1. The appellant herein who was the judgment debtor in O. S. 5 of 1953, filed an application under Order XXI Rule 90 C. P. C. on 30-9-1963 for setting aside the sale of the property that took place in execution of the decree in the suit and purchased by the respondent herein, and also filed an application for dispensing with the furnishing of security contemplated by the proviso to Order XXI Rule 90 C.P.C. I must mention the fact that the suit itself was based on a mortgage and the respondent herein, who was the decree-holder, purchased the property in auction for a sum of Rs. 2005.
The application filed by the appellant for dispensing with the furnishing of security was numbered as E. A. 525 of 1963, the same was dismissed and the appellant herein was directed to furnish security for a sum of Rs. 2000 within one month from the date of the order dated 14-11-1963. The learned Subordinate Judge of Chinglcput who disposed of that application, stated that the point for determination before him was whether it was a fit case for dispensing with security to be furnished under Order XXI Rule 90 CPC and then answered the point as follows-
'On behalf of the petitioner an affidavit filed by Valliammal in C. M. P. 2194 of 1953 in C. M. A. 127 of 1953, High Court, Madras, has been marked as Ex. A. 1 and in para 5 of the said affidavit, it is alleged that the building was fetching a rent of Rs. 500 per month. Ex. A. 2 gives the value of the property at Rupees 60,000 while according to Ex. A. 1, the four mortgage debts amounted to Rupees 35000. It is contended that all the mortgages are old, and have ripened to decrees and that no amount was paid, whether towards principal or interest, and that the property has deteriorated in value, and therefore the security cannot be dispensed with. On the materials placed before me, I find that it is a fit case to call upon the applicant to furnish security to the extent of Rs. 2000 and therefore the petition for dispensing with the security to be furnished under Order XXI Rule 90 C. P. C. is dismissed with costs. Time one month'.
Thereafter the appellant furnished an extent of 72 cents of punia in S. No. 88/6 in Aviyur village, Gingee taluk, South Arcot as security. The respondent therein opposed it on the ground that the same was insufficient. Thereafter by an order dated 10-12-1964, the learned Subordinate Judge of Chingleput held that the security offered by the appellant was not sufficient, that the same could not be accepted as security furnished in terms of the order in E. A. 525 of 1963, and that once the security was not furnished as called for, the application could not be maintained; and he consequently dismissed with costs the application E. A. 15 of 1964 filed by the appellant for setting aside the sale. The present appeal has been filed against that order.
2. Mr. A. Ramanathan, the learned counsel for the appellant, advanced the following contentions: (1) the order dated 14-11-1963 made in E. A. 525 of 1963 was erroneous on two grounds (a) that the proviso to Order XXI Rule 90 C.P.C. requiring the furnishing of security has no application to a mortgage decree and (b) that even assuming that it has application, the learned Subordinate Judge erred in demanding security on the facts of this case; (2) the order dated 14-11-1963 madeIn E. A. 525 of 1963 can be questioned by the appellant in the present appeal which has been preferred against the order dated 10-12-1964 made in E. A. 15 of 1964; and (3) on 16-1-1964 the learned Subordinate Judge had admitted E. A. 15 of 1964 and consequently after the stage of admission he had no jurisdiction to demand security. These contentions of the learned counsel for the appellant are refuted by Mr. R. Rajagopala Aiyar, the learned counsel for the respondent.
3. Logically I shall take the second contention first, because if I come to the conclusion that the appellant is not entitled to challenge the correctness of the order dated 14-11-1963 in the present appeal, it will be unnecessary for me to go into the first question whether that order is correct or not. The argument of the learned counsel in this behalf is that the order dated 14-11-1963 is merely an interlocutory order and it does not determine the rights of the parties; nor does it put an end or terminate the application filed by the appellant for setting aside the sale. According to the learned counsel the dismissal of the application to dispense with the security will have only the consequence of compelling him to furnish security and only if he does not furnish security in terms of the order dated 14-11-1963, his application for setting aside the sale would become liable to be dismissed. Therefore, the order dated 14-11-1963 is only an interlocutory order which can be challenged in the appeal preferred against the final order dated 10-12-1964. For this contention the learned counsel relied on several decisions and the provisions contained in Section 105 read with Section 108 C. P. C. In Maharaja Mohashur Singh v. Bengal Govt. 1865-7 Moo Ind App 283, 302 the Privy Council stated-
'We are not aware of any law or regulation prevailing in India which renders it imperative upon the suitor to appeal from every interlocutory order by which he may conceive himself aggrieved, under the penalty, if he does not do so, of forfeiting for ever the benefit of the consideration of the appellate court. No authority or precedent has been cited in support of such a proposition, and we cannot conceive that anything would be more detrimental to the expeditious administration of justice than the establishment of a rule which would impose upon the suitor the necessity of so appealing; whereby on the one hand he might be harassed with endless expense, and delay, and on the other inflict upon his opponent similar calamities',
4. In Chandrambala Devi v. Prabodh Chandra Roy ILR (1909) Cal 422,time had been repeatedly granted by the court at the instance of the judgment-debtor with the consent of the decree-holders for compromise, and on the final date to which payment was adjourned, the Judgment-debtor prayed for further time and the decree-holder demanded it as a condition precedent to the grant of further time that the judgment-debtor should definitely agree that upon her failure to pay the money on the date to be fixed, her right to challenge the validity of the sale should finally cease. Notwithstanding this arrangement, the court subsequently extended the time for payment of the money and permitted the judgment-debtor to deposit part of the decree amount on a particular day and gave her further time to pay the balance of the money. On the judgment-debtor complying with this order, the sale was set aside. Against the order setting aside the sale, the auction purchaser filed the appeal. The question arose whether in that appeal the auction purchaser could challenge the earlier order passed by the court granting time to the judgment-debtor to pay the money. A Division Bench of the Calcutta High Court took the view that he could challenge the earlier order and he was not bound to prefer a separate appeal against the earlier order. The Learned Judges pointed out--'In our opinion, it was not necessary for him to do so. As was pointed out by this court in Beharilal Pundit v. Kedarnath Mullick, ILR (1891) Cal 469, an appeal need not be preferred against every order in an execution proceeding. If the contrary view prevailed, and if appeals were allowed to be preferred against Interlocutory orders, there might be innumerable appeals in the course of one execution proceeding. It is open to the party aggrieved to challenge by an appeal against the final order which determines the rights of the parties, the propriety of the interlocutory orders made in tlie course of the proceedings'.
The principles have been given statutory sanction in the form of Section 105 C. P. C, Sub-section (1) of Section 105 provides-
'Save as otherwise expressly provided, no appeal shall lie from any order made by a court in the exercise of its original or appellate jurisdiction; but where a decree is appealed from, any error, defect or irregularity in any order, affecting the decision of the case, may be set forth as a ground of objection in the memorandum of appeal.'
It may be observed that the second limb of the Sub-section applies not only to non-appealable orders but also appealable orders which are not appealed against. This is clear from the language of the section itself. Apart from that, Sub-section (2) of Section 105 which provides an exception to the second limb of Sub-section (1) of Section 105 states that any party aggrieved by an order of remand is precluded from disputing its correctness, ifhe has not preferred an appeal against the said order where such order is appealable. Consequently, the language of Section 105 makes it clear that it is open to a party not to prefer an appeal against an order which is appealable under the Civil Procedure Code and yet to challenge its correctness in an appeal preferred against the final decree where that order has affected the decision of the case. Mr. Rajagopala Aiyar contended that the second limb of Sub-sec, (1) of Section 105 will apply only to orders against which no appeal lies and that too when the ultimate appeal is preferred against a decree and not against an order. I have already pointed out that the second limb of Sub-section (1) of Section 105 applies to orders, whether appealable or non-appealable. Otherwise, the observations referred to by me. In the decisions cited above, will have no meaning, because there can be no question of a party not being obliged to prefer an appeal against an order which is not appealable. With regard to the second part of the objection of Mr. Rajagopala Aiyar, it has to be pointed out that by virtue of Section 105 C. P. C. the provisions of Section 105 will apply to the case of an appeal against final order also. In Alagappa Chetti v. Annamalai Chettl 4 MLW 411 :AIR 1917 Mad 404 , Seshagiri Aiyar J. observed-
'I am Inclined to think that the principle of Section 105 C. P. C. would apply not only to decrees and interlocutory orders, but also to orders and interlocutory orders which lead up to the final order. The principles enunciated in Jones v. Gough 1865 3 Moo PC (NS) 1 and Cameron v. Fraser 1842 4 Moo P. C. 1 to which Mr. Rajah Aiyar on behalf of the respondent drew my attention, support this view'. This has been followed by Menon J. In Saminatha v. Narayanaswami : AIR1936Mad936 . The Supreme Court in Satyadhyana v. Smt. Dacorjin Debi, : 3SCR590 , after elaborately referring to Section 363 C. P. C. of 1859 and the corresponding provisions in the subsequent C. P. Code and to Section 105 of the present Code stated-
'It is clear therefore that an interlocutory order which had not been appealed from either because no appeal lay or even though an appeal lay an appeal was not taken could be challenged in an appeal from the final decree or order'. In the light of these decisions, I am of the view that the appellant in the present case is entitled to challenge the validity or the correctness of the order dated 14-11-1963, dismissing the application of the appellant to dispense with the furnishing of security, in the present appeal preferred against the order dismissing his application to set aside the sale. The learned Counsel points out that in thegrounds of appeal preferred to this court he has challenged the correctness of the order dated 14-11-1963. In this connection Mr. Ramanathan, learned counsel for the appellant, invited my attention to the decision of the Travancore-Cochin High Court in Md. Ali v. Abdul Rahiman, AIR 1952 T. C. 316 . In that case the execution court declared that the decree-holder was entitled to interest on mesne profits awarded to him by the decree, though the decree itself did not make any such provision. However, no appeal was preferred against the order declaring that he was entitled to interest; but that order was sought to be challenged in the appeal preferred against the final order. The learned Judges of the Travancore-Cochin High Court took the view that the appellant was entitled to do so. However, the learned Judges were of opinion that if the appellant had not raised the question in the Memorandum of appeal, he would not be entitled to do so. The learned Judges observed- 'The circumstance that the appellant had not in his memorandum of appeal made the correctness of the execution court's order as to interest on mesne profits a ground of objection disentitled him to raise the question before the lower appellate court',
I would like to make one comment with regard to this observation. If this observation of the learned Judges merely referred to the general principles that it is in the discretion of the court whether it will allow an appellant to urge a point at the time of the hearing, which was not raised in the ground of appeal, or not, there can be no dispute with regard to the statement of the learned Judges. But If they are of the view that the right of an appellant to canvass the correctness of an earlier order in the subsequent appeal is available to him at all only if he ad raised the question in the grounds of appeal, I find it difficult to subscribe to such a proposition.
5. There is an unreported decision of this court in Santhia Servai v. Solayappa Chettiar C. M. A. 86 of 1959 (Mad) to which I am referred to by the learned counsel for the appellant. In that case the appellant applied for setting aside the sale under Order XXI Rule 90 C. P. C. and the execution court passed an order under the proviso to Order XXI Rule 90 C. P. C, directing the appellant to furnish security for the amount obtained at the sale But as he did not take steps for testing the security offered, the application was ultimately dismissed. Against the order dismissing the application for non-prosecution, C. M. A. 92 of 1959 was filed in this Court. After dismissal of the application, the appellant filed an application for setting aside the order of dismissal for default. That application was also dismissed by the lower Court and against that order C. M. A. 8G of 1959 was preferred in this Court. It must be remembered that no independent appeal was preferred by the appellant in that case against the order of the execution Court directing him to furnish security for the amount obtained at the sale. Notwithstanding that, in the appeals against the final order, a Division Bench of this Court went into the correctness of the execution Court's order passed on the earlier occasion directing the appellant to furnish security, and holding that the execution court erred in directing the appellant to furnish security allowed the appeals. In view of these decisions I hold that the appellant in the present case is entitled to challenge in the present appeal the correctness of the order dated 14-11-1963 made in E. A. 525 of 1963.
6. With regard to the first contention, I am of the view that there is no substance in that part of the contention of the learned counsel where he argues that the proviso to Order XXI Rule 90 has no application to a mortgage decree. The rule with the proviso is in the following terms-
'Where any immoveable 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 interests are affected by the sale, may apply to the court to set the sale aside on the ground of a material irregularity or fraud in publishing or conducting it: Provided that the court may, before admitting the application, call upon the applicant either to furnish security to the satisfaction of the court for an amount equal to that mentioned in the sale warrant or that realised by the sale, which ever is less, or to deposit such amount in court.'
Thus it will be seen that the rule applies to over case where an immoveable property has been sold whether it is in execution of a mortgage decree or any other decree and the language of the rule does not warrant any distinction being made between the sale of an immoveable property made in execution of a mortgage decree and that in execution of any other decree. Mr. Ramanathan, in support of his contention, relied upon the un-reported decision of this court referred to by me above. The relevant observations in that decision on which the learned counsel relies are as follows:
'We are satisfied that on the merits of the case the lower Court should not have demanded security from the appellant. The decree was on the basis of the mortgage. There was therefore ample security for the amount due thereunder, to require the judgment-debtor or his representative to give security once overfor amount covered by the decree. In our opinion, the terms of the proviso to Order XXI Rule 90 C. P. C. which requires security to be furnished either in respect of the amount mentioned in the sale proclamation, or in respect of the sale amount would be inappropriate in the case of a mortgage decree, as there is already a subsisting security for the decree amount. It may be that in certain cases on account of the delaying tactics adopted by the judgment-debtors, the existing security might depreciate and in such event it might be considered equitable that there should be a power in court to demand security for the deficiency, viz, between the amount realised at the sale and the present value of the property. But there is no provision in order XXI Rule 90 C. P. C. to cover a case of such deficiency in security. In the case of a mortgage decree it will be apparent from the above discussion that a court can be said to be exercising its jurisdiction wisely if it does not demand security under the proviso to Order XXI Rule 90 C. P. C.'
The above observations make it abundantly clear that the learned Judges in deciding that case were merely concerned with the exercise of discretion on the part of the court under the proviso to Order XXI Rule 90 C. P. C. and were of the view that the discretion must be exercised in a particular manner in relation to a mortgage decree. The said observations do not establish that the proviso to Order XXI Rule 90 C. P. C. is not attracted to a case of mortgage decree. However, the second part of the contention of Mr. Ramanathan is well founded, I have already extracted the order of the learned Subordinate Judge dated 14-11-1963, in which he has concluded that it was a fit case to call upon the appellant to furnish security to the extent of Rupees 2000. The learned Subordinate Judge referred to Ex. A. 1 which mentioned the rent fetched by the property at Rupees' 500 per month and also Ex. A. 2 which mentioned the value of the property at Rs. 60000. At the same tune, the learned Subordinate Judge pointed out that all the four mortgages which included the mortgage on the basis of which the present decree was obtained, amounted to Es. 35000. The learned Subordinate Judge thereafter referred to the contention put forward on behalf of the respondent herein and without taking into account the value of the property with reference to the total liability that was existing on the property, he considered it a fit case for directing the appellant to furnish security. Mr. Rajagopala Iyer contended that admittedly there were four mortgages over the property, that for a number of years no amount was paid either towards the principal or interest, that consequently the liability on the property was swell'
ing day after day, that in the sale in question the property was sold only for Rs. 2005, and that therefore there was a risk of the property fetching less in any further subsequent sale. I am however Unable to accept this contention. In the case of a mortgage decree a proper exercise of discretion on the part of the execution court will be to direct furnishing of security only if it comes to the definite conclusion that the value of the property will not be sufficient to cover the liability on the property including the amount for which the property was sold. So long as the learned Subordinate Judge has not come to a positive conclusion on this aspect, he will not he exercising his discretion properly or legally, if he directs the applicant to furnish security. Therefore, I am of the view that on the facts of this case the learned Subordinate Judge was not justified in dismissing the application of the appellant to dispense with security and directing him to furnish security.
7. Then remains the third contention of Mr. Ramanathan. According to him, on 16-1-1964, the execution Court passed the following order-
'Test warrant not returned. Title deeds. Await 27-1-1064 and notice' The argument is that this was an order made by the court on the present E. A. directing notice to the other side, that that would amount to admitting the petition, that in terms of proviso to Order XXI Rule 90, C. P. Code, the jurisdiction of the court to demand security is available only before admitting the petition, and that once the court has admitted the petition no such jurisdiction is available to It. The learned counsel, in support of this proposition, relied on the decision of this court in Vaidyanatha v. Indian Bank Ltd. : AIR1955Mad486 . In my view that decision does not help the appellant's contention. In the present case, as I have already stated on 14-11-1963, the learned Subordinate Judge has directed the appellant to furnish security within a period of one month. Thereafter the appellant furnishes security. It is only at that stage on 16-1-1964, the notice referred to above was directed by the court. Consequently even if the order directing notice is to be taken as constituting the admission of the petition, which was done after demanding security, once security had been demanded earlier to the admission of the petition, the subsequent admission does not take away the jurisdiction of the court to test the security permitted to be furnished already. It is relevant to refer to the observations of this court in Venkatalingamma v. Rajagopala Venkata Narasimha AIR 1942 Mad 509 to the following effect- 'It is clear therefore to us that in Issuing notice the court did not intend todeprive itself of the power of deciding whether the security to be eventually furnished by the petitioner was adequate or not, and when it was found that the security was not adequate, the court was entitled under Rule 90 as now amended to dismiss the application without any further consideration on its merits'.
Therefore I am of the view that on the facts of this case the contention of Mr. Ramanathan that by virtue of the order dated 16-1-1964, the learned Subordinate Judge had denied to himself the right to insist on the compliance with his order dated 14-11-1963 is not tenable. However, in view of my conclusion that the order dated 14-11-1963, dismissing the application of the appellant to dispense with the security is erroneous, this appeal succeeds and has to be allowed, with the result that the learned Subordinate Judge will have to dispose of the application of the appellant for setting aside the sale on merits. There will be no order as to costs.