Skip to content


Mundlapati Jagannadha Rao and ors. Vs. Rachapudi Basavayya - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported inAIR1927Mad835; (1927)53MLJ255
AppellantMundlapati Jagannadha Rao and ors.
RespondentRachapudi Basavayya
Cases ReferredBhagwati v. Banwari Lal
Excerpt:
.....sale aside and therefore there can be no application of article 166. it is further said that the decree-holder cannot be said to be satisfied till possession is delivered, that it has not been decided as to when a decree-holder who is also an auction purchaser is satisfied, and further that either article 181 or 182 of the limitation act applies because the right must accrue from the time when the application to remove obstruction was made in 1924. the present petition dated 3rd september 1924 asks that the court shall issue sale notices in respect of certain items which remained unsold and for an order permitting the decree-holder to bid. 829 referred to and disapproved by the learned judges the court held that where a third person and a stranger has brought a suit to set aside the..........by a stranger. his petition to remove obstruction and get delivery was dismissed. thereupon the decree-holder filed the petition appealed from to set aside the satisfaction that had been entered up, as the judgment-debtor had no saleable interest in some of the properties sold and the petitioner had consequently failed to get possession. the subordinate judge relying on certain authorities held that the petition lay and allowed further execution to the extent of the sale price of the item in respect of which the decree-holder's petition to remove obstruction was disallowed. hence the appeal.2. this case has been elaborately argued and it may no doubt be dealt with in more than one aspect, but fortunately there is one recent authority which, if accepted, in my opinion, answers the.....
Judgment:

Odgers, J.

1. This is an appeal from the order of the Subordinate Judge of Bezwada under the following circumstances. The petitioner decree-holder obtained a mortgage decree. In execution he brought to sale some only of the mortgaged items and bought them in Court auction, and as the price fetched was enough to satisfy the decree, satisfaction was recorded. After the sales were confirmed, when the petitioner went to take possession of the properties he had bought, he was resisted by a stranger. His petition to remove obstruction and get delivery was dismissed. Thereupon the decree-holder filed the petition appealed from to set aside the satisfaction that had been entered up, as the judgment-debtor had no saleable interest in some of the properties sold and the petitioner had consequently failed to get possession. The Subordinate Judge relying on certain authorities held that the petition lay and allowed further execution to the extent of the sale price of the item in respect of which the decree-holder's petition to remove obstruction was disallowed. Hence the appeal.

2. This case has been elaborately argued and it may no doubt be dealt with in more than one aspect, but fortunately there is one recent authority which, if accepted, in my opinion, answers the question propounded. It will be noticed in the present case that the remedies ordinarily open to a person in the position of the decree-holder here are contained in Order 21, Rules 91, 92 and 93, particularly 91, which enacts that the purchaser at any such sale in execution of a decree may apply to the Court to set aside the sale, on the ground that the judgment-debtor had no saleable interest in the property sold. The period of limitation for this under Article 166 of the Limitation Act is 30 days. It is not disputed that no action has been taken under the rule. The question is whether to have the sale set aside is the only remedy of the decree-holder and he being now too late his petition must be dismissed. It is said that there is here no petition to set the sale aside and therefore there can be no application of Article 166. It is further said that the decree-holder cannot be said to be satisfied till possession is delivered, that it has not been decided as to when a decree-holder who is also an auction purchaser is satisfied, and further that either Article 181 or 182 of the Limitation Act applies because the right must accrue from the time when the application to remove obstruction was made in 1924. The present petition dated 3rd September 1924 asks that the Court shall issue sale notices in respect of certain items which remained unsold and for an order permitting the decree-holder to bid. There is no mention of the previous sale and it is true there is no prayer to set aside the previous sale in respect of the items possession of which was obstructed. If, however, the procedure under Rule 91 is the only course open to the petitioner, it is obvious that the present method of attempting to circumvent this provision must be discouraged. Muthukumarasamia Pillai v. Muthusami Thevan (1926) 52 MLJ 148 is a decision of Wallace and Madhavan Nair, JJ., and it is a case, to my mind, exactly on all fours with the present. In the present appeal it was attempted to be argued that the Court sale of the property Which turns out not to belong to the judgment-debtor is void ab initio and therefore does not need setting aside. Wallace and Madhavan Nair, jj., held that such a sale is not void but only voidable. They say:

If the contention of the appellant were accepted, it would mean that a Court in selling property in execution gives a guarantee that the property sold is the property of the judgment-debtor which is opposed to one of the fundamental principles of Court sale.

3. In Radha Kishun Lal v. Kashi Lal ILR (1923) Pat. 829 referred to and disapproved by the learned Judges the Court held that where a third person and a stranger has brought a suit to set aside the execution sale and obtained a decree, no formal setting aside of the sale as between the decree-holder and the judgment-debtor is necessary and further that Order 21 is not exhaustive of the procedure for setting aside an execution sale. The learned Judges refused to accept the Patna proposition that a decree-holder who purchases at a Court sale is in a more favourable position than a stranger auction purchaser and continue:

In fact, it is one of the decree-holder's duties to see that the property sold was the property of his judgment-debtor, and if he makes a mistake he must take the consequence.

4. Further in support of this Balvant Raghunath v. Bala ILR (1922) B 833 held that where a Court auction-purchaser does not succeed in getting possession he must get the sale set aside on the ground that the judgment-debtor had no saleable interest in the property sold before he is entitled to an order for the re-payment of his purchase money and further that the limitation for the former of these steps is 30 days. In Bihari Lal Misr v. Jagarnath Prasad ILR (1906) A 651 the sale had already been declared to be a nullity. It was a question of limitation. In Abinash Chandra Kar v. Bhuban Chandra Maiti (1921) 25 CWN 756 a mortgagee purchasing under his decree was held not to be in any better or worse position than any other purchaser. It seems therefore to me that the refusal of the learned Judges in Muthukumarasamia Pillai v. Muthusami Thevan (1926) 52 MLJ 148 to accept the authority of Radha Kishun Lal v. Kashi Lal ILR (1923) Pat. 829 was well founded. The learned Judges in Muthukumarasamia Pillai v. Muthusami Thevan (1926) 52 MLJ 148 also say that before the appellant can again apply to execute the decree which has been recorded as satisfied by the previous Court sale he must have the Court sale set aside. They also dealt with the contention that because the main relief sought is further execution the decree-holder is entitled to a larger period of limitation. There it seems the appellant actually put forward the analogy of a suit for possession by a person who cannot get possession unless he sets aside adoption. They hold that the appellant could not get round the limitation of 30 days merely by putting in a fresh execution application, no mention being made of the previous Court sale. The Subordinate judge relied on Bihari Lal Misr v. Jagarnath Prasad ILR (1906) A 651 which is, as before stated, a case of limitation and it was a case of a sale of two villages being held to be a nullity and the decree-holder made an application to revive the previous application. It was held his right accrued when the sale was declared to be a nullity. It was a decision under the old Code, and there is, of course, no such declaration here. Another case relied on by the Subordinate Court was a decision Keramat Ali v. Nagendra Kishore Ray (1916) 21 CWN 571 of the Calcutta High Court, but the learned Subordinate Judge seems-to have failed to note that the decree there was set aside. There again it was a case of limitation. The other case is the case of Radha Kishun Lal v. Kashi Lal ILR (1923) Pat. 829 which was commented on and disposed of in Muthukumarasamia Pillai v. Muthusami Thevan (1926) 52 MLJ 148.

5. The second point is about delivery of possession. Nothing is said in the relevant rules of the Code about it, and it seems to me that when a decree-holder has himself certified satisfaction to the Court he must be taken to have done so with all risks. We were referred to a case Mathonkandi Kannan v. Thayyil Pakkutti Avvulla Haji (1926) 52 MLJ 1, a decision of Devadoss and Sundaram Chetty, JJ. Really what the learned Judges had to decide was whether an application for delivery of property by a decree-holder purchaser is a step-in-aid of execution within Article 182, Clause (5). They held that execution was not complete till the decree-holder obtains possession of the property purchased by him in execution of the decree. The learned Judges after elaborately examining the law on the point came to the conclusion that the decision in Lakshmanan Chettiar v. Kannammal ILR (1900) M 185 was sound. They further add:

The contention that the moment he, i.e., the decree-holder, buys the property of the judgment-debtor he ceases to be a decree-holder and assumes the capacity of a stranger purchaser is not supported by any authority.

6. I do not take this case to decide that the decree-holder who has been unable to obtain possession can proceed without more to execute the decree anew. The other cases cited for this proposition are to the same effect, namely, Sariatoolla Molla v. Raj Kumar Roy ILR (1900) C 709, Lakshmanan Chettiar v. Kannammal ILR (1900) M 185, Babu Ram v. Piari Lal ILR (1919) A 479 and Rajagopala Aiyar v. Ramanujachariar ILR (1923) M 288 : 46 MLJ 104. In the last of these cases the sale was a nullity on the ground that no notice had been served but in respect of that there was an application to set it aside under Section 47, and it was held it was governed by Article 181 and not Article 166. In Bhagwati v. Banwari Lal ILR (1908) A 82 three out of five learned Judges of the Full Bench held that where an auction purchaser fails to obtain possession of the property purchased, he may claim possession by application under the Code or by suit. (This was under the old Code.) The case is only useful for the observation of Banerji, J.:

That all auction purchasers, whether they are decree-holders or not, and whether they are purchasers under a mortgage decree or under a simple decree for money, are in the same position as regards recovery of possession of the property purchased by them and that it is only in their capacity as auction purchasers that they can obtain possession.

7. On the best consideration I can give to this case and the two questions that have been agitated before us, I can see no reason to hold that the decision in Muthukumarasamia Pillai v. Muthusami Thevan (1926) 52 MLJ 148 is wrong or needs consideration. It seems to me that the decision covers the whole of this case, and all the arguments that have been advanced here have been examined in that case. I therefore think the learned Subordinate Judge was wrong and that the appeal must be allowed with costs.

Curgenven, J.

8. This appeal is against an order of the Subordinate Judge of Bezwada allowing further execution of the decree in O.S. No. 33 of 1912 on his file. It was a mortgage decree, and some of the properties had already been sold under it, and bought by the decree-holder. Of these, he obtained delivery of all but four items, with regard to which he was obstructed, and a petition to remove the obstruction was dismissed on the ground that these items were not the property of the judgment-debtor. Therefore he filed the application to which the order now under relates, for the sale of other items included in the decree. The contention of the judgment-debtor, now the appellant, is that further execution cannot be taken, because the sale was confirmed and satisfaction of the decree entered, so that there is now nothing more to execute.

9. Under Rule 91 of Order 21, Civil Procedure Code, a purchaser at an execution sale, whether he be the decree-holder or another, may apply to the Court to set aside the sale on the ground that the judgment-debtor had no saleable interest in the property sold. Article 166 of the First Schedule of the Limitation Act allows him 30 days from the date of the sale within which to do this. If he does not present such an application, on the expiry of the 30 days, the Court, under Rule 92 of the same order

shall make an order confirming the sale, and thereupon the sale shall become absolute.

10. The terms of this rule were complied with in the present case. If the auction purchaser is other than the decree-holder, the sale price which the former has deposited is paid over to the latter; where the decree-holder and auction-purchaser are one, no payment, of course, has to be made; but in other cases where the sale has resulted in the satisfaction of the decree, entry is made accordingly. Here the decree-holder, having failed to apply under Rule 91, is now unable to get the sale set aside. The question which then arises for decision is whether, without having done so, he is at liberty, in the circumstances, to proceed with the execution of his decree.

11. This question has recently been considered by a Bench of this Court (Wallace and Madhavan Nair, JJ.) reported as Muthukumarasamia Pillai v. Muthusami Thevan (1926) 52 MLJ 148 and has been answered in the negative. An attempt has been made to distinguish that case on the ground that the decree-holder there applied not only for further execution but also to have the sale and record of satisfaction set aside, whereas here we have to deal only with an application for execution. But it is evident from what the learned Judges say that they considered whether execution could proceed notwithstanding no order setting aside the sale had been passed, and this is precisely the question which we have now before us. Thus there is no substance in the attempted distinction, and we have to decide whether we are to follow or differ from this decision It will be convenient to consider how far the grounds upon which it is based have been successfully attacked before us.

12. The learned Judges deal first with, and reject, the contention that an execution sale of property not belonging to the judgment-debtor is void and without jurisdiction, so that it is not necessary to get it set aside before proceeding further with execution. Of the cases cited to us in support of this proposition one is Bihari Lal Misr v. Jagarnath Prasad ILR (1906) A 651, which is among those relied upon by the learned Subordinate Judge. Two villages were sold under a mortgage decree, and were purchased by the decree-holder. The amount for which he purchased them was sufficient to discharge the decree. The sale was confirmed and satisfaction entered. Subsequently in a suit filed by the purchaser of the judgment-debtor''-interest before the Court sale, the High Court declared the latter sale void and set it aside. It was held that the decree-holder was entitled to proceed against the remainder of the mortgaged property as the sale which took place in regard to two items of property has been declared to be a nullity. It is added that no question relating to the applicability of Section 315 of the Civil Procedure Code (now Order 21, Rule 93) arises. Now with regard to the former of these grounds, it is true that the sale had been declared to be a nullity, but the declaration was made at the instance of the real owner of the property, and it does not appear to me necessarily to follow that it would be available to a decree-holder who had failed to take advantage of the provisions of the Code to get the sale set aside. The real owner was no party to the execution proceedings, and nothing that was therein done or left undone would bind him. But unless we are to hold that no finality attaches to the Court's order making the sale absolute, and that a decree-holder, auction-purchaser who, by Sub-rule (3) of Rule 92, is precluded from bringing a suit, may ignore it upon discovering that his judgment-debtor had no saleable interest, it is difficult to see why he should not be bound by the confirmation of the sale, whatever infirmity may subsequently appear in his title. The Code expressly lays upon him the necessity, or at least provides him with an opportunity to get the sale set aside where the judgment-debtor has no saleable interest, and the reasonable inference is that, if he does not do so, he must abide by the consequences. He cannot be heard to say, after it has been made absolute, that it is a nullity. To hold otherwise would, as the learned Judges point out in Muthukumarasamia Pillai v. Mutkusami Thevan (1926) 52 MLJ 148, imply that every Court sale is accompanied by a warranty of title. To put it another way, what is sold is the right, title and interest of the judgment-debtor, and even if this should turn out to be valueless, the sale is no less a sale for that reason.

13. Of the two other cases relied upon by the learned Subordinate Judge, he must have overlooked the circumstance that in Keramat Ali v. Nagendra Kishore Ray (1916) 21 CWN 571 the decree itself was set aside, so that all proceedings subsequent to it were vacated. The case is thus no authority for the proposition in support of which it was invoked. In the remaining case Radha Kishun Lal v. Kashi Lal (1923) ILR 2 Pat. 829, it was indeed held that the effect of a decree obtained by a third-party claimant against the decree-holder (who had purchased the property) and the judgment-debtor was to set aside the sale, and that no formal order to that effect was required. This view has been criticised in Muthukumarasamia Pillai v. Muthusami Thevan (1926) 52 MLJ 148 and I am in general agreement with what has been there said about it. I have suggested above the objections which I feel to allowing a decree-holder or, more properly, an auction-purchaser to call in question the effect of a sale which has already been made absolute.

14. The respondent has endeavoured to advance his argument by the citation of cases which support the view that although a sale has been confirmed, the decree is not satisfied until the decree-holder, where he is himself the auction purchaser, has obtained delivery of the property purchased. Authority for this position is to be found in Moti Lal v. Makund Singh ILR (1897) A 477, Sariatoolla Molla v. Raj Kumar Roy ILR (1900) C 709, Lakshmanan Chettiar v. Kannammal (1900) LR 24 m 185, Babu Ram v. Piari Lal ILR (1919) A 479 and Mathonkandi Kannan v. Thayyil Pakkutti Avvulla Haji (1926) 52 MLJ 1. The question which arose in these cases was whether an application for delivery under Order 21, Rule 95 is a step-in-aid of execution. In the case last cited Devadoss and Sundaram 'Chetty, JJ., have summarised the effect of the case-law originating in this Court, and have come to the conclusion that the balance of authority is in favour of the proposition. But although such an application for delivery may be defeated by the resistance of a third party, that does not imply, having regard to the provisions of the Code, that the decree-holder can proceed to execute his decree anew. The learned Judges in the case last referred to meet the objection that the decision at which they arrived involved a confusion of decree-holder with auction-purchaser by saying 'The contention that the moment he (the decree-holder) buys the property of the judgment-debtor he ceases to be the decree-holder and assumes the capacity of a stranger purchaser is not supported by any authority. When the law prescribes a certain course to be pursued by the decree-holder even when he becomes the purchaser of the property, it is not open to rely upon the expression in Article 138 of the Limitation Act, and to hold that his capacity as decree-holder ceases the moment he becomes the purchaser in. Court sale.'

15. If I may respectfully comment upon these observations in so far as they are fairly applicable to the present circumstances, the course which the law prescribes is set out in Rule 94 of Order 21, and it is prescribed not to the decree-holder but to the auction-purchaser.

16. Qua decree-holder the rule does not affect him. In the words of Banerji, J., in Bhagwati v. Banwari Lal ILR (1908) A 82 'the decree-holder as such is not entitled to possession as the decree does not award possession. It is only in his capacity as auction-purchaser that he can apply for and obtain possession. In this respect his position is no better and no worse than that of any other purchaser.'

17. It appears to me that there is much to be said for this view. Our attention has not been drawn to any provisions of the Code which distinguish a decree-holder auction purchaser from a stranger auction purchaser in respect of his rights as auction purchaser. I infer from this circumstance that no such distinction is intended. Suppose immoveable property is sold in satisfaction of a money or of a mortgage decree and the purchaser as here does not apply within 30 days to have the sale set aside. If he is other than the decree-holder, he deposits the money, if he is the decree-holder it is unnecessary for him to do so, the one sum being set off against the other under Order 21, Rule 12(2), C. P. C. In either case the sale is confirmed, and satisfaction of the decree is entered. As soon as such entry is made, the decree-holder as decree-holder is settled with, and if any further difficulty arises he has to meet it under the provisions relating to auction-purchasers. Upon this view it is impossible to hold that any further opportunity to take out execution remains, for so to hold would mean that it was the auction purchaser and not the decree-holder to whom such a step was open. It is purely business of the purchaser to obtain his sale certificate under Rule 94 and to apply for delivery under Rule 95 or 96. If he is resisted the succeeding rules provide him with a remedy in the shape of an inquiry into and adjudication by the Court upon the title of the person resisting and if he is dissatisfied with the result, the purchaser may institute a suit under Order 21, Rule 103, Civil Procedure Code.

18. Although this principle in some of its implications may not have been invariably followed to its logical extremity, it may, I think, be adopted at least so far as to negative the somewhat startling proposition under consideration that a decree-holder who has in effect received payment and whose decree has been recorded as satisfied may, upon a defect in the judgment-debtor's title appearing, re-open his decree and proceed to obtain further satisfaction of it. So adopting it, I see no reason to dissent from the decision in Muthukumarasamia Pillai v. 'Muthusami Thevan (1926) 52 MLJ 148 and I would accordingly allow the Civil Miscellaneous Appeal and dismiss the application with costs throughout.


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