Authored By : Mookerjee, Charles Peter Caspersz

Mookerjee, J.

1. We are invited in this Rule to consider the legality ofan order by which the Court of Appeal below, in reversal of an order of theCourt of first instance, has directed the confirmation of an execution sale.There is no controversy as to the circumstances under which the order has beenmade. One Ehaya Hossain obtained a mortgage decree against the Petitioner onthe 10th June 1908. The decree was made absolute on the 11th February 1909.Execution was taken out on 13th July 1909, and the properties were purchased atthe auction sale which followed on the 20th September 1909, by one MahomedHabibuddin. On the 9th October 1909, the judgment-debtor applied for leave todeposit the decretal amount, and two days later the Court granted theapplication. The judgment-debtor, however, on the 5th October 1909, made anapplication under r. 90 of or. 21 of the Civil Procedure Code of 1908 forreversal of the sale on the ground of fraud and material irregularity in itspublication and conduct, which had resulted in substantial injury to thePetitioner. During the pendency of this proceeding, the decree-holder intimatedto the Court his willingness to accept the decretal amount and to allow thesale to be set aside, if the judgment-debt was satisfied. Thereupon, thePetitioner alleges, he paid the sum to the decree-holder who certified paymentto the Court. On the 12th April 1910, the Subordinate Judge set aside the sale,not on the ground that as the decree-holder had consented to its reversal itcould not stand good, but on the ground that the sale had been irregular andthe judgment-debtor had suffered substantial injury by reason of thenon-publication of the requisite notices and sale-proclamation. Theauction-purchaser alone appealed against this order to the District Judge. Thelearned Judge held upon the evidence that neither material irregularity norfraud had been established, and that the alleged substantial injury had notbeen proved. In this view, he set aside the order of the Court of the firstinstance and directed the sale to be confirmed. The judgment-debtor thenapplied to this Court and obtained the Rule now under consideration on theground that the appeal was incompetent because as the decree-holder hadconsented to have the sale set aside and by acceptance of a sum in fullsatisfaction of the judgment-debt had precluded himself from challenging itsvalidity, the auction-purchaser had no locus stands in the matter. In supportof this proposition, reliance has been placed upon the case of Poorna Chandrav. Doorga Prosad (1). It has further been argued that before an execution salehas been confirmed, the auction-purchaser has no interest in the property, atany rate, no such interest therein as would entitle him to invite the Court toconfirm it, even though the decree-holder was not in a position to ask for itsconfirmation. The question raised is of some novelty and apparently of firstimpression, but upon well-recognized principles we are unable to hold that thecontention of the judgment-debtor should prevail. In the first place, it cannotin our opinion be disputed that the auction-purchaser is entitled to be heardbefore the execution sale at which he has purchased is set aside. This ismanifest from or. 21, r. 92, sub-r. 2, the proviso to which lays down that noorder upon an application to set aside a sale shall be made unless notice ofthe application has been given to all persons affected thereby. See alsoKripali Singh v. Pairoo Paul 11 C L. J. 86 (1909). In the second place, theauction-purchaser is not concluded by the decision of the original Court; it isopen to him to take the matter to the Court of Appeal, if he has beenprejudiced by the order, and obtain its reversal on the ground that it iserroneous. This conclusion follows from fundamental principles which regulatethe right of appeal. As was pointed out by this Court in the case of SrinathDas v. Probodh Chunder Das 11 C. L. J. 580 at p. 586 (1910), as a generalproposition of law no one can appeal from a judgment or decree unless he was aparty to the action or was treated as such, or is the legal representative of aparty, or has privet of estate, title or interest apparent on the face of therecord. Another requisite of a valid appeal is that the Appellant has aninterest in the subject-matter of the proceeding. A third requisite of a validappeal is that the Appellant should have been prejudicially affected by thejudgment or order complained of. Now, in the case of an appeal by an auction-purchaseragainst an order of the original Court by which the execution sale has been setaside, it cannot be disputed that the auction-purchaser was a party to theproceeding in the Court of first instance., The very circumstance that he isentitled to notice before any order is made to his prejudice shows conclusivelythat he is treated as a party to the proceedings for reversal of the sale. Hehas also a substantial interest at stake, because he has paid the considerationfor the purchase of the property, and, as observed by their Lordships of theJudicial Committee in Brij Mohan Thakur v. Umanatk Chowdhury I. L. R. 20 Cal. 8(1892), if no application is successfully made to set aside the sale there isonly one duty left to the Court, namely, to pass an order confirming the saleas regards the parties to the suit and the purchaser. Again as pointed out inthe case of Adhur Chunder v. Aghore Nath 2 C. W. N. 589 (1898) and in othercases reviewed in Bhawani Koer v. Mathura Prasad 7 C. L. J. 1 at p. 28 (1907),an auction-purchaser does not acquire a full title till the confirmation of thesale, he has what has been described as an inchoate or an equitable right whichis perfected or becomes absolute upon confirmation.

2. This view is strengthened by the alteration in the lawmade by the Code of 1908, under which (sec. 65) the property is deemed to havevested in the purchaser from the time when the properly is sold and from thetime when the sale becomes absolute upon confirmation under r. 92, sub-r. I. Itmay further be observed, as pointed out by this Court in the case of HiralalGhose v. Chandra Kanta Ghose I. L. R. 26 Cal. 539 (1899), which upon this pointwas accepted as good law in Joytata v. Pranhisto 13 C. L. J. 257 at p. 261: s.c. 15 C. W. N. 512 (1910) that whether an appeal is competent or not, depends,not upon the status of the party who prefers the appeal, but upon the nature ofthe order which is assailed. In the case just mentioned, it was held that if anorder is one within the scope of sec. 244 of the Code of 1882, it can bechallenged by way of appeal by the auction-purchaser precisely in the samemanner as its validity can be contested by the decree-holder or by thejudgment-debtor. On this principle, it was ruled in the case of Gopal Singh v.Dular Kuar I. L. R. 2 All. 352 (1880) and Kanthi Ram v. Bankey Lal I. L. R. 2All 396 (1880) that the auction-purchaser can appeal against an order made tohis prejudice in the course of proceedings for reversal of the sale. It wasobserved that as it is the duty of the Court, where an objection has beendisallowed, to confirm the sale as regards the parties to the suit and thepurchaser, it is equally the duty of the Court to hear the purchaser if heappears to answer the objection of the judgment-debtor or decree holder to thesale, and if he has to be heard in the first Court there is no intelligiblereason why he should not be heard in the second Court whether he appears asAppellant or Respondent. That this view is based not upon any technical rulesof procedure but upon broad principles of justice, equity and good conscienceis in our opinion incontestable.

3. The question was in fact raised and discussed as one ofprinciple in a case before the Supreme Court of the United States, Blossom v.Milwaukee Ry. Co. [1864] 1 Wallace 655, and it was ruled that a purchaser at ajudicial sale who has complied with the terms thereof and paid thepurchase-money has the right to appeal from an order setting aside the sale.Mr. Justice Miller who delivered the unanimous opinion of the Court quoted withapproval the following passage from the judgment of Chancellor Walworth inDelaplaine v. Lawrence 10 Paige N. Y. 602. "In sales made by masters underdecrees and orders of this Court, the purchasers who have bid for the propertyand paid their deposits in good faith are considered as having inchoate rightswhich entitle them to a hearing upon the question whether the sale shall be setaside and if the Court errs by setting aside the sale improperly, they have theright to carry the question by appeal to a higher tribunal." To put thematter in another way, a purchaser or bidder subjects himself to thejurisdiction of the Court so much so that if he fails to complete the sale, hemay be penalized in the manner mentioned in r. 86 of Or. 21; it is thereforeonly just to hold that he acquires a corresponding right to appear and claim atthe hands of the Court relief to which he may be entitled under the rules ofequity proceedings. This view has been maintained in numerous decisions amongstwhich may be mentioned, Kneeland v. American Land T. Co. 136 U. S. 89, Magannv. Segal 92 Fed. 252; 34 C. C. A. 323., Flournoy v. Smith 8 Howard (Miss.) 62.County v. Bunch 49 West 599; 96 Pac. 164, Penon v. Crieghton 51 Neb. 659; 71 N.W. 279 Todd v. Gallego 84 Va 586; 5 S. E. 676 and Wood v. Seattle 62 Pac. 185,li of which confirm the right of the purchaser at a judicial sale to appealfrom an order for reversal thereof on the principles just explained. On theother hand, the case of In re Robinson 142 Cal. 152 75 Pac. 777 shows that anunsuccessful bidder at a sale cannot appeal, because he acquired no interestinchoate or otherwise, while the case of Thomas v. Elliott 215 Mo. 598; 114 S,W. 987 shows that the right of appeal which would otherwise be enjoyed by theauction-purchaser may be restricted or taken away completely by statutoryprovision to that effect.

4. From a review then of the principles just explained it isplain that two positions are firmly established, namely, first, that anexecution sale cannot be set aside without notice to the auction-purchaser andwithout opportunity afforded to him to support the validity of the sale: and,secondly, that if the original Court has passed an order adverse to theinterest of the auction-purchaser, he is entitled to appeal and test thelegality of the order in the superior tribunal.

5. The question next arises whether the rights of theauction-purchaser are affected by the omission of the decree-holder to contestthe application of the judgment-debtor for reversal of the sale or by hisacceptance of terms from the judgment-debtor which stop him from supporting thesale. In our opinion the right of the auction-purchaser is independent of theright enjoyed by the decree-holder to support the legality of the sale. Theauction-purchaser cannot be treated as the representative in interest of thedecree-holder, and his position cannot be affected by any arrangement which thedecree-holder may be prepared to accept. As a general rule a Defendant who isinjured by a judgment against a co-Defendant, may appeal there from, althoughthe Defendant, against whom the judgment is rendered, does not do so.Illustrations of this doctrine may be found in various cases in the reports:thus in Murtay v. Guse 10 West 25; 38 Pac. 753 it was ruled that where anadverse judgment has been given against the owner of the property and severalholders of liens thereon, who were all Defendants to an action, thelien-holders were not prevented from appealing against the erroneous judgment,if aggrieved thereby, merely by reason of the failure of the owner to prefer anappeal. A similar view was maintained in French v. Peters [1901] 59 N. E. 449.,Mr. Daniel v. Correll 19 111. 226; 68 Am. Dec 587 and Arthur v. Reed 26 Tex.574; 64 S. W. 831. It is plain that after an execution sale has taken place,the auction-purchaser is quite as much interested in the proceedings as thedecree-holder himself, though no doubt their points of view may be different:the former has deposited the purchase-money, and his bid has been accepted bythe Court, with the result that if the sale cannot be set aside in one or otherof the different modes prescribed by the Code, his purchase must be confirmed;the decree-holder, on the other hand, is interested to see that the salecontinues in force so that the proceeds may be available for the satisfactionof the judgment-debt. It is conceivable that the decree-holder may be satisfiedif his claim is paid in full, and he may not be willing to enter into a contestwith the judgment-debtor about the legality of the sale: but that is no reasonwhy the auction-purchaser should have his position affected without hisconsent. He has a substantial interest at stake, and he is entitled to provethe validity of his purchase irrespective of the subsequent conduct of thedecree-holder. If any other view were maintained, the provisions of r. 89 ofor. 21 would be futile. That rule clearly contemplates that an execution salemay be set aside on payment of the judgment-debt to the decree-holder and ofstatutory damages to the purchaser, if the application is made within theprescribed time. If it is open to the judgment-debtor to enter into anengagement with the decree-holder for reversal of the sale at any time withoutthe assent of the auction-purchaser and without the payment to him of the sumprescribed by r. 89, no judgment-debtor need avail him self of the provisionsof that rule. In our opinion, the view taken by the Court of first instance inthe present case, namely, that the auction-purchaser was not bound by thealleged arrangement between the decree-holder and the judgment-debtor and thatthe sale could be set aside, if at all, only on proof of the grounds mentionedin r. 90, is sound : and if the correctness of this position is once conceded,the conclusion becomes inevitable that the auction-purchaser was entitled totest the propriety of the order of the original Court by an appeal to theDistrict Judge.

6. The learned Vakil for the Appellants placed much relianceupon the case of Poorna Chandra Roy v. Doorga Prosad Babu 3 Shome 104 (1880).,in which it appears to have been ruled that in a suit brought under sec. 14 ofthe Putni Regulation, for reversal of a sale against the zemindar and thepurchaser, an appeal against the decree cannot be maintained by the purchaseralone. That case, in our opinion, is clearly distinguishable. The zemindar aswell as the purchaser had jointly preferred an appeal to this Court against thedecree for reversal of the sale. The zemindar applied to the Court fordismissal of the appeal so far as he was concerned, because in his opinion thedecree of the Court below could not be success-fully challenged: the appeal wasthereupon dismissed. The purchaser then claimed to prosecute the appeal so faras he was concerned. The Court held that he could not be heard because thequestion at issue, namely, whether there was or was not any arrear for whichthe zemindar could take proceedings under the Putni Regulation, was one betweenthose two parties alone, and the purchaser could not give the Court anyinformation about it. Upon a careful examination of the judgment we are notsatisfied that it lays down a comprehensive rule of law that in cases of salesunder the Putni Regulation the purchaser can, in no event, appeal against thedecree of reversal unless the zemindar also joins in the appeal. If the learnedJudges intended to lay down any such rule the question when it arises again mayrequire reconsideration. In any event the learned Judges clearly intimated thatthere was in this respect no analogy between a putni sale and a sale inexecution of a decree under the Civil Procedure Code, in fact they added thatin cases of execution sales, when the question before the Court is one ofregularity of the proceedings, the purchaser, who is himself a party to thoseproceedings, may very well appear before the Court and maintain theirregularity. In our opinion the case of Poorrna Chandra v. Doorga Prosad 3 Shome104 (1880) does not really advance the contention of the Petitioners.

7. We may add that at one stage of the proceedings we wereinclined to make an order for the reversal of the sale under r. 89 of or. 21 ofthe Code. We are unable to do so, however, because under r. 92, sub-r. 2, thedeposit must be made within thirty days from the date of sale, and we have nopower either under sec. 5 of the Limitation Act, or under sec. 148 of the CivilProcedure Code of 1908, to enlarge the time. We are therefore constrained tohold that the appeal to the District Judge was competent and that no groundshave been established for our interference with his order in the exercise ofour re-visional jurisdiction.

8. The result is that the rule is discharged: but there willbe no order for costs in this Court.

Charles Peter Caspersz, J.

9. The Petitioner is the judgment-debtor whose application,under Or. XXI, r. 90 of the Code of Civil Procedure, was allowed by theSubordinate Judge of Patna the sale of the Petitioners properties being setaside. During the pendency of that case the decree-holder accepted his duesfrom the Petitioner and certified satisfaction to the Court. But theauction-purchaser took the matter in appeal before the District Judge whoconfirmed the sale for the reasons given in his judgment. The Petitioner nextobtained a rule from this Court, and the point for determination is whether theauction-purchasers appeal to the District Judge was competent.

10. Under or XLIII, r. I (j) of the Code, an order under r.92 of or. XXI, setting aside a sale, is appeal able at the instance of any onewhose interests are affected by the sale (see r. 90 of Or. XXI). It appears,therefore, that the auction-purchaser was entitled to prefer his appeal to theDistrict Judge. The auction-purchaser, it is true, had no vested right to theproperties in question by reason of any order passed by the Court confirmingthe sale. But he had an equitable title to the property, and a right, in thelast resort, under r. 93 of or. XXI, namely, the right to get back hispurchase-money with or without interest. The carriage of the executionproceedings was in the hands of the decree-holder who elected to compromisewith the judgment-debtor contra curs us curice. Such a compromise, however,cannot be allowed to defeat the interests of the auction-purchaser and theintention of the Code which allows a deposit to set aside the sale only if themoney is paid in a particular way and within 30 days. See Or. XXI, rr 89 and 92(2). I, therefore, agree, for the reasons generally stated in the judgment ofmy learned brother, that this rule must be discharged.

.

Bibi Sharofan vs.Mahomed Habibuddin (21.03.1911 - CALHC)