Kasinadha Sahu v. G. Gurunadha Rao — 1970 DIGILAW 31 (ORI)

JUDGMENT :- This is a Miscellaneous First Appeal against the judgment of the learned Subordinate Judge, Berhampur, who has rejected an application purporting to be under Section 47 read with Section 151, C.P.C. 2. That application was filed on 18-2-64 before the learned Subordinate Judge. The appellant who was the applicant before the learned Subordinate Judge happens to be judgment-debtor No. 2, in Execution Case No. 234 of 1956. The application which was filed on 18-2-64 called in question the validity of the sale of a building located in the town of Berhampur on various grounds. The grounds were specifically stated in paragraph 2 of the application under sub-paragraphs (a) to (t). The reliefs asked for in the application were to set aside the confirmation of the sale on the basis that the entire proceeding was void, alternatively to review the order of confirmation and thereafter to set aside the sale and pending disposal of the application to stay delivery of possession. The learned Subordinate Judge disposed of the matter on 13-3-65. In his order he noticed three contentions mainly, namely, (a) That the valuation of the property has been deliberately made grossly low and that there was no division into lots of the property, a portion of which would have been sufficient to satisfy the decretal dues. (b) That there has been no due service of notice under Order 21, Rule 22, C.P.C. upon all the judgment-debtors and that there was suppression of valuation notices upon the judgment-debtors. (c) That the sale proclamation was not made in conformity with law in force. These three contentions were taken into consideration by the learned Subordinate Judge who discarded them and held that there was no merit in the application. He further found that the application was grossly barred by limitation. 3. Certain facts which are not disputed at the Bar may be stated, particularly because in the present Paper Book all the facts have not been available. A suit was filed in 1943 being T. S. No. 23 of 1943 by the present appellant who was a member of the Sahu family for partition of the family properties including the building in question. In the said suit there was a compromise petition and a decree was passed in terms of the said compromise on 19-4-51. A suit was filed in 1943 being T. S. No. 23 of 1943 by the present appellant who was a member of the Sahu family for partition of the family properties including the building in question. In the said suit there was a compromise petition and a decree was passed in terms of the said compromise on 19-4-51. According to the terms of the compromise some properties including the suit property otherwise known as Sahu's Bungalow were set apart for payment of the family debts. Dasarathi and 4 others who were all members of the family were appointed as receivers to arrange sale of the properties including the Bungalow for discharging the debts of the family including some debts of the appellant. Accordingly receiver Dasarathi with permission of the Court sold a portion of the bungalow under a registered sale deed dated 28-5-53 and the Court also directed delivery of possession of the same by its order dated 24-4-56. 4. By then the entire bungalow along with its vacant site was already subjected to a mortgage. Respondent No. 1 in this appeal was the mortgagee who on 10-7-66, obtained a decree for sale in T. M. S. No. 50 of 1946. On the basis of the said decree Execution Case No. 234 of 1956 was levied and the decree-holder himself purchased the bungalow on 14-7-58 for a consideration of Rs. 26,000/-. The sale was confirmed on 6-12-58. 5. On 1-8-58, an application under Section 47, C.P.C. had been filed by some of the judgment-debtors including the wife of the present appellant. Many of the present contentions which have been raised by the appellant were raised in the said application. That application was registered as M. J. C. No. 72 of 1958 and was ultimately rejected. An appeal was carried against the judgment of the learned Subordinate Judge to this Court and was registered as Miscellaneous Appeal No. 65 of 1959. That appeal was eventually disposed of by a Bench of this Court and the learned Judges upheld the order of the learned Subordinate Judge and negatived the various contentions raised on behalf of the judgment-debtors. 6. Mr. D. Mohanty, learned counsel for the appellant, raised the following contentions - (1) The sale had been attacked on various grounds. That appeal was eventually disposed of by a Bench of this Court and the learned Judges upheld the order of the learned Subordinate Judge and negatived the various contentions raised on behalf of the judgment-debtors. 6. Mr. D. Mohanty, learned counsel for the appellant, raised the following contentions - (1) The sale had been attacked on various grounds. Each of the reasons indicated in grounds (a) to (t) in paragraph 2 of the application before the executing Court was sufficient by itself to have the sale annulled. The learned Subordinate Judge without considering them specifically in a cursory manner dealt with three of the grounds. Such a disposal cannot be considered to be proper in the facts of the present case. (2) The application cannot be taken to be barred by limitation, because according to Mr. Mohanty to the present case the three-year rule of limitation provided under Article 181 of the Limitation Act of 1908 would apply. In this connection he placed reliance on the decision of their Lordships of the Supreme Court in AIR 1956 SC 87 (Ramanna v. Nallaparaju). He further contended that there having been no dispossession in this case the cause of action actually cannot be taken to be barred by limitation. This contention of his was on the basis that the sale was a nullity having been carried on without the leave of the court. (3) The building along with certain other properties had been completely set apart for the purpose of payment of the family debts. As there was a genuine arrangement made in the family of the debtors for the purpose of paying the decree-holder and the decree-holder fully knew about the matter, the building in question should not have been sold by the decree-holder. Though the decree-holder is not a party to the transaction (namely, the compromise decree) since that was a bona fide arrangement he must be bound by it. He relied upon a decision of the Supreme Court in AIR 1952 SC 170 (Pannalal v. Mt. Naraini). (4) The decree-holder having not obtained the leave of the court for the purpose of having the property sold the sale is not binding. For that purpose Mr. Mohanty sought to place reliance on a decision of their Lordships of the Supreme Court in AIR 1958 SC 725 (Kanhaiyalal v. Dr. D. R. Banaji). Naraini). (4) The decree-holder having not obtained the leave of the court for the purpose of having the property sold the sale is not binding. For that purpose Mr. Mohanty sought to place reliance on a decision of their Lordships of the Supreme Court in AIR 1958 SC 725 (Kanhaiyalal v. Dr. D. R. Banaji). (5) The notice on the judgment-debtors under Order 21, Rule 22, C.P.C. was mandatory and since it had not been dispensed with by the Court until the judgment-debtors were served, the execution case could not continue. For the purpose of this proposition he relied upon the principles indicated in (1913) ILR 40 Cal 635 (PC) (Krishna Pershad Singh v. Moti Chand). (6) The confirmation of sale by the executing court is not a formal act since it dealt with the parties' rights and the parties were entitled to a hearing. In the present case the confirmation was not on the date fixed, but on a date advanced on the application of the decree-holder and without notice to the judgment-debtors. (7) The waiver by one of the judgment-debtors to a fresh sale proclamation is not a waiver by all and as such the other judgment-debtors were not bound by such waiver. (8) The building was actually valued at more than Rs. 1,00,000/- and its valuation was grossly low. The court had a duty under Order 21, Rule 66, C.P.C. to fix the proper price and since that has not been done the sale is vitiated and is liable to be annulled. In this connection he relied upon AIR 1945 PC 67 (Marudanayagam v. Manickavasakam). 7. He further contended that the Division Bench decision in M. A. No. 65 of 1959 is not binding on me in the present appeal on account of the fact that the said decision is contrary to the Supreme Court decision in AIR 1958 SC 725 referred to above. He ultimately contended that since these are serious aspects of the case which have not been taken into account by the learned Trial Judge and seems to have disposed of the matter more on first impression and in a somewhat summary process, the case should go back for a fresh determination by him. He ultimately contended that since these are serious aspects of the case which have not been taken into account by the learned Trial Judge and seems to have disposed of the matter more on first impression and in a somewhat summary process, the case should go back for a fresh determination by him. An opportunity should be given to the parties to substantiate these allegations some of which can only be established by leading evidence and, therefore, unless a fresh enquiry is ordered the appellant would be prejudiced. 8. Mr. R. Mohanty, appearing for the respondents, contended that the application under Section 47, C.P.C. at the instance of judgment-debtor No. 2 in the present case is not maintainable. For this he relied upon Order 21, Rule 90, sub-rule (1), C.P.C. as amended in this Court. The proviso to that Rule reads as follows :- "Provided that no application to set aside a sale shall be admitted, (a) upon any ground which could have been, but was not put forward by the applicant before the sale was concluded, and (b) .........". He contends that these grounds were all available to the appellant at a time prior to 6-12-58 when the sale was confirmed, and as such at his instance the present enquiry is not entertainable. 9. He next contended that the receivers in this case were appointed for the purpose of sale only and the strict principle of custodia legis would not apply to the facts of the case. He distinguished the decision indicated in AIR 1958 SC 725 by saying that it was a case which dealt with the vesting of property in the receiver while in the present case the property did not vest in the receiver, but the only duty cast on the receiver was to arrange for disposal of the same. 10. His next contention was that under Order 21, Rule 69, sub-rule (2) proviso as amended in this Court, the Court may dispense with the consent of any judgment-debtor who has not appeared in the proceedings. In the circumstances the objection of Mr. D. Mohanty on the ground that on behalf of the non-appearing judgment-debtors there could be no dispensing of fresh proclamation is not warranted. In the circumstances the objection of Mr. D. Mohanty on the ground that on behalf of the non-appearing judgment-debtors there could be no dispensing of fresh proclamation is not warranted. He relied upon a decision of this Court in ILR (1956) Cut 630 (Kangali Maharana v. Shyamsundar Mohanty) and a decision of the Patna High Court in AIR 1947 Pat 461 (FB) (Baleshwar Chaubey v. Ram Ranavijaya) in support of his propositions. 11. As I find, the application of the judgment-debtor appellant is barred by limitation. This is not a case which can be covered by the decision of their Lordships of the Supreme Court in AIR 1956 SC 87 referred to above. In that case the property which was sold was not covered by the decree and as such there was no scope for any sale. Possession was continuing with the aggrieved party, but only when he got dispossessed a cause of action for him arose. Their Lordships of the Supreme Court came to hold in that background that an application under Order 21, Rule 89, 90 or 91, C.P.C. need not be made where the sale was inoperative and void. They, therefore, came to hold that to the facts of that case Article 166 of the First Schedule of the Limitation Act of 1908 had no application and that Article 181 was applicable and the three-year period prescribed under the Article commenced to run from the date of dispossession. 12. The sale in the present case cannot be held to be void; at best it is a voidable one. Respondent No. 1 obtained a decree in this case which he levied execution of, and in the execution case this property was sought to be sold. In the circumstances, there is a material distinction between the facts of the case before their Lordships of the Supreme Court and the present case. Once it is held that the sale is voidable and not void, the position in law would be materially changed. In AIR 1958 SC 725 , Sinha, J., as he then was, speaking for the Court stated : "So far as the Indian Courts are concerned, it is settled law that a sale held without making attachment of the property, or without duly complying with the provisions of the law relating to attachment of property is not void but only voidable. Rule 52 of Order 21 of the Code of Civil Procedure, requires that where the property is in the custody of any court or public officer, attachment shall be made by a notice to such court or officer. But the absence of such a notice would not render the sale void ab initio because the jurisdiction of the Court or the authority ordering the sale, does not depend upon the issue of the notice of attachment. It is also settled law that proceedings taken in respect of a property which is in the possession and management of a Receiver appointed by Court under Order 40, Rule 1 of the Code of Civil Procedure, without the leave of that Court are illegal in the sense that the party proceeding against the property without the leave of the Court concerned, is liable to be committed for contempt of the Court, and that the proceedings so held, do not affect the interest in the hands of the Receiver who holds the property for the benefit of the party who, ultimately, may be adjudged by the Court to be entitled to the same............ In the instant case, we do not think it necessary to go into the question raised by the learned counsel for the respondents that a sale of a property in the hands of the Court through its Receiver, without the leave of the Court, is a nullity. The American Courts appear to have taken the view that such a sale is void. In our opinion, it is enough to point out that the High Court took the view that the sale was voidable and could be declared illegal in a proper proceeding or by suit. We shall assume for the purposes of this case that such a sale is only voidable and not void ab initio." No other authority has been placed before me on the point. The authority of the aforesaid decision is binding on this Court, but on the basis that their Lordships did not examine the point and did not express a final view and no authority has been placed before me to take a different view. On the authority of the aforesaid decision I would also hold that the sale in the present case can only be taken to be voidable and not a void one. On the authority of the aforesaid decision I would also hold that the sale in the present case can only be taken to be voidable and not a void one. On the aforesaid premises an application under Order 21, Rule 89, 90 or 91, C.P.C. was tenable and that having not been filed within the period prescribed under Article 166 of Schedule 1 of the Limitation Act, on the authority of the earlier decision of their Lordships of the Supreme Court in AIR 1956 SC 87 , the present application must be held to be barred by limitation. Once it is held that the application is barred by limitation and is not maintainable on that count it is not necessary to go into the other contentions raised by Mr. D. Mohanty. I would therefore, conclude that the application in the court below was barred by limitation and as such no relief is available in the present appeal to judgment-debtor No. 2 whose application was rejected inter alia on the ground of limitation also. 13. The appeal fails and is dismissed. I would, however, direct no costs to be paid by the appellant.