Kumaran Palppan vs Ayyappan Gswaran and Others

Vithayathil, J.—The decree-holder is the Appellant. The appeal is from an order in execution allowing an application of Defendant 4 for restitution. Defendant 4 died and his legal representatives are the Respondents. The suit was for recovery of possession of the plaint properties with mesne profits. It was originally filed in the Attingal Munsiff''s Court on 29-2-1097 but was returned for being filed in the Trivandrum District Court. It was filed in the District Court on 16-6-1101. The District Court decreed the suit on 3-8-1104 allowing the Plaintiff to recover the properties with mesne profits at the rate of Rs. 252 chukrams 18 and cash 15 from the date of suit and costs with interest at 6 per cent per annum. The Defendants appealed from this decree and while the appeal was pending in the High Court the Plaintiff took out execution for recovery of possession of the properties and for realisation of mesne profits and costs. The properties were taken delivery of on 30-2-1105. Other properties belonging to the Defendants were attached for realisation of the decree amount and were sold in court action on 24-7-1109 and purchased by the decree-holder for 9000 fanams. According to e execution application of the decree-holder there was a balance amount of about 8000 ms yet to be realised under the decree. Mesne profits were calculated from 29-2-1097 the crate of the filing of the suit in the Munsiff''s Court, and not from 16-6-1101, the date on which the suit was filed in the District Court. In the decree of the District Court it was only stated that mesne profits were allowed from the date of suit and 16-6-1101 was mentioned as the date of the filing of the suit. Defendant 4 filed a petition to set aside the sale on the ground of material irregularity, but as he did not comply with the order of the Court allowing him to deposit the auction amount and commission within a particular time, the application was rejected and the sale was confirmed. In the meanwhile, the appeal filed by the Defendants from the decree of the District Court was decided by the High Court on 31-11-1112. The High Court directed the Plaintiff to pay the Defendants the value of improvements, if any, effected by them in the suit properties which had to be determined in execution. The value of improvements payable to the Defendants was directed to be set off against the mesne profit payable to the Plaintiff. The parties were also directed to suffer their respective costs in both the Courts.

After this decision of the High Court the Plaintiff applied for delivery of possession of the properties purchased by him and obtained delivery of the same on 2-6-1113. Subsequently, on the application of Defendant 4 a commission was issued by the execution Court to assess the value of improvements in the plaint properties. Ex. I is the report of the commissioner. According to that report, the value of improvements would come to 22577 fanams 1 chukram and 10 cash. The Plaintiff objected to the correctness of this report and the Court below found that the value of improvements due to the Defendants was only 15797 2/3 fanams. Since no amount would be found due to the Plaintiff under the decree of the High Court if the value of improvements is set off against the mesne profits Defendant 4 filed the present petition for setting aside the court sale, for recovery of possession of the properties sold in court auction with mesne profits and for the balance amount of value of improvements payable to the Defendants. The Court below found that the mesne profits due to the Plaintiff from the date of suit till the date of recovery of possession of the suit properties, namely, from 16-6-1101, to 30-2-1105, would come in 952 rupees 15 chukrams. Deducting this amount from the value of improvements due to the Defendants it was found that a sum of 1304 rupees 1 chukram was payable to the Defendants by the Plaintiff. As no amount would be payable to the Plaintiff by the Defendants if the value of improvements is set off against the mesne profits the Court below held that the court sale conducted as per the decree of the trial Court could not stand. The sale was, therefore, set aside and Defendant 4 was allowed to recover possession of the properties from the Plaintiff with mesne profits at the rate of 343 rupees 18 chukrams 3 cash from the date on which the Plaintiff took delivery of the properties. The Defendants were also allowed to recover the balance of the value of improvements due to them after setting off the mesne profits due to the Plaintiff, namely, 1304 rupees 1 chukram, with interest at 6 per cent from the date on which the Plaintiff took delivery of the suit properties. The appeal is from this order.

The main argument advanced on behalf of the Appellant is that the Court below has gone wrong in setting aside the court, sale and in allowing the Defendants to recover possession of the properties with mesne profits. It is argued that even under the High Court decree the Plaintiff is entitled to realise from the Defendants the mesng profits awarded by the trial Court and that only the decree relating to costs was set aside by the High Court. Costs allowed to the Plaintiff by the trial Court would come to 2459 odd fanams. The balance amount that remained due to the Plaintiff under the decree of the trial Court after the court sale would, according to the Plaintiff, be about 8000 fanams. It is, therefore, contended that the court sale was not held for any portion of the costs awarded by the trial Court but disallowed by the High Court and that the sale was not held for an amount which was not due to the Plaintiff under the decree of the High Court. With regard to the direction in the High Court decree that the improvements due to the Defendants might be ascertained in execution and that the value of the same might be set off against the mesne profits due to the Plaintiff, it is contended that it is only an enabling provision and that the Defendants are only entitled to set off whatever amount that may be found due to the Plaintiff by way of mesne profits on the date when the value of improvements is ascertained, and that this direction cannot in any way affect the court sale that took place before value of improvements was ascertained.

The decretal portion of the judgment of the High Court is to the following effect:

In the result, in modification of the decree passed by the Court below we allow the Plaintiff to recover possession of the plaint properties from the Defendants with future mesne profits from the date of suit at the rate of 252 rupees 18 chukrams 15 cash per annum'' as found by the Court below till delivery of possession or the expiry of three years after date of decree, whichever event happens first. We also direct that the Plaintiff shall pay the value of improvements, if any, effected by the Defendants in the proper ties which will be determined in execution. The amount payable as value of the improvements is allowed to be set off against the future mesne profits payable to the Plaintiff. In view of -the fact that both side raised false contentions we direct the par"s ties to suffer their costs throughout, both here and in the Court below.

It is clear from this that the rights and liabilities of the parties under the decree are to be finally determined after the value of improvements payable to the Defendants is ascertained in execution. Instead of the trial Court itself determining the amount the matter was referred to the execution Court and it was specifically directed that the value of improvements should be set off against the mesne profits payable to the Plaintiff. The'' Plaintiff''s right to mesne profits can, therefore, be determined only after the value of improvements payable to the Defendants is determined. Since the value of improvements payable to the Defendants is more than the mesne profits due to the Plaintiff and since the High Court decree directs that the value of improvements should be set off against the mesne profits, it is clear that the Plaintiff was not entitled to realise any amount by way of mesne profits from the Defendants. So far as the Plaintiff''s right to mesne profits is concerned, the decree of the trial Court must be taken to have been substantially varied by the High Court. Since the Plaintiff would not be entitled to realise any amount by way of mesne profits from the Defendants as per the direction in the High Court decree the sale held for realisation of an amount which was not really due to the Plaintiff has to be set aside and the parties restored to their original position. It is clear that the case will come u/s 108, CPC Section 108 reads thus:

Where and in so far as a decree is varied or reversed the Court of first instance shall on the application of any party entitled any benefit by way of restitution or other wise, cause such restitution to be made will, so far as may be, place the parties the position which they would have occupied but for such decree or such part the of as has been varied or reversed; and, this purpose, the Court may make any orders, including orders for the refund of costs and the payment of interest, damages, compensation and mesne profits, which are properly consequential on such variation or reversal.

Another provision in the Travancore CPC which was in force on the date on which the court sale took place is the provise contained in Order 21, Rule 86. It reads thus:

Provided that no sale of immovable property shall be confirmed until the final result of any appeal preferred against the decree in execution of which the sale was made is known. If such decree be finally not, confirmed, on appeal the sale shall be set aside.

This proviso was deleted in 1120 but was in force when the court sale took place. In - ''Kochukrishna Pillai v. Venkitachalam Iyer'' 1948 Trav LR 775 (A)'', a Full Bench of the erstwhile Travancore High Court held that the provision contained in the proviso to Order 21, Rule 86, Code of Civil Procedur is imperative and that the confirmation of a sale pending appeal from the decree was an illegality. In that case, when an appeal from the decree was pending, the properties of the judgment debtor were sold in court auction for the decree amount and delivered to the decree-holder auction-purchaser, and subsequently the appeal was decided, and by that decision a reduction was made in the decree amount. The judgment-debtor''s application for setting aside the sale and for recovery of possession of the properties was disallowed by the execution Court. In allowing the appeal filed by the judgment-debtor their Lordships held that as the terms of the proviso to Order 21, Rule 86, are imperative the sale could not have been confirmed and that if the sale was confirmed it was an illegality. Reference was made to the following observation of Abraham J. in an earlier decision of the Travancore High Court, i.e., - ''Kochukunji Amma v. Krishna Iyen'' 1944 Trav LR 420 (B).

Where the decree or order that was executed has been confirmed in the main, and the part that was varied or reversed represented only an inconsequential fraction compared to the portion which was confirmed, or the decree as a whole, both u/s 108 and under Order 21, Rule 86, the execution sale will be confirmed, and the parties will be otherwise placed in such position as they would have occupied but for such variation or reversal. But it is equally true that where the variance or modification bears an appreciable proportion to the extent of the original claim, or to the portion confirmed in appeal, the execution sale will be wholly set aside and the parties reverted to their original position, as if no sale had taken place.

Their Lordships observed that although this view, which is based on the decision of the Calcutta High Court in - Doyal Sarkar Vs. Tari Deshi and Others, may be said to be in accordance with substantial justice, "it is difficult to escape from the consequences of the clear wording of the proviso to Order 21, Rule 86". Their Lordships were of opinion that the following observation of Krishnaswami Iyer C.J. who agreed with the conclusion of Abraham J. is more in'' conformity with the proviso.

The law prohibits a confirmation of a sale when the decree in execution is pending in appeal, and where the appellate decree does not confirm the decree of the lower Court the sale has to be set aside. The order in this case is dictated by the imperative terms of Order 21, Rule 86, and no question of a sale being set aside in restitution or a sale being upheld in spite of a variation in the appellate decree arises for consideration. There has been no valid order of confirmation at any time.

Their Lordships held that the proviso to Order 21, Rule 86, contemplated that the sale should not become absolute by confirmation and that, on the decree not being confirmed in appeal, the unconfirmed sale should be set aside. It was also held that the fact that the sale was confirmed by the Court would make no difference as the order confirming the sale was an illegality. The sale was, therefore, set aside and the judgment-debtor was allowed to recover possession of the properties with mesne profits. The principle laid down in this decision applies to this case. Since the decree of the trial Court relating to mesne profits was in effect varied by the decision in appeal the order confirming the sale while the appeal was pending must be held to be an illegality and the sale has to be set aside.

Reliance was placed by learned Counsel for the Appellant on the rulings in - Fateh Lal Vs. Sher Singh, , - Pirthi Nath and Another Vs. Mt. Kunji Kunwar and Another, , - Gansu Ram and Others Vs. Mt. Parvati Kuer, , - Maganti Venkataswami Naidu Vs. Annapareddi Nagireddi alias Mutyalu Reddi, and - Kuppa Sankara Sastri and Others Vs. Kakumanu Varaprasad and Another, In the first two cases, namely, - (D) and - Pirthi Nath and Another Vs. Mt. Kunji Kunwar and Another, , the sale took place in execution of a decree which was subsequently amended. The property was purchased by a third party. It was held that the subsequent amendment of the decree would not necessarily nullify the sale when the property was purchased by a stranger. Obviously these two rulings do not apply to the facts of this case. In - Gansu Ram and Others Vs. Mt. Parvati Kuer, the decree amount, according to the decree of the trial Court, was Rs. 963.12.15 dams. The property of the judgment-debtor was sold for Rs. 300 and purchased by the decree-holder. Subsequently the amount of the decree was reduced by the High Court in second appeal to the sum of Rs. 507-14-6. An application was made by the judgment-debtor for setting aside the sale and for restitution. The Court found on evidence that the judgment-debtor could not have paid up even the reduced decretal amount within 30 days of the date of sale and the sale was not set aside. This ruling also does not apply to the facts of this case. Under the High Court decree in this case the judgment-debtors would not be liable to pay any amount to the decree-holder if the value of improvements due to them is set off against the mesne profits due to the decree-holder. Moreover, a provision similar to that contained in the proviso to Order 21, Rule 86, Travancore CPC that was in force on the date of the court sale in this case is not found in the Indian Code of Civil Procedure. In the fourth case, i.e., - Maganti Venkataswami Naidu Vs. Annapareddi Nagireddi alias Mutyalu Reddi, pending appeal from the decree of the trial Court the properties of the judgment-debtor were sold and purchased by the decree-holder. Subsequently, the amount of the decree was reduced by the appellate Court. The judgment-debtor applied to set aside the sale and for restitution; Their Lordships Wardsworth J. and Patanjali Sastri J. (as he then was) laid down the law thus:

The true criterion seems to be to consider what would be the position had the appellate Court''s decree been passed by the Court of first instance. If the sale which had been held is one which would have been held even if the Court of first instance had decreed the amount eventually found due in appeal, there is no legal or equitable reason for setting aside that sale or ordering restitution. On the facts of the present case, it is clear that at the time when the sale of Defendant 8''s property was held the amount due to the decree-holder on the basis of the eventual decree passed in second appeal would have been very much more than the amount for which the property was sold. It cannot, therefore, be said that the sale of Defendant 8''s property was the result of the error in the original Court''s decree... In such circumstances, there is no case for restitution at all.

This decision was followed in - Kuppa Sankara Sastri and Others Vs. Kakumanu Varaprasad and Another, . But the facts of the present case are entirely different, as stated above. If in this case the appellate Court''s decree has been passed by the Court of first instance it is clear that the decree-holder could not have taken out execution for the mesne profits decreed in his favour. We do not think that the rulings relied on by learned Counsel for the Appellant apply to the facts of this case.

For the above reasons, we hold that the court sale held in this case is liable to be set aside and that the Defendants are entitled to get back the properties with mesne profits as ordered by the Court below. We do not, however, think that the Defendants are entitled to get interest on the value of improvements. The High Court decree does not provide for it. The order of the Court below has to be modified with respect to that. Subject to this modification the order of the Court below is confirmed and the appeal is dismissed with costs.