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Babu Atma Ram Vs. Lala Nanak Chand and ors. - Court Judgment

LegalCrystal Citation
CourtAllahabad
Decided On
Judge
Reported in92Ind.Cas.571
AppellantBabu Atma Ram
RespondentLala Nanak Chand and ors.
Cases Referred and Shivlal Bhagwan v. Shambhuprasad Parvatishankar
Excerpt:
execution of decree - mortgage-decree--sale held without compliance with condition precedent, validity of--auction-purchaser, position of--sale set aside--purchase-money, whether can be directed to be re-paid--inherent power of court--civil procedure code (act, v of 1908), sections 144, 151. - - 585. 6. on the strength of these cases it has been argued that a bona fide purchaser at an auction-sale was not to be defeated simply because, later on, it turned out that the decree was not a right one. there can be no doubt that these cases lay down that where there is an executable decree and the court has the jurisdiction to execute it, a sale, made to a third party, who purchases without notice, would hold good although the decree may be reversed later on in appeal or otherwise. in my..........was executed and the four sihams share mortgaged was sold find was purchased by the respondents nanak chand and musammat parbati. peary lal then brought his own suit. the order that was passed in the decree that followed was that the property mortgaged might be sold, but, if peary lall wanted to sell the property purchased by nanak ohand and musammat parbati, he must pay them a sum of rs. 20,000 as a condition precedent to the sale. peary lai never paid the sum of rs. 20,000, but brought to sale a 2 sihams share, with the allegation that this was a property which could be sold without previous payment of any money. nanak chand and musammat parbati objected to the sale. they said that the property which was going to be sold was really a part of the property which they had purchased in.....
Judgment:

Mukerji, J.

1. This is an appeal by an auction-purchaser in the following circumstances.

2. One Mahbub Ali Shah was the original owner of a certain share in the property described as 6 1/3 sihams. He mortgaged four sihams out of the aforesaid share to his wife Sultana Begam as a first mortgagee and then he mortgaged the entire 6 1/3 sihams to the respondent decree-holder Peary Lai. Sultana Begam obtained a decree for sale and it appears that in her suit Peary Lai was not a party. Sultana Bagam's decree was executed and the four sihams share mortgaged was sold find was purchased by the respondents Nanak Chand and Musammat Parbati. Peary Lal then brought his own suit. The order that was passed in the decree that followed was that the property mortgaged might be sold, but, if Peary Lall wanted to sell the property purchased by Nanak Ohand and Musammat Parbati, he must pay them a sum of Rs. 20,000 as a condition precedent to the sale. Peary Lai never paid the sum of Rs. 20,000, but brought to sale a 2 sihams share, with the allegation that this was a property which could be sold without previous payment of any money. Nanak Chand and Musammat Parbati objected to the sale. They said that the property which was going to be sold was really a part of the property which they had purchased in execution of a decree passed on the prior mortgage.

3. While this objection of Nanak Chand and Musammat Parbati was still undisposed of the share advertised for sale was brought to sale and was purchased by the appellant Atma Ram. The objection was decided in due course on the 9th of December 1922 and it was dismissed. The sale was confirmed on the 12th of December 1922. Nanak Chand and Musammat Parbati filed an appeal to this Court against the order dated the 9th of December 1922. It having transpired that the property had in the meantime been sold. Atma Ram, the auction-purchaser, was made a party in appeal. A Division Bench of this Court found on appeal that the judgment of the Subordinate, Judge was-very unsatisfactory, set it aside and remanded the objection to the Court below for disposal. The Court below had three parties before it, viz, Atma Ram the auction-purchaser, Nanak Chand and Musammat Parbati, the objectors and the decree-holder, Peary Lal. It came to the conclusion that the property sought to be sold was really a part of the property which had been purchased by Nanak Chand and Musammat Parbati and that, therefore, the property could not be sold in execution of Peary Lai's ' decree without the payment ordered. It accordingly set aside the sale and ordered that the objectors be put in possession. As regards the purchase money the Court remarked that Atma Ram might recover it by a regular suit.

4. Atma Ram in his appeal contends that he is a bona -fide purchaser for value and the sale could not be set aside. He further contends that if the sale be set aside he should be paid back the price deposited by him in Court and that he should not be relegated for his remedy to a suit.

5. On the first question raised the,learned Counsel for the appellant has cited several cases. They are:

Rewa Mahton v. Ram Kishen Singh 14 C.18 : 13 I.A. 106 : 10 Ind. Jur. 428 : 4 Sar. P.C.J. 746 : 7 Ind. Dec. (N.S.) 13 (P.C), Zain-ul-Abdin Khan v. Muhammad Asghar Ali Khan 10 A. 166 :5 I.A. 12 : 5 Sar. P.C.J. 129 : 6 Ind. Dec. (N.S.) 112 (P.C.), Peary Lal v. Hanif-un-nissa Bibi 34 Ind. Cas. 303 : 38 A. 240 : 14 A.L.J. 302, Nazhat-ud-Daula Abbas Husain Khan v. Dilband Begam 21 Ind. Cas. 570 : 16 O.C. 225 and Shivlal Bhagwan v. Shambhuprasad Parvatishankar 29 B. 435 : 7 Bom. L.R. 585.

6. On the strength of these cases it has been argued that a bona fide purchaser at an auction-sale was not to be defeated simply because, later on, it turned out that the decree was not a right one. There can be no doubt that these cases lay down that where there is an executable decree and the Court has the jurisdiction to execute it, a sale, made to a third party, who purchases without notice, would hold good although the decree may be reversed later on in appeal or otherwise. The principle is clear. Where a sale takes place in the exercise of a jurisdiction vested in a Court, a third party purchaser cannot be bound by the result of any further litigation relating to the decree. In my opinion, however, the principle laid down in these cases has no application to the facts of the present case. This was a decree which was not executable at all as against Musammat Parbati and Nanak Chand. As Mr. Seth has rightly put, it is a misnomer to call Nanak Chand and Musammat Parbati, judgment-debtors. The decree was virtually a combined decree for redemption and sale. Nanak Chand and Musammat Parbati had stepped into thsj shoes. of Musammat Sultana Begum who had not been redeemed. There was a bar, according to the judgment, to the sale of the property purchased by Nanak Chand and Musammat Parbati till the mortgage, on which they relied as a shield, had been, paid off. The decree was, therefore, a combined decree for redemption and sale. It Is wrong to say that the Court was seised of the jurisdiction to execute the decree and could sell the property in the exercise of its jurisdiction. If the decree did not permit of the sale of the property, the mere fact that the 'Court had pecuniary and territorial jurisdiction would not permit' it to go contrary to the terms of the decree and sell the property. In my opinion, the terms of the decree itself did not justify a sale of the property and the sale cannot hold good, even if the appellant be a bona fide purchaser, in the sense that he is a third party purchaser who had no notice of the facts of the case. The result would be that the sale must be set aside.

7. The second question is whether on the sale being set aside the appellant should be relegated to a suit for recovery of his money or whether the money could be refunded to him under the present proceedings. It seems to me that, in the circumstances that had happened-, the Court below was right in making what was virtually an order for restitution, viz., in passing an order that Nanak Chand and Musammat Parbati shall be put in possession of their property which had been taken away from them as a result of sale and subsequent delivery of possession to Atma Ram. I have held that the Court had not acquired jurisdiction to sell the property and the sale, therefore, was a void one. The restitution must be complete and the decree-holder, if he has taken away the money, must hand it back to the appellant. If the money still be in deposit in Court the Court will, of course, hand it over to the appellant. I may note that Order XXI, Rule 91, has no application to the facts of the present case. A purchaser who may wish to have a sale set aside on the ground that the judgment-debtor had no saleable interest would have only thirty days within which to apply from the sale. In this case the auction-purchaser maintained that the sale should be upheld and it was not till the Court held that the sale was void that his right to refund of the purchase-money arose. He could not, therefore, avail himself of the provisions of the Code. I do not see why the appellant should be relegated to a suit for his remedy when all the three persons concerned are parties to the present proceedings. The matter is only one of procedure and it strikes me that if there be no other rule applicable, the rule enacted in Section 151 of the C.P.C. would be ample justification for ordering a refund of the purchase money in the present proceedings. Any objection to re-payment of the money that the decree-holder might have, could be urged in the present proceedings and he would not benefit at all by a regular suit being instituted against him. He has not shown any valid cause why he should not refund.

8. I allow the appeal in part and modify the decree of the Court below. I dismiss the appeal so far as if is aimed against the order of the Court below setting aside the sale and ordering restitution of the property to Nanak Chand and Musammat Parbati. I modify the order of the Court below so far as it relegates the appellant far his remedy to a suit. I order the decree-holder Peary Lai to pay back the appellant the entire purchase-money paid by the latter into Court without deducting therefrom any poundage-fee or other costs accessory to a sale. He will also pay interest at 6 per cent, per annum from the date of his recovery of the money out of Court. The appellant must 'have the. entire money which he paid into Court and interest.

9. The appellant must pay the respondent Nanak Chand and Musammat Parbati the costs of the appeal and Peary Lal respondent must pay one-half of the costs incurred by Atma Ram in his appeal. Peary Lal must pay his own costs. The costs in this Court will include Counsel's fees on the higher scale.


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