1. This revision petition is against the appellate order of the Additional District Magistrate of Cuttack exercising the powers of a Collector under the Orissa Tenancy Act dismissing an appeal filed by the petitioner against the order of the Rent-Suit Deputy Collector, Jaipur, rejecting his petition for restitution.
2. The material facts are as follows: The petitioner was a tenure-holder (Madhyasatwadhikari) in respect of 12 acres 50 decimals of rent-free 'Lakhraj Bahel' iands in mouza, Barunia, khata No. 12 appertaining to touzi No. 18. Only cess was payable in respect of the property amounting to Rs. 6-3-0 per annum to the zamindar Pandit Shyamsundar Nath Satho (opposite party 2). The zamindar obtained an ex-parte decree for arrear cess against, the petitioner on 22-2-43 and in execution of the same put the property to sale. On 4-6-43 the entire property was purchased by opposite party 1 for a paltry sum of Rs .45/- and the sale was confirmed on 12-7-43 and delivery of possession was also effected on or before 26-11-43.
3. In the meantime as early as 15-3-43 the petitioner had applied for setting aside the 'ex-parte' decree and on 2-4-43 deposited a portion of the claim in Court. On 25-7-45 the 'ex-parte' decree was set aside and after revival of the rent suit it was dismissed on full satisfaction. In the execution proceeding the petitioner-judgment debtor on 10-1-44 filed an objection under Order 21, Rule 90, Civil P. C. for setting aside the sale on the gronud of fraud and material irregularity. The auction-purchaser (opposite party 1) filed an objection. The execution Court on 23-6-47 passed the following order.
'Suit has been dismissed as is seen from the certified copy of the order. Order 21, R. 90 application has been stayed. It is dismissed as the whole proceedings in the execution proceeding are null and void'.
The aforesaid order of the rent-suit Deputy Collector is clearly wrong. If the entire execution proceeding became null and void in consequence of the setting aside of the 'ex-parte' decree and the original suit after revival was dismissed on full satisfaction the executing Court should not have dismissed the application under Order 21, Rule 90, Civil P. C. but may have recorded a note to the effect that it had become infructuous. Perhaps this is what the Court meant though the use of the expression 'dismissed' has led to some argument at the Bar before us.
4 The petitioner then applied for restitution of the entire property basing his claim mainly on the fact that as the whole suit had been dismissed on full satisfaction the sale in execution of the 'ex-parte' decree should not stand. In that restitution he specifically alleged that opposite party 1 was not a stranger but a creature of the 'zamindar' (opposite party 2) and that valuable property had been sold for a paltry sum. Thus his clear case was that opposite party 1 was not a 'bona fide' purchaser for value but was a creature of the decree holder himself. On this allegation the executing Court ought to have allowed the parties to lead evidence and then come to a clear decision as to whether the auction-purchaser (opposite party 1) was or was not a 'bona fide' purchaser for value. Instead of determining this question the Court rejected the restitution petition on the ground that it was not maintainable. On appeal the learned Additional District Magistrate maintained the order chiefly on the ground that opposite party 1 was a stranger auction-purchaser and that restitution cannot be ordered against him.
5. Both the Courts have completely misconceived the law on the subject and have failed to exercise their jurisdiction properly. The law on the subject is clear. Where property is sold in execution of an 'ex-parte' decree and purchased bona fide' by a third party for value and the 'ex-parte' decree is subsequently set aside, restitution will not ordinarily be granted against such stranger auction-purchaser. This principle was laid down by Privy Council as early as 1886 in the well-known case of 'Rewa Mahton v. Ram Krishen 13 I. A. 106: (14 Cal 18 P. C.)'. Their Lordships particularly emphasized that a person purchasing 'bona fide', and for a fair value, property exposed for sale under an execution issued by a Court of competent jurisdiction was not bound to make any enquiry into the correctness of the order for execution. The same principle was reiterated in 'Zainul-Abdin Khan v. Muhammad Asghar All Khan', 15 I. A. 12: (10 All 166 P. C.) where restitution was refused as against third party auction-purchasers. Similarly in 'Janukdhari Lal v. Gossain Lal, 11 C. L. J. 254: (37 Cal 107)' the Calcutta High Court relying on the aforesaid decisions of the Privy Council pointed out that a 'bona fide' purchaser for value without notice in execution of an 'ex-parte' decree could not be put on the same category as the decree-holder auction-purchaser and that restitution may not be available as against him. Again in 'Parsh Nath v. Haricharan', 38 Cal 622: (10 I C 361) it was held that the purchase made by an innocent purchaser for value' in execution of an 'ex-parte' decree should not be disturbed even though the 'ex-parte' decree might have been subsequently set aside. To a similar effect are the observations of the Allahabad High Court in 'Peary Lal v. Hanifunnissa Bibi', AIR (3) 1916 All 159: (38 All 240) and the observations of the Patna High Court in 'Chota Nagpur Banking Association v. C.T. M.Smith', AIR (30) 1943 Pat 325: 22 Pat 315).
6. The reason for thus making an exception in favour of a 'bona fide' purchaser for value is clear. Ordinarily when the decree on which the execution sale takes place is set aside the Court should restore the parties to the position which they originally held so that the action of the Court may not prejudice either party. But on some occasions this equitable principle may conflict with another rule of equity to the effect that a 'bona fide' purchaser for value should not be allowed to suffer for the mistake of the Court. To quote Jenkins, C. J. (Paresh Nath v. Haricharan, 38 Cal 622 at P 627: (10 IC 361).
'At the same time it is the policy of the Court and a very wise policy to protect its purchasers, for although in an individual case there may be some hardship, it would be far more prejudicial to the general body of judgment-debtors that any doubt should be thrown upon titles acquired by purchasers in execution under decrees which are to all appearances in order and free from objection'.
But this rule is not an inflexible rule and even against 'bona fide' purchasers for value restitution has been allowed in exceptional circumstances such as where the sale itself was without jurisdiction (see 'Janukdharilal v. Gossain Lal', 11 C. L. J. p. 254: (37 Cal 107) or there has been a mistake or material irregularity of the Court) (Radha Bai v. Jagannadha Naidu, AIR (24) 1937 Mad 694: (169 I C 783).).
7. In the present case it is unnecessary to consider whether Schedule 44 Civil P. C. will in terms apply where restitution is asked for on the basis of the reversal of the decree by the very same Court and not by any superior Court. There is doubtless some conflict of judicial decisions on this question. But it is now well-settled since the decision of the Privy Council in 'Jai Berham v. Kodar Nath, 49 I A 351: (AIR (9) 1922 PC 269) that:
'It is inherent in the general jurisdiction of the Court to act rightly and fairly according to the circumstances towards all parties involved'.
Thus even if Schedule 44, Civil P. C. may not in terms apply the Court has inherent powers under Schedule 51 Civil P. C. to grant restitution.
8. It is thus clear that restitution in favour of the petitioner can be refused only if opposite party 1 can show that he is a 'bona fide' purchaser for value If the allegations made by the petitioner in his restitution petition are believed it is clear that opposite party 1 being a creature of the decree-holder was not a 'bona fide' purchaser at all. The property has been sold for a grossly inadequate price of Rs. 45/-. Valuable rent-free property of 12 acres 50 decimals would surely have fetched several thousands of rupees as fair price. In fact I notice that the record contains a mortgage bond dated 29-1-20 from which it appears that the previous owner of the property mortgaged 5 acres 19 decimals of the property with the petitioner for Rs. 300/- in 1920. It will be idle to contend that when the entire property was purchased in 1943 for Rs. 45/- the 'purchase was for fair value'. For some reason or other, evidence was not taken by trial court on the question of 'bona fide' of opposite party 1 and the fair value of the property. This is perhaps because the lower court was in some confusion as to the principle underlying restitution petitions and thought that it had no jurisdiction to grant restitution in cases of this type.. I am however unable to dispose of this revision petition in the absence of a clear finding as to whether opposite party 1 is really a 'bona fide' purchaser for value or not.
9. The petition is allowed, the orders of the lower courts are set aside and the trial court is directed to give both parties an opportunity to lead evidence on the limited question as to whether opposite party 1 is a 'bona fide' purchaser for lair value and then dispose of the restitution petition in accordance with law bearing in mind the legal position explained above. Costa will abide the result.
10. I agree.