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Kishanlal Vs. Kothari Jethmal - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMadhya Pradesh High Court
Decided On
Case NumberFirst Appeal No. 27 of 1955
Judge
Reported inAIR1959MP115
ActsCode of Civil Procedure (CPC) , 1908 - Sections 65 - Order 21, Rules 72(2), 84 and 84(1)
AppellantKishanlal
RespondentKothari Jethmal
Appellant AdvocateS.L. Garg, Adv.
Respondent AdvocateR.L. Bhabya, Adv.
DispositionAppeal dismissed
Cases Referred and Ganesh v. Purushottam
Excerpt:
.....as satisfied until the sale has been confirmed. this contention must fail when, as has been said above, the decree-holder is entitled to interest up to the date of the confirmation of the.....p.v. dixit, j.1. this appeal by the judgment-debtor arises out of execution proceedings of a money decree obtained by the respondent against the appellant from the gwalior high court on 16-9-1948. the decree was for rs. 15294-12-0 with interestthereon at the rate of six per cent per annum till the payment of the amount to the decree-holder. the judgment-debtor unsuccessfully appealed against that decree to the special appeal committee set up by the madhya bharat government.the decree holder then filed two applications for execution, one for the execution of the decree passed by the gwalior high court and another for the recovery of the costs awarded in the special appeal. in execution of the decree passed by the gwalior high court and upheld in special appeal, certain property belonging.....
Judgment:

P.V. Dixit, J.

1. This appeal by the judgment-debtor arises out of execution proceedings of a money decree obtained by the respondent against the appellant from the Gwalior High Court on 16-9-1948. The decree was for Rs. 15294-12-0 with interestthereon at the rate of six per cent per annum till the payment of the amount to the decree-holder. The judgment-debtor unsuccessfully appealed against that decree to the Special Appeal Committee set up by the Madhya Bharat Government.

The decree holder then filed two applications for execution, one for the execution of the decree passed by the Gwalior High Court and another for the recovery of the costs awarded in the special appeal. In execution of the decree passed by the Gwalior High Court and upheld in special appeal, certain property belonging to the judgment-debtor was sold on 23-6-1950. The decree-holder himself purchased the property with the leave of the court for Rs. 24098/-.

In execution proceedings, the decree-holder claimed that he was entitled to get interest at the rate of six per cent per annum from 17-3-1943 the date of the filing of the suit, until 15-5-1951, the date on which the sale was confirmed in his favour and in addition to this amount he was entitled to get expenses of the execution applications in question and of the previous execution proceedings he had taken. The judgment-debtor objected to the recovery of these amounts from him. The executing Court overruled these objections. The judgment-debtor has, therefore, preferred this appeal.

2. The main contention of Mr. Garg, learned counsel for the appellant, is that the decree awarded interest to the respondent at the rate of six per cent per annum from the date of the suit till realisation; that as the property was sold on 23-6-1950 and the decree-holder himself purchased the property with the permission of the Court under Order 21 Rule 72 C. P. C. he became entitled under Sub-rule (2) of that rule to have the amount due under the decree set oft against the purchase money; and that therefore, the decree would be regarded as satisfied on the date of the sale itself.

Learned counsel referred to Section 65 and Order 21 Rule 84(2) C. P. C. and argued that those provisions also indicated that where the decree-holder himself purchases the property and is allowed to have the amount due under the decree set off against the purchase money the decree is satisfied to the extent of the proceeds of the sale on the date of the sale itself. It was, therefore, urged that the decree-holder could at the most get interest up to the date of the sale, that is 23-6-1950. In support of this contention, learned counsel relied on Vyravan chettiar v. Rayalu Ayyar and Co. AIR 1951 Mad 844.

3. I am unable to accede to this contention. It is true that under Order 21 Rule 72(2) C. P. C. when the decree-holder purchases the property with the permission of the Court, he is entitled to have the amount due under the decree set off against the purchase money, and the Court executing the decree is required to enter satisfaction of the decree in whole or in part accordingly. This sub-rule only speaks of the right of the decree-holder to have the decreed amount set off against the purchase-money and of the Court's duty to enter satisfaction of the decree.

It does not say anything as to the precise point of time when the decree-holder legally becomes entitled to the set off and as to when the Court can enter satisfaction of the decree. Order 21 Rule 84(2) C. P. C. only says that where the decree-holder is the purchaser and is entitled to set off the purchase money wider Order 21 Rule 72, the Court may dispense with the requirements of the deposit mentioned in Sub-rule (1) by the decree-holder purchaser.

It is in the discretion of the Court whether in any particular case the decree-holder purchaser shouldor should not be called upon to deposit the amount required by Sub-rule (1) of Order 21 Rule 84. The fact that in a particular case the requirement of Sub-rule (4) has been dispensed with and the decree-holder has been allowed to set off the purchase money under Rule 72 does not mean that the purchase money which the decree holder as a purchaser would have been otherwise required to deposit is not under the control and directions of the Court and is one which the decree holder is entitled to set off against the decree even before the confirmation of the sale.

In such a case, the decree holder purchaser may have the physical possession of the money; but his custody of the money would be custody on behalf of the Court until the sale is confirmed. A compulsory sale does not become absolute till it is confirmed. Until it is confirmed, the sale is liable to be set aside at the instance of judgment debtor on various grounds (see Order 21 Rules 89, 90 and 91). It is only when no application is made under these rules for setting aside the sale or where such application is made and disallowed that the Court makes an order under Order 21 Rule 92 C. P. C. confirming the sale whereupon the sale becomes absolute.

It is only when the sale becomes absolute that the decree-holder becomes entitled to withdraw the purchase money for the satisfaction of the decree. Learned counsel did not dispute that where a property is sold to a stranger, the decree-holder would not be entitled to withdraw the purchase money for the satisfaction of the decree until the sale is confirmed. But he said that this principle cannot be applied where the decree holder is the purchaser and has been allowed to set off.

It is difficult to understand how the applicability of this principle is ruled out when the decree holder is the purchaser. The fallacy in the argument advanced by the learned counsel for the appellant lies in assuming that where a decree holder has been granted leave by the Court to purchase the property and to set off the decretal amount against the purchase money and has been exempted from making any deposit under Order 21 Rule 84 C. P. C. the amount which the decree-holder as a purchaser would have been otherwise required to deposit in the Court is not one subject to the directions and control of the Court and when the decree-holder has been granted such leave and exemption at the time of the sale, he cannot be called upon to deposit the purchase money at any time thereafter.

Such an assumption, as has been pointed out earlier, is altogether unwarranted. Section 65 C. P. C., which says that on the sale becoming absolute, the property shall be deemed to have vested in the purchaser from the time when it is sold, does not also lend support to the contention advanced on behalf of the appellant. The question of the date on which the property is deemed to have vested in the purchaser is quite distinct from the question of the date on which the decree-holder becomes entitled to withdraw the purchase money.

The property is no doubt deemed to have vested in the purchaser from the date of the sale, if, and only if, the sale is confirmed. But that does not in any way affect the date on which the decree-holder becomes entitled to withdraw and appropriate the purchase money in satisfaction of his decree.

4. The point seems to me to be concluded by the decision of the Privy Council in Raghunandan prasad Singh v. Commissioner of Income Tax, B. & O., AIR 1933 PC 101. That case no doubt related to an income-tax matter. But it laid down clearly on the basis of the provisions of the Code of the Civil Procedure referred to above that where in execution of a decree a sale is held and the decree-holder has with the permission of the court purchased the property, the decree cannot be regarded as satisfied until the sale has been confirmed. Their Lordships of the Privy Council observed:

'The decree is only a step towards realization, and the date of the decree is therefore plainly not the date of realization. Nor on the date of the sale does the purchaser obtain an indefeasible right for under Order 21 Rules 89, 90 and 91, the sale may be set aside on various grounds. It is only where no application is made under these rules or where such application is made and disallowed that the court under Order 21, Rule 92 makes an order confirming the sate, whereupon 'the sale shall become absolute'. 'It is then that the process of realization is completed and any profit or income is realised by the decree holder. This is so whether the property is purchased by the decree holder himself or by a third party, for the right of set off conferred on the purchasing decree holder must also be dependent on the sale being rendered absolute by confirmation. No doubt Section 65 of the Code provides that

'Where immoveable property is sold in execution of a decree and such sale has become absolute the property shall be. deemed to have vested in the purchaser from the time when the property is sold and not from the time when the sale becomes absolute.' But this provision does not come into operation unless and until the sale has become absolute. The actual date of realization is not affected by this retrospective vesting of the property.'

In the face of this decision, it seems to me unnecessary to refer to other cases. But the same view has been taken in Ramchandra Marotrao v. Ramcbandra Gujaba, AIR 1938 Nag 54, Nataraja Pillai v. Rangaswami, AIR 1942 Mad 119, Ch. Megha Rarn v. Moti Ram, AIR 1944 Lah 325 and Ganesh v. Purushottam, ILR 33 Bom 311. Learned counsel sought to distinguish these cases by saying that some of them related to mortgage decrees and others related to the position where the property was purchased not by the decree holder himself but by a third party.

This distinction does not in any way render Inapplicable the rule laid down by the Privy Council to cases where the decree holder has himself purchased the property of the judgment debtor in execution of a decree against him. The Privy Council itself has said that it makes no difference whether the property is purchased by the decree holder himself or by a third party, for the right of set off conferred on the purchasing decree holder depends on the sale being made absolute by confirmation.

5. The decision in, AIR 1951 Mad 844, no doubt lays down that when the decree holder purchases the property of the judgment debtor in execution of a decree against him, he becomes the owner of the property from the date of the sale and that from this it necessarily follows that the debt is pro tanto reduced from that date and the sale-price should be credited towards the decree on the date of the sale itself and not on the date when the sale becomes absolute.

The learned judges of the Madras High Court expressed this opinion solely on the basis of Section 65 C. P. C. They did not consider the other provisions in the Code. The learned judges did not also notice the Privy Council's decision in AIR 1933 PC 101 and even a decision of their own court in AIR 1942 Mad 119. With all due deference to the learned judges deciding AIR 1951 Mad 844, it must be stated that the aforesaid view taken by them is not correct.

If then the decree-holder purchaser in the present case was not entitled to have the decretal amount set off against the purchase-money until the confirmation of the sale, the decree could not besaid to have been realized until the sale was confirmed. The decree holder would, therefore, be entitled to interest up to the date of the confirmation of the sale.

6. Learned counsel then submitted that the decree-holder was not entitled to get Rs. 181-13-0 on account of counsel's fee in the previous execution case as he had not filed any certificate of fee as required by the Gwalior State Legal Practitioners Act Samvat 2003. As to this, it is sufficient to say that Section 38 of the Act is not applicable to execution proceedings.

7. Lastly it was said that the decree-holder cannot get expenses of the present execution proceedings as if the decree-holder is allowed interest up to the date of the sale and not upto its confirmation, then nothing would remain due from the appellant and that, on the other hand, the decree-holder would be required to refund some amount to the appellant. This contention must fail when, as has been said above, the decree-holder is entitled to interest up to the date of the confirmation of the sale.

Quite apart from that, the decree-holder must get costs of execution proceedings unless the judgment debtor shows that the execution proceedings initiated were altogether unjustified. In the present case, the decree-holder was compelled to initiate proceedings for the execution of the decree by the sale of the judgment debtor's property as the judgment debtor did not pay him anything.

8. All the contentions advanced on behalf ofthe appellant must, therefore, be rejected. In theresult, this appeal fails and is dismissed with costs.


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