1. We are invited in this appeal to consider the propriety of an order made by the Court below in concurrence with the Court of first instance, by which execution has been allowed to proceed on the basis of a mortgage decree. On the 13th June, 1904, one Judhistir Karmakar obtained a decree on a mortgage against Shib Chandra Karmakar upon confession of judgment. As the decretal debt was not paid within the period of grace, the decree-holder obtained an order absolute on the 27th August 1904. On the 19th March 1907, the decree-holder assigned the decree in favour of Dwarka Nath Karmakar, called the assignee in these proceedings and now respondent before this Court. On the 6th June 1907, the assignee applied for substitution of his name and for leave to execute the decree. The notice required by Section 232 of the Code of 1882 was served on the transferor and the judgment-debtor on the 18th June 1907. As no objection was taken, the application of the assignee was granted on the 6th July 1907. Sale-proclamation was subsequently issued in due course and the sale was fixed to take place on the 19th November, 1907. On that date, the assignee intimated to the Court that he was not anxious to proceed with execution further at that stage, and consequently the application was dismissed. Meanwhile, at a sale held in execution of a decree against the judgment-debtor, Shib Chandra Karmakar, obtained by another creditor Sarada Ranjan Karmakar, the mortgaged properties had been purchased on the 19th September 1907 by one Mon Mohan Karmakar called the purchaser in these proceedings and now appellant before this Court. This sale was confirmed on the 21st November 1907, and the sale certificate was issued in due course. On the 11th January, 1908, the assignee presented a second application for execution; the 9th March, 1908, was fixed for the sale, and the sale proclamation was ordered to issue. On the 12th March, 1908, Mon Mohan, the purchaser, presented a petition of objection in which he urged that the sale ought not to be held substantially for two reasons: namely, first, that the judgment-debtor has satisfied the decree by payment to the decree-holder of the judgment-debt in full in October and November, 1906, and that consequently the assignee did not by his purchase acquire any enforceable right; and, secondly, that the assignment was a fraudulent decree by the judgment-debtor to defeat the just claims of his other creditors, as, in spite of the satisfaction of the decree, he had obtained the assignment for his own benefit in the name of the brother-in-law of his eldest brother, Krishna Gopal Karmakar. On the day fixed for the determination of the validity of this objection, the purchaser happened to be absent and his petition of objection was consequently dismissed for default on the 13th June 1908. The assignee was represented on the occasion and was directed by the Court to take steps for execution of the decree. On the 18th June, he deposited the fees for the issue of the sale proclamation but as he did not file the forms duly filled in, no further action was taken by the Court. On the 3rd July 1908, the purchaser made an application for a review of the order of rejection of his petition, and he assigned various grounds to explain why he had failed to be present on that occasion. On the 27th July, 1908, the purchaser presented a fresh petition in which he put forth various objections to execution of the decree by the assignee. The application for review and the fresh petition of objection, however, could not be considered on the merits, inasmuch as on the 10th August, 1908, the original application for execution was dismissed for non-prosecution. On the same day, the petition of objection was rejected without trial on the ground that, as the application for execution had been dismissed, it was not necessary to deal with the objection. Some days later, on the 27th August, 1908, the application for review was also dismissed for default. On the 10th December, 1908, the assignee presented his third application for execution, and thus initiated the proceedings which are now before the Court. On the 23rd January, 1909, the purchaser preferred his objections substantially identical with all those embodied in the applications of the 12th March and the 27th July, 1908. The Court of first instance overruled the objections on the ground that, as no application had been made to certify satisfaction of the decree under Section 258 of the Code of 1882 within the period prescribed by Article 173A of the Limitation Act of 1877, the alleged payment could not be recognised by the execution Court, and that consequently the decree-holder was entitled to execute the decree. Upon appeal, this order has been confirmed by the learned District Judge, not only for the reasons assigned by the original Court bat also on the additional ground that as the objection taken in the previous execution proceedings had been unsuccessful it could not be repeated so as practically to re-open the matter in controversy. The purchaser has now appealed to this Court, and on his behalf the judgment of the District Judge has been assailed on two grounds, namely, first, that the order of dismissal of the previous petitions of objection does not operate as an insuperable bar to the consideration of the matter on the merits, because there was no investigation and no decision by reason of the default of the assignee and secondly, that neither Section 258 of the Code of 1882 nor Order XXI, Rule 2 of the Code of 1908, has any application. These positions have been strenuously contested on behalf of the respondent, and it has further been urged on his behalf that the truth or otherwise of the allegation of fraud made by the appellant can be determined, not under Section 244 of the Code of 1882, but in a regular suit appropriately framed for the purpose.
2. In so far as the first of these contentions is concerned, it is clear from an examination of the record that the view taken by the District Judge cannot be supported. It may be conceded that, as laid down by their Lordships of the Judicial Committee in the cases of Mungul Pershad Dichit v. Grija Kant Lahiri 8 C. 51 : 11 C.L.R. 113 : 8 I.A. 123 Ram Kirpal v. Rup Kumari 6 A. 269 : 11 I.A. 37 and Beni Ram v. Nanhumal 7 A. 102 : 11 I.A. 181 a party to an execution proceeding who allows an order for execution to be passed against him at one stage of the proceeding, where he had an opportunity to contest the validity of that order, cannot be permitted at a subsequent stage of the proceeding to re-open the whole matter in controversy. This principle, which is founded on the obvious reason that, if the contrary view were maintained, there would be no end to litigation, is based on the assumption that the person debarred had an opportunity to contest the validity of the order. As Mr. Justice West puts it in Shiekh Budan v. Ram Chandra 11 B. 537 the doctrine rests on the ground that the judgment-debtor, though called on to dispute, if he wishes or if ho can, a certain proposition of right and consequential demand of relief or action by the judgment-creditor, either fails in his contention to the contrary or at any rate allows the judgment to go by default. To put the matter in another way, the essence is that the matter has either been controverted as well as determined, or that it has been allowed to be decided to the detriment of the judgment-debtor when he had full opportunity to establish his defence. The principle consequently has no application when it is proved that there was no adjudication by reason of the failure of the decree-holder to prosecute the execution proceedings with due diligence. Consequently, where there has been no judicial determination of the objection by reason of the default of the decree-holder, as in Bholanath v. Prafullanath 28 C. 122 and Hira Lal Bose v. Dwija Churan Bose 3 C.L.J. 240 : 10 C.W.N. 209 or by reason of the defective notice served upon judgment-debtor, as in Sheikh Budan v. Ram Chandra 11 B 537 Narayana Puttar v. Gopal Krishna Chetti 28 M. 355 : 15 M.L.J. 247 and Ramasami Naik v. Ramasami Pattar 30 M. 255 : 2 M.L.T. 167 : 17 M.L.J. 201 or by reason of a fraudulent suppression of all notices issued upon the judgment-debtor as in Mazzem Hossain v. Sarat Kumari 11 C.L.J. 357 : 5 Ind. Cas. 89 : 14 C.W.N. 433 it cannot rightly be held that the previous order operates as an effective bar to an enquiry into the merits on the occasion of a subsequent application for execution. In the case before us, it is true that when the petition of objections of the purchaser was dismissed for default on the 13th June, 1908, the assignee was present, and consequently if proceedings had stopped at that stage, the order of dismissal might have operated as a bar as in the nature of a judgment by default [see Sheoraj Singh v Kameshar Nath 24 A. 282]. But after the dismissal of the petition of objections, there was an application for review of the order and there was also a fresh petition of objections to further progress with the execution proceedings. In ordinary course these applications would have been determined on the merits, but for the dismissal of the execution proceedings by reason of the default of the assignee. It is worthy of note, as we have already stated, that the Court expressly declined to deal with the application for review as also the petition in which the objections were urged solely on the ground that, as the execution proceedings had terminated, it was needless to investigate the matter. We must, consequently, hold that it is still open to the appellant to urge the objections embodied in the applications of the 12th March and the 27th July 1908. The first ground taken on behalf of the appellant must consequently be sustained.
3. In support of the second ground taken on behalf of the appellant, it has been argued that although the time during which the decree-holder might have been compelled to certify satisfaction of the decree under Section 258 of the Code of 1882 has expired, it is competent to the Court to determine the validity of the objection under Section 244; and in support of this proposition reliance has been placed upon the case of Denobundhu v. Harimati 31 C. 480. As pointed out, however, in the cases of Gadadhar Panda v. Sham Churn Naik 12 C.W.N. 485 and Kamini Debi v. Aghore Nath Mukherjee 11 C.L.J. 91 : 4 Ind. Cas. 402 this position cannot be sustained[ see also the cases of Ganapathy v. Changa 29 M. 312 and Veerappa Chettiar v. Arumugam Poosaray 17 M.L.J. 527 where the contrary view taken in Ramayyar v. Ramayyar 21 M. 356 was not followed and the rule laid down in Periatambi v. Vallaya 21 M. 409 was adopted]. If we were to accede to the argument of the learned Vakil for the appellant, the effect would be that Article 173A of the Limitation Act would be completely nullified. It must consequently be maintained that in cases, to which the provisions of Section 258 are applicable, if appropriate application has not been made within the prescribed time, the alleged payment or satisfaction must be ignored, and the party who seeks the benefit thereof cannot indirectly obtain an extension of the period of limitation on the ground that the question falls within the scope of Section 244 and may be determined there under. While, therefore, we overrule the contention of the appellant that the case treated as one under Section 244 is not open to objection on the ground of limitation, we must examine the question whether Section 258 or the corresponding provision of the Code of 1908 (Order XXI, Rule 2) has any application to the circumstances of the present case. It will be observed that in the case before us, it is not the judgment-debtor who seeks to obtain against the execution creditor the benefit of an uncertified payment, adjustment or satisfaction; the contest lies between the assignee of the decree on the one hand and on the other, the execution purchaser of the interest of the judgment-debtor in the properties covered by the decree. No doubt, on the principle recognised by a Full Bench of this Court in the case of Ishan Chunder Sirkar v. Beni Madhub Sirkar 24 C. 62 : 1 C.W.N. 36 and in the cases of Radha Kishun v. Hem Chandra 11 C.W.N. 495 and Gulzari Lal v. Madhoram 26 A. 447 such purchaser of the equity of redemption of the judgment-debtor at a judicial sale is a representative of the judgment-debtor within the meaning of Section 47 of the Code of 1908. It may also be conceded that assignee of the decree is a representative of the decree-holder within the meaning of the same section [Dwar Buksh Sirkar v. Fatik Jali 26 C. 250 : 3 C.W.N. 222, Ganga Das v. Yakub Ali 27 C. 670 Badri Narain v. Jai Kishen 16 A. 483]. The question now in controversy between the parties is consequently one which arises between the representatives of the parties to the suit and obviously relates to the execution, discharge or satisfaction of the decree. From this point of view, the question, in our opinion, attracts the operation of Section 47 of the Code of 1908. But this does not necessarily justify the inference that the question also falls within the scope of Order XXI, Rule 2 of the Code. The argument of the learned Vakil for the respondent, that the question is comprised within the scope of the latter Rule, is based upon the fallacy that no question can arise between the representatives-in-interest of the parties to the suit other than those which may arise between the parties themselves. The contention on behalf of the respondent is founded on the assumption that, if the original judgment-debtor had sought to prove as against the original decree-holder, the alleged uncertified payment or satisfaction he would have been met by the provisions of Order XXI, Rule 2, read with Article 174 of the Limitation Act of 1908 and that, consequently, when the question is raised between the representatives-in-interest of the parties, the same result must follow. This, it may be conceded, would ordinarily be so; Panduranga Mudaliar v. Vythilinga Reddi 30 M. 537 : 2 M.L.T. 466 : 17 M.L.J. 417. But the argument overlooks the fundamental point that here the representative-in-interest of the judgment-debtor makes allegation's of fraud and conspiracy between the decree-holder and the judgment-debtor in the matter of the assignment of the decree. As already stated, his case is that, although the judgment-debtor has satisfied the decree, yet with a view to defraud his other creditors, he has, with the assistance of the decree-holder, obtained an assignment of the decree for his own benefit in the name of a near relative, so that he may use it as a shield for his own protection. We are not prepared to hold that Order XXI, Rule 2, was ever intended to apply to a case of this description. The substantial questions in controversy here are twofold, namely, first, whether the assignee of the decree who makes the application under Order XXI, Rule 16, is to be treated as the purchaser of an enforceable right even if it is established that the decree which he professed to buy had been satisfied in full by the judgment-debtor, and, secondly, whether, if the assignee is in reality no other than the judgment-debtor himself, he can execute the decree against the purchaser of the equity of redemption. These clearly are questions within the scope of Section 47, but beyond the scope of Order XXI, Rule 2, and consequently it cannot be successfully contended that the Rule relied upon offers any effective bar to the investigation of the matters in controversy. It has, indeed, been suggested by the learned Vakil for the respondent that the matter is beyond the scope of Section 244 of the Code of 1882, and Section 47 of the Code of 1908, and our attention has been drawn to the case of Bomanapati v. Chinta Kunta 26 M. 264 to show that a suit lies at the instance of the assignee of a decree for a declaration as to the validity of his assignment. This, however, does not show that the question may not be investigated under Section 244 Civil Procedure Code, and, in fact, the terms of that section, as we have already explained, are wide enough to comprise within its scope an enquiry of the character now before us. But we may add that the question, whether a regular suit is maintainable for the determination of the question of fraudulent assignment or whether it ought to be determined in execution proceedings, is of no practical importance, because, in the case before us, the Court in which the question has been raised is the Court competent to execute the decree as also to entertain a suit, if it were brought by the appellant for a declaration that the decree was satisfied and the assignment had been fraudulently obtained by the judgment-debtor with a view to defraud his creditors nor does any question of limitation arise because, while the assignment was made on the 19th March, 1907, the petition of objection was presented on the 23rd January, 1909. As no question of jurisdiction or limitation arises, it is manifest that the petition of objection might be treated as the plaint in a suit, or, if a suit were instituted, the plaint might be treated as an application in the execution-proceedings. The matter is plainly one of form, and the Court will not, by a strict adherence to the form, defeat the ends of justice. This rule, which was laid down by Sir Richard Couch, C.J. in Purmessuree Pershad v. Jankee Kooer 19 W.R. 90 has been repeatedly followed in this as also in other Courts [see Aziz-ud-din v. Ramanugra 14 C. 605; Biru Mahata v. Shama Churn Khawas 22 C. 483; Shiblakshan Bhagat v. Srimati Tarangini Dassi 8 C.L.J. 20; Jotindra v. Mahomed 32 C. 332; Jhamman Lal v. Kewalram 22 A. 121; Lalman Das v. Jagan Nath Singh 22 A. 376; Sadho v. Abhenandan 26 A. 101; Siddipal v. Vabang 29 M. 343 and Pasupathy Ayyar v. Kothanda Rama Ayyar 28 M. 64; while the learned Judges of the Madras High Court have recently held in Thathu Naik v. Kondu Reddi 32 M. 242 : 5 M.L.T. 248 : 1 Ind. Cas. 237 that even a written statement may in a proper case be treated as an application in execution proceedings. The principle in question has further received legislative recognition in the Code of 1908 Section 47, Sub-section (4), and the propriety of the practice followed by the Court under the repealed Code is, therefore, now beyond controversy. Consequently even if we were disposed to treat as well-founded the contention of the respondent that the remedy of the appellant was by way of a suit and not by a petition of objection in the execution-proceedings, we would have granted leave to him to treat the petition of the 23rd January 1909 as a plaint and called upon him to pay the deficit Court-fees. Whatever view, therefore, may be adopted, the truth or otherwise of the allegations of the purchaser and their legal effect have to be determined.
4. As regards the merits of the objection, it will be observed that the allegation of the appellant is of a two-fold character, namely, first, that the judgment-debtor satisfied the decree so far back as October or November 1906, and, secondly, that subsequently, in collusion with the decree-holder he took an assignment of the decree for his own benefit in the name of a near relation. Now, if it is found as a fact that the decree has not been satisfied and that the assignee is a bona fide purchaser for value, there is no question that the decree must be executed. If, on the other hand, it is found as a fact that the decree has been satisfied, but that the assignee is a bona fide purchaser for value without notice, the question arises, whether the assignee is entitled to execute the decree. In our opinion, he is not entitled to proceed with execution under such circumstances, because as laid down in Section 233 of the Civil Procedure Code of 1882, and Section 49 of the Code of 1908, the transferee of the decree holds the same subject to the equities, if any, which the judgment-debtor might have enforced against the original decree-holder. In substance, the assignee stands in no better position than the assignor, as regards equities existing between the original parties to the judgment, and takes it subject to all the equities and defences subsisting at the time of the assignment, which the judgment-debtor could have asserted against it in the hands of the judgment creditor, not with standing the assignee may have had no notice thereof. Hence, as well put in the case of Sutton v. Sutton (1886) 26 S.C. 33 : 1 S.E. 19 if the assignor has no title to the judgment, he can convey none to the assignee, and, where a judgment once paid, though not satisfied of record, is assigned by the judgment-creditor, the assignee takes it subject to all defences and equities which were available to the judgment-debtor against the assignor [Black on Judgments, Vol. II Section 953 Freeman on Judgments, Vol. II Section 427]. If, again, it is proved that the decree has not been formally satisfied but that the assignee is a benamdar for the judgment-debtor, he ought not to be allowed to execute the decree as against the representative of the latter, because the assignment in substance operates merely as a satisfaction of the decree. Finally, if it is found as a fact that the decree has been satisfied and that the judgment-debtor has obtained in collusion with the decree-holder an assignment thereof with a view to defraud his creditors, it is manifest that the decree cannot be executed, because, as is well observed in the case of Zimmerman v. Gameer (1899) 152 Ind. 553 : 53 N.E. 829 the payment of judgment by one primarily liable to pay the same, is an absolute satisfaction and the assignment of the judgment to him or to another for him will not prevent its extinction (Black on Judgments Vol. It Section 941: Freeman on Judgments, Vol. II Section 466). Under these circumstances, the true nature of the transaction must be investigated upon evidence to be adduced by the parties.
5. The result, therefore, is that this appeal must be allowed, and the orders of the Courts below discharged. The case will be remanded to the Court of first instance in order that the objection taken by the appellant in his petition of the 23rd January 1909, may be determined. The appellant is entitled to his costs both here and in the Court of appeal below. Costs of the Court of first instance will abide the result. We assess the hearing-fee in this Court at two gold mohurs.