Surendra Kumar Singh v. Srichand Mahata And Others

Surendra Kumar Singh v. Srichand Mahata And Others

(High Court Of Judicature At Patna)

| 17-08-1935

Dhavle, J.The appellant in this case objects to execution proceedings started afresh against him by the respondents in the following circumstances: The respondents obtained a money decree against the appellant, and in execution of it brought certain lands of the appellants to sale in April 1931 and themselves purchased them. The sale was confirmed in June 1931 and a record was made to the effect that the decree had been fully satisfied by reason of the sale. Later on the respondents came to know that the lands had been previously sold in execution of a rent decree, so that at the time of the sale brought about by the respondents the appellant had no saleable interest in them. Upon this, in January 1933, they made an application under Order 21, Rule 91 for setting the sale aside. This application was obviously barred by limitation and was accordingly dismissed. About six months afterwards the respondents made an application out of which the present appeal arises, asking for fresh execution on the ground that their decree was in fact unsatisfied. The application was resisted by the appellant on the ground that the order in execution entering satisfaction of the decree, not having been set aside by any Court, was a bar to a fresh execution and that therefore the respondents decree-holders, who had lost their remedy under Order 21, Rule 91, were not entitled to maintain the application in question.

2. The appellants objection has been overruled by the lower Courts, relying upon certain observations in Firm Ganga Ram-Gulraj Ram v. Muktiram Marwari 1931 Pat 405 ; they have held that the sale in favour of the respondents was a nullity, inasmuch as the property which the Court purported to sell to them had already been sold in execution of a previous decree and therefore could not pass to the decree-holder under the sale. As that view was in conflict with the view taken in Muthukumara Swami Pillai v. Muthuswami Thevan 1927 Mad 394, which was followed in Jagannadha Rao v. Rachapudi Basavayya 1927 Mad 835 and in this Court in Miscellaneous Appeal. No. 285 of 1934 (decided by my Lord the Chief Justice and Verma, J.). The learned Judges before whom this appeal first came on for hearing, Fazl Ali and Luby, JJ. have made this reference to a Full Bench, formulating the point for decision as follows:

Whether a sale of immovable property in which the judgment-debtor had no saleable interest at the date of the sale is a nullity and whether the decree-holder, if he purchases the property, can without taking steps under Order 21, Rule 91, or in spite of having taken steps under that provision and failed to have the sale set aside, successfully maintain an application for the revival of the execution proceedings on the ground that the decree not being satisfied is still liable to be executed.

3. Now, it appears at the outset that the point for decision in Firm Ganga Ram-Gulraj Ram v. Muktiram Marwari 1931 Pat 405 was whether the executing Court had properly disposed of an application for rateable distribution in ultimately dismissing it and at first ignoring it and confirming the relevant execution sale even after it had been brought to its knowledge that the judgment-debtors property had already been sold in execution at the instance of another decree-holder. That matter is entirely different from the present case where the propriety of the order confirming the sale cannot be and is not challenged, but the decree-holder merely seeks to ignore that order as well as the order recording satisfaction of the decree on the ground that the decree has not in fact been satisfied by the sale. There cannot, of course, be any dispute that if a property has already been sold in execution of a decree, it cannot be effectively sold again in execution of another decree against the same judgment-debtor unless possibly there is a question of mortgage liens and the like. The first sale operating on the entire interest of the judgment-debtor there would be nothing left for the second sale to operate on. A second sale would therefore really convey nothing to the purchaser, and the question may arise [as happened in Firm Ganga Ram-Gulraj Ram v. Muktiram Marwari 1931 Pat 405 whether, vis-a-vis the judgment-debtor, it ought to be confirmed. That however is not what we have to deal with in the present case; the confirmation of the sale, as I have already said, is not in question. It may be indeed, it appears to be the case, that the respondents, if they are right in saying that the property had already been sold in execution of a rent-decree obtained by the landlord, have taken nothing by the sale and that as against the prior execution purchaser they will not be entitled to the property.

4. The sale might be a nullity in the sense that it would not operate to pass an effective title to the purchaser vis-a-vis the prior purchaser, but the mere absence of a saleable interest would not go to the jurisdiction of the Court that sells the property at the instance of the decree-holder, especially as there is no warranty of title in Court sales. But the question that arises when a decree-holder auction-purchaser applies for a fresh execution on the ground that the sale has not in fact passed any title to him and satisfied his decree is a question between him and the judgment-debtor, and not one between him and another person against whom he has obtained no title by the sale. It is open to a decree-holder, who brings the judgment-debtors property to sale in execution and purchases it himself, to apply to the Court under Order 21, Rule 91 to set aside the sale on the ground that the judgment-debtor had no saleable interest in the property; and if he so applies within the period of thirty days prescribed for such applications, and proves that the judgment-debtor had no saleable interest, the Court will, under Order 21, Rule 92, Sub-rule (2), make an order setting aside the sale. Such an order entitles the purchaser, under Rule 93 of the same order, to an order for repayment of his purchase money, and would, when the decree-holder himself is the purchaser, lead, if it did not amount, to an order giving him leave to proceed again with the execution, in so far as the purchase money is not deposited but set off against the decretal amount. But if the sale is not set aside on this ground (or on other grounds which are open to other parties under Rules 89 and 90 of the order), the Court has to make an order under Clause (1) of Rule 92 confirming the sale, whereupon the sale becomes absolute. Clause (3) of Rule 92 then comes into play and debars a suit by any person against whom such order of confirmation is passed to set aside such order. The effect of this provision of the law was considered in detail by Kulwant Sahay, J., (sitting with Jwala Prasad, J., who concurred) in Nagendra Nath Ghosh v. Sambhu Nath Pandey 1925 Pat 106 . It was held in that case that:

Whereas under the Code of 1882 it was optional to enforce repayment of the purchase money upon setting aside of a sale by having recourse to the procedure provided for execution of a decree for money and the auction-purchaser was not limited to that remedy which was not an exclusive remedy, but he could, if he so chose, bring a regular suit to enforce payment of the purchase money, under the present Code no such option is left to the auction-purchaser and his only remedy is by way of an application under Order 21, Rule 91 of the Code.

5. The auction-purchaser, therefore, loses the purchase money deposited by him --and the sale stands, though ineffective against third parties--if the judgment-debtor has no saleable interest in the property and if the auction-purchaser has lost his remedy under Order 21, Rule 91. The only possible exception to this is where the auction-purchaser can make out a case for equitable relief on the ground of fraud or the like; see such oases as Rishikesh Laha v. Manik Molla 1926 Cal 971 and Bashiruddin v. Elahi Bux 1935 Cal 645, but that does not arise in the present case.

6. On what principle then can it be held that the auction-purchaser is better off if he should also be the decree-holder and that in the latter capacity he can ignore the sale and take out fresh execution Much reliance has been placed by the respondents on Radha Kishun Lal v. Kashi Lal 1924 Pat 273 in support of the contention that as decree-holder he can do so. But that was a case where after the satisfaction of a decree by reason of an execution sale a third person had obtained a declaration of his rights to the property in a suit in which both the decree-holder and the judgment-debtor had been impleaded. Mullick, J., who delivered the judgment of the Court in the case, held that the effect of the decree in favour of the successful claimant was to set aside the sale and that no formal order to that effect was required as both the original decree-holder and his judgment-debtor were bound by the later decree. This view has been criticized in Madras in view of the finality of execution proceedings between decree-holder and judgment-debtor, but it is not now necessary to examine the soundness. For in the present case there is no adjudication in the presence of the decree-bolder and the judgment-debtor which could be taken to have the effect of setting the sale aside. On the other hand, there is the sale which, being confirmed, binds the decree-holder, and further there is the record of satisfaction of the decree, which is binding on the decree-holder and cannot be ignored; if it were not binding, there would (as their Lordships of the Judicial Committee said in Ram Kirpal v. Rup Kuari (1884) 6 All 269, be no end to litigation.

7. The decree-holder auction-purchaser would seem in such circumstances to have a smaller claim to consideration than a third party auction-purchaser; for while both of them purchase at their own risk, it is the decree-holder himself that brings the property to sale and he ought to see that it is still the property of his judgment-debtor, if he makes a mistake, to discover it within the period of limitation prescribed for applications for setting sales aside. That in circumstances essentially similar to those of the present case an application for further execution is unsustainable, was held in Muthukumara Swami Pillai v. Muthuswami Thevan 1927 Mad 394, the reasoning in which was accepted in this Court in Misc. Appeal No. 285 of 1934, the case referred to by Fazl Ali and Luby, JJ. As a matter of fact, Muthukumara Swami Pillai v. Muthuswami Thevan 1927 Mad 394 was perhaps in one respect rather stronger in favour of the decree-holder auction-purchaser than the present case, for the property put up to sale in that case did not belong to the judgment-debtor at all; and the learned Judges held that even so, the sale was not void as between the decree-holder and the judgment-debtor and that the want of title did not entitle the decree-holder to ignore it.

8. The learned Advocate for the respondent has pressed us to hold that the sale in the present case was a nullity--was absolutely void--but in support of this contention he has relied on cases which only deal with the relations between an earlier and a later purchaser, and not with those between the later purchaser and the judgment-debtor himself. It is therefore unnecessary to refer to them in detail. The latest of the cases cited was Kedar Nath Goenka v. Munshi Ram Narain Lal 1936 PC 139 . But in this case their Lordships of the Judicial Committee merely pointed out that a sale for arrears of land cess in 1914 of a property which purported to be the property of a man to whom it did not belong at that time was a nullity against an auction-purchaser of 1908 who was no party to the proceedings leading to the sale in question, and that Article 12, Lim. Act, was therefore no bar to the suit of the successor of the purchaser of 1908 against the cess purchaser of 1914. The sale in favour of the respondents before us may, as I have already said, have no effect whatsoever against the landlord if the latter had brought the property to sale in execution of his rent decree before the sale obtained by the respondent. But that has nothing to do with the satisfaction of the decree that has already been entered on the record and that must bar further execution unless it is set aside, as it cannot be set aside without the sale itself being set aside as between the judgment-debtor and the decree-holders auction-purchasers. The observations from Firm Ganga Ram-Gulraj Ram v. Muktiram Marwari 1931 Pat 405, on which the lower Courts have acted, were made in a case in which, as the learned Judges found, the second sale ought not to have been confirmed on the materials then before the Court. It is therefore unnecessary to examine them in detail on the present occasion; they could not have been meant to apply to cases like the present where the propriety of the order confirming the sale is not in question. In my opinion the lower Courts were in error in concluding on the basis of those observations that the respondents were entitled to ignore the sale because long after the confirmation it is discovered to have brought them nothing in fact. I would answer the question propounded by the referring Judges as follows:

9. (a) A sale of Immovable property in which the judgment-debtor has no interest at the date of the sale is not a nullity in the sense of being beyond the jurisdiction of the executing Court or void as between the judgment-debtor and the decree-holder or auction-purchaser, and (b) the decree-holder, if he purchases the property, cannot successfully maintain an application for the revival of the execution proceedings on the ground that the sale has not in fact satisfied his decree to the extent of the sale-price, unless he has the sale set aside by applying under Order 21, Rule 91. I would accordingly allow the appeal, reverse the order of the lower Courts and dismiss the application for execution with costs in all Courts.

Courtney-Terrell, C.J.

10. I agree.

Agarwala, J.

11. I agree.

Advocate List
Bench
  • HON'BLE JUSTICE Courtney-Terrell, C.J
  • HON'BLE JUSTICE Dhavle, J
  • HON'BLE JUSTICE Agarwala, J
Eq Citations
  • AIR 1936 PAT 97
  • LQ/PatHC/1935/122
Head Note

Execution of decree — Execution proceedings — Fresh execution — Sale of property in execution — Decree-holder purchasing property — Subsequent discovery by decree-holder that judgment-debtor had no saleable interest — Fresh execution application without setting aside prior sale and satisfaction of decree — Held, not maintainable — Court sale does not carry any warranty of title and the remedy of decree-holder is to apply for setting aside the sale under Order 21, Rule 91 and then proceed with execution, if the judgment-debtor fails to deposit the purchase price — Order 21, Rules 91 & 92, CPC, 1908\n