Ghulam Kadir and Another vs The Municipal Council Negapattinam and Another

Panchapagesa Sastry, J.—This civil miscellaneous second appeal arises out of a petition filed by defendants 7 and 10 in O. S. No. 355 of

1939 on the file of the District Munsif''s Court, Negapatam, to set aside a court sale held on 23rd November 1948 and confirmed on 29th

December 1942. Both the lower Courts have dismissed the petition. Hence this appeal.

The Municipal Council, Negapatam, respondent 1 herein obtained the aforesaid decree for recovery of Rs. 18-1-6 being the arrears of

property tax for T. S. No. 155. The decree also gave a first charge over the properly. The property originally belonged to one Vanjoor Animal.

Defendants 2 to 10 were impleaded as her heirs and as persons in possession and enjoyment. Defendant 11 was impleaded as he claimed some

interest in the property. An ex parts decree was passed in the first instance on 19th April 1940. Defendants 7 to 10 were described as minors

represented by guardian, defendant 2. They were, however, majors at the time of the institution of the suit. During the pendency of the suit it

appears that defendant 7 was declared a major and the cause title amended accordingly. In execution of this ex parte decree, E. P. No. 419 of

1941 was filed on 6-10-1941 for sale of the property after settlement of proclamation. The sale notice Ex. D. 1 (a) sets out in the cause title

defendants 7 to 10 as minors and notice seems to have been served by affixture on the outer door of the house of defendant 2, The property was

finally sold and purchased by defendant 2 for Rs. 505. On a petition by defendant 10, I. A. No. 584 of 1948, dated 15th July 1943 to set aside

the ex parte decree, the decree was so set aside on 6th March 1944. Defendant 7 also filed a petition I. A. No. 245 of 1944, on 23rd March

1944. He alleged that he became aware of the decree and the court sale only on 9th March 1944. It was his case that the decree itself was

obtained fraudulently at the instance of one Jabbar Maracair, a municipal councillor of Negapatam living in a house of his own very near the suit

house; and that it was at his instigation and by his machinations, the Municipal Council was made to file the suit and it was for his benefit and

benami for him that respondent 2 purchased in court auction. It was further alleged that defendant 6 had died even before the suit and that

defendants 7 to 10 who were all majors were purposely described as minors and the suit summons was got served by affixture on the outer door

of the house of defendant 2 as guardian for the minors. The entire decree and the sale thereunder are stated to be designedly fraudulent.

The Court finally passed an order on 2nd April 1945 setting aside the ex parte decree against all the defendants. Along with this petition to set

aside the ex parte decree defendants 7 and 10 filed the present petition to set aside the sale u/s 47, Civil P. C. The sale was claimed to be illegal

and void; its validity was attacked on various grounds: (1) The decree itself was a void decree, as defendants 7 to 10 who were majors were

treated as minors and these was no service of summons even on the guardian; (2) The sale was illegal as even the notice of sale under Order 21

Rule 66 , of the Code was served by affixture treating defendants 7 to 10 as minors though they were majors all the time; and they were not served

either; (3) the purchase by respondent 2 was really benami for Jabbar Maracair who was responsible for the fraud; (4) the sale was for a very low

price, the property being worth not, less than Rs. 2000; (5) the legal representatives of defendant 8 who had died were not brought on record and

one Azeez who was one of the heirs was not impleaded at all.

It was claimed that the petition was in time under Article 181, Limitation Act.

The petition was contested by both the decree-holder and the auction-purchaser. They denied the allegations of fraud against them and

contended that there was neither illegality nor irregularity in the conduct of the sale, that the price fetched was not inadequate and the petition was

barred by time as it was not filed within 90 days from the date of sale. Respondent 9 claimed to be a bona fide purchaser who was not aware of

any defect in the decree, or in execution proceedings. As stated already both the Courts have dismissed the petition.

The first argument of the learned advocate for the appellants was that the sale became void as the ex parte decree was set aside later on. The

decisions relied on by him however relate to cases where the decree-holder was himself the purchaser. In the present case the auction purchaser is

a stranger. The learned advocate finally conceded that this would make a difference and admitted that the sale could not be challenged on this

ground.

It was, however, very strenuously contended by him that the real purchaser was Jabbar Maracair who was responsible for all the illegalities in

obtaining the decree and in the sale proceedings. The lower Courts have held that the auction purchaser was a bona fide purchaser for value. In

second appeal, this finding has got to be accepted, although some admissions made by him in his evidence to which my attention was drawn would

seem to indicate that he was merely a benamidar for another. There is not, however, any definite proof of this and it rests only on suspicion. The

lower Courts have also found as a fact that the value was not shown to be inadequate. This must also be accepted in second appeal.

It is argued however that the absence of notice on defendants 7 and 10 in the circumstances set out above treating them only as minors although

they had long ago attained majority, was an illegality vitiating the sale and amounting to a nullity of the sale. There is no authority which goes to the

extent of holding that the sale is a nullity. That it is an illegality which makes the sale liable to be set aside is clear enough. The difficulty however in

this case is that unless the sale is treated as a nullity the petition which was filed about 16 months after the confirmation of the sale is not in time.

Article 166, Limitation Act, would be applicable and not Article 181. It is pointed out, however, that defendant 7 was kept in complete ignorance

of the decree and the sale and he could not apply before he had knowledge of the proceedings. It is true that defendant 7 came to know of it only

in March 1944, but even then unless he is in a position to take advantage of Section 18, Limitation Act, he cannot get over the bar of limitation.

Section 18, however, is applicable only against the person guilty of the fraud. It is not sufficient, therefore, to attribute and prove fraud against the

decree holder. After the confirmation of sale the petition (position?) will be different. In P. Payidanna v. Lakshminarasamma, 38 Mad. 1076: A. I.

R. 1916 Mad. 83 Sadasiva Ayyar J. observed as follows :

If the fraud was only on the part of the decree holder and not of the court auction purchaser, I think the Legislature intended that a bona fide court

auction purchaser should be protected after 30 days and that an application to set aside the sale should be brought within 30 days of the sale even

though the judgment-debtor was ignorant of the sale and of the decree-holder''s fraud which brought about the sale. The judgment-debtor in such a

case ought to be left to his remedy for damages caused to him by the decree-holder''s fraud.

The Calcutta High Court would appear to have taken a different view. (See Mahipati Haldar Vs. Atul Krishna Moitra and Others , Kedar Hura v.

Asutosh Roy, 44 C. L. J. 565. The ground of decision is that the fraud which vitiates the sale is the fraud of the decree holder and it is not

necessary to show that the auction purchaser was a party to it. What Section 18 requires however is not merely proof of fraud which vitiates the

sale but also proof of fraud which kept the applicant in ignorance of his right to make an application for setting aside the sale. No doubt the

decree-holder''s fraud may have a continuing influence so as to keep the applicant in ignorance of his right to file a petition for setting aside the sale.

Indeed in cases where he is unaware of the decree and of the sale this will ordinarily be so. Nevertheless, where the sale has been confirmed in

favour of a bona fide auction purchaser the ignorance of the applicant of his right to file an application must also be established as due to the fraud

of the auction purchaser. Otherwise, the rights of the auction purchaser which though inchoate before the confirmation have become crystallised by

confirmation would run the risk of being nullified by the petitions filed long after the due time and after considerable delay for which he is in no way

responsible. The policy of the Legislature would appear to be that judicial sales should be challenged only within a comparatively short period. It

was observed by the Judicial Committee in Malikarjan v. Narhari, 25 Bom. 337 : 27 I. A. 216 that

the question of nullity of the sale as distinguished from its illegality is one of great importance to all those who take the property under the apparent

security afforded by judicial sales which in India is conducted not by the creditor but by the Court itself.

They further said :

The Limitation Act protects bona fide purchaser at judicial sales by providing short limit of time within which suits may be brought to set them

aside.

I am of opinion that except in cases where there was no jurisdiction to sell and the sale is a nullity, on that ground, bona fide court auction

purchasers must not be deprived of the benefit of the provisions of the Limitation Act under Article 166 and Article 12 and that it is not consistent

with the policy of the Act to apply Section 18 against them where they are not shown to be parties to the continuing influence of the fraud

committed by the decree holder. I prefer the view of Sadasiva Aiyar J. and I hold accordingly that the present petition is barred by limitation. It is

not that in such cases the judgment debtor has no remedy at all. He would certainly have his remedy for damages on the ground of fraud by a suit

against the appropriate parties for which Article 95 will be the relevant article, fixing the period of limitation.

I could have seen my way to decide in favour of the appellants if I could have treated the present application to set aside the sale along with the

application filed by them to set aside the ex parte decree as in effect a suit instituted by them for a declaration that the decree and sale are void.

Even in such a case, Article 12 would apply and the present petitions even treated as suits would be out of time under Article 12. Moreover, in

such a case, the auction purchaser must have an opportunity to disprove the fraud alleged in the matter of obtaining the decree itself. The

proceedings in the present case however are on different lines and it is only as a petition to set aside the sale that the matter has been argued before

me.

There is no substance in the contention that the legal representatives of defendant 8 were not brought on record. Actually, some of them were

already on record. It is said that one Azeez, another heir of the deceased defendant 8 was not made a party, we are not concerned with his rights

in this petition. The sale is not liable to be set aside on that ground.

In the result this civil miscellaneous second appeal fails and is dismissed with costs --one set. Leave refused.