Abdul Rahman and Another vs Haji Abdul Rashid and Another

Tarun Agarwala, J.—Heard Sri Pradeep Kumar Rai, the learned counsel for the appellants and Sri V.M. Zaidi, the learned Senior Counsel assisted by Sri S.M.G. Asgar, the learned counsel for the respondents. The facts leading to the filing of the present second appeal is, that Suit No. 386 of 1966 was filed by Haji Abdul Rashid for recovery of Rs. 700/- against Tulsi. This suit was decreed by a judgment dated 25.10.1966. The decree was put in execution, being Execution Case No. 81 of 1967 and, in this execution proceeding Plot No. 3 of the judgment-debtor was attached and put to auction. In the auction, the decree-holder participated. The attachment was made on 9th November, 1967 and was auctioned on 9th July, 1968. The decree-holder took possession of the plot on 12th December, 1968, on which date, the present plaintiff came to know about the decree against Tulsi and the subsequent attachment and auction of the plot. The plaintiff, being aggrieved, filed a suit for mandatory and prohibitory injunction for setting aside the auction sale, for possession and for mesne profits.

The plaintiffs'' case was that he was a bona fide purchaser having no knowledge about the earlier suit and that he had purchased the property vide a registered sale-deed dated 30.10.1967 whereas the attachment by the Court, on the property in question, was done on 9.11.1967. The plaintiff contended that he had no knowledge of the suit or of the attachment proceedings since, there was no order of attachment passed by a Court of law prior to the date of purchase of the land by the plaintiff, and consequently, being a bona fide purchaser, the auction sale was liable to be set aside and possession was liable to be restored to the plaintiff.

The suit was contested by the decree-holder contending that the sale-deed was fraudulently executed with intent to defeat or delay the creditors of Tulsi and that the plaintiff had executed the sale-deed in collusion with Tulsi and that the sale-deed was hit by the provision of Section 53(1) of the Transfer of Property Act. The trial Court on the basis of the pleadings framed various issues namely:--

Whether the plaintiff is the bhoomidhar of the land in suit?

Whether the sale dated 9.7.1968 of the land in suit is liable to be cancelled?

Whether the suit is not triable by this Court?

As the suit barred by Order 2, Rule 2, C.P.C.?

As the suit barred by Rules 63, 89, and 90 of Order 21, C.P.C.?

Whether the plaintiff is entitled to get Rs. 500/- p.m. as mesne profits?

Whether defendant No. 1 is liable to remove the trees planted by him?

Whether the plaintiff is entitled to get possession over the land in suit?

As the suit under valued?

Whether the Court for paid is deficient?

To what relief, if any, is the plaintiff entitled?

The trial Court found that there was no prior agreement to sale in respect of the land and that the so called agreement relied by the plaintiff was a forged document. The trial Court further found that the plaintiff had full knowledge about the execution application filed by the defendant decree-holder in respect of the very land and in spite of having knowledge he went ahead in collusion with Tulsi to get the sale-deed executed. The trial Court consequently found that the transfer was hit by Section 53 of Transfer of Property Act was a void document. The trial Court found that the transfer of the property by Tulsi in favour of the plaintiff was made with the intent to defeat or delay the creditors of the transferor which was voidable and such sale-deed would have no effect in law. The trial Court concluded that the plaintiff had no subsisting right by virtue of a sale-deed 30.10.1967 as the sale-deed was executed by fraudulent means. The trial Court, accordingly, dismissed the suit with costs.

The plaintiff being aggrieved by the judgment filed an appeal which met with the same fate and the judgment of the trial Court was affirmed. The lower appellate Court found that the plaintiff was neither a bona fide purchaser nor paid the full value as mentioned in the sale-deed and that the factors placed before the Court through evidence goes to show that the sale-deed was executed with intent to defeat or delay the creditors of the erstwhile Tulsi. The appeal was accordingly dismissed with costs.

The plaintiff being aggrieved by the concurrent findings of the Court below has filed the present second appeal u/s 100 of the CPC which was admitted on the following two substantial questions of law:--

(i) Whether the sale-deed dated 30.10.1967 was a benami transaction?

(ii) Whether in absence of a finding that the sale-deed was not executed the suit of the appellants could be dismissed?

The learned counsel for the appellants submitted that he does not wish to argue on the substantial questions of law so framed and requested the Court to remould the substantial questions of law in the following manner, namely:--

Whether the defendant decree-holder was entitled to participate in the auction, to bid and get the sale-deed confirmed in violation of Order XXI, Rule 72 of the CPC ?

Whether the suit of the plaintiff could be dismissed when the plaintiff''s was a bona fide purchaser without notice especially when the sale-deed was executed prior to the attachment of the land in question on 9th November, 1967?

Insofar as the first question raised by the learned counsel for the appellants is concerned, the learned counsel for the appellants placed reliance upon a decision of the Supreme Court in Lal Chandra v. 8th Additional District Judge and others, 1997 ALJ 926 in which it has been held that the provisions of Order XXI, Rule 72 is mandatory and that without express permission of the Court, the decree-holder could not bid in the auction. On the strength of this judgment, the learned counsel for the appellants contended that since no express permission was taken by the decree-holder he could not participate in the auction and bid for the land and consequently, the auction in favour of the decree-holder could not have been made being violative of the provision of Order XXI, Rule 72 of the Code and, consequently, on this short ground, the auction in favour of the decree-holder was liable to be set aside.

The argument of the learned counsel for the appellants seems to be attractive in the first blush and with profound respect to the Hon''ble Supreme Court the decision rendered in Lal Chandra (supra), cannot be accepted for the reason that the provision of Order XXI, Rule 72 has been amended insofar as the State of Uttar Pradesh is concerned. For facility the provision of Order XXI, Rule 72 is extracted hereunder:--

Decree-holder not to bid for or buy property without permission--(1) No holder of a decree in execution of which property is sold shall, without the express permission of the Court, bid for or purchase the property.

(2) Where decree-holder purchases, amount of decree may be taken as payment.--Where a decree-holder purchases with such permission, the purchase money and the amount due on the decree may, subject to the provisions of Section 73, be set off against one another, and the Court executing the decree shall enter up satisfaction of the decree in whole or in part accordingly.

(3) Where a decree-holder purchases, by himself or through another person, without such permission, the Court may, if it thinks fit, on the application of the judgment-debtor or any other person whose interests are affected by the sale, by order set aside the sale, and the costs of such application and order, and any deficiency of process which may happen on the re-sale and all expenses attending it, shall be paid by the decree-holder.

Vide Notification No. 4084/35(a)-3(7), dated 24th July, 1926 sub-rules (1) and (3) were omitted and sub-rule (2) was renumbered as sub-rule (1) insofar as the State of Uttar Pradesh is concerned. The said amendment of 1926 is extracted hereunder:--

Allahabad.--In Order XXI, in Rule 72--

(a) omit sub-rules (1) and (3);

(b) re-number sub-rule (2) as sub-rule (1);

(c) in sub-rule (1) as so renumbered, for the words "with such permission", substitute the words "the property sold".

[Vide Notification No. 4084/35(a)-3(7), dated 24th July, 1926.]

In the light of the aforesaid amendment, it is apparently clear that there is no embargo upon a decree-holder to participate in the auction. The Hon''ble Supreme Court has failed to consider the amendment in relation to the Allahabad High Court while deciding the aforesaid case and consequently, the said decision is not similar to the present facts and circumstances of the case. The issue so raised by the learned counsel for the appellants cannot be accepted and is rejected.

Insofar as the second issue is concerned, admittedly, the sale-deed was executed on 30.10.1967. The attachment of the land was made subsequently on 9.11.1967. But, it does not mean that the plaintiff is a bona fide purchaser or that he had no knowledge of the decree passed against the original owner Tulsi or that he had no knowledge of the execution proceedings. On the other hand, the evidence that has been brought on record on the basis of which, two Courts have given concurrent findings is that the plaintiff was not a bona fide purchaser and had knowledge of the execution proceedings, in spite of which, in order to defeat the decree in collusion with the original seller Tulsi, got the sale-deed executed. There is also a finding by the lower appellate Court that the plaintiff was not a bona fide purchaser and had not paid the full value mentioned in the sale-deed.

In the light of the aforesaid concurrent findings of fact which cannot be disturbed in a second appeal and in absence of any specific plea that these findings are perverse or against the material evidence on record, the Court is not willing to accept the submission of the learned counsel for the appellants.

The learned counsel for the plaintiff-appellant also contended that since the sale-deed was executed prior to the attachment of the land, the plaintiff was a bona fide purchaser. The said contention cannot be accepted. A clear finding has been given by the Courts below that the sale-deed executed by Tulsi in favour of the plaintiff was a fraudulent transfer in order to defeat the decree and was hit by sub-clause (1) of Section 53 of the Transfer of Property Act. The said finding is neither perverse nor is against the material evidence on record. This Court has no hesitation in affirming the said findings.

In the light of the aforesaid, the Court below rightly held that the sale-deed executed by Tulsi in favour of the plaintiff was in violation of Section 53 of the Transfer of Property Act and consequently, would have no effect in law. In the light of the aforesaid, the Court does not find any merit in the present second appeal and is dismissed. In the circumstances of the case, there shall be no order as to costs.