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Alapati Subbarayudu Vs. Jallipalli Lakshmayya - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtChennai High Court
Decided On
Case NumberSecond Appeal No. 2660 of 1947
Judge
Reported inAIR1954Mad129; (1952)IMLJ700
ActsCode of Civil Procedure (CPC) , 1908 - Sections 34 and 35 - Order 21, Rule 93
AppellantAlapati Subbarayudu
RespondentJallipalli Lakshmayya
Appellant AdvocateV. Rangachari, Adv.
Respondent AdvocateA.V. Krishna Rao, Adv.
Cases ReferredRamalinga Mudaliar v. Muthuswami Aiyar
Excerpt:
.....as well as the costs incurred by him in defending o. 156 of 1935, as well as interest on the purchase money from the date of the deposit. the learned counsel urges that the only remedy open to such a defeated purchaser is to apply under order 21, rule 91, c. , a suit for refund of purchase money paid in respect of a court-sale does not lie unless there is a total failure of consideration or a total want of title in the judgment-debtor in regard to the property bold. the right having been recognised and there being nothing in the code to prohibit a suit for the recovery of the purchase money when there had been a total failure of consideration, a suit lay under the general law. the court was considering a case where there had been a total failure of consideration and the judgment..........reconsideration and secondly, even if that is not to be allowed, the dicta contained in the full bench decision ought to be restricted to the facts of the case, namely, where it has been held that the judgment-debtor had no kind of right whatever in all the properties sold. for this, reliance is placed upon a decision in -- 'narasingi vannechand firm, guntur v. suryadevara narasayya', air 1945 mad 363 (b) where leach c. j. and lakshmana rao j. distinguished the decision in -- air 1936 mad 50 (a)'. the learned judges held that having regard to the provisions of order 21, rule 91 and 92, c. p. c., a suit for refund of purchase money paid in respect of a court-sale does not lie unless there is a total failure of consideration or a total want of title in the judgment-debtor in regard to.....
Judgment:

Govinda Menon, J.

1. In execution of the decree in O. S. No. 154 of 1931 against one Ramabrahmam, the appellant, who was the decree-holder, brought certain items of properties to sale, and in court auction, they were purchased by the respondent. The sale certificate shows that two items were, sold in two separate lots, the first lot having been knocked down for Rs. 625 and the second lot for Rs. 1340, the entire purchase money being Rs. 1960, Subsequently, one Vecrabrahmacharlu, filed O. S. No. 156 of 1935 on the ground that this Ramabrahmam had no title to some of the properties sold tO that suit, the present respondent, who was the purchaser, was a party. The decision therein was that in the first lot, the 'judgment-debtor, Ramabrahmam, had no title and, therefore, the properties were delivered over from the possession of the respondent to the plaintiff therein. Thereafter, the present respondent-plaintiff filed the suit out of which this second appeal srises, for the refund of the purchase money of lot No. 1 with interest thereon from the date when he paid the money, as well as the costs incurred by him in defending O. S. No. 156 of 1935.

2. The learned District Munsif found that the plaintiff-respondent was entitled to refund of the purchase money alone and that he was not entitled to recover the costs or the interest from the earlier date, but only from the date when O. S. No. 156 of 1935 was decreed by the Court of appeal. Against that decision, there was an appeal by the defendant, who was the decree-holder in O. S. No. 154 of 1931. A memorandum of cross-objections was filed by the plaintiff, who was the purchaser in court auction. The lower appellate Court dismissed the appeal and allowed the memorandum of objections, and thereby gave the purchaser in court auction, not only the purchase money deposited by him, but also the costs which he had incurred in defending O. S. No. 156 of 1935, as well as interest on the purchase money from the date of the deposit.

3. The decree-holder, at whose instance the items of properties were sold, comes to this Court to second appeal, and it is contended on his behalf by Mr. V. Rangachari that in view of the provisions of Order 21, Rule 91 to 93, C. P. C., it is not open, under the general law, for a purchaser in court auction, whose property had been taken away from him by a person with superior title, to file a fresh suit for recovery of the purchase money. The learned counsel urges that the only remedy open to such a defeated purchaser is to apply under Order 21, Rule 91, C. P. C. for a refund of the purchase money within the period allowed by law under Article 166, Limitation Act, and if no such application has been filed in time, a suit under the general law is not sustainable. Unfortunately for the learned counsel, the point at issue has been set at rest by a Pull Bench of this Court in -- 'Macha Koundan v. Kottara Koundan', AIR 1936 Mad 50 (A) where it is held that where an auction purchaser in execution of a mortgage decree loses possession of the property as a result of a suit filed by a third party, then, he has a light to recover back the purchase money from the decree-holder by a separate suit and not by proceedings in execution. The principles decided in that case apply to the facts of the present case.

4. But Mr. Rangachari wants, first of all, to contend that the decision of the Full Bench requires reconsideration and secondly, even if that is not to be allowed, the dicta contained in the Full Bench decision ought to be restricted to the facts of the case, namely, where it has been held that the Judgment-debtor had no kind of right whatever in all the properties sold. For this, reliance is placed upon a decision in -- 'Narasingi Vannechand Firm, Guntur v. Suryadevara Narasayya', AIR 1945 Mad 363 (B) where Leach C. J. and Lakshmana Rao J. distinguished the decision in -- AIR 1936 Mad 50 (A)'. The learned Judges held that having regard to the provisions of Order 21, Rule 91 and 92, C. P. C., a suit for refund of purchase money paid in respect of a court-sale does not lie unless there is a total failure of consideration or a total want of title in the judgment-debtor in regard to the property Bold. At p. 334 the learned Judges observe as follows:

'We Will now turn to -- 'AIR 1936 Mad 50 (A)'. There the property was sold in execution of a mortgage decree and it was subsequently discovered that the mortgagor had no interest at all in the mortgaged property. The question was whether the auction purchaser had, in addition to the right given to him by Order 21, Rule 91 a rignt to file a suit to recover what he had paid. The Pull Bench (Beasley C. J., Ramesam and King JJ.) held that a suit did lie. In delivering the judgment of the Court, Ramesam J. pointed out that the Legislature had recognised a right in the auction purchaser to a refund of the money paid if the Judgment-debtor's interest in the property turned out to be nothing. The right having been recognised and there being nothing in the Code to prohibit a suit for the recovery of the purchase money when there had been a total failure of consideration, a suit lay under the general law. The Court was considering a case where there had been a total failure of consideration and the Judgment cannot, in our opinion, be read as laying down that there is a right of suit in a case of partial failure of consideration.'

5. Somayya J. considered the 'ratio decidendi' of the Full Bench decision in -- 'Butchi Reddi v. Venkata Suryaprakasarao' : AIR1945Mad40 . The learned Judges observed that there were weighty considerations for re-considering the Full Bench decision adverted to above. Those considerations were those enumerated by himself and Krishnaswami. Aiyangar J. in -- 'A. S. No. 90 of 1942 (Mad) (D)'. I have perused the judgment in -- 'A. S. No. 90 of 1942 (Mad) (D) and it seems to me that, with due deference to the learned Judges the principles laid down in the decision of the Full Bench cannot be doubted in the way in which the learned Judges have done. Whatever that might be, I am bound by the observations of the Full Bench, unless it is dissented from or overruled by a Fuller Bench. I do not, therefore, propose to discuss or reconsider the points considered by Somayya J.

6. Such being the case, the question is whether the principles enunciated in -- 'A. I. Rule 1945 Mad 363 (B)' regarding failure of partial consideration should be applied to the facts of the present case. It is urged by Mr. Rangachari that there has been a partial failure of consideration and not a total failure of consideration, because a third party, at whose instance O. S. No. 156 of 1935 was filed, claimed only one of the items of properties, and the respondent has been deprived of only that item. If that is so, it has to be held that there was only a-partial failure of consideration, with the result that the observations in -- 'AIR 1945 Mad 363 (B)' must be held to apply. On the other hand, it is urged by the respondent relying upon -- 'Nagalinga Chettiar v. Guruswami Aiyar', AIR 1930 Mad 856 (E) that since the properties were sold in separate lots and that there was a separate purchase for each of the lots, the result is that there has been complete failure of consideration for one of the lots. The learned District Munsif discussed the matter in paragraph 13 of his judgment and in his opinion, the failure of consideration mentioned in --'A. I. Rule 1945 Mad 363 (B)' can be separated as regards each of the items and that, if there was failure of consideration regarding one of the items and no failure as regards the other item, then it has to be held that there was complete failure of consideration only so far as one item alone is concerned. The distinction is this in my opinion: If the judgment-debtor has full interest in the property that is, all the totality of the bundle of rights are in him and it only some of the rights were taken from the judgment-debtor, while other rights still remain in him; in such a case it cannot be said that there has been a complete failure of consideration. The principle is inapplicable to a circumstance like this, where, so far as one item is concerned, the Judgment-debtor had complete title in him. That being the case, each of the lots has to be judged by itself and the test is whether the judgment-debtor had interest in each of the lots It cannot be said that so far as the first lot is concerned, the judgment-debtor has any interest at all, I am, therefore, of opinion, that the observations of the learned Judges in -- 'AIR 1930 Mad 856 (E)' should be applied to the present case. In that view, the suit as framed is maintainable and the decision-of the lower Court is correct on that point.

7. The next question is whether the lower Court was justified in decreeing in favour of the respondent the costs incurred by him in O. S. No. 156 of 1935. as well as the interest on the purchase money. A Full Bench of this Court has laid down in -- 'Ramalinga Mudaliar v. Muthuswami Aiyar', AIR 1927 Mad 99 (P) that where there is no contractual obligation and when the Interest Act does not apply, in the absence of any custom or usage or any liability as damages, no interest cart be allowed. Here is a case where the basis of the suit is on the footing of money not received, in such a suit, it cannot be said that the plaintiff is entitled to any kind of interest. The English law on the point, as observed by the Chief Justice in the Referring Order in -- 'A. I.R. 1927 Mad 99 (F)' is explicit and clear. There is no difference so far as the Indian law is concerned. I would, therefore, hold that the respondent is not entitled to the interest on the amount till the date of the suit, Nor is he entitled to the costs incurred toy him in O. S. No. 156 of 1935.

8. Therefore, in modifications of the decree of the lower appellate Court, it is ordered that the plaintiff-respondent will be entitled to the refund of the purchase money paid by him with interest thereon from the date of the suit. As both parties have succeeded and failed partially, each party will bear his own costs in this Court and in the lower appellate Court.


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