AMEER ALI, LORD MOULTON, LORD PARKER OF WADDINGTON, SIR JOHN EDGE
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Judgement Appeal from a judgment and decree of the High Court (June 4, 1912) reversing a judgment and decree of the Subordinate Judge of Burdwan (September 8, 1909). The respondents granted to certain lessees a lease of a colliery and sold to the lessees the equipment, including engines, boilers, offices, &c. On September 7, 1903, the respondents commenced a suit in the Court of the Subordinate Judge at Burdwan against the lessees to recover royalties due under the lease. On January 7, 1904, a mortgagee from the lessees obtained a decree against them. On June 22, 1904, the respondents obtained a decree in their suit and, on July 13, 1904, obtained thereunder an attachment against the colliery and equipment. On September 8, 1904, the lessees filed in the High Court at Calcutta their schedule in insolvency, under the Indian Insolvency Act, 1848, and upon that date the usual order was made vesting their estate in the official assignee. On September 10, 1904, an order was made by the Subordinate Judge staying the sale of the attached property, and on November 23, 1904, the Subordinate Judge ordered that notice should issue to the official assignee to shew cause why his name should not be substituted in place of the judgment debtors, and this notice was duly served. On January 10, 1905, the Subordinate Judge ordered the official assignees name to be substituted for the judgment debtors, and, without any further notice to the official assignee, ordered the issue of a sale proclamation. On March 6, 1905, the sale took place and the respondents, who had obtained leave to bid, purchased the property. On April 18, 1905. the sale was confirmed and subsequently a sale certificate was granted to the respondents stating that they had purchased "whatever right, title, and interest the judgment debtors had to and in the properties." On May 23, 1905, the High Court made an order in the insolvency proceedings, upon the application of the mortgagee already referred to, granting liberty to the official assignee to sell the property. The official assignee, under this order, sold and conveyed the colliery and equipment, subject to the mortgage, to a purchaser who sold and conveyed to the appellants. On July 16, 1908, the appellants commenced a suit against the respondents in the Court of the Subordinate Judge of Burdwan to establish their title to possession of the property.
The official assignee, under this order, sold and conveyed the colliery and equipment, subject to the mortgage, to a purchaser who sold and conveyed to the appellants. On July 16, 1908, the appellants commenced a suit against the respondents in the Court of the Subordinate Judge of Burdwan to establish their title to possession of the property. The Subordinate Judge, by his judgment delivered on September 8, 1909, made a decree in the appellants favour. Upon appeal to the High Court, that Court, by its judgment delivered on June 4, 1912, reversed the decision of the Subordinate Judge. The learned judges held that the order for substitution of the official assignees name in place of the judgment debtors was irregular, but that, inasmuch as he had been so substituted and had not taken exception to the procedure, the execution sale of March 6, 1905, must be regarded as having taken place in his presence and as binding upon him, and that, consequently, the sale to the respondents was effective as against him and his purchasers. De Gruyther, K.C., and Dunne, for the appellants. A judgment creditor has no priority over the official assignee in respect of property attached by him previously to the vesting order Peacock v. Madan Gopal(( 1902) I. L. R. 29 Calc. 428.), which was followed in Kristnasawmy Mudaliar v. Official Assignee of Madras (( 1903) I. L. R. 26 Madr. 673.) and Jitmand Ramanand v. Ramchand Nandram. (( 1905) I. L. R. 29 Bomb. 405.) Under the Indian Insolvency Act, 1848 (11 & 12 Viet. c. 21), s. 49, the Court was, upon the filing of the insolvents schedule, bound to stay the execution proceedings until further order. In that section "may" should be read as "must." The proceedings by which the official assignee was substituted as a party in place of the judgment creditors did not affect the matter. The Code of Civil Pro cedure, 1887, s. 372, only applies where the person substituted is the representative of the person for whom he is substituted, but the official assignee was not the judgment debtors representative. Further, no order was in fact made for the sale of the official assignees interest. On the contrary, the sale certificate expressly stated that what was sold was the debtors interest.
Further, no order was in fact made for the sale of the official assignees interest. On the contrary, the sale certificate expressly stated that what was sold was the debtors interest. There was really no power to make the official assignee a party to the proceedings In re Hunt, Monnet & Co. (( 1864) 1 Bomb. H. C. 251.) [The Code of Civil Procedure, 1882, ss. 284, 287, and 316 were referred to.] Dube, for the respondent. The official assignee was given notice of the application to substitute his name for that of the judgment debtors ; the object of this notice could only be for the purpose of execution. He must be treated as having notice of the subsequent proceedings, including the sale, and is bound thereby. In any case, however, the sale could only be set aside by an application under the Code of Civil Procedure, 1882, s. 311, and under the Limitation Act, 1877, Sched. IL, art. 12, that remedy was barred after one year Malkarjun Bin Shidramappa Pasare v. Narhari Bin Shivappa. (( 1900) L. R. 27 Ind. Ap. 216.) Under s. 244 of the Code the validity of the sale could not be tested in a fresh suit, but only by an application in the execution proceedings to the Court executing the decree. It is well established that this applies not only to an original party to the suit, but also to a person who has been made a party to the execution proceedings under s. 248 Prosunno Coomar Sanyal v. Kasi Dao Sanyal (( 1892) L. R. 19 Ind. Ap. 166.); Punchanum Bundopadya v. Rabia Bibi. (( 1890) I. L. R. 17 Calc. 711) The judgment of their Lordships was delivered by LORD PARKER OF WADDINGTON. The suit in which this appeal arises is one for the recovery of a leasehold colliery. The plaintiffs (the present appellants) claimed title to the property under the official assignee in the insolvency of the lessees. The order vesting the property in the official assignee was made under the Indian Insolvency Act, 1848, on September 8, 1904. At the date of this order the colliery had been attached in an execution case in which the lessees were the judgment debtors and the defendants (the present respondents) were the judgment creditors, and an order had been obtained for the sale of the interest therein of the judgment debtors.
At the date of this order the colliery had been attached in an execution case in which the lessees were the judgment debtors and the defendants (the present respondents) were the judgment creditors, and an order had been obtained for the sale of the interest therein of the judgment debtors. Counsel for the respondents admitted that attachment in execution of a money decree followed by such an order for sale does not confer on the judgment creditor any charge on the land (see Sarkies v. Mussumat Bundho Baee (( 1869) 1 N. W. P. H. C. Rep. 172.)). An attachment prevents and avoids any private alienation, but does not invalidate an alienation by operation of law such as is effected by a vesting order under the Act of 1848, and an order for sale, though it binds the parties, does not confer title. It follows that under the order of September 8, 1904, the property vested in the official assignee free from any charge in favour of the judgment creditors. The official assignee in due course, by order of the Court having jurisdiction in the insolvency, sold the property, and the appellants derive title through the purchaser. Their title is thus prima facie a good and valid title, but it is disputed by the respondents under the following circumstances. On September 12, 1904, the judge in the execution proceedings stayed the sale therein directed until further order. This was the proper and indeed the only thing he could do, for the judgment debtors had no longer any interest which could be sold. Further, if, as was no doubt the case, the judgment debt was included in the schedule filed by the insolvents under the Act, their Lordships are of opinion that he was bound to stay the sale under s. 49 of the Act. At any rate the execution could not proceed until the official assignee had been properly brought before the Court and an order binding on him had been obtained. In their Lordships opinion this could only be done by obtaining an order for the issue of, and by serving him with, a notice under s. 248 of the Code of Civil Procedure, 1882, which was the Code then in force.
In their Lordships opinion this could only be done by obtaining an order for the issue of, and by serving him with, a notice under s. 248 of the Code of Civil Procedure, 1882, which was the Code then in force. It was suggested in argument that he might have been made a party to the proceedings either under s. 32 or under s. 372 of the Code, but even if these sections are applicable after final decree, as to which there is considerable doubt (see Goodall v. Mussoorie Bank (( 1887)1. L. R. 10 Allah. 97.)), no proceedings seem to have been taken thereunder. What the judgment creditors did was this they applied to the judge in the execution case for an order, and on September 30, 1904, and again on November 3, obtained an order for the issue and service on the official assignee of a notice calling upon him to shew cause why he should not be substituted in the suit for the judgment debtors. This was not a proper notice under the 248th section. A notice under that section should have called upon the official assignee to shew cause why the decree should not be executed against him. Had the official assignee been served with such a notice, it is at least probable that he would, as in their Lordships opinion he certainly could, have shewn good cause why the decree should not be executed, the property having under the Act and vesting order been transferred to him for the benefit of the creditors of the insolvent generally. It is possible that the notice might be upheld as a proper notice preliminary to adding the official assignee as a party under s. 32, if that section were applicable, but in order to bind a party added under that section, he has, after being added, to be served with a summons to appear and answer, and it is not suggested that any such summons was served. Similarly, it is not suggested that any order to carry on proceedings was obtained under s. 372. Having obtained leave in that behalf the respondents proceeded to serve the notice in question, and their Lordships will assume that the notice was duly served on the official assignee.
Similarly, it is not suggested that any order to carry on proceedings was obtained under s. 372. Having obtained leave in that behalf the respondents proceeded to serve the notice in question, and their Lordships will assume that the notice was duly served on the official assignee. The official assignee took no notice of it, possibly because he had no objection to being substituted as a party, and expected to be served with notice of any further application against him. There is no evidence that he knew that an order for sale had been already made. The time fixed by the notice for cause to be shewn having expired, the respondents, without further notice to the official assignee, applied for and obtained an order not only substituting the official assignee as a party in the place of the judgment debtors but directing the sale to proceed. The sale accordingly proceeded. There had to be a fresh sale proclamation by reason of s. 291 of the Code. This proclamation is not in evidence, but their Lordships must presume in default of evidence to the contrary that the property offered for sale was the property ordered to be sold, that is to say the right and interest of the judgment debtors in the colliery. At the sale the respondents (the judgment creditors), having obtained leave to bid, became the purchasers. The sale was confirmed by the Court on April 8, 1905, and on April 25, 1905, the appellants obtained the usual certificate which refers to the right, title, and interest of the judgment debtors as the property sold. Their Lordships are of opinion that this sale was altogether irregular and inoperative. In the first place the property having passed to the official assignee it was wrong to allow the sale to proceed at all. The judgment creditors had no charge on the land, and the Court could not properly give them such a charge at the expense of the other creditors of the insolvents. In the second place no proper steps had been taken to bring the official assignee before the Court and obtain an order binding on him, and accordingly he was not bound by anything which was done.
In the second place no proper steps had been taken to bring the official assignee before the Court and obtain an order binding on him, and accordingly he was not bound by anything which was done. In the third place the judgment debtors had at the time of the sale no right, title, or interest which could be sold to or vested in a purchaser, and consequently the respondents acquired no title to the property. Their Lordships’ attention was called in this connection to the case of Malkarjun Bin Shidramappa Pasare v. Narhari Bin Shivappa (L. R. 27 Ind. Ap. 216.), but in their opinion there is nothing in that case which has any bearing upon the present appeal. As laid down in Gopal Chunder Chatterjee v. Gunamoni Dasi (( 1892) I, L. R. 20 Calc. 370.), a notice under s. 248 of the Code is necessary in order that the Court should obtain jurisdiction to sell property by way of execution as against the legal representative of a deceased judgment debtor. In the case in 27 Indian Appeals, such a notice had been served, and the Court had determined, as it had power to do for the purpose of the execution proceedings, that the party served with the notice was in fact the legal representative. It had therefore jurisdiction to sell, though the decision as to who was the legal representative was erroneous. There being jurisdiction to sell, and the purchasers having no notice of any irregularity, the sale held good unless or until it was set aside by appropriate proceedings for the purpose. The present case is of a wholly different character. No proper notice was served under the section, and the respondents had full notice of, and indeed were responsible for, the irregularities of the procedure adopted. The respondents suggested that with regard to certain machinery which was included in the sale of the colliery by the official assignee, and which was also sought to be recovered in this action, the Statute of Limitations was a good defence. This point does not appear to have been taken at any time prior to the hearing before their Lordships Board. It was not one of the issues settled by the Court in the action, nor did the respondents mention it among their grounds of appeal from the decision of the Subordinate Judge.
This point does not appear to have been taken at any time prior to the hearing before their Lordships Board. It was not one of the issues settled by the Court in the action, nor did the respondents mention it among their grounds of appeal from the decision of the Subordinate Judge. Their Lordships consider that it involves an inquiry as to the nature of the machinery to which it is said to be applicable, and that it is therefore too late to raise it. Their Lordships will humbly advise His Majesty that the appeal ought to be allowed and the decree of the High Court of June 4, 1912, set aside with costs here and below, and that the judgment of the Subordinate Judge of Burdwan of September 8, 1909, ought to be restored.