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M.L. Suryanarayana Rao Vs. Special Tahasildar and Magistrate, Mysore and ors. - Court Judgment

LegalCrystal Citation
CourtKarnataka High Court
Decided On
Case NumberWrit Petn. No. 21643 of 1982
ActsKarnataka Debt Relief Act, 1976 - Sections 4 and 4(J); Code of Civil Procedure (CPC), 1908 - Sections 65 - Order 1, Rule 19(2) - Order 21, Rule 92
AppellantM.L. Suryanarayana Rao
RespondentSpecial Tahasildar and Magistrate, Mysore and ors.
Appellant AdvocateChandrashekharaiah, Adv.
Respondent AdvocateM.C. Ranganna, Adv.
Cases ReferredIn Veeramma v. B. G. Siddappa
- constitution of india -- article 226; [a.s. bopanna, j] jurisdiction under held, high court will have jurisdiction regarding the statutory contracts and not a non statutory contracts. proper remedy is to work out through the competent civil court. .....[1967]2scr77 and in dasappa's case (1968) 1 mys lj 200 it has been held that on confirmation, the sale dates back to the date of sale, but the question is whether this fiction of dating back has the effect of extinguishing the mortgage debt, as on 21-10-1975? what is the position of judgment-debtor between the date of sale and the date of confirmation?11. s. 65 c.p.c. states that the property sold in execution sale shall be deemed to have vested in the purchaser from the date of sale and not from the time when the sale becomes absolute. according to o. 20 r. 92 c.p.c. sale becomes absolute, where no application is made under r. 89, 90 or 91 of o. 21 or where such application, if made is disallowed. under o.43, r. 1 ( j) an order setting aside or refusing to set aside a sale is.....

1. This is a creditor's petition, challenging the order passed by the Special Tahsildar and Magistrate, Mysore, dated f9-61982, redeeming the mortgages dated 5-7-1965 and 2-2-1966, and directing delivery of possession of house No. 494 (B) situated at Veenaseshanna Road, K. R. Mohalla, Mysore.

2. Petitioner and his wife Padmavatamma are the mortgagees, under two deeds, dated 5-7-1965 and 2-2-1966 respectively. The first mortgage was for Rs. 3000/- and the second one for Rs. 2000/-. House described above is the subject matter of mortgage. Respondents 2 to 4 are the mortgagors.

3. Padmavatamma (Petitioner's wife) 2nd mortgagee, obtained a decree in O. S. No. 758 of 1970, on the file of the II Munsiff, Mysore. The mortgaged house was sold on 11-4--1974, and decree-holder herself purchased the property; sale was confirmed on 3-3-1980, in Execution Case No. 617 of 1973.

4. The Karnataka Debt Relief Act, 1976 (Act 25 of 1976) was published in Gazette on 13-3-1976; Ss. 3, 4, 7 and 8 came into force from 21-10-1975; Ss. 5 and 6 came into force from 11-11-1975 and S. 9 came into force from 28-11-1975. S. 4(a) declares that every debt advanced before the commencement of this section, including interest, shall be deemed to be wholly discharged. Ss. 4(c) and 4(f) read thus :

'(c) all suits and proceedings (including appeals, revisions, attachments or execution proceedings) pending on the said date against any debtor for the recovery of any such debt shall abate.

xxx xxx xxx(f) every mortgage executed by the debtor in favour of the creditor shall stand redeemed and the mortgaged property shall be released in favour of such debtor and where the creditor fails to do so, the Sub-Divisional Magistrate having jurisdiction over the place where the mortgaged property is situate may, suo motu or on application of the debtor and after such inquiry as he may deem fit, put the debtor in possession of the mortgaged property'.

5. Respondents 2 to 4, claiming themselves as 'debtors' filed application to the first respondent seeking relief under S. 4(f). It was resisted by the petitioner. On an earlier occasion, the order of the Magistrate was set side by this Court in W. P. No. 4504/1979, and the matter was remanded for fresh disposal. After remand, the impugned order is passed.

6. Mr. Chandrashekhariah, appearing for the petitioner urged the following contentions : -

1) Sale having been held on 11-4--1974, and confirmed on 3-3-1980, confirmation dates back to the date of sale as per S. 65 CPC hence petition was not maintainable as there was no subsisting 'debt' on 21-10-75;

2) Parvatamma-decree-holder - not being made a party, no relief could be granted; and

3) Respondents are not 'debtors' as defined in the Act.

7. Mr. Chandrashekhariah placed reliance, for his first proposition on Janakraj v. Gurdial Singh, : [1967]2SCR77 ; H. K. Dasappa v. Kalidasappa, (1968) 1 Mys U 200 and V. Krishna Rao v. S. D. M. Mysore, (1980) 2 Kant LJ 71.

8. Mr. M. C. Ranganna contended that being a beneficial Legislation, its object being to carry out the directive principle in Art. 46 of the Constitution the Court should consider the intent or object of the Legislature. He contended that the fiction of dating back has no effect on his rights under S. 4 of the Act. He maintained that the wordings of the Act being clear, the provisions of S. 4 will be available till the date of confirmation and that while by fiction, the right of auction purchaser dates back to the date of sale, the date of confirmation remains unaltered. Between the date of sale and date of confirmation, the rights of judgment-debtors remain unaltered and right of auction purchasers is inchoate and imperfect. He relied on the following decisions: : : AIR1966All360 (FB); : AIR1974Guj218 ; and AIR 1953 SC 425.

9. As regards the finding, that his clients are debtors, it was contended that the said finding is a finding of fact and in view of S. 6 of the Act, the creditor has not established that the 'debtors' were not entitled to the benefits of' the Act, therefore the same is unsustainable. Lastly, he contended that Padmavatamma is no other than petitioner's wife and if for any reason the Court comes to the conclusion that without impleading her no relief could be granted, matter could be remanded.

10. It is no doubt true that in Janakiraj's case, : [1967]2SCR77 and in Dasappa's case (1968) 1 Mys LJ 200 it has been held that on confirmation, the sale dates back to the date of sale, but the question is whether this fiction of dating back has the effect of extinguishing the mortgage debt, as on 21-10-1975? What is the position of judgment-debtor between the date of sale and the date of confirmation?

11. S. 65 C.P.C. states that the property sold in execution sale shall be deemed to have vested in the purchaser from the date of sale and not from the time when the sale becomes absolute. According to O. 20 R. 92 C.P.C. sale becomes absolute, where no application is made under R. 89, 90 or 91 of O. 21 or where such application, if made is disallowed. Under O.43, R. 1 ( j) an order setting aside or refusing to set aside a sale is appealable. An order of confirmation is not appealable. (Osanjiah v. Babu (1972) 1 Mys LJ Short Notes Item 27). However, if in appeal, the sale is set aside the confirmation order, done in the meanwhile, becomes non est. Dealing with this position, under the Madras Agriculturists Relief Act (4 of 1938), the Supreme Court in Sri Ranga Nilayam Ramakrishna Rao v. Kandokori Chellayamma AIR 1953 SC 425, observed thus :

' But, as was pointed out by the Privy Council, the High Court as an appellate court had the same powers as the trial court and it is only when the appeal was dismissed by the High Court that the order of the trial court confirming the sale became absolute. Till the decision of the appellate court, no finality attached to the order confirming the sale.

It is clear that in this case the same rule would apply to the order recording satisfaction of the decree and to the order confirming the sale. If the order recording satisfaction of the decree was not final and remained an inchoate order until the appeal was decided, the order confirming the sale would have the same inchoate character. This position seems to have been fully conceded in the statement of their case filed on behalf of the respondents in this Court'.

12. In Nidhpal Sharma v. Union of India : AIR1966All360 , the Full Bench considered the following two questions : -

'(1) Whether an auction purchaser has a right in the immoveable property sold prior to the confirmation of the sale, i.e., the sale becoming absolute; and

(2) Whether there is any final adjudication of his rights as a result of the sale being set aside under O. XXI R. 90, C.P.C.'

In para 36, Justice Mathur, who spoke for the Full Bench stated thus : -

'......Title is, I may say, with respect, something stronger than a right. The immovable property sold does not vest in the auction-purchaser till the sale becomes absolute, in other words, the confirmation of the sale, though on confirmation the property vests in him from the date of sale. If the sale is set aside, the property does not vest in the auction purchaser and he has no right thereto. The title of the auction-purchaser thus flows out of the order of confirmation of the sale, and for so long as no order of confirmation is passed, the auction purchaser can have no title to the property, but he does enjoy a substantial right which he can transfer'.

13. In Chimanlal Narasibhai Patel v. Amratlal Chhotalal Shah, : AIR1974Guj218 , the Court was considering the right of judgment-debtor to receive the rents between the date of sale and date of confirmation; the head Note reads thus :

'An auction purchaser (plaintiff) of suit property, in execution of a mortgage decree for sale, is not entitled to claim as compensation from the tenants (defendants), inducted by the judgment-debtor during the pendency of the darkhast proceedings, the amount of rent paid by them to take judgment debtor for the period between the date of execution sale (14-12-1957 in the instant case) and the date the sale became absolute (30-4--1959 in the instant case) in spite of notice of sale to the tenants. It is obvious from the provisions of S. 65 read with O. 21 Rr. 89 to 92 and 94 and 95, Civil P.C. and Art. 180 of the Limitation Act of 1908 that the title as well as the possession as regards the property sold in execution of a decree is acquired by the auction purchaser only after the sale becomes absolute as per the provisions of R. 92 of O. 21, C.P.C. Till the sale became absolute, the judgment-debtor continued to be landlord and as such was entitled to collect rent from the defendants as his tenants. The payment of that rent to the judgment-debtor by the defendants, therefore, cannot be considered either wrongful or mala fide. Even though the deeming fiction contemplated by S. 65 acts in retrospection from the date of sale, before the sale became absolute, no such deeming fiction was available to the plaintiff (auction purchaser) ...........'

14. From the above decision what flows is that the right of the auction purchaser, though after confirmation dates back to the date of sale, it is not an indefeasible right and it cannot be said that judgment-debtor has lost all his rights from the date of sale. Further in this case it is a mortgage decree and judgment-debtor can produce the mortgage money, even beyond thirty days of the sale. R. 5 of O. 34 makes it clear that the defendant can make the payment 'on or before the day fixed or at any time before the confirmation of sale made in pursuance of final decree'. In Veeramma v. B. G. Siddappa (1963(2) Mys LJ 413), it is held that 'so long as the sale is not confirmed, the judgment-debtor can produce the mortgage money'. In view of the above, I have no hesitation to hold that the debt was subsisting on the date the Act came into force and the concept of 'dating back' on confirmation did not affect the rights of respondents 2 to 4.

Mr. Chandrashekariah contended that the subsequent to the confirmation of the sale, the debt has been discharged and on the date of passing of the impugned order, there was no debt in existence and therefore the impugned order cannot be sustained.

Mr. M. C. Ranganna appearing for the respondents does not admit this factual position. He submitted that there is no evidence on record on this aspect of the matter concerned.

Since I have held that the debt was in existence on the date the Act came into force, it is not possible to hold, in the absence of evidence, that it stood discharged on the date when the impugned order was passed. Hence I reject the contention of Mr. Chandrashekariah.

15. Mr. Chandrashekariah however relied on Krishna Rao's case (1980) 2 Kant LJ 7 1, and submitted that since the right of equity of redemption, which alone the judgment-debtor has, is sold to the auction purchaser, he is not entitled to make application under S. 4 of the Karnataka Debt Relief Act. In that case the sale was confirmed on 11- 10- 1957, long before the Karnataka Debt Relief Act came into force. In the instant case, the confirmation is on 3-31980, and respondents application to the Taluka Magistrate is in 1976. Therefore the said decision is of no assistance and is clearly distinguishable. I reject the contention of Sri Chandrashekhariah.

16. Coming to the finding regarding the position of respondents as 'debtors', I must uphold the contention, of Sri M. C. Ranganna for the reason that after remand, the respondent in his 4tatement has said that he had no knowledge of the definite income of the applicants and as stated by the Magistrate 'he has not disputed the income revealed by the applicants' In this petition, except stating in para 7 that the income of respondents 2 to 4 is more than Rs. 10,000/- per annum, the details are not furnished. Hence I uphold the said finding and reject Mr. Chandrashekhariah contention.

17. Coming to the last point, whether Padmavatamma is necessary party and without her presence the impugned order could be passed, particularly in respect of the mortgage debt, covered by the decree obtained by Padmavatamma. Padmavatamma has not filed the writ petition nor does the petitioner, who is her husband, state that he is filing the writ petition in respect of her claim also. Fact remains, without impleading Padmavatamma, and giving her an opportunity no order could have been passed; to this extent the order becomes unsustainable. Therefore, my conclusions are:

1. The petition filed by respondents 2 to 4 was maintainable, as it was in respect of a subsisting debt;

2. Respondents 2 to 4 have established that they are 'debtors':

3. There is no infirmity in the impugned order to the extent, it concerns, petitioner's debt of Rs. 3000/- dated 5-7-65;

4. The order of redeeming the mortgage debt of Padmavatamma is unsustainable.

Hence I make the following order: -

1. Rule to the extent it concerns petitioner's right is discharged, writ petition is dismissed.

2. The impugned order, to the extent, it directs the redemption of mortgage of Padmavatarnma7s debt of Rs. 2000/- dated 2-2-1966, is quashed. Matter is remitted to the first respondent-Tahsildar and Magistrate, Mysore, to issue notice to Padmavatamma and pass appropriate orders in respect of her debt, after giving reasonable opportunity to file objections and of being heard in accordance with law. No costs.

Sri B. R. Nanjundaiah, learned HCGA is permitted to file his memo of appearance for respondent-1 within four weeks.

18. Order accordingly.

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