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1969 DIGILAW 35 (MP)

PARWVTIBAI v. LAXMI DEVI

1969-02-27

K.L.PANDEY

body1969
JUDGMENT : ( 1. ) THIS revision under section 115 of the Code of Civil Procedure is directed against a reversing order dated 23 March 1968 passed in appeal under Order 43, rule 1 (j) of the Code whereby, differing from the executing court, the Second Additional District Judge, Sagar, dismissed an application for setting aside an auction sale under Order 21, rule 89 of the Code on the ground that it did not fulfil the requirements of that provision. ( 2. ) THE material faces which are no longer in dispute are these. Narmada prasad (non-applicant 11) obtained against Shrichand and 7 others (non-applicants 3 to 10) a money decree for Rs. 2,868/9/- and costs. In execution of that decree, the house in dispute belonging to the non-applicants 3, 4 and 5 was put to sale by public auction on 7 October 1959 and it was purchased by dr. Laxmi Devi and Ramcharan (non-applicants 1 and 2) for a sum of rs. 65,100/ -. The decretal amount had, however, been paid to the decree-holder on 1 October 1959 and, on 10 October 1959, when the decree-holder and the judgment-debtors were present, the receipt dated 1 October 1959 showing full satisfaction of the decree was filed. In view of full satisfaction of the decree, the executing Court, by its order dated 14 October 1959, set aside the sale, directed that one fourth of the sale proceeds deposited by the auction-purchasers be refunded and dismissed the execution application as fully satisfied. The auction-purchasers, however, applied for review of the order setting aside the sale and that was allowed by the executing Court on 4 December 1959. Two successive appeals against the order pissed in review were dismissed. In the order passed by this Court in Shrichand v. Mohanlal (1963 M P L J Note 58=misc. (second) Appeal No. 7 of 1962, decided on the 25 th April 1962.)T. C. Shrivastava J. took the view that the uncertified adjustment could not be taken notice of to the prejudice of the auction-purchaser and the case must be decided on the basis of that position. ( 3. ) THE judgment-debtors had filed on 6 November 1959 an application under Order 21, rule 90 of the Code, but it was dismissed in default on 26 July 1960. ( 4. ( 3. ) THE judgment-debtors had filed on 6 November 1959 an application under Order 21, rule 90 of the Code, but it was dismissed in default on 26 July 1960. ( 4. ) THE applicant 1 (mother of J. Ds.) the applicants 2 to 4 (sons of J. D. Shrichand) and the applicants 5 and 6 (sons of J. D. Ramsingh) had filed on 6 November 1959 an application under Order 21, rule 89 of the Code stating that the decretal amount had already been paid by the J. Ds. to the decree-holder and deposited five per cent of the purchase money for payment to the auction-purchasers. That application too was dismissed in default on 26 July 1960. An application for its restoration was dismissed by the executing court on 30 December 1961. A revision against that order was also dismissed on 25 April 1962. On a petition for review of the order passed in revision, this Court held in Smt. Parwatibai v Narbada Prasad (Misc. Civil Case No. 195 of 1962, decided on the 6th March 1963.) that the application under Older 21, rule 89 of the Code should be deemed to be pending and directed the executing Court to decide it in accordance with law. As already indicated, the executing Court allowed that application and set aside the auction sale but, in appeal, the lower appeal Court reversed that order. ( 5. ) THE relevant rule 89 as in force in the State of Madhya Pradesh reads: "89 (1) Where immovable property has been sold in execution of a decree, any person claiming any interest in the property sold at the time of the sale or at the time of the petition or acting for, or in the interest of such person, may apply to have the sale set aside on his depositing in Court,- (a) for payment to the purchaser, a sum equal to five per cent of the purchase money, and (b) for payment to the decree-holder, the amount specified in the proclamation of sale as that for the recovery of which the sale was ordered, less any amount which may, since the date of such proclamation of sale, have been received by the decree-holder. (2) Where a person applies under rule 90 to set aside the sale of his immovable property, he shall not, unless he withdraws his application, be entitled to make or prosecute an application under this rule. (3) Nothing in this rule shall relieve the judgment-debtor from any liability he may be under in respect of costs and interest not covered by the proclamation of sale. " ( 6. ) THE non-applicants 1 and 2 (auction-purchasers) accepted in the courts below, and did not also dispute before me, that the applicants, who filed on 6 November 1959 an application under Order 21, rule 89 of the Code had then sufficient interest in the house in dispute to be entitled to make that application. ( 7. ) IN order that an application made by an interested person under order 21 rule 89 of the Code may succeed, the following conditions must coexist : (i) The application should be made by him within 30 days of the sale. (ii) He should not also have made an application under Order 21, rule 90 of the Code and, if one has been made, it should be withdrawn within 30 days of the sale. (iii) He should deposit, within 30 days of the sale, a sum equal to five per cent of the purchase money for payment to the auction-purchaser. (iv) He should further deposit, within the same time, the amount specified in the sale proclamation for the recovery of which sale was ordered, for payment to the decree- holder, less any amount which might have been received by the decree-holder since the date of proclamation of sale. ( 8. ) THE lower appeal Court rightly held and it is also not contested before me that the applicants fulfilled the first three conditions. But, differing from the Court of first instance, the lower appeal Court held that the fourth condition was rot fulfilled. As I will show immediately, in taking that view, the appeal Court misconstrued the provisions of rule 89 and, as a result of such misconstruction, erroneously failed to exercise the jurisdiction vested in it for setting aside the sale. It is well established that when such an error of law leads a Court to decline to exercise its jurisdiction, the powers of this Court under section 115 of the Code may legitimately be invoked for correcting the error. ( 9. It is well established that when such an error of law leads a Court to decline to exercise its jurisdiction, the powers of this Court under section 115 of the Code may legitimately be invoked for correcting the error. ( 9. ) ON the question of fulfilment of the forth condition, it was not disputed by the auction-purchasers that the full decretal amount was as a matter of fact paid to the decree-holders on 1 October 1959, that is to say, before the sale which took place on 7 October 1959. Further, on 10 October 1959, when the decree-holder and the judgment-debtors were present, the receipt for full decretal amount was filed by the latter. Finally, on 14 October 1959, the executing Court accepted the full satisfaction and set aside the sale. Both the courts below held that this amounted to implied certification of the full satisfaction of the decree (Paragraph 30 of the appeal Courts order ). Even so, the appeal Court took the view that the fourth condition could not be regarded as fulfilled unless the full satisfaction was so certified before the sale. There is, for this view, no warrant in the language of clause (b) of rule 89 (1) "less any amount which may since the date of such proclamation of sale, have been received by the decree-holder". What has to be taken into consideration is the receipt of any amount by the decree-holder right from the date of proclamation upto the dale when the limitation for making an application under rule 89 expires and it is not restricted to the amount which has been certified as received by him. ( 10. ) WHEN the appeal Court stated that the satisfaction should have been certified before sale, it did not realise that in such a case the sale, which takes place on the basis of a satisfied judgment and decree duly certified by the Court, is altogether void and ineffectual to pass any title even to a bona fide purchaser for value without notice: Balkishen Das v. Simpson (25 I A. 151.) The appeal Court failed to notice that in Rambhau v. Nagarmal (1948 N L J 54 = A I R 1948 Nag. 94.) relied upon by it, there was no application under Order 21, rule 89 of the Code and the only question was whether the auction sale should be disregarded as void when on the date of sale the full satisfaction made earlier had not been certified though it was certified subsequently. That was also the position in Nanhelal v. Umrao Singh (AIR 1931 P. C. 33.)which was relied upon in the Nagpur case mentioned above. Even in the case before me, the auction sale had earlier been erroneously set aside in like circumstances on 14 October 1959 on the ground that the decree had been earlier satisfied but in disregard of the fact that that satisfaction had not been certified before the sale. As already indicated, that order was reviewed and the corrected order was affirmed in two successive appeals. These decisions indicate that if an auction sale is to be disregarded, the adjustment or full satisfaction of the decree must be made under Order 21, rule 2 of the Code before the sale. The reason is that, in such a case, the sale is altogether without jurisdiction and void and need not, therefore, be set aside. Indeed, in such a situation, there is no scope for making any application for setting aside the sale. On the other hand, Order 21, rule 89 of the Code postulates a valid sale which requires an application for setting it aside on fulfilment of certain conditions. So, in Nanhelal v. Umrao Singh (supra), the Judicial Committee held that an adjustment come to subsequent to the sale, without more, was of no avail and observed : "the only means by which the judgment-debtor can get rid of a sale, which has been duly carried out, are those embodied in rule 89, viz. by depositing in Court the amount for the recovery of which the property was sold, together with 5 per cent on the purchase money which goes to the purchaser as statutory compensation, and this remedy can only be pursued within 30 days of the sale. See Article 166, Sch. I, Limitation Act, 1908. " ( 11. ) THE learned counsel for the auction-purchaser relied upon a number of decisions of the Supreme Court to sustain the view taken by the appeal court. See Article 166, Sch. I, Limitation Act, 1908. " ( 11. ) THE learned counsel for the auction-purchaser relied upon a number of decisions of the Supreme Court to sustain the view taken by the appeal court. In Janak Raj v. Gurdial Singh (AIR 1967 S. C. 608.) there was no application under order 21, rule 89 of the Code and all that had happened was that the decree, in execution of which the sale was held, was reversed after the sale but before its confirmation It was held that the sale could not be set aside. Their Lordships observed: "on the facts of this case, it is difficult to see why the judgment-debtor did not take resort to the provisions of Order XXI, rule 89. . . . . . For reasons which are not known to us, he did not do so. " Their Lordships noticed in the body of the judgment, apparently without disapproval, Shankar v. Jawaharlal (AIR 1828 Nag. 265 F. B.-11 N L J 142.): Kabiruddin v. Krishna Rao (AIR 1928 Nag 136 (2 ).) and Nanhelal v. Umrao Singh (supra ). In the first and the third case, there was no application for setting aside the sale under Order 21, rule 89 of the Code and in the second case the one made was barred by time. Even these cases do not assist the auction-purchasers ( 12. ) IN In Ramchandra Rao v. Kutumba Rao (AIR 1967 S. C. 1637), their Lordships observed: "there can be do doubt that it at the time when an application under Order XXI, rule 89 is made by the judgment-debtor, the decree has been satisfied or adjusted, the deposit of any money tor payment to the decree-holder is not called for. " (Page 1638, paragraph 3.)However, in the facts of that case, their Lordships found that there was no adjustment or satisfaction of the decree. ( 13. ) TRIBHOVANDAS v. Ratial (A I R 1968 S. C. 372.) was again a case where there was no adjustment or satisfaction of the decree and their Lordships held that mere abandonment of execution proceedings did not amount to such adjustment. ( 14. ) AS I indicated elsewhere in this order, both the Courts below regarded the full satisfaction made on 1 October 1959 as impliedly certified on 14 October 1959. ( 14. ) AS I indicated elsewhere in this order, both the Courts below regarded the full satisfaction made on 1 October 1959 as impliedly certified on 14 October 1959. That apart, the counsel was unable to cite any authority for the view that receipt of the amount by the decree-holder had to be certified before it could be taken notice of for purposes of Order 21, rule 89 of the code On the other hand there are numerous cases where there was no certification. Some of these cases are, Janki Prasad v. Lekkraj (AIR 1938 All. 610); Brijlal v. Manohar-prasad (A I R 1934 Nag. 21.) Subbayya v. Venkata Subba Reddi (AIR 1935 Mad. 1050.) Mahendra Chandra v. Parashmani dasya (AIR 1938 Cal. 862.); Muthuvenkatapathy v. Kuppu (A I R 1940. Mad. 427 F. B.) Vithoba v. Dhanaji (1947 N LJ 494=a I R 1948 Nag. 186.) Laxmansing v. Laxminarayan Deosthan (1947 N L J 506=a I R 1946 Nag. 127.) Rabindra Nath v. Harendra Kumar ( AIR 1956 Cal. 462 .) and Shivaji Rao v. Niranjanaiah (AIR 1862 Mys. 36.) It is true that in Tribhovandas v. Ratilal (supra), the Supreme court noticed some of these cases but did not consider it necessary to express any opinion thereon for the reason that, on the facts of the case before it, there was no adjustment of the decree out of Court. However, the view taken in these cases has been impliedly approved in the quotation from Ramchandra Rao v. Kutumba Rao (supra) reproduced above. ( 15. ) THE result is that this revision succeeds and is allowed. The appeal courts order dated 23 March 1968 is set aside and the one passed by the executing Court on 5 November 1966, whereby the sale was set aside, is restored. Costs throughout shall follow that event. Hearing fee in this Court Rs. 100/ -. Revision allowed.