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Umadai Raja Rajai Damara Kumara Thimma Nayanim Bahadur Varu Raja of Kalahasti Vs. Sri Raja Velugoti Sri Rajagopala Krishna Yachendra Bahadur Varu, K.C.i.E., Maharajah of Venkatagiri and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtChennai
Decided On
Reported in(1913)25MLJ198
AppellantUmadai Raja Rajai Damara Kumara Thimma Nayanim Bahadur Varu Raja of Kalahasti
RespondentSri Raja Velugoti Sri Rajagopala Krishna Yachendra Bahadur Varu, K.C.i.E., Maharajah of Venkatagiri
Cases ReferredMoore v. Peachy
Excerpt:
.....have proceeded on the footing that the description would embrace all that was mortgaged to the decree-holder; and it is in this view that we have to decide whether there was not a material irregularity which the judgment-debtor is entitled to complain of. in the view that this entire right has been sold by the court, the judgment-debtor's acquiescence in the statement of the peishcush must be clearly held to be due to a mistake of fact regarding what the court intended to sell. ramesam do not apply to a case where the judgment-debtor's failure to object to the proclamation was due to a mistake for which he could not be held to blame. ramesam contends that, as against his client who is the auction-purchaser, the judgment-debtor cannot rely on his failure to object to the proclamation..........in the application for sale proclamation to be settled by the court under order 21,, rule 66, the decree-holder stated the revenue payable on the village to be rs. 188-11-10, and estimated its market value at rs. 2,800. there seems to have been some objection raised to the draft of the sale proclamation, and the judgment-debtor was called upon to give his own estimate of the value of the village. he stated that the value was, es. 9285 calculated at 15 times the average annual gross income of rs. 619. it is not disputed that both the decree-holder and the judgment debtor were quite mistaken with respect to the value that each gave of the village. the cause of the mistake was clearly this : the decree-holder acted on the footing that what was to be sold in execution of the decree was the.....
Judgment:

1. This appeal is against an order of the District Court of North Arcot refusing to set aside the sale of a village Chintapalli held in the execution of a mortgage decree. The mortgagor Judgment-debtor is the Rajah of Kalhasti, and the mortgagee is the Maharajah of Venkatagiri. The purchaser at the Court sale is the Rajah of Tuni. Subsequent to the mortgage which was the subject of the decree, the mortgagor entered into a transaction of exchange with one Narasimha Rayanimgar by which Chintapalli was given to Narasimha in exchange for some other property. Under the terms of the instrument of exchange the mortgagor was entitled in addition to the village received by him in exchange to an annual sum of Rs. 507-2-9 . from the income of the Chintapalli yillage. This arrangement was apparently made in order to compensate the mortgagor for the difference in value between Chintapally and the village given by him in exchange for it. The suit and the decree on the mortgage were subsequent to the exchange, but the mortgagee was of course not bound by the exchange. Narasimha Raynimgar, to whom the equity of redemption had passed under the exchange transaction, was not a party to the suit on the mortgage. It may be mentioned in passing that there were several other items of property comprised in the mortgage and the decree passed thereon. In execution of the decree, the mortgagee realised the greater part of the money due to him by the sale of other properties; he then brought to sale Chintapally village for the recovery of the balance. In the application for sale proclamation to be settled by the Court under Order 21,, Rule 66, the decree-holder stated the revenue payable on the village to be Rs. 188-11-10, and estimated its market value at Rs. 2,800. There seems to have been some objection raised to the draft of the sale proclamation, and the Judgment-debtor was called upon to give his own estimate of the value of the village. He stated that the value was, Es. 9285 calculated at 15 times the average annual gross income of Rs. 619. It is not disputed that both the decree-holder and the Judgment debtor were quite mistaken with respect to the value that each gave of the village. The cause of the mistake was clearly this : the decree-holder acted on the footing that what was to be sold in execution of the decree was the mortgagor's right, title and interest as it existed at the time of the sale. This right, it would be observed, was only a rent charge of Rs. 507-2-9 a year in consequence of the transaction of exchange which took place subsequent to the mortgage. As a matter of fact the mortgagee was entitled to bring to sale the mortgagor's right in the village as it stood at the time of the mortgage. Whether the mortgagee was under the mistaken impression that he was entitled to sell only the mortgagor's equity of redemption as it then stood or whether an account of his having omitted to make Narasimha Rayanimgaru a party to the suit as he was bound to do under Section 85 of the Transfer of Property Act, he contented himself with bringing the equity of redemption to sale, is not quite clear. It is, however, certain that the Judgment debtor in giving his own valuation and in stating the annual income and revenue of the village also proceeded on the footing that the mortgagee intended to bring to sale only his rent charge over the village. He calculated the value at 15 times the gross annual income, he took the rent charge and the land cess which was also payable by Narasimha Rayanimgar to the mortgagor to be the annual income and the peishcush which appears to have been calculated at one-third of the rent charge, in accordance with the usual estimate made of the proportion borne by the peishcush to the actual income, was stated to be Rs. 188-11-10 the same figure as had been adopted by the decree-holder. The right of the defendent in the village to be brought to sale was described as ' defendant's ayan interest.' The expression ' ayan interest,' would apparently be consistent with the interest of the defendant as it stood at the time of the mortgage or at the time of the sale. What the words ' other interest' mean is not quite clear. Possibly they were put in to denote that all the right title and interest of the debtor was to be brought to sale; but this again is consistent with the intention that what was to be sold should be the right mortgaged by the Judgment-debtor to the plaintiff in the suit or the interest of the mortgagor as it stood at the time of the sale. The price fetched at the auction sale was Rs. 7950. The Judgment-debtor applied under Order 21, Rule 90, to set aside the sale.

2. The application proceeded on the basis that the sale proclamation would have the effect of passing to the purchaser the entire right of the mortgagor as it stood at the time of the mortgage to the plaintiff. The application was not opposed by the decree holder, but it was resisted by the purchaser, who maintained that what was sold to him was what was mortgaged to the plaintiff and not merely the rent charge which the Judgment-debtor had at the time of the sale. The District Judge has also proceeded on the view that the entire right in the village was sold by it and passed to the purchaser. The arguments in appeal have also proceeded on the same footing. It will be observed that in this view the auction-purchaser would not have a safe title, as Narasimha Rpyanimgaru, who had a substantial interest in the village at the time of the suit, was not made a party to it, but the purchaser is apparently prepared to take the title to the village with this defect. It is not disputed that the price fetched at the auction sale must be regarded as very much less than the real value of the village. In his petition, the Judgment-debtor stated that the annual gross income of the village was about Rs. 4,000 and that the value will be about Rs. 60,008. His clerk, the first witness at the enquiry held by the Judge, said that the annual beriz of the village was Rs. 2,000. The 2nd witness another clerk, stated that Narasimha Rayanimgaru had after the exchange spent about Rs. 4,000 in improving the village. The karnam of the village the third witness gives Rs. 8,400 as the average annual income. The figures given by these witnesses are disputed by the auction-purchaser, and he relies upon a statement made by the Judgment-debtor at an earlier stage of the proceedings that the annual income was not less than Rs. 1,200. The value of the village would then be about Rs. 1.8,000 taking the gross income for 15 years to represent the market value. It is at any rate clear that the price fetched at the sale was much less than the market value of the village. The petitioner requested the lower court for an adjournment to examine two witnesses who did not attend at the hearing; but the District Judge refused the adjournment; as in the view he took of the case there was no defect or irregularity in the publication and conduct of the sale, and it would be useless for the petitioner to prove that sale was made for a grossly insufficient price.

3. The learned vakil for the purchaser does not seriously contend before us that Rs. 7,950 would be an adequate price for the village, his argument being that the sale cannot be set aside as there was no irregularity in publishing and conducting it. The District Judge's order refusing to set aside the sale is based on the ground that the Judgment-debtor is estopped from objecting to the statements contained in the sale proclamation regarding the peishcush and the value of the village and from seeking to set aside the sale on the ground of the incorrectness of these statements. Mr. Ramesam on behalf of the purchaser maintains that this view is correct. Order 21, Rule 66 lays down that 'the proclamation of sale should specify as fairly and accurately as possible.

(b) the revenue assessed upon the estate.

(c) every other thing which ' the courts consider material for a purchaser to know in order to judge the nature and value of the property.' It is not incumbent upon the court to state the value of the property in the sale proclamation. It is not denied that a materially incorrect statement of the revenue or of the value of the property where the value is stated would constitute an irregularity which if it caused substantial injury to the debtor, would entitle him to have the sale set aside.

4. Now, in India an execution sale is an act of the court. The title of the purchaser is derived from the court's act. The court has according to Rule 66, to give notice to the decree-holder and the judgment debtor before a proclamation to sell is drawn up. The decree-holder is bound to put in a verified statement of the matters required to be stated in the sale proclamation. The Court is entitled to summon any person whom it thinks necessary and to examine him in respect to any of those matters in order to ascertain correctly the particulars stated in the proclamation. Although the settlement and publication of the proclamation are acts done by the Court, it is of course largely dependent upon information given by the parties With respect to the particulars to be given in the proclamation. It has, therefore, been held by the Privy Council and by the courts in India that a party who does not raise an objection to the proclamation which he ought to have raised and thereby fails in the duty which he owes to the court should he held to be estopped from complaining of an irregularity resulting from an erroneous statement which he should have corrected. Mr. Ramesam contends that this rule of estoppel must be applied to this case and relies on Girdhari Singh v. Hurdeo Narain Singh . Olpherts v. Mahabir Pershad Singh and Arunachallam v. Arunachellam I.L.R. (1888) M. 19 and Behari Singh v. MukatSingh I.L.R. (1905) M. 273. The question for decision is whether the rule is applicable against a Judgment-debtor in the circumstances of the case. It has to be remembered that the mistake in the proclamation was in the first instance due to the action of the decree-holder, who calculated the peishcush on the value of the rent charge possessed by the Judgment debtor at the time of the sale. Now, there was nothing to prevent the decree-holder from bringing to sale only the Judgment-debtor's equity of redemption us it stood at the time of the sale. Whether he voluntarily intended to get only the Judgment debtor's rent-charge sold, or whether he was under the impression that was what he was entitled to bring to sale, it cannot be said that the Judgment-debtor was bound to assume that his right in the village at the time of the mortgage was to be brought to sale in the face of what was indicated by the decree-holder's statement of the peishcush. If the description of the Judgment-debtor's interest had been more definite and showed more clearly that the rent-charge alone was intended to be sold, no possible trouble could have arisen. The amount realised by the sale was sufficient to discharge the balance due to the decree-holder on his mortgage. The sale would not then be impeachable on the ground that Narasimha Rayanimgaru was not made a party to the suit. It is the inconsistency between the description of the property to be sold (as it is assumed to be' by all the parties concerned in these proceedings) and the statement of the peishcush and the value of what was to be sold that has caused detriment to the judgment-, debtor. The description of the judgment-debtor's right was certainly not such as to show clearly that what was to be brought to sale was riot the rent charge only. In the circumstances, it is hardly reasonable to charge the judgment-debtor with any neglect or failure of duty in proceeding on the footing that what was to be sold was only his rent charge. It is by no means clear that he could not successfully insist that the purchaser has acquired only the rent-charge by the sale. But both he and other parties concerned as well as the lower court have proceeded on the footing that the description would embrace all that was mortgaged to the decree-holder; and it is in this view that we have to decide whether there was not a material irregularity which the judgment-debtor is entitled to complain of. We are not prepared to hold that the judgment-debtor's act in not objecting to the statement of the peishcush and in stating the value on the footing of the peishcush being correctly stated should be held to estop him from complaining that the statement as applied to his entire right in the village at the time of the mortgage is incorrect and constitutes a substantial irregularity which would vitiate the sale. In the view that this entire right has been sold by the court, the judgment-debtor's acquiescence in the statement of the peishcush must be clearly held to be due to a mistake of fact regarding what the Court intended to sell. He was certainly not aware that anything more than the rent charge was to be sold. It cannot be held that he was bound to be aware that the court was going to sell anything more than the rent charge. The decisions relied on by Mr. Ramesam do not apply to a case where the judgment-debtor's failure to object to the proclamation was due to a mistake for which he could not be held to blame. If the decree-holder voluntarily chose to sell only the rent charge, though aware that he could sell more then the Judgment-debtor was not bound to object to his doing so. If on the other hand, the decree-holder was under the impression that he could not sell more than the rent charge even then the judgment-debtor was probably under the same mistake; at any rate, he was not bound to object to the decree-holder's selling less than what he might be entitled to bring to sale. The Court will not apply the rule of estoppel to cases where the Judgment-debtor was not aware of the facts to which he was bound to object. See Dhanukdhari Singh v. Nathuni Sahu (1907) 6 C.L.J. 62 . Basanta Kumari Guha v. Ramkanai Sen Poddar (1910) 13. C. L. J. 192 and Kabidanund Thakur v. Pirthi Chand Lal (1911) 14 C.L.J. 346. In this case the judgment-debtor was not aware that all his right in the Chintapally village as it stood at the time it was mortgaged was intended to be sold; and we are not in a position to say that he ought to have been aware that such was the case. To such a case the doctrine of estoppel will not apply. Where an act of a court is induced by the mistake of parties, it may be set aside. Hudders field Banking Company, Limited v. Henry Lister and Son Limited (1895) 2 Ch. 273. Moore v. Peachy the Charging Cross Bank, Garnishee (1897) 66 L.J. 198 and Freeman on Execution; Vol. II, 1802. The irregularity is the mistake in the proclamation made by the court. That mistake was no doubt induced in part by the judgment debtors omission to object to the statement of the peishcush and to his proceeding to state the value in accordance with that statement; but his omission was due to a mistake for which he cannot be held responsible, as already pointed out. Mr. Ramesam contends that, as against his client who is the auction-purchaser, the judgment-debtor cannot rely on his failure to object to the proclamation being due to the act of the decree holder; but a purchaser at a court auction has no absolute right to have the sale confirmed where there is an irregularity in the publication or the conduct of the sale, although he could in no manner be responsible for the irregularity. The sale being the act of the court, the auction-purchaser has no absolute right to its being confirmed where there are irregularities in the court's auction. There is a considerable difference between an auction-purchaser's rights before and after the confirmation of the sale. Where there has been substantial irregularity in publishing or conducting a sale and material injury has been suffered by the judgment-debtor in consequence, the auction-purchaser has no right to the confirmation. We must, therefore, reverse the order of the Lower Court and set aside the sale. The case is not one in which we would make any order as ho costs either in this or in the lower court. The purchase-money should be refunded to the auction-purchaser.


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