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1961 DIGILAW 131 (ALL)

New Empire Engineering Company Private Limited v. Birmo Devi

1961-05-22

SAHAI, SRIVASTAVA

body1961
JUDGMENT Srivastava, J. - These two appeals are connected with each other and can, therefore, be conveniently disposed of together. The circumstances in which they have arisen are these: 2. House No. 47/55, General Ganj Kanpur, belonged to Smt. Premwati Jain and Sri Kamal Kumar Jain. Their predecessor entitle was Manoharlal Jain. Manoharlal Jain had executed a simple mortgage in respect of the house in favour of Smt. Birmo Devi. She filed a suit for the enforcement of the mortgage and obtained a decree. In execution of the decree the house was put up for sale. In the mean-time the New Empire Engineering Company Private Ltd., the Appellant in both these appeals (which will be referred to hereinafter as the Appellant) purchased the house when it was sold at auction in execution of a simple money decree which one Chandra Shekhar had against Smt. Premwati Jain and Kamal Kumar Jain. This sale was held on the 18th of March, 1955, but was not confirmed till the 7th of May, 1956. Before it was confirmed in favour of the Appellant, Smt. Birmo Devi the decree-holder in the mortgage decree got the house sold in execution of her own decree. In the execution of that decree the property was sold first through a firm of auctioners on the 10th of September, 1956, and Smt. Birmo Devi herself purchased it for Rs. 60,000. That sale was, however, set aside on the 20th of December, 1957. The property was again put up for sale on the 17th of April, 1958, and the decree holder again purchased it this time for Rs. 59, 500. On the 6th of September, 1956, the Appellant applied to be impleaded as judgment debtor on the ground that it had purchased the property at an auction sale under the simple money decree. This application was rejected by an order dated the 6th of Sept. 1956, on the ground that the Appellant was an absolute stranger and had no right to be impleaded in the case. It is against that order that Ex. F.A. No. 532 of 1956 has been preferred. The Appellant subsequently filed an objection against the proposed proclamation of sale also but that was rejected on the ground that it had no right to object. After the sale was held on the 17th of April, 1958 the Appellant made an application under Or. It is against that order that Ex. F.A. No. 532 of 1956 has been preferred. The Appellant subsequently filed an objection against the proposed proclamation of sale also but that was rejected on the ground that it had no right to object. After the sale was held on the 17th of April, 1958 the Appellant made an application under Or. XXI, R. 90, CPC objecting to the sale and praying that it be set aside. A number of irregularities in the publication and the conducting of the sale were alleged and it was also said that there was collusion between the auction purchaser and the original judgment debtors. It was contended chat the property which was worth more than a lac and a half had been sold for an inadequate amount of Rs. 59, 500. The application for setting aside the sale was opposed on behalf of the of the auction purchaser Smt. Birmo Devi and was rejected by the executing court by its order dated the 27th of July 1959. Against that order F.A.F.O. No. 391 of 1959 has been filed. 3. Taking up Ex. F.A. No. 532 of 1956 first, it is contended on behalf of the Appellant that having purchased the interest of the judgment debtors at the auction sale in the simple money decree and the sale in favour of the Appellant having been confirmed, the Appellant became a representative of the judgment debtors so far as their interest in the property sought to be sold was concerned and was on that account entitled to be impleaded in the execution case and to be allowed to file objections but by the order under appeal the Appellant has been deprived of that right. 4. In answer it is contended on behalf of the Respondent that in the first place the Appellant could not claim to have become the representative of the judgment debtors, secondly it had applied not for being impleaded in addition to the original judgment debtors but for being substituted in place of the judgment debtors but that prayer was unjustified and thirdly that in any case no appeal lay against the order dated the 6th of September, 1956. by which the Appellant's application for being impleaded had been rejected. 5. In view of the decision of a Full Bench of this Court in Gulzarilal v. Madho Ram ILR 26 Alld. by which the Appellant's application for being impleaded had been rejected. 5. In view of the decision of a Full Bench of this Court in Gulzarilal v. Madho Ram ILR 26 Alld. 447 it is, in our opinion, no longer open to the Respondent to contend that the Appellant could not claim to be a representative of the judgment debtors. The facts of that case are very similar to those of the present case. Like the case in hand in that case Gulzarilal had purchased the property at an auction sale in execution of a simple-money decree during the pendency of proceedings for the enforcement of an earlier mortgage on the property. Having purchased the property Gulzari Lal filed an objection before the court which was executing the mortgage decree. His objection was rejected and he then preferred a regular suit. The suit was contested on the ground that having become the representative of the judgment debtors on account of his purchasing their rights in the property at an auction sale, he had no right to bring a regular suit and ought to have filed his objection u/s 244 of the old CPC which corresponded to Section 47 of the present Code. This contention was upheld by the Full Bench which held that in spite of the fact that Gulzari Lal had purchased the property at an auction sale and not at a private sale, he was a representative of the judgment debtors for purposes of Section 244 of the CPC and the regular suit was, therefore, barred. Applying the principle of that decision to the present case the Appellant having purchased the property at auction in execution of the simple money decree of Chandrashekhar against the judgment debtors, became their representative so far as the property in dispute was concerned. The Appellant could, therefore, intervene in the execution case which was being prosecuted by the decree holder Smt. Birmo Devi on the basis of her own mortgage and was entitled to file objections in the execution case. 6. Under Cl. (3) of Section 47, CPC the question whether a certain person is a representative of one of the parties to the execution case or not is a question which has to be decided by the executing court u/s 47. 6. Under Cl. (3) of Section 47, CPC the question whether a certain person is a representative of one of the parties to the execution case or not is a question which has to be decided by the executing court u/s 47. That being so, the question whether the Appellant was a representative of the judgment debtors was a question which could be raised and decided u/s 47, CPC. It was raised by the Appellant and has been decided by the learned Civil Judge against it. The decision being one under Cl. (3) of Section 47 was appealable under the provisions of the Code. The contention that the decision rejecting the Appellant's application of the 6th of September, 1956, was not appealable is, therefore, not correct. 7. It is also not correct that the Appellant claimed to be substituted in place of the judgment debtors in the execution case. The only thing it wanted was that it should be impleaded as a party to the case. The original judgment debtors could remain parties to the case and in addition to them the Appellant could have been impleaded so that it could get an opportunity of raising objections to the execution case. The Appellant was vitally interested in the property, it having purchased it at an auction sale. The original judgment debtors having lost the property did not have much interest left in it and it is, therefore, not surprising that they did not raise the objections in the execution department which could have been raised. We have, there therefore, no hesitation in holding that the learned Civil Judge was wholly unjustified in treating the Appellant as an absolute stranger and in holding that it had no right to be brought on record in the execution case. The Appellant's application was, therefore, improperly rejected 8. It was urged that instead of merely applying for being impleaded in the case the Appellant should have filed an objection in the execution case. That was certainly one course open to the Appellant but that was not the only course it could follow. It could first get itself impleaded as a party on the ground that it was a representative of the judgment debtors and then file objections in the execute on case. That was certainly one course open to the Appellant but that was not the only course it could follow. It could first get itself impleaded as a party on the ground that it was a representative of the judgment debtors and then file objections in the execute on case. If it was not allowed to be impleaded it was deprived of the right to object in the present case, however, an objection was filed but was also rejected on the ground that the Appellant was not a proper party. Ex. F.A. No. 532 of 1956 must, herefore, be allowed and the case sent back to the executing court with a direction that the Appellant should be impleaded in the case as a representative of the judgement debtors so that it may file any objection it may like in the execution department. 9. In view of the above decision everything done in the execution case behind the back of the Appellant after the refusal to implead it in the case cannot be binding on the Appellant and can be a avoided by it. This includes the sale that was subsequently held on the 17th of April, 1958. 10. In connection with the sale, however, we have FAFO No. 391 of 1959. That appeal has been preferred against an order rejecting the application of the Appellant under Or. XXI, R. 90 praying that the sale be set aside. A number of objections were taken against the sale but it is not necessary to consider all of them. One defect in respect of which it cannot be seriously disputed that it amounted to a material irrigularity in the publication of the sale appears to be that in the sale proclamation among three encumbrances shown in respect of the property one related to a zamanatnama (security bond) said to have been executed by both the judgment debtors Smt. Premwati Jain and Kamal Kumar Jain to secure a sum of Rs. 1,50,000. The security bond covered besides the house in dispute some shops also. In respect of the security bond it is not disputed that though in the sale proclamation it was mentioned as having been executed by both the judgment debtors in fact it was executed only by Smt. Premwati Jain and not by Kamal Kumar Jain. 1,50,000. The security bond covered besides the house in dispute some shops also. In respect of the security bond it is not disputed that though in the sale proclamation it was mentioned as having been executed by both the judgment debtors in fact it was executed only by Smt. Premwati Jain and not by Kamal Kumar Jain. In fact it was executed by Smt. Premwati Jain in connection with her application to be appointed guardian of her minor son Kamal Kumar Jain. It was executed in compliance with the orders of the learned Civil Judge. Smt. Premwati Jain offered the security of her own share of the property in order to get herself appointed as a guardian of the minor. The security could, therefore, be an encumbrance only on half share of the property and not on the whole of it. It is also not disputed that subsequently by an order of the learned Civil Judge the amount for which the security had been furnished was reduced from Rs. 1,50,000 to Rs. 75,000. Thus the third encumbrance mentioned in the sale proclamation related to only half the property and was in respect of Rs. 75,000 only. In the sale proclamation, however, it was shown as covering the entire property and was also mentioned as being in respect of Rs. 1,50,000. 11. The value of the property in dispute as was given in the state proclamation was Rs. 1,50,000. When it was first sold for Rs. 60,000 an objection was taken that the price fetched was not adequate and that the auctioneer had not given enough publicity to the sale. That objection was accepted and the sale was set aside. In the circumstances it appears to be clear that the value of the property in dispute was about Rs. 1,50,000. This conclusion can be arrived at by another process also. In the sale proclamation itself the monthly rental of the property according to the municipal assessment was mentioned as Rs. 827. If we take the value of the property to be 20 times the annual income then the property must be held to be worth more than Rs. 1,50,000. 12. The property was in the present case sold for about one third of its value i.e., for Rs. 59,000 only. 827. If we take the value of the property to be 20 times the annual income then the property must be held to be worth more than Rs. 1,50,000. 12. The property was in the present case sold for about one third of its value i.e., for Rs. 59,000 only. It is by no means difficult to attribute this inadequate amount to the fact that in the sale proclamation the encumbrance of Rs. 1,50,000 had been shown as existing in respect of the property. In face of that item in the sale proclamation no one could be expected to purchase the property for its proper value. In this case, therefore, the circumstances clearly establish that substantial injustice was caused to the judgment debtors on account of the irregularity in the publication of the sale and that the inadequate price for which the property was sold was due to the incorrect mention in the sale proclamation about the third encumbrance. On this ground alone the Appellant was entitled to have the sale set aside. 13. It may, however, be said that the ground above mentioned could not be taken by the Appellant under Or. XXI, R. 90 because it could have been taken earlier but had not been taken. Under the proviso added by this Court to R. 90 no application to set aside a sale shall be entertained upon any ground which could have been taken by the applicant on or before the date on which the sale proclamation was drawn up. It is urged that the objection to the incorrect encumbrance shown in the sale proclamation could have been taken at the time when the sale proclamation was drawn up and as it was not taken at that stage it could not, therefore, be made a ground for setting aside the sale under Or. XXI, R. 90. As, however, the sale in favour of the Respondent was confirmed later and it was not allow to be impleaded at an earlier stage it could not take that objection at any time earlier. The proviso did not, therefore, apply to it and could not prevent it from taking this objection under Or. XXI, R. 90. 14. We are, therefore, of opinion that both the appeals must succeed. They are, therefore, allowed. The sale held on the 17th of April, 1958, is set aside. The proviso did not, therefore, apply to it and could not prevent it from taking this objection under Or. XXI, R. 90. 14. We are, therefore, of opinion that both the appeals must succeed. They are, therefore, allowed. The sale held on the 17th of April, 1958, is set aside. The case will now go back to the executing court so that it may implead the Appellant as a party to the case and then proceed with the execution. The Appellant will get its costs of both these appeals from the contesting Respondent. The order appointing a receiver shall stand vacated but this will not affect the right of the decree holder to apply for the appointment of another receiver in the execution case if she wants to make an application in that respect. The record will be sent back to the executing court at an early date so that the execution may proceed.