Muttalooru Bojjanna vs Boya Kristappa

Sidney Wadsworth, Officiating C.J.

This is an appeal against the decision of Koman, J., and it raises the question of the extent of the inherent powers of the Court in dealing with a

sale in execution of a mortgage decree. The appellant obtained a decree on a mortgage of 1929. The final decree was passed on 10th February,

1942. The part of the hypotheca with which we are now concerned was put up for sale on 2nd April, 1943, but there were no bidders and the

sale was adjourned to the 19th April, 1943, when four items were sold, including items 6 and 9 with which we are now concerned. Both of these

items were purchased by the decree-holder at a price slightly in excess of the upset price. Item No. 6 which is S. No. 440-B is of an extent of 103

acres 9 cents of dry land which the decree-holder valued at Rs. 200. The upset price fixed by the Court was Rs. 400 and the successful bid was

Rs. 405. Item No. 9 is of an extent of 1993 acres which was valued by the decree-holder at Rs. 50, the upset price was Rs. 100 and the

successful bid Rs. 102. The Court closed shortly after this sale and re-opened on the 7th June. On the 10th June, the sale of these two items 6 and

9 was confirmed and part satisfaction was recorded. On the afternoon of the day on which the sale was confirmed, the judgment debtor appeared

in Court with the amount of the decree to get the sale set aside. But it was too late to make the deposit.

On the 30th June, 1943, that is to say more than two months after the sale and twenty days after the confirmation of the sale, the judgment-

debtor filed the petition out of which these proceedings arise. The petition purports to be under Sections 47 and 151 and Order VII Rule 1 of the

Code of Civil Procedure. It scrupuloulsly avoids any reference to the provisions of Order 21, Rule 90 of the Code. It starts by reciting the bare

facts, stating that the sale is a nullity having been effected by playing fraud on the Court as well as on the petitioner. Then it proceeds to set forth

the particulars of the fraud. Firstly it is alleged that after the first abortive sale, the petitioner tendered to the decree-holder the amount of the decree

; there was a Panchayat on or about the 10th April, 1943 in which it was settled that the decree-holder should get correct particulars of the amount

due from his vakil, get the sale adjourned to some other date after the holidays and take the amount in full satisfaction of the decree. It is alleged

that when the properties came up for sale on 19th April, the decree-holder clandestinely and in defiance of the agreement, got the properties

knocked down to himself for absurdly low prices, keeping back the facts from the knowledge of the debtor and his friends. Next it is asserted that

the petitioner came to know of the fraud practised by the decree-holder "" during the holidays "" on enquiry from his vakil who wrote to him that he

should come to Court with money on the 10th of June. Then it is alleged that the petitioner charged the decree-holder with fraud and the latter said

that he would get matters rectified immediately after the reopening of the Court and that he failed to do so. Then the petitioner came to Court on

10th June, to deposit the money by way of abundant caution and to his surprise found that the sale had been already confirmed. On account of the

fraud practised by the decree-holder, the petitioner was kept back from coming to the Court and the other bidders in the village also were kept

back from attending the Court on the day of sale. It was also contended with reference to item 6 that the petitioner has no saleable interest in the

land which contains a temple utilised by the public to whom free access is given. The profits of the land have been endowed for the maintenance

and upkeep of the temple. The decree-holder is charged with having suppressed the fact that there is a temple which makes the land public

property and as such inalienable. As to item 6 it is also said that it is worth Rs. 6,000, that the bid of Rs. 405 is grossly inadequate, the decree-

holder has gained an unconscionable advantage and the sale is therefore a nullity.

It is to be noticed that the whole application is based on the alleged fraud in the matter of the Panchayat agreement for the liquidation of the

decree and the postponement of the sale while inquiry was being made. The trial Court did not believe that story ; but the learned District Munsiff

came to the conclusion that the major item, item 6 had been undervalued by the decree-holder by the omission of all reference to the temple

constructed in the land the value of which is admittedly at least Rs. 700. No attention seems to have been given to the fact that if the temple was as

alleged public property dedicated to a God it would not be the property of the judgment debtor, and, could not pass to the purchaser at the Court

auction. However, the learned District Munsiff after pointing out that a petition to set aside the sale having regard to Order 21, Rule 90, of the

Code would become barred on 7th June, 1943, that as it was a mortgage decree, the decree amount should have been paid on 10th June, 1943

before the sale was confirmed and that the judgment-debtor arrived at the Court on the afternoon of the day of the confirmation of the sale

apparently owing to the bus arriving late, remarks that it is not unusual in such circumstances that the Court should set right the matters excusing the

delay. The learned District Munsiff concludes that on account of the unfortunate delay in the arrival of the bus on the 10th June, and also on

account of the fact that the decree-holder deliberately misled the Court in valuing the property, this is a fit case in which the Court should exercise

its inherent power u/s 151 of the CPC ; and for the ends of justice and to prevent abuse of the process: of Court it is essential that the sale should

be set aside. The whole sale was therefore set aside.

This order was confirmed by the learned District Judge who does not go into-the question of the truth of the alleged Panchayat, but bases his

conclusion solely on the fact that there was a fraud on the Court by the suppression of any reference to the building on item 6. The learned District

Judge says,

I am definitely of the opinion that even after a Court has confirmed sale order if a judgment debtor in a mortgage suit appears that same day a little

late and offers to deposit the whole amount, it is open to a Court to cancel its order of confirmation and allow this to be one under Order 34, Rule

5 of the CPC in special circumstances such as this, and quoting P.V. Raghavachariar, by his authorised Agent, P.R. Srinivasan Vs. Murugesa

Mudali and Others, the learned Judge comes to the conclusion that the District Munsiff had inherent powers to cancel the sale. This decision has

been confirmed by Koman, J., in second appeal.

No case has been quoted before us in which it has been specifically held that after a sale in execution has been confirmed, the Court can, by the

exercise of its inherent powers, cancel that sale on the ground that there has been a fraud on the Court by the suppression of relevant matters in the

sale proclamation. The general rule undoubtedly is that the Court should not presume the existence of an inherent power to do that for which a

statutory provision has been made and it is quite clear that outside the limited discretion conferred by the Limitation Act in certain cases, a Court

has no general discretion to relieve a suitor from the operation of the provisions of the Limitation Act, vide Maqbul Ahmad v. Pratap Narain Singh

(1935) 68 M.L.J. 665 : 62 I.A. 80 : 57 All. 242 (P.C.). In the present case, the petitioner came to Court alleging that the sale was a nullity

because of the fraudulent conduct of the decree-holder in getting the sale knocked down in his favour notwithstanding an agreement that he would

get the sale adjourned. That allegation was not proved to the satisfaction of the trial Judge. No doubt the petition does also contain an allegation

that the sale has been for much less than the real value of the property and it contains a reference to the existence of the temple on the land. But the

temple is referred to only for the purpose of showing that the petitioner has not got a saleable interest therein and that the public have certain rights

which prevent the land from being sold. There is no suggestion that the saleable value of the land as the land of the petitioner was enhanced by the

existence of this temple.

If there was a fraud in publishing the sale or in the conduct of the sale, an application under Order 21, Rule 90 of the Code is the proper remedy

for a person whose interests are affected by the sale. For that remedy a period of limitation has been prescribed and no doubt the person affected

could get the benefit of Section 18 of the Limitation Act if he alleged and proved that he was prevented from getting knowledge of the sale by the

fraud of the opposite party. The point to note is that if we assume the fraud which the petitioner does not allege in his petition but which the Court

has inferred out of the facts appearing in the evidence, it is a fraud in the preparation of the proclamation of sale. The decree-holder is found to

have suppressed the fact which has resulted in the settlement of wrong terms for the sale. It is admitted that the judgment-debtor was aware of the

original sale. He had notice of the proclamation and did not object to its terms. Assuming that there was a fraud on the Court for which the decree-

holder was responsible, that was a matter which would have given the petitioner a ground for an application under Order 21, Rule 90 of the Civil

Procedure Code, to set aside the sale. Prima facie, therefore, it is not a ground with reference to which the Court should presume the existence of

any inherent power to remedy the wrong done. The Code having given a specific remedy, the Court cannot be presumed to have an inherent

power overlapping or running parallel to the procedure laid down in the Code.

Similarly with reference to what seems to be the alternative ground for the exercise of the inherent powers, viz., the hardship resulting from the

lateness of the arrival of the judgment debtor to deposit the sale amount, the Code provides that in the case of a mortgage decree, the sale may be

set aside by a deposit of all the amounts due from the judgment-debtor at any time before the confirmation of the sale. If the judgment debtor takes

the risk of deferring his deposit until the very day of the confirmation of the sale and then arrives too late owing to some accident, it is no doubt

unfortunate, but he has only himself to blame for taking the risk of waiting to the last possible day. At any rate the Code clearly provides a definite

period of limitation for such payments and it seems to us that there cannot be an inherent power in the Court to extend that period beyond the limits

prescribed by the Code.

The respondent in the argument before us has relied chiefly on the decision in P.V. Raghavachariar, by his authorised Agent, P.R. Srinivasan Vs.

Murugesa Mudali and Others, in which it was held by Schwabe, C.J., and Wallace, J., that a Court has an inherent power to refuse to confirm a

sale held in Court auction if it is satisfied that it has been misled by the decree-holder either by actual misstatements to the Court or non-disclosure

to the Court of relevant facts unknown to the Court and which there was a duty to bring before the Court. In the judgment of Wallace, J., the

learned Judge remarks that Order 21, Rule 92 of the CPC is no bar to the Court interfering to cancel the sale in such circumstances. It is

contended that by inference from this decision if the Court has an inherent power to disobey the mandatory provisions of Order 21, Rule 92 and

refuse to confirm the sale it must also have the inherent power, on proof of a fraud on the Court, to cancel a sale which has already been held and

confirmed. There are no doubt observations in the judgments in this case which would seem to go some way towards supporting the respondent''s

argument, and it is possible that at some future time the correctness of these observations will have to be considered. We are however, concerned

now with the actual decision. The observation of Wallace, J., with reference to Order 21, Rule 92 may well have been influenced by the fact that in

the case before that Bench there was an application under Order, 21, Rule 90 of the Code which was actually before the learned trial Judge at the

time when he purported to invoke his inherent powers to refuse to confirm the sale. What seems to have happened was that the application to set

aside the sale was based on untenable grounds and the trial Court called in aid its inherent powers to give effect to a ground for setting aside the

sale which might have been but was not taken in the actual application. It was therefore a case to which Order 21, Rule 92 did not in terms apply.

Moreover although the learned Judges observed that the Courts have inherent powers to refuse to confirm a sale when it is established that there

has been a fraud on the Court, they were in fact dealing with a case in which an application under Order 21, Rule 90 of the Code was pending and

the same result could have been achieved by allowing the applicant to amend his application and allege the fraud which the Court found to have

been committed. We do not therefore think that the rather wide observations in this judgment are sufficient authority for holding that the Court has

a discretion to disregard the mandatory provisions of Order 21, Rule 92 in a case where there has been no application under Rules 89, 90 or 91 of

Order 21, of the Code or where such an application has been made and dismissed. Nor do we think this decision is authority for the further

proposition that when a sale has been held and confirmed without objection, the Court can utilise its inherent powers to give effect to any objection

based on fraud which should have been put forward by an application under Order 21, Rule 90 of the Code, when no application has been

preferred within the time allowed. We are therefore of opinion that the trial Court had not the power u/s 151 of the CPC to cancel this sale on the

ground of fraud in the valuation of the land, which fraud had not been the subject of an application under Order 21, Rule 90, of the Code filed

within time.

We are however asked to treat this application as an application which is within time, having been filed within 30 days of the date on which the

petitioner had knowledge of the sale, he having been kept from prior knowledge of the sale by the fraud of the decree holder, and we are asked to

hold that the sale is liable to be set aside in such circumstances either because of suppression of facts affecting the value, a matter falling under

Order 21, Rule 90 of the Code, or because owing to the fraud of the decree-holder in the circumstances of the alleged Panchayat (on which the

District Judge has given no finding) the petitioner was prevented from averting the sale by paying the decree amount. This contention involves the

admission of a plea u/s 18 of the Limitation Act which is not put forward in the petition and has not apparently been suggested at any of the three

previous hearings of the case. Nor are there the facts pleaded in the petition on which a plea u/s 18 of the Limitation Act could be founded. The

only relevant plea is that the petitioner came to know of the fraud practised by the respondent "" during the holidays on enquiry from his vakil.

Since the Court re-opened on the 7th of June and the petition was actually filed on the 30th of June, it is obvious that the averment that the

petitioner only came to know the facts during the holidays would not be sufficient averment if he sought to save limitation for his petition by

pleading Section 18 of the Limitation Act. We see no reason why the principle of Order 7, Rule 6 of the CPC should not be applied to an

application to set aside a sale in execution and it seems to be improper to treat an apparently time-barred application as being within time by calling

in aid Section 18 of the Limitation Act when the pleading does not show how the exemption under the section is available to the petitioner and

particularly when the plea is raised for the first time in Letters Patent Appeal. Moreover, the plea rests in substance on allegations of fact which

have been discredited by the trial Court though the learned District Judge has not given any finding upon them.

In the result, therefore, we allow the appeal with costs throughout and restore the order confirming the sale of items 6 and 9.