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A.L.V.R.S.T. Veerappa Chettiar and anr. Vs. Mohamed Mytheen Mana Pillai - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtChennai High Court
Decided On
Case NumberSecond Appeal No. 705 of 1959
Judge
Reported inAIR1963Mad33
ActsCode of Civil Procedure (CPC) , 1908 - Order 40, Rule 1
AppellantA.L.V.R.S.T. Veerappa Chettiar and anr.
RespondentMohamed Mytheen Mana Pillai
Appellant AdvocateK. Parasaran, Adv.
Respondent AdvocateT.R. Ramachandran, Adv.
DispositionAppeal allowed
Cases ReferredKanhaiyalal v. Dr. D. R. Banaji
Excerpt:
.....sale in favour of plaintiff effected without leave of district court which had appointed receiver void or voidable - as per order 40 rule 1 property in possession of receiver and therefore in custodia legis no process without leave of court which appointed receiver can be levied upon such property - but where court competent and has jurisdiction, sale effected in exercise of that jurisdiction not rendered void on account of want of leave of court which appointed receiver - held, sale of property in possession of receiver appointed by court by private treaty or by its owner in court sale without leave of court which appointed receiver only voidable. - - it is well settled that where property has gone into the possession of a receiver appointed by a court, its sale either by private..........for due payment of the amount covered by the decree in that suit, the security including the suit property. on february 1, 1108, the security was accepted by the additional district munsif, nagarcoil. on august 16, 1112, there was an attachment of the same property by the district court, nagarcoil in o. s. no. 64 of nog. in that suit, the district court appointed a receiver on 30-11-1113, who took possession of the property of the judgment-debtor in o. s. no. 658 of 1101, including those now in question.on 10-7-1114 the plaintiff purchased the suit property in execution of the decree in o. s. no. 658 of not. the sale was confirmed on 18-8-1114 and the sale certificate was issued on march 2, 1115. on 22-11-112i, apparently without knowledge of the earlier court auction sale, the.....
Judgment:

Veeraswami, J.

1. This is a plaintiff's second appeal against the reversing judgment of the Subordinate Judge of Nagarcoil, holding that his purchase of the suit property at a Court auction in execution of a money decree obtained in O. S. No. 658 of 1101 M. E. on the file of the Additional District Munsif, Nagarcoil, against one Pavankusam Anachaperu-mal, the original owner of the property, was invalid for want of sanction of the District Court, Nagarcoil, which had appointed a receiver in O. S. No. 64 of 1109 M. E. on its file. On 26th January 1108, the judgment-debtor in O. Section 658 of 1101 M. E. pending an appeal which he had filed, furnished security for due payment of the amount covered by the decree in that suit, the security including the suit property. On February 1, 1108, the security was accepted by the Additional District Munsif, Nagarcoil. On August 16, 1112, there was an attachment of the same property by the District Court, Nagarcoil in O. S. No. 64 of nog. In that suit, the District Court appointed a Receiver on 30-11-1113, who took possession of the property of the judgment-debtor in O. S. No. 658 of 1101, including those now in question.

On 10-7-1114 the plaintiff purchased the suit property in execution of the decree in O. S. No. 658 of not. The sale was confirmed on 18-8-1114 and the sale certificate was issued on March 2, 1115. On 22-11-112I, apparently without knowledge of the earlier Court auction sale, the Receiver appointed in O. S. No. 64 of 1109 sold the suit property to the first defendant, pursuant to orders of Court in seisin of conciliation proceedings. Though in the courts below there was a controversy as to whether the plaintiff had taken actual delivery of the suit property, in view of the concurrent findings, it is no longer disputed that he did not take possession. It does not also appear to be in dispute that the first defendant, since his purchase from the Receiver, has been in possession of the suit property. In such circumstances, the plaintiff, coming to know of the sale by the receiver to the first defendant, brought the suit out of which this second appeal arises for a declaration of his title to the suit property based on his Court auction purchase and for recovery of possession thereof with mesne profits. The first defendant resisted the suit mainly on the ground that the court auction sale in favour of the plaintiff was illegal and void and conveyed no title to the plaintiff in the suit property.

2. In the courts below, the question turned upon whether the execution sale in favour of the plaintiff, inasmuch as it was effected without leave of the District Court, Nagarcoil, which had appointed the receiver in O. S. No. 64 of 1109 M. E., was void or voidable. On that question, the courts below have taken conflicting views, the lower appellate court, as already indicated by us, holding that the sale was invalid for want of sanction. The lower appellate Court proceeded to say that, as the want of sanction has not been cured by the plaintiff getting sanction subsequently and before confirmation of the sale, the sale had become invalid, and the plaintiff could not recover the property on the strength of the invalid sale.

3. For the plaintiff, it is contended that the view of the lower appellate Court on the effect of the sale in his favour cannot be supported. It is well settled that where property has gone into the possession of a receiver appointed by a Court, its sale either by private treaty or by its owner or in invitum as in a court sale without the leave of the Court which appointed the Receiver, is only voidable. This is not because the person who is the owner or the Court which brings the property to sale has no right or jurisdiction, as the case may be, to effect such a sale. But the property being in the possession of the receiver and, therefore, in custodia legis, no process without the leave of the Court which appsinted the receiver can be levied upon such property. This aspect is not specifically mentioned by Rule 1 of Order 40 Civil Procedure Code but is part of the common law of receivers. It is only where there is a total lack of jurisdiction to bring the property to sale in execution through Court can it be said that the sale is void as one without jurisdiction. But, where the Court is otherwise competent, and, has jurisdiction, the sale effected in exercise of that jurisdiction is not rendered void on account of want of leave of the Court which appointed the receiver. This view of the effect of a Court auction sale without leave of the Court which appointed the receiver is also supported by authority.

4. Venkata Narasimha v. Venkatalingam : AIR1944Mad372 was a case of sale in execution of a mortgage decree but inasmuch as the sale was effected without the leave of the Court which appointed a receiver in possession of the properties sold, the validity of the sale was questioned. Mockett and Kunhiraman, JJ., did not accept the contention that such a sale would be void for want of sanction. They were of the view that the sale was only voidable, which meant that the sale would be good until set aside. The same view was followed in Venkatalingama v. Venkata Ranganayakulu, 1954-2 Mad LJ 86.

5. Our attention was invited to the decision in Kanhaiyalal v. Dr. D. R. Banaji, : [1959]1SCR333 , where, it appears, however, the point was not decided but expressly left open. But, in saying so, the Supreme Court observed,

'So far as the Indian Courts are concerned, It is settled law that a sale held without making attachment of the property, or without duly complying with the provisions of the law relating to attachment of property, is not void but only voidable. Rule 52 of Order 21 Civil Procedure Code, requires that where the property is in the custody of any Court or public officer, attachment shall be made by a notice to such Court or officer. But the absence of such a notice would not render the sale void ab initio because the jurisdiction of the Court or the authority ordering the sale, does not depend upon the issue of the notice of attachment.

It is also settled law tbat proceedings taken is respect of a property which is in the possession and management of a receiver appointed by Court under Order 40 Rule 1 Civil Procedure Code, without the leave of that Court, are illegal in the sense that the party proceeding against the property without the leave of the Court concerned, is liable to be committed for contempt of the Court, and that the proceedings so held, do not affect the interest in the hands of the Receiver who holds the property for the benefit of the party who> ultimately, may be adjudged by the Court to ba entitled to the same. The learned counsel for the respondent was not able to bring to our notice any ruling of any Court in India, holding that a sale held without notice to the receiver or without the leave of the Court appointing the receiver in respect of the property, is void ab initio.'

6. The Supreme Court proceeded to notice the American view that such a sale would be void, and considered that on the facts in that case it would assume for its purposes that such a sale was only voidable and not void ab initio. We are therefore unable to consider these observations of the Supreme Court as a decision that sale of the type in question would be void and not merely voidable. The two cases of this Court we have already referred to and the others which followed them have clearly held that such a sale is only voidable and we are in entire agreement, if we may say so with respect, with that view.

7. It would have been open to the first defendant in the instant case to have taken the appropriate plea with a view to avoid the sale. But it is surprising that he has not done so. Not even when he filed an appeal did he take a ground that he was entitled to avoid the sale for any particular reason. The only question which appears to have been presented to the appellate court as well as to the trial court was regarding the effect of the sale, whether it was void or viodable, and, therefore the lower appellate court had no opportunity to consider the circumstances in the light of which the sale could be avoided by the first defendant.

8. In the course of the arguments in this court, however, the learned counsel for the first defendant, apparently realising the true position, viz, that the sale in favour of the plaintiff was only voidable and not void, as we have held, contended that he is entitled to avoid the sale even at this late stage by offering to pay the plaintiff the entire price which he had paid for the purchase of the property at the court auction, with interest at six per cent thereon from the date of the sale certificate. We are inclined in the circumstances of this case, to accept this contention especially in view of the fact that the first defendant has on his purchase from the receiver on 22-11-1121 been in possession of the suit property and effected improvements valued at Rs. 1200. In fact, the trial court, while decreeing the suit, granted a decree for this amount in favour of the first defendant.

It is obvious from the facts that both the plaintiff and the first defendant were innocent purchasers without notice of the defects in one or the other sale. While we do not want to be understood to lay down a proposition that the mere fact of failure to obtain leave will in itelf be a ground for setting aside such a sale, we consider that the question of setting aside a sale will have to be decided on the particular facts and circumstances in each case. On that view we think that it will be reasonable and just from the standpoint of both the plaintiff and the first defendant to set aside the sale on condition that the first defendant pays to the plaintiff the sum of Rs. 600 with interest at six per cent per annum from 2-3-1115.

9. We are told that pending the second appeal this court has in C. M. P. No. 4400 of 1959 appointed a receiver by its order dated 30-9-1959, to take possession of the properties of the plaintiff. The receiver so appointed has therefore been brought on record in this second appeal as the second appellant. The amount payable to the plaintiff will therefore be paid by the first defendant to the receiver appointed by this court. We grant leave to the receiver to receive the amount from the first defendant in avoidance of the court sale in favour of the plaintiff. The first defendant will have eight weeks from now to deposit the amount with the receiver. In default of payment within the specified time, the judgment and decree of the trial court will stand restored.

10. In the result, the second appeal is allowed and the judgments and decrees of both thecourts below are set aside and there will be adecree in terms we have indicated. The partieswill bear their own costs throughout, but, thereceiver will be entitled to take his costs from theestate of the plaintiff.


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