A.M.A. Murugappa Chettiar and Others vs Arunachala Goundan and Others

Satyanarayana Rao, J.—Defendants 2 to 5 are the appellants in this second appeal. The first respondent instituted the suit to recover various

sums of money from the different defendants. In execution of the decree in O.S. No. 1614 of 1933 of the District Munsiff''s Court, Coimbatore,

the plaintiff purchased a four-fifth share in two lots of property. That decree was obtained by defendants 1 to 5 against one Sinnia Goundan and his

four sons. Sinnia Goundan was adjudicated an insolvent in I.P. No. 180 of 1933, Sub-Court, Coimbatore, prior to the institution of the suit; and

the suit was instituted against him with the leave of the insolvency Court, and his four sons were also impleaded as parties to the suit. A decree for

money was passed in that suit on the 21st March, 1934. Two lots of property were brought to sale on the 19th March, 1935, and the two lots

were purchased in the auction sale held on that date by the plaintiff, lot I for a sum of Rs. 1,030 and lot II for Rs. 376, i.e., in these lots only the

sons'' interests, namely four-fifth was sold and purchased. The sale was duly confirmed on 1st September, 1936, and the plaintiff obtained delivery

of possession. The sale price deposited by the plaintiff in Court was distributed between the various decree-holders who claimed rateable

distribution. Defendants I to 5 received Rs. 308, the sixth defendant Rs. 412 and the seventh defendant Rs. 310. On an application filed by the

Official Receiver in the insolvency Court to set aside the sale or, in the alternative, to pay the sale proceeds into his hands on the ground that the

property was the exclusive property of Sinnia Goundan, the first Court upheld the sale; but this decision was reversed on appeal by the District

Court on the 19th September, 1938. It was held by that Court that the sale was a nullity and the sale was, therefore, set aside. After this order of

the District Judge, the plaintiff was dispossessed from the property on the 1st February, 1942. The order of the District Judge setting aside the sale

was confirmed only to lot I and the sale in respect of lot II was not disturbed. After the plaintiff was dispossessed from lot I, he applied in I. A.

No. 32 of 1942 for refund of the purchase money which he paid in respect of lot I. That application was unsuccessful in the first Court and also in

the appellate Court and it was pointed out by the appellate Judge that the only remedy of the plaintiff was to institute a suit to recover the money

and that he was not entitled to recover the amount in the application. After these proceedings, the plaintiff instituted the present suit on the 20th

November, 1943, against defendants 1 to 7 for the recovery of the amounts drawn by them by applications u/s 73 of the Civil Procedure Code,

amounts which represented the sale proceeds of lot I.

Two objections were raised by defendants to the suit, one, that the suit was not maintainable and second, that the suit was barred by limitation.

These contentions were overruled by both the Courts and the plaintiff''s suit was decreed.. Hence this second appeal.

The same contentions have again been raised in the second appeal. In cases where a Court auction sale is found to be a nullity and no title

passed under such sale to the auction purchaser, it was finally established by the Full Bench of this Court in V. Macha Koundan Vs. V.K. Kottora

Koundan, that if the sale was held to be a nullity after it was confirmed, the auction purchaser will be entitled to sue to recover the purchase price

paid by him. In view of this decision of the Full Bench, the contention that the suit is not maintainable is not tenable.

It was however contended on behalf of the appellants that as the sale with reference to lot II was not disturbed it must be held that on the

principle of the decision in Narasinji Vannechand Firm, Guntur v. Narasayya (1945) 1 M.L.J. 313 : ILR 1945 Mad. 789, that the plaintiff auction

purchaser was not entitled to sue. The principle of that decision is that if under the sale no interest passed, though not the entire interest that was

brought to sale, the auction purchaser would not be entitled to claim a refund for the reason that the sale cannot be good in part and bad as regards

the rest. In that case, it would be noticed that the sale was of 4 acres 2 cents of agricultural lands and out of this extent the sale in respect of the

entire extent except I acre 2 cents was set aside on the ground that the judgment-debtors had no saleable interest. The entire sale was not set aside

in that case and therefore it was pointed out that there was no total failure of consideration but only failure of consideration in part. It was pointed

out that the Full Bench did not lay down that if there was failure of consideration only in respect of part of the property sold, a suit would still lie to

recover a proportionate part of the consideration. In the present case the property was sold in two lots. It is the sale of lot I that was held to be

ineffective to convey any title to the auction purchaser. It is not, therefore, a case where the sale of an item failed in part but was good as regards

the rest. The principle, therefore, of the decision in Narasinji Vannechand Firm, Guntur v. Narasayya (1945) 1 M.L.J. 313 : ILR 1945 Mad. 789

does not apply to the present case. The first objection regarding the maintainability of the suit, must, therefore, be overruled.

The second question argued was that the suit was barred by limitation; and that the proper article of the Limitation Act applicable to a case of

this description is Article 62 and that time began to run from the date of receipt of the money which was more than three years prior to the date of

suit. Reliance was placed in support of this position upon the decision of Cornish, J., in Sivaramaraju v. Secretary of State for India in Council

(1934) 68 M.L.J. 630. In this case it must be remembered that until 1st February, 1942, the plaintiff continued to be in possession of the property

notwithstanding the declaration by the appellate Court that the sale was a nullity. He was not therefore in a position to sue for refund of the

purchase money. The position of the plaintiff is analogous to the position of the plaintiff in the case reported in Sri Raja Velugoti Sarvagna Kumara

Krishna Yachandra Bahadur Garu, Rajah of Venkatagiri and Others Vs. Sri Rajah Sobhanadri Appa Rao Bahadur, Zamindar Garu and Another, .

In that case also the sale though a voluntary one, was void but the purchaser continued in possession of the property and it was held that his suit

claiming refund of the price paid by him was within time as the cause of action to institute the suit accrued and arose only when he was

dispossessed and not when the sale was found to be void. I do not see any reason for not following and applying the principle of this Bench

decision to the facts of the present case. The only ground of distinction that was pointed out was that in that case the sale was a private sale

whereas in the present case the sale is a Court auction sale. I see no difference in principle so far as the question of limitation is concerned between

the two cases. King, J., in Jayanthi Rudrayya Vs. Jayanthi Subbarayappa and Others, applied to the facts before him Article 96 as in that case it

was found that all the parties were under a mistake as regards the right.to the property. A similar view was taken by Horwill, J., in Mylavaram

Nagayya Vs. The Penukonda Co-operative Town Bank Ltd., . I may however point out that the learned Judge in considering the question whether

Article 97 applied or not made certain observations in the course of the judgment which seem to be somewhat inconsistent with the view of

thesame learned Judge in the Bench decision in Sri Raja Velugoti Sarvagna Kumara Krishna Yachandra Bahadur Garu, Rajah of Venkatagiri and

Others Vs. Sri Rajah Sobhanadri Appa Rao Bahadur, Zamindar Garu and Another, which was perhaps not brought to the notice of the learned

Judge. In a very early case in Appavoo Odayan v. District Board of Tanjore (1907) 17 M.L.J. 298 this Court applied Article 97 to a suit by a

purchaser in respect of a Rent Sale under the Madras Rent Recovery Act to recover purchase money after the sale was set aside. Failure of

consideration for the sale accrued only when the property was taken possession of by the original owner and not earlier. I therefore think that the

view of the Courts below that the suit was not barred by limitation is correct.

The second appeal fails and is dismissed with costs. No leave.