Gulzari Mal v. Madho Ram — 1904 DIGILAW 33 (ALL)

JUDGMENT : STANLEY, J. 1. The question discussed before us in this appeal is the subject of conflicting decisions in this Court. It is whether or not an auction-purchaser at sale held in execution of a simple money decree against a judgment-debtor whose property has been ordered to be sold at the suit of mortgagees in a mortgage suit is a representative of the judgment-debtor within the meaning of section 244, sub-section (c) of the Civil Procedure Code. 2. One Ram Sahai and others executed five mortgage deeds hypothecating different portions of his property in favour of the defendant, Madho Ram and Hargu Lal. The several mortgages did not comprise the whole but parts only of the mortgaged property. The defendants brought a suit for recovery of the amount due to them on foot of all the mortgages by sale of the mortgaged property and obtained a decree for sale under section 88 of the Transfer of Property Act. This decree provided that the properties hypothecated in the bonds shall be considered liable for the satisfaction of the amounts due by them respectively, together with all legal costs and future interest, etc. It further declared that on the 8th of September, 1897, the sum of Rs. 52,259-1-3 will be payable to the plaintiff with future interest etc., and directed that in case the defendant should fail to pay to the plaintiff the said sum on or before the date mentioned, the property should be sold, and the proceeds of the sale be paid into Court and applied in payment of the sum found due to the plaintiff, etc. On the 10th of December, 1897, an order absolute for sale was passed under section 89 of the Act to which I have referred. It merely directed that the property mentioned in the decree be sold, but gave no directions in regard to the liability of the several properties to satisfy the debt. The defendants, decree-holders, took out execution of the decree and prayed for the sale of all the mortgaged properties. One of the judgment-debtors took objection to the form of the order under section 89 and contended that the sale of all the mortgaged properties in satisfaction of consolidated debt was improper. The defendants, decree-holders, took out execution of the decree and prayed for the sale of all the mortgaged properties. One of the judgment-debtors took objection to the form of the order under section 89 and contended that the sale of all the mortgaged properties in satisfaction of consolidated debt was improper. This Court in appeal, however, held that the only order which could be executed was the order under section; 89, and as the judgment-debtor had not taken steps in time to have the mistake in that order rectified, he could not be permitted at that late stage of the proceedings to go behind it, and by its judgment delivered on the 22nd May, 1900, the court held that all the properties were liable to be sold for the amount due under the five bonds. Meantime, on the 20th of January, 1899, the plaintiff, who had obtained a simple money decree against the judgment-debtors, in execution of his decree had sold and purchased himself portion of the property comprised in the defendants' mortgages. 3. After the disposal of the appeal in this Court, the defendants again took out execution of their decree, and the properties purchased by the plaintiff were sold, but the sale has not as yet been confirmed. The plaintiff objected, to the sale in the execution department, but his objection was disallowed. Thereupon he, brought the present suit for a declaration that the defendants were not entitled to bring to sale in satisfaction of their entire debt the property hypothecated in the bonds executed in their favour, which the plaintiff purchased, but “that the property purchased by the plaintiff and hypothecated in a bond standing first in point of time should be sold in satisfaction of it first, and if the same property be hypothecated in subsequent bonds, the amount due thereunder should be deducted from the surplus sale proceeds in order of priority.” The defendants defended the suit and amongst other defenses raised the point that the plaintiff being the purchaser of the interest, of the judgment-debtor in part of the property is a representative of the judgment-debtor, and is not entitled under the circumstances which I have mentioned by reason of the provisions of section 244 of the Code of Civil Procedure, to bring a regular suit. The court of first instance dismissed the plaintiff's claim. 4. The court of first instance dismissed the plaintiff's claim. 4. Upon appeal the learned District Judge dismissed the appeal on the ground that the suit was barred by the provisions of section 244. Hence this appeal. 5. The only ground of appeal which it is necessary for us to determine is the ground that “the court below has erred in holding that the appellant,” an auction-purchaser, is a representative of the judgment-debtor within the meaning of section 244.” As I have said the decisions on this question are in conflict, I do not propose to refer to all the authorities bearing upon the point which have been cited to us, but shall content myself by a reference to one or two of them. Section 244 defines the questions which are to be decided by a court executing a decree and directs that such questions shall be determined by a separate suit. Clauses (a) and (6) specify definite questions whilst clause (c) is of more general application embracing as it does “any other question arising between the parties to the suit in which the decree was passed or their representatives, and relating to the execution, discharge or satisfaction of the decree or to the stay of execution, thereof.” In the Full Bench case in this Court of Basil vs. Ram Fattu, [1886] I.L.R. 8 All. 146. It was held that the provisions of section 244 prohibited not only a suit between parties and their representatives, but also a suit by a party or his representatives, against a purchaser at a sale in execution of money decree, the object of the suit being to determine a question which properly arose between the parties or their representatives, and related to the execution, discharge or satisfaction of the decree. In that case the defendant in the suit held a simple money decree against the plaintiff and an execution of that decree, caused to be attached and advertised for sale the plaintiffs right of occupancy in certain lands. The plaintiff objected to the attachment on the ground that the sale in execution of the decree of such a right, was prohibited by section 9 of Act XII of 1881. The court executing the decree disallowed this objection and the tenure was put up for sale and purchased by the defendant and possession of the lands was delivered to him. The court executing the decree disallowed this objection and the tenure was put up for sale and purchased by the defendant and possession of the lands was delivered to him. The plaintiff then brought his suit against the defendant to set aside the order disallowing his objection and also the sale and for recovery of possession of the land on the ground that the sale was illegal. The court of first instance gave a decree in favour of the plaintiff which was affirmed by the lower appellate court. A second appeal was preferred to this Court which was referred to a Full Bench, when it was, I have stated, held that the question involved in the suit was determinable only by an order of the court executing the decree, and that the suit was not maintainable. ‘The Court consisted of PETHERAM, C.J., STRAIGHT, OLDFIELD, BRODHURST and TYRRELL, JJ. Referring to the questions arising under section 244 the learned Judges say: The questions must be questions which arise between parties to the suit or their representatives and which relate to the execution, discharge or satisfaction of the decree. If they are questions of this nature, and which properly arise” between the parties or their representatives they must be determined by order of the court executing the decree and not by separate suits; and the provision disallowing a separate suit to determine these questions applies not only to prohibit a suit between parties and their representatives, but also a suit by a party or his representatives against an auction-purchaser in execution of the decree, the object of which is to determine a question which properly arises between parties or their representatives and relates to the execution, discharge or satisfaction of the decree. If the question be of this nature, it is one which by section 244 must be determined by order of the court executing the decree, and not by-separate suit and it is immaterial whether the party did or did not raise it prior to the auction sale at the time of execution. If he did not, he lost the remedy which the legislature has provided.” 6. If he did not, he lost the remedy which the legislature has provided.” 6. In this case the auction-purchaser was also the decree-holder and purchased at a sale held in execution of his own decree, and it may be said that this fact differentiates the case from the case before us, and that a purchaser under circumstances such as exist in the case before us, would not be in the like position. 7. It seems to me, however, that there is no real distinction. It was qua auction-purchaser that the defendant was sued, the suit being to set aside the sale to him, and as such auction-purchaser, he was deemed to be the representative of the judgment-debtor within the meaning of section 244. 8. The true meaning of section 244 is indicated by their Lordships of the Privy Council in the case of Prosonno Kumar Sanyal vs. Kali Das Sanyal, [1892] I.L.R. 19 Cal. 683, P.C. in which it was held that where questions are raised between the parties to a decree relating to its execution, discharge or satisfaction, the fact that the purchaser at a judicial sale, who was no party to the decree, of which the execution is in question, is interested and concerned in the result, has never been held to prevent the application of section 244, limiting the disposal of these matters to the court executing the decree. It was argued on behalf of the appellants in that appeal that the suit was not barred by the provision of section 244, because the question concerned the auction-purchasers as much as any body, and therefore could not properly be described as a question “arising between the parties to the suit in which the decree was passed.” Their Lordships in their judgment refer two cases which had arisen under section 244, namely, the case of Sukharam Govind Kale vs. Damodar Akharam Gujar, [1885] I.L.R. 9 Bom. 468 and Kuriy-ali vs. Mayan, I.L.R. 7 Mad. 255 and observe. “It is of the utmost importance that all objections to execution sale should be disposed of as cheaply and as speedily as possible. 468 and Kuriy-ali vs. Mayan, I.L.R. 7 Mad. 255 and observe. “It is of the utmost importance that all objections to execution sale should be disposed of as cheaply and as speedily as possible. Their Lordships are glad to find that the Courts in India have not placed any narrow construction on the language of section 244, and that when a question has arisen as to the execution, discharge or satisfaction of a decree between the parties to the suit in which the decree was passed, the fact that the purchaser, who is no party to the suit, is interested in the result, has never been held a bar to the application of the section.” 9. I take this to mean that a question, which is determinable under section 244, must be determined under that section, not-withstanding that the interest of one of the parties to the suit has passed to a third party; and that the decision arrived at will be binding on such third party as well as on the parties to the suit. Their Lordships did not contemplate that the decision would not be binding on the third party, or that an order under it would be passed without giving the third party an opportunity of intervening and being heard. Likewise it seems to follow that a purchaser by private sale of the judgment-debtor's interest pending suit must be regarded as the representative of the judgment-debtor within the meaning of the section. He in fact represents the interest of the judgment-debtor in the property which is the subject matter of the suit. This was not the view which was taken by a Full Bench of this Court in the case of Sabhajit vs. Sri Gopal, [1895] I.L.R. 17 All. 222. It was in that case held that a purchaser at an auction sale under a decree is not, as such purchaser, a representative of a party or a party to the suit in which the decree was passed, although if such auction purchaser was a transferee within the meaning of section 232 of Act XIV of 1882 of the decree, he might be, as such transferee a representative of a party to the suit for the purpose of section 244 of the Code. The facts of that case were as follows: One Kundan Lal brought a suit upon a mortgage for sale of a share in certain village, the defendants to that suit being Sita Ram and Daya Kishan, the predecessors in title of Sri Gopal. The defendants pleaded that they were in possession under two mortgages of the 20th January, 1856 and the 5th of July, 1869. The court of first instance dismissed the suit. But upon appeal the appellate court decreed the plaintiffs claim subject to the rights of the defendants under their prior mortgages. Kundan Lal having obtained his decree for sale, transferred it to Sabhajit who in execution of it brought the mortgaged property to sale and purchased it himself and obtained possession. Thereupon Sri Gopal, claiming as heir to Sita Ram and Daya Kishan, applied to be restored to possession. Sabhajit resisted this application on the allegation that Sita Ram and Daya Kishan were never in possession as mortgagees, but had obtained possession merely as an auction-purchaser under a simple money decree. The Subordinate Judge found that Sita Ram and Daya Kishan had been in possession as mortgagees and passed an order re-instating Sri Gopal in possession. The auction-purchaser thereupon applied to the High Court for revision of this order of the Subordinate Judge when the matter was referred to a Full Bench, and it was held that the auction-purchaser Sabhajit, who happened also to be the assignee of the decree was not a representative of a party to the suit within the meaning of section 244. I find no reference in the judgment in this case to the judgment of their Lordships of the Privy Council to which I have referred, and no reference to the earlier Full Bench case in this Court of Basti Ram vs. Fattu, [1886] I.L.R. 8 All. 146. It is difficult to reconcile the decision with the pronouncement of their Lordships of the Privy Council in the case of Prosunno Kumar Sanyal vs. Kali Das Sanyal, [1892] I.L.R. 19 Cal. 683. 10. This decision also appears to be in conflict with the views expressed by EDGE, C.J. and my brother, BANERJI, in the case of Madho Das vs. Ratttji Pathak, [1894] I.L.R. 16 All. 683. 10. This decision also appears to be in conflict with the views expressed by EDGE, C.J. and my brother, BANERJI, in the case of Madho Das vs. Ratttji Pathak, [1894] I.L.R. 16 All. 286 in the following passage: “It has been held, and we think rightly, by the High Court at Calcutta and the High Court at Bombay and by this Court, that where the decree in execution is a decree for sale of hypothecated property, a purchaser who had purchased under a private sale from the judgment-debtor the property or part of it, so decreed, to be sold, was representative within the meaning of section 244, and there was good reason for so holding, because the suit and decree were based on the mortgage or hypothecation bond. The proceeding was really one in tern qua the property, and the person claiming title to the property affected by those proceedings would be representative within the meaning of section 244. In a suit for sale under the Transfer of Property Act, 1882 (Act No. IV of 1882), such a purchaser, if his purchase was made before the institution of the suit, and if the plaintiff in the suit had notice of the purchaser's interest, would, by reason of section 85 of that Act, be a necessary party to the suit. If the purchase was made after the suit was instituted it was made pendente lite. In either case, if for no other reason, convenience suggests that such purchaser should be treated as a representative of the defendant mortgagor, from whom he purchased the whole or part of the property the sale of which was sought by the plaintiff in the suit.” This was a case of a private purchase, but I am wholly unable to discover any reason for drawing a distinction between the case of a private purchase and a purchase in execution of a decree so far as regards the question before the Court. In each case the purchaser, as it appears to me becomes the representative of the interest of the owner in the property which is the subject matter of the suit, and is in fact a representative. 11. The later decision in the case of Lalji Mal vs. Nand Kishore, [1887] I.L.R. 19 All. 332 also appears to be in direct conflict with the case of Sabhajit vs. Sri Gopal, [1895] I.L.R. 17 All. 223. 11. The later decision in the case of Lalji Mal vs. Nand Kishore, [1887] I.L.R. 19 All. 332 also appears to be in direct conflict with the case of Sabhajit vs. Sri Gopal, [1895] I.L.R. 17 All. 223. In that case one Nand Kishore sued for a decree declaring that the interest of his judgment-debtor, Ram Mohan, in certain property was liable to sale in execution of his decree, dated the 25th of May, 1889. On the 2nd of May, 1891, Ram Mohan transferred the property in suit by a private sale to the 2nd defendant, Lalji Mal. At that time the property was under attachment in pursuance of the decree of the 25th May, 1889. On application being made by the decree-holder to bring the property to sale in execution of his decree, Lalji Mal filed an objection under section 278 of the Code of Civil Procedure, and that objection being allowed, the suit was instituted. The court of first instance-dismissed the suit. On appeal, the lower appellate court allowed the appeal and made an order of remand under section 562 of the Code of Civil Procedure. From that order the defendant, Lalji Mal, appealed to the High Court. In the course of their judgment, Edge, C.J. and my brother Blair, observed; “It is contended on behalf of the appellant, Lalji Mal, that the suit did not lie as the order passed on his objection was an order in a matter to which section 244 of the Code applied. On the other side it is contended that Lalji Mal was not a representative of a judgment-debtor within the meaning of section 244, and further that his objection having been filed under section 278 of the Code, section 244 did not apply.” They then observe “convenience which is not always a good reason for laying down a proposition of law, would suggest that a sale which was contrary to the provisions of section 276 of the Code of Civil Procedure, should, if challenged by the decree-holder, be a matter to be adjudicated upon under section 244. In our opinion, as the property in question was under attachment at the time the sale took place, the purchaser must be treated as a representative of the judgment debtor, on the same principle as he would have been a representative of the judgment-debtor by reason of his purchase, if the decree had been one for sale of a particular property.” They accordingly determined that the suit was barred by section 244 of the Code of Civil Procedure. 12. This ruling was followed by my brothers, BLAIR and BURKITT, in the case of Gur Prasad vs. Ram Lal, [1899] I.L.R. 21 All. 20. 13. I may also refer to the recent cases in this High Court of Dhani Ram vs. Chatur Bhuj, [1900] I.L.R. 22 All, 80, Daulat Singh vs. Jugal Kishore, [1900] I.L.R. 22 All. 108 and Mathura Das vs. Lachhman Ram, [1903] I.L.R. 24 All. 239 which were decided in view of the ruling in Prosunno Kumar Sanyal vs. Kali Das Sanyal, [1892] I.L.R. 19 Cal. 683. 14. There are also recent cases in the Calcutta High Court to which I desire to refer, namely, the case of Bhutan Mohan Pal vs. Nanda Lal Dey, [1899] I.L.R. 26 Cal. 324 and the case of Molt Lal Chakurburtty vs. Russick Chancier Bairagi, [1899] I.L.R. 26 Cal. 326. In the latter of these cases, the plaintiff had instituted a suit to recover possession of certain lands on the allegation that they constituted his jote under defendants Nos. 2—4, that these defendants in collusion with defendant No. 1, fraudulently obtained against the plaintiff an ex-parte decree, and then caused the sale of the jote in execution of their decree, without serving any writ of attachment or sale proclamation, and the jote was purchased at the execution sale by defendant No. 1 for the benefit of defendants Nos. 2—4. Among other defences was the defence that no regular suit to set aside the sale was maintainable. In Second Appeal it was contended for the defendants that section 244 barred the suit, and in support of this contention reliance was placed upon the decision of the Privy Council in the case to which I have referred. The Court, consisting of BANERJI and RAMPINI, JJ. In Second Appeal it was contended for the defendants that section 244 barred the suit, and in support of this contention reliance was placed upon the decision of the Privy Council in the case to which I have referred. The Court, consisting of BANERJI and RAMPINI, JJ. following the ruling of their Lordships of the Privy Council, held that section 244 was a bar to the suit so far as it sought to set aside the sale notwithstanding that one of the parties to it was the auction-purchaser who was no party to the original rent suit. The case of Bhuban Mohan Pal vs. Nanda Lal Dey was similar in its main facts to this case, and was decided by the same Judges in accordance with the ruling of the Privy Council. 15. I am unable, as I have said, to discover any distinction between the case of a purchaser who purchases by private agreement from a udgment-debtor, whose property is the subject matter of a suit for sale at the instance of a mortgagee, and that if a purchaser who purchases at a judicial sale in execution of a simple money decree against such judgment-debtor. It seems to me that if in the one case such a purchaser is to be regarded as a representative of the judgment-debtor, he should likewise be so regarded in the other. 16. In the case of Ishan Chander Sirkar vs. Bent Madhab Sirkar, (1897) I.L.R. 14 Cal. 62 a Full Bench of the Calcutta High Court consisting of PETHERAM, C.J., O'KINEALY, MACPHERSON, TREVELLYAN and BANERJI, JJ. held that the term representative as used in s. 244 of the Code of Civil Procedure, when taken with reference to the judgment-debtor, does not mean only his legal representative, that his heir, executor, or administrator, but it means his representative in interest and includes a purchaser of his interest, who so far as such interest is concerned is bound by the decree. It was also held that there was no reason for excluding from its signification an execution purchaser of the judgment-debtor's interest. I entirely concur in this ruling. BANERJI, J., in delivering the judgment of the Court observed. It was also held that there was no reason for excluding from its signification an execution purchaser of the judgment-debtor's interest. I entirely concur in this ruling. BANERJI, J., in delivering the judgment of the Court observed. “As far as I can see, there is no distinction in principle between the case of a purchaser of the judgment-debtor's interest at a private sale, and that of a purchaser of his interest at an execution sale so long as they are both bound by the decree in regard to the interest acquired by purchase. At one time there was some conflict of opinion as to the application of the doctrine of lis pendens, to the case of the latter (see the case of Gout money vs. Read) (Taylor and Bell, 83) referred to the judgment of this Court in Radha Kishen Mukerjee vs. Radha Madhub Haldar, (1873) 21 W.R. 349. But the question must now be taken to be practically settled by the decision of the Privy Council in Radha Madhub Haldar vs. Manokar Mukerji, (1888) I.L.R. 15 Cal. 756 and it must be held that an execution purchaser is bound by the doctrine of lis pendens quite as much as a purchaser at the private sale.” The case before us would furnish a good illustration of the inconvenience which would follow if a contrary view were upheld. The plaintiff in his suit asks the court to interpret a decree passed in another suit and which is at present under execution. If such a suit can be maintained, we might have a case in which a Munsif would be called upon and required to interpret a decree of the High Court which was in course of execution and in which his views might be in conflict with those of the Court which passed the decree. In view of the conflict of authority upon this question, it is open, I think, to us to follow the earlier Full Bench decision of this Court in preference to tile later decision, particularly as it appears to be more in consonance with the observations of their Lordships of the Privy Council in regard to the true meaning of section 244. I would, therefore, for the reasons which I have stated, hold that the suit has been rightly decided and would dismiss the appeal with costs. I would, therefore, for the reasons which I have stated, hold that the suit has been rightly decided and would dismiss the appeal with costs. BANERJI, J. The principal question which we have to decide in this appeal is whether the plaintiff-appellant is precluded from maintaining his suit by the provisions of section 244 of the Code of Civil Procedure, that is to say, whether the questions which arise in the suit are questions relating to the execution, discharge or satisfaction of the decree obtained by the respondents and arise between the parties to the suit in which the decree was passed or their representatives. That those questions relate to the execution of the decree admits of no doubt, and is also the fact that the plaintiff-appellant was not a party to the suit in which the decree was passed. Is he then the representative of party? The decision of this question depends upon the answer to the further question whether an auction-purchaser of property comprised in a mortgage for the sale of which a decree has been passed in favour of the mortgagee against the mortgagor is a representative of the judgment-debtor within the meaning of section 244, clause (c). It has been held in this Court that a person who has purchased under a private sale from the judgment-debtor the property decreed to be sold in a suit for sale upon a mortgage is such representative. Madho Das vs. Ramji Pathak, (1894) I.L.R. 16 All., 386, see also Gobardhan Rai vs. Bishun Prasad, (1901) I.L.R. 23 All. 116. And the earlier ruling in which it has been held that the word “representative” in section 244 had no “more extended meaning than heir, devisee or executor” [see per OLDFIELD, J., in Jagat Narain vs. Jagrup, (1883) I.L.R. 5 All. 452 at 456], are no longer followed. A distinction, however, has been made between a purchaser at a private sale and a purchaser at an auction sale, and it has been held that, whilst the former is a representative within the meaning of the section, the latter is not. The correctness of this view appeared to my brother BLAIR and myself to be questionable. We therefore referred this case to a Full Bench for a reconsideration of the existing rulings on the subject. 17. The correctness of this view appeared to my brother BLAIR and myself to be questionable. We therefore referred this case to a Full Bench for a reconsideration of the existing rulings on the subject. 17. It seems, to me that every purchaser of the judgment-debtor's interests, who is bound by the decree, is a representative of the judgment-debtor within the meaning of the section, whether he is a purchaser under a private sale from the judgment-debtor or a purchaser at a compulsory sale held in execution of a decree obtained against the judgment-debtor. I can see no distinction in principle between the case of a purchaser under a private sale and that of an auction purchaser, provided that the decree in execution can be enforced against him. In my judgment the word “representative” in section 244 means a person against whom the decree can be enforced either as the legal representative of the judgment-debtor or as his representative in interest. In Radhamadhub Holdar vs. Manohar Mookerji, [1888] I.L.R. 15 Cal, 756 their Lordships of the Privy Council held that a person who had during the pendency of the mortgagee's suit for sale purchased the mortgaged property in execution of a simple decree for money was bound by the proceedings and the decree in the suit. Such a purchaser is undoubtedly the representative in interest of the judgment-debtor as regards the property purchased by him. It is true that a purchaser at auction acquires, in some respects, higher rights than those acquired by a purchaser under a private sale, but as observed by the Full Bench of the Calcutta High Court in Ishan Chunder Sirkar vs. Bent Madhub Sirkar, [1898] I.L.R. 24 Cal. 62 “because that is so, it does not follow that the execution purchaser is not to be regarded as a representative in interest of the judgment-debtor even in those respects in which, and for those purposes for which, his rights are no higher than those of the judgment-debtor whose right, title and interest he has purchased.” And there appears to be no reason why he should not be deemed to be the representative of the judgment-debtor. As the learned Chief Justice has pointed out, the trend of recent decisions, both of the Privy Council and of the courts in this country, is in favour of placing on section 244 as wide an interpretation as is compatible with its provisions, so that questions which may be determined by the court-executing a decree should not be made the subject of a separate suit. 18. The plaintiff in this case is admittedly bound by the decree obtained by the respondents, as he purchased the property in question after that decree had been passed. In fact he prays in his suit that the property should be sold in accordance with the directions, contained in the decree. He is therefore, in my opinion, a representative of the judgment-debtors mortgagors, within the meaning of section 244 and his suit has been rightly held to be barred by that section. I also would dismiss the appeal.