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Thatathil Nayippatiyil Raman Adiyoty Vs. Chirikandoth Kunnath Kaitheri Kannan Nambiar and anr. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai
Decided On
Reported inAIR1940Mad725; (1940)1MLJ340
AppellantThatathil Nayippatiyil Raman Adiyoty
RespondentChirikandoth Kunnath Kaitheri Kannan Nambiar and anr.
Cases ReferredKotlu Satyam v. Thammanna Perraju
Excerpt:
.....interest in the property sold but was still allowed to pay the necessary sums into court for getting the sale set aside under rule 89, he would clearly be a volunteer. the plaintiff was clearly entitled to rid himself of that unlawful interference by any lawful means without thereby affecting his right to hold the defendants liable for that which they have thus caused him to do. the decree-holder's claim is satisfied and the auction purchaser is compensated. 16. these observations clearly show that the learned judge never intended his decision in kummakutty v. these decisions clearly establish that a payment made by a person interested in the property to have the property released from a wrongful attachment or to stave off a wrongful sale of the property must be regarded as an..........code, to set aside the sale, depositing the amount as required by the rule for payment to the decree-holder and the auction purchaser, and the sale was accordingly set aside. on the very next day, he applied to the court for issue of an order withholding payment to the decree-holder of the amount deposited until his suit, o.s. no. 843 of 1927, was decided. this application however was rejected and the amount due under the decree in o.s. no. 912 of 1925 was paid to the appellant in march, 1928. the first respondent's suit, o.s. no. 843 of 1927, was dismissed by the trial court in august, 1929, but was decreed on appeal in march, 1931, the appellate court having found that the decree in o.s. no. 912 of 192$ was vitiated by fraud and collusion and based upon debts which were not real.....
Judgment:

Patanjali Sastri, J.

1. This is an appeal by the first defendant against the decree of the lower Court directing him to refund a sum of Rs. 423-15-6 with interest to the first respondent.

2. The facts giving rise to the appeal may be briefly stated. The respondents form a tavazhi tarvad of which the second respondent is the karnavan. The appellant sued the second respondent in O.S. No. 912 of 1926 in the District Munsif's Court at Kuthuparamba and obtained a decree for payment of money against him personally and as karnavan. In execution of that decree, certain properties belonging to the tavazhi were attached and brought to sale. The first respondent who was then a minor instituted through his next friend O.S. No. 843 of ly27 in the same Court for a declaration that the decree obtained by the appellant against the second respondent as karnavan in O.S. No. 912 of 1926 referred to above was a fraudulent and collusive decree based upon debts which were not real but had been fictitiously put forward and therefore not binding on the tavazhi tarvad. Pending this suit, the first respondent applied for a temporary injunction restraining the appellant from proceeding with the execution of the decree in O.S. No. 912 of 1926 against the properties of the tavazhi. But the injunction was refused and an appeal against such refusal also failed. The properties of the tavazhi were then sold in execution in December 1927 and the proceedings were adjourned to January 1928 for confirmation of the sale. In the meantime, the first respondent with a view to avert such confirmation and avoid further complications, applied under Order 21, Rule 89, Civil Procedure Code, to set aside the sale, depositing the amount as required by the rule for payment to the decree-holder and the auction purchaser, and the sale was accordingly set aside. On the very next day, he applied to the Court for issue of an order withholding payment to the decree-holder of the amount deposited until his suit, O.S. No. 843 of 1927, was decided. This application however was rejected and the amount due under the decree in O.S. No. 912 of 1925 was paid to the appellant in March, 1928. The first respondent's suit, O.S. No. 843 of 1927, was dismissed by the trial Court in August, 1929, but was decreed on appeal in March, 1931, the appellate Court having found that the decree in O.S. No. 912 of 192$ was vitiated by fraud and collusion and based upon debts which were not real but fictitious. Thereupon, the first respondent applied under Section 144, Civil Procedure Code, for restitution of the amount deposited by him into Court and paid to the appellant. Though the Court finally dealing with that petition found that the first respondent was entitled to a refund in the circumstances of the case, it dismissed the petition on the technical ground that the remedy by application under Section 144 of the Code is available only to a person who is actually a party to the decree which has been varied or reversed, and that the first respondent's only remedy was to sue for the refund of the amount. Hence this suit.

3. Both the Courts below have decreed the plaintiffs' claim on the ground that the payment made by the first respondent was, in the circumstances of the case, one made under compulsion of law and the decree in O.S. No. 912 of 1926 having been set aside as not binding on the tavazhi tarvad, the first respondent was entitled to restitution of the amount which had been wrongfully recovered by the appellant under colour of that decree.

4. From the facts of the case stated above, it will be manifest that the payment was made under force of execution while the decree in O.S. No. 912 of 1926 was still outstanding against the tavazhi tarvad. It was obviously made to avert the confirmation of the sale which had just then taken place and to avoid further complications. The first respondent had taken various steps to prevent the attachment and sale of the properties which he has now succeeded in establishing that the appellant had no right to proceed against. After all such attempts failed, he applied under Order 21, Rule 89 for setting aside the sale and in the affidavit in support of his application, he referred in detail to all the steps which he had been taking, though unsuccessfully for preventing the properties from being brought to sale in execution of the decree in O.S. No. 912 of 1926 which he said he was suing to set aside as a collusive decree, and wound up by stating that the application was filed and the deposit made for averting the completion of the sale. In these circumstances, there can be no presence for saying that the payment by the first respondent was voluntary, and it would be a clear case, in my opinion, for awarding relief to the first respondent under Section 72 of the Indian Contract Act.

5. But the appellant's learned Counsel has contended before me that having regard to certain decisions of this and other High Courts on the nature and scope of an application under Order 21, Rule 89, Civil Procedure Code, the payment by the first respondent which was made under that provision must be regarded as a voluntary payment which he is not entitled to recover from the appellant. The contention is somewhat startling, for, it is difficult to see why a payment which all the circumstances of the case clearly establish to have been made under compulsion of law should, by reason merely of the provision of law which allowed such payment to be made, be deemed to have become a voluntary payment. If the payment had been made after the attachment but before the sale of the properties, it is clear that it would be an involuntary payment which the appellant would be bound to refund in the events that have happened see Kanhaya Lal v. National Bank of India, Ltd. (1913) 25 M.L.J. 104 : L.R. 40 IndAp 56 I.L.R. 40 Cal. 598 . But as the payment was made at a later stage of the execution to set aside a sale of the properties, the payment, it is contended, must be regarded as voluntary. This would be the extraordinary result if the contention of the appellant's learned Counsel were correct, but, it is urged, that such is the effect of certain decisions, some of them said to be binding upon me, which have therefore to be now examined. The line of cases relied on by the learned Counsel starts with Narayan v. Amgauda I.L.R.(1920) 45 Bom. 1094. There in execution of a mortgage decree the mortgaged properties were sold and purchased by the decree-holder himself. A third party claiming the property to be his and not the judgment-debtor's paid the requisite amount into Court and got the sale set aside under Order 21, Rule 89 and the amount was paid to the decree-holder. The persons who paid the money later brought a suit for the refund of the amount paid alleging that the properties sold belonged to him and the question arose whether it was a voluntary payment. Macleod, C.J. and Shah, J., held that it was and so could not be recovered. I may say at once that if the facts of the present case were similar, I should have respectfully declined to follow that decision. The gist of the reasoning was this: If the plaintiff had no interest in the property sold but was still allowed to pay the necessary sums into Court for getting the sale set aside under Rule 89, he would clearly be a volunteer. Now, what is ordinarily sold at an execution sale is the right, title and interest, if any, of the judgment-debtor in the property and not the property itself. If the plaintiff, to suit his own convenience, got rid of the sale of the judgment debtor's right, title and interest in the property by paying the decretal amount into Court, he must equally be regarded as a volunteer. The learned Chief Justice observes:

If the true owner allows the attachment to continue, and the property to be sold as belonging to the judgment-debtor, he can treat the sale as a nullity and resist the auction purchaser. There is no necessity for him to get rid of the sale of what in his opinion does not exist. The attachment of the property itself is a different matter, that may seriously inconvenience him, but if he is the true owner the sale of a non existent interest in it does not affect him. If he pays in money to get that sale set aside it can only be treated as a voluntary payment.

6. The learned Judges however recognise that if the property was sold there might be a difficulty in distinguishing between a payment made under protest to get rid of an attachment and a payment made under protest to get a sale after attachment set aside, conceding, of course, that in the former case the payment would be involuntary according to the decision of the Privy Council in Kanhaya Lal's case (1913) 25 M.L.J. 104 : L.R. 40 IndAp 56 I.L.R. 40 Cal. 598 .

7. With all due respect, I find it difficult to appreciate this reasoning. It is no doubt the right, title and interest of the judgment-debtor, if any, in the property that is brought to sale. But what is brought to sale is what has been attached (Order 21, Rule 64), so that there is no distinction in this respect between an attachment and a sale. If, therefore, a Court sale of a property cannot affect the true owner's title thereto, neither can an attachment by Court affect it and payments to avert both must be equally voluntary. The fact is, however, that both attachment and sale purport to affect the property proceeded against, so far as the provisions of the Civil Procedure Code in that behalf are concerned (see Sections 60, 65, Order 21, Rule 54, Rule 64, Rule 66 and Rule 94 and Forms Nos. 24, 27,29 and 38 of Appendix E to Schedule I, Civil Procedure Code), and the familiar expression 'right, title and interest of the judgment-debtor' does not occur in any of these provisions but (so far I have been able to trace its origin) was used by Sir James Colvile in the judgment of the Privy Council in pointing out the difference between a sale by private contract and a sheriff's sale under a fi fa in Dorab Ally Khan v. Abdool Azeez .

8. It seems to me therefore that if the attachment of property in execution of a decree obtained against a third party is a wrongful interference with the true owner's right and a payment to avert it must be regarded as involuntary, the same result must follow where the attached property is sold and payment is made to avert such sale.

9. Referring to the terms of Order 21, Rule 89, the learned Chief Justice observes:

But I think it was also intended that once the property had been sold the price paid by the purchasers should be available for the decree-holder, leaving it to the purchaser to make what he could out of his purchase, and that if the sale was set aside by payment into Court under Rule 89, the money should go to the decree-holder in execution of whose decree the property was sold....' 'If the Legislature had intended that sales could be set aside if payment was made into Court conditionally, then it would have said so.

10. It seems to me, however, that this can have no bearing upon the question whether the payment was involuntary and recoverable as such. It may be that the payment into Court should be unconditional for a sale to be set aside under Order 21, Rule 89; but so has it to be for an attachment to be withdrawn under Order 21, Rule 55. The truth is that the right to recover the money paid to raise an attachment or to set aside a sale does not depend upon any conditions annexed to such payments when made, but arises out of the compulsion of law involved in such cases. In this country, it is a 'statutory right' under Section 72 of the Indian Contract Act see Kanhaya Lal v. National Bank of India, Ltd. (1923) 45 M.L.J. 497 : L.R. 50 IndAp 162 : I.L.R. 4 Lah. 284 .

11. The learned Chief Justice then refers to the various remedies available under the Civil Procedure Code to the true owner whose property has been wrongfully attached and sold in execution and observes that if such owner, 'to suit his own convenience,' gets the sale set aside by depositing the required amount in Court under Order 21, Rule 89 unconditionally there is no reason why such payment should not be considered to be voluntary. But this line of reasoning, one should have thought, was finally disposed of by their Lordships of the Privy Council in Kanhaya Lal v. National Bank of India, Ltd. (1913) 25 M.L.J. 104 : L.R.40 IndAp 56 : I.L.R. 40 Cal. 598 , where they made these memorable observations:

'A wrongful interference' (that is, by attachment) 'with the plaintiff's lawful enjoyment of his own property is alleged; The plaintiff was clearly entitled to rid himself of that unlawful interference by any lawful means without thereby affecting his right to hold the defendants liable for that which they have thus caused him to do. By English law it is not open to the wrongdoer to prescribe by which of two lawful alternatives the injured man puts a stop to the wrong under which he is suffering. His choice of any one alternative does not make it as between him and the wrongdoer a voluntary act, or estop him from claiming that it was done under coercion.'

12. I have dealt with this decision of the Bombay High Court at some length as it is the first of its kind, the later cases having mostly adopted its reasoning and followed it. It is however worthy of note that in Shankerrao Keshavrao v. Vadhilal Mulchand I.L.R.(1932) 57 Bom. 601, another Bench of that Court while following the above case remarked:

If the matter were res Integra, it must have been possible to hold that the plaintiffs are entitled to recover back the amount under Section 72 of the Indian Contract Act. The action of the plaintiffs would not be a voluntary payment of the debts of the other defendants Nos. 2 to 6 who were liable, but it was a payment made to save their property and get it back from the mortgagee-decree-holder who had wrongly allowed it to be sold in execution of the mortgage decree.

13. The decision of the Patna High Court in Raghu Ram Pandey v. Deokali Pande I.L.R.(1927) 7 Pat. 30 followed Narayan v. Amgauda I.L.R.(1920) 45 Bom. 1094 and does not call for any additional comment. Turning now to Madras decisions on the point, there is the judgment of Venkatasubba Rao, J., sitting alone in Kummakutty v. Neelakandan Nambudri : AIR1930Mad921 . The learned Judge also followed the decisions in Narayan v. Amgauda I.L.R.(1920) 45 Bom. 1094 and Raghu Ram Pandey v. Deokali Pande I.L.R. (1927) 7 Pat. 30 already referred to. Referring to Order 21, Rule 89, he observed:

Its object is to put an end to every kind of contention and dispute. The judgment-debtor is saved from the threatened deprivation of his property; the decree-holder's claim is satisfied and the auction purchaser is compensated. The section would be frustrated if the person paying money under it is permitted to do so under protest. Clause 2 of Rule 89 enacts:

Where a person applies under Rule 90 to set aside the sale of his immovable property, he shall not, unless he withdraws his application, be entitled to make or prosecute an application under this rule.

This shows that the proceedings referred to are utterly incompatible. If the debtor wants to keep a dispute open, he cannot claim the benefit of this section. In fact, this accords to him a special indulgence. While he is thus favoured, care is taken to provide that the interests neither of the decree-holder nor of the purchaser are sacrificed. It follows from this that, when the judgment-debtor pays the amount specified, he pays it unconditionally.

14. These observations are rather widely expressed and if they were intended to convey the meaning that once a judgment-debtor pays the amount to set aside the sale under Order 21, Rule 89, he must be deemed to have made the payment voluntarily even though he has preferred an appeal from the decree in question, and will be disentitled to a restitution of the amount if the decree is set aside on such appeal, I must respectfully dissent from them, but that this was not the learned Judge's meaning would seem to be clear from his later decision in Pappu Reddiar v. Pichu Aiyar : AIR1938Mad493 . That was a case where a decree-holder after obtaining satisfaction of his decree which was not however certified to the Court, executed it again and brought certain properties as belonging to the judgment-debtor to sale. A transferee from the judgment-debtor applied under Order 21, Rule 89 to set aside the sale making the statutory deposit and afterwards brought a suit to recover from the decree-holder the amount paid to him. The learned Judge sitting with Abdur Rahman, J., held that:

A person making a payment to rid himself of unlawful interference with his property can recover the money back and this principle is applicable to a payment under Order 21, Rule 89, Civil Procedure Code. The right in such a case does not rest upon justice and equity founded on the English analogy but is a statutory right expressed in terms of Section 72 of the Contract Act. (Head note).

15. Dealing with the decision in Kummakutty v. Neelakandan Nambudri : AIR1930Mad921 , he observed:

In the former case, it has been held that Order 21, Rule 89 is inconsistent with the notion that payment can be made either under protest or coupled with conditions. True, but the whole judgment proceeds upon the footing, first that there was a subsisting decree, that is, subsisting in fact and secondly, there was a decree-holder, one who really answered that description.... Order 21, Rule 89 assumes the existence of the decree and of a decree-holder, and where the very foundation is gone, namely, a subsisting decree, it would be futile to contend that the decisions which refer to unconditional payment can apply.

16. These observations clearly show that the learned Judge never intended his decision in Kummakutty v. Neelakandan Nambudri : AIR1930Mad921 to be understood as barring the claim of a judgment-debtor to restitution after the decree is varied or reversed in appeal or the similar claim of a person in the position of the first respondent here who gets a decree purporting to affect his property, set aside in a regular suit brought for the purpose. For, in either case it can be said with equal justification that there was no 'subsisting decree' nor any one really answering to the description of a decree-holder.

17. The learned Counsel for the appellant then referred me to the decision of a Full Bench of this Court in Krishna Aiyar v. Arunachalam Chettiar : (1935)69MLJ349 , where the observations contained in Narayan v. Amgauda I.L.R.(1920) 45 Bom. 1094, Kummakutty v. Neelakandan Nambudri : AIR1930Mad921 and Raghu Ram Pandey v. Deokali Pande I.L.R.(1927) 7 Pat. 30, to the effect that a deposit under Order 21, Rule 89 must be unconditional were applied to a case to whose facts, if I may say so, they were properly applicable. A mortgagee from a judgment-debtor claimed and established that he had priority over the rights of a decree-holder auction purchaser of the property and applied for the return of the amount which he had deposited under Order 21,. Rule 89 for getting rid of the sale. The amount was still in Court and was also claimed by the decree-holder whose purchase had been set aside, and the question arose as to who was entitled to the payment of the deposit. The Full Bench held that an applicant under Order 21, Rule 89 could not attach any condition to the deposit required to be made under that provision, nor could the Court accept such deposit subject to any condition. In this view the learned Judges directed the deposit to be paid out to the decree-holder, as it had been expressly put into Court for that purpose. It will be observed that the Full Bench was not concerned with a suit to recover money paid under coercion or a claim by way of restitution as to which, as I have already indicated, different considerations will arise. There may be observations here and there which may perhaps appear to have a bearing on the question whether a payment made for purposes of Order 21, Rule 89 should be regarded as voluntary or involuntary, but they must be regarded as obiter and not as concluding the question before me.

18. The learned Counsel for the respondents has relied upon the decisions of the Privy Council in Fatima Khatoon Chowdrain v. Mahomed Jan Chowdry (1868) 12 M.I.A. 65, Dulichand v. Ramkishen Singh and on Kotlu Satyam v. Thammanna Perraju (1931) 34 L.W. 399 decided by a Division Bench of this Court. These decisions clearly establish that a payment made by a person interested in the property to have the property released from a wrongful attachment or to stave off a wrongful sale of the property must be regarded as an involuntary payment and can be recovered by the person making the payment. As I have already observed, the entire circumstances of the present case unmistakably point to the payment in question having been made by the first respondent under force of execution of the decree in O.S. No. 912 of 1926 which has since been set aside at his instance. Indeed, the learned Counsel for the appellant did not seriously contend that apart from Order 21, Rule 89, the payment could be deemed to be voluntary on the facts of this case. He took his stand solely upon the provisions of Order 21, Rule 89 as establishing the voluntary character of the payment. In other words the argument was however involuntary in fact and in truth a payment may be found to be as disclosed either by the express terms or by the circumstances in which it is made, if it is made for the purposes of Order 21, Rule 81, the latter provision imports a species of estoppel which prevents the person making the payment from recovering it as one made under coercion. As I said before, this contention is somewhat startling, though some of the decisions already referred to seem to lend some support to it, but I do not regard them as binding precedents.

19. And it is worthy of note that none of these decisions goes the length of holding that if a judgment-debtor or any other person bound by a decree makes a deposit under Order 21, Rule 89 to have a sale of his property held in execution set aside, his claim for restitution ma le either under Section 144, Civil Procedure Code or under the general law, after the decree has been reversed in appeal or set aside in a suit brought for the purpose, is unsustainable. The first respondent's claim in this case is also essentially one for restitution and I can see nothing in reason or in law to bar his claim.

20. The appeal therefore fails and is dismissed with costs.

21. Leave granted.


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