(1) The third respondent, auction purchaser, in E. A. 1125 of 1961 in E. P. 1355 of 1959 in O. S. 660 of 1958 is the appellant herein. E. A. 1125 of 1961 was filed by the first defendant in O. S. 660 of 1958 under S. 47 C.P.C. for setting aside the sale held on 21-6-1961, as it was illegal and void and liable to be set aside.
(2) O. S. 660 of 1958 was instituted for recovery of the amount due under a mortgage executed by the first defendant, the first respondent herein. The State of Madras was impleaded as the second defendant on the ground that it claimed some interest in the hypotheca by reason of a loan said to have been advanced to the first defendant. The trial court negatived the claim of the State of Madras and passed a preliminary decree for sale on 22-6-1959 in favour of the plaintiff. Against that decree the State preferred an appeal, A. S. 504 of 1959, which was allowed on 25-8-1960 and the encumbrance in favour of the State was upheld. Pending appeal, the decree holder plaintiff filed E. P. 1355 of 1959 for bringing the hypotheca to sale on 11-11-1959. When that petition came on for hearing on 17-3-1960, an endorsement was made by the decree-holder's advocate to the following effect.
'The property may be brought to sale subject to the Government's encumbrance over the property. This is without prejudice to the contentions in the appeal by the Government'.
The petition was then posted to 26-3-1960 for settlement of proclamation. Proclamation was issued for sale of the property on 29-6-1960 subject to the security mortgage for Rs. 1600 in favour of the second defendant without prejudice to the decreeholder's contention in the appeal. There was no bid at the sale held in pursuance of this proclamation and therefore the decreeholder filed applications for reducing the upset price. It is not disputed that the judgment debtor was served with notices of these applications. The upset price was reduced to Rs. 4500, then to Rs. 3500 and ultimately to Rs. 2550. The property as ultimately sold and purchased by the third respondent appellant on 21-6-1961 for Rs. 2555. As already stated, E. A. 1125 of 1961 was filed on 18-7-1961 for setting aside the said sale.
(3) The trial court held that the judgment debtor ought to have filed an application under O. 21 R. 90 C.P.C. and that a petition under S. 47, C.P.C. does not lie. It also held that the judgment debtor has failed to prove that the sale was fraudulent or collusive or that it was vitiated by any irregularity or illegality, and dismissed the petition. On appeal the learned District Judge held that the application under S. 47 C.P.C. was maintainable and that the sale by the executing court of the hypotheca subject to an encumbrance in favour of the State of Madras, is not in accordance with the decree and as such the sale is liable to be set aside. He also held that as the execution was of the decree of the trial court, subsequent to the passing of the decree by the appellate court, without the necessary modification, it cannot be sustained. He further held that as the execution of the decree was beyond the powers of the executing court, no question of res judicata would arise. In the result, the appeal was allowed and the sale was set aside. Hence this appeal by the auction purchaser.
(4) In this appeal Mr. Sharfuddin, learned counsel for the appellant, did not contend that an application under S. 47 C.P.C. does not lie. He however contended that the judgment debtor had ample notice of the proceedings which resulted in the sale of the property subject to the encumbrance in favour of the second defendant and as she did not raise the objection that the executing court had no jurisdiction to execute the decree as the decree that was executed was that of the trial court after the passing of the decree in appeal modifying the trial court's decree, she is barred by constructive res judicata from raising these questions.
(5) It is found from the records that the preliminary decree in O. S. 660 of 1958 was passed on 22-6-1959 directing the defendants to pay into court sum of Rs. 1272-8-0 before a particular date and in default directing the hypotheca to be sold. Clause (6) in that decree states-
'The second defendant be and is hereby declared not to be entitled to any prior charge over the property'.
It was this decree that was put in execution in E. P. 1355 of 1959. The appeal, as already stated, preferred by the State was allowed on 25-8-1960. Pending that appeal an endorsement was made in the execution petition on 17-3-1960 that the property may be sold subject to the encumbrance in favour of the second defendant and the executing court also directed the sale of the property subject to that encumbrance. According to the appellate decree the priority claimed by the second defendant was upheld. But even though the decree of the trial court was modified in appeal, the decree-holder did not intimate to the executing court about the modification of the decree. It is also seen from the records that the judgment debtor was not put on notice regarding the endorsement made by the decree-holder's advocate in the execution petition on 17-3-1960. It does not also appeal that the judgment debtor was aware of the order of sale subject to the encumbrance in favour of the second defendant. But it is not disputed that she was aware of the proclamation of sale of the property and of the subsequent proceedings which resulted in the reduction of the upset price.
(6) On the facts stated above two questions arise for consideration. Firstly, the decree that was sought to be executed was different from the decree that was passed. The decree as it stood did not provide for the sale of the hypotheca subject to the encumbrance in favour of the second e. But the sale ordered for 29-6-1960 directed the sale of the hypotheca subject to the encumbrance in favour of the second defendant. There is nothing to indicate that the judgment debtor had notice of this direction in the sale. When the sale was ordered on 29-6-1960, the appeal by the State had not been disposed of and there was no warrant of that date for selling the property subject to the encumbrance in favour of the second defendant. It is thus clear that the executing court was not acting within its jurisdiction in having directed the sale of the hypotheca subject to the encumbrance in favour of the second defendant. But Mr. Sharfuddin, learned counsel for the appellant, submitted that even though the direction to sell was not in accordance with the decree, the judgment debtor should not be allowed to raise this question as she failed to put forward this contention in the proceeding which resulted in the proclamation of sale and the further proceedings which resulted in the reduction of the upset price to Rs. 2550. But the learned counsel was unable to point out from the records that the judgment debtor had notice before the sale was ordered by the court directing sale subject to the encumbrance in favour of the second defendant. Though she was aware of the proclamation directing the sale of the property subject to encumbrance, she is entitled to contend that the order to sell the property without notice to her is void and is liable to be set aside.
(7) It has been observed in Ramaswami Naik v. Ramaswami Chetti, ILR(1907) Mad 255 as follows:
'When, however, it is endeavoured to obtain in execution something not granted by the decree, mere notice to the defendant that further execution is to be applied for, will not be sufficient to make the order res judicata against him..... And where the application is not for the execution of something which has been directed to be done by any decree order so as ipso facto to carry information as to what the claim made and the relief prayed for are, notice to the judgment debtor without inserting the specific prayers will not render the order made upon such application res judicata... As in our opinion the decree did not order the sale of the interests of defendants 2 to 5 in the zamindari during the lifetime of the first defendant, and as they had no notice that it was intended to apply for a sale of their interests we think the two orders in question do not render the orders for sale res judicata against them'.
Thus, it will be seen that when an application is for execution of something which has not been directed by the decree, there must be specific notice of the relief prayed for to the judgment debtor, and a mere notice to him that further execution has been applied for, will not be sufficient to make the order res judicata against him. In this case there is nothing in the record to indicate that the judgment debtor was not on notice of the fact that the property was to be sold subject to the encumbrance in favour of the second defendant, which direction is not in conformity with the decree. In Adaikappa Chetti v. Natesa Chettiar : AIR1931Mad381 it was held that when the judgment debtor had no sufficient notice of the right claimed against him, the order passed in execution proceedings cannot operate as res judicata. The decision in Narayana Pattar v. Gopalakrishna Pattar, ILR(1905) Mad 355 was cited with approval. It was observed (at page 356).
'The appellant's application was not for the execution of something which had been directed to be done by any decree or order, so as ipso facto to convey information to the respondents as to what the claim made and the relief prayed for were, but in regard to a matter of which, so far as the question of interest at least was concerned, they could not without being expressly apprised have become aware of. Consequently, the notice issued to them, such as it was, was insufficient to fix them with the knowledge of the claim for interest and thereby bar them from raising any controversy in the matter of their failing to appear on the date fixed'.
In Chidambaram v. Kandaswami, AIR 1924 Mad 1 it was held that where there is nothing more than the non-attendance at the hearing of an application to settle the terms of a sale proclamation, the non-attendance cannot be taken to be estopped by the principle of res judicata thereafter so as to prevent him from pleading that the property was not liable to attachment in execution by reason of that non-attendance. From the decisions cited above, it is clear that if the decreeholder seeks to put in execution something which is not in the decree, specific notice should be given to the judgment-debtor before any bar of res judicata could be pleaded. In this case, the appellant has not succeeded in establishing that he judgment-debtor had notice that he property was to be sold subject to the encumbrance in favour of the second defendant.
(8) Mr. Sharfuddin, learned counsel for the appellant, relied on several decisions wherein it has been held that when a judgment debtor could have taken a defence and if he had failed to take it, or after taking it he did not succeed ground in subsequent proceedings. It is unnecessary to refer to these decisions as the proposition is not disputed by the learned counsel for the judgment debtor. All that the learned counsel for the judgment debtor contended was that this execution was contrary to the terms of the decree, apart from the question that the executing court had no jurisdiction to put the property to sale subject to the encumbrance, as the judgment debtor had no notice of any of the proceedings which resulted in the order of sale subject to the encumbrance in favour of the second defendant. This point has to be found in favour of the judgment-debtor.
(9) In this view, it is unnecessary to consider the other question whether the execution of the decree as passed by the trial court, after it has been modified in appeal, is valid. I agree with the finding of the lower appellate court that the sale by the executing court of the property subject to the encumbrance in favour of the second defendant cannot be held to be valid.
(10) In the result this appeal is dismissed with costs. No leave.
(11). Appeal dismissed.