Skip to content


Saraswathi Ammal Vs. Manickavasaka Reddiar and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil;Property
CourtChennai High Court
Decided On
Case NumberA.A.O. No. 80 of 1971
Judge
Reported inAIR1975Mad147
ActsCode of Civil Procedure (CPC) , 1908 - Order 21, Rules 58, 63, 89 and 90
AppellantSaraswathi Ammal
RespondentManickavasaka Reddiar and anr.
Appellant AdvocateK. Ramachandran, ;N.C. Raghavachari, ;N.S. Varadachari and ;C.P. Pattiabiraman, Advs.
Respondent AdvocateA.K. Kumaraswami, ;K. Sarvabhuman and ;K. Sampath, Advs.
Cases ReferredDhanammal v. Veeraraghava Naidu
Excerpt:
civil procedure code act (v of 1908), order xxi, rule 90-application under to set aside court sale-by whom maintainable-person claiming to have purchased property prior to attachment-filing a claim petition-dismissed-not filing a regular suit within a period to set aside such an order-filing application to set aside court sale after;on the question raised as to whether a person who claims to have purchased the property prior to the date of the attachment and whose claim petition under order xxi, rule 58 was dismissed and who did not institute a suit under order xxi, rule 63 could maintain a petition under order xxi, rule 90, civil procedure code, for setting aside the sale, ;held, per kailasam, j., that even when a claim under order xxi, rule 58 to a property attached was.....1. (22-8-73) the petitioner in e. a. no. 54 of 1965 in o. s. no. 92 of 1962 on the file of the court of the subordinate judge of cuddalore, under order 21, rule 90, code of civil procedure for setting aside a sale held on 21-12-1964 on the ground that it is vitiated by material irregularity and fraud, is the appellant before us.2. the property in dispute is claimed to have been purchased by the appellant from one k. m. krishnan for rs. 25.000 under a registered sale deed dated 17-10-1962. the first respondent manickavasaka reddiar filed a suit against the said k. m. krishnan in o. s. 92 of 1962 and obtained a decree on 13-3-1963. in execution of the decree, in e. p. no. 160 of 1963 the petition mentioned property was attached on 16-7-1963. the appellant filed a claim petition under order.....
Judgment:
1. (22-8-73) The petitioner in E. A. No. 54 of 1965 in O. S. No. 92 of 1962 on the file of the Court of the Subordinate Judge of Cuddalore, under Order 21, Rule 90, Code of Civil Procedure for setting aside a sale held on 21-12-1964 on the ground that it is vitiated by material irregularity and fraud, is the appellant before us.

2. The property in dispute is claimed to have been purchased by the appellant from one K. M. Krishnan for Rs. 25.000 under a registered sale deed dated 17-10-1962. The first respondent Manickavasaka Reddiar filed a suit against the said K. M. Krishnan in O. S. 92 of 1962 and obtained a decree on 13-3-1963. In execution of the decree, in E. P. No. 160 of 1963 the petition mentioned property was attached on 16-7-1963. The appellant filed a claim petition under Order 21, Rule 58, Civil Procedure Code on the ground that she purchased the property on 17-10-62 and prayed for raising of the attachment. That petition was dismissed. The appellant did not take up the matter by filing a suit under Order 21, Rule 63, Code of Civil Procedure.

3. The respondents questioned the maintainability of the present petition on the ground that the petitioner's purchase was prior to the attachment and that as she had failed to file a suit to set aside the adverse claim order, she cannot claim to be a person whose interest is affected by the sale and as such this petition under Order 21, Rule 90 cannot be maintained.

4. The lower court upheld the claim of the respondents and dismissed the petition and hence this appeal.

5. The question that arises for consideration is whether a person who claims to have purchased the property prior to the date of the attachment and whose claim petition under Order 21, Rule 58 was dismissed and who did not prefer a suit under Order 21, Rule 63 could maintain a petition under Order 21, Rule 90, C. P.. C.

6. The provision as to attachment of property in execution of decree and orders is provided for from Order 21, Rule 41, C. P. C. Rule 54 provides that where the property is immovable, the attachment shall be made by an order prohibiting the judgment-debtor from transferring or charging the property in any way, and all persons from taking any benefit from such transfer or charge. Rule 58 relates to investigation of claims to and objections to attachment of attached property. When a claim is preferred or objection is made to attachment of any property on the ground that such property is not liable to such attachment, the Court shall proceed to investigate the claim or objection. The claimant or ob-jector under Rule 58 must adduce evidence to show that on the date of attachment, he had some interest in or was possessed of the property attached. In this case, the claimant, the appellant herein, alleged that she was possessed of the property and had title to it by virtue of her purchase before the date of the attachment. There could be no dispute that in the circumstances the appellant is entitled to maintain a petition under Order 21, Rule 58. Such a petition was in fact filed and was dismissed. No suit having been instituted to establish her right in the property in dispute, the order made in the petition under Order 21, Rule 58 had become final. To this extent, there is no dispute.

7. The point that arises is whether an unsuccessful claimant against whom the claim order has become final is entitled to maintain a petition under Order 21, Rule 90. Order 21. Rule 89 provides that where immovable property has been sold in execution of a decree, any person, either owning such property or holding an interest therein by virtue of a title acquired before such sale, may apply to have the sale set aside on his depositing in Court the amount specified in Clauses (a) and (b) of that Rule. This provision is applicable to any person owning a property or holding an interest in such property by virtue of a title acquired before such sale. The claim order which has become final is unfortunately not filed and is not available for us. The adverse claim order would conclude that the property is liable to be attached and the appellant had not succeeded in proving that she had some interest in or was possessed of the property. A person owning such property or holding an interest in such property by virtue of a title acquired before such sale is entitled to make an application under Order 21, Rule 89. The contention that the petitioner had some interest or was possessed of the property having been negatived in the claim petition, the argument that he is barred from claiming that he holds an interest by virtue of a title acquired before such sale was negatived by a Bench of this Court in Dhanammal v. Veeraraghava Naidu, 44 Mad LJ 325 = (AIR 1923 Mad 487 (2)). Repelling such a contention. Spencer, J. held that even when a claim under Order 21, Rule 58 to a property attached was negatived, there was nothing to prevent the person from coming forward and applying unconditionally to have the sale set aside under Order 21, Rule 89 for the reason that he holds an interest in the suit property. Though in that case the time for filing a suit under Order 21, Rule 63 had not become barred, the court held that the effect of the dismissal of a claim petition was not to decide finally that the petitioner had no interest in the property to ask that the sale should be set aside on payment of the amount as specified in Order 21, Rule 89. The learned Judge while observing that the provision in Rule 89 may imply the existence of an interest of a judgment-debtor owning the property sold or an interest derived from the same source as the owners of an interest paramount to the judgment-debtor's, the provision in Rule 58 implies the existence of a fight independent from and antagonistic to the judgment-debtor's. The Court expressed its opinion that it is impossible to conceive how the dismissal of the claim petition could operate as res judicata to prevent the admission of an application to pay the decree amount and get the property released after the sale. As the question whether the petitioner was owning or holding an interest in the property sold by virtue of a title acquired before the sale had not been decided in spite of an adverse order under Order 21, Rule 58, the matter was remanded to the trial Court. Venkatasubba Row, J. while agreeing with Spencer, J. observed that an application based on title paramount to that of the judgment-debtor is maintainable under. Order 21, Rule 89, and the decision in Dulhin Mathura Koer v. Bangasidhari Singh (15 CLJ 83) was referred to. Venkatasubba Row, J. found that the said decision took a very narrow view of Rule 89 and held that an application under Rule 89 is maintainable on a title paramount to that of the judgment-debtor, even though an application under Order 21. Rule 58 had not been filed.

8. Order 21, Rule 90. Code of Civil Procedure is another mode by which the sale could be set aside. The rule provides that where any immovable property has been sold in execution of a decree, the decree-holder, or any person entitled to share in a rateable distribution of assets or whose interest are affected by the sale, may apply to the Court to set aside the sale on the ground of a material irregularity or fraud in publishing or conducting it. The present application is one under Order 21, Rule 90, Code of Civil Procedure. The appellant claimed to be a person whose interests are affected by the sale. The contention of the learned counsel for the appellant is that a person claiming paramount title, that is, purchaser of the property before the date of attachment, is a person whose interests are affected by the sale. Rule 89, whereunder a person holding an interest by virtue of a title is found to be entitled to maintain an application in spite of an adverse claim order under Order 21, Rule 58, was sought to be distinguished on the ground that though such a person would be a person holding an interest, he will not be a person whose interests are affected by the sale. I am unable to accept the contention, for a person holding an interest in a property will be affected by the property being sold. If the claim based on paramount title could be maintained under Order 21, Rule 89. there could not be any restraint on his maintaining an application under Order 21, Rule 90, Code of Civil Procedure also. In this view, the Court below will have to go into the question whether the applicant has made out a case that her interests are affected. The order under Order 21, Rule 58 would not by itself operate as res judicata makin? the application inadmissible,

9. It is necessary to refer to cases which had been cited to support the opposite view. In Asmuthunnissa Begum v. Ashruff Ali, (1888) ILR 15 Cal 488 a Full Bench of the Court in construing Section 311 of the Code of Civil Procedure (Act 24 of 1882) held that the words "person whose immovable property had been sold" would not enable a person setting up paramount title to have the sale set aside. With respect, on the wording of the section as it then stood, the correctness of the decision cannot be doubted, for, the words "any person" in the section would refer to the person whose property had been sold in Court auction, that is, a judgment-debtor, and not to third parties who claim independent title

10. In Jagat Narayanan v. Khar-tar Sah, AIR 1941 PC 45 it was held that a third party objecting to the sale of his property for the judgment-debt of another person cannot disregard Rule 58 of Order 21, and apply after the sale under Rule 90 of that Order. In the case before the Privy Council one Madhusudan who was the applicant under Order 21. Rule 90 was a party to a compromise which provided that the decree-holder should receive Rs. 3,000 cash. As the decree was not fully satisfied, the decree-holder took out execution proceedings. Madhusudan did not file any petition under Order 21, Rule 58. But subsequently he came forward with a petition under Order 21, Rule 90, claiming that he is a third party. On the facts of the ease, their Lordships of the Privy Council held that Madhusudan on his own case ought to have made a claim under Order 21, Rule 58 if he desired to take up the attitude of a third party whose property had been wrongfully taken for another's debt. There was a prayer that the petition under Order 21, Rule 90 should be treated as one under Order 21, Rule 58. But their Lordships taking into account the conduct of Madhusudan and his undertaking to pay the debt and hold the property as a charge to the decree of the decree-holder held that he was not entitled to any such indulgence. The Privy Council does not lay down that an application under Order 23, Rule 90 cannot be maintained by a third party claiming paramount title. All that has been ruled is that the applicant not having filed a petition under Order 21, Rule 53, should not be allowed to file a petition under Order 21, Rule 90. This case cannot be relied on by the respondents.

11. In Cherappan v. Sankara Aiyar, (1941) 2 Mad LJ 63 = (AIR 1941 Mad 680) a single Judge of this Court laid down that where a sale of properties of the judgment-debtor was made but what was sold was only an undivided share in certain items of property and the petitioners applied under Order 21, Rule 90, C. P. C. to set aside the sale in regard to such items as had fallen exclusively to their chares under an arbitration award previous to the sale itself, the petition was unsustainable and that the petitioners as claimants by a paramount title were not affected in any way by the sale of an undivided share in certain items and if the purchaser wanted to realise the fruits of his purchase, he would have to file a suit for partition and separate possession of the share purchased and then it would be open to the petitioners to resist the claim. The learned Judge expressed his view that a person claiming title paramount to that of the judgment-debtor cannot make an application under Order 21, Rule 90. The learned Judge relied on the decision in (1888) ILR 15 Cal 488 (FB) which had already been referred to. The decision in Subbarayadu v. Pedda Subbarazu,(1893) ILR 16 Mad 476 followed (1888) ILR 15 Cal 488 (FB) already referred to and held that when a person seeks to set aside sale by reason of a title adverse to that of the judgment-debtor on the date of attachment, his proper remedy as observed in Asmutunnisa Begum v. Ashruff Ali, ILR 15 Cal 488 (FB) is a regular suit and not a proceeding under Section 311, Code of Civil Procedure, it has been pointed out that when the Full Bench decision of the Calcutta High Court was rendered, the wording of Section 311, Code of Civil Procedure was different from the wording in the present Code and therefore that decision is not applicable. The Bench decision in 44 Mad LJ 325 = (AIR 1923 Mad 487 (2)) was not brought to the notice of the learned Judge, and in view of the Bench decision referred supra, it must be observed that the case in (1941) 2 Mad LJ 63 = (AIR 1941 Mad 680) was not correctly decided.

12. On a consideration of the three decisions in (1888) ILR 15 Cal 488 (FB): AIR 1941 PC 45 and (1941) 2 Mad LJ 63 = (AIR 1941 Mad 660), I do not think that the authority of the Bench decision in 44 Mad LJ 325 = (AIR 1923 Mad 487 (2)) is in any way affected.

13. A claim petition under Order 21, Rule 58 is preferred against attachment of a property in the execution of a decree on the ground that on the date of the attachment, the objector had some interest in or was possessed of the property attached. Such a claim may be disallowed under Order 21, Rule 61 by the Court on the finding that the property at the time of the attachment was in the possession of he judgment-debtor in his own right. When once such an order is made, and there is no challenge by way of a suit under Rule 63, the order made on the claim or objection petition shall be conclusive. Whatever may be the result of the finality of the order under Order 21, Rule &3, a person who either owns the property or holds an interest in the property by virtue of a title acquired before such sale may apply for setting aside the sale under Order 21, Rule 89. So also any person whose interests are affected by the sale may apply to the Court to set aside the sale on the ground of material irregularity or fraud in publishing or conducting the sale under Order 21, Rule 90. The rights conferred under Order 21, Rules 89 and 90 are limited enabling the persons specified to apply for setting the sale. So far as this right to apply for setting aside the sale is concerned, the decision in 44 Mad LJ 325 = (AIR 1923 Mad 487 (2)) held that the effect of the dismissal of the claim under Order 21, Rule 58 was not to decide finally that the petitioner had no interest to ask that the sale should be set aside on payment of the decree amount plus five per cent, into court, but only to decide that the claimant had no right to have the attachment raised. The Court held that "It is impossible to conceive how the dismissal of the claim petition could operate as res judicata to prevent the admission of an application to pay the decree amount and get the property released after the sale". The rights conferred under Rules 89 and 90 of Order 21 are only limited, that is to enable the person concerned to have the sale set aside. Certain rights might have become final because of the order passed under Order 21, Rule 58 not being challenged by a civil suit under Order 21, Rule 63, But that would not operate as res judicata to prevent an application for setting aside the sale under Rule 89 or 90 of Order 21. If the petitioner could prove that his interests are affected by the sale, the sale is liable to be set aside on the ground of material irregularity or fraud in publishing or conducting the sale. I therefore-hold that an application under Order 21. Rule 90 is maintainable in the circumstances. Though the order passed under Order 21, Rule 58 has become final it does not operate as res judicata. The order made under Order 21, Rule 58 will be final only for some purposes and that will have to be taken into account in disposing of the application.

14. In a Full Bench decision of this Court in Narasimhachariar v. Raghava Padayachi, ILR (1946) Mad 79 = (AIR 1945 Mad 333) it was held that an order under Order 21, Rule 58 only applies to a claim preferred or objection made to the order of attachment in the particular execution proceedings. The statement in Rule 63 that an order passed on the claim or objection shall, subject to the result of the suit, be conclusive must be read in conjunction with Order 21, Rule 58 which speaks of such attachment. The Full Bench expressed its view that it would be unreasonable to hold that the intention of the Legislature was to make the order conclusive for all purposes inside and outside the particular execution proceedings. The Full Bench was dealing with a case in which the property was not sold in execution. In a case of sale the Bench observed that the title claimed by the objector would pass to the purchaser at the court-auction. The said decision of the Full Bench was upheld by the Supreme Court in Mangru v. Taraknathju. where the position was summed up thus:--

"If no suit is brought under Rule 63 within the prescribed period of limitation, the order in the claim proceeding is conclusive on the question whether the property was or was not liable to attachment and sale in execution of the particular decree. But the order is not conclusive for all purposes. See ILR (1946) Mad 79 = (AIR 1945 Mad 333) (FB, A claim proceeding under Rule 53 is not a suit or a proceeding analogous to a suit. An order in the claim proceeding does not operate as res judicata It is because of Rule 63 that the order becomes conclusive. The effect of Rule 63 is that unless a suit is brought as provided by the rule, the party against whom the order in the claim proceeding is made or any person claiming through him cannot re-agitate in any other suit or proceeding against the other party or any person claiming through him the question whether the property was or was not liable to attachment and sale in execution of the decree out of which the claim proceeding arose, but the bar of Rule 63 extends no further."

15. The executing Court in disposing of the application will bear in mind the effect of the dismissal of the applicant's petition under Order 21, Rule 53 which has become final in the light of the two decisions referred, viz., ILR (1946) Mad 79 = (AIR 1945 Mad 333) (FB) and AIR 1967 SC L390. On such consideration of the facts before it in the application, if the lower Court is satisfied that the applicant has established that her interests are affected by the sale and that the sale is liable to be set aside on the ground of material irregularity or fraud in publishing or conducting it will have to allow the petition under Order 21, Rule 90, otherwise dismiss the same.

16. With these observations, the appeal is allowed and the order of the Additional Subordinate Judge, Cuddalore in E. A. No. 54 of 1965 in O. S, No. 92 of 1952 on his file is set aside and the matter is remanded for fresh disposal according to law There will be no order as to costs in this appeal.

N. S. RAMASWAMI. J.

17. I have had the advantage of perusing the judgment of my learned brother. I agree that this appeal has to be allowed and the matter remitted to the executing court for considering the application under Order 21, Rule 90, Code of Civil Procedure (hereinafter referred to as the Code) on merits, as the dismissal of the application on the ground that it is not maintainable, is wrong However, I am writing a separate judgment for two reasons. The first is that I regret that I am unable to agree with my learned brother that the executing court should be directed to decide the question whether the appellant's interests are affected by the court sale, for according to me, that is the very question that is agitated before us and calls for a decision. The appeal is being allowed on the basis that the appellant is a person "whose interests are affected by the sale," as contemplated under Rule 90 of Order 21 of the Code and hence the dismissal of her application as not maintainable is wrong. Therefore the executing court cannot be directed to again decide whether the appellant's interests are affected. The second reason for my writing a separate judgment is that my reasons for holding that the order of the executing court (dismissing the application under Order 21, Rule 90 of the Code), is wrong, are different and I am unable to associate myself with some of the observations of my learned brother.

18. The appellant before us has purchased the property in question from one K. M. Krishnan under the sale deed dated 17-10-1962. Subsequent to this sale, the property was attached in pursuance of a money "decree in O. S. No. 92 of 1962, obtained by Manickavachaka Reddiar, the first respondent, against the said Krishnan. The appellant filed an application under Order 21, Rule 58 of the Code claiming that the property is not liable to be attached for the decree against Krishnan. inasmuch as, she (appellant) has purchased the property very much prior to the date of attachment. However, the executing court disallowed the claim of the appellant and dismissed her application under Order 21, Rule 58 of the Code. The appellant did not file any suit to set aside the above summary order as contemplated under Rule 63 of Order 21 and therefore the abovesaid order disallowing the claim made by the appellant, has become final. Subsequently, that is on 21-12-1964, the property was sold in court auction in pursuance of the abovesaid decree and Rajaram Reddiar, the second respondent herein, has purchased the property in the said court auction. Then the appellant filed the executed application, out of which the present appeal has arisen, under Order 21, Rule 90 of the Code alleging that the court sale has been vitiated by material irregularity and fraud. A preliminary objection was raised regarding the maintainability of the said application. The contention has been twofold. The first is that the appellant having failed in her earlier application under Order 21, Rule 58 of the Code and she having not filed a suit to set aside the above order, the same has become final and it is not open to the appellant now to come forward with an application under Order 21, Rule 90 of the Code. It is stated that the order in the claim petition would operate as res judicata against the appellant claiming interest in the property. The second is that the private sale in favour of the appellant being one prior to the date of attachment, her interests in the property are in no way affected by the court sale and therefore the application under Order 21, Rule 90 is not maintainable.

19. The executing Court which heard the above application has found as a matter of fact that the appellant haying purchased the property from the said Krishnan has interest in the same, but she is barred by the order in the earlier application, namely to one under Order 21, Rule 58 of the Code, which has become final. The executing Court further found that the interests of the appellant in the property (by virtue of her private purchase from Krishnan) might be affected by the court sale, but doubted whether the appellant can maintain the present application inasmuch as her purchase was prior to the attachment of the property. The executing court seems to think that the sale in favour of the appellant being prior to the date of attachment her interests in the property would not be affected by the court sale.

20. There is good deal of confusion in the reasoning of the executing court. As seen above, the executing court does hold that the appellant has interest in the property and such interests might be affected by the court sale. On that finding it necessarily follows that the application under Order 21, Rule 90 of the Code is maintainable by the appellant. However, the executing court makes certain observations which are against its own finding in coming to the conclusion that the application is not maintainable.

21. I am quite clear that the appellant is a person "whose interests are affected by the sale" as contemplated under Order 21, Rule 90 of the Code.

22. At the outset, I wish to point out the differences between Rule 89 and Rule 90 of Order 21 of the Code. Under Rule 89, any person holding an interest in the property sold may apply to have the sale set aside on his depositing the amount as contemplated under that Rule. But under Rule 90, every person who has an interest in the property sold in the court auction would not be entitled to file an application to set aside the court sale on the ground of material irregularity or fraud, unless such interest, is affected by the court sale. If a person holds an interest in the property sold in the court auction, the same need not necessarily be affected by the court sale. Courts have consistently held that in cases where a person claims title paramount and says that the property in question is not liable to be proceeded against for the debt of the judgment-debtor, the interests that he claims in the property would in no way be affected by the court sale and therefore he is not a competent person to file an application under Order 21, Rule 90 of the Code. In the present case itself, the sale in favour of the appellant was very much prior to the attachment. If the appellant had not filed an application under Order 21, Rule 58 of the Code and got an adverse order on the same, she would be a person who holds interest in the property but yet she would not be entitled to file an application under Order 21, Rule 90 of the Code inasmuch as her interests in the property would not be affected by the sale. If the appellant had not filed the claim application and got an adverse order which has not become final, it would always be open to her to set up title paramount as against the court auction purchaser. In such a situation, when the court auction purchaser tries to take possession of the property, the appellant could resist him and set up title paramount to the property and then the question whether she has such paramount title would have to be gone into. Therefore, it is said, that the court sale would not affect her interests, but that is not the situation in the present case. Here the appellant did file an application under Order 21, Rule 58 of the Code contending that the property was not liable to be attached in pursuance of the decree against Krishnan, her vendor, but that claim has been dismissed and that order has become final as the appellant did not file a suit within the statutory period to have the said order set aside. Undoubtedly, in the face of the abovesaid order dismissing her claim, she cannot be heard to say hereafter, that the property cannot be proceeded against for the decree amount due by her vendor. She cannot possibly set up title paramount against the court auction purchaser. Therefore, it is wrong to say that her interests in the property are not affected by the court sale and that, therefore, she is not a person competent to file the application under Order 21, Rule 90 of the Code.

23. The contention of the learned counsel for the respondent has been that the appellant being a person who set up title paramount to the property on the ground that she purchased the property from the judgment-debtor even prior to the attachment, her interests in the property are in no way affected by the court sale. According to the learned counsel it would be open to the appellant to put forward her title paramount even now, against the auction-purchaser. This is wholly untenable. It is true that the appellant set up title paramount in her application under Order 21, Rule 58 of the Code and contended that the property was not liable to be attached for the decree amount due by her vendor, Krishnan. But that contention has been overruled by the executing court and the effect of the order of the executing court dismissing the application is that the property is liable to be proceeded against for the decree amount for which it was attached. As the said order has become final, it is certainly not open to the appellant hereafter to contend that she has title paramount and that the property is not liable to be sold in pursuance of the decree against Krishnan. The learned counsel is wholly incorrect in his contention that the appellant can still put forward her title paramount against the decree-holder as well as the auction-purchaser and that therefore it must be held that her interests in the property are not affected by the court sale.

24. The learned counsel relied on three decisions in this connection. They are: (1&S8;) ILR 15 Cal 488 (FB); AIR 1941 PC 45 and 1941-2 Mad LJ 63 = (AIR 1941 Mad 680). The Calcutta case arose under Section 311 of the Code of Civil Procedure of 1882 which corresponds to Order 21, Rule 90 of the present Code. There is slight variation in the language between that section and Rule 90 of Order 21 of the present Code regarding persons who are entitled to file an application to set aside the court sale. While the present Code says "any person.... whose interests are affected by the sale", Section 311 of the Code of 1882 says "any person whose immovable property has been sold", is entitled to apply. But as far as the present question, namely, whether a person who claims title paramount is one whose interests are affected by the court sale, is concerned, there is no difference between the provisions in the two Codes. In the Calcutta case, the person who filed the application under Section 311 of the earlier Code was one who had purchased the property prior to the attachment. The question was whether such a person, namely, one who had purchased the property prior to the attachment, was entitled to object to the sale under Section 311 of the earlier Code. The Full Bench of the Calcutta High Court held that the words "any person" occurring in the said section would take in persons other than the judgment-debtor, but the applicant therein being one who claimed title paramount to the judgment-debtor (inasmuch as he had purchased the property prior to the attachment) is not entitled to apply to have the sale set aside, as his title to the property is not affected by the sale, whether it was regular or irregular.

24-A. In AIR 1941 PC 45 the case put forward in the application under Order 21, Rule 90 of the Code was that the sale was without jurisdiction, as the property was not liable to be proceeded against for the decree debt. The Judicial Committee pointed out that such an objection is not one that could be made under Order 21, Rule 90 of the Code and the only mode by which such an objection can be raised is by filing an application under Order 21, Rule 58 of the Code. The reference to an application under Order 21, Rule 58 as the proper remedy is only incidental. The point decided is that when the applicant objects that the property cannot be proceeded against (on the ground that he has paramount title) such objection is not one falling under Order 21, Rule 90.

25. (1941) 2 Mad LJ 63 = (AIR 1941 Mad 680) is a decision by a Single Judge of this Court and the learned Judge, after pointing out the difference between the language in Rule 89 and that in Rule 90 held that a person who claims title paramount is not one whose interests are affected as contemplated under Rule 90 and therefore he cannot maintain an application under that Rule. The learned Judge after referring to certain observations of Burkitt, J., in an earlier case observed at pages 65 and 66 (of Mad LJ) = (at p. 681 of AIR) as follows:--

"With these observations I respectfully agree. Mr. Ramakrishna Iyer relied on a number of cases under Order 21, Rule 89, but it is not necessary for me to deal with them because the expression used there is 'any person holding an interest in the property' whereas the language used in Order 21, Rule 90 is 'any person whose interests are affected'. The fact that under the section, no relief can be given unless the applicant has sustained substantial injury, shows that the person claiming title paramount was not meant to be a person whose interest is affected by the sale. It may be that a cloud is cast on his title by reason of the sale which may furnish a cause of action for a declaratory suit, but casting a cloud on title is not substantial injury within the meaning of the rule."

26. I may also refer to a Bench decision of this Court reported in (1893) ILR 16 Mad 476 though that was not relied on by the learned counsel for the respondents. In that case the Full Bench decision of the Calcutta High Court in (1888) ILR 15 Cal 488 (FB) was followed and it was held that when a person seeks to set aside a sale by reason of a title adverse to that of the judgment-debtor on the date of attachment, his remedy is not on application under Section 311 of the old Code.

27. The significant fact to be noted in the above decisions is that even though the application to set aside the sale was either under Section 311 of the old Code or under Order 21. Rule 90 of the present Code, the ground put forward in the application was that the property was not liable to be proceeded against for the decree debt on the ground that the respective applicant has title paramount to that of the judgment-debtor. The Courts have pointed out that if the application, though purporting to be under Section 311 of the old Code or Order 21, Rule 90 of the present Code as the case may be, puts forward a case of title paramount or a title adverse to that of the judgment-debtor as the ground to set aside the same, such an application is misconceived, it has also been held that the interests of the applicant cannot be said to be affected by the court sale and therefore he is not entitled to maintain the application under Order 21, Rule 90 of the present Code (or under Section 311 of the old Code).

28. As against the above decision, the learned counsel for the appellant referred to Dhanammal v. Veeraraghava Naidu, 44 Mad LJ 325 = (AIR 1923 Mad 487 (2)) which is a decision by a Division Bench of this Court. But that decision can be used as an authority in the present case only regarding the question whether the order on the claim petition is res judicata against the appellant in maintaining the present application which aspect would be dealt with infra. As far as the present point is concerned, the observations in that judgment, which is one rendered under Order 21, Rule 89 of the Code, are in no way in conflict with the position, that in order to maintain an application under Order 21, Rule 90, the applicant should not only prove that he has interest in the property sold but also that such interest is affected by the sale. In the above case, after holding that the order on the claim petition was not res judicata in maintaining the application under Order 21, Rule 89, Venkatasubba Rao, J., one of the members of the Division Bench, added that even if an application under Rule 58 had not been filed, the application under Order 21, Rule 89 cannot be said to be not maintainable on the ground that the applicant's right is based upon a title paramount to that of the judgment-debtor. But these observations would not in any way go against the position that if an applicant under Order 21, Rule 90 claims paramount title, he cannot maintain that application, as his rights cannot be said to be affected by the court sale. I have already indicated the difference between Rule 89 and Rule 90. As far as Rule 89 is concerned, all that the applicant has to prove is that he has interest in the property. Even if the applicant claims title paramount to that of the judgment-debtor, he would squarely come under Rule 89 as a "Person holding an interest in the property". But every person holding an interest in the property need not necessarily be one whose interest is affected by the court sale. If he can put forward title paramount to that of the judgment-debtor, his right cannot be said to be affected by the court sale. Therefore, the Bench decision in 44 Mad LJ 325 = (AIR 1923 Mad 487 (2)) is in no way in conflict with (1941) 2 Mad LJ 63 = (AIR 1941 Mad 680) which is a decision by a Single Judge of this Court. As already indicated that decision of a Single Judge is in accord with the decisions reported in (1883) ILR 15 Cal 488 (FB); AIR 1941 PC 45 and the decision of a Division Bench of this Court reported in (1893) ILR 16 Mad 476.

29. Therefore, the contention of Mr. Sarvabhauman, the learned counsel for the respondents, that when a person claims title paramount, his right cannot be said to be affected by the court sale and, therefore, he is not a person entitled to file an application under Order 21, Rule 90 of the Code is correct. But the soundness of his argument ends there, His further contention that in the present case the appellant is a person who claims title paramount, that her interests are not affected by the court sale and that, therefore, she cannot maintain the application under Order 21, Rule 90 of the Code is manifestly wrong. I have already pointed out, that though the appellant had put forward her title paramount in her application under Order 21, Rule 58 of the Code, the order of the executing Court that the property is liable to be proceeded against for the decree debt against Krishnan has become final and that, therefore, it is no longer open to the appellant to claim title paramount as against the decree-holder and the auction-purchaser (the respondents herein). She having not filed the statutory suit to set aside the summary order on the application under Order 21, Rule 58 of the Code, she cannot re-agitate the question of title paramount as against the respondents herein in any proceeding. As a matter of fact, in the application out of which this appeal has arisen, the appellant has not put forward a case that the property is not liable to be proceeded against for the decree debt. She accepts the position that the property is liable to be sold for the decree debt and the application to set aside the court sale is only on the ground that the sale has been vitiated due to material irregularity and fraud. She places herself just in the same position as the judgment-debtor as far as the present application is concerned.

30. The only other contention of the learned counsel for the respondents is that the appellant is debarred from filing the present application, because of the adverse order on the application under Order 21, Rule 58 of the Code having become final. In other words, the contention is that the order of the executing Court on the application under Order 21, Rule 58 is res judicata against the appellant in putting forward the case that her interest in the property is affected by the court sale. I have already pointed out that the executing Court has found that the appellant had interest in the property (as she has purchased the property from Krishnan under the sale deed dated 17-10-1962) but she is debarred by the principle of res judicata because of the adverse order in the application under Order 21, Rule 57 of the Code. The contention of the learned counsel for the respondents is also on the same lines. It was never contended that the appellant is not a person who has interests in the property as contemplated under Order 21, Rule 90 of the Code. All that is contended is that the earlier order of the executing Court on the application under Order 21, Rule 58 of the Code, which has become final, is res judicata against the appellant in filing the present application. As a matter of fact, the contention of the learned counsel for the respondents swings to the other extreme, namely, that the appellant is a person who can put forward her title paramount (by virtue of the sale in her favour prior to the attachment) in spite of the adverse order on the claim petition. That being so, it would be wholly inconsistent on the part of the learned counsel to contend that the appellant had no interest at all in the property. Anyway as I said, the learned counsel did not contend that the appellant had no interest. The contention has been that her interest cannot be said to be affected because of the paramountcy of her title, apart from the contention that the present application is barred because of the adverse order on the claim petition.

31. The contention that the order on the claim petition is res judicata against the appellant in maintaining the present application is untenable. It has been held by a Division Bench of this Court in 44 Mad LJ 325 = (AIR 1923 Mad 487 (2)) (already referred to) that an adverse order on a claim petition does not bar the filing of an application under Order 21. Rule 89 of the Code. The reasoning is that the effect of the dismissal of the claim petition was not to decide finally that the petitioner had no interest to ask that the sale should be set aside, but only to decide that he had no right to have the attachment raised. It is further pointed out that it is impossible to conceive that the dismissal of the claim petition could operate as res judicata to prevent an application to have the sale set aside.

32. In ILR (1946) Mad 79 = (AIR 1945 Mad 333) (FB) and in , the same view is expressed. It is pointed out by the Supreme Court in the above case that the effect of Rule 63 of Order 21 is that unless a suit is brought within the period provided, the party against whom the order in the claim petition is made (or any person claiming through him) cannot re-agitate in any suit or proceeding against the other party (or any person claiming through him), the question whether the property was or was not liable to attachment and sale in execution of the decree out of which the claim proceeding arose. It has been specifically pointed out by the Supreme Court that the bar under the abovesaid rule (Rule 58 of Order 21) extends no further.

33. Whatever be the reasons given by the executing Court in dismissing the earlier claim petition filed by the appellant, they are irrelevant for the present purpose and that order (dismissing the claim petition) would have more effect than binding the parties to the position that the property is liable to be sold in pursuance of the decree under which the same was attached. The appellant herein does not question the right of the decree-holder to bring the property to sale. She accepts the position that the property is liable to be sold in execution of the decree and all that she contends is that the execution sale is vitiated by material Irregularity and fraud as contemplated under Order 21, Rule

90. That, she is certainly entitled to put forth as he is a person who is interested in the property and whose interest is affected by the sale.

34. I would therefore allow the appeal and remit the matter to executing Court to decide the same on merits, regarding the question whether the sale is vitiated by material irregularities or fraud resulting in substantial injury, as alleged by the appellant. There would be no scope for the lower Court to again go into the question as to whether the appellant's interest in the property is affected by the court sale.

The order of the Court was pronounced by

Kailasam, J.

35. As we are agreed that the appeal should be allowed and the order of the Additional Subordinate Judge, Cuddalore in E. A. No. 54 of 1965, in O. S. No. 92 of 1962 should be set aside and the matter remanded for fresh disposal, there shall be an order accordingly. But as one of us is of the view that the entire application should be left open for decision by the executing Court and the other is of the view that this Court should decide that the petitioner's interest had been adversely affected and leave the other questions only for decision to the executing Court, this matter will have to be referred to a third Judge for decision. The papers will be placed before the Hon'ble the Chief Justice for orders.

The appeal then came for hearing before

Ramanujam, J.

(10-1-74) The appellant herein as an earlier purchaser filed an application under Order 21, Rule 90, C. P. C. to set aside a court auction sale of certain property held on 21-12-1964 on the ground that it is vitiated by material irregularity and fraud. She claimed in her petition that she purchased the property in question from the judgment-debtor on 1,7-10-62 long before the first respondent obtained a decree against the judgment-debtor on 18-3-1963, and that, therefore, she would be entitled to maintain the application under Order 21, Rule 90, C. P. C. though she might not be entitled to question the decree-holder's right to bring the property to sale in execution of the decree in his favour. The decree-holder as well as the court auction purchaser contested the application, on the ground that, even though the appellant was a prior purchaser of the property, she would not be entitled to maintain an application under Order 21, Rule 90, C. P. C.

36. The court below considered this legal objection and held that the appellant could not maintain the application under Order 21, Rule 90, C. P. C. relying on certain authorities. Aggrieved by the order of the lower court, she came before this Court, contending that, as a prior purchaser of the property, she would be entitled to maintain the application under Order 21, Rule 90. C. P. C. on the ground of irregularity and fraud. The appeal was heard by Kailasam and N. S. Ramaswami, JJ. After considering the rival contentions of the parties, in the light of the statutory provisions and also the relevant decisions on the point, both the learned Judges, by their separate judgments, held that the dismissal of the application under Order 21, Rule 90, C. P. C. filed by the appellant, on the ground that it would not be maintainable, is erroneous, and that the matter must be remitted to the lower court for fresh disposal of the application under Order 21, Rule 90, C. P. C. on the merits.

37. However, the learned Judges have differed as to what has to be done by the court below after remand. According to Kailasam, J., in addition to the consideration of the application under Order 21, Rule 90, C. P. C. on the merits, the court below must satisfy itself that the appellant's interests are affected by the court auction sale. But N. S. Ramaswami, J. has held that the lower court after remand should confine itself to the consideration of the application under Order 21, Rule 90, C. P. C. on the merits, without going into the question as to whether the appellant's interests in the property are affected by the court auction sale. On such a difference of opinion, the matter has come up before me.

38. It is seen that, though the appellant has set out in her application details relating to the purchase of the property from the judgment-debtor on 17-10-1902, neither the decree-holder nor the court auction purchaser has controverted the said factual position. Therefore, the lower court proceeded on the basis that the applicant, the appellant herein, has got sufficient interest in the property which is affected by the court sale, and held that even if the appellant's interest is affected by the court sale, her remedy would not be to file an application under Order 21, Rule 90, C. P. C.

39. The claim put forward by the applicant-appellant is that she has acquired an interest in the property by virtue of her purchase on 17-10-1962 and that interest has been affected by the court sale. She contended that a purchaser, either before or after attachment, is a person whose interest should be considered to be affected by the court sale. The contention of the decree-holder and the court auction-purchaser, on the other hand, was that, the appellant's purchase being prior to the attachment, she could not be considered to be a person whose interest has been affected by the court sale. The respondents did not, in fact, question the appellant's plea that she has acquired an interest in the property and that interest is affected by the court sale. If really the applicant's interest is not affected, the decree-holder or the court auction-purchaser would have resisted the said plea. They have not done so. They merely proceeded on the basis. of that the applicant is not entitled to maintain an application under Order 21, Rule 90, C. P. C. That position having been held to be erroneous, the further consideration of the application can only be on the merits under Order 21, Rule 90, C. P. C. I am, therefore, inclined to agree with N. S. Ramaswami, J. and hold that it is not necessary to the lower court to go into the question whether the appellant's interest in the property is affected by the court sale, but that it has to decide the application on the merits, that is, the question whether the sale is vitiated by material irregularity and fraud and has resulted in substantial injury, as alleged by the appellant. [Final order was made by Kailasam, J. in terms of the opinion of Ramanujam, J.].


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