Harnandrai Badridas vs Debidutt Bhagwati Prasad

Lahiri, C.J.—This appeal arises out of an order of Mr. Justice Ray dismissing the Appellant''s application for setting aside the sale of premises Nos. 99 and 128/129. Cotton Street, Calcutta, held by a Receiver appointed in suit No. 748 of 1956. On June 7, 1956 the Respondent obtained a summary judgment against the Appellant and for the realisation of its dues under the summary judgment the Respondent levied attachment of premises Nos. 99 and 128/129, Cotton Street. On July 30, 1957 the Respondent applied for adjudication of Durga Prosad Goenka, one of the partners of the Appellant firm. In January 1958, Mr. Justice G.K. Mitter appointed Mr. Tibrewal a Receiver to sell premises No. 09 and 128/129, Cotton Street. On April 3, 1958 Mr. Justice Bachawat passed an order by consent appointing Mr. Tibrewal a Receiver of the identical premises in execution of the decree in suit No. 748 of 1956. In the minutes of this order no authority was given to the Receiver to sell the premises. On April 26, 1958 the Receiver sold premises No. 99, Cotton Street, for a sum of Rs. 32,000 and premises No. 128, Cotton Street, for a sum of Rs. 52,000. It will appear that the two premises were sold by the Receiver Mr. Tibrewal in the insolvency jurisdiction as well as in execution of the decree obtained by the Respondent in money suit No. 748 of 1956. On or about May 5, 1958 the Appellant made an application to set aside the sale held in the insolvency jurisdiction. This application was allowed by Mr. Justice Ray on August 5, 1959. By this order Mr. Justice Ray set aside the appointment of Mr. Tibrewal as the Receiver in insolvency jurisdiction and also set aside the sale held by him in that jurisdiction of premises No. 99 and 128/129 Cotton Street; but, that order was made "without prejudice to the sale held in execution proceedings in suit No. 748 of 1956 of this Court" and the Receiver was directed to hold the sale proceeds of the said premises subject to any direction that might be given by the executing court. I have already said that the minutes of the order passed by Mr. Justice Bachawat on April 3, 1958 did not invest the Receiver Mr. Tibrewal with authority to sell the premises although in the petition for appointment of Mr. Tibrewal as Receiver there was a prayer to that effect and although the attorney for the Appellant put his signature to that petition in token of his consent to that prayer. The mistake was. however, not detected till the 7th May, 1959 when on the Respondent''s petition to speak to the minutes Mr. Justice Bachawat corrected the minutes of the order, dated April 3, 1958, in the following terms:

I am satisfied that in the minutes of the order dictated by me on April 3, 1958, there are clerical mistakes arising therein from accidental slips and omissions. I direct that the minutes of the order, dated April 3, 1958 be corrected as follows:

The word "of" between the word "Receiver" and the word "Premises" in the second line of the order dictated by me on April 3, 1958 be deleted and in place thereof the words "for selling" be substituted.... Let the order, dated April 3, 1958, be drawn up accordingly and wide expedition.

The order, dated April 3, 1958, as drawn up, which has been printed in the paper book shows that MT. Tibrewal was appointed Receiver of the two premises for the purpose of selling the same. On August 14, 1959 the Appellant filed the present application for declaring the sale as void and also for setting aside the sale.

Before Mr. Justice Ray the Appellant challenged the validity of the sale on the ground that on the date of the sale, that is to say, on April 26, 1958 the Receiver was not armed with authority to hold the sale and consequently claimed that the sale, was void. This point of the Appellant was repelled by Mr. Justice Ray on the ground that although the minutes of the order, dated April 3, 1958, were corrected by his Lordship Mr. Justice (Bachawat on May 7, 1959. the corrected minutes took effect from the date of the original minutes. The prayer for setting aside the sale was rejected by Mr. Justice Ray on the ground that it was barred by limitation. Against that order this appeal has been brought by the judgment-debtor.

Mr. Meyer appearing in support of the appeal has raised five points before us:

(1) The sale in insolvency jurisdiction having been declared to be a nullity the sale by the Receiver in the execution proceeding must also be declared to be void.

(2) The powers exercised by the Receiver in the insolvency jurisdiction are inextricably interwoven with the powers exercised by him in the execution proceeding and the former having been declared to be void the latter cannot be treated as valid.

(3) The sale by the Receiver in the execution proceeding is void because on the date of the sale the Receiver had no authority to sell the premises.

(4) Assuming that the Receiver was authorised by the Court to sell the premises on April 218, 1958, he could not exercise that power until the order of Mr. Justice Bachawat, dated April 3, 1958, was drawn up or in any event until a signed copy of the minutes of the order was handed over to the Receiver.

(5) In any view of the matter Mr. Justice Ray was wrong in holding that the application for setting aside the sale was barred by limitation under Article 166 of the Indian Limitation Act, because the Appellant did not acquire the right to set aside the sale until. His Lordship Mr. Justice Bachawat corrected the minutes by his order dated May 7, 1959.

The first point is entirely without substance. The declaration of nullity of the sale held in insolvency jurisdiction does not and cannot entail the consequence that the sale in the execution proceeding, must also be declared to be a nullity. I have already said that the sale in insolvency jurisdiction was only of the share of Durga Prosad Goenka, who is one of the, partners of the Appellant firm, whereas the sale in the execution proceeding is of the right, title and interest of the firm itself. Consequently, the declaration of nullity of the sale held in insolvency jurisdiction cannot affect the validity of the sale held in execution proceeding. [Moreover, in setting aside the sale in insolvency jurisdiction Mr. Justice Ray expressly stated that that order was made without prejudice to the sale in the execution proceeding and the Receiver was directed to hold the sale proceeds subject to any order that might be passed by the executing court. The first point raised by the Appellant must accordingly be overruled.

The second point has also no merits. This point is not a pure question of law and involves a detailed consideration of the terms and conditions of sale and also of the advertisements relating to the sale. It was not raised by the Appellant in the trial court and as the question is a mixed question of law and fact, I am not prepared to allow the Appellant to raise it for the first time in appeal. On the merits also this point is untenable.

Mr. Meyer placed before us the minutes of the meetings held by the Receiver from February 1, 1958 up to April 26, 1958 for the purpose of inducing us to bold that all the meetings except the meeting held on April 26, 1958 were held in the insolvency jurisdiction. This contention, however is not quite correct. In the minutes of the meetings held on April 3, 1958 it is stated that Mr. Tibrewal had also been appointed Receiver in execution proceedings in suit No. 748 of 1956 to sell the premises. It is to be remembered that Mr. Tibrewal was appointed Receiver in the execution proceeding by His Lordship Mr. Justice Bachawat on April 3, 1958. Mr. Deb appearing for the Respondents has contended that in addition to the minutes of the Receiver''s meeting we must also consider the terms and conditions of the sale as settled by the attorneys of the parties before the Receiver and those terms and conditions are not on the record, because this point was not raised by the Appellant in the trial court. I have, therefore, no hesitation in rejecting the second point raised in support of the appeal.

The third point raised in support of the appeal must also be overruled for the reasons given by Mr. Justice Ray. The order passed by Mr. Justice Bachawat on May 7, 1959 is not an order amending any previous order made by his Lordship. The effect of the order of May 7, 1959 is that it must be deemed to have been in existence from April 3, 1958 and the order, dated April 3, 1958, as drawn up supports this conclusion. Under Chapter XVI, Rule 32 of the Rules of the Original Side of this Court, when a Judge sitting on the Original Side corrects the minutes of a previous order passed by him, the effect is that the corrected minutes relate back to the date of the original order. I cannot accordingly hold that on April 26, 1958 when the Receiver held the sale he had no authority to hold the sale.

In support of the fourth point Mr. Meyer has relied upon an old English case, namely, Tolson v. Jervis (1845) 8 Beav 364 : 50 E.R. 143. The facts of that case are obscure and it is not known under what rule of procedure that decision was based. So far as this Court is concerned the point is concluded against the Appellant by the decision of a Division Bench (Rankin, C.J. and Costello, J.) in the case of Hiralal v. Mangtulal (1932) 36 C.W.N. 861 which lays down the proposition that the drawing up of an order is not equivalent to the bringing into existence of the order except where the order has no utility except in so far as it may be enforced.

The last point argued in support of the appeal is that Mr. Justice Ray was wrong in holding that the application for setting aside the sale was barred by limitation. If the sale is void ab initio an application for having a declaration of nullity of the sale is governed by the three years'' Rule of Limitation under Article 181 of the Indian Limitation Act. If, however, the sale, is voidable only and requires to be set aside on the ground of irregularity in publishing or conducting the sale, the application is governed by thirty days'' rule of limitation under Article 166 of the Indian Limitation Act. The starting point of limitation in both the cases is the date of the sale. The sale in the present case was held on April 26, 1958 and the application for declaring the sale as void and also for selling aside the sale was filed on August 14, 1959. The application, therefore, will be within time if it is governed by Article 181, but out of time if it is governed by Article 166. Mr. Meyer''s argument is that until the minutes of the order passed by Mr. Justice Bachawat on April 3, 1958 were corrected by His Lordship on May 7, 1959, the Appellant had a clear right to have a declaration that the sale was void on the ground that the Receiver was not clothed with authority to hold the sale and that right was governed by Article 181; as a result of the correction of the minutes by His Lordship Mr. Justice Bachawat on May 7, 1959, the period of limitation of three years was abridged into a period of thirty days under Article 166, which had expired long before May 7, 1959. Accordingly Mr. Meyer contends that Article 166 has no application to the facts of this case. In support of this contention Mr. Meyer has relied upon the Bench decisions of this Court in the cases of Sheikh Ariatullah v. Sashi Bhusan (1919) 24 C.W.N. 73 (Woodroffe and Chatterjee, JJ.) and Gopal Saran v. Mohammad Sheikh Ashan 6 I.C. 804 (Brett and Vincent, JJ.) and also on a Bench decision of the Bombay High Court in the case of Shivbai v. Yesoo I.L.R (1918) Bom. 235 (Heaton and Hayward, JJ.). In all the cases relied upon by Mr. Meyer, Article 181 of the Indian Limitation Act was applied by the Courts under entirely different circumstances on the ground that on the date of the sales the judgment-debtor had no right to apply for setting them aside. In the case before us, however, it cannot be questioned that the Appellant had the right to have a declaration that the sale was void and also to apply for setting aside the sale on the date on which the sale was held by the Receiver. It is not true as a proposition of law that the Receiver was clothed with authority to hold the sale in the execution proceeding for the first time on May 7, 1959, nor is it true that the judgment-debtor had no right to apply for setting aside the sale on the ground of irregularity in publishing or conducting the sale on April 26, 1958, when the sale was held by the Receiver. I have already pointed out that the legal effect of the correction of minutes by His Lordship Mr. Justice Bachawat on May 7, is to invest the Receiver with authority to hold the sale in execution proceeding with effect from April 3, 1958. The Appellant''s right to have the sale set aside on the ground of irregularity also arose on April 26, 1958 when the sale was held. In this view of the matter the conclusion cannot be avoided that the Appellant''s application, for setting aside the sale is governed by Article 166 of the Indian Limitation Act and is, therefore, barred by limitation.

For the reasons given above, I find it impossible to interfere with the decision of Mr. Justice Ray on the merits, but in the circumstances of the case I would set aside His Lordship''s order with regard to costs and direct that the parties do pay and bear their own costs in this Court as well as in the trial court. Subject to the modification indicated above, I direct that the appeal be and the same is hereby dismissed.

Bachawat, J.

I agree.