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G.F.F. Foulkes, Administrator of Estate of Robert Foulkes by Agent A. Kailasam Pillai Vs. A.S. Suppan Chettiar and anr. - Court Judgment

LegalCrystal Citation
Subjectcivil
CourtChennai
Decided On
Reported inAIR1945Mad13
AppellantG.F.F. Foulkes, Administrator of Estate of Robert Foulkes by Agent A. Kailasam Pillai
RespondentA.S. Suppan Chettiar and anr.
Cases ReferredRajagopala Venkatanarasiinha Rayanimgar v. Veniatalinga Nayanim Bahadur
Excerpt:
.....in kalyanasuudaram iyer v. and where leave of the court is obtained subsequently the illegality is effectively cured and the sale is not liable to be set..........rule 90 to set it aside. three days after the filing of the application, that is on 10th july the learned subordinate judge called upon the applicant to deposit in court the amount realized by the sale under the proviso to rule 90. the appellant protested against this and on 20th july the court modified its order by dispensing with the production of cash and asking instead for the security of immovable property for the total amount of the sale proceeds. this security was not furnished. so far therefore as the petition alleged that the sale ought to be set aside on the ground of material irregularities the learned judge refused to enter into the merits. the petition however also raised matters which fell under section 47. it was contended that the sale was ab initio void as the property.....
Judgment:

King, J.

1. The appellant here is the administrator of the estate of the late Mr. Robert Foulkes. In that capacity, he was the judgment-debtor in O.S. No. 35 of 1937 on the file of the Ramnad Temporary Subordinate Court and a part of the estate was brought to sale in execution and was sold on 18th June 1942 for a sum of Rs. 2,01,700. Shortly after the sale was held the appellant filed an application under Order 21, Rule 90 to set it aside. Three days after the filing of the application, that is on 10th July the learned Subordinate Judge called upon the applicant to deposit in Court the amount realized by the sale under the proviso to Rule 90. The appellant protested against this and on 20th July the Court modified its order by dispensing with the production of cash and asking instead for the security of immovable property for the total amount of the sale proceeds. This security was not furnished. So far therefore as the petition alleged that the sale ought to be set aside on the ground of material irregularities the learned Judge refused to enter into the merits. The petition however also raised matters which fell Under Section 47. It was contended that the sale was ab initio void as the property which was sold was in the hands of the appellant himself as Receiver in another suit, O.S. No. 29 of 1936 on the file of the Subordinate Judge of Madura, and that no leave had been granted by that Court for the holding of the sale. The learned Subordinate Judge therefore decided to confine his disposal of the application to this question of the jurisdiction of the Court to hold the sale. Before the application was disposed of an order was obtained by the respondents from the Subordinate Judge of Madura granting permission to sell the property. This order was on 28th September 1942. Subsequently the petition was Dismissed and the sale was confirmed. This is an appeal against the order dismissing the petition and confirming the sale.

2. In his order the learned Subordinate Judge has given two reasons for dismissing the petition. One is that the sale was not void in the circumstances but only void able and that there was no sufficient reason to set it aside and the second that the contention of the appellant that the sale was void was barred by the principle of constructive res judicata as he had not raised it during the execution proceedings prior to the sale. This second point has not been argued before us and we do not propose to deal with it. The arguments of the learned counsel for the appellant in this Court have turned upon two points. The first is that it is open to this Court to consider whether the action of the learned Subordinate Judge in calling upon the appellant to furnish security under Order 21, Rule 90 was in the exercise of proper judicial discretion and that if we can agree that it was not, we can ourselves call for further investigation into the merits of the petition. The second argument was that the sale was void and must be set aside in the circumstances. The first argument will obviously depend upon a consideration of the terms of Order 21, Rule 90. The portion of the rule which permits the Court to call for security is para. 2 which runs as follows:

Provided that the Court may after giving notice to the applicant, call upon him before admitting the application either to furnish security to the satisfaction of the Court for an amount equal to that mentioned in the sale warrant or that realized by the sale whichever is less, or to deposit such amount in Court.

3. The obvious meaning of these words is that the Court is granted the option of taking one of three courses, either it may demand no security at all or it may demand the deposit of money in Court or it may call for security in some other form. In either of the two latter alternatives it seems clear from the wording of the sub-rule that the amount of cash or the amount for which security must be demanded must be one of two definite sums, either the amount mentioned in the sale warrant or that realized by the sale. It is, however, now contended for the appellant that the discretion is still wider and that the executing Court can call for security for any sum it pleases which is not greater than that laid down by the sub-rule, and in support of this argument we have been referred to the third portion of the rule. That runs as follows:

Provided also that the security furnished or the deposit made as aforesaid shall be liable to be proceeded against only to the extent of the deficit on a re-sale of the property already brought to sale.

4. It is contended that as this para. 3 in the rule contemplates the forfeiture of money or the enforcement of the security to only a limited extent the Court cannot exercise its discretion properly without calling upon the applicant to furnish security only to what it considers likely to be that limited extent. We are quite unable to accept this argument. We are of opinion that there is nothing in Sub-rule (3) of the rule to govern or in any way modify what is laid down so plainly in Sub-rule (2) and apart even from this, it is clear that Sub-rule (3) cannot in the nature of things occupy any such prominent place in the administration of the rule. It will be obvious from a consideration of Sub-rule (3) that it can come into operation only in very extraordinary circumstances, namely, when the Court has demanded security and then has proceeded to consider the merits of the petition1 and has come to the conclusion that the grounds urged in the petition justified the setting aside of the sale, in other words, when the property sold has owing to certain irregularities fetched a sum far less than it ought to have done. It is obvious in these circumstances that if the Court's decision is right the result of a re-sale is almost certain to result in a much larger sum being realized, so that there will be no opportunity in the ordinary course for the enforcement of the security against the person who has furnished it. Sub-rule (3) of Rule 90 therefore can come1 into operation only in the extraordinary circumstances of the Court being first satisfied that there are good grounds for setting aside the sale and then finding, no doubt to its extreme surprise, that the result of the re-sale is even less satisfactory in the matter of the sale proceeds than the result of the sale which it has set aside. This will show conclusively that Sub-rule (3) in Rule 90 can in no sense be taken as controlling the general interpretation of the rule. We must once more repeat that according to the plain language of Sub-rule (2) in Rule 90 if the Court decides to demand security at all it must demand it for one or other of the exact sums mentioned in that sub-section.

5. We therefore are left with only one point to consider, whether the Court below has properly exercised its discretion in calling for security at all. On this matter there is no sufficient material before us to justify any finding that the order calling for security should be set aside. Much has been made in the arguments of two facts and two facts only. One is that the total amount realized at the sale is very large, Rs. 2,01,700, and the other is that the applicant before the learned Subordinate Judge was not suing on behalf of his own property but as the administrator of the estate of a deceased person. We can see no reason why these two facts should influence us in any way in disposing of this appeal. Whatever be the amount realized at the sale, the same principles must govern the Court in deciding whether to call for security or not, and it is obvious that an administrator in charge of the estate of a deceased person is subject to the same temptation as anybody else to exaggerate or misstate his case. No special facts relating to the position of the appellant or the previous history of this case have been put before us and the only materials on the record which were available to the Court when it passed its orders demanding security were a general protest by the appellant on the two facts which we have just mentioned. We are quite unable therefore, to agree with the contention of the learned advocate for the appellant that in this case the Court has called for security arbitrarily and without exercising its discretion properly. The appeal on this ground must therefore fail.

6. The second question is whether the learned Judge was right in holding that the sale in question was merely void able and need not therefore be set aside automatically and whether in the circumstances there was no justification for the refusal to set it aside. The authorities in this Court are, in our opinion, strongly in favour of the decision of the learned Subordinate Judge. It was held by a Bench of this Court in Ammukutty v. Manavikrarna A.I.R. 1920 Mad. 709 that although it was illegal to file a suit against a Receiver appointed by a Court without obtaining the previous sanction of that Court such an illegality did not affect the jurisdiction of the Court in which the suit was laid but could be effectively cured by the plaintiff obtaining the sanction during the course of the litigation and this principle was approved by another Bench of this Court in Kalyanasuudaram Iyer v. Narasimha lyengar A.I.R (1923) 10 It will be noticed, of course, that these decisions did not deal specifically with any sales in execution. But the same principle has recently been extended by another Bench of this Court in Rajagopala Venkatanarasiinha Rayanimgar v. Veniatalinga Nayanim Bahadur : AIR1944Mad372 to such a sale in execution. The head-note of that case runs thus:

Where property in the possession of a Receiver is sold in execution without obtaining leave of the Court, the sale is not void but is only void able at the discretion of the Court. And where leave of the Court is obtained subsequently the illegality is effectively cured and the sale is not liable to be set aside.

There are no decisions to the contrary and if these decisions can be taken to govern the facts of this case, we are naturally bound by them. It is argued by learned counsel for the appellant that the decisions do not govern the facts of this case, that the analogy between a suit and a sale in execution is not complete but rather misleading and that there are special facts which differentiate the decision in Rajagopala Venkatanarasiinha Rayanimgar v. Veniatalinga Nayanim Bahadur : AIR1944Mad372 from the case now before us. On the question of the analogy between a suit and a sale we think the contention of the learned counsel is wrong. His argument is that the holding of a sale is equivalent to the decision of a suit and the confirmation of the sale is equivalent to an adjudication in an appeal; but we are unable to see the force of this contention. The decree in a suit may or may not be appealed against. It depends entirely upon the volition of the party against whom the decree has been passed. But the question of the confirmation of the sale must inevitably be decided by a Court after the interval laid down by the procedure Code. It seems to us that the analogy is far stronger between the holding of a sale and the filing of a plaint. When a plaint is filed the proceedings necessarily end at some time or other in the passing of a decree. When a sale is held the proceedings necessarily end at some time or other in the setting aside of the sale or in its confirmation. We think therefore that if the law is that an illegality can be cured by leave obtained during the pendency of the suit the same principle should rightly be extended to the case of a sale where, as in this case, the leave has been obtained before the sale has finally been confirmed. Whether therefore there is any distinction on facts between Rajagopala Venkatanarasiinha Rayanimgar v. Veniatalinga Nayanim Bahadur : AIR1944Mad372 and the present case, we are of opinion that the general extension of the rule from suit to sale in execution is justified on a consideration of the nature of the two kinds of legal process. It is not necessary to consider the differences in fact which undoubtedly exist. In 1944 1 M. L. J. 129 leave was in fact granted before the sale, although the question which arose was in some way complicated by the fact that when the leave was granted one Receiver was in control of the property and when the sale was held he had been succeeded in office by another Receiver. Without therefore deciding that the decision in Rajagopala Venkatanarasiinha Rayanimgar v. Veniatalinga Nayanim Bahadur : AIR1944Mad372 is binding upon us, we hold that the view of the learned Subordinate Judge was right and that the sale was not void but only void able. On the facts we see no reason at all why this void able sale should be set aside. No injustice of any kind can be pointed out, apart from the allegations made Under Rule 90 which cannot now be considered to show why this sale should be set aside. We accordingly hold that the appeal fails on all points and must be dismissed with costs.


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