Skip to content


Annamma Vs. Ouseph Tressiamma - Court Judgment

LegalCrystal Citation
SubjectProperty;Contract
CourtKerala High Court
Decided On
Case NumberSecond Appeal No. 566 of 1970
Judge
Reported inAIR1975Ker185
ActsContract Act, 1872 - Sections 70 and 72; Code of Civil Procedure (CPC) , 1908 - Order 21, Rules 91 and 93
AppellantAnnamma
RespondentOuseph Tressiamma
Appellant Advocate C.K.S. Panicker,; P.G.P. Panicker and; T.A. Narayanan Na
Respondent Advocate K.S. Paripoornan, Adv.
DispositionAppeal allowed
Cases ReferredVenkitachalam Iyer v. Vishnu Namboori.
Excerpt:
.....72 of indian contract act, 1872 and order 21 rules 91 and 93 of code of civil procedure, 1908 - decree-holder-auction-purchaser sought to sue judgment-debtor for refund of money paid by him on ground that he had no saleable interest in subject property - auction-purchaser not stranger but decree-holder itself - judgement-debtor in no way contributed to situation resulting in court sale of subject property - judgment-debtor found to have no title in subject property on date of sale - situation has been brought about solely by decree-holder and he should be one to lose transaction - suit to be dismissed. - - 1. an interesting question has been raised in this second appeal and the case has been referred to a full bench in view of the importance of the question. the decree-holder..........the case has been referred to a full bench in view of the importance of the question. can a decree-holder-auction-purchaser institute a suit against the judgment-debtor for refund of the purchase money paid by him when, subsequent to the sale, he discovers that the judgment-debtor had, at the time of the court sale, no saleable interest in the property that is the question for our consideration. the answer to this by the courts below was in the affirmative and the plaintiff has therefore obtained a decree. that is challenged by the appellant here who is the sole defendant in the suit.2. the appellant before us is the first defendant in o.s. 83 of 1955 of the sub-court. vaikom. that was a suit filed by one ouseph tressiamma against this appellant who was her sister, as the first defendant.....
Judgment:

Subramonian Poti, J.

1. An interesting question has been raised in this Second Appeal and the case has been referred to a Full Bench in view of the importance of the question. Can a decree-holder-auction-purchaser institute a suit against the judgment-debtor for refund of the purchase money paid by him when, subsequent to the sale, he discovers that the judgment-debtor had, at the time of the Court sale, no saleable interest in the property That is the question for our consideration. The answer to this by the Courts below was in the affirmative and the plaintiff has therefore obtained a decree. That is challenged by the appellant here who is the sole defendant in the suit.

2. The appellant before us is the first defendant in O.S. 83 of 1955 of the Sub-Court. Vaikom. That was a suit filed by one Ouseph Tressiamma against this appellant who was her sister, as the first defendant and one Isaac as the second defendant. That was for recovery of a sum of Rs. 1,500/- with interest said to be due to Tressiamma under a will executed by her father which amount the appellant was directed to pay her. That is said to have been charged upon the property bequeathed to the appellant. The suit was contested by the first defendant, but Isaac, the second, defendant, remained ex parte. A decree was obtained and the property was brought to sale. The decree-holder herself purchased 1 acre 10 cents of the decree schedule property in auction and the sale was confirmed. But before she could take delivery one Mariakutty filed a suit, O. S. 384 of 1964, claiming that the property belonged to her, having been purchased by her from the appellant in 1125 M. E. and that the decree and Court sale were not binding on her right to the property sold in Court auction. This Mariakutty was the wife of Isaac, the second defendant, in O. S. 83 of 1955. Evidently the sale was taken by the wife, but it was the husband who was impleaded In the suit. Mariakutty succeeded in her suit and obtained a decree as a result of Which the Court sale in favour of the decree-holder became ineffective. The decree-holder sought to execute the decree once again, as if the decree was not satisfied. But the Court did not allow such execution. Thereafter she filed the present suit against the appellant who was the first defendant in the earlier suit O. S. 83 of 1955 claiming that she was entitled to recover from the appellant the auction price together with interest at 6 per cent from the date of sale. The cause of action alleged is that there has been total failure of consideration in the matter of the Court sale and this was occasioned by the fraud practised by the defendant and her collusion in the earlier suit with Isaac, the second defendant, to keep the plaintiff in ignorance of the fact of conveyance.

3. The suit was resisted by the defendant on the plea that the plaintiff had no cause of action. The plea of fraud was denied. The claim against the defendant, it was said, was satisfied by the decree in O. S. 83 of 1955 and thereafter it was not open to the plaintiff to claim to recover any amount. It was also pleaded that the default to implead the real owner of the property was that of the plaintiff and therefore plaintiff alone should suffer the consequences. The maintainability of the suit was question ed. The Courts below found' that the plaintiff was entitled to claim recovery of the purchase money since the sale had become ineffective. In taking this view the Courts below have evidently purported to follow a decision of this Court in Mathai v O. Oommen, 1962 Ker LT 12 = (AIR 1963 Ker 148) which had referred to the Full Bench decision of the Travancore High Court in Kasim v. Aliarkuniu. 1947 Trav LR 132 with approval. But these decisions related to the question of the right of a stranger auction-purchaser to recover the sale amount where the judgment-debtor whose property was sold in Court auction was found to have no saleable interest in the property sold. Here the suit was by the decree-holder auction-purchaser Who had brought the property to sale and purchased it in auction. The appeal is by the defendant challenging the decree passed against her.

4. There is keen divergence of views among the High Courts in India on the question whether a stranger auction-purchaser who discovers later that the judgment-debtor had no saleable interest could file a suit to recover the purchase money from the decree-holder. The controversy is not easy to resolve. Opinion appears to be equally divided and eminent Judges have forcefully supported their respective view points with persuasive reasons. Different views have been taken by two Full Benches of the High Court of Travancore on this Question. The decision of a Full Bench in 1947 Trav LR 132 (Kasim v. Aliarkunju) has been overruled by a majority of the Full Bench of three Judges in the decision in Venkitachalam Iyer v. Vishnu Namboori, 1948 Trav LR 370. The decision in Kasim v. Aliarkuniu, 1947 Trav LR 132 (FB) has been followed by the Kerala High Court in Mathai v. O. Oommen. 1962 Ker LT 12 = (AIR 1963 Ker 148) and later in Abdul Kassim v. State of Kerala. 1964 Ker LT 102 = (AIR 1964 Ker 109). That a stranger auction-purchaser can file a suit against the decree-holder when total failure of consideration is shown in that the judgment-debtor is found to have no interest in the property sold is supported by the authority of the cases in Macha Koundan v. V. Kottora Koundan, AIR 1936 Mad 50 (FB): Bahadur Singh v. Ram Phal. AIR 1930 Oudh 148 (FB); Mehar Chand v. Milkhi Ram. AIR 1932 Lah 401 (FB); Thakar Lal v. Nathulal, AIR 1964 Rai 140; Kasim v. Aliarkunju, 1947 Trav LR 132 (FB) and Maung Aye Maung v. A. Scott & Co., AIR 1940 Rang 1 (FB); The contrary view is held in Balavant Ranga-nath v. Bala Malu. AIR 1922 Bom 205; Santimmappa v. Balbhim Co-op. Credit Society, AIR 1950 Bom 313; Amar Nath v. Firm Chotelal, AIR 1938 All 593 (FB); Nagendra Nath v. Sambhu Nath. AIR 1925 Pat 106: Surendra Kumar v. Srichand, AIR 1936 Pat 97 (PB); Abinash Chandra V. Matilal. AIR 1961 Cal 172 and Suryakanthamma v. Dorayya, AIR 1965 Andh Pra 239 (FB).

5. The auction-purchaser in this case is the decree-holder himself. The suit is therefore not by the auction-purchaser against the decree-holder but by the decree-holder against the judgment-debtor. If we could possibly decide the question before us without expressing any view one wav or the other on the question of the right of the stranger auction-purchaser to seek recovery of the sale price, we should attempt to do so. One of the pleas urged in answer to the plaint claim is that an action for money had and received would not lie in a case where a suit for refund of purchase money is brought by the decree-holder-auction-purchaser against the judgment-debtor. It is necessary to examine this question here. If the plaintiff does not succeed in establishing his right to bring such an action, then, we can refrain from expressing our views on the question whether the Court-sale is void on account of the absence of title of the judgment-debtor.

6. The suit, in execution of the decree in which the plaintiff brought the property to sale, was for recovery of money due from the first defendant in that suit who is the defendant here. The first defendant had parted with her rights prior to the institution of that suit and that was by a registered document executed in favour of the wife of the second defendant in the earlier suit. But nevertheless the transferee was not impleaded, though her husband was made the second defendant. The Court-sale became ineffective for the reason the plaintiff omitted to make the vendee a party and was satisfied with her husband on the party array possibly on the assumption that the husband was the real owner though the document stood in the name of the wife. In that stand the decree-holder auction-purchaser failed in the present suit, Though a plea of fraud by the first defendant in the earlier suit is set up here, that remains a mere averment, for, no evidence oral or documentary has been adduced. Parties have not examined any witnesses in the suit and the case was heard by the learned Munsiff on the pleadings. Therefore as the matter now stands, it is not possible to find that the judgment-debtor was in any way responsible for the sale of a property over which he had no title. He had title to the property sometime prior to the suit. The plaintiff-decree-holder evidently assumed that the second defendant was the necessary party. This was either due to his ignorance of the fact of the title being in the second defendant's wife or the was knowingly taking the stand that the second defendant had title and not his wife. It was the decree-holder who brought the property to sale, caused the settlement of the proclamation of the property, as if it belonged to the judgment-debtor and purchased it in auction. There can be no scope, in such circumstances, for a plea of misrepresentation, much less any scope for a plea of fraud. There is also no scope for any plea of estoppel which may possibly be urged by a stranger auction-purchaser against the decree-holder. The judgment-debtor has not contributed, in any measure to the situation resulting in the sale of a Property in which the judgment-debtor had no title. He had no obligation under law to enlighten the decree-holder, assuming that he could have done so in this case. If the property had been sold with the wife of the second defendant in the earlier suit on the party array, that would have conveyed title to the auction-purchaser and that would have extinguished the liability of the judgment-debtor for the decree debt to the extent of the sale price. We are stating these facts as they may be necessary in assessing a plea of unjust enrichment on the part of the defendant in the case.

7. An action for money had and received founded on a plea of failure of consideration cannot succeed by merely showing that one person has lost and another has made a gain. Money had and received was a development of a remedial form of action. All monies lost to one and gained by another cannot be said to be recoverable by reason of this rule irrespective of all other considerations. There may not be a legal right in the person who has paid to recover it and a corresponding obligation in the one who has benefited to return it. The rights must be founded on the theory of unlawful enrichment. It is not every gain or enrichment that is unlawful. Situations calling for redress for civil wrongs are conceived by the law of contracts as well as the law of torts. It is not easy to assume a moral code which covers all categories of cases, which fall outside the purview of these.

8. Lord Mansfield attempted to provide a Juristic basis for the doctrine of unjust enrichment. As early as in 1760 in Moses v. Macferlan, (1760) 2 Burr 1005 the learned Judge said--

'The gist of this kind of action is that the defendant, upon the circumstances of the case, is obliged by the ties of natural justice and equity to refund the money.'

8-A. The learned Judge did not lay down and evidently did not intend to lay down that in every case where a benefit was obtained or even unjustly obtained an action would lie. In Weston v. Downes. ((1778) 1 Doug (KB) 23) the learned Judge said--

'I am a great friend to the action for money had and received, and therefore I am not for stretching, lest I should endanger it.'

At the beginning of this century the authority of this doctrine in quasi contracts was doubted and the expression of this is seen in what Lord Sumner said in Sinclair v. Brougham, 1914 AC 398. Whatever might have been the effect of Lord Sumner's judgment, later cases again recognised the validity of Lord Mansfield's views. We may refer to the decision in Fibrosa Spolka Akcyjna v. Fairbaira Law-son Combe Harbour Ltd.. (1943 AC 32), Lord Wright said in that case--

'It is clear that any civilized system of law is bound to provide remedies for cases of what has been called unjust enrichment or unjust benefit, that is to prevent a man from retaining the money or some benefit derived from another which it is against conscience that he should keep. Such remedies in English law are generically different from remedies in contract or in tort, and are now recognised to fall within a third category of the common law which has been called quasi-contract or restitution.'

Cheshire and Fifoot in the Law of Contract (7th Edn.) at page 584, referring to this doctrine, observe--

'Academic, as well as judicial, opinion has been divided upon the merits of Lord Mansfield's doctrine. But in the latest and most searching study of English quasi-Contract Mr. Goff and Mr. Gareth Jones have accepted as its rationale the principle of unjust benefit or unjust enrichment. This principle ''presupposes three things : first, that the defendant has been enriched by the receipt of a benefit; secondly, that he has been so enriched at the plaintiff's expense; and thirdly, that it would be unjust to allow him to retain the benefit.' The learned authors have also faced, and turned to profit, a contributory difficulty in the analysis and development of quasi-contract; the fact that it transcends the traditional demarcation between law and equity. It is significant that both in Sinclair v. Brougham and in Re Diplock the Judges were driven to examine both common law and equity; and Lord Wright said of the former case that it 'demonstrated a category of claims distinct from contract or tort or trust'.'

That 'the good sense of the law will impose an obligation to return where there was a total failure of consideration' (Kasim v. Aliarkunnu. 1947 Trav LR 132) (FB) is a statement of the law in too wide terms. Abraham. J. said in Venkitachalam Iyer v. Vishnu Namboori. 1948 Trav LR 370 (FB) thus:

'The urge to give a remedy where loss has been sustained, but no legal right infringed is an urge which is outside the province of law.'

In the case of a judgment-debtor who has in no was contributed to the situation resulting in a Court sale of property to which the judgment-debtor is found to have no title on the date of sale, he 'having parted with his right to the property eyen before the date of suit, it is difficult to find any justification for a plea that he has been unjustly enriched. As we said earlier even assuming that he has been enriched, which itself, in the circumstances of the case, is controversial, it cannot be said to be unjust. The situation has been brought about by the decree-holder and solely by him. If someone is to lose in the transaction it must necessarily be the party who has been responsible for the situation and that would be the plaintiff himself. Therefore it may not be possible to find that the defendant had received the money or the benefit for the use of the plaintiff. Consequently no action for money had and received would lie, The suit will have, therefore, to be dismissed on this ground. We do so. The concurrent decrees of the Courts below are reversed. But in the circumstances of the case we direct the parties to suffer costs in all the Courts.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //