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2025 DIGILAW 2471 (KER)

Dilip Shankar Gang Jain, Represented By Its Power Of Attorney Holder Dhirajkumar Phootermal Jain v. Rehmath A. R.

2025-09-17

P.KRISHNA KUMAR, SATHISH NINAN

body2025
JUDGMENT : Sathish Ninan, J. Application filed under Order XXI Rule 97 of the Code of Civil Procedure (CPC), was dismissed by the execution court. The applicant is in appeal. The parties are being referred to as per their status in the appeal. 2. On 15.03.2016, the appellant had obtained a money decree against the second respondent, for an amount of ? 50,94,664/- with interest and costs, in OS 932/2015 of the City Civil Court, Bombay. 3. On 17.06.2016, the first respondent obtained a money decree against the second respondent, for an amount of ? 3,10,96,011/- with interest, in OS 14/2016 of the Subordinate Judge’s Court, Karunagappilly. 4. The respective decrees were transferred for execution to the Additional Sub Court-II, Thrissur. 5. On 24.09.2020, the application schedule property (hereinafter referred to as “the property”) was sold in execution in favour of the first respondent, in EP 26/2017, in execution of his decree in OS 14/2016. At the instance of a third party, as per order dated 06.01.2021 in EA 678/2020 in EP 26/17, the sale held on 24.09.2020 was set aside. 6. On 15.03.2021, the property was sold in favour of the appellant, in execution of his decree, in EP 167/17 in OS 932/2015. The sale was confirmed by the execution court on 30.07.2021. 7. In between, on 23.03.2021, the first respondent had filed FAO 27/2021 before this Court, challenging the order setting aside his sale. On 30.03.2021 this court stayed all further proceedings in execution in EP 26/2017. 8. On 26.08.2022, the first respondent preferred WP(c) No.27800/2022 before this Court for a direction not to effect mutation in favour of the appellant pursuant to the sale in his favour. Therein, the applicant was the 5 th respondent. 9. On 07.12.2022, FAO 27/2021 was allowed by this Court, thus upholding the sale in favour of the first respondent. Thereafter the execution court, after dismissing a claim petition filed by a third party, on 04.07.2024 confirmed the sale held in favour of the first respondent and ordered delivery. It is at that stage that the present application has been filed by the appellant under Order XXI rule 97 of the CPC. 10. The contention of the applicant is that, on 15.03.2021 when the property was sold in his favour, the prior sale in favour of the first respondent stood set aside. There was no subsisting sale. His sale was confirmed. 10. The contention of the applicant is that, on 15.03.2021 when the property was sold in his favour, the prior sale in favour of the first respondent stood set aside. There was no subsisting sale. His sale was confirmed. Thus, he had obtained valid title over the property. The subsequent confirmation of the prior sale in favour of the first respondent, is of no avail. 11. The first respondent contended that his sale being prior in point of time, has precedence over the subsequent sale in favour of the appellant. 12. The execution court held that in the light of Section 65 CPC, upon confirmation of the sale in favour of the first respondent, title over the property is deemed to have vested with him as on the date of sale, and accordingly dismissed the application. 13. We have heard the learned counsel on either side. 14. The point that arises for determination is: - “Is the sale in favour of the appellant, which was held when the prior sale in favour of the first respondent stood set aside, saved, even though the prior sale was later upheld in appeal?” 15. The learned counsel for the appellant argued that, on 15.03.2021 when the property was sold in favour of the appellant, the prior sale in favour of the first respondent stood set aside. As on 15.03.2021 there was no subsisting challenge against the order setting aside the sale of the first respondent. The sale in favour of the applicant was confirmed on 30.07.2021. By that date, though the first respondent had approached this court in FAO 27/2021 challenging the order setting aside his sale, the interim order passed by this Court only stayed further proceedings in his execution petition. Therefore, the appellant had obtained absolute title over the property by virtue of the sale held on 15.03.2021. The subsequent judgment in FAO 27/2021, upholding the sale in favour of the first respondent, and the subsequent confirmation of sale in favour of the first respondent, are of no consequence. At any rate, it cannot affect the rights obtained by the appellant in the interregnum, when none other than the judgment debtor had any right over the property, it is argued. The learned counsel relied on the judgment in Banke Lal and Ors. v. Jagat Narain and Anr. (1900) ILR 22 All 168) to canvass his plea. 16. At any rate, it cannot affect the rights obtained by the appellant in the interregnum, when none other than the judgment debtor had any right over the property, it is argued. The learned counsel relied on the judgment in Banke Lal and Ors. v. Jagat Narain and Anr. (1900) ILR 22 All 168) to canvass his plea. 16. The learned counsel for the respondent would on the other hand contend that, as per Section 65 CPC, upon confirmation of sale, vesting of title relates back to the date of sale. The sale was upheld in FAO, followed by confirmation. The title relates back to the date of sale. Referring to the judgment of the Allahabad High Court in Banke Lal and Ors. v. Jagat Narain and Anr. (supra), relied upon by the appellant, it is pointed out that the said judgment was under the Civil Procedure Code of 1882, Section 316 of which, unlike Section 65 , provided for vesting of title only on the date of issuance of sale certificate. The order impugned is sound in law and on facts, it is argued. 17. The learned counsel appearing for the appellant would in reply submit that, the effect of Section 65 CPC that, on confirmation of sale, title relates back to the date of sale, is beyond challenge. According to him, his contention is that, at the time of the sale in favour of the appellant, the sale in favour of the first respondent stood set aside. There was no appeal pending against the said order. The Allahabad High Court in Banke Lal's case supra, has held that sale held at such point of time, when there is no subsisting sale, is saved. The subsequent appeal and the judgment therein, resulting in confirmation of the earlier sale, cannot affect the right that had accrued in favour of the appellant in between, it is argued. 18. We are unable to agree with the contention of the learned counsel for the appellant. Banke Lal's case (supra) was a case under the Code of Civil Procedure , 1882. As is evident from its facts, the sale therein was set aside on 05.05.1886 and at that time the Code of 1882 did not provide for an appeal against such order. Certain precedents had held a regular suit to be maintainable. Accordingly, a suit was preferred challenging the order setting aside the sale. As is evident from its facts, the sale therein was set aside on 05.05.1886 and at that time the Code of 1882 did not provide for an appeal against such order. Certain precedents had held a regular suit to be maintainable. Accordingly, a suit was preferred challenging the order setting aside the sale. In between, the property involved was sold in execution of certain other decree against the same judgment debtor. The court held that the rights of the subsequent purchaser, who had purchased at a time when the prior sale stood set aside, would not be defeated. 19. Section 316 of the Civil Procedure Code, 1882 read thus:- “When a sale of immovable property has become absolute in manner aforesaid, the Court shall grant a certificate stating the property sold and the name of the person who at the time of sale is declared to be the purchaser. Such certificate shall bear the date of the confirmation of the sale; and, so far as regards the parties to the suit and persons claiming through or under them, the title to the property sold shall vest in the purchaser from the date of such certificate and not before : provided that the decree under which the sale took place was still subsisting at that date.” Under the section, the vesting of title in the auction purchaser is only from the date of certificate of sale, and not before. However under Section 65 CPC, 1908, on confirmation of sale, vesting of title relates back to the date of sale. The Section reads thus:- “ 65. Purchaser's title .— 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 the purchaser from the time when the property is sold and not from the time when the sale becomes absolute.” The Apex Court in Bishan Paul v. Mothu Ram ( AIR 1965 SC 1994 ) , dealt with the distinction under Section 316 of the CPC, 1882 and Section 65 of the CPC, 1908, and held that an execution sale when confirmed under CPC 1908, by a statutory fiction, the vesting of title over the property sold is antedated to the date of auction. The Apex Court held thus:- “Under Section 65 of the Code of Civil Procedure , title is deemed to commence from the date of auction and not when the sale becomes absolute. Sale becomes absolute under the Code after the period of thirty days, during which sale may be asked to be set aside, has passed. When that time has passed and no application to set aside the sale has been made the sale becomes absolute (Order 21, R. 92) and a certificate then issues (Order 21, R. 94). Under the corresponding section of the Code of 1882 (Section 316) the certificate was required to bear the date of the confirmation of sale and title vested from the date. The amendment of the Code in 1908 now antedates title, by a fiction, to the date of the auction.” Similar view was expressed in Janak Raj v. Guridal Singh & Ors. (AIR 1967 SC 608) and Sagar Mahila Vidyalaya Sagar v. Pandit Sadashiv Rao Harsha [(1991) 3 SCC 588] . Therefore, a prior sale prevails over a subsequent sale even if the confirmation of the prior sale was after the subsequent sale. 20. Hence, on 04.07.2024, when the sale held on 24.09.2020 in favour of the first respondent was confirmed, the title related back to the date of sale. 21. The fact that the sale in favour of the first respondent stood set aside when the sale in favour of the appellant was held on 15.03.2021, is not determinative since, within the period of limitation the first respondent had challenged the order setting aside his sale by filing FAO 27/2021 before this Court. An appeal is the continuation of the original proceeding. When an appeal has been filed within the period of limitation, the lis is deemed to be pending. The doctrine of lis pendens which is expressed in the maxim “ut lite pendente nihil innovetur”, is embodied in Section 52 of the Transfer of property Act (in short “the TP Act”). The Section reads thus, “52. When an appeal has been filed within the period of limitation, the lis is deemed to be pending. The doctrine of lis pendens which is expressed in the maxim “ut lite pendente nihil innovetur”, is embodied in Section 52 of the Transfer of property Act (in short “the TP Act”). The Section reads thus, “52. Transfer of property pending suit relating thereto.— During the pendency in any Court having authority within the limits of India excluding the State of Jammu and Kashmir or established beyond such limits by the Central Government of any suit or proceedings which is not collusive and in which any right to immoveable property is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any other party thereto under any decree or order which may be made therein, except under the authority of the Court and on such terms as it may impose. [Explanation.— For the purposes of this section, the pendency of a suit or proceeding shall be deemed to commence from the date of the presentation of the plaint or the institution of the proceeding in a Court of competent jurisdiction, and to continue until the suit or proceeding has been disposed of by a final decree or order and complete satisfaction or discharge of such decree or order has been obtained, or has become unobtainable by reason of the expiration of any period of limitation prescribed for the execution thereof by any law for the time being in force.]” As per the Section, if any right to immovable property is in issue in any suit or proceeding, then, any dealing with the property by either of the parties to the lis cannot affect the right of the adversary. This is subject to the condition that the lis must not be a collusive one. By virtue of Section 2(d) of the TP Act, Section 52 would not apply to involuntary transfers held in execution of a decree or order. However, the Apex Court has held that, though the Section as such would not apply, the principles of lis pendens would apply to involuntary alienations. In Samarendra Nath Sinha and Ors. By virtue of Section 2(d) of the TP Act, Section 52 would not apply to involuntary transfers held in execution of a decree or order. However, the Apex Court has held that, though the Section as such would not apply, the principles of lis pendens would apply to involuntary alienations. In Samarendra Nath Sinha and Ors. v. Krishna Kumar Nag ( AIR 1967 SC 1440 ), the Apex Court held, “It is true that Section 52 strictly speaking does not apply to involuntary alienations such as court sales but it is well-established that the principles of lis pendens apply to such alienations”. The above was reiterated in Kedar Nath Lal and Ors. v. Ganesh Ram and Ors. ( AIR 1970 SC 1717 ), Jayaram Mudaliar v. Ayyaswami and Ors.( AIR 1973 SC 569 ). 22. In Jagan Singh v. Dhanwanti and Anr (2012) 2 SCC 628 , the Apex Court, referring to Section 52 of TP Act held that a suit or proceeding would be deemed to continue till the expiration of the period of limitation prescribed for filing appeal. It was held that, an alienation made even after the dismissal of a suit, would be hit by lis pendens even if the appeal is filed subsequent to the sale but, was filed within the period of limitation. The Apex Court held, “The doctrine of lis pendens is founded in public policy and equity, and if it has to be read meaningfully such a sale as in the present case until the period of limitation for second appeal is over will have to be held as covered under Section 52 of the TP Act.” A similar view was expressed by this Court in Litty v. Shri Vasu & Ors. (2013) 1 KLT 669 . This Court clarified that the doctrine would apply only within the period of limitation, during which, the lis would be deemed to be pending. 23. Even otherwise, it is a well settled proposition of law that an appeal is the continuation of the original proceeding. (D. Purushotama Reddy v. K. Sateesh [ (2008) 8 SCC 505 ], Darshan Singh Vs. Ram Pal Singh [ AIR 1991 SC 1654 ], Lachhman Dass v. Santokh Singh [ (1995) 4 SCC 201 ], Malluru Mallappa v. Kuruvathappa [ (2020) 4 SCC 313 ]) . (D. Purushotama Reddy v. K. Sateesh [ (2008) 8 SCC 505 ], Darshan Singh Vs. Ram Pal Singh [ AIR 1991 SC 1654 ], Lachhman Dass v. Santokh Singh [ (1995) 4 SCC 201 ], Malluru Mallappa v. Kuruvathappa [ (2020) 4 SCC 313 ]) . In Garikapati Veeraya v. N. Subbiah Choudhry & Others ( AIR 1957 SC 540 ) , the Apex Court held, “From the decisions cited above the following principles clearly emerge: (i) That the legal pursuit of a remedy, suit, appeal and second appeal are really but steps in a series of proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding. (ii) The right of appeal is not a mere matter of procedure but is a substantive right. (iii) The institution of the suit carries with it the implication that all rights of appeal then in force are preserved to the parties there to till the rest of the carrier of the suit. (iv) The right of appeal is a vested right and such a right to enter the superior Court accrues to the litigant and exists as on and from the date the lis commences and although it may be actually exercised when the adverse judgment is pronounced such right is to be governed by the law prevailing at the date of the institution of the suit of proceeding and not by the law that prevails at the date of its decision or at the date of the filing of the appeal. (v) This vested right of appeal can be taken away only by a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise.” The correctness of the order passed by the original forum is under challenge before the appellate forum and is being considered. When the appellate court reverses the judgment/order of the original authority, it renders a finding that the original order is not correct. It is essentially correcting an error committed by the original forum. In "BSES Rajdhani Power Ltd. v. Delhi Electricity Regulatory Commission (2023 (4 ) SCC 788), the Apex Court held, “The expression “appeal” has not been defined in the CPC. Black’s Law Dictionary (10 th Edn.) defines an “appeal” as a “proceeding undertaken to have a decision reconsidered by bringing it to a higher authority”. In "BSES Rajdhani Power Ltd. v. Delhi Electricity Regulatory Commission (2023 (4 ) SCC 788), the Apex Court held, “The expression “appeal” has not been defined in the CPC. Black’s Law Dictionary (10 th Edn.) defines an “appeal” as a “proceeding undertaken to have a decision reconsidered by bringing it to a higher authority”. An appeal is the judicial examination of a decision of a subordinate court by a higher court to rectify any “possible error(s) in the order under appeal. The law provides the remedy of an appeal in recognition of the fact that those manning the judicial tiers too may commit errors”. As a general rule, the impugned judgment/order merges with the appellate judgment and stands in the place of the original judgment for all legal purposes. [Gojer Bros. (Pvt.) Ltd. v. Ratan Lal Singh ( AIR 1974 SC 1380 ), Kewal Ram v. Ram Lubhai AIR 1987 SC 1304 ] . To approach the higher forum, statute has prescribed a period of limitation. When a litigant invokes such remedy within the stipulated period and the appellate court finds the judgment/order impugned therein as erroneous, the litigant is not to suffer for the mistake committed by the original forum. 24. Therefore in the present case, even after the original order dated 06.01.2021 setting aside the sale of the first respondent, the proceeding is deemed to have been pending till the disposal of the appeal therefrom. The transfer effected in between, on 15.03.2021, though by way of court sale, the principles of lis pendens applies and at any rate was during the pendency of the lis. By virtue of Section 65 CPC, on the confirmation of the first sale held in favour of the first respondent, vesting of title relates back to the date of sale viz. 24.09.2020. Therefore, the sale which was held earlier in point of time in favour of the first respondent prevails over the subsequent sale held in favour of the appellant. 25. As was noted earlier, while considering Banke Lal's case (supra), the Code did not provide for appeal against the order setting aside sale. 24.09.2020. Therefore, the sale which was held earlier in point of time in favour of the first respondent prevails over the subsequent sale held in favour of the appellant. 25. As was noted earlier, while considering Banke Lal's case (supra), the Code did not provide for appeal against the order setting aside sale. The court took note of few earlier judgments holding that, though under the CPC, 1882, the vesting of title is only on confirmation of sale, at the time of the sale an inchoate or equitable title vests with the auction purchaser, and on confirmation of sale, the title relates back to the date of sale. However it was observed that, there was no provision for appeal against an order setting aside a sale and the mere possibility of a suit challenging such order cannot affect the title of the auction purchaser in a sale held prior to the institution of such suit. The learned judge further observed that there is doubt regarding the conflicting rights, if there was an appeal provision and the order setting aside the sale was reversed in appeal. It was even observed that, if the view that the sale in the interregnum is saved, is adopted, the right of appeal would become nugatory. The question was left open. The relevant discussions in the judgment read thus, “Can it be said that the inchoate title still existed, although the sale giving rise to it had been set aside, merely because there was a possibility of a suit being brought by the auction purchasers for reversal of the order setting aside the sale and for confirmation of the sale itself?” ….. “I have not arrived at this conclusion without some doubt, because unquestionably there are difficulties in any view of the conflicting rights of these two auction purchasers. It is possible, for instance, that questions of some difficulty might arise if the competition were between an auction purchaser buying after the previous sale had been set aside, and the prior auction purchaser, who, after the second sale, obtained on appeal a reversal of the order setting his sale aside. It is possible, for instance, that questions of some difficulty might arise if the competition were between an auction purchaser buying after the previous sale had been set aside, and the prior auction purchaser, who, after the second sale, obtained on appeal a reversal of the order setting his sale aside. As to which of the two auction purchasers would in that case be entitled to priority, I need express no opinion, though I acknowledge that in favour of the prior auction purchaser it might plausibly be contended that to deny him priority would have the effect of rendering nugatory the right of appeal now given to him by Section 588(16) of the Code………..”. “But the greatest difficulty to my mind is in holding that there remains an inchoate title when the sale has been set aside and when all that remains to the plaintiff is the possibility of bringing a suit to have the reversal of the sale itself set aside……” 26. The judgment in Banke Lal's case (supra) was by a Division Bench and the brother judge expressed his own reservations as regards the observations that a sale prior to the institution of the suit would be saved. The Division Bench proceeded to dispose of the case on another point. As is evident, even the learned judge who had opined that a sale held when the prior sale stood set aside would be saved, had expressed his own concern that if there was an appeal and a reversal, the application of the said principle would have some difficulty. As discussed above, an appeal is the continuation of the proceeding and is not an independent proceeding. The effect of an appeal and deemed continuance of the lis etc. have already been discussed by us above. Suffice to notice that, the judgment in Banke Lal's case (supra) does not come to the aid of the appellant. 27. For the foregoing reasons we endorse the order of the execution court in having dismissed the application. There is no merit in the appeal. The appeal fails and is dismissed.