Skip to content


Kode Seshamma Vs. Mandana Rattayya and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Case NumberSecond Appeal No. 661 of 1948
Judge
Reported inAIR1953Mad454; (1952)1MLJ684
ActsDebt Law; Madras Agriculturists' Relief Act, 1938 - Sections 23 and 24
AppellantKode Seshamma
RespondentMandana Rattayya and ors.
Appellant AdvocateA.L. Narayana Rao, Adv.
Respondent AdvocateD. Munikanniah, Adv.
DispositionAppeal allowed
Cases ReferredSeshavatarm v. Bamayya
Excerpt:
.....23 and 24 of madras agriculturist's relief act, 1938 - whether amount deposited by appellant (auction purchaser) and distributed among creditors of judgment debtors (respondent) can be recalled from judgment debtors who had benefit of money by their liability being discharged - section 24 of act is species of restitution specially conferred upon purchaser who has lost fruits of his purchase by result of compulsory setting aside of sale - held, appellant entitled to recover money - appeal allowed. - - 107 of 1932 was satisfied by this amount being taken over by thirupathiah. 107 of 1932, more than double the principal amount had been paid up and that the decree in that suit must be entered up as satisfied. 3. various contentions were raised by the defendants against the..........aside under section 23, a purchaser shall be entitled to an order for repayment of any purchase money paid by him against the person to whom it has been paid. this contemplates an application and not a suit. but since between the parties it is now final that a suit is the only remedy, the question regarding the maintainability of the suit need not now engage our attention any further.5. section 24 of madras act 4 of 1938 is practically identical with order 21, rule 93, civil p. c. which says that where a sale of immovable property is set aside under rule 92, the purchaser shall be entitled to an order for repayment of his purchase money with or without interest as the court may direct, against any person to whom it has been paid. the concluding words of both the provisions arc.....
Judgment:

Govinda Menon, J.

1. In O.S. No. 84 of 1932 on the file of the Subordinate Judge's Court of Vijayawada, the present appellant obtained n decree against the respondents and their father for a sum of money on foot of a mortgage and the mortgaged properties were brought to sale. The appellant herself became the auction-purchaser and deposited the amount that remained after setting off the decree amount due to her, in Court. This balance amount was Rs. 995-12-0 and it stood to the credit of the judgment-debtors. A third party, one Tirupathiah, had a decree against the judgment-debtors in S.C. No. 107 of 1932 and in pursuance of that decree he attached the amount in Court to the credit of the judgment-debtors and drew out that sum in part satisfaction of his decree. Later on, the judgment-debtors applied under Section 23, 'Madras Agriculturists Relief Act', 1938, to have the sale set aside and the same was accordingly set aside. The result was that the appellant, who had purchased the properties in court auction, lost them, but the decree which she had against the judgment-debtors respondents was executable.

2. The suit out of which the present appeal arises was for recovery of the excess amount deposited by the plaintiff in Court to the credit of the judgment-debtors and taken over by Thirupathiah the decree-holder in S.C. No. 107 of 1932, on the ground that the judgment-debtors had benefit of that amount by reason of the fact that me claim against them in S.C. No. 107 of 1932 was satisfied by this amount being taken over by Thirupathiah. It has also to be stated that the respondents filed I.A. No. 379 of 1942 in S.C. No. 107 of 1932 alleging that by reason of the withdrawal of the sum of Rs. 995-12-0 by Thirupathiah, the decree-holder in SC No. 107 of 1932, more than double the principal amount had been paid up and that the decree in that suit must be entered up as satisfied. After enquiry, satisfaction of that decree was also entered up.

3. Various contentions were raised by the defendants against the maintainability of the suit and the trial Judge found that though the suit is not maintainable under Section 24 of the 'Madras Act 4 of 1938'. the appellant is entitled to equitable relief against the judgment-debtors, because the decree against them was satisfied by the withdrawal of this amount by the decree-holder Tirupathiah. The learned District Munsif went into the question and found that the respondents had the benefit to the extent of a sum of Rs. 683-1-5 and to that extent they are bound to repay the same to the plaintiff appellant. A decree for that amount with interest thereon was passed. The plaintiff not being satisfied with the decree for Rs. 683-1-5, preferred an appeal to the subordinate Judge complaining that the decree should have been for the entire amount of Rs. 995-12-0 with interest etc., and the defendant filed a memorandum of cross-objections objecting to the decree of the District Munsif to the extent of Rs. 633-1-5. The lower appellate Court was of opinion that the plaintiff had no cause of action against the defendants and that the equitable relief granted was not sustainable. The appeal was therefore, dismissed and the memorandum of cross-objections allowed. The present second appeal by the plaintiff is against this decision of the Subordinate Judge.

4. It has to be mentioned at the very outset that Tirupathiah, the decree-holder in S.C. No. 107 of 1932, was not made a party to the suit; nor was he made a party to the proceedings by which the plaintiff applied under Section 24, Madras Agriculturists Relief Act for a refund of the purchase money when the sale was set aside under section 23 of the Act. The order Ex. P. 4 shows that on the objection raised by the respondents when the plaintiff claimed refund of the purchase money, the executing Court held that the remedy of the plaintiff was a regular suit and not by means of execution proceedings. How far this order is correct need not be decided now though section 24 of Act 4 of 1938 lays down that where a sale is set aside under section 23, a purchaser shall be entitled to an order for repayment of any purchase money paid by him against the person to whom it has been paid. This contemplates an application and not a suit. But since between the parties it is now final that a suit is the only remedy, the question regarding the maintainability of the suit need not now engage our attention any further.

5. Section 24 of Madras Act 4 of 1938 is practically identical with Order 21, Rule 93, Civil P. C. which says that where a sale of immovable property is set aside under Rule 92, the purchaser shall be entitled to an order for repayment of his purchase money with or without interest as the Court may direct, against any person to whom it has been paid. The concluding words of both the provisions arc practically the same except that in section 24 of Act 4 of 1933 in qualifying the word 'person' the definite article 'the' is used whereas in Order 21, Rule 93, Civil P. C., the word 'any' qualified 'person'. The argument put forward by the respondents, which found favour With the lower appellate Court is that the money has not been paid to them but that the same had been taken by Thirupathiah, the decree-holder in S.C. No. 107 of 1932, and that if at all the plaintiff is entitled to any remedy it is only against Thirupathiah, and this was accepted by the lower appellate Court despite the fact that in the application for scaling down the decree in O.S. No. 107 of 1932 the respondents have acknowledged and accepted the surplus amount deposited in Court by the decree-holder, i.e., the appellant, and attached by Thirupathiah as money belonging to them, and contended that since such money was received by the decree-holder Thirupathiah in payment of his decree -- more than double the decree -- amount had been paid over to him & the decree had therefore become completely satisfied.

The learned Subordinate Judge thinks that when once the sale was set aside under section 23 of Act 4 of 1938, the money which had been deposited in Court automatically becomes the money of the depositor and when Thirupathiah withdrew, that money ho should be deemed to have taken the money of the depositor, so that it cannot be said that the defendants-judgment-debtors had any use or ownership over that money. But this point of view has omitted to take note of the acceptance by the judgment-debtors of the deposited money as belonging to them and getting the decree against them satisfied on foot of such money being taken over by their decree-holder. This action of the judgment-debtors cannot be interpreted as disclaiming the right over the deposited amount or revesting the title in the money in the depositor plaintiff. The judgment-debtors under such circumstances will have to be estopped from thereafter contending that the deposited amount does not belong to them, or that they did not have the benefit of the amount.

It is well accepted principle of law that a party cannot both approbate and reprobate. In the words of Honyman J. in -- 'Smith v. Baker', (1373) 8 C. P. 350 a party cannot

'at the same time blow hot and cold. He cannot say at one time that the transaction is valid, and thereby obtain some advantage to which he could only be entitled on the footing that it is valid, and at another time say it is void for the purpose of securing some further advantage'.

Similar observations were made by Lord Kenyon C. J. in -- 'Smith v. Hodson', 2 S. L. C 13 Edn. 140. See also the observations of the Privy Council in -- 'Ambu Nair v. Kelu Nair', 56 Mad 737.

6. On the footing that the deposited amount belonging to the judgment-debtors when the same was attached and taken away by Thirupathiah, the present respondents got the decree against them scaled down and satisfied, i.e., they have used the money in Court deposit for getting the decree against them satisfied and such being the case they have obtained an advantage by the use of that money. We, therefore, are of opinion that it is not open to the judgment-debtors now to contend that the money deposited in Court when once the sale was set aside, automatically reverts and becomes the money of the depositor and that the respondents have no interest or benefit in the same.

7. The learned Subordinate Judge relied upon the decision in -- 'Seshavatharam v. Ramayya', : AIR1943Mad274 as authority for the proposition that the plaintiff can have no cause of action against the judgment-debtors. The facts of ttiat case cannot, by any means, be said to be similar to those in the present case. What happened there was that after a sale was set aside under Section 23 of Madras Act 4 of 1938, the judgment-debtor applied for redelivery of the properties to him and the purchaser applied for repayment of the monies paid by him for purchasing the properties. The lower Court held that the judgment-debtor should not be entitled to obtain redelivery of the properties without paying to the court auction purchaser the whole of the amount which had gone in discharge of the decree.

On appeal, Wadsworth and Patanjali Sastri JJ. observed that no such conditional order can be made and say at page 35:

'....... .the satisfaction of the decree out of the purchaser's money is cancelled just as the sale is cancelled. The decree-holder has to give back the money which he has drawn and he remains at liberty to execute any amended decree which may be passed in fresh proceedings. There can be no question in such circumstances of the payment made by the auction purchaser having benefited the judgment-debtor. The decree towards which the payment was made is one that has been into the melting pot and as a result of the application of section 19 it may well disappear entirely. The decree-holder is not debarred by reason of his having drawn the proceeds of the sale from executing any revised decree which may be passed, but he is required to refund the sale proceeds to the auction purchaser. In such circumstances, there can be no question of any refund of the sale prices by the judgment-debtor. Nor is there any necessity to allow the auction purchaser to retain possession of the property pending a payment by the judgmen debtor of the amount due from him under the mortgage-decree'.

We are not able to find how these observations can be said to fit in with the present case. It may be that when once the sale is set aside the money automatically becomes the money of the purchaser. But the difference is that whereas in the present case the judgment-debtors had claimed and accepted the money remaining in deposit as their own and obtained a benefit therefrom, in the case in -- 'Seshavatharam v. Ramayya : AIR1943Mad274 , there was no such acceptance. The decree-holder had taken away the money and the auction purchaser had after the sale was set aside, withdrawn the surplus amount in Court. The judgment-debtor there had nothing to do with any of these moneys. We do not feel that this decision can really assist the respondents.

8. A somewhat similar question was considered by their Lordships of the Judicial Committee in the case reported in -- 'Jai Berham v. Kedar Nath', 44 Mad. L. J. 735 where the question arose whether the amount deposited by the auction purchaser and distributed among the creditors of the judgment-debtors can be restituted or recalled from the judgment-debtors who had the benefit of the money by their liability being discharged. Their Lordships held, 'following the principle laid down by Cairns L. C. in -- 'Rodger v. Comptoir d'Escompte de Paris', (1871) 3 P. C. 465 that such restitution was possible. Lord Carson in delivering the judgment says at page 739:

'The auction purchasers have parted with their purchase money which they paid into Court on the faith of the order of confirmation and certificate of sale already referred to. This money has been distributed amongst creditors of the judgment-debtor who had attached the unencumbered property in question and could have realised their judgment-debtors by a sale of this property in execution and it would be inequitable and contrary to justice that the judgment-debtor should be restored to this property without making good to the auction purchaser the moneys which have been applied for his benefit'.

The matter is made clear in the judgment of the Patna High Court from which the appeal was taken to the Judicial Committee in -- 'Jai Berham v. Kedarnath', 44 Mad L. J. 735. The High Court judgment is reported in -- 'Kedarnath v. Jai Berham', 37 Ind. Cas. 863 and in column 2 of paragraph 2 at p. 868 of the report we find the following observation:

'It is not denied that the money paid to the decree-holders was due to them from the judgment-debtors. The decree-holders applied to the Court for a rateable distribution of the purchase money and the Court directed the rateable distribution of the money. The decree-holders received the money from the Court and under the orders of the Court. The judgment-debtors are bound by tile orders of the Court directing the payment.' The auction purchasers paid the money in Court and they have nothing to do with how the money was disposed of. The judgment-debtors have been benefited by the payments, and the payments made by the decree-holders will be considered to nave been made to the judgment-debtors. The judgment-debtors are, therefore liable to pay this money to the auction purchasers before they can recover possession of the property'.

If, in restitution proceedings, though the party to whom money has been paid is different from the party who lias received the benefit thereunder, it has been held that it is the party who has received the benefit that is to restitute, we do not see any reason why the same equitable principle should not be applied to a suit of the present nature. After all Section 24 of Madras Act 4 of 1938 is a species of restitution specifically conferred upon a purchaser who has lost the fruits of his purchase by result of a compulsory setting aside of the sale not in accordance with the ordinary provisions of law but as a result of the special enactment of Section 23, Madras Agriculturists Relief Act.

9. The learned counsel for the respondents stressed before iis the point of view outlined in the judgment of the lower appellate Court that when the sale is set aside the auction purchaser's deposit becomes revested in him and that the judgment-debtors could not be said to have had any interest or right over such amount. We have already expressed our opinion that in the circumstances of this particular case the money must be deemed to have been paid over to the judgment-debtors because they have accepted and had the benefit of such deposit.

10. In -- 'Mangel v. Mathura Prasad' : AIR1935All470 , Sulaiman C.J. has held that under Order 21 Rule 93, Civil P. C., even though it is possible when the sale is set aside on account of the fact that the judgment-debtor had no saleable interest in the property, that the monies paid, over, not to the decree-holder but to the creditors, of the judgment-debtor, can be recalled in an application under that rule if made within time, a suit against persons to whom the deposited' amount has been paid as being due from the judgment-debtor cannot be maintained. By implication it should be understood that the learned. Judges intended to hold that a suit would lie against the judgment-debtor who had the benefit of the money by the decree against him being satisfied. The respondent contended that under Order 21 Rule 93, Civil P. C. it would not be possible for third parties to be paid the monies in Court-deposit until the sale has been confirmed, i. e., after thirty days of the completion of the sale and therefore Order 21 Rule 93, Civil P. C. does not contemplate payment to third parties, though the expression any person to whom the money is paid is found in that rule. Ordinarily it might be so, but there may be cases where even before the sale is confirmed monies are paid over to the decree-holders or the creditors of the judgment-debtors. See -- 'Nafar Chandra v. Gopal Chandra', 22 Ind. Cas. 943.

10a. The view taken by the learned District Munsif seems to be more in accord with justice and equity rattier than the legalistic view adopted by the learned Subordinate Judge. We do not think that the decision in -- 'Seshavatarm v. Bamayya', : AIR1943Mad274 on which the learned Subordinate Judge relies can be applied to the facts of the present case.

11. Nothing could be urged before us to show that the conclusion arrived at by the District Munsif to the effect that the respondents had the benefit of the deposit only to the extent of Rs. 683-1-5 is incorrect. In these circumstances the plaintiff-appellant will be entitled to a decree for that amount only. The appeal is, therefore, allowed, the decree of the Subordinate Judge is set aside and that of the District Munsif restored with, proportionate costs throughout.


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