Mahadeo Ram vs Mohan Vikram Sah and Others

Kulwant Sahay, J.—This case has been referred to a Special Bench for a consideration of the question whether an auction-purchaser of a property in execution of a decree is a person whose interests are affected by the sale "within the meaning of the words in Order 21, Rule 90, Civil P.C.

The facts are that in execution of a decree which purported to be a rent decree a certain holding was advertised for sale. It appears that certain co-sharers in the holding had not been made parties in the rent suit and they made an application under Order 21, Rule 58 of the Code with the result that the share of the objectors was released from attachment and sale.

The sale proclamation however which related to the entire holding, remained as it was before the objection and the sale took place in accordance with the description of the property as contained in the sale proclamation. The petitioner was the purchaser at the sale, and soon after his purchase he discovered that what he had purchased was not the holding as described in the sale proclamation but only the right, title and interest of the judgment-debtors and that the property that he had purchased was subject to certain encumbrances. He accordingly made an application for setting aside the sale under Order 21, Rule 90, Civil P.C, The decree-holder appeared and filed an application stating that there had been irregularities in the sale and that he and the auction-purchaser had come to an agreement that the sale might be set aside, that the purchase money be refunded to the auction-purchaser, and that the execution case be struck off so that a fresh execution proceeding may be stated.

The learned Munsif however referred to certain decisions of this Court and held that an auction-purchaser is not entitled to apply under Order 21, Rule 90 to set aside a sale and he accordingly rejected the application. On appeal the learned Subordinate Judge concurred with the opinion of the Munsif and held that in face of the rulings of the Patna High Court the application could not be entertained. The auction-purchaser then came in revision to this Court, and the application was first heard by a Single Judge who referred it to the decision of a Division Bench. The Division Bench referred the matter to the learned Chief Justice for reference to a Special Bench and the matter has now been heard by us.

The decisions of this Court relied upon in the Courts below are the cases of Khetro Mohan Datt Vs. Sheikh Dilwar and Others, and Kartick Chandra Chatterji Vs. Nagendra Nath Roy and Others, . In the first case which was decided in the year 1918, Mullick and Thornhill, JJ., held that an auction-purchaser cannot apply to set aside a sale except on the ground that the judgment-debtor had no saleable interest. No reference was made in this case to the provisions of Order 21, Rule 90. In the second case, which was heard in the year 1923, Mullick, J., sitting with Bucknill, J., reiterated the view taken by him in the first case.

The provisions of Order 21, R .90 were here considered, and a decision of the Madras High Court (given in the year 1919) holding the contrary view was also considered. The learned Judges held that the words "interests affected by the sale" in Rule 90 meant interests in the property existing before the sale and which have been adversely affected thereby. Since then it appears that so far as this Court is concerned the question has not again been considered and the law so far as this Province is concerned has been as enunciated by Mullick, J.

In the Madras case referred to above, Gopala Krishnayya v. Sanjeeva Reddy AIR 1920 Mad 145, the learned Judges held that an auction-purchaser is a person "whose interests are affected by the sale" under Order 21, Rule 90. They seem to be of opinion that the word "interest" in Rule 90 means interests in the property, and they held, that the interests of the auction-purchaser are affected by the sale inasmuch as he acquires an interest which he did not possess previously.

The question came to be considered in the Allahabad High Court in Ravi Nandan Prasad Vs. Jagar Nath Sahu and Others and Walsh, J., criticized the judgments of Mullick, J., in the two Patna cases cited above and held that the words "whose interests are affected by the sale" are wide enough to include the auction-purchaser. He was of opinion that the Madras Court had put rather a narrow interpretation on the word "interests" inasmuch as it treated the word as being an interest in the property which the purchaser had acquired by the sale. Walsh, J., was of opinion that there was no reason for limiting it to the notion of interests in the property sold, but that having regard to the fact that the plural word "interests" had been used, it covered all interests which were affected by the sale, and that the auction-purchaser''s interests were thus affected.

The question then came for decision before a single Judge of the Calcutta High Court in Surendra Nath Das Vs. Alauddin Mistry, . Mitter, J., considered the two decisions of the Patna High Court as well as decisions of the Madras and the Allahabad Courts, cited above, and was of opinion that the view taken in the Patna cases was the correct view. In the Rangoon High Court, Brown, J., held in Subramanian Chettiyar v. N.L.M. Chettyar Firm AIR 1927 Rang 301 that the Allahabad decision referred to above put the correct interpretation upon the words in Rule 90; but his decision was upset by the Rangoon High Court in K.V.A.L. Chettyar Firm v. M.P.Maricar AIR 1929 Rang 33 where a Division Bench of that Court agreed with the view taken by the Patna High Court and dissented from the view taken by the Madras and the Allahabad High Courts. In the Lahore High Court Shadi Lal, C.J., and Broadway, J., in Nihal Chand Gopal Das v. Pritam Singh AIR 1932 Lah 468, agreed with the view taken by the Patna and the Calcutta High Courts and disagreed with the view taken by the Madras and the Allahabad High Courts.

We have thus a conflict of decisions upon the point, the Patna, Calcutta, Lahore and Rangoon High Courts taking one view and the Allahabad and the Madras Courts taking the other view. In this state of conflict of decisions the least that can be said is that the words used by the legislature in Rule 90 are ambiguous. It is open to us in order to find out the intention of the legislature to examine what was the previous state of the law and whether the legislature intended to make any change in the law. Under the corresponding provisions contained in Section 311 of the Code of 1882, it had been authoritatively established by the decision of the Privy Council, Brij Mohan Thakur v. Uma Nath (1893) 20 Cal 8, that an auction-purchaser could not apply to set aside a sale on the ground of material irregularity, the words used in Section 311 being dear that it was only the decree-holder or any person whose immovable property had been sold who could apply to set aside a sale.

It had however been held by the Courts that u/s 311 of the Code of 1882, other persons who had interest in the property, besides the person whose property was sold, could come in and apply for setting aside the sale under the provisions of the section.

Did the legislature intend by using the words in Rule 90 of the present Code to change the law so far as the auction-purchaser was concerned? There can be no doubt that the words whose interests are affected by the sale" are very wide, and following the ordinary meaning of the words an auction-purchaser can be said to be included as such a person; but did the legislature intend to include him? The provisions as regards setting aside sales are contained in Order 21, Rules 89, 90 and 91 of the present Code. Rule 89 provides for setting aside sale on deposit of certain sums of money by any person either owning the property sold or holding an interest therein by virtue of a title acquired before the sale. Rule 90 provides that a sale can be set aside on the ground of material irregularity or fraud in the publication and conduct of the sale, leading to a substantial injury to the person applying, and the persons who can apply under this rule are decree-holder or any person entitled to share in a rateable distribution of assets or whose interests are affected by the sale.

Rule 91 then provides for an application to set aside the sale by the purchaser and his right to do so in limited to the ground that the judgment-debtor had no saleable interest in the property sold. Those provisions correspond to the provisions contained in Sections 310-A. 311 and 312 of the Code of 1882. So far as Rules 89 and 91 are concerned there has been no alteration. The alteration has been made only in Rule 90. Now if it was intended that an auction-purchaser would be included within the words "whose interests are affected by the sale," there was no reason to retain the provision contained in Section 312 of the Code of 1882 and to reproduce it as Rule 91 in the present Code.

If the purchaser was a person whose interests are affected by the sale, then he could apply under Rule 90 even on the ground that the judgment-debtor had no salable interest.

It cannot be assumed that the legislature omitted to notice that there was a provision in the Code of 1882 contained in Section 312 and that that provision was being reiterated in Rule 91. It must have been a deliberate act of the legislature to provide for application by a purchaser to set aside the sale in Rule 91 and to limit it only to the ground that the judgment-debtor had no saleable interest in the property: There can be no doubt that it is open to us in order to find out the intention of the legislature to see what the law on the subject was before the new enactment and whether the legislature deliberately intended to alter that law: Abdur Rahim v. Abu Mohamed Barkat Ali AIR 1928 PC 16 referred to by Mitter, J. in the Calcutta case cited above.

By making an express provision for an application by the auction, purchaser in Rule 91, I am of opinion that the legislature implied his exclusion from Rule 90 and after giving the matter my best consideration, I am of opinion that the view taken by Mullick, J., which was agreed to by Thornhill and Bucknill, JJ., in the cases cited above, is the correct view. The auction-purchaser is not without his remedy, as he has a right to sue, for the exercise of which right he has got a longer period of limitation and which right would be taken away if it be held that he can come in under Rule 90, in as much as a suit by him would be barred under the provisions of Rule 92.

I would therefore answer the question arising in the case by saying that an auction-purchaser is not a person whose interests are affected by the sale within the meaning of the words in Order 21, Rule 90 of the Code. It is only persons who had any interest in the property before its sale, and which interests are affected by the fact of the property being sold and of its passing out from the judgment-debtor to the purchaser, who can come in under Rule 90. In the present case however we find that the decree-holder as well as the auction-purchaser agreed that the sale should be set aside and, in fact, the decree-holder also filed an application to the effect that the sale might be set aside and the execution case struck off without satisfaction, and the judgment-debtor never objected to it.

Under those circumstances, upon the application of the decree-holder agreed to by the auction purchaser and not objected to by the judgment-debtor, I am of opinion that it was within the power of the Court to set aside the sale before it was confirmed, and in the present case the sale ought to have been set aside under the inherent powers of the Court on the agreement of the parties even though the application of the auction-purchaser was not maintainable. The order of the Court is that the order of the Court below will be set aside; the sale will also be set aside and the execution case must be dismissed without satisfaction.

James, J.

I agree with the order proposed; but for reasons other than those set out by my learned brother Kulwant Sahay. When this case was originally before the Division Bench, we would have accepted the authority of the decisions of the late Sir Basanta Kumar Mullick without questioning them, as bound by them whether we approved of them or not if it had not been for the fact that the learned Judge before whom the case originally came had indicated some doubt regarding the correctness of these decisions by the manner of his reference of the case to a Division Bench. Now that it has been referred to a larger Bench for the express purpose of examining the basis of those decisions, it is not possible to avoid consideration of the question of whether they ought to be followed in preference to the decisions of the High Courts of Allahabad and Madras.

I need not again describe the effect of those decisions, which have been mentioned in the order recommending reference to a Special Bench. Two other decisions, Pritam Singh v. Nihal Chand Gopal Das AIR 1931 Lah 630 and Nihal Chand Gopal Das v. Pritam Singh AIR 1932 Lah 468, have been cited before us here, indicating a difference of Opinion on the question among the Judges of the Lahore High Court, in which the Division Bench accepted the view of Sir Basanta Kumar Mullick. But in my judgment the argument of Sir Cecil Walsh, criticising the ground of the decisions of Sir Basanta Kumar Mullick is quite unanswerable. To my mind the argument in support of Sir Basanta Kumar Mullick''s decisions, which is based on the ground that any other view would make Rule 91 superfluous rests on two mutually repugnant propositions.

The first is that the framers of the rule were so extremely careful to avoid anything like surplusage in Order 21, as a whole, that if they had meant what they had said in Rule 90, they would necessarily have repealed Rule 91, The second proposition is that they were so careless in their amendment of Rule 90 that Sir Cecil Walsh, Sir Shah Muhammad Sulaiman, the Judges of the Madras High Court and other Judges of the Rangoon and Lahore High Courts have been unable to discover their true meaning. The correct manner to interpret the rule appears to me to assume that Rule 90 as amended means what it says; and if this interpretation renders Rule 91 superfluous, the matter must be left at that.

The provisions of the old Code strictly limiting to certain persons the right of preferring an application to set aside a sale on the ground of material irregularity or fraud in publishing or conducting it were repealed by the new Rule 90 Since the rule was so completely changed, we must take it as it stands: and in my judgment the view of Sir Cecil Walsh must be accepted, that decisions based on the old rule no longer have any force, since the new rule is certainly not a mere repeal and re-enactment of the old rule. Any person whose interests are affected by the sale may prefer an application under Rule 90. It appears to me impossible to hold that the purchaser is not a person whose interests are affected by a Court sale. If I sell a horse to B it cannot be said that my interests are affected and B''s are not.

If the word "interest" is to be used in its narrower sense, it must equally be held that the interest of the auction-purchaser is affected by the transaction which brings him into existence. It certainly cannot be said that I was not affected by the act of the creator which brought me into existence; and I consider that an interest must be regarded as affected by a transaction which creates it as much as by a transaction which extinguishes it. Hence I feel constrained to hold, with Sir Cecil Walsh and Sir Shah Muhammad Sulaiman, with the Madras High Court, that an auction-purchaser is a person whose interests are affected by the sale who is entitled to prefer an application under Order 21, Rule 90.

Agarwala, J.

I agree to the order proposed. With respect to the question whether an auction-purchaser is a person whose interests are affected by the auction sale I respectfully agree with the reasoning of Walsh, J., in Ravi Nandan Prasad Vs. Jagar Nath Sahu and Others . It is not disputed that a judgment-debtor is a person whose interests are affected by the sale and I am unable to understand how a transaction which results in the ownership of property being transferred from the judgment-debtor to the auction-purchaser can be said to affect the interests of one and not of the other. It has been suggested that a sale, so far as the vendee is concerned, creates an interest but does not affect that interest and that the interest referred to in the rule is an interest in the property which is the subject-matter of the sale. As has been observed by Walsh, J., if the word in the rule were "interest" there might have been, something to be said for this contention. But the word used by the legislature is "interests," and, as has been pointed out in the case of Dhirendra Nath Roy Vs. Kamini Kumar Pal, , the word "interests" in Rule 90 is not limited to a proprietary or possessory interest in the subject-matter of sale and does not exclude pecuniary interests.

It has also been suggested that as Rule 91 specifically provides for the setting aside of the sale at the instance of an auction-purchaser on the ground stated therein, an auction-purchaser is impliedly excluded from the category of persons whose interests are affected by the sale within the meaning of Rule 90. In my opinion the scope of these two rules is entirely different. Rule 90 provides for the setting aside of a sale on the ground of material irregularity or fraud in the proceedings which have led up to the sale and prescribes the procedure to be followed by persons affected by such irregularity or fraud. Rule 91 applies however to an entirely different state of affairs and provides a remedy in a case where a property has been put up to sale in which the judgment-debtor has no saleable interest and it provides the procedure to be followed by the only person who is interested in having such a sale set aside, viz. the auction-purchaser.

It may however be contended that the putting up to sale of a property which does not belong to the judgment- debtor is itself a material irregularity and is therefore covered by Rule 90. But in my opinion the words "material irregularity" in Rule 90, governed as they are by the words "in publishing or conducting it," refer only to an irregularity in the procedure to be followed before a property is put up to sale, and Rule 91 comes into operation in those cases where, in spite of the prescribed procedure having been regularly followed, property has been sold in which the judgment-debtor had no saleable interest.