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The Trivandrum Permanent Fund Vs. K.M.A. Mohamed Mohideen Sahib - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Reported in(1968)2MLJ377
AppellantThe Trivandrum Permanent Fund
RespondentK.M.A. Mohamed Mohideen Sahib
Cases ReferredAnanthalakshmi v. H. I.
Excerpt:
.....which the order of remand can be appealed against are not limited to the grounds mentioned in sub-rule (2) of rule 4 of order 47, and consequently, the appeal is maintainable even under order 43, rule 1, clause (w). 3. in order to clear the ground, i would like to mention the fact that so far as the learned subordinate judge sought to cancel the order passed by him on 19th october, 1965, he was fully justified. consequently, there has been a failure on the part of the learned subordinate judge to comply with the requirements of the rule. consequently, the order of the learned subordinate judge dated 19th october, 1965 was clearly unjustifiable and therefore the learned subordinate judge was fully justified in recalling that order or reviewing :that order subsequently. on the other hand,..........contained in order 47, rule 4, civil procedure code. the said rule is in two parts. the first sub-rule of rule 4 provides that when it appears to the court that there is no sufficient ground for review, it shall reject the application.5. sub-rule (2) of rule 4 provides -where the court is of opinion that the application for review should be granted, it shall grant the same:provided that-(a) no such application shall be granted without previous notice to the opposite party, to enable him to appear and be heard in support of the decree or order, a review of which is applied for; and(b) no such application shall be granted on the ground of discovery of new matter or evidence which the applicant alleges was not within his knowledge, or could not be adduced by him when the decree or order.....
Judgment:

M.M. Ismail, J.

1. O.S. No. 15 of 1951 instituted by the appellant herein was based on a mortgage and a decree therein was passed on 28th October, 1953. The amount for which the decree was passed is said to be over Rs. 50,000. The mortgaged properties were brought to sale on 6th April, 1961, and the decree-holder himself purchased the same for a sum of Rs. 37,450. Thereafter the respondent herein who was the first defendant in the suit and to whose family the property belonged, filed an application to set aside the sale under the provisions of Order 21, Rule 90 of the Civil Procedure Code. On 9th January, 1962, the Court passed an Order directing the respondent herein to furnish security. Against the said order, the respondent preferred A.A.O. No. 154 of 1962 on the file of this Court. On 4th August, 1965 this Court set aside the order of the lower Court dated 9th January, 1962 and directed that ' the lower Court may, if it considers necessary, call upon the appellant to furnish security as required under Order 21, Rule 90, Civil Procedure Code, and dispose of the petition according to law.' On receipt of the records back from this Court, the learned Subordinate Judge, Nager-coil, before whom the execution proceedings were pending, passed an order on 19th October, 1965 to the following effect:

Furnish security by 25th October, 1965.

Notice of this order was sent to the parties. It appears that on 25th October, 1965 at the request of the respondent herein, the Court extended the time to 2nd November, 1965. Against on 2nd November, 1965 at the request of the respondent, the Court extended time till 8th November, 1965. Thereafter on 8th November, 1965, the respondent herein filed E.A. No. 415 of 1965 under Section 151 and Order 4.7, Rule 1 of Civil Procedure Code, praying for an order holding that security need not be furnished and to recall the directions to furnish security. In the affidavit filed in support of the said application, the respondent. Herein put forward three grounds, namely, (1) the order dated 19th October, 1965 was passed without giving an opportunity to the respondent to show cause why security should not be directed to be furnished, and if he had been given an opportunity to show cause, he would have satisfied the Court that this was a case in which no security need be demanded; (2) the decree being a mortgage decree, the Court failed to consider whether any security at all is necessary; and (3) the petition filed by the respondent to set aside the sale had been numbered as E.A. No. 381 of 1965, and consequently that petition had been admitted; and when once the petition had been admitted, the Court had no jurisdiction to demand security from the respondent. The learned Subordinate Judge, Nagercoil, by his order, dated 23rd November, 1965 allowed this application. He has stated as follows:

The Court has to consider whether it is necessary to call upon the petitioner to furnish security. The decree is a mortgage decree. The case of the petitioner is that the property is worth Rs. one lakh. The decree is on the basis of a mortgage. Therefore, there is ample security for the amount due thereunder. To require the judgment-debtor to give security once over for the amount covered by the decree is quite unwarranted. The terms of the first proviso to Order 21, Rule 90, Civil Procedure Code, would be inappropriate in the case of a mortgage decree as there is already a subsisting security for the amount covered by the decree and the sale proclamation. I am of the view that in these circumstances, security need not be demanded.

It is against this order, the decree-holder-purchaser has filed the present appeal.

2. Mr. S. Thyagaraja Iyer, learned Counsel for the respondent raised a preliminary objection as to the maintainability of the appeal. According to him, the appeal is not maintainable because the order appealed against is not an order coming within the scope of either Section 47 or Order 43 of Civil Procedure Code, and if it is intended to be an appeal against the order granting review by the learned Subordinate Judge, such an appeal will lie only on the grounds mentioned in Order 47, Rule 7, since the provisions of Order 43, Rule 1 (w) is controlled by the provisions contained in Order 47, Rule 7. Consequently I have to consider the question whether the appeal filed by the decree-holder-purchaser is maintainable at all. Mr. R. Gopalaswamy Iyengar, learned Counsel for the appellant contended that the appeal lies under the provisions of Order 43 since the order appealed against is one under Order 21, Rule 92, Civil Procedure Code. Learned Counsel further contended that the order will come within the scope of Section 47 also and therefore, an appeal will be available. The further contention of the learned Counsel is that the grounds on which the order of remand can be appealed against are not limited to the grounds mentioned in Sub-rule (2) of Rule 4 of Order 47, and consequently, the appeal is maintainable even under Order 43, Rule 1, Clause (w).

3. In order to clear the ground, I would like to mention the fact that so far as the learned Subordinate Judge sought to cancel the order passed by him on 19th October, 1965, he was fully justified. The provision for furnishing security has been introduced by an amendment made to Order 21, rule go by the Madras High Court and the said amendment is in the following terms:

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 to that realised by the sale, whichever is less, or to deposit such amount in Court:

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.

In this case, the facts narrated above by me will show that before passing the order on 19th October, 1965, on receipt of the orders from this Court, the learned Subordinate Judge did not give notice to the respondent. Consequently, there has been a failure on the part of the learned Subordinate Judge to comply with the requirements of the rule. Apart from that, the order directing the respondent to furnish security is an order which is undoubtedly prejudicial to the respondent and no order prejudicial to a party can be passed without giving him an opportunity to show cause, prior to the passing of such an order. Consequently, the order of the learned Subordinate Judge dated 19th October, 1965 was clearly unjustifiable and therefore the learned Subordinate Judge was fully justified in recalling that order or reviewing : that order subsequently.

4. The next question is whether against that order granting a review of the earlier order dated 19th October, 1965, an appeal will lie. Mr. S. Thyagaraja Iyer's contention is that an appeal against an order granting a review will lie only if there had been a contravention of the provisions contained in Order 47, Rule 4, Civil Procedure Code. The said rule is in two parts. The first sub-rule of Rule 4 provides that when it appears to the Court that there is no sufficient ground for review, it shall reject the application.

5. Sub-rule (2) of Rule 4 provides -

Where the Court is of opinion that the application for review should be granted, it shall grant the same:

Provided that-

(a) no such application shall be granted without previous notice to the opposite party, to enable him to appear and be heard in support of the decree or order, a review of which is applied for; and

(b) no such application shall be granted on the ground of discovery of new matter or evidence which the applicant alleges was not within his knowledge, or could not be adduced by him when the decree or order was passed or made, without strict proof of such allegation.

According to Rule 7 of Order 47, so far as it is relevant for the purpose of this case, an order granting an application may be objected to on the ground that the order was in contravention of the provisions of Rule 4. Mr. Thyagaraja Iyer contends that there has been no violation of Rule 4 (2) (a), since the review was granted only after giving notice to the appellant and hearing him. There has been no violation of Rule 4 (2) (b) also since the review was not granted on the discovery of new matter or evidence which the respondent alleged was not within his knowledge or could not be adduced by him when the original order was passed or made, without strict proof of such allegation. On the other hand, the review was granted on the basis that the Court on the earlier occasion failed to observe the requirements of law. Consequently, no appeal will lie against such an order within the scope of Rule 7 of Order 47 read with Order 43, Rule 1, Clause (w). In support of this contention, Mr. Thyagaraja Iyer relied on a decision of this Court in Srinivasa Ayyangar v. Official Assignee, Madras : AIR1927Mad641 , and also a passage occurring in Mulla on Code of Civil Procedure, 13th Edition, Vol. II, page 1679 to the effect that ' the preponderance of judicial opinion in Madras is also in favour of the view that an appeal lies against an order granting review only on the grounds mentioned in Rule 7.' As against this, Mr. R. Gopalaswamy Iyengar relied on the decision of this Court in Ananthalakshmi v. H.I. & F. Trust : AIR1951Mad927 , and a decision in Francis v. Ouseph A.I.R. 1953 Trav.-Co. 441. The decision in Srinivasa Ayyangar v. Official Assignee, Madras : AIR1927Mad641 , is, as the head note itself reads:

Although Order 43, Rule 1 (w) of Civil Procedure Code allows an appeal against an Order under Rule 4 of Order 47 granting an application for review, yet, the Order 43, Rule 1 (w) is subject to the restrictions and limitations placed by Order 4T, Rule 7. Hence no appeal lies against an order granting review if the appeal is not on any of the grounds mentioned in Order 47, Rule 7.

As against this, the learned Judges in Ananthalakshmi v. H.I. & F. Trust : AIR1951Mad927 , have stated as follows:

A preliminary objection was taken on behalf of the Company by its managing director, that the appeal was not maintainable, as the conditions of Order 47, Rule 7, Civil Procedure Code, were not fulfilled. According to that rule, an order granting an application for review could be objected only on the ground that the order was in contravention of the provisions of Rule 2 or Rule 4 or that the application for review was barred by limitation and there was no sufficient cause. This objection, though very plausible and has some support in decided cases, does not appear to us to be invulnerable. An appeal would lie on the ground that an order granting review was in contravention of the provisions of Rule 4. Rule 4 (1) says that,

Where it appears to the Court that there is not sufficient ground for review, it shall reject the application.So if the Court does not reject the application where there is no sufficient ground for review but grants the application, then it contravenes Rule 4. We do not see any justification for construing ' Rule 4 ' in Rule 7 (1) (b) as confined to Rule 4 (2). But we do not think it necessary to finally decide this question, because even assuming that an order permitting a review, that is to say, allowing the case to be reopened, is not by itself appealable, there is nothing to prevent an appeal being filed against the final order passed after a reconsideration. That order on review can be attacked on the merits in an appeal, see Govinda Chetti v. Rangammal : AIR1929Mad261 .

I must point out that the decision of a Bench of this Court in Srinivasa Ayyangar v. Official Assignee, Madras : AIR1951Mad927 , referred to already was not brought to the notice of the learned Judges who decided the case in Ananthalakshmi v. H. I. &. F. Trust : AIR1951Mad927 . In view of this, and in view of the fact that the learned Judges themselves in the Ananthalakshmi's case A.I.R. 1953 Trav. Co. 441, did not think it necessary to decide the question finally, I am not prepared to hold that contrary to the decision in Srinivasa Ayyangar v. Official Assignee, Madras : AIR1951Mad927 , the ruling in Ananthalakshmi v. H. I. & F. Trust : AIR1951Mad927 , has held that Order 43, Rule 1 (w) is not controlled by the provisions of Order 47, Rule 7. However, even as far as the present case is concerned, as the learned Judges pointed out in the latter case, the appeal is not against the order of the learned Subordinate Judge granting review, but against the order passed by him finally after the grant of the review. As a matter of fact, whenever an order is sought to be reviewed, it involves two stages. The first stage is to consider the earlier order, and if the Court comes to the conclusion that the order is liable to be reviewed, to set aside the same. Having set aside that order, the Court passes a fresh order in the proceedings in which the order which was set aside was originally passed. In the present case, the learned Subordinate Judge by the order appealed against, after having set aside his order dated 19th October, 1965, has passed a fresh order holding that the respondent need not furnish security. Consequently, the present appeal is not strictly an appeal against an order granting a review, but an appeal against the final order made after the review was granted. Therefore, I am of the view that if an appeal lies against the final order under some other provision of law, the provisions of Order 43, Rule 1 (w) cannot bar the present appeal. This takes me to the question whether the present appeal is competent under any other provision of Jaw. Mr. R. Gopalaswamy Iyengar contended, as I pointed out already, that the order appealed against is an order passed under Order 21, Rule 92, Civil Procedure Code, and there fore is appealable under Order 43, Rule 1 (j). I am unable to agree with this contention. Under Order 21, Rule 92, read with Order 43, Rule 1 (j), an appeal lies only against an order setting aside a sale or confirming a sale after disallowing an application to set aside the sale. Since the disallowing of an application to set aside a sale, automatically involves the confirmation of the sale, it has been held by decided cases that an appeal will lie under these provisions against an order disallowing an application to set aside the sale. But the present order cannot be said to come within the scope of Order 21, Rule 92. Mr R. Gopalaswamy Iyengar contended that any intermediate steps or step towards the setting aside of a sale or confirmation of a sale will come within the scope of order 21, Rule 92. I am unable to accept this contention. Mr. R. Gopalaswamy Iyengar has not been able to bring to my notice any principle or authority supporting such a contention. Therefore, I hold that the present appeal is not maintainable under Order 43, Rule 1 (j) read with order 21, Rule 92, Civil Procedure Code.

6. Mr. Gopalaswamy Iyengar ultimately contended that the appeal lies under Section 47 of Civil Procedure Code. He contends that the question has arisen between the judgment-debtor and the decree-holder who has purchased the property and this matter relates to satisfaction of the decree. Consequently, the matter falls within the scope of Section 47. Mr. Gopalaswamy Iyengar conceded that it cannot be said that every order that may be passed by a Court in the course of an execution will fall within the scope of Section 47, Civil Procedure Code. But according to him. any order affecting the rights of parties as between the judgment-debtor and the decree-holder will fall within the scope of Section 47, Civil Procedure Code, The basis of this argument is that if the respondent is permitted not to furnish security, then his application to set aside the sale will be gone into on merits. On the other hand, if the respondent is required to furnish security and he fails to furnish security, his application to set aside the sale will not be investigated into and that will result in the confirmation of the sale of the property in favour of the appellant. Consequently, this order dispensing with the furnishing of security by the respondent affects the rights of the parties, and the matter is in relation to the execution and satisfaction of the decree. Hence, the matter falls within the scope of Section 47, and an appeal lies. I am inclined to agree with this contention. Therefore I hold that this appeal is competent under Section 47 of the Civil Procedure Code.

7. The next question is whether the order of the learned Subordinate Judge calls for any interference. I have already extracted the reasons given by the learned Subordinate Judge for modifying his earlier order. As I pointed out earlier, the learned Subordinate Judge was fully justified in vacating or recalling the earlier order passed by him on 19th October, 1965. The question is whether there was any justification for substituting the fresh order passed by him or, in other words whether the new order passed by him is justified. Mr. S. Thyagaraja Iyer contended that the order passed by the learned Subordinate Judge is justified. He says that the property is of the value of Rs. one lakh and the property being the subject-matter of the mortgage and the decree-holder having the mortgaged property as security, there is no need to call upon the respondent to furnish security,.' As against this, Mr. R. Gopalaswamy Iyengar contends that the fact that the property was sold only for a sum of Rs. 37,450 itself will be an indication that the property is not of sufficient value so as to warrant the dispensing with of furnishing security by the respondent herein. As far as I am concerned, all that I am pointing out at this stage is that the learned Subordinate Judge had not considered this question, before coming to the conclusion that the respondent need not furnish any security. I must point out here that the learned Subordinate Judge appears to have proceeded on the basis that the provisions regarding the furnishing of security is inappropriate in the case of a mortgage decree, as already a subsisting security for the amount covered by the decree and the sale proclamation is there. Mr. Gopalaswamy Iyengar points out that this view is wrong. He contends that the fifth defendant in the very same suit filed an application to set aside the sale, and a similar order was passed in his case requiring him to furnish security and that matter came up to this Court in A. A. O. No. 191 of 1962 and L.P.A. No. 91 of 1964. In its judgment, dated 12th December, 1966, a Bench of this Court in the said L.P. Appeal stated as follows:

It is submitted that it is a case of a mortgage decree and in the case of a mortgage decree, security need not be demanded. But it is not an inflexible rule that no security should be demanded on an application under Order 21, Rule 90, Civil Procedure Code, in the case of a mortgage decree. Cases may differ and require security be demanded even in the case of mortgage decrees.

Consequently, Mr. Gopalaswamy Iyengar argues that the view of the learned Subordinate Judge that the decree is on the basis of a mortgage and therefore there is ample security for the amount due thereunder is erroneous. He contends that taking into account the fact that it is a mortgage decree and the other relevant circumstances, the Court will have to decide whether security is required or not. Mr. Thyagaraja Iyer, learned Counsel for the respondent, in view of the decision of the Bench of this Court in the L. P. Appeal mentioned above, very rightly does not contest this position. But he contends that the learned Subordinate Judge has taken into account all the relevant facts and has exercised the discretion and therefore his order does not call for any interference in the appeal. I am unable to agree. The learned Subordinate Judge has not referred to any material circumstance on the basis of which he came to the conclusion that no security need be demanded in this case. No doubt, there is the sentence in his order that the case of the respondent is that the property was worth Rs. one lakh. The order does not make it clear that the learned Judge accepted that case of the respondent. Consequently, it is for the learned Subordinate Judge to come to a conclusion whether security should be called for or not, after taking into account the value of the property, other encumbrances, if any, existing on the property and the amount of liability thrown on the property by the decree in question and any other relevant factor or circumstance. If he had taken into account all these circumstances and had come to the conclusion that no security need be demanded, such an order would not have merited any interference by this Court. But on the terms of the present order, I am unable to say that he has taken into account all the relevant circumstances before coming to the conclusion that in this particular case, no security need be demanded. Mr. Thyagaraja Iyer points out that the object of demanding security under the proviso to Order 21, Rule 90 is to meet any deficiency that may occur as a result of a re-sale; and taking into account the fact that the earlier sale took place in 1961, there should have been inevitable appreciation of the property during the period of these seven years and consequently if the property is to be resold again, there will be no deficiency at all and therefore there is no warrant for demanding the security. That again is a matter which the learned Subordinate Judge has to take into account and consider. In view of all these, I allow this appeal and set aside the order of the learned Subordinate Judge dated 23rd November, 1965. The result of that will be that the learned Subordinate Judge will have to consider afresh, whether the circumstances of this case warrant calling upon the respondent to furnish any security or not, after taking into account all the relevant factors. There will be no order as to costs.


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