Mookerjee and Carnduff, JJ.
1. The subject-matter of the litigation out of which the present appeal arises is Mouza Raghunathpur in the District of Gaya. The plaintiff respondent commenced the action for declaration that the sale of the Mouza held by the Collector under the Public Demands Recovery Act, 1895, is a nullity, and for recovery of possession of the property from the purchaser. It appears that on the 26th July 1905 the Collector made a certificate for recovery of Rs. 15-1. as arrears of road-cess for the June kist of that year. The plaintiff deposited in the Treasury two days later the entire amount due. This fact, however, was overlooked, and a notice under Section 10 of the Public Demands Recovery Act of 1895 was served on the 27th August on the basis of the certificate previously made. The property, which is now valued at Rs. 6,000, was sold on the 18th December following, and was purchased by Sheo Sahai Lal for Rs. 100. The sale was confirmed on the 20th February 1906, and the purchaser on the 28th June 1906 transferred the property for Rs. 500 to Janakdhari Lal. On the 2nd January 1907 the plaintiff commenced the present action for declaration of his title and for recovery of possession. He joined the Secretary of State for India in Council as the first defendant, Sheo Sahai Lal, the purchaser at the certificate sale as the second defendant, some mokuraridars as the third, fourth, fifth and sixth defendants, and the transferee from the auction-purchaser as the seventh defendant. The claim was resisted by the seventh defendant alone, substantially on the ground that arrears of cesses were due, that the sale had been rightly held, and that in any event, it could not be set aside, as against a bona fide purchaser for value without notice. The Subordinate Judge in the Court below found that the certificate was as a matter of fact made, not on the 26th July 1905, but on the 11th August, on which date an entry was made in the order-sheet initiating the certificate proceedings. He concluded, therefore, that on the date on which the certificate was made there were no arrears due, and that, consequently, the Collector had no jurisdiction either to issue a certificate or to execute it. In this view, he set aside the sale and made a decree in favour of the plaintiff which entitled him to recover possession. The seventh defendant has now appealed to this Court, and, on his behalf, it has been contended, first, that the certificate was made on the 26th July 1905, and not on the 11th August, as held by the Subordinate Judge; secondly, that the only remedy of the plaintiff was by proceedings under Sections 12 and 15 of the Public Demands Recovery Act; and, thirdly, that even if a regular suit is held to be maintainable, the plaintiff is not entitled to any relief on the ground that the sale took place on the basis of a satisfied certificate.
2. As regards the first ground taken on behalf of the appellant, we are satisfied that the view taken by the Subordinate Judge is erroneous. The copy of the certificate on the record shows that it was initialled by the certificate officer on the 26th July, and there is no foundation for the speculation of the Subordinate Judge that the entry of the date was subsequent to the actual making and signature of the certificate. It is perfectly true that the date is not entered in the space provided in the printed form for that purpose; nor is the amount due mentioned in the place where it ought to have been made. But these defects do not, by themselves, afford any basis for suspicion that the certificate was subsequently made and deliberately antedated. We must consequently hold that the certificate was made on the 26th July 1905.
3. The second ground taken on behalf of the appellant raises the question as to the remedies open to the plaintiff after the certificate had been made. It is argued on behalf of the appellant that the sole remedy of the plaintiff was to file a petition of objection to the certificate under Section 12 of the Public Demands Recovery Act, and if he was defeated on such an application, he might institute a suit in the Civil Court under Section 15. In our opinion, there is no foundation for this contention. Section 12 contemplates a case in which an objection is taken that the judgment-debtor is not liable to pay the whole or any part of the amount for which the certificate has been made and filed against him. Section 13 provides that the certificate officer may set aside, modify or vary the certificate if the petitioner establishes his denial of liability. It is manifest that the procedure provided in Section 12 is open only when the judgment-debtor is in a position to allege and prove that there were no arrears due from him at the time when the certificate was made, or that a smaller amount than the one in respect of which the certificate was made was due. Section 12 has no application when the judgment-debtor admits that the certificate was rightly made, but alleges that the amount of arrears has been subsequently paid. Section 15 has precisely the same scope, and entitles the judgment-debtor to maintain an action for cancellation or modification of the certificate. A certificate which has been properly made for arrears actually due cannot be cancelled or modified, because the demand has been subsequently satisfied. This, we think, is reasonably plain from Section 17, Sub-section (1), which provides that no certificate duly made shall be cancelled by a Civil Court, otherwise than on the ground that the amount stated in the certificate was actually paid or discharged before the making of such certificate, or that no part of the amount stated in the certificate was due by the judgment-debtor under the certificate. In other words, a certificate can be cancelled only on the ground that the amount stated was either never due, or, if due, had been paid before the certificate was made. Sections 12 and 15, therefore, have obviously no application to the circumstances of the present litigation, in which the contention of the plaintiff is, not that the certificate was improperly made, but that the sale was held without jurisdiction, because the amount due under the certificate had been paid before the sale was held. We must, therefore, overrule the objection of the appellant that the sole remedy of the plaintiff was by an application under Section 12, or by a suit under Section 15. In the view we take, neither of these courses was open to the plaintiff. It is, therefore, unnecessary to consider whether, if either of these courses had been open to the plaintiff, that could have been rightly treated as his exclusive remedy. The decision of their Lordships of the Judicial Committee in Bal Kishen Das v. Simpson (1898) I.L.R. 25 Calc. 833, as also the earlier decisions of this Court in Baijnath Sahu v. Lala Sital Prasad (1868) 2 B.L.R. (F.B.); 10 W.R. 66 (F.B.) and Harkhoo Singh v. Bunsidhur Singh (1898) I.L.R. 25 Calc. 876, tend to support the proposition that if circumstances are established which show that the sale has been held without jurisdiction, the sale cannot be rightly treated as one made under the provisions of the Act, and may consequently be challenged by a civil suit without recourse to the procedure provided in the Act; in other words, in a case of this description, as there is no foundation for the exercise of jurisdiction by the Revenue authority, the person injuriously affected is not deprived of his remedy by recourse to the ordinary law. As we have already indicated, however, in the case before us, the plaintiff was not entitled to proceed under either Section 12 or 15 of the Public Demands Recovery Act. The second ground urged on behalf of the appellant cannot, therefore, be supported.
4. The third and last ground taken on behalf of the appellant raises a question of some nicety, namely whether, when a sale has been held by the Collector under the Public Demands Recovery Act, although the amount due under the certificate has been previously deposited in the Treasury, the sale is null and void, even as against a bona fide purchaser for value without notice. It has been strenuously contended by the learned vakil for the appellant that the sale cannot be set aside, and he has placed reliance upon the cases of Rewa Mahton v. Ram Kishen Singh (1886) I.L.R. 14 Calc. 18; L.R. 13 I.A. 106, Mothura Mohun v. Akhoy Kumar (1888) I.L.R. 15 Calc. 557 and Yellappa v. Ram Chandra (1896) I.L.R. 21 Bom. 463. The substance of his argument is that as soon as the certificate has been properly made, the certificate has, upon the authority of the decision in Purna Chandra v. Dina Bandhu (1907) I.L.R. 34 Calc. 811; 5 C.L.J. 696, the same force and effect, to all intents and purposes, as a final decree of a Civil Court, and that the purchaser in execution of a satisfied decree of a Civil Court is not liable to have the sale cancelled, if he is a bona fide purchaser for value without notice. This argument raises two questions of considerable importance, viz., first, as to the precise effect of a sale in execution of a decree of a Civil Court which has been satisfied before the sale takes place, and, secondly, whether the rule applicable to sales in execution of decrees of a Civil Court governs in this matter sales under the Public Demands Recovery Act.
5. Now, so far as the first of these two questions is concerned, it is clear that the proposition for which the appellant contends is too broadly stated, and is not supported by the authorities upon which reliance is placed. It is perfectly true that so far as a sale in execution of a money decree is concerned, the reversal of the decree subsequent to the sale does not affect its validity, if the purchaser at the execution sale is a person other than the decree-holder himself. This principle was affirmed by Sir Barnes Peacock in Jan Ali v. Jan Ali (1868) 1 B.L.R. 56 A.C. in the case of sales in execution of ex-parte decrees which are subsequently vacated and was then applied to cases of sales in execution of decrees which are subsequently reversed on appeal: Zainulabdin v. Muhammad Asghar (1887) L.R. 15 I.A. 12, Dorasami v. Annasami (1899) I.L.R. 23 Mad. 306, Chandan v. Ramdeni (1904) I.L.R. 31 Calc. 499 and Set Umed Mal v. Srinath Roy (1900) I.L.R. 27 Calc. 810. It has also been ruled that there is no real distinction in this respect between an auction-purchaser at a sale in execution of a money decree and an auction-purchaser at a sale in execution of a mortgage decree: Mukhoda Dassi v. Gopal Chunder Dutta (1899) I.L.R. 26 Calc. 734 and Shivlal v. Shambhu Prasad (1905) I.L.R. 29 Bom. 435. The principle is based upon weighty reasons explained by Lord Redesdale in Bennet v. Hamill (1806) 2 Schedule & Lef. 506, in which that learned Judge pointed out that a purchaser has a right to presume that the Court has taken the steps necessary to investigate the rights of the parties, and that on that investigation, it has properly decreed a sale; see also Bowen v. Evans (1844) 1 Jones & LaTouche, 178, 259 where Sir Edward Sugden observed that it was of the greatest importance that sales made under the authority of the Court should not be lightly set aside. The principle in question was affirmed by the House of Lords in Bowen v. Evans (1848) 2 H.L.C. 257 and Tommey v. White (1850) 3 H.L.C. 49, and by the Supreme Court of the United States in Beauregard v. New Orleans (1855) 18 Howard 497 and Griguon v. Astor (1844) 2 Howard 219. We do not refer to these decisions as authorities in any way binding upon this Court, but simply as indicating that the doctrine that the reversal or modification of a judgment does not invalidate the sale, nor divest the title of the purchaser, is based upon the perfectly intelligible principle that a purchaser at a judicial sale is not compelled to go behind the judgment or decree and investigate the facts upon which it was rendered. The question, however, still remains, whether a sale in execution of a judgment which has been satisfied, in so far as a bona fide purchaser without notice is concerned, is entitled to be placed in the same category as a sale in execution of a decree which was in existence and full force at the time of the sale, but it subsequently reversed. It is manifest that upon principle there is a substantial difference between the two classes of cases. In the first class of cases, there is a subsisting judgment which it is the duty of the Court to execute, but which is subsequently set aside because made ex parte or reversed on appeal because erroneous on the merits. In the second class of cases, there is not at the time of the sale an unsatisfied decree which it is the duty of the Court to execute. This fundamental distinction between the two classes of cases has led to considerable divergence of judicial opinion upon the matter. In the case of Rewa Mahton v. Ram Kishen (1886) I.L.R. 14 Calc. 18, two persons A and B held cross decrees against each other. A, who held a decree for the smaller sum, took out execution, whereas under the law B alone ought to have taken out execution for the difference of the sums due under the decrees. Under these circumstances, their Lordships of the Judicial Committee held that, although the sale was irregular, the title of the execution purchaser, who was a stranger to the proceedings, was not affected. Their Lordships went on to observe as follows: 'A purchaser under the sale in execution is not bound to enquire whether the judgment-debtor had a cross-judgment of higher amount, any more than he would be bound in an ordinary case to enquire whether a judgment upon which an execution issues has been satisfied or not. These are questions to be determined by the Court issuing the execution. To hold that the purchaser at a sale in execution is bound to enquire into such matters would throw a great impediment in the way of purchases under executions. If the Court has jurisdiction, a purchaser is no more bound to enquire into the correctness of an order for execution than he is as to the correctness of the judgment upon which the execution issues.' No doubt, the principle thus enunciated, taken apart from the circumstances of the case in which the rule was laid down, may be treated as of the widest possible application, but it must not be overlooked that in an earlier part of the judgment, their Lordships had pointed out that both the cross-decrees had not been brought before the Court for execution, and consequently there was nothing to prevent A, the holder of the decree for the smaller sum, from taking out execution of his decree under Section 246 of the Code of Civil Procedure of 1877. The Court, therefore, had ample jurisdiction to execute the decree at the instance of A, and if the Court had jurisdiction, no question could arise as to the propriety of the sale. The observations of the Judicial Committee, however, have been treated in subsequent cases as capable of general application. Thus in Mothura Mohun v. Akhoy Kumar (1888) I.L.R. 15 Calc. 557 and Yellappa v. Ram Chandra (1896) I.L.R. 21 Bom. 463, it was ruled that where a person, a stranger to the proceedings, purchases property bona fide at an execution sale, his purchase cannot be invalidated on the ground that the decree had already been satisfied out of Court at the time the sale was held. This decision may be justified on the ground that as satisfaction had not been certified to the Court, the decree remained, so far as the Court was concerned, an unsatisfied decree capable of execution, and the Court had consequently jurisdiction to execute it. The cases relied on by the learned vakil for the appellant do not, therefore, support the broad contention that when a sale takes place in execution of a decree which has been satisfied and the property of the judgment-debtor passes into the hands of a bona fide purchaser for value without notice, the sale cannot under any circumstances be set aside. The cases relied upon are at best authorities for the proposition that the sale cannot be set aside, if the satisfaction of the decree has not been certified to the Court; but even upon this point, there has been some, divergence of judicial opinion. For instance, in the case of Patdasi v. Sharup Chand Mala (1887) I.L.R. 14 Calc. 376, it appears to have been assumed as obvious that as the decree in execution of which the sale took place had been satisfied before the sale, the purchaser, though a stranger to the proceedings, did not acquire any valid title see also Ram Gopal v. Rajan (1907) 6 C.L.J. 43. Again, the decision of their Lordships of the Judicial Committee in Ganga Pershad Sahu v. Gopal Singh (1884) I.L.R. 11 Calc. 136. L.R. 11 I.A. 234 may lend some apparent support to this view. In that case the decree-holder and judgment-debtor had agreed to a postponement of the sale, but the joint petition of the parties was by an error presented to the wrong Court, with the result that the sale took place. This Court sot aside the sale on the authority of Rajmohun v. Gour Mohan (1859) 8 M.I.A. 91, and this decision was subsequently affirmed in appeal by the Judicial Committee. No doubt, in that case, the decree-holder himself was the purchaser, but no reference is made to this circumstance as the foundation of the judgment. In any event, it is clear that there is no authority in our Courts in support of the proposition that when a decree has been satisfied, and the satisfaction has been certified to the Court, a sale held in execution of the satisfied decree passes to the purchaser an indefeasible title, because he is a stranger to the proceedings. The nearest case in the English Courts is the decision of Lord Hardwicke in Jeanes v. Wilkins (1749) 1 Ves. Sen. 195. In that case, a creditor had the body of his debtor seized in execution under a 'capias ad satisfaciendum'; during the continuance thereof, the sheriff sued out a writ of fieri facias and levied on a leasehold of 99 years. The question arose, whether the sale could be avoided, on the ground that during the existence of the capias ad satisfaciendum and the person in custody, a fieri facias ought not to have been taken out. Lord Hardwicke ruled that the fieri facias could not be treated as void, that although it was irregular, it was sufficient to indemnify the sheriff, so that he might justify in an action of trespass, and that consequently the purchaser under the sheriff gained a good title,notwithstanding the writ might be afterwards set aside. This is an express authority in favour of the view that when a sheriff holds a sale without notice that the defendant in execution was then in custody on a capias ad satisfaciendum, the sale passes a good title to a stranger purchaser. If, therefore, there is no difference between a satisfaction of a judgment in fact by the payment of money and a satisfaction in law by taking the defendant in custody on a capias ad satisfaciendum, it follows that a sale held on the basis of a satisfied judgment when the satisfaction has not been certified to the Court, is not void. The question has also been much debated in the American Courts, and the preponderance of authority there is in favour of the view that a sale under a satisfied judgment is void, even though such satisfaction has not been notified to the Court, and the property has passed into the hands of an innocent purchaser. The leading decisions on the point will be found collected in Kleber on Void Judicial and Execution Sales, Sections 262; 263 and 289; Freeman on Judgments, Section 480; Freeman on Execution, Sections 19 and 20; and Freeman on Void Judicial Sales, Section 7A and Section 23, note 4; where it is pointed out that a sale under a satisfied judgment is affirmed to be void in Wood v. Colvin (1842) 2 Hill 566; 38 Am. Dec. 598, Doe v. Ingersoll (1848) 11 S. & M. 249; 49 Am. Dec. 57 and Murrell v. Roberts (1850) 11 Ired. 424; 53 Am. Dec. 449, whereas such a sale is upheld in favour of innocent purchasers in Boren v. McGeehee (1837) 6 Port. 432; 31 Am. Dec. 695, Van Campen v. Snyder (1838) 3 How. 66; 32 Am. Dec. 311, Hoffman v. Strohecker (1338) 7 Watts 86; 32 Am. Dec. 740 and Reed v. Austin (1846) 9 Missouri 722; 45 Am. Dec. 336. The ground in support of the view that the sale on the basis of a satisfied judgment is void is thus put in Craft v. Merrill (1856) 14 N.Y. 456. 'The judgment was the sole foundation of the sheriff's power to sell and convey the premises, and if the judgment was paid when he undertook to sell and convey, his power was at an end, and all his acts were without authority and void; the purchaser under a power is chargeable with notice, if the power does not exist, and purchases at his peril.' In another case where after full satisfaction of a decree by a sale of part of the property of the judgment-debtor, execution was again taken out and a sale held, Durette v. Briggs (1871) 47 Missouri 361, the Court observed: 'When an execution has performed its office by extracting full satisfaction from a portion of the debtor's property, it cannot have sufficient life and vigour to deprive him of the residue and transfer the title from him to another.' The ground in support of the contrary view that a sale on the basis of a satisfied judgment cannot be set aside as against a purchaser for value without notice is thus emphatically put in Mason v. Vance (1863) 1 Sneed. 178: 60 Am. Dec. 144: 'An execution, regular on its face, based upon a judgment equally regular and apparently in full force, mast be regarded as a regular execution; that, while a regular execution may be voidable, it cannot be void; that it must operate as a sufficient justification to officers entrusted with its execution; and finally, that it cannot be the means of ensnaring innocent purchasers when nothing exists to warn them that the foundation on which it apparently rests has in fact been swept away.' But amidst this diversity of judicial opinion, there is unanimity upon one point, namely, that when a sale has taken place on the basis of a satisfied judgment, the satisfaction of which has been certified to the Court, the sale is void and ineffectual to pass any title even to a bona fide purchaser for value without notice. This proposition is sufficient for the determination of the rights of the parties in the case now before the Court.
6. But the second question, which calls for decision, is whether these principles are applicable to cases of sales under the Public Demands Recovery Act. Here the form of the notice prescribed by the Act to be issued to the judgment-debtor under Section 10 expressly states that the certificate is to be executed, unless the amount is paid into the office of the Collector. Section 26 of the Act further provides that, in the event of payment, the certificate officer shall cause satisfaction to be entered upon the certificate, as also in the Register of Certificates kept under Section 24. From these statutory provisions, it is manifest that the certificate officer has authority to sell only so long as the certificate remains unpaid, and that a duty is cast upon him by the law to enter satisfaction as soon as payment has been made. In these circumstances, can it be contended upon any intelligible principle that a sale may be upheld as valid, though it has been held in execution of a certificate which has been duly satisfied? In our opinion, such a view cannot possibly be supported. The Secretary of State is the decree-holder under the Act, and the Collector is authorised to execute the certificate on his behalf. If a payment is made into the Treasury sufficient to satisfy the demand, it is difficult to appreciate upon what principle it can be seriously contended that the sale is merely irregular and not void because held entirely without statutory authority. In this view, we are supported by the decision of this Court in Gujraj Sahai v. Secretary of State (1889) I.L.R.17 Calc. 414, where Mr. Justice Pigot ruled, on the authority of the cases of Abdul Haye v. Nawab Raj (1868) B.L.R. Sup. Vol. 911 and Mohan Ram v. Baboo Shib Dutt (1871) 8 B.L.R. 230, 235, that a sale in execution of a satisfied certificate is absolutely void. When the matter was taken on appeal before the Judicial Committee Abdul Hai v. Gujraj Sahai (1893) I.L.R. 20 Calc. 826; L.R. 20 I.A. 70 this view was expressly affirmed. Their Lordships observed as follows: 'Upon the arrear being paid into the Treasury, it becomes the statutory duty of the Collector, to enter satisfaction upon the certificate, under his hand and signature which he failed to do. The appellant argued that there being no such entry upon the certificate, his purchase of that date was valid. It would be a singular result if a Collector's neglect of his statutory duty gave him statutory power to sell in execution the property of a person who owed nothing to the Government. That such was not the intention of the Legislature is abundantly clear. By the terms of the notice served upon the judgment-debtor, along with a copy of the certificate all that the debtor is required to do in order to prevent execution of the certificate, is to pay the amount of arrears demanded into the office of the Collector.' These observations upon the provisions of the Public Demands Recovery Act of 1880 are, in our opinion, equally applicable to the Act of 1895. The third ground taken on behalf of the appellant must consequently be overruled.
7. The learned vakil for the appellant finally argued that this was a case of great hardship on his client--a purchaser from an innocent purchaser at a Government sale. With reference to this argument, it is sufficient to refer to the weighty observations of Mr. Justice Pigot in his judgment in the case of Baijnath v. Ramgat (1890) 5 C.L.J. 687, which was subsequently affirmed by their Lordships of the Judicial Committee Baijnath Sahai v. Ramgut Singh (1896) I.L.R. 23 Calc. 775 'If considerations of hardship could affect our decision, we should still say there were none in this case. The defendant with his eyes open made a speculative purchase of a valuable estate for next to nothing, getting it at that price, as we have no doubt, because no one would buy at a sale surrounded with circumstances of such a doubtful character. If he had succeeded, as he very nearly did, he would have made a very good thing indeed. He ran the chance of some loss or enormous profit. He must abide by the result.'
8. The result, therefore, is that the decree of the Court below must be affirmed, and this appeal dismissed. There will be no order for costs as the learned vakil for the respondent intimated to the Court that he had no instructions to defend the appeal.