Kasinatha Pandaram vs Viswanatha Pandaram and others

Venkatadri, J.—This appeal arises out of execution proceedings in O. S. No. 9 of 1924, on the file of the District Court, Tanjore. The short facts necessary for the disposal of this appeal are these. One of the decree-holders, the third plaintiff, is the appellant. Originally, the suit was filed by one Annasami Pandaram for recovery of a sum of Rs. 7394 due on a mortgage executed by the first defendant in the suit. A preliminary decree was passed on 4th September, 1924 and the final decree was passed on 5th October, 1925. In pursuance of that decree, plaintiffs 2 to 6 who were interested in executing the decree filed E. P. No. 49 of 1936 for sale of the hypothec, for realisation of the decree amount. The property was purchased by plaintiffs 2, 3, 5, and 6 on 21st December, 1937. The execution petition was adjourned and finally the sale was confirmed by the High Court on 22nd July, 1958. While the High Court confirmed the sale, they declared that the sale of the suit property would not affect the l/16th share of one of the judgment-debtors in the suit. The High Court confirmed the sale only with regard to 15/16 share. The sale certificate was issued by the District Court on 23rd July, 1959 to the appellant herein. As soon as the sale was confirmed, the sale certificate was issued, the E. P. was closed. The second plaintiff, one of the decree-holder''s acting for himself and the other decree-holders, filed an unnumbered E. P. on 18th July, 1961 for delivery of the 15/16 share as per the High Court''s decree, which was subsequently returned by the office for rectifying certain defects. In the meantime, the second plaintiff received Rs. 7,000 from the judgment-debtors in full settlement of his claim and did not, therefore, re-present the unnumbered petition, but only filed a memo to the effect that he had received the sum in full settlement of his claim in O. S. No. 9 of 1924. The third plaintiff, the appellant herein, filed the present execution petition E. A. No. 14 of 1962 on 7th December, 1961. This application was resisted by the judgment-debtors that it was barred by limitation. The main question, therefore, that arose for consideration before the Court below was whether the present application was barred by limitation or not.

When this matter came before the learned District Judge of Tanjore he was of opinion that the execution application was not maintainable, on the ground that the last date for filing the application was 7th September, 1961. He therefore dismissed the application, It is against this order that the third plaintiff has filed the present appeal.

The main point that I have to consider in this appeal is whether the execution application is barred by limitation or not, as the other contention raised here that the execution petition dated 18th July, 1961 should be revived was rightly rejected by the lower Court.

Art. 180 of the Limitation Act in the following words :

Description of application

Period of limitation

Time from which period begins to run.

By a purchaser of immovable property at a sale in execution of a decree for delivery of possession.

Three years

When the sale becomes absolute.

To decide the question whether the execution application is barred by limitation or not, we have to interpret the words "when the sale becomes absolute". In the case of a private sale, the property vests in the purchaser from the time when the deed of sale is executed. The reason is that the voluntary sale becomes absolute on execution and delivery of the deed by the vendor. In the case of a Court sale, the property does not vest in the purchaser immediately on the sale thereof. A period of 30 days must expire from the date of the sale, before the sale can become absolute. During this period, the sale is liable to be set aside at the instance of the Judgment debtor on the ground of irregularity in publishing or conducting the sale. When no such application is made, the Court must make an order confirming the sale and it is upon such confirmation the sale becomes absolute. In AIR 1940 230 (Lahore) a Division Bench have held at page 233 :

The commentary of Mulla on the C. P. Code under S. 65 shows clearly that this reasoning is not correct. The title to the property after the sale is made absolute vests in the auction purchaser from the date of the sale according to the section and the learned Commentator points out that the old rulings to the effect that the right to possession only accrued from the date of the sale certificate are no longer good in law.

It is only after the sale becomes absolute that the Court grants to the purchaser a certificate of sale. The certificate bears the date on which the sale becomes absolute. In Ranjit Singh v. Baldeo Sing 30 All 390 at 392, the learned Judges observed:

We are of opinion that, although the grant of a certificate is a necessary preliminary to an application under S. 318 (present O. 21 , R. 91) such application will be barred under S. 178 (now Art. 134) of the Second Schedule to the Limitation Act, if not made within 3 years of the date on which the certificate is granted, which we take to mean the date it bears, that is, the date of the confirmation of sale.

Though the property does not vest in the purchaser until the sale has become absolute, when it does vest in him, it shall be deemed to have vested on the sale becoming absolute from the time when it was sold. In Babulal v. Annapurnabai A. I. R. 1953 Nag 215 it has been held:

Now the certificate in such cases is not a title deed. It is merely evidence of title. Art. 180, Limitation Act, provides its own conditions-Such a certificate would entitle the respondent to obtain possession under R. 95 of O. 21. There is nothing in that rule to make it incumbent for the purchaser to file the certificate along with his application. On the confirmation of the sale it is compulsory to issue the certificate. The failure to issue the certificate whether the delay arises due to the action of the Court or to the inaction of the purchaser has no bearing on the limitation for the application under Art. 180. The purchaser cannot seek to extend the limitation on the ground that the certificate has not been issued. It is patent, therefore, that the issue of a certificate is not the "sine qua non" of the application.

Therefore Art. 180 provides that a purchaser of the immovable property, at a sale in execution of a decree for delivery of possession, must make the application within three years from the time when the sale becomes absolute. In order to ascertain when such a sale becomes absolute, reference is to be made to the provisions in the Civil Procedure Code, relating to the sale of immovable property in execution of decrees. O. 21, Rr. 82 to 96 in the First Schedule to the C. P. Code would apply to sale of immovable property. Rules 89, 90 and 91 deal with application to set aside sale. R. 92 (1) provides :

Where no application is made under rule 89, rule 90, or rule 91, or where such application is made and disallowed, the Court shall make an order confirming the sale, and thereupon the sale shall become absolute.

At this stage, it is useful to refer to the passage of the Judicial Committee in AIR 1934 134 (Privy Council) :

In construing the meaning of the words ''when the sale becomes absolute'' in Art. 180. Limitation Act, regard must be had not only to the provisions of O. 21, R. 92 (1) of the Schedule to the C. P. Code, but also to the other material sections and orders of the Code, including those which relate to appeals from orders made under O. 21, R. 92 (1). The result is that where there is an appeal from an order of the Subordinate Judge, disallowing the application to set aside the sale, the sale will not become absolute within the meaning of Art. 180, Limitation Act, until the disposal of the appeal, even though the Subordinate Judge may have confirmed the sale, as he was bound to do, when he decided to disallow the above mentioned application.

It is also useful to refer to Raja Raghunandan Prasad Singh v. Commissioner of Income tax, Bihar and Orissa 64 M. L.J. 544 = 87 L. W. 691 (P.C), which arose under the income tax Act. It was held that for purpose of assessment to income tax, the interest must be deemed to have been received and realised by the mortgagee, not when the new mortgage was granted, nor at the date of the Court sale, but on the date when the sale was confirmed under O. 21, R. 92 C.P. Code. There are other bench decisions also of the various High Courts, for example, in Anarjan Bibi and Others Vs. Chandramani Shaha, , where it has been held that the limitation starts from the date of the confirmation of the sales and not from the date of the sale certificate.

No doubt, learned Counsel pointed to an earlier decision of the Nagpur High Court in Parbat v. Bindraj 12 I. C. 360, where it was observed that the title to property sold in execution of a decree did not vest in the purchaser prior to the date of the certificate of sale. But a contrary view has been held in a later case of the Nagpur High Court cited earlier in this judgment, Babulal v. Annapurnabai A. I. R. 1053 Nag 215.

Therefore taking a comprehensive view of the law on the subject, it is practically settled law that, when a person wants to take delivery of the property purchased in a court auction, the limitation starts from the date of the confirmation of the sale and not from the date of the issue of the sale certificate by the Court. The view of the Court below seems to be, therefore, correct. This appeal is, therefore, dismissed. There will be no order as to costs. Learned Counsel for the appellant-third plaintiff represented that, since the 2nd plaintiff who is another decree-holder, had received Rs. 7,000, his client should be given an opportunity to take appropriate proceedings against the second plaintiff for contribution of the decree amount. In equity, he is entitled to proceed against the second plaintiff, for his share of the decree amount in the suit.