1. The plaintiff who is the appellant here brought a suit for a declaration that a sale in execution of a decree obtained in S. S. No. 287 of 1924 was not binding upon him. The suit in question was brought against one Gangulu, who was the original pattadar of land situated in an estate under the Madras Estates Land Act. We are concerned throughout this appeal with the Act prior to the amendment of 1934. Gangulu fell into arrears and two decrees were obtained against him. The first was in S. S. No. 373 of 1922 and the second was in S. S. No. 287 of 1924. The earlier decree was executed in 1926 after the second decree had been obtained and in the execution proceedings the land put up for sale was purchased by the present appellant on 5th May, 1926. I am informed that this land was only a portion of the holding of Gangulu. After the purchase the appellant does not appear to have produced the sale certificate before the landholder, as he should have done under Section 146 (1) of the Act; but he paid the rent and got a receipt showing that he had paid the rent on his own account. In subsequent years rent was paid by his agent and the receipts wrongly indicate that it was paid on account of the registered pattadar Gangulu. In 1933 the landholder proceeded to execute the second decree obtained in 1924 and in the course of execution without notice to the appellant he brought the holding to sale and purchased it himself. Subsequently the landholder ejected the appellant and it was his dispossession which gave rise to the suit.
2. Two contentions have been urged in appeal. One is that the second sale is bad for want of notice to the appellant who must be deemed to be the defaulter in the light of the Full Bench ruling in Lakshmana Aiyar v. Ayyaswami Chettiar : (1941)1MLJ1 , as interpreted by a later Full Bench ruling in Peria Muniswami Mudali v. Sena Narasappa Mudali S.A. No. : (1941)2MLJ79 . The second is that, whether the sale is bad for want of notice or not, it is bad because the charge in respect of the arrears which had accrued due after the first decree at the time of the first sale must be deemed to have been wiped out by that sale so far as the liability of the portion of the holding sold is concerned. It seems to me that the appellant must fail on the first contention, for there appears to be no necessity under Section 117 of the Estates Land Act to give personal notice of a sale in execution of a rent decree to the defaulter. The kind of notice contemplated is by beat of drum in the village and by an affixture in a conspicuous place in the village. It is therefore not necessary to go into the question whether there has been such recognition of the appellant by the landholder as would enable him to claim rights as a defaulter even though he has not complied with the formalities required by Section 146.
3. The second contention seems to me to be more substantial. It is true that under Section 5 of the Act a first charge is created on the holding in respect of the arrears due thereon, so that the arrears due under the second decree would be a charge on the holding just as much as the arrears due under the first decree; and it is also true that Section 118 read with Section 126 contemplates only the sale of so much of the holdings is necessary, to satisfy the particular demand which in the present case must be the amount due under the first decree. It is argued that the provisions of Section 125 whereby the sale is free of incumbrarices other than those specified will not extend to statutory incumbrances such as are created by Section 5 and it must therefore be held that when the sale was held in execution of the first decree, though the proclamation did not recite the existence of the second decree and no notice was taken to the purchaser at the time of the subsequent sale, the sale under the first decree must be deemed to be a sale subject to the charge for rent in respect of the second decree which was not being worked out by that particular sale. This argument would be a forcible argument were it not for the provisions of Section 127. By Sub-section (c) of that section, if a sale results in a surplus after paying the costs and the amount of the arrears in respect of which the sale was held, the landholder has a right to appropriate from and out of the surplus any rent which may have fallen due to him in respect of the holding between the date of the suit and the sale. The effect of this provision seems to be to make the sale a sale in liquidation not only of the charge for the arrears in respect of which a sale was expressly held but also in liquidation of the charge for any subsequent arrears due on the same holding. To hold otherwise would involve the anomalous consequence that the landholder would be entitled to liquidate a portion of the charge in respect of the latter arrears from and out of the proceeds of that sale and to treat that charge as still subsisting for any balance and bring the same property to sale again. The original defaulter would get a price which was determined by the value of the land less the amount of arrears including any subsequent arrears and the purchaser would pay a price which would take into consideration the amount of subsequent arrears.... But the landholder would have a right to deduct those arrears, from the price so paid and also would retain the right to claim those arrears over again to the extent to which they had not been satisfied from the purchaser of the land. The same question came up before the Calcutta High Court in a case under the Bengal Tenancy Act the provisions of which are in this respect essentially similar to those of the Estates Land Act: vide Faez Rahaman v. Ramsukh Bajpai I.L.R.(1893) Cal. 169. The learned Judges point out that the view similar to that which has been put forward on behalf of the respondent in this case would result in the landlord having a charge on the tenure as well as on the surplus sale proceeds, and, if that was the law, would lead to great injustice, for the defaulter might be made to pay the full amount of the arrears without getting the full value of his tenure from the auction purchaser and the auction purchaser would get a tenure for less than its full value without having to pay the arrears of rent.
4. The learned Subordinate Judge who heard the appeal in the Court below has rejected the appellant's contention on the simple ground that the amendment of Section 125 by Act VIII of 1934 expressly provides that the purchaser at the rent sale shall take subject to any incumbrance created before the passing of the Act but not subject to any arrears of rent due in respect of the holding before the date of sale or to interest on such arrears, whether a decree has been obtained or not for such arrears or interest. After stating quite correctly that this amendment will have no retrospective effect, he assumes that the amendment necessarily makes a change in the law and that therefore the law as it stood prior to the amendment made such sales subject to any claim for arrears subsequent to the date of the decree. It seems to me that no such assumption is warranted and that the effect of the amendment of Section 125 by Act VIII of 1934 is merely to clarify the existing law and to remove the possibility of a contention such as has been urged before me on behalf of the respondent. I am of opinion that under Section 125 as it stood before the amendment, read in the light of Section 127, the sale of a holding in execution of a decree for rent must be deemed to put an end to the landlord's charge over that holding in respect of the arrears and interest thereon which have accrued due since the decree at the time of the sale. It follows therefore that the sale of the appellant's holding in pursuance of the decree obtained anterior to the purchase by the appellant was illegal. I accordingly allow the second appeal with costs throughout and restore the decree of the trial Court.
5. Leave to appeal is granted.