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1974 DIGILAW 22 (GUJ)

CHIMANLAL NARSIBHAI PATEL v. AMRATLAL CHHOTALAL SHAH

1974-03-21

T.U.MEHTA

body1974
T. U. MEHTA, J. ( 1 ) BOTH these appeals arise out of the suits filed by the appellant Chimanlal Narsibhai Patel against the respondents for the recovery of different amounts of compensation for the use of the suit premises as tenants. The suits were filed in City Civil Court Ahmedabad where they were registered as Civil Suits Nos. 448 and 449 of 1963. The said court has finally decreed both the suits but has rejected the plaintiffs claim for compensation for the period from 14th December 1957 to 30th April 1959 and therefore the plaintiffs claim only for this period remains to be considered in these appeals. Before the lower court there was a dispute between the parties as regards the rate of compensation but that dispute now does not survive as during the course of these appeals Shri Patel the learned advocate of the plaintiff has accepted the lower courts finding as regard the rate of compensation. ( 2 ) FOLLOWING are the brief facts which explain the background of the dispute between the parties. ( 3 ) THE property in question bears Municipal Census No. 84 to 84/4. This property originally belonged to one Kasturbhai Balabhai who had mortgaged it with one Vallabhdas Fulchand. The mortgagee then filed Civil Suit No. 229/52 against the mortgagor to recover the mortgage money by sale of the mortgaged property. That suit was decreed and thereafter the mortgagee executed that decree by filing Darkhast No. 67/54 for the recovery of the decretal amount and interest by the sal of mortgaged property. The appellant of both these appeals who is hereafter referred to as the plaintiff was the highest bidder in the Court auction in those execution proceedings with the result that the sale of the suit property in his favour was knocked down on 14th December 1957 This sale was however made absolute under 0. 21 R. 92 C. P. C. as late as 30th April 1959 and a sale certificate contemplated by 0. 21 R. 94 C. P. C. was issued in his favour a few months thereafter i. e. on 15th September 1959. ( 4 ) IT is found that while the Darkhast proceedings were pending the judgment debtor Kasturbhai inducted the two respondents of these appeals who are hereinafter referred to as the defendants as the tenants of the second and third floors respectively of the disputed property. ( 4 ) IT is found that while the Darkhast proceedings were pending the judgment debtor Kasturbhai inducted the two respondents of these appeals who are hereinafter referred to as the defendants as the tenants of the second and third floors respectively of the disputed property. These defendants thereafter continued to pay rent to this judgment debtor Kasturbhai. ( 5 ) IT is found that on 28th March 1958 the plaintiff served the defendants with a notice that the sale of the suit property was knocked down in his favour and that they were inducted by the judgment debtor in the suit property as tenants malafide with a view to delay the delivery of the possession of the suit property to him. A similar application was also given by the plaintiff to the Court on the same date. Since the defendants did not pay any heed to this notice of the plaintiff the plaintiff filed civil Suit N. 3 890/59 which was renumbered in the Civil Court as Civil Suit No. 484/61. By this suit the plaintiff prayed for restraining defendants from paying rent to the judgment debtor Kasturbhai. The plaintiff also obtained an interim order in that suit directing the defendants to deposit future rent in court. The Court in that suit is found to have passed this interim order and accordingly the rent was deposited in Court by the defendants. It may however be noted that these proceedings were adopted after the sale became absolute on 30th April 1959. ( 6 ) INSPITE of the sale becoming absolute and the plaintiff having obtained a certificate contemplated by Rule 94 of 0. 21 C. P. C. the plaintiff could not obtain the actual possession of the suit premises. He therefore made an application for obtaining the actual delivery of the possession of the slit premises under 0. 21 R. 95 C. P. C. That application was registered as Misc. Application No. 71/59. It is not necessary to narrate the details as regards this application but it would be sufficient to state that in that application this Court eventually ordered in Civil Revision Application No. 932/66 that the plaintiff was entitled to obtain the actual possession of the disputed premises. Application No. 71/59. It is not necessary to narrate the details as regards this application but it would be sufficient to state that in that application this Court eventually ordered in Civil Revision Application No. 932/66 that the plaintiff was entitled to obtain the actual possession of the disputed premises. Ultimately the plaintiff obtained the actual possession of the suit premises from the defendants on 17th October 1962 ( 7 ) IT was thereafter that the plaintiff filed these suits claiming compensation from the defendants for wrongful use and occupation of the suit premises from the date of the sale i. e. from 14th December 1957. ( 8 ) THESE facts make it clear that the only dispute which now survives between the parties is whether the plaintiff as the auction purchaser of the suit property is entitled to claim as compensation from the defendants the amounts of rent paid by them to the judgment-debtor for the period between 14th December 1957 and 30th April 1959 On this question the stand of the plaintiff is that by virtue of the provisisions of sec. 65 C. P. C. the suit property is deemed to have vested in him from the time it was sold i. e. from 14th December 1957 and not from the time the said sale became absolute i. e. 30th April 1959 and hence even if the defendants have paid the rent for the period between 14th December 1957 and 30th April 1959 to the judgment-debtor the said payment is wrongful and does not absolve them from their liability to compensate him for the loss of that rent. As against this the case of the defendants is that the deeming fiction contemplated by sec. 65 of the C. P. C. comes into existence only when the auction sale becomes absolute and therefore any payment made to the judgment-debtor by a tenant before the sale becomes absolute is proper and valid. According to the defendants if the plaintiff has got any right under sec. 65 C. P. C. the same is against the judgment-debtor who received the disputed rent from them. ( 9 ) THIS takes us to the consideration of the legal implications of sec. According to the defendants if the plaintiff has got any right under sec. 65 C. P. C. the same is against the judgment-debtor who received the disputed rent from them. ( 9 ) THIS takes us to the consideration of the legal implications of sec. 65 C. P. C. which is in the following terms:-65 Where immovable property is sold in execution of a decree and such sale has became absolute the property shall be deemed to have vested in the purchaser from the time when the property is sold and not from the time when the sale becomes absolute. These provisions of sec. 65 should be read along with these provisions of O. 21 C. P. C. which relate to Court sale and its confirmation. Rules 89 90 and 91 of the said order provide for applications to set aside sale of an immovable property which is sold in execution of a decree on various grounds. These rules make it clear that the sale which is knocked down in favour of the auction purchaser does not become absolute till an application made under any of these rules is finally disposed of. Rule 92 of this order says when the sale becomes absolute. According to this rule where no application is made under rules 89 90 and 91 or where such application is made and disallowed the Court shall make an order confirming the sale and thereupon the sale shall become absolute. After the sale thus becomes absolute the Court acting under rule 94 is supposed to grant a certificate specifying the property sold and the name of the person who at the time of the sale is declared to be the purchaser. Then follows Rule 95 which is with regard to the delivery of the actual possession of the property sold in court auction when the same is found to be in occupancy of the judgment-debtor or of some person claiming under him. Rule 95 specifically provides that such a delivery can be obtained only after the sale certificate contemplated by rule 94 in respect of the property in question has been granted by the Court. Rule 95 specifically provides that such a delivery can be obtained only after the sale certificate contemplated by rule 94 in respect of the property in question has been granted by the Court. Thus rule 95 makes it clear that the actual possession of the property purchased in Court auction can be obtained by the auction purchaser only after he obtains the sale certificate contemplated by Rule 94 and it need not be said that the sale certificate contemplated by Rule 94 can be obtained only after the sale becomes absolute as contemplated by Rule 92. So far as the facts of this case are concerned they show that the defendants were the tenants claiming under a title of lease created by the judgment-debtor subsequent to the attachment of the property and therefore the plaintiff became entitled to the actual delivery of the property after the certificate in respect of the sale was granted to him under Rule 94 and not before that. ( 10 ) THE total effect of all these Rules when read together with the provisions of sec. 65 C. P. C. is that till the sale became absolute the plaintiffs title to the property was inchoate but the moment the sale became absolute the said inchoate title became perfect and vested in him retrospectively from the date of the sale. In other words from 14th December 1957 when the Court sale was effected to 30th April 1959 when it became absolute the plaintiff had not acquired any indefeasible title but had acquired merely an equitable interest in the suit property. The provisions contained in Rules 89 to 91 of O. 21 C. P. C. show that the sale which took place in his favour on 14th December 1957 was precarious as it was liable to be set aside on any of the grounds mentioned in these Rules. If the sale was set aside under any of these Rules the plaintiff would not have obtained any title to the property. By making all these provisions in Rules 89 to 92 in the scheme of O. 21 C. P. C. the Legislature has recognised the fundamental difference between voluntary sales entered into between the parties themselves and compulsory sales through the process of Court. By making all these provisions in Rules 89 to 92 in the scheme of O. 21 C. P. C. the Legislature has recognised the fundamental difference between voluntary sales entered into between the parties themselves and compulsory sales through the process of Court. While in the former the property vests immediately after the sale is effected as nothing more remains to be done in the latter since the sale is compulsory something yet remains to be done to ascertain that no injustice is done to the party which is compelled to sell the property. It is thus evident that the vesting of property sold in court sale is delayed by the Legislature with a purpose. This position is further emphasised by Rule 95 of O. 21 C. P. C. when read together with Art. 180 of the Limitation Act of 1908 which was in force at the relevant time. (It is corresponding to Art. 134 of the Limitation Act 1963 According to this Article the period of limitation for an application by a purchaser of immovable property by a sale in execution of a decree for delivery of posession begins to run when the sale becomes absolute. Thus Rule 95 of O. 21 C. P. C. when read with Art. 180 shows that the auction purchaser can apply for delivery of possession only after the sale becomes absolute. ( 11 ) IT is thus obvious from the above discussed relevant provisions of C. P. Code and Limitation Act that the title as well as the possession as regards the property sold in execution of a decree are acquired by the auction purchaser only after the sale becomes absoulte as per the provisions of Rule 92 of O. 21 C. P. C. ( 12 ) SHRI Patel who appeared on behalf of the defendants however contended that though it is true that the auction purchaser acquires title only on the sale becoming absolute under Rule 92 of O. 21 C. P. C. once it becomes absolute it relates back to the date of the sale by virtue of the deeming fiction of sec. 65 and if that is so the tenants occupying the property sold in Court auction become the tenants of the auction purchaser with retrospective effect from the date of the sale and thus become liable to the payment of rent to the auction purchaser from that date. 65 and if that is so the tenants occupying the property sold in Court auction become the tenants of the auction purchaser with retrospective effect from the date of the sale and thus become liable to the payment of rent to the auction purchaser from that date. It was pointed out that in this case on 28th March 1958 i. e. after the court sale but before the sale became absolute the plaintiff had informed the defendants by a notice that the property was sold to him in Court auction and hence they were inducted in the suit property by the judgment debtor malafide. Pointing out to these facts Shri Patel contended that since the defendants knew that the plaintiff had acquired an interest in the property by virtue of the Court sale they should not have paid rent to the judgment debtor subsequent to 18th March 1958 i. e. subsequent to the date of the above notice. According to Shri Patel since the sale had not become absolute the right course which the defendants could have adopted was either to deposit the rent in Court or to file an inter-pleader suit. In this connection Shri Patel also pointed out to the provisions contained in sec. 50 of the Transfer of Property Act which protects a tenant who has paid rent or profits of any immovable property in good faith to any person from whom he has held this property in good faith. According to Shri Patel therefore the defendants having acted in collusion with the judgment debtor cannot be said to be possessing any good faith and therefore cannot avail of the protection of sec. 50 of the Transfer of Property Act. ( 13 ) IN my opinion the above contentions of Shri Patel are not acceptable because even though it is true that the deeming fiction contemplated by sec. 50 of the Transfer of Property Act. ( 13 ) IN my opinion the above contentions of Shri Patel are not acceptable because even though it is true that the deeming fiction contemplated by sec. 65 of the C. P. Code acts in retrospection from the date of sale the fact remains that before the sale became absolute no such deeming fiction was available to the plaintiff in this case and if that is so it cannot be said that the judgment-debtor from whom the defendants took the lease of the suit property was not entitled to receive rent from the defendants The ownership over the suit property could never have remained in abeyance and if before the sale became absolute the plaintiff had not acquired a perfect title over the suit property it must follow that the ownership of the suit property continued to vest in the judgment debtor till the sale because absolute. In other words it was the judgment debtor and the judgment-debtor alone who could have received rent from the defendants with regard to the suit property as their landlord. If that be the legal position the defendants were bound to pay rent for the disputed period only to the judgment-debtor. In fact they have paid this rent to the judgment-debtor and if they have paid it in obedience to the legal position it cannot be said that they have paid malafide. This Court has held in Dave Sadashiv Jaykrishna v. Rana Govubha (1962) III G. L. R. 1007 that it is only when the sale is confirmed by the court under the provisions of O. 21 R. 92 C. P. C. that the Judgment debt is extinguished and until confirmation of the sale the judgment-debt remains outstanding and subsisting. With respect I agree with this view. One consequence of the judgment-debt remaining outstanding till the date of the confirmation of the sale is that the judgment-debtor continues to remain as the owner of the property till the sale is confirmed. Of course when the sale is knocked down in favour of the auction purchaser the auction purchaser does get an interest in the property sold in auction. Of course when the sale is knocked down in favour of the auction purchaser the auction purchaser does get an interest in the property sold in auction. But that interest falls far short of a clear and absolute title and if that is so it would not be correct to say that the defendants should not and could not have paid any rent for the disputed period to the judgmentdebtor. ( 14 ) SHRI Patel relied upon two decisions one of Lahore High Court and the other of Rangoon High Court in support of his contention that on sale becoming absolute the property vests in the auction purchaser with retrospective effect and therefore the payment of rents by the defendents to the judgment-debtor is illegal. These two decisions are Qazi Abdul Ghani v. Lala Lal Chand A. I. R. 1940 Lahore 230 and Ma Hava Bi v. Sein Kho A. I. R. 1928 Rangoon 67 (2 ). In my opinion none of these two decisions is helpful to the plaintiff. In the Lahore case one Lal Chand Khosla had taken one property called C on mortgage and subsequently also obtained an arbitration award with regard to this property in his favour. This award was subsequently turned into a Court decree. In the meanwhile one Abdul Ghani was alleged to have purchased this property by an oral sale. This Abdul Ghani also obtained an award decree in his favour. Thereafter Lalchand Khosla purchased the property in Court sale in execution of the decree which he had obtained. Then he instituted a suit for possession of that property against Abdul Ghani the trial court decreed that suit in favour of Lal Chand Khosla but rejected his prayer for mesne profits. He therefore approached Lahore High Court in appeal. Disposing of this appeal the High Court is found to have observed as under:- turning now to the appeal of Lal Chand Khosla as regards mesne profits the trial Court held that as the sale certificate had only beer granted in 1936 and as no notice had been given by Lal Chand Khosla to Abdul Ghani to vacate the property or be liable for mesne profits therefore mesne profits could not be allowed to him. Commentary of Mulla on the Civil Procedure Code under sec. 65 shows clearly that this reasoning is not correct. Commentary of Mulla on the Civil Procedure Code under sec. 65 shows clearly that this reasoning is not correct. The title to the property after the sale is made absolute vests in the auction-purchaser from the date of the sale according to the section and the learned Commentator points out that the old rulings to the effect that the right to possession only accrued from the date of the sale certificate are no longer good Law. The learned counsel for the respondent would only contend that notice had not been given by Lal Chand Khosla to Abdul Ghani and this point should be taken into consideration. I have already pointed out that Lal Chand Khosla had applied for possession and was resisted by Abdul Ghani. Abdul Ghani therefore clearly hail notice of the claim of Lal Chand Khosla to possession and had resisted it. It was not necessary that a separate notice should be given the he did not give up possession he would be liable for mesne profits. These observations show that the question which is involved in the appeal before me was not involved in the case before the Lahore High Court and that the only question which that High Court has considered is whether Abdul Ghani had a notice to vacate the property or not. Moreover there is absolutely nothing in the recorded judgment in the Lahore High Court to show that the masne profits which were in dispute were relating to any period before sale became absolute. Under these circumstances the above quoted observations of the High Court in that case do not help the plaintiff. ( 15 ) IN the Rangoon decision also the question which was considered by the High Court was entirely different. There the contention which was urged before the High Court was whether the plaintiff bought only the lands in question and whether she was entitled to rent in view of Sec. 8 of the Transfer of Property Act. The legal effect of the provisions of sec. 65 of C. P. C. read with O. 21 R. 92 C. P. C. were not considered in that case. Under the circumstances even this Rangoon decision is of no help to the plaintiff. The legal effect of the provisions of sec. 65 of C. P. C. read with O. 21 R. 92 C. P. C. were not considered in that case. Under the circumstances even this Rangoon decision is of no help to the plaintiff. ( 16 ) DURING the course of his argument Shri Patel referred to one decision given by the High Court of Bombay in Girdharlal Harilal Pandya v. Liladhar Amthalal 33 B. L. R 1123 In that case the question view whether the lease which was created by the mortgagor on the suit property was effected by doctrine of lis pendens and whether provisions contained in sec. 52 of the Transfer of Property Act did not a affect the rights of the plaintiff who stood in the shoes of the second mortgage. It is obvious that this decision has no relavance to the facts of the present case. ( 17 ) I find that as early as the year 1933 the Privy Council has endorsed the view that the deeming retrospective clause of sec. 65 C. P. C. does not come into operation till the sale becomes absolute and hence the auction purchaser cannot be said to have obtained an indefeasible title on the sale. This view is taken by the Privy Council in Raghunandan Prasad Singh and anr. v. Commissioner of Income-tax Bihar and Orissa A. I. R 1933 P. C. 101. That was an income-tax case which went up before their Lordships of the Judicial Committee. One of the questions for consideration in that case was whether the assessee who had purchased in an auction sale the property of his mortgagor in auction of his mortgage decree liable to pay income-tax on the amount by which the value of the purchased property exceeded the original loan advanced to the mortgagor together with costs and other incidental expenses. The auction sale in that case was confirmed some years after the sale was knocked down The assessee relied upon the provisions of sec. 65 C. P. C. and contended that be must be deemed in law to have realised his loan and made a profit not in the year when the sale was confirmed but in the year in which the title became vested in him namely the year when the sale was held. 65 C. P. C. and contended that be must be deemed in law to have realised his loan and made a profit not in the year when the sale was confirmed but in the year in which the title became vested in him namely the year when the sale was held. But their Lordships of the Judicial Committee over-ruled this contention as is evident from the following observations taken from the judgment of their Lordships delivered by Lord Macmillan:- nor on the date of the sale does the purchaser obtain an indefeasible right for under 0. 21 Rules 89 90 and 91 the sale may be set aside on various grounds. It is only where no application is made under these rules or where such application is made and disallowed that the court under 0. 21 R. 92 makes an order confirming the sale whereupon the sale shall become absolute. It is then that the process of realisation is completed and any profit or income is realised by the decree-holder This is so whether the property is purchased by the decree-holder himself or by a third party for the right of set-off conferred on the purchasing decree-holder must also be dependent one sale being rendered absolute by confirmation. No doubt sec. 65 of the Code provides that where immovable property is sold in execution of a decree and such sale has become absolute the property shall be deemed to have vested in purchaser from the time when the property is sold and not from the time when the sale becomes absolute but the provision does not come into operation unless and until the sale has become absolute. The actual date of realisation is not affected by this retrospective vesting of the property. It therefore follows that till the sale become absolute the judgmentdebtor continued to be the landlord and as such was entitled to collect rent from the defendants as his tenants. The payment of this rent to the judgment-debtor by the defendants therefore cannot be considered either wrongful or malafide. A similar view is also taken by Madras and Allahabad High Courts in the cases to which I will now make a reference. ( 18 ) IN the Madras case of T. S. Radhakrishna Chettiar v. A. R. Ramaswami Ayyar and others I. L. R. 1954 Madras 1213 Chief Justice Rajamanar and Mr. A similar view is also taken by Madras and Allahabad High Courts in the cases to which I will now make a reference. ( 18 ) IN the Madras case of T. S. Radhakrishna Chettiar v. A. R. Ramaswami Ayyar and others I. L. R. 1954 Madras 1213 Chief Justice Rajamanar and Mr. Justice Rajagopala Ayyangar observed that between the date of the court sale and its confirmation the only person who was entitled to be in possession of the property sold and to enjoy or collect the rents and profits from it was the judgment-debtor and that till confirmation the auction purchaser had only an inchoate right and could not have sustained a suit either for possession or for mesne profits. His right to sue for the profits of the entire period between the sale and its confirmation accured to the plaintiff only on the confirmation of sale. The learned Judges have further observed that in view of this the receipt of rent and profits during that period by the judgment-debtor could not be held wrongful. In another Madras case of Kondava Nayakar v. Chinna Ramaswami Naickar A. I. R. 1938 Madras 317 Beasley C. J. has construed the provisions of sec. 65 C. P. C. and has held that the payment of rent by the lessee to the judgment debtor was quite proper and that he was entitled to do so in spite of the fact that there was the fiction of relation back of the vesting. ( 19 ) A Single Judge of Allahabad High Court and a Full Bench of that High Court have also taken the same view in Ram Krishna Kapoor v. Behari Lal Ram Sahai and anr. A. I. R. 1963 Allahabad 44 and Nidhpal Sharma and ors. v. Union of India and ors. A. I. R. 1966 Allahabad 360. ( 20 ) IN view of this settled position in law the plaintiffs claim of compensation for the disputed period is found to have been rightly rejected by the lower court. Both of these appeals of the plaintiff therefore should fail. . ( 21 ) THE defendants have filed cross-objections in both the appeals. Their first cross-objection relates to rent for the months of June July and August 1959 which the defendants are said to have paid as deposit to the judgment debtor. Both of these appeals of the plaintiff therefore should fail. . ( 21 ) THE defendants have filed cross-objections in both the appeals. Their first cross-objection relates to rent for the months of June July and August 1959 which the defendants are said to have paid as deposit to the judgment debtor. The defendants now claim that since this payment was valid the same should be deducted from the amount decreed in favour of the plaintiff. The defendants are not entitled to raise this question in these appeals because neither in their written statement nor at any stage during the trial they have contended that this deduction should be given to them. There was no issue on this point and therefore the plaintiff has got no opportunity to show how far this claim is acceptable. ( 22 ) THE second cross-objection which is raised by the defendants is that they have paid some municipal tax which was in arrears and therefore the amount of this tax should be deducted from the amount which is decreed. Even this claim of the defendants is not sustainable because there is nothing in evidence to show that the arrears of this tax were subsequent to the date on which the auction sale became absolute. On the contrary the municipal receipts found at ex. 102 and 110 show that the tax in arrears was prior to the years 1960-61. Under the circumstances the lower Court has rightly rejected this plea of the defendants. These cross objections also should therefore fail. ( 23 ) THE result is that both these appeals filed by the plaintiff as well as the cross-objections filed by the defendants fail. They are therefore dismissed without any order as to costs. The decree passed by the trial Court stands confirmed. Appeals dismissed. .