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S.K. Sundaram Vs. M. Joshi Rajamannar Chettiar and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Case NumberCivil Revn. Petn. No. 2052 of 1971
Judge
Reported inAIR1973Mad166
ActsCode of Civil Procedure (CPC), 1908 - Order 21, Rule 90
AppellantS.K. Sundaram
RespondentM. Joshi Rajamannar Chettiar and ors.
Cases ReferredMurugappa Chettiar v. Kannammai Achi
Excerpt:
- - clearly some limitation must be placed on the words 'whose interests are affected by the sale. when even the right of a person who has obtained a decree is hedged in by such a restriction, it stands to reason that a mere creditor like the petitioner herein, who has not even obtained a decree and who has not filed any execution petition, cannot claim to be a person whose interests are affected by the sale. indeed, any one who has a prospective claim which can be satisfied by a sale of the properties of a person against whom he has the claim can be said to be a person whose interests are affected, by the sale of such property......before it and to give directions to the interim receiver to file an applications under order xxi, rule 90 civil procedure code and hence in a case where the terms of the appointment of an interim receiver enabled him to file an application, he would have locus standi to file the application. it may be noted that this very decision still approved the reasoning in ilr (1943) mad 577 air 1943 mad 199, that the general body of creditors as such could not claim that their interests would be affected by the sale. the learned judges of the full bench pointed out that that was the only reason put forward before the court in ilr (1943) mad 577 : air 1943 mad 199 and that the reason relied on by them (full bench) was not put forward in the earlier case, namely, that the court could take steps to.....
Judgment:
ORDER

1. This revision petition has been filed by one of the alleged creditors of the judgment-debtors in O. S. 69 of 1969 on the file of the Court of the Subordinate Judge of Tiruchirapalli, but he was not a party to that suit. In execution of the decree certain properties of the judgment-debtors was sold on 17-3-1971. The petitioner herein filed an application under Order XXI, Rule 90, Civil Procedure Code to set aside the sale on the ground of material irregularity and fraud, contending that the price fetched was low. The learned Subordinate Judge, following the decision in Official Receiver, Ramnad v. Veerappa Chettiar AIR 1943 Mad 199 ILR (1943) Mad 577, held that the petitioner could not be said to be a person whose interests were affected by the sale within the meaning of Order XXI, Rule 90, Civil Procedure Code and therefore had locus standi to maintain the application. This petition has been filed against that order.

2. Order XXI, Rule 90, Civil Procedure Code describes the person who may apply to the court to set aside the sale as the decree-holder or any person entitled to share in a ratable distribution of assets or whose interests are affected by the sale. Clearly some limitation must be placed on the words 'whose interests are affected by the sale.' It will be noted that even a person who has obtained a decree against the judgment-debtors cannot come within the second phrase 'any person entitled to share in a ratable distribution of assets', unless he has filed an execution petition. When even the right of a person who has obtained a decree is hedged in by such a restriction, it stands to reason that a mere creditor like the petitioner herein, who has not even obtained a decree and who has not filed any execution petition, cannot claim to be a person whose interests are affected by the sale. A Full Bench of this court in Ayyappa Naicker v. Kasiperumal Nayakar, ILR (1939) Mad 374 AIR 1939 Mad 250 has held that a person who has obtained an attachment before judgment is a person whose interests are affected within the meaning of Order XXI, Rule 90, Civil Procedure Code. In I.L.R (1943) Mad 577 AIR1943 Mad 199, another Bench of this court distinguished the above decision in a case where an interim receiver was appointed in proceedings in insolvency. The argument put forward was that he represented the general body of creditors whose chances of obtaining dividends would be diminished if an inadequate price was fetched at the execution sale. It was held that it could not be said that their interests were affected by the sale.

3. This decision was overruled by a Full Bench of this court in Sailappan v. Subbiah Pillai : AIR1963Mad156 on the ground that, when an interim receiver was appointed, the property was in the custody of the court and it would be open to the court to preserve the property for the litigants before it and to give directions to the interim receiver to file an applications under Order XXI, Rule 90 Civil Procedure Code and hence in a case where the terms of the appointment of an interim receiver enabled him to file an application, he would have locus standi to file the application. It may be noted that this very decision still approved the reasoning in ILR (1943) Mad 577 AIR 1943 Mad 199, that the general body of creditors as such could not claim that their interests would be affected by the sale. The learned Judges of the Full Bench pointed out that that was the only reason put forward before the court in ILR (1943) Mad 577 : AIR 1943 Mad 199 and that the reason relied on by them (Full Bench) was not put forward in the earlier case, namely, that the court could take steps to preserve the property. The learned Judges of the Full Bench in : AIR1963Mad156 also affirmed the reasoning of Rajamanner, C. J. and Ganapatia Pillai, J., in Murugappa Chettiar v. Kannammai Achi : AIR1959Mad76 . It was held there that a creditor, who had obtained a decree against the judgment-debtor but had not yet filed an execution petition, could not file an application under Order XXI, Rule 90, Civil Procedure Code. The learned Judges observed:--

'The words are indeed very wide and on a literal construction of the words, not only decree-holders but even ordinary creditors, who have not yet sought to enforce their claims, can be said to be affected by the sale of any of the properties of their debtor. Indeed, any one who has a prospective claim which can be satisfied by a sale of the properties of a person against whom he has the claim can be said to be a person whose interests are affected, by the sale of such property. We have no hesitation in holding that this wide construction was not contemplated by the words. The interests which are alleged to be affected by the sale should be interests which are directly likely to be affected and not interests which may hypothetically and remotely be affected by the sale.'

The wider interpretation was sought to be given by the Patna High Court. Differing from that interpretation, the learned Judges observed--

'The interpretation of the expression 'whose interests are affected by the sale' would let in several classes of persons who, we are convinced, were never intended to be given the right to apply under Order XXI. Rule 90, Civil Procedure Code and would obstruct the course of execution'.

This reasoning was affirmed by the Full Bench in : AIR1963Mad156 and applies to this case. No interim receiver has been appointed in the insolvency proceedings relating to the judgment-debtor in this case and therefore the petitioner cannot invoke : AIR1963Mad156 in his favor.

4. The view taken by the learned Subordinate Judge is correct. This civil revision petition is therefore dismissed.

5. Petition dismissed.


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