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Varkey Varkey Vs. N.M. Kurian and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKerala High Court
Decided On
Case NumberS.A. No. 841 of 1976
Judge
Reported inAIR1982Ker222
ActsTransfer of Property Act, 1882 - Sections 52; Code of Civil Procedure (CPC) , 1908 - Order 21, Rule 92
AppellantVarkey Varkey
RespondentN.M. Kurian and ors.
Appellant Advocate V. Sankara Menon, Adv.
Respondent Advocate C.K. Sivasankara Panicker,; P.G.P. Panicker,; V. Bhaskar
DispositionAppeal dismissed
Cases ReferredRamkishan Lal v. Muhammed Manzurul Haque
Excerpt:
.....notice of executing court to sort them out - these issued cannot be raised by filing independent suit - sale of property valid - execution petition justified. - - 1. the unsuccessful plaintiff in a suit for declaration that plaint items nos. d8 mortgage and possession of those items, and who was also unsuccessful in the first appellate court, is the appellant herein. the claim was based on personal covenant as well as allegation that item no. p1 assignment, the decree, execution proceedings as well as the sale. the mortgage money was really not due and the suit and the decree were brought about by collusion between defendants 1 and 2 as well as fraud. act strictly speaking does not apply to involuntary alienations, such as court sales, but it is well established that principle of..........or mortgage and if there is a prior suit pending on the basis of the charge or mortgage, the sale held by the public authorities will be subject to such charge or litigation. in other words, principle of ms pendens applies to such involuntary public sales. i am supported in this view by the decisions reported in mathura prasad sahu v. desai sahu (air 1922 pat 542) and korlapati thammayya v. medida ramanna (air 1926 mad 1161).8. it is contended by the learned counsel for the appellant that court auction sale can be held only on a date so posted and proclaimed and in this case the sale was held on 31-7-1963 and the sale had not been posted to that date. ext. p-19 is the execution 'b' diary. it shows that rule 66 notice was served on the judgment-debtor and on 14-6-1963 since he did.....
Judgment:

U.L. Bhat, J.

1. The unsuccessful plaintiff in a suit for declaration that plaint items Nos. 1 to 3 belong to him as per a revenue sale and for a declaration that the decree, execution proceedings and the sale in O. S. No. 7o of 1963 are vitiated by fraud and collusion and not binding on his rights over the properties and for recovery of possession of mesne profits and in the alternative for redemption of Ext. D8 mortgage and possession of those items, and who was also unsuccessful in the first appellate court, is the appellant herein.

2. Four items of properties shown in the plaint schedule belonged originally to the second defendant. He possessorily mortgaged the same on 21-3-1952 under Ext. D8 to one Karthiyani Amma for Rs. 2,500/-. The first defendant obtained assignment of the mortgage right on 20-2-1954 under Ext. p-1. For arrearsof abkari dues from the second defendant there was attachment on 18-12-1953 and sale by the Government on 7-3-1963 in which the properties were purchased by the plaintiff subject to Ext. D8 mortgage. The sale was confirmed on 19-7-1963, as is seen in Ext. p-2 and Ext. p-10 is the sale certificate issued to the plaintiff. Meanwhile, on 15-2-1963 the first defendant filed O. S. No. 70 of 1963 against the second defendant for recovery of the mortgage money due under Ext. D8 and value of improvements on the charge of equity of redemption. The claim was based on personal covenant as well as allegation that item No. 4 had not been put in the possession of the mortgagee. An ex parte mortgage decree was passed on 1-4-1963. The first defendant filed execution petition for sale on 28-5-1963. Rule 66 notice was ordered returnable by 14-6-1963. Notice was served, but the second defendant did not file any objection. On 14-6-1963 the court settled the sale proclamation and ordered proclamation and sale of the properties. Court auction and sale took place on 31-7-1963 and the first defendant became the successful bidder. The sale was confirmed on 30-8-1963 and Ext. D-5 is the sale certificate issued to the first defendant. Delivery was taken on 13-2-1964. On 3-10-1963 the plaintiff filed the present suit.

3. In the plaint, he challenged Ext. P1 assignment, the decree, execution proceedings as well as the sale. According to him, it was the second defendant who paid up the mortgage money due to Karthiayani Amma, but instead of taking a release, took an assignment Ext. P1 in the name of the first defendant. The mortgage money was really not due and the suit and the decree were brought about by collusion between defendants 1 and 2 as well as fraud. The decree suffers from other defects also. Execution proceedings also are vitiated by fraud and collusion. Execution was speeded influencing the court staff. The properties were under-valued. Encumbrances were not shown in the proclamation. Description and details given in the proclamation were wrong. Meanwhile, the first defendant assigned his rights to the 3rd defendant under Ext. D1. Defendants 1 and 3 contested the suit. They denied all the allegations made against Ext. P1, the suit, the decree, execution proceedings and the court sale. They contended that all these proceedings arc valid. Ac-cording to them, the sale in favour of the plaintiff is vitiated by lis pendens by virtue of pendency of O. S. No. 70 of 1963. Two courts below overruled all the contentions urged by the plaintiff further accepted the contentions of defendants 1 and 3 to the effect that the sale in favour of the plaintiff under Ext. P. 10 certificate is hit by the doctrine of lis pendens on account of the pendency of O. S. No. 70 of 1963. Two courts be-low further held meeting the contention raised in the course of arguments that the confirmation made on the 30th day of the court auction sale cannot be challenged in this suit.

4. Even though several contentions have been urged in the Memorandum of second appeal, the learned counsel for the appellant made only three submissions before me in the course of his arguments, viz., (i) that the doctrine of lis pendens applies only to voluntary sales, but not to involuntary sales or revenue sales, (ii) that the execution court held the sale without fixing a date for the sale and on the date fixed for return of sale proclamation and therefore the sale is illegal and (iii) that confirmation on the thirtieth day of the court auction sale is a nullity and therefore, the plaintiff is entitled to redeem the mortgage which though has merged in a decree, is still outstanding, since there is no confirmation of the sale.

5. Section 52 of the Transfer of Property ACT. 1882 states, inter alia, that during the pendency of any non-collusory suit in which any right to immove-able property is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the suit or proceedings so as to affect the rights of any other party thereto under any decree or order which may be made therein, except under the authority of the court and on such terms as it may impose. Strictly speaking, it is true that Section 52 applies only to transfers pendente lite by parties and not to involuntary sales; but courts in India have always applied the principle of Its pendens to involuntary sales also. This court hag held so in the decision reported in Govinda Marar v. Sivarama Kurup (AIR 1972 Ker 68). In Samarendra Nath Sinha v. Krishna Kumar Nag (AIR 1967 SC 1440), the Supreme Court has observed as follows (at p. 1445):

'It is true that Section 52 of the T. P. Act strictly speaking does not apply to involuntary alienations, such as court sales, but it is well established that principle of lis pendens applies to such alienations also.'

6. The learned counsel for the appellant, however, relied on the decision reported in Jayaram Mudaliar v. Ayya-swami (AIR 1973 SC 569) to argue that the Supreme Court has later on doubted the correctness of its earlier view. The learned counsel refers to para 50 of the latter decision. In this para the Supreme Court observed as follows :

'.....Hence it could be argued thatwhere it is not a party to the litigation but an outside agency, such as the tax Collecting authorities of the Government, which proceeds against the subject matter of litigation, without anything done by a litigating party, the resulting transaction will not be hit by Section 52.... Allthese are matters which the Court could have properly considered.'

In the separate judgment delivered by S. M. Sikri, C. J., following Samarendra Nath Sinha v. Krishna Kumar Nag (AIR 1967 SC 1440) and Kedarnath Lal v. Sheonarain (AIR 1970 SC 1717) it has been observed that the principle of lis pendens applies to involuntary alienations. But, in the judgment delivered by Beg, J. and A N. Ray J. there is no conclusion urged and the matter was left open in the manner extracted above. It cannot be said that the view in the earlier decision has been changed in the later decision. The view that the principle of lis pendens applies to involuntary sales still holds good. I am, therefore unable to agree that the principle of lis pendens will not apply to involuntary sales.

7. The learned counsel for the appellant further contended that at any rate, the principle of lis pendens will not ap-ply to involuntary sales held by the Government or officers representing the government. It is true that under the provisions of the Revenue Recovery Act and parallel provisions of similar statutes in other States, there is a first charge on land for realisation of the land revenue. Where revenue sale is conduct-ed for arrears of land revenue under the provisions of this statute (if there is a first charge), the sale will be free from all encumbrances and in such a case the fact that the revenue sale has takenplace during the pendency of a mortgage suit will not make the revenue sale subject to the result of the suit. That is because the revenue sale is free from all encumbrances. All involuntary sales held by the Government or by officers under the authority of the Government are not sales free from encumbrances. The Government or public authorities may be empowered to sell properties for recovery of dues other than land revenue, such as abkari dues or rent dues under certain statutes, etc. For those dues first charge on the property is not available. Involuntary sales held by public authorities for recovery of such dues are not sales free from encumbrances; but they are sales subject to encumbrance. If there is a prior charge or mortgage and if there is a prior suit pending on the basis of the charge or mortgage, the sale held by the public authorities will be subject to such charge or litigation. In other words, principle of Ms pendens applies to such involuntary public sales. I am supported in this view by the decisions reported in Mathura Prasad Sahu v. Desai Sahu (AIR 1922 Pat 542) and Korlapati Thammayya v. Medida Ramanna (AIR 1926 Mad 1161).

8. It is contended by the learned counsel for the appellant that court auction sale can be held only on a date so posted and proclaimed and in this case the sale was held on 31-7-1963 and the sale had not been posted to that date. Ext. P-19 is the execution 'B' Diary. It shows that Rule 66 notice was served on the judgment-debtor and on 14-6-1963 since he did not prefer any objection, the conditions of sale were settled and the case was adjourned to 31-7-1963 with the endorsement (Matter in vernacular omitted here--Ed.) Accordingly it is contended that 31-7-1963 was the date on which the return of the sale proclamation was expected and it was not the date on which the sale was expected to be held. There can be no doubt that the entry in the 'B' Diary is not happily worded. The procedure contemplated by law is that the executing court should settle the terms and conditions of the sale and then issue a sale proclamation, ensure its publication and thereupon hold the sale. Order XXI, Rule 66 (2) C. P. C. requires that proclamation must contain the time and place of sale. Rule 68 states that the sale must be held 30 days after the affixture of the sale proclamation in the court house. There is no case thatthe sale proclamation was not affixed in the court premises or that the sale was held within 30 days of the affixture. In fact the plaint does not even allege that the sale was held without fixing the dale for sale. Ext. P-17 copy of the sale proclamation shows that the date of the sale was fixed as 31-7-1963 and that was also proclaimed. It is, therefore, clear that the executing court had ordered proclamation and sale for 31-7-1963. I do not find any substance in this contention.

9. In the plaint it is alleged that the sale was held on 30-7-1963 and it was confirmed on 31-8-1963, i. e. more than 30 days after the sale. But when the plaintiff obtained copies of the execution records, he found that the sale was held on 31-7-1963 and confirmed on 30-8-1963, that is, on the 30th day of the sale. Yet he did not amend the plaint alleging any defect in the act of confirmation of the sale. But an argument appears to have been addressed in both the courts below contending that the confirmation is a nullity, if the confirmation is a nullity it is as if there was no confirmation. The argument is that though the sale on confirmation relates back to the date of the sale, it does not become absolule until confirmation and since in this case the confirmation made is a nullity, it is as if the sale has never been confirmed in which case it must follow that the judgment-debtor in the prior suit was not divested of bis title and consequently the revenue sale in favour of the plain-tiff must be treated as having vested title in the plaintiff and therefore the plain-tiff is entitled to redeem Ext. D-8 mortgage. This is the alternative relief claimed in the suit.

10. Order XXI, Rule 89 C. P. C. enables any person having interest in the property to apply to have the sale set aside on his depositing in the court the money mentioned therein. Order XXI, Rule 90 C. P. C. enables the decree-holder or the purchaser or any person entitled to a share in the rateable distribution of assets or whose interests are affected by the sale to apply to the court to set aside the sale on the ground of material irregularity or fraud in publishing or conducting it. Order XXI, Rule 91 C.P.C. enables the purchaser to apply to the court to set aside the sale on the ground that the judgment-debtor had no saleable interest in the property sold. Clause (1) of Rule 91, of Order XXI states that where noapplication is made under Rule 89, 90 or 9l or where such an application is made and disallowed the court shall make an order confirming the sale and thereupon the sale shall become absolute. Rule 94 requires the court to grant a sale certificate to the purchaser on the sale becoming absolute. The application contemplated under Rules 89, 90 or 91 is required to be filed within 30 days from the date of the sale under Article 127 of the Limitation Act 1963 (Same as Article 16G of the Limitation Act 1908). It is on a combined reading of these provisions of law that it is contended that the confirmation cannot be made within 30 days of the sale or even on the 30th day and that the confirmation made on the 30th day of the sale is a nullity. The learned counsel also placed reliance on certain decisions which will be considered presently.

11. The decision in Arunachala Chettiar v. Vadla Koundan (AIR 1952 Mad 871) had to deal with a case where the judgment-debtor was alive on the date of the sale but was dead by the time of the confirmation of the sale and the confirmation was made without impleading his legal representatives. The Madras High Court held that the purchaser before confirmation has only an inchoate interest which becomes vested interest only after confirmation of the sale, though confirmation is only automatic and a matter of course if there is no objection to the sale. The judgment-debtor and the legal representatives have a right to apply under Rules 89 and 90 of Order XXI, C.P.C. within 30 days of the sale. The non-impleadment of the legal representatives of the deceased judgment-debtor has deprived them of that opportunity. The order of confirmation after the death of the judgment-debtor and without impleading his legal representatives was a nullity. Consequently an independent suit filed by the auction purchaser for the confirmation of possession on the basis of the auction sale was found to be unsustainable. This decision will not help the appellant's contention. It only lays down that under certain circumstances confirmation will be a nullity, viz., where the judgment-debtor is dead and his legal representatives are not impleaded before confirmation of the sale.

12. The decision in Siddaveerappa v. Jalal Khan (AIR 1953 Mys 87) had to deal with the case of confirmation on the same day as the acceptance of the bid bythe court. The High Court in revision set aside the order of confirmation and remanded the case directing the executing court to post the execution petition again for confirmation. This decision does not lay down that the act of confirmation without the period of 30 days is a nullity. It was only found to be contrary to law and that was corrected in the revision proceedings.

13. The decision reported in Ramathal v. Nagarathinammal (1967-1 Mad LJ 260) dealt with a case where after the executing court, dismissing the application under Order XXI, Rule 90 C.P.C., confirmed the sate. The order dismissing the application to set aside the sale was quashed by the High Court and the application was remanded for fresh disposal. Thereafter the decree amount and other charges contemplated under Order XXI, Rule 89 C.P.C. were deposited. The question arose whether the deposit was to be accepted in view of the prior order of confirmation of the sale. Mysore High Court held that even though there was an order of confirmation consequent on the dismissal of Rule 90 application, since the Rule 90 application was restored to file by the High Court, the restoration automatically operated to vacate or render ineffective the earlier confirmation order. This decision also will not help the appellant's contention inasmuch as it does not lay down the theory of nullity. Even otherwise the act of confirmation in a case where an application to set aside the sale has been filed is contingent and dependent on dismissal of the application and once the dismissal is reversed, the confirmation also stands automatically vacated. It is also to be noted that the High Court held so in revision proceedings against the order dismissing the application to set aside the sale and not in an independent suit.

14. The decision in Ramachandra Bhagat v. Mrs. Eva Mitra (AIR 1960 Pat 378) only lays down the general proposition, which is not disputed, that the sale is incomplete till confirmation, though on confirmation it relates back to the date of the sale. This proposition has been accepted by the Supreme Court in Janak Raj v. Gurdial Singh (AIR 1967 SC 608). In that case it was held that even if the decree under execution is set aside before confirmation, the confirmation has to follow as a matter of course.

15. In the decision reported in Inderdeo Tiwari v. Ram Ran Bijay Prasad Singh (AIR 1936 Pat 164), on the 13th day of the sale, the decree-holder, the judgment-debtor and the auction purchaser filed a compromise application and prayed that it may be recorded and the sale confirmed. The application was rejected on several grounds, one of the grounds being that the sale could not be confirmed till the expiry of 30 days. The order was challenged in revision before the High Court The High Court held against the other grounds which weighed with the executing court and set aside, the order, High Court itself confirmed the sale.

16. None of the authorities relied on by the learned counsel for the appellant support the contention that the confirmation within 30 days is a nullity and has to be ignored. The confirmation on the 30th day of the sale is, no doubt, violative of Order XXI Rule 92 C. P. C. However, in passing an order of confirmation of the sale, the executing court is not doing an act without jurisdiction. It has inherent jurisdiction to confirm the sale. When the court having jurisdiction passes a wrong order that cannot be treated as a nullity, it may be contrary to law and being so, it has to be rectified in the manner known to law. It is no doubt true that the executing court should have waited for 30 days to pass in the matter of confirmation of the sale. It is significant to note that till the expiry of 30 days or even thereafter none of the parties, nor any person interested in the property filed any application to set aside the sale. Probably the executing court was not aware that 30 days had not been passed when it passed the order of confirmation. But, that by itself cannot render the order of confirmation a nullity. If the judgment-debtor or his representatives had moved the executing court at the proper time the court could certainly have corrected its error.

17. It is significant to note that in the plaint the plaintiff did not challenge the order of confirmation. He did not also seek any relief with reference to the confirmation order. Unless the order of confirmation is a nullity, the court cannot ignore it Even assuming that the plaint contains a challenge against the order of confirmation can the plaintiff be allowed to challenge it in an independent suit Confirmation has to be made under Order XXI, Rule 92 (1) C. P. C. Clause (3) of Rule 92 states that no suit to set aside the order made under this rule shall be brought by any person against whom such an order is made. Can it be said that the plaintiff is a party to the proceedings or a representative of any party to the proceeding?

18. The plaintiff is the purchaser of the rights of the mortgagor pending the suit to enforce the mortgage. Subject to the result of the suit and the execution proceedings, he can claim to be in the shoes of the mortgagor. He could have got himself impleaded in the suit or in the execution proceedings. Even without getting himself impleaded, he could have moved the executing court to set aside the sale under Rule 89, or R- 90 of Order XXI C. P. C. He is a person who claims to have derived the mortgagor's rights and those rights were derived pending the mortgage suit. He is certainly bound by the decree under Section 11 C. P. C. since he is a person who claims under the defendant-judgment-debtor in the prior suit. He is also a person who is a 'representative' of the party to the suit for the purpose of Section 47 C. P. C. He is a person in whom interest could be said to have devolved within the meaning of Order XX, Rule 10 C. P. C. He is a 'person interested' as contemplated under Rules 89 and 90 of Order XXI C. P. C. If that be so he is bound by the decree of the court and the orders of the executing court and could get over the decree of the court or the orders of the court only in accordance with the procedure laid down in the C. P. C. He could have moved the executing court to set aside the confirmation of the sale and if he was not successful, he could have challenged that order before the revisional authority. Order of confirmation cannot be got over in a separate suit by him.

19. The question whether a court auction purchaser pendente lite is bound by the proceedings and is entitled to be impleaded in the proceedings came up for consideration at the hands of the Supreme Court in the decision reported in Smt. Saila Bala Dassi v. Smt. Nirmala Sundari Dassi (AIR 1958 SC 394). The Supreme Court directed the purchaser to be impleaded in an appeal filed against the order in execution. The Supreme Court has observed as follows: (at p. 398)

'As a purchaser pendente lite, she will be bound by the proceedings taken by the first respondent in execution of her decree and justice requires that she should be given an opportunity to protect her rights.'

20. It must, therefore, follow that since the order of confirmation is not a nullity, it should have been got over in accordance with the provisions of the Civil P. C. For example, in the decision reported in Siddaveerappa v. Jalal Khan (AIR 1953 Mys 87) the order was set aside in revision. In the decision reported in Ramkishan Lal v. Muhammed Manzurul Haque (AIR 1938 Pat 593) it was observed that questions like these could be decided by the executing court if they are brought to the notice of that court. The same cannot be challenged in an independent suit. In the present case there was the order of confirmation, though it was not in conformity with Rule 92 of Order XXI C. P. C. But the order of confirmation stands since it has not been vacated or rendered ineffective by a competent court in appropriate proceedings. At no point of time did any one move the executing court to set aside the sale or to set aside the order of confirmation. At one stage in the course of his arguments, the learned counsel for the appellant submitted that the present plaint may be treated as an application. It has to be noticed that the plaint does not contain any averment challenging the legality of the order of confirmation. Even treating the plaint as an application, it cannot be treated as an application challenging the confirmation of the sale on account of the defect now canvassed. I hold that the order of confirmation has become final and the title of the judgment-debtor in the earlier suit hag vested in the decree-holder-purchaser and therefore the title has not vested in the plaintiff in the present suit Therefore the plaintiff-appellant is not entitled to a decree for redemption either.

In the result, the decree and judgment of the first appellate court are confirmed and the second appeal is dismissed with costs.


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