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Chimanlal Narsibhai Vs. Amratlal Chhotalal Shah and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtGujarat High Court
Decided On
Case NumberFirst Appeal Nos. 477 and 478 of 1966
Judge
Reported inAIR1974Guj218; (1975)0GLR22
ActsCode of Civil Procedure (CPC), 1908 - Sections 65 - Order 21, Rules 92, 94 and 95
AppellantChimanlal Narsibhai
RespondentAmratlal Chhotalal Shah and anr.
Appellant Advocate C.C. Patel, Adv.
Respondent Advocate V.V. Mehta, Adv.
Cases Referred and Nidhpal Sharma v. Union of India
Excerpt:
.....avail of the protection of section 50 of the transfer of property act. the ownership over the suit property could never have remained in abeyance and if before the sale became absolute, the plaintiff had not acquired a perfect title over the suit property, it must follow that the ownership of the suit property continued to vest in the judgment-debtor till the sale became absolute. the commentary of mulla on the civil procedure code under section 65 shows clearly that this reasoning is not correct. the title to the property after the sale is made absolute vests in the auction-purchaser from the date of the sale according to the section and the learned commentator points out that the old rulings to the effect that the right to possession only accrued from the date of the sale..........bidder in the court auction in those execution proceedings with the result that the sale of the suit property in his favour was knocked down on 14th december, 1957. this sale was, however, made absolute under order 21, rule 92, c.p.c. as late as 30th april, 1959 and a sale certificate contemplated by order 21, rule 94, c.p.c. was issued in his favour a few months thereafter i.e. on 15th september, 1959.4. it is found that while the darkhast proceedings were pending, the judgment-debtor kasturbhai, inducted the two respondents of these appeals, who are hereinafter referred to as the defendants, as the tenants of the second and third floors respectively of the disputed property. these defendants thereafter continued to pay rent to this judgment-debtor kasturbhai.5. it is found that on.....
Judgment:

1. Both these appeals arise out of the suits filed by the appellant Chimanlal Narsibhai Patel against the respondents for the recovery of different amounts of compensation for the use of the suit premises as tenants. The suits were filed in City Civil Court, Ahmedabad, where they were registered as, Civil Suits Nos. 448 and 449 of 1963. The said court has finally decreed both the suits but has rejected the plaintiff's claim for compensation for the period from 14th December 1957 to 30th April 1959 and, therefore, the plaintiff's claim only for this--period remains to be considered these appeals. Before the lower court there was a dispute between the parties as regards the rate of compensation but that dispute now does not survive as during the course of these appeals Shri Patel, the learned advocate of the plaintiff, has accepted the lower court's finding as regards the rate of compensation.

2. Following are the brief facts, which explain the background of the dispute between the parties.

3. The property in question beers Municipal Census Nos. 84 to 84/4. This property originally belonged to one Kasturbhai Balabhai who had mortgage it with one Vallabhdas Fulchand. The mortgagee then filed Civil Suit No. 229/52 against the mortgagor to recover the mortgage money by sale of the mortgaged property. That suit was decreed and thereafter the mortgagee executed that decree by filing Darkhast No. 67/54 for the recovery of the decretal amount and interest by the sale of the mortgaged property. The appellant of both these appeals, who is hereafter referred to as the plaintiff, was the highest bidder in the court auction in those execution proceedings with the result that the sale of the suit property in his favour was knocked down on 14th December, 1957. This sale was, however, made absolute under Order 21, Rule 92, C.P.C. as late as 30th April, 1959 and a sale certificate contemplated by Order 21, Rule 94, C.P.C. was issued in his favour a few months thereafter i.e. on 15th September, 1959.

4. It is found that while the Darkhast proceedings were pending, the judgment-debtor Kasturbhai, inducted the two respondents of these appeals, who are hereinafter referred to as the defendants, as the tenants of the second and third floors respectively of the disputed property. These defendants thereafter continued to pay rent to this judgment-debtor Kasturbhai.

5. It is found that on 28th March, 1958, the plaintiff served the defendants with a notice that the sale of the suit property was knocked down in his favour, and that they were inducted by the judgment-debtor in the suit property as tenants mala fide with a view to delay the delivery of the possession of the suit property to him. A similar application was also given by the plaintiff to the court on the same date. Since the defendants did not pay any deed to this notice of the plaintiff, the plaintiff filed Civil Suit No. 890/59 which was renumbered in the City Civil Court as Civil Suit No. 484/61. By this suit, the plaintiff prayed for restraining defendants from paying rent to the judgment-debtor Kasturbhai, The plaintiff also obtained an interim order in that suit directing the defendants to deposit future rent in court. The court in that suit is found to have passed this interim order and accordingly the rent was deposited in court by the defendants. It may however be noted that these proceedings were adopted after the sale became absolute on 30th April, 1959.

6. In spite of the sale becoming absolute and the plaintiff having obtained a certificate contemplated by Rule 94 of Order 21, C.P.C., the plaintiff could not obtain the actual possession of the suit premises, He, therefore, made an application for obtaining the actual delivery of the possession of the suit premises under Order 21, Rule 95, C.P.C. That application was registered as Misc. Application No. 71/59. It is not necessary to narrate the details as regards this application, but it would be sufficient to state that in that application this court eventually ordered in Civil Revision Application No. 932/66 that the plaintiff was entitled to obtain the actual possession of the disputed premises. Ultimately, the plaintiff obtained the actual possession of the suit premises from the defendants on 17th October 1962.

7. It was thereafter that the plaintiff filed these suits claiming compensation from the defendants for wrongful use and occupation of the suit premises from the date of the sale i.e. from 14th December 1957.

8. These facts make it clear that the only dispute which now survives between the parties is whether the Plaintiff, as the auction purchaser of the suit Property, is entitled to claim as compensation from the defendants the amounts of rent paid by them to the judgment-debtor for the period between 14th December. 1957 and 30th April 1959. On this question, the stand of the plaintiff is that by virtue of the provisions of Section 65, C.P.C. the suit property is deemed to have vested in him from the time it was sold i.e. from 14th December, 1957 and not from the time the said sale became absolute, i.e. 30th April, 1959 and hence even if the defendants had paid the rent for the period between 14th December. 1957 and 30th April 1959 to the judgment debtor, the said payment was wrongful and does not absolve them from their liability to compensate him for the loss of that rent. As against this, the case of the defendants is that the deeming fiction contemplated by Section 65 of the C.P.C. comes into existence only when the auction sale becomes absolute and, therefore, any payment made to the judgment-debtor by a tenant before the sale becomes absolute, is proper and valid. According to the defendants, if the plaintiff has got any right under Section 65, C.P.C., the same is against the judgment debtor who received the disputed rent from them.

9. This takes us to the consideration of the legal implications of Section 65, C.P.C. that is in the following terms:

'65. Where immovable property is sold in execution of a decree and such sale has become absolute, the property shall be deemed to have passed in the purchaser from the time when the property is sold and not from the time when the sale becomes absolute.'

These provisions of Section 65 should be read along with those provisions of Order 21, C.P.C. that relate to court sale and its confirmation. Rules 89, 90 and 91 of the said Order provide for applications to set aside sale of an immovable property, which is sold in execution of a decree on various grounds. These rules make it clear that the sale which is knocked down in favour of the auction purchaser does not become absolute till an application made under any of these rules is finally disposed of. Rule 92 of this Order says when the sale becomes absolute. According to this rule, where no application is made under Rules 89, 90 and 91 or where such application is made and disallowed, the court shall make an order confirming the sale, and thereupon the sale shall become absolute. After the sale thus becomes absolute, the court acting under Rule 94 is supposed to grant a certificate specifying the property sold and the name of the person, who, at the time of the sale, is declared to be the purchaser. Then follows Rule 95, which is with regard to the delivery of the actual possession of the Property sold in court auction when the same is found to be in occupancy of the judgment-debtor or of some person claiming under him. Rule 95 specifically provides that such a delivery can be obtained only after the sale certificate contemplated by Rule 94 in respect of the property in question has been granted by the court. Thus, Rule 95 makes it clear that the actual possession of the property purchased in court auction can be obtained by the auction purchaser only after he obtains the sale certificate contemplated by Rule 94 and it need not be said that the sale certificate contemplated by Rule 94 can be obtained only after the sale becomes absolute as contemplated by Rule 92. So far as the facts of this case are concerned, they show that the defendants were the tenants claiming under a title of lease created by the judgment-debtor subsequent to the attachment of the property and, therefore, the plaintiff became entitled to the actual delivery of the property after the certificate in respect of the sale was granted to him under Rule 94 and not before that.

10. The total effect of all these Rules when read together with the provisions of Section 65, C.P.C. is that till the sale became absolute, the plaintiff's title to the property was inchoate but the movement the sale became absolute, the said Inchoate title became perfect and vested in him retrospectively from the date of the sale. In other words, from 14th December 1957 when the court sale was effected to 30th April 1959, when it became absolute, the plaintiff had not acquired any indefeasible title but had acquired merely an equitable interest in the suit property. The provisions contained in Rules 89 to 91 of Order 21, C.P.C. show that the sale which took place in his favour on 14th December, 1957 was precarious as it was liable to be set aside on any of the grounds mentioned in these Rules. If the sale were set aside under any of these Rules, the plaintiff would not have obtained any title to the property. By making all these Provisions in Rules 89 to 92 in the scheme of Order 21, C.P.C. the Legislature has recognized the fundamental difference between voluntary sales entered into between the parties themselves and compulsory sales through the process of court. While in the former, the property vests immediately after the sale is effected, as nothing more remains to be done in the latter, since the sale is compulsory, something yet remains to be done to ascertain that no injustice is done to the Party which is compelled to sell the property it is thus evident that the vesting of property sold in court sale is delayed by the legislature with a purpose. This position is further emphasised by Rule 95 of Order 21, C.P.C. when read together with Art. 180 of the Limitation Act of 1908, which was in force at the relevant time. (It is corresponding to Art. 134 of the Limitation Act, 1963), According to this Article, the period of limitation for an application by a purchaser of immovable property by a sale in execution of a decree for delivery of Possession begins to run when the sale becomes absolute. Thus, Rule 95 of Order 21, C.P.C. when read with Art. 180 show that the auction Purchaser can apply for delivery of possession only after the sale becomes absolute.

11. It is thus obvious from the above discussed relevant Provisions of C, P. Code and Limitation Act that the title as well as the Possession as regards the property sold in execution of a decree is acquired by the auction purchaser only after the sale becomes absolute as per the provisions of Rule 92 of Order 21, C.P.C.

12. Shri Patel, who appeared on behalf of the defendants, however contended that though it is true that the auction purchaser acquires title only on the sale becoming absolute under Rule 92 of Order 21, C.P.C., once it becomes absolute, it relates back to the date of the sale by virtue of the deeming fiction of Section 65 and if that is so, the tenants occupying the property sold in court auction become the tenants of the auction purchaser with retrospective effect from the date of the sale and thus become liable to the payment of rent to the auction purchaser from that date, It was pointed out that in this case on 28th March, 1958 i.e. after the court sale but before the sale became absolute, the plaintiff had informed the defendants by notice that the property was sold to him in court auction and hence they were inducted in the suit property by the judgment-debtor mala fide. Pointing out to these facts, Shri Patel contended that since the defendants knew that the plaintiff had acquired an interest in the property by virtue of the court sale they should not have paid rent to the judgment-debtor subsequent to 18th March 1958 i.e. subsequent to the date of the above notice. According to Shri Patel, since the sale had not become absolute, the right course, which the defendants could have adopted, was either to deposit the rent in court or to file an inter- pleader suit. In this connection, Shri Patel also pointed out to the provisions contained in Section 50 of the Transfer of Property Act, which Protects a tenant, who has paid rent or profits of any immovable property in good faith to any person from whom he has held this property in good faith. According to Shri Patel, therefore, the defendants having acted in collusion with the judgment debtor cannot be said to be possessing any good faith and, therefore, cannot avail of the protection of Section 50 of the Transfer of Property Act.

13. In my opinion, the above contentions of Shri Patel are not acceptable because even though it is true that the deeming fiction contemplated by Section 65 of the C. P. Code acts in retrospection from the date of sale, the fact remains that before the sale became absolute, no such deeming fiction was available to the plaintiff in this case and if that is so, it cannot be said that the judgment-debtor from whom the defendants took the leased of the suit property was not entitled to receive rent from the defendant. The ownership over the suit property could never have remained in abeyance and if before the sale became absolute, the plaintiff had not acquired a perfect title over the suit property, it must follow that the ownership of the suit property continued to vest in the judgment-debtor till the sale became absolute. In other words, it was the judgment-debtor and the judgment-debtor alone, who could have received rent from the defendants with regard to the suit Property as their landlord. If that be the legal position, the defendants were bound to pay rent for the disputed period only to the judgment debtor. In fact, they have paid this rent to the judgment-debtor and if they have paid it in obedience to the legal position, it cannot be said that they have paid mala fide. This court has held in Dave Sadashiv Jaikrishna v. Rana Govubha, (1962) 3 Guj LR 1007 that it is only when the sale is confirmed by the court under the provisions of Order 21, Rule 92, C.P.C. that the judgment-debt is extinguished and until confirmation of the sale, the judgment-debt remains outstanding and subsisting. With respect, I agree with this view. One consequence of the judgment debt remaining outstanding till the date of the confirmation of the sale is that the judgment-debtor continues to remain as the owner of the property till the sale is confirmed. Of course, when the sale is knocked down in favour of the auction purchaser, the auction purchaser does get an interest in the property sold in auction. But that interest falls far short of a clear and absolute title and if that is so, it would not be correct to say that the defendants should not and could not have paid any rent for the disputed period to the judgment-debtor.

13-A. Shri Patel relied upon two decisions one of Lahore High Court and the other of Rangoon High Court in support of his contention that on sale becoming absolute the property vests in the auction purchaser with retrospective effect and, therefore, the payment of rents by the defendants to the judgment-debtor illegal. These two decisions are Abdul Ghani v. Lala Lal Chand AIR 1940 Lah 230 and Ma Hawa Bi v. Sein Kho, AIR 1928 Rang 67 (2). In my opinion, none of these two decisions is helpful to the plaintiff. In the Lahore case one Lalchand Khosla had taken one property called 'C' on mortgage and subsequently also obtained an arbitration award with regard to this property in his favour. This award was subsequently turned into a court decree. In the meanwhile one Abdul Ghani was alleged to have purchased this property by an oral sale. This Abdul Ghani also obtained an award decree in his favour. Thereafter Lalchand Khosla purchased the property in court sale in execution of the decree, which he had obtained. Then he instituted a suit for possession of that property against Abdul Ghani. The trial court decreed that suit in favour of Lalchand Khosla but rejected his prayer for mesne profits. He, therefore, approached Lahore High Court in appeal. Disposing of this appeal, the High Court is found to have observed as under:

'Turning now to the appeal of Lal Chand Khosla as regards mesne profits, the trial court held that as the sale certificate had only been granted in 1936 and as no notice had been given by Lal Chand Khosla to Abdul Ghani to vacate the property or be liable for mesne profits, therefore mesne profits could not be allowed to him. The Commentary of Mulla on the Civil Procedure Code under Section 65 shows clearly that this reasoning is not correct. The title to the property after the sale is made absolute vests in the auction-purchaser from the date of the sale according to the section and the learned Commentator points out that the old rulings to the effect that the right to possession only accrued from the date of the sale certificate are no longer good law. The learned counsel for the respondent could only contend that notice had not been given by Lal Chand Khosla to Abdul Ghani and this point should be taken into consideration. I have already pointed out that Lal Chand Khosla had applied for possession and was resisted by Abdul Ghani. Abdul Ghani therefore clearly had notice of the claim of Lal Chand Khosla to possession, and had resisted it. It was not necessary that a separate notice should be given that if he did not give up possession, he would be liable for mesne profits.'

These observations show that the question which is involved in the appeal before me was not involved in the case before the Lahore High Court and that the only question which that High Court has considered is whether Abdul Ghani had a notice to vacate the property or not. Moreover, there is absolutely nothing in the recorded judgment of the Lahore High Court to show that the mesne profits, which were in dispute, were relating to any period before sale became absolute. Under these circumstances, the above quoted observations of the High Court in that case do not help the plaintiff.

14. In the Rangoon decision also the question that was considered by the High Court was entirely different. There the contention which was urged before the High Court was whether the plaintiff bought only the lands in question and whether she was entitled to rent in view of Section 8 of the Transfer of Property Act. The legal effect of the provisions of Section 65 of C.P.C. read with Order 21, Rule 92, C.P.C. was not considered in that case. Under the circumstances, even this Rangoon decision is of no help to the plaintiff.

15. During the course of his argument Shri Patel referred to one decision given by the High Court of Bombay in Girdharlal Harilal v. Liladhar Amthalal, 33 Born LR 1123 : (AIR 1931 Born 539). In that case, the question was whether the lease which was created by the mortgagor on the suit property was affected by doctrine of lis pendens and whether Provisions contained in Section 52 of the Transfer of Property Act did not affect the rights of the plaintiff, who stood in the shoes of the second mortgagee it is obvious that this decision has no relevance to the facts of the present case.

16. I find that as early as the year 1933, the Privy Council has endorsed the view that the deeming retrospective clause of Section 65, C.P.C. does not come into operation till the sale becomes absolute and hence the auction purchaser can he said to have obtained an indefeasible title on the date of the sale. This view is taken by the Privy Council in Raghunandan Prasad Singh v. Commr. of Income-tax Bihar & Orissa .That was an income-tax case, which went up before their Lordships of the judicial committee. One of the questions for consideration in that case was whether the assessee who had purchased in an auction sale the property of his mortgagor in execution of his mortgage decree was liable to pay income-tax on the amount by which the value of the purchased property exceeded the original loan advanced to the mortgagor together with costs and other incidental expenses. The auction sale in that case was confirmed some years after the sale was knocked down. The assessee relied upon the provisions of Section 65, C.P.C. and contended that he must be deemed in law to have realised his loan and made a profit not in the year when the sale was confirmed but in the year in which the title became vested in him, namely, the year when the sale was held. But their Lordships of the Judicial Committee overruled this contention as is evident from the following observations taken from the judgment of their Lordships delivered by Lord Macmillan:

'Nor on the date of the sale does the purchaser obtain an indefeasible, right, for under Order 21, Rs. 89, 90 and 91 the 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 sale, whereupon 'the sale shall become absolute'. It is then that the process of realisation 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 immovable 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 realisation is not affected by this retrospective vesting of the property.'

It therefore follows that till the sale became absolute, the judgment-debtor continued to be the landlord and as such was entitled to collect rent from the defendants as his tenants. The payment of this rent to the judgment-debtor by the defendants, therefore, cannot be considered either wrongful or mala fide. A similar view is also taken by Madras and Allahabad High Courts in the cases to which I will now make a reference.

17. In the Madras case of Radhakrishna, Chettiar v. Ramaswami Ayyar ILR (1954) Mad 1213 Chief Justice Rajamannar and Mr. Justice Rajagopala Ayyangar observed that between the date of the court sale and its confirmation, the only person who was entitled to be in possession of the property sold and to enjoy or collect the rents and profits from it was the judgment-debtor, and that till confirmation the auction purchaser had only an inchoate right and could not have sustained a suit either for possession or for mesne profits. His right to sue for the profits of the entire period between the sale and its confirmation accrued to the plaintiff only on the confirmation of sale. The learned Judges have further observed that in view of this, the receipt of rent and profits during that period by the judgment-debtor could not be held wrongful. In another Madras case of Kondava Nayakar v. Ramaswami Naicka : AIR1938Mad317 , Beasley C. J. has construed the provisions of Section 65, C.P.C. and has held that the payment of rent by the lessee to the judgment-debtor was quite proper and that he was entitled to do so in spite of the fact that there was the fiction of relation back of the vesting.

18. A Single Judge of Allahabad High Court and a Full Bench of that High Court have also taken, the same view in Ram Krishna Kapoor v. Behari Lal Ram Saha : AIR1963All44 and Nidhpal Sharma v. Union of India : AIR1966All360 .

19. In view of this settled position in law the plaintiff's claim of compensation for the disputed period is found to have been rightly rejected by the lower courts. Both of these appeals of the plaintiff, therefore, should fail.

20. The defendants have filed cross-objections in both the appeals. The first cross-objection relates to rent for the months of June, July and August 1959, which the defendants are said to have paid as deposit to the judgment debtor. The defendants now claim that since this payment was valid, the same should be deducted from the amount decreed in favour of the plaintiff. The defendants are not entitled to raise this question in these appeals, because neither in their written statement nor at any stage during the trial, they have contended that this deduction should be given to them, There was no issue on this point, and, therefore, the plaintiff has got no opportunity to show how far this claim is acceptable.

21.The second cross-objection, which is raised by the defendants, is that they have paid some municipal tax, which was in arrears, and, therefore, the amount of this tax should be deducted from the amount, which is decreed. Even this claim of the defend-ants is not sustainable, because, there is nothing in evidence to show that the arrears of this tax were subsequent to the date on which the auction sale became, absolute. On the contrary the municipal receipt found at Exs. 102 and 110 show that the tax in arrears was prior to the year 1960-61. Under the circumstances, the lower court has rightly rejected this plea of the defendants. These cross-objections also, should, therefore, fail.

22. The result is that both these appeals filed by the plaintiff as well as the cross-objections filed by the defendants fail. They are, therefore, dismissed without any order as to costs. The decree passed by the trial court starts confirmed.

23. Appeals & Cross-objections dismissed


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