Muthuswami Thevan (1927) 14 A.I.R. Mad. 394 there was a case where a decree-holder had by mistake got the properties of some person other than the judgment-debtor sold in execution of his decree and purchased it himself and entered up satisfaction. More than thirty days after the sale he found out his mistake and applied for further execution by setting aside the sale. It was held that his application was unsustainable as the sale, though of the property of a stranger, was not void and the prayer to set it aside was beyond the period allowed by Article 166, Limitation Act. Similarly in Jaganadha Rao v. Basawayya : AIR1927Mad639 where it was found that there was only a partial interest of the judgment-debtors in the property sold it was held that the decree-holder who was the auction-purchaser must apply to get the sale set aside before he could make a further application for execution and that he could not get the sale set aside after the period expired under Article 166, Limitation Act.

23. There are certain rulings cited for the respondents. Macha Koundan v. Kottora Koundan (1936) 23 A.I.R. Mad. 50, Full Bench of three Judges. In this case it was held that the auction-purchaser had a right to recover the purchase money from the decree-holder by a separate suit on the ground that a third party had established his title to the property by suit after confirmation of the sale. Ramesam J. who delivered the judgment of the Full Bench, on p. 209 states as follows:

Whatever might be the theory of law in the minds of the framers of the Code of 1859, it is now clear that the Legislature was unwilling to adopt the view of the law laid down in Dorab Ally Khan v. Executors of Khajah Moheeooddeen (1887) 3 Cal. 806 and they proceeded to frame the language of the corresponding Section in the Codes of 1877 and 1882 (Section 315) on a different theory. Section 315 contained a clause : 'the purchaser shall be entitled to receive back his purchase money from any person to whom the purchase money has been paid'. It is clear that this clause recognizes the light of the auction-purchaser to obtain a refund of his purchase money if there is no saleable interest though there is no warranty of title.

24. This passage states that it is open to the Legislature to declare a view of the law which is different to the view taken by their Lordships of the Privy Council. With due respect to the learned Judges who decided that Full Bench case of Madras, I am of opinion that the functions of a Legislature are not to declare the law but to enact provisions of the law. When the Legislature finds that the Privy Council has declared that there is no right of an auction-purchaser to receive back his purchase money under certain conditions, the Legislature, if it desires to give him such a right, provides so by statute, but it does not declare that the previous view of the Privy Council was wrong. A Legislature does not interpret the law and therefore this passage cannot be a sound basis for a decision. A Full Bench of three Judges of the Lahore High Court has also taken a view similar to that of Madras in Mehr Chand v. Milkhi Ram (1932) 19 A.I.R. Lah. 401 On page 645 it is stated in the judgment delivered by Jai Lal J.:

Therefore, in the absence of a dear indication to the contrary, it is not permissible to assert that Section 315 created a substantive right in favour of the auction-purchaser which did not originally exist. On the other hand, it is more in accord with the object of the Code to hold that the Section was intended to provide the auction-purchaser with a summary remedy to enforce his right which existed prior to its enactment, a kind of remedy which but for the Section was not available to him.

25. Nowhere in the ruling do we find any statement as to the source of the right which the auction-purchaser has to sue. As I have shown, the auction-purchaser had no such right either at Common law or by statute prior to 1877. On page 655 the judgment states:.their Lordships of the Privy Council in Dorab Ally Khan v. Executors of Khajah Moheeooddeen (1887) 3 Cal. 806 held that in the case before them the auction purchaser could institute a suit to recover the purchase price, on being deprived of the property purchased by him, as money had and received on a total failure of consideration.

26. With due respect to the learned Judges of the Lahore High Court, who laid down this ruling, the interpretation of what the Privy Council said in Dorab Ally Khan v. Executors of Khajah Moheeooddeen (1887) 3 Cal. 806 is not correct. In the first place they did not lay down at all that the purchaser could institute a suit for recovery. All that the Privy Council stated was that on the allegations in the plaint the suit could not be dismissed without trial of the remaining issues. Further the basis of the judgment of the Privy Council was the admitted fact that the High Court of Calcutta and the Sheriff had no territorial jurisdiction in Oudh and therefore the auction-sale of landed property in Oudh was entirely a nullity. As already quoted their Lordships of the Privy Council had laid down clearly in the report in Dorab Ally Khan v. Executors of Khajah Moheeooddeen (1887) 3 Cal. 806 at the p. 813 that where the property has been sold under a regular execution and the purchaser is afterwards evicted under a title paramount to that of the judgment-debtor, he has no remedy either against the Sheriff or the judgment, creditor. The proposition laid down by the Punjab High Court as to the law prior to 1877 is in my opinion in conflict with the dictum quoted of their Lordships of the Privy Council.

27. In Bahadur Singh v. Ramphal (1930) 17 A.I.R. Oudh. 148 there is a ruling of a Pull Bench by a majority of two Judges to one that the auction-purchaser is entitled to recover his money from the decree, holder apart from the provisions of the Civil Procedure Code. Learned Counsel for respondents pressed on us the interpretation which one of the learned Judges placed on the ruling of their Lordships of the Privy Council in Dorab Ally Khan v. Executors of Khajah Moheeooddeen (1887) 3 Cal. 806 to which reference is made on pp. 572 to 574, and the learned Judge claims that Dorab Ally Khan v. Executors of Khajah Moheeooddeen (1887) 3 Cal. 806 is authority for his view that an action like the present is maintainable. Now in the first place, as already pointed out, the judgment of the Privy Council in Dorab Ally Khan v. Executors of Khajah Moheeooddeen (1887) 3 Cal. 806 was delivered by Sir James Colvile three years after he had delivered the judgment in Ram Tuhul Singh v. Biseswar Lall (1875) 2 I.A. 131 laying down quite clearly that there is no such right. The passage in Dorab Ally Khan v. Executors of Khajah Moheeooddeen (1887) 3 Cal. 806 which I have quoted above is, in my opinion, a reference to the general principle of the former ruling, and the later ruling in Dorab Ally Khan v. Executors of Khajah Moheeooddeen (1887) 3 Cal. 806 was merely that because of the want of territorial jurisdiction the sale was a nullity and the trial of the suit became therefore necessary.

28. For respondents reliance was placed on Prasanna Kumar Bhattacharjee v. Ibrahim Mirza (1918) 5 A.I.R. Cal. 505 On p. 206 the ruling observed that all High Courts in India agreed that a suit would lie. It is obvious that the rulings of the Privy Council had not been brought to the notice of the Court and this ruling has no value. The recent rulings of this Court may now be mentioned as it is in regard to them that this reference has been made. In Anand Krishna v. Krishan Devi : AIR1931All377 the decree-holder purchased at auction sale a house of a judgment-debtor and the sale was confirmed and by a later suit a third party got a decree for possession of half the house on the ground that the judgment-debtor did not have title in that half. The-decree-holder then applied for further execution for half the sale price. It was held that he was not entitled to execute his decree further. It was held at p. 229 that the execution order operated as res judicata. None of these rulings have met this difficulty in a case like the present where a decree-holder and a judgment-debtor are parties to an execution proceeding and-where the execution Court decides under Order 21, Rule 92 that the auction-sale should be finally confirmed. That is a judicial! decision between the parties. Learned Counsel for respondents has not shown how the decree-holder can make a further application for execution without applying to get that order set aside. One argument he made was that there is no res judicata in. execution proceedings, but the contrary has been held by their Lordships of the Privy Council in several rulings, namely : Ram Kirpal v. Rup Kuari (1884) 6 All. 269, Mungul Pershad Dichit v. Girja Kant Lahiri (1882) 8 Cal. 51 and Beni Ram v. Nanhu Mal (1885) 7 All. 102 It was further held by a Bench of this Court in Anand Krishna v. Krishan Devi : AIR1931All377 that there was no equity in favour of the decree-holder and that the period for a decree-holder applying to set aside a sale was limited to thirty days under Article 166, Limitation Act. In Sahu Deputy Shankar v. Mangal Sen : AIR1933All63 a Bench of this Court held that an auction-purchaser who had been subsequently deprived of the property had no claim in, equity against a decree-holder for the auction price. On page 1008 it was held:

Under Section 315 of the Code of 1882, the auction-purchaser was given a right to receive back his purchase money not only when the sale was set aside, but also when it is found that the judgment-debtor had no saleable interest in the property which was purported to be sold, and the purchaser is for that reason deprived of it. Under the Code of 1882 therefore the auction-purchaser would in the present case have been entitled to a refund. But in the Code of 1908 the law was substantially altered. In Order 21, Rule 93 the clause quoted has been deliberately omitted, and the auction-purchaser is only entitled to a refund when the sale has been set aside under Rule 92.

29. In Dubey Amba Lal v. Ramgopal Madho Prasad : AIR1933All218 there was a ease in regard to rateable distribution between different decree-holders. Neither of the questions which are before us arose in this case but on pp. 67 and 68 the Bench set out that it did not agree with the law laid down in Anand Krishna v. Krishan Devi : AIR1931All377 In Mangal Sen v. Mathura Prasad (1935) 22 A.I.R. All. 472 the late Chief Justice Sir Shah Sulaiman and Ganga Nath J., held that since there is no warranty of title in an auction sale the auction-purchaser has no right to sue for refund of the purchase money on the ground that the judgment-debtor has no saleable interest and the conflict between the two previous rulings of this Court was noted on p. 268. In Ramgopal v. Ram Kunwar : AIR1935All910 a Bench of this Court held that an auction-purchaser had no right to apply under Section 47, Civil P.C., for his certificate of satisfaction for the amount he had paid at auction sale to be set aside on the ground that the judgment-debtor had no saleable interest, and that his only remedy was to apply under Order 21, Rule 91, within a period of 30 days from the auction sale. In Bindeshri Prasad Tewari v. Badal Singh (1923) 10 A.I.R. All. 394 it was held that the auction-purchaser was entitled to recover the purchase money from the decree-holder when the decree itself under which the auction sale had taken place was set aside. With the setting aside of the decree the auction sale became a nullity and therefore that case is to be distinguished from the cases before us which are cases referring to a decree which holds that the judgment-debtor has no title to the property sold. Respondents also referred to Behari Lal v. Jagannath Prasad (1906) 28 All. 651 But that was a ruling under the Code of Civil Procedure of 1882 and therefore different considerations apply.

30. In conclusion it appears that the Common law of England gave no implied right of warranty of title to a purchaser of immovable property. The two rulings of their Lordships of the Privy Council in Ram Tuhul Singh v. Biseswar Lall (1875) 2 I.A. 131 and Dorab Ally Khan v. Executors of Khajah Moheeooddeen (1887) 3 Cal. 806 lay down that there is no warranty in an auction sale and that the auction-purchaser has no right to recover the purchase price by suit from the decree-hold or in case it subsequently turns out that what he has purchased : does not belong to the judgment-debtors. A statutory right was granted under the : Codes of Civil Procedure of 1877 and 1882 by which an auction-purchaser could sue to recover the purchase price under those Codes. With the repeal of the Code of 1882 by the Code of 1908 that statutory right came to an end as the present Code of Civil Procedure, Act 5 of 1908, makes no such provision. There is no right at present either in law or in equity for an auction-purchaser to recover under such circumstances. As regards a decree holder who has purchased at auction sale his rights are limited to those granted by the Civil Procedure Code in Order 21, Rules 91 and 92, and if the auction sale is; confirmed that becomes res judicata between him and the judgment-debtor and he cannot reopen the matter by the mere application for further execution or by any other means unless he can get the order confirming the sale set aside.

31. For these reasons I consider that the; lower Appellate Court was incorrect and that the decree-holder has no right to apply for further execution of his decree and I would set aside the order of the lower Appellate Court and restore the order of the execution Court dismissing the application for execution, and I would grant costs throughout to the appellant Amar Nath.

Harries, J.

32. I agree.

Collister, J.

33. I agree.

Ismail, J.

34. I agree.

Yerma, J.

35. I concur.


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