Periya Perumal Ammal vs Veluchami Reddy

Wadsworth, J.—The petitioner was the judgment-debtor under an appellate decree, dated 18th March, .1938. In execution of that decree

the petitioner''s property was sold, the decree-holder being given leave to bid and set-off The sale price was something less than the full decree

amount. On the 27th July, 1938, before the sale was confirmed, the petitioner filed applications under Sections 20 and 19 of Act IV of 1938 and

in due course the stay was ordered. The position therefore was that when the sale had been held, the set-off, though permitted, had not been

completed by the confirmation of the sale-Vide Nataraja Pillai and Another Vs. Rangaswami Karamundar, . and further proceedings in execution

were stopped at this stage. On the 3rd March, 1939, in spite of this stay, the decree-holder was permitted to give up the balance due under the

decree and record satisfaction by reason of the sale which had not yet been confirmed and the petition u/s 19 was dismissed on the ground that

there was no longer a decree debt subsisting. It seems to us impossible to support this order. Our attention has been drawn to the decision of one

of us in C.M.S.A. No. 267 of 1940 as authority for the view that when a sale has been held but not yet confirmed at the time when an application

u/s 19 is filed, the judgment-debtor has no remedy in respect of the sale. No such principle was laid down in the decision referred to. Clearly when

the execution proceedings are stayed and the petition u/s 19 is filed at a time when there is a subsisting decree, debt, the Court is obliged to apply

the procedure laid down in section. 19 and scale down that decree. The question then arises; what is the result of the scaling down with reference

to the sale held but not yet confirmed? Clearly there is no procedure under the Act for setting aside a sale held after the commencement of the Act.

But that does not mean that the sale has to be confirmed regardless of the. effect of the scaling down application. The position being that the

decreeholder has the right to set-off against the purchase price the amount due to him under the decree if the procedure of scaling down that

decree results in the decree-debt being reduced to something below the purchase price, clearly, the decreeholder will have to put into Court the

balance before the sale can be confirmed. If he elects to have the sale set aside rather than put into Court the balance, that is his own business. But

if he wishes to get the sale confirmed in the ordinary course, he must either have to his credit under the decree a sufficient amount to meet the price

which he has bid or he must deposit the balance. Certainly the Court has no power to treat as satisfied a decree which at the time of the stay was

unsatisfied and allow the set-off to be completed on the basis of the decree which the Court had to scale down.

In the result therefore the revision petition is allowed with costs and the application is remitted to the lower Court for disposal in the light of this

judgment.