1. This suit was brought for a declaration that the decree in O.S. No. 731 of 1917 on the file of the District Munsiff of Chidambaram was null and void and that the sale held in execution of the decree in the Small Cause Suit No. 658 of 1917, was also null and void. The grounds on which this declaration was asked for, were that those concerned in the sale, the judgment-debtor, Alamelu and the purchaser, her brother, 3rd defendant, had combined in a fraud, the main element of which was the allowing O.S. No. 374 of 1917 to be brought and decreed Collusively, that decree being in force at the time of the Court sale and deterring possible bidders, but being set aside again collusively later, the cloud on the title to the properties sold being thus removed from it in the interest of the third defendant.
2. The first objection and the objection mainly considered by the lower Courts is that this fraud should have been brought before the Court by a petition under Order XXI, Rule 90, Schedule I of the Code of Civil Procedure for the setting aside of the Court sale on the ground of fraud in publishing or conducting it. We cannot follow this. The fraud alleged was constituted by the collusion which enabled the decree in O.S. No. 734 to be passed and set aside. The publication, - for no separate argument has been addressed to us as regards the conduct of the sale, - consisted for the present purpose in the settlement of the terms of the sale proclamation. In that settlement, we have not been shown that any term was included in the sale proclamation which was not literally in accordance with fact. The proclamation contains a reference to the charge imposed by the decree in O.S. No. 734. It further contains a, reference to the objection of the decree-holder (now 1st defendant), at whose in stance the proclamation was being issued, to the previous decree as fraudulent. It is difficult to say what more could have been included in the proclamation : and in any case we should be unable to hold that the. judgment-debtor, the 2nd defendant, has been shown to be responsible for that part of the proclamation. In these circumstances, we agree with the lower Appellate Court that a petition under Order X XI, Rule 90, was not the plaintiff's proper remedy, and that a suit was open to them.
3. it is next urged that, even it the fraud alleged in the plaint is established, it will not be a ground on which the sale can be set aside. We postpone discussion of that contention, until we have before us the result of the remand, which we are about to direct in order to obtain a finding of fact as to the fraud, if any, which is proved.
4. There is, in our opinion, no doubt that there was evidence before the lower Courts on which fraud could be found. It was proved that O.S. No. 734 had been brought against the present 2nd defendant, that a decree had been passed against her property, but that it had been set aside on her objection, and that, when the trial on the merits was resumed, the then plaintiffs now represented by defendants Nos. 4 and 5 allowed the suit to be dismissed without adducing any evidence. There was next some evidence, which, if believed, would show that the 2nd defendant and also the plaintiffs in O.S. No. 731 had at one time or other admitted to the present plaintiffs the collusive nature of that litigation. It is not necessary to go further into the materials available to support the finding of fact since what has been mentioned affords evidence, on which, if it is believed, such a finding can be based.
5. There being then a casa of fraud for the consideration of the lower Courts, it is urged next that the lower Appellate Court has not considered that case judicially. This argument is baaed on the insufficiency of the judgment under appeal on this point. That judgment in fact is occupied mainly with the question of the application of Order XXI, Rule 90. That may be the case, because the appellant in the lower Appellate Court was the 1st plaintiff and ho would primarily be concerned with the only point, on which the District Munsiff has decided against him. At the same time it is not suggested that an attempt was made by the 3rd defendant to support the District Munsiff's decree on the facts and to obtain a decision that no fraud has been established. The lower Appellate Court dealt with the question of fraud in its paragraphs 12 and 13; but, paragraph 12, except for a statement that there was fraud undoubtedly by the persons who colluded together for a sham decree, is occupied with the distinction between fraud in the publication of the sale and the other description of fraud for which there may be a remedy otherwise than by a petition. In paragraph 13 alone is there any discussion of the question with which we are now dealing. That discussion consists in a reference to the finding of the District Munsiff that the 3rd defendant, the auction-purchasers, was a party to the fraud; and the statement of the lower Appellate Court that it is in agreement therewith. There is then a statement that the 3rd defendant; was helping the decree-debtor in her litigation and he knew the decree was a fraudulent decree. The lower Appellate Court, however, does not seem to have considered whether his helping her would be necessarily conclusive as to his participation in the fraud she might have committed. Lastly, there is an inference drawn that the 3rd defendant was instrumental in getting the decree passed. Here, again, there is nothing referred to, to show that he was an instrument, and that he was conscious of the full implication of what he was doing. There the discussion of the evidence of fraud in fact ends. It is undesirable that we should attempt to carry it further. 'We will, therefore, observe only that neither the lower Appellate Court nor the District Munsiff appears to have recognised the extent to which the absence of evidence of any connection between the plaintiffs in O.S. No. 734 and either the 2nd or the 3rd defendant was material to the argument that collusion, in which all were concerned, had been established.
6. We may point out further that the District Munsit's finding as to the value of the property sold and the insufficiency of the price realised is too general to be of any use and we can hardly believe that the District Judge, if he had really applied his mind to that portion of the case, would not have been able to reach a more definite conclusion founded on definite reasons.
7. That being so, we are unable to accept the lower Appellate Court's finding on the question of fraud. We must, therefore, call on it to submit a revised finding on the second issue framed by the District Munsiff, 'is the Court-sale vitiated by fraud as alleged by the plaintiffs.' In dealing with that issue we think it advisable to authorise the lower appellate Court to exercise the same power with reference to calling for evidence as it would have been able to exercise at the original hearing of the appeal.
7. Mr. Krishnaswami Aiyar, on behalf of the appellant has drawn our attention to the fact that the plaintiffs who represented themselves and defendants Nos. 6 to 17 and other creditors entitled to share in the rateable distribution, were entitled to share in the proceeds of the sale, which the plaintiffs are now attempting to set aside. Mr. Krishnaswami Aiyar tells us that they have in fact taken shares in such proceeds out of Court. On the other side, however there is no information as to whether this is so. In the circumstances, we must ask the lower Appellate Court to report whether the proceeds of the sale have been taken out of the Court by all or any of the creditors entitled to share in the rateable distribution. If they have done so, the importance of the fact lies in the absence of any offer in the plaint or elsewhere on their part to refund what they have drawn in case they obtained the relief they claimed. It is clear to us that they cannot obtain that relief except on making such an offer, in other words, they cannot have equity, unless they do equity. 'We refer to the point now, because, if Mr. Sitarama Rao on behalf of the 1st respondent is to maintain the decree he has obtained, he will have to satisfy us regarding it and, unless he can do so, he will have to make some offer, to return what has been received, either by amending the plaint or otherwise, which we can accept.
8. The finding is due in two months and seven days will be allowed for objections.
9. The lower Court submitted a finding that the Court sale was vitiated by fraud.
1. The finding that the sale is vitiated by fraud is not objected to and we accept it. It is then suggested that as only one of the creditors has made an offer to restore the money obtained by them, the offer should not be accepted. Inasmuch as the one creditor has undertaken the responsibility of all the creditors, we see no force in the contention. The Second Appeal is accordingly dismissed and the lower Appellate Court's decree confirmed, and we further order that the resale be held subject to the conditions agreed to by the 1st respondent in his memo, dated 31st March 1923, the amount to be charged on the property being the sale price plus the amount paid in discharge of the mortgage. Appellant will pay 1st respondent's costs of this appeal.