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Nachimuthu Chettiar and anr. Vs. Moorthammal - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai High Court
Decided On
Reported in(1977)2MLJ40
AppellantNachimuthu Chettiar and anr.
RespondentMoorthammal
Cases ReferredM. Desikachariar v. Ramachandra Reddiar
Excerpt:
.....bench has held that the failure to affix a proclamation of sale on the property sold and to publish it by beat of tom tom are only irregularities in the publication and conduct of the court-sale, which may give rise to an application under order 21, rule 90 of the cede of civil procedure, but that such an irregularity cannot, form the basis for claiming the relief under section 47. in that case it was argued that a sale held in contravention of order 21, rule 67 will be without jurisdiction and therefore, has to be treated as null and void. in that case there was no question of lack of jurisdiction on the part of the executing court to execute the decree and the irregularities pointed out in the conduct of sale are the omission to affix the proclamation of sale on the property sold and..........order passed by the executing court under section 47 of the code of civil procedure declaring the sale held on 25th june, 1973 in e.p. no. 135 of 1972 to be void and without jurisdiction, which has been affirmed by the lower appellate court.2. the first appellant herein obtained a mortgage decree against the respondent herein in o.s. no. 546 of 1964 on the file of the court of the district munsif, udumalpet. thereafter he applied for the sale of the hypotheca. the respondent appeared by a lawyer in the said execution proceedings. by an order dated 6th june, 1972 the sale of 4.37 acres of the respondent's lands was ordered to be held on 7th august, 1972. as there were no bidders on that day, an application was filed by the decree-holder for reduction of the upset price, and the upset.....
Judgment:

G. Ramanujam, J.

1. This Civil Miscellaneous Second Appeal arises out of an order passed by the executing court under Section 47 of the Code of Civil Procedure declaring the sale held on 25th June, 1973 in E.P. No. 135 of 1972 to be void and without jurisdiction, which has been affirmed by the lower appellate Court.

2. The first appellant herein obtained a mortgage decree against the respondent herein in O.S. No. 546 of 1964 on the file of the Court of the District Munsif, Udumalpet. Thereafter he applied for the sale of the hypotheca. The respondent appeared by a lawyer in the said execution proceedings. By an order dated 6th June, 1972 the sale of 4.37 acres of the respondent's lands was ordered to be held on 7th August, 1972. As there were no bidders on that day, an application was filed by the decree-holder for reduction of the upset price, and the upset price was actually reduced to Rs. 17,000 in the said application and the sale, was ordered to be held on 21st November, 1972. Even on that day there were no bidders and the decree-holder again filed another application to reduce the upset price and the upset price was reduced to Rs. 9,000 and the sale was fixed to 12th March, 1973. Even on that day there were no bidders and the decree-holder again came forward with an application to reduce the upset price and the upset price was actually reduced to Rs. 5,000 and the sale was directed to be held on 25th June; 1973. The decree-holder at this stage filed an application for permission to bid and set off and the said permission was granted on 24th April, 1973. At that stage the respondent filed an application E.A. No. 960 of 1973 under Section 20 of the, Tamil Nadu Act IV of 1938 for stay of the execution for the purpose of enabling her to file an application for relief under the said Act. The said application was returned on 23rd June, 1973 for production of the necessary documents to show that the petitioner is an agriculturist. The said application was represented on 25th June, 1973 the date fixed for sale. The executing Court has passed the following order in the said petition:

Notice given. Counter by 29th June, 1973'. On 23rd June, 1973 when the application under Section 20 was returned for compliance, the respondent filed an application E.A. No. 959 of 1973 under Order 21, Rule 69 of the Code of Civil Procedure for adjournment of the sale on the ground that he had already filed an application for stay under Section 20 of the Tamil Nadu Act IV of 1938 and that till the disposal of the said application the sale should stand adjourned. This application was taken up by the respondent on 25th June, 1973 before the sale actually took place and it was dismissed on the ground that the application has been filed only with a view to drag on the execution proceedings. The result was the sale took place on 25th June, 1973 as per schedule and the decree-holder became the purchaser of the property for a sum of Rs. 5010. Subsequently E.A. No. 960 of 1973 filed by the respondent under Section 20 was dismissed on the ground that the counsel reported 'No instructions' and the sale was confirmed by order dated 25th August, 1973. Thereafter the first appellant-decree holder has sold the property to the second appellant on 25th September, 1972.

3. On 26th November, 1974 the respondent filed an application in E.A. No. 26 of 1975 to have the sale set aside under Section 47 of the Code of Civil Procedure on the, ground that the sale is void and without jurisdiction. The respondent's case is that while his application under Section 20 for stay of the execution is pending, the executing Court had no jurisdiction to direct the sale of the property, and that as the sale held in this case is in contravention of Section 20, the sale is void and inoperative in law. The executing Court accepted the respondent's case and held that the sale having taken place without a proper disposal of the application filed under Section 20 is without jurisdiction and, therefore the sale is void. The above view of the executing Court has also been upheld by the lower appellate Court. Against the said decision of the Courts below holding the sale to be void under Section 47 of the Code of Civil Procedure, the present appeal has been filed by the decree-holder-purchaser as well as his subsequent purchaser.

4. The learned Counsel for the appellants contend that the view taken by the Courts below that the sale held in this case was without jurisdiction cannot be sustained in law, that Section 20 of the Tamil Nadu Act IV of 1938 does not affect the jurisdiction of the executing Court to execute a mortgage decree by the sale of the hypotheca and that the more pendency of an application under Section 20 does not take away the said jurisdiction of the executing Court to execute the decree. According to the learned Counsel, there is a clear distinction between an irregularity and an illegality, that if at all the sale in execution of the decree without finally disposing of the application under Section 20 will only amount to an irregularity and that it will not amount to an illegality which will go to invalidate the sale. It is also contended by the learned Counsel that though Section 20 uses the word shall, it cannot in any sense be treated as mandatory, that on a correct interpretation of the said provision it should be taken only to be directory and that the provisions of the Tamil Nadu Act IV of 1938 not having invalidated specifically the orders passed in violation of Section 20, it should be taken that Section 20 is only directory and not mandatory.

5. The learned Counsel refers to the following decision as supporting b is stand. In Narayanan Namboodiripad v. Thomakutty and Ors. : AIR1967Ker163 , a Division Bench has held that the failure to affix a proclamation of sale on the property sold and to publish it by beat of tom tom are only irregularities in the publication and conduct of the Court-sale, which may give rise to an application under Order 21, Rule 90 of the Cede of Civil Procedure, but that such an irregularity cannot, form the basis for claiming the relief under Section 47. In that case it was argued that a sale held in contravention of Order 21, Rule 67 will be without jurisdiction and therefore, has to be treated as null and void. While rejecting the said contention, the Court pointed out that it is only where a Court lacks inherent jurisdiction over the subject-matter of the proceedings or action in which an order is made or judgment rendered that such order or judgment will be wholly void and that such an order may be shown as nullity in any proceeding where reliance is placed upon it although no formal or direct proceedings have been taken to have it vacated. But where the Court possesses inherent jurisdiction over the subject matter but exercises the same in an irregular or illegal manner, the objection in such a case may be waived and may in general be assumed to be waived when objection is not taken as enjoined by the statute. Thus, the purport of the said decision is that as the executing Court has inherent jurisdiction to execute the decree by sale of immovable property, the sale held though in contravention of Order 21, Rule 67 of the Code cannot be said to be without jurisdiction. I do not see how this decision helps the appellants. In that case there was no question of lack of jurisdiction on the part of the executing Court to execute the decree and the irregularities pointed out in the conduct of sale are the omission to affix the proclamation of sale on the property sold and the failure to publish the same by beat of tom tom. The Court naturally held that the irregularities alleged did not affect the jurisdiction of the executing Court to direct sale of the properties in execution of the decree.

6. In this case we are concerned with the question as to whether the execution sale is contrary to Section 20 of the Tamil Nadu Act IV of 1938 and, as such, void and 'without jurisdiction. It is no doubt true that the executing Court has undoubted jurisdiction to realise the decree amount by sale of the judgment debtor's property. The question is whether the said jurisdiction of the executing Court was in any way affected by the provision in Section 20. Section 20 reads as follows:

Every Court executing a decree passed against a person entitled to the benefits of this Act, shall on application, stay the proceedings until the Court which passed the decree has passed orders on an application made or to be made under Section 19.

Provided that where within 60 days after the application for stay has been granted the judgment-debtor does not apply to the Court which passed the decree for relief under Section 19 or where an application has been so made and is rejected, the decree shall be executed as it stands notwithstanding anything contained in this Act to the contrary.

Under this section every person entitled to the benefits of the Act may apply for the reliefs mentioned therein and seek a stay of the execution proceedings so as to enable such a person to do so. The section makes it obligatory on the Court to stay the execution proceedings on an application made by the judgment-debtor claiming the benefits under the Act. The section uses the expression 'shall' on application, stay the proceedings The above expression rules out any discretionary power on the part of the executing Court either to stay the proceedings or not. The section seems to suggest that once an application for stay of the execution is filed by the judgment-debtor claiming benefits under the Act, it is obligatory on the part of the Court to decide the, question whether the judgment-debtor is an Agriculturist and is otherwise entitled to the relief under the Act and to stay the execution proceedings if it is found in the affirmative Having regard to the language used in Section 20 of the Act and the object with which it is made, it can easily be taken that the jurisdiction of the executing Court to execute the decree is suspended or kept in abeyance once an application for stay of execution is filed under Section 20 claiming benefits of the Act, until the said application is disposed of. Section 20 can, therefore, be treated as a fetter on the power of the executing Court to execute the decree as against an agriculturist. If in a particular case the executing Court proceeds to execute the decree overlooking the said fetter, imposed by Section 20, it can be taken to have acted without jurisdiction. As already pointed out, the judgment-debtor has filed an application under Section 20 on 22nd June, 1973 and the said application was represented after compliance on 35th June, 1973 before the sale actually took place. Even two days earlier to the sale, the judgment-debtor has filed an application for postponement of the sale on the ground that his application under Section 20 has not been disposed of and that till the disposal of that application the sale has to be adjourned. This application was, however, dismissed on the ground that it is intended to drag on the proceedings. The application under Section 20 has not been finally disposed of, but adjourned for the counter of the decree-holder. Therefore, there cannot be any dispute that at the time when the sale actually took place there was an application under Section 20 undisposed of on the file of the executing Court. The question is whether when an application under Section 20. for stay of execution is actually pending, the executing Court can proceed with the execution sale and whether such execution sale is void for infringement of Section 20.

7. The test to determine whether the violation of an express provision in a statute will nullify the proceedings was laid down by Mookerjee, J., in Ashutosh Sikdar v. Behari Lal Kirtania I.L.R.(1908) Cal. 61, in the following terms:

The only rule, therefore that may be adopted is that, when the provision of a statute has been contravened, if a question arises as to how far the proceedings are affected by such contravention, it must be determined with regard to the nature, scope, and object of the particular provision which has been violated. As pointed out in Macnamara on Nullities and Irregularities, no hard and fast line can be drawn between a nullity and an irregularity; but this much is clear, that an irregularity is a deviation from a rule of law which does not take away the foundation or authority for the proceeding, or apply to its whole operation, whereas, a nullity is a proceeding that is taken without any foundation for it, or is so essentially defective as to be of no avail or effect whatever, or is void and incapable of being validated. It may be conceded, that the application of this doctrine to an individual case, may sometimes be attended with difficulty. One test, however, is well established, and is often useful, as was observed by Justice Cole-ridge in Holmes v. Russell (1941) 9 Dowl. 487: 'It is difficult sometimes to distinguish between an irregularity and a nullity; but the safest rule to determine what is an irregularity and what is a nullity is to see whether the party can waive the objection; if he can waive it, it amounts to an irregularity; if be cannot, it is a nullity. Where the Court possesses inherent jurisdiction over the subject-matter and assumes jurisdiction or exercises the same in an irregular or illegal manner, the objection in such a case may be waived and may, in general assumed to be waived when not taken as enjoined by the statute.

Subba Rao, J. (as he then was) in Dhirendra Nath v. Sudhir Chandra : [1964]6SCR1001 , considered the question whether a Court-sale held in contravention of Section 35 of the Bengal Money Lenders Act is a nullity and observed at page 1304 as follows:

If a provision of a statute is only directory, an act done in contravention of the provision is manifestly not a nullity. Section 35 of the Act is couched in a mandatory form and it casts in terms a duty on the Court to comply with its provisions before a sale is held. Prima facie the provision is mandatory; at any rate, we shall assume it to be so far the purpose of these appeals.

It was, however, held in that case that as Section 35 of the Bengal Money Lenders Act is only directory and, as Such it can be waived by the party, the sale, held in contravention of that provision will not make the sale void.

8. In Durga Parshad v. Custodian of Evacuee Property, 'P' Block, New Delhi and Ors. a sale was in contravention of Section 17(1) of the E.P. Evacuees (Administration of Property) Act (XIV of 1947) and the question arose as to whether the sale is void for that reason. The Full Bench of the Punjab High Court had taken the view that that the inhibition against the sale of evacuee property in execution proceedings contained in the first part of Section 17(1) is of mandatory nature and, therefore, the sale is wholly null and void. The Full Bench has relied on the decisions of the Supreme Court in Manilal Mohanlal v. Saved Manhmad : [1955]1SCR108 , and Merla Ramanna v. Nallaparaju : [1955]2SCR938 , in support of their view. The learned Counsel for the appellants would, however, submit that Section 17 in terms prohibited the executing Court from proceeding with the sale of an evacuee property and that there is no such provision in Section 20 preventing the executing Court from executing the decree. I am of the view that the learned Counsel for the appellant is not right in his submission that Section 20 will not have the effect of putting a restraint on the power of the executing Court. As already stated Section 20 specifically says that the executing Court shall stay the execution proceedings on an application by the judgment-debtor claiming to he an agriculturist. A proper interpretation of Section 20 is that the power of the executing Court to execute a decree against an agriculturist stands affected by the said section. If the executing Court proceeds to execute the decree notwithstanding the pendency of an application by the judgment-debtor under Section 20 claiming to be an agriculturist, it will be contrary to Section 20, which is a mandatory provision and, therefore, an application for setting aside the sale of the judgment-debtor's property held in contravention of Section 20 would lie under Section 47 of the Code.

9. A Full Bench of this Court had held in M. Desikachariar v. Ramachandra Reddiar : AIR1951Mad56 , after a detailed consideration of the scope and effect of Sections 19 and 20 of the Tamil Nadu Act IV of 1938, that an order passed under Section 20, though summary in character, conclusively determines the rights of the parties so far as the executing Court is concerned and, therefore, it is a decree and appealable. This shows that the right claimed by a person under Section 20 of the Act is substantial and the executing Court cannot proceed with the sale of the judgment-debtor's property unless his claim under Section 20 for stay of the execution of the decree is decided one way or the other.

10. In Kishoreganj Co-operative Town Bank Ltd. v. Rukmini Kanta Bhattacharjea and Ors. : AIR1944Cal231 , a somewhat similar question arose with reference to the provisions of the Bengal Agricultural Debtors Act, 1936. Under Section 34 of that Act, the Debt Settlement Board constituted under that Act was empowered to give a notice of the proceedings taken by the judgment-debtor under Section 8 for settlement of his debt sand on such notice from the Board the proceedings in any civil or revenue Court shall be stayed until the Board disposes of the application under Section 8. Section 35 specifically stated that no decree of a civil Court for the recovery of a debt shall be executed until the application filed under Section 8 by the judgment-debtor has been disposed of by the said Board. In the above case the execution petition was filed while the judgment-debtor's application under Section 8 was pending before the Debt Settlement Board. On the day fixed for holding the sale, a notice under Section 34 was received by the executing Court from the Board. The Court, though originally adjourned the sale sine die, subsequently ordered sale without notice to the judgment-debtor; as a result thereof the sale was held, The said sale was challenged in an application under Section 47 of the Code on the ground that the sale having been held in contravention of Section 34, it should be held to be a nullity. This challenge was upheld by Henderson, J. The learned Judge expressed the view as follows:

I do not think that it can be seriously contended that a sale held in contravention of the provisions of Sections 33. and 34, Bengal Agricultural Debtors Act, is not a nullity.... I have myself no doubt that the sale held in the present case was a nullity.

Though the learned Judge had not given detailed reasons for his conclusion, it can be taken that he was of the view that the sale held in contravention of a statutory provision has to be treated as a nullity. It has already been pointed out that having regard to the scope and object of Section 20 it should be taken to be a mandatory provision. A sale held in contravention of such a mandatory provision should be taken to be without jurisdiction and, as such, void.

11. In Dorairajan v. Mohammed Kuthoose (1974) 87 L.W. 877, Natarajan, J., has taken a view that having due regard to the scheme of the Act, which is to provide relief to the agriculturists from the oppressive burden of their debts, there can be no doubt that the executing Court has to necessarily stay the execution of the decree whenever an application is made before it by the judgment-debtor, who has already filed or who contemplated filing an application under Section 19, to stay the execution of the decree. The learned Judge observed as follows:

The rational and proper view to be taken of the provision contained in Section 20 of Act IV of 1938 should be that immediately an application is filed to the executing Court for staying the execution of the decree the Court should bring execution proceedings to a temporary halt and should give the judgment-debtor in opportunity to get redress before the Court which passed the decree. If such a course is not followed anomalous consequences and incongruous results would follow.

12. The learned Judge seems to take the view that once an application is filed under Section 20 seeking stay of the execution, the executing Court should automatically stay the execution leaving the question whether the judgment-debtor is entitled to the benefits of the Act to be decided by the Court which passed the decree under Section 19. This view was, however, not accepted by Varadarajan, J., in M.A. Rathinam v. Thangammal : AIR1976Mad309 . According, to Varadarajan, J., Section 20 does not say that execution must be stayed in all cases where it is represented that an application under Section 19 would be filed and whenever an application filed under Section 20 is opposed on the ground that the petitioner is not a person entitled to the benefits of the Act, that question has to be gone into and considered by the executing Court before stay can be granted under that section. I am of the opinion that both Natarajan, J., in Dorairajan v. Mohammed Kuthoose (1974) 87 L.W. 877, and Varadarajan, J., in M.A. Rathinam v. Thangammd : AIR1976Mad309 , have taken two extreme positions. In my view the correct interpretation of Section 20 is that for the purpose of directing stay of the execution the executing Court must prima facie consider the applicant's claim that he is entitled to the benefits of the Act, though that decision may not be conclusive. In a subsequent application under Section 19, the Court which passed the decree can alone decide the question conclusively. If the executing Court has to straightaway order stay of execution on the mere representation of the applicant that he is entitled to the benefits of the Act, it will lead to frivolous attempts on the part of the judgment-debtor, who may not, in fact, be an agriculturist. To avoid such a misuse of a statutory provision, the executing Court must satisfy itself as to whether the judgment-debtor is prima facie entitled to the benefits of the Act. At the same time if the executing Court has to decide finally the claim put forward by the judgment-debtor under Section 20 that he is entitled to the benefits of the Act, then there is no room for any further adjudication under Section 19 by the Court which passed the decree. Having regard to the language of Section 19, which specifically confers the power on the Court which passed the decree to grant the relief to an agriculturist, that Court should be taken to have been given an exclusive jurisdiction to decide the question as to whether the applicant is entitled to the benefits of the Act. This shows that any view taken by the executing Court under Section 20 on the question as to whether the applicant is entitled to the benefits of the Act can only be tentative, subject to the ultimate decision by the Court which passed the decree under Section 19. The view I have taken finds support from the observations of the Full Bench in M. Desikachariar v. Ramachandra Reddiar : AIR1951Mad56 . In that case it was argued that Section 20 is only ancillary to Section 19, and that the enquiry contemplated by Section 20 was an enquiry of a summary kind where the applicant should show the Court that Prima facie he was entitled to the benefits of the Act. The Full Bench held that whether the proceedings under Section 20 are ancillary or independent, the order passed thereunder conclusively determines the right of the parties so far as the executing Court is concerned and therefore it amounts to a decree.

13. The result is the sale in this case has to be held void as infringing Section 20 of the Tamil Nadu Act IV of 1938. The appeal is, therefore, dismissed. There will be no order as to costs. Now that the sale has been set aside, the execution proceedings wilt be restored to the file of the executing Court and disposed of in accordance with law. No leave.


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