Laxmikant Rao vs Bhikalal

S.P. Bhargava, J.—This appeal has been filed by the judgment-debtors u/s 47 of the Court of Civil Procedure.

The facts of the case are that in Civil Suit No. 1-B of 1954, Respondent. Bhikulal obtained a money decree on 9-11-1955 against the Appellants. He took out execution and a house belonging to the Defendants was attached. The judgment-debtors claimed the value of the house to be more than Rs. 30,000/. It was actually sold on 22-4-1961 for Rs. 37,201/ Long before the commencement of the proceedings for sale of the house on 1-3-1960, the Appellants filed an application u/s 11 of the C. P. Moneylenders Act praying for instalments being granted to pay the decretal amount. The Court required the judgment-debtors to deposit Rs. 1,000/ before 16-3-1960 and ordered that in case the deposit was not made, further proceedings will not be stayed. The judgment-debtors deposited the amount on 16-3-1960 and further proceedings were stayed. Subsequently on 1-3-1961, the lower Court rejected the judgment-debtors'' said application without any enquiry. The Defendants came up in appeal to the High Court. That appeal was registered as Miscellaneous Appeal No. 39 of 1961 and was decided by Mr. Justice P. K. Tare on 18-4-1961. The operative portion of the order is as follows:

As a result of the discussion aforesaid, this appeal succeeds and is a lowed. The order under appeal is set aside and the trial Judge is directed to decide the application after giving parties due opportunity to lead such evidence as they want. There shall, however, be no order as to costs of this appeal. The Appellants, if they so wish, may approach the trial Court, for staying the execution proceedings till the completion of the enquiry. The trial Judge shall decide that question on its own merits.

On 29-4-1961, the Appellants filed an application in the lower Court along with an affidavit informing the Court of the aforesaid decision in the appeal and requesting that the sale may be stayed. The Court ordered the Appellants to produce a certified copy of the order in appeal on the following day Originally, the auction sale was to commence on 19-4-1961. On making of this application, the Court postponed the sale to 21-4-1961 and fixed the case for 22-4-1961. The sale of the house commenced on 21-4-1961 and the house was sold on 22 4-1961. The proceedings for confirmation of sale are pending in the Court below and the Appellants have raised objections under Order 21, Rule 90 in that Court. Being aggrieved by the order, dated 12-4-1961, which reads as follows, the Appellants have filed this appeal:

The property has been sold for Rs. 37,200/ and 1/4th sale proceeds has been deposited in CCD vide No. 5-A. 3/4th sale proceeds be now deposited.

For confirmation of sale on 20-6-1961.

Shri Dharmadhikari, learned Counsel for the Respondent, has raised a preliminary objection. He contends that as the auction purchaser has not been made a party to this appeal, the appeal is not properly constituted and is not tenable. His argument is that Explanation to Section 47 of the Code of CPC as amended by Act, 66 of 1956 makes a purchaser in execution of the decree ''a party to the suit'' for the purposes of this section. The controversy as to whether the sale suffers from any defect or lacuna and, therefore is void or voidable, cannot be decided in the absence of the auction-purchaser whose interests are bound to be vitally affected if the sale is set aside. Shri P. R. Padhye, on the other hand, contends that the sale which was made by the Court was a complete nullity having been made in flagrant violation of the order passed in appeal (Misc. Appeal No. 39 of 1961) by the High Court. He urges that the sale being nullity ab initio did not create any right, title or interest in the purchaser and, therefore, it was not necessary to implead him. He further emphasized that under Order 21, Rule 92 (Cl. 2) it is specifically provided that ''no order shall be made unless notice of the application has been given to all persons affected thereby''. But, no similar provision was made in Section 47. Shri Padhye relied upon Shan Kumar v. Lachmi Kanta, AIR 1941 Pat 566 where it has been laid down:

Where a sale is wholly without jurisdiction and consequently void as opposed to voidable an application by the judgment-debtor to have it declared void will lie u/s 47. In such a case it is clear that no actual setting aside of the sale is really necessary.

Stress was laid on an observation contained at page 570 ibid to the effect:

This will be so notwithstanding the fact that the auction purchaser who is interested in the result of the application to set the sale aside may not have been a party to the suit.

In my opinion, the Patna Case is no authority for the proposition that when a sale is required to be set aside on an application made by the judgment debtors, the auction purchaser is not a necessary party. In fact, it will be seen that that case was decided long before the Amendment in the Explanation to Section 47 of the Code, referred to above The Explanation unequivocally makes an auction purchaser a party to the suit for the purposes of Section 47. It appears to be absolutely necessary that a matter of vital interest to the auction purchaser should only be allowed to be decided after he has been afforded an opportunity to safe-guard his interest. In Order 21 Rule 92 of the Code of Civil Procedure, the provision made is that no order shall be made unless notice of the application has been given to all persons affected thereby. It has been held in cases under Order 21 Rule 92 that an order setting aside the sale made, without giving affected persons an opportunity of being heard is without jurisdiction. See: Sundaraja Aiyangar v. Thasiri Naidu, 32 Indian Cases 891, and Mahanth Bhikhan Gir Gossain Vs. Jalpadat Jha and Others, . It was held in Kanda Velloo v. Kumaran, AIR 1953 TC. 529, and Charan Chandra Ghosh Vs. Rai Behari Lal Mitra Bahadur, , that it is essential that notice of the application should be given to all persons affected by the order thereon. In my opinion, it was not necessary to provide specifically with regard to issuing of notices to affected parties u/s 47 of the Code because once it was made clear that an auction purchaser would be a party within the meaning of that section, I think it is implicit in this provision that no decision could be arrived at without noticing him.

Shri Padhy next contended that as the sale made on 22-4-1961 was a complete nullity it was not necessary to make the auction-purchaser a party to have it set aside. He contends that no right, title or interest vested in the auction-purchaser as the sale was a nullity. In my view, this argument cannot be accepted.

It cannot be assumed as contended by the judgment-debtors that, the sale was a nullty. An opportunity has to be afforded to the auction-purchaser to show that it was a valid sale and did not suffer from any legal defect. On the mere possibility that in future the sale may be held to be a nullity by some Court, the judgment-debtors could not avoid impleading the auction purchaser. The Court cannot fairly adjudicate on the question of sale being a nullity in his absence. The preliminary objection, therefore, succeeds and on this ground alone, the appeal deserves to be dismissed

I, however, do not wish to rest my decision on the acceptance of the (sic) liminary objection alone and would examine the other contentions raised on behalf of the Appellants also. Shri Padhye contends that when the High Court accepted the judgment-debtors'' appeal on 18-4-1961, the stay order which was passed by the lower Court on 1-3-1960 automatically revived. I am unable to accept the submission. Shri Padhye was unable to cite any provision of law or authority to show that the previous proceedings automatically revived. He, however, urged that the principle which governs the further proceedings in a trial Court after the passing of stay order under Order 41 Rule 5 of the Code of CPC should be applied. He relied upon Jaisingh v. Jagatram, 1953 NLJ 13, where Kaushalendra Rao J., held that a stay order takes effect immediately from the moment it is passed and not from the moment that it is communicated to the Court. In my opinion, the anology of Order 41. Rule 5 has no bearing in the instant case. The High Court on 18-4-1961 did not pass any stay order As a matter of fact, in the concluding portion of the order passed in the appeal which has been reproduced in para 2 of this judgment, Mr. Justice Tare specifically observed that the Appellants, if they so wish, may approach the trial Court for staying the execution proceedings till the completion of the enquiry.'' In fact, in pursuance of this direction, the Appellants made an application for stay of sale on 19-4-1961 in the lower Court, but the lower Court, did not grant that request. It is well settled that after an order of remand the jurisdiction of the Court to which the case is remanded depends upon the order of remand itself. Further, it is clear that if the High Court intended to post-pone the sale till the application for instalment was decided by the lower Court, it would have clearly said so in the order, dated 18-4-1961 and would not have directed the judgment debtors to make an application for stay if they desired the execution proceedings to be stayed till the completion of the enquiry. In my opinion, the contention raised has no substance.

Shri Padhye raised a further objection to the effect that it was incumbent on the lower Court to postpone the sale until the objection was disposed of. Shri Y. S. Dharmadhikari, learned Counsel for the Respondent, frankly admits that the lower Court did proceed with some undue haste but he contends that the judgment-debtors failed to adopt proper remedy against the order passed by the Court on 19-4-1961 and, therefore, no order favourable to them could now be passed in this appeal I am of the view that the appropriate remedy of the Appellants was to file a revision petition against the order, dated 19-4-1961, because the stay order, was not appealable according to the view taken in Sheonarayan v. Ahem Raj, AIR 1954 Nag. 31. It cannot be said that the lower Court had no jurisdiction to sell the property in execution on 22-4-1961.

It would further be seen that the Appellants have made application in the lower Court under Order 21, Rule 90 of the Code seeking to have the sale set aside on the ground of material irregularity in conducting it that application is still pending in the lower Court. Lastly, it would be seen that actually the Appellants do not appear to have sustained any injury. They themsselves stated that the house was worth more than Rs. 30,000(sic) in their objection.

The house actually been knocked down for Rs. 37,201. It cannot therefore, be said that the Appellants had sustained any loss by securing a low price in the auction sale.

The result is that the appeal is dismissed, with costs.