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(Chathurvedula) Subbayya Vs. Simha Venkata Subba Reddi and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil;Property
CourtChennai
Decided On
Reported inAIR1935Mad1050; 159Ind.Cas.224
Appellant(Chathurvedula) Subbayya
RespondentSimha Venkata Subba Reddi and anr.
Cases ReferredSorimuthu Pillai v. Muthukrishua Pillai
Excerpt:
- .....reason of the fact that the judgment-debtor had not deposited in court the amount specified in the sale proclamation. the district munsif held following the decision of the privy council in nanhelal v. umarao singh 1931 p.c. 33, that, after the sale had taken place and the right of a third party, namely, the auction purchaser, had intervened, no adjustment or satisfaction of a decree could be set up. that decision certainly does decide that that cannot be done. but it is perfectly clear that their lordships were not dealing with the position which is arrived at after an application has been put in by a judgment-debtor for the setting aside of the sale under order 21, rule 89, civil p.c. in fact they say that that is the only remedy to be pursued where a sale has taken place if the.....
Judgment:
ORDER

Beasley, C.J.

1. This Civil Revision Petition arises out of an application put in by a judgment-debtor under Order 21, Rule 89, Civil P.C. The petitioner here was respondent 2 in the lower Courts and was the auction-purchaser of one of the items of property brought to sale in pursuance of a decree. The decree-holder, respondent 1, in the lower Courts, purchased another item of property. The applicant under Order 21, Rule 89, Civil P.C., was the judgment-debtor. He deposited the required five per cent of the purchase money for payment to the petitioner here, respondent 2. He however made no deposit under Rule 89(1)(b), namely,

for payment to the decree-holder the amount specified in the proclamation of sale

for the reasons that he came forward with an arrangement whereby the decree-holder, who was respondent 1, in the application, agreed to accept a mort gage for Rs. 600 from the applicant, the judgment-debtor, in satisfaction of the amount owing to him under the decree. The petitioner here, respondent 2, objected raising the point that the condition laid down in Order 21, Rule 89, Civil P.C., had not been complied with by reason of the fact that the judgment-debtor had not deposited in Court the amount specified in the sale proclamation. The District Munsif held following the decision of the Privy Council in Nanhelal v. Umarao Singh 1931 P.C. 33, that, after the sale had taken place and the right of a third party, namely, the auction purchaser, had intervened, no adjustment or satisfaction of a decree could be set up. That decision certainly does decide that that cannot be done. But it is perfectly clear that their Lordships were not dealing with the position which is arrived at after an application has been put in by a judgment-debtor for the setting aside of the sale under Order 21, Rule 89, Civil P.C. In fact they say that that is the only remedy to be pursued where a sale has taken place if the judgment-debtor seeks to set it aside. Hence we are driven back to the words of Order 21, Rule 89. The amount that has to be deposited in Court for payment to the decree-holder is the amount specified in the proclamation of sale

less any amount which may, since the date of such proclamation of sale, have been received by the decree-holder.

2. The question is, what is the construction to be placed upon 'any amount which may have been received by the decree-holder.' Is it necessary that the decree-holder must receive the amount in cash or can he receive the equivalent of cash? It was contended very strenuously here that the words of the rule must be strictly read and that the rule permits of no receipt by the decree-holder other than of an amount in cash. I am entirely unable to see any reason for such a construction being placed upon these words. It is a rule which gives a very special indulgence to judgment-debtors or persons interested in the property sold to satisfy the decree amount as stated in the proclamation which is owing to the decree-holder so that he can go away with that amount; and the sale is set aside. The Court is bound, upon the conditions laid down in Rule 89, being satisfied, to set aside the sale. The Court has no option but to do that. It is only fair, therefore that, when the decree-holder has, since the date of the proclamation and before the application is made to set aside the sale, received something which reduces the amount which is owing to him, the judgment debtor should not have to pay the full amount into Court and then withdraw the amount which the decree-holder has received in between those two dates. Obviously the convenient thing is for the judgment-debtor to deduct what the decree-holder has received since the date of the proclamation upto the time of the filing of the application and to pay the net amount which is owing to the decree-holder into Court. I am quite unable to follow the reason for the argument addressed to me upon this point, namely, that there must be an actual receipt of cash and none other. If there has been a receipt of cash which reduces the amount set out in the sale proclamation the auction-purchaser has no cause to complain. He received 5 per cent of the purchase money as compensation under Clause (a), Rule 89. I fail to see what his complaint can be, having received that 5 per cent, if the decree-holder chooses to take some jewels in part satisfaction of the decree, those jewels being an equivalent to a certain sum of money.

3. I am unable to see that the auction-purchaser has any grievance if the decree-holder chooses to forgo the whole of the amount owing to him under the decree. In answer to a question put by me to the learned Counsel for the petitioner whether he contested the position that it was open to a decree-holder to waive the whole of the decree amount and whether under these circumstances the judgment-debtor would still have to deposit the full amount stated in the sale proclamation in Court, I understood his answer to be that it would be unnecessary, and that he would then not have to deposit any amount in Court. The position therefore is that the decree-holder can waive the whole of the amount in which case the judgment-debtor need pay nothing into Court in respect of the claim. The decree-holder can, if he likes, accept a lesser amount in which case the judgment-debtor need only pay the difference into Court. The decree-holder can agree to receive a part of that which is owing to him in which case the judgment-debtor has to deposit the balance into Court. I am quite unable to see why a decree-holder cannot be permitted to receive anything which to him is an adequate equivalent of the amount which is owing to him under the decree by the judgment-debtor.

4. The petitioner's contention with regard to this is only supported by the authority of a decision of the Allahabad High Court which upon examination does not turn out to be any authority at all. That is Janaki Pershad v. Lekhraj 1933 All. 510, a decision of Sulaiman, C.J. In that case the full amount set out in the sale proclamation had been deposited in Court and it was therefore quite unnecessary to consider what the result of some other receipt by the decree-holder than an actual amount in cash would have been and therefore the observations of the learned Chief Justice upon that question are merely obiter. On the other hand there are three cases of this High Court which are directly Contrary to the argument advanced here. The first of these is Vedala Lakshminarasimhacharyulu v. Lakshmiamma (1912) M.W.N. 756, a decision of Abdur Rahim and Sundara Iyer, JJ., under the old Code of 1882, the wording of the old section being exactly similar to the words found in Order 21, Rule 89. There it was held that an agreement with the decree-holder's widow to treat a portion of the decree debt as discharged in consideration of services rendered by the judgment-debtor to her husband is a valid discharge and actual receipt of cash is not necessary. This decision was followed by Benson and Sundara Iyer, JJ. in Ananta Lakshmi Ammal v. Sankaran Nair : (1913)24MLJ205 . In that case the decree-holders waived a portion of the decree amount, and following the decision in Vedala Lakshminarasimhacharyulu v. Lakshmiamma (1912) M.W.N. 756, it was held that the requirements of the rule were satisfied. The position is stated as follows on p. 206:

The whole amount duo to the decree holder was no doubt not paid in cash to the decree-holders. They waived a portion of the amount due to them and put in an application to the Court requesting that satisfaction might be entered of the whole amount due to them under the decree.... It was held by this Court in Vedala Lakshminarasimhacharyulu v. Lakshmiamma (1912) M.W.N. 756, that the payment to the decree-holder need not be in cash and that it is enough if the decree-holder is satisfied' with regard to the whole of the amount due to him to justify an application under Order 21, Rule 89.

5. In another case, viz. Karunakara v. Krishna 1916 Mad. 717, Spencer and Seshagiri Ayyar, JJ. referred to Ananta Lakshmi Ammal v. Sankaran Nair : (1913)24MLJ205 and Vedala Lakshminarasimhacharyulu v. Lakshmiamma (1912) M.W.N. 756, and distinguished those cases from the case before them which was a case where a co-judgment-debtor had paid an amount to the decree-holder and they held that a payment by a co-judgment-debtor does not satisfy the requirements of Rule 89. At the same time they accepted the position that there can be a constructive receipt of the money by the decree-holder. It was seriously argued that a recent decision of Madhavan Nair, J., in Sorimuthu Pillai v. Muthukrishua Pillai 1933 Mad. 598, in which a number of authorities are discussed has cast doubts upon the view expressed in the three Madras cases to which I have referred. That decision does nothing of the kind. It deals with a totally different state of facts and; moreover reference is made to three-Madras cases and no dissent from what is laid down there is expressed by Madhavan Nair, J. Indeed he could not do so since those decisions are Bench decisions which are therefore binding upon him. I am quite unable to see how the petitioners argument can possibly succeed.

6. Some attempt was apparently made in the District Munsif's Court and before the learned District Judge before whom the matter came on appeal and who has, in my view, quite rightly held that the requirements of Rule 89 were satisfied, to show that, by reason of this arrangement between the decree-holder and the judgment-debtor, the rights of the petitioner here to have rateable distribution would be defeated. The answer to that is that the petitioner has no right to rateable distribution, that is to say, when a judgment-debtor deposits in Court under Order 21, Rule 89, Civil P.C. an amount sufficient to satisfy the claim of a person for the satisfaction of whose decree the property is ordered to be sold, the money goes to the satisfaction of that decree-holder's decree and nobody else's and the other decree-holders have no right to claim rateable distribution in that amount. This point is dealt with in the Notes to Order 21, Rule 89, in Sir Dinshaw Mulla's Code of Civil Procedure (10th Edn., p. 816). With regard to the mortgage which was accepted by the decree-holder in satisfaction of his decree, in my opinion, that can be taken as something which the decree-holder regarded as a reasonable equivalent for the amount owing to him by the judgment-debtor under the decree. If that is so, he has received a sum towards his decree or in this case in total extinction of his decree. For these reasons, in my view, this Civil Revision Petition, must be dismissed with costs of respondent 1.


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