Podila Venkanna vs Chinchinada Venkanna and Others

Krishnaswami Nayudu, J.—These revision petitions arise out of orders setting aside a court auction sale on the ground of fraud and material

irregularity in publishing and conducting the sale, and excusing the delay in filing the petition to set aside the sale. The auction purchaser is the

petitioner. The first respondent who is one of the judgment debtors alleged that he was not served with the sale notice as he was absent at

Rangoon and the decree-holder committed fraud in taking the sale notice to his village knowing that he was at Rangoon, that there was no proper

proclamation and that the sale was vitiated by material irregularities. The decree holder contended among others that the petition to set aside the

sale was barred by limitation as it was filed beyond 30 days of the sale. Two petitions were filed by the first respondent in the District Munsif''s

Court of Tanuku, E. A. No. 842 of 1941 which was a petition under Order 21, B. 90, Civil P. 0. to set aside the sale and E. a. no. 947 of 1943

to excuse the delay in filing the petition to set aside the sale u/s 18, Limitation Act. Both the applications were allowed and the sale was set aside.

The said orders were confirmed in appeals preferred by the petitioner. The auction purchaser now seeks to contest the correctness of the orders

of the lower Courts.

The finding that the sale was vitiated by fraud and material irregularities has not been contested before me and the counsel for the petitioner

confined his arguments to the question of limitation, the finding having been that there was fraud played upon by the decree-holder on the

judgment-debtor who was prevented from coming to know of the sale and it was held that Section 18, Limitation Act applied. The counsel for the

petitioner argues that in order to entitle the judgment debtor to avail himself of the extended time u/s 18, Limitation Act the fraud by reason of

which the judgment-debtor was kept back from knowledge of the sale must be that of the auction purchases and not of the decree-holder. Section

18 runs as follows:

Where any person having a right to institute a suit or make an application has, by means of fraud been kept from the knowledge of such right or of

the title on which it is founded, . . . the time limited for instituting a suit or making an application-

(a) against the person guilty of fraud or accessory thereto, ....... shall be computed from the time when the fraud first became known to the person

injuriously affected thereby, .......

The fraud contemplated u/s 18, Limitation Act must therefore be a fraud of the person against whom the suit or application is made. It is therefore

for consideration whether an application under Order 21, Rule 90, Civil P. C. is an application against the decree-holder or the auction purchaser

or against both. For such an application the decree-holder is a necessary party. Under Order 21, Rule 92, Civil P. C. cl. 2 it is provided that no

order setting aside the sale shall be made unless notice of the application has been given to all persons affected thereby and the auction purchaser

would necessarily be a person affected by the sale and therefore notice should go to the auction purchaser before an order is made setting aside

the sale. Though the Code does not provide that in an application under Order 21, Rule 90, Civil P. C. for setting aside the sale an auction

purchaser is a necessary party yet notice having been provided for him in case the order is made setting aside the sale it can be stated that he will

be a proper party to the application and will be a necessary party at a later stage when the order is made. In this case the fraud alleged and proved

is that of the decree-holder alone that he knowing that respondent 1 was at Rangoon successfully prevented him from knowing the sale, and the

auction purchaser therefore does not come in on the scene at all. It is for consideration, though ordinarily a decree-holder is a necessary party to

an application under Order 21, Rule 90, Civil P. C. whether the decree-holder could be said to be the person against whom the application is

made within the meaning of Section 18, Limitation Act. There can be no doubt that an application to set aside the sale in execution of the decree is

primarily an application against the decree-holder since he is the person at whose instance the sale proceedings were initiated and for whose

benefit the sale is held since by reason of the sale he would expect to realise the amount of the decree, to which he is entitled, and it is he that is in

charge of publishing and conducting the sale and it is therefore for him to see that it is done properly and regularly. If the sale is set aside, apart

from the auction purchaser, the decree-holder is affected since his realisation of the decree amount is put off and he would be obligged to launch

fresh proceedings for conduting the sale. I have therefore no hesitation in holding that an application under Order 21, Rule 90 is an application

against the decree-holder though those who are affected by the sale would also be necessary parties.

The nature of fraud that could be practised against the judgment-debtor with a view-to deprive him of the knowledge of the sale could, in the

ordinary circumstances, be attributed mostly to the decree-holder''s conduct. If the decree-holder could successfully see that notice of the

execution proceedings, notice, effecting the sale proclamation and thereby of the sale itself, are not brought within the knowledge of the judgment-

debtor, the judgment-debtor could not be made aware of the sale. It is very seldom that one could come across a case where the knowledge of

the sale was kept away from the judgment-debtor when it could be attributed to the auction purchaser. Ordinarily the auction purchaser is a

stranger to the proceedings and no duty is cast upon him to take any proceedings whereby the judgment-debtor could be made aware of the sale

since the auction purchaser comes in only on the sale being held and it will be at the time of instituting proceedings for possession that he comes in

contact with the judgment-debtor. No doubt in cases where the decree-holder himself is the auction purchaser and the fraud is that of the decree-

holder it may be said the auction purchaser was a party to the fraud. It is therefore reasonable to hold that in order to entitle a judgment debtor to

get the benefit of Section 18, Limitation Act in an application for seting aside sale it is not the auction purchaser''s fraud alone that could be relied

upon but the judgment debtor could also rely upon the fraud practised by the decree-holder in not bringing to his notice the sale. The proper

construction of the language of Section 18, Limitation Act and its application to the provisions of Order 21, Rule 90, Civil P. C, would lead to the

same result.

In support of his contention that it wag the auction purchaser''s fraud alone that the judgment-debtor could take advantage of the learned

counsel for the petitioner relied upon two decisions in Abubaker Saheb v. Mohideen Saheb, 20 Mad. 10 and Payidanna v. Lakshminarasamma,

38 Mad 1076 :A. I. R. 1916 Mad 33. In the former the question of limitation did not arise. The latter was in a suit for setting aside the sale by a

minor on her attaining majority on the ground of fraud and it was held that the suit having been instituted within three years was not barred by

limitation. The learned counsel however relied on some observations of Sadasiva Aiyar J. in that case. The learned Judge while stating that it :

would be hard upon a judgment-debtor whose properties have been sold for a song by the fraud of the decree-holder that he should be compelled

to come in 30 days though he might not have known of the fraud till after the 30 days have expired, stated that Section 18, Limitation Act would

not help him in getting an extension of the 30 days unless after the date of the fraudulent sale the decree-holder and the purchaser kept him by

fraud from the knowledge of his, right to make the application especially where the court auction purchaser has joined the decree-holder in bringing

about the fraudulent sale. These observations were not necessary for the decision of that case and the learned Judge appears to have taken it for

granted that in order to get extension of the time u/s 18, Limitation Act, the fraud must be by both the decree-holder and the court auction

purchaser probably because in that case the court auction purchaser joined the decree, holder in bringing about the fraudulent sale. I am however

unable to agree with these observations of the learned Judge in view of the language of Section 18, Limitation Act, and the nature of the

proceedings to which it has to be applied. In Pulla Reddi. v. Pattabhiramai Reddi, 56 Mad 734 : A. I. R. 1933 Mad 626 which was a case where

the fraud of the auction purchaser was relied upon a Bench of this Court held while construing Section 18, that if the words of the section were to

be followed, any person whose fraud had kept from another person the knowledge of his right to institute a suit or make an application was

included within the provisions of that Section and that the auction purchaser, if he could be proved to have committed fraud, then the application

for setting aside the sale would not be barred because time would run only from the discovery of such fraud. The learned Judges held that the

words of Section 18, Limitation Act were sufficiently wide to include any person whose fraud had kept from the knowledge of another person his

right to institute a suit or make an application and therefore held that the auction purchaser''s fraud could also enure to the benefit of the judgment

debtor in getting extension of time. Though this point was not expressly considered in that decision in view of the wider interpretation put upon

Section, 18 a decree-holder would also come in among the persons whose fraud the judgment-debtor would be entitled to take advantage of. But

one cannot subscribe to view that the fraud of any person who could not be said to be a party against whom the application is made could be

availed of by the judgment debtor. Excepting the desision in Pulla Reddi. v. Pattabhirami Reddi, 56 Mad 734 : A. I. R. 1933 Mad 626 where the

interpretation of Section 18 was gone into with reference to the limited question raised whether the fraud of the auction purchaser could be taken

advantage of by the judgment debtor, the question as is now raised before me does not appear to have been considered in any of the reported

decisions of this High Court. But in Muhammad Rawther v. Subba Nicker, 17 M. L. W. 152 : A. I. R. 1923 Mad 353 in a case where the

decree-holder failed to serve the judgment-debtor with notice of the intended sale but even after the sale actively concealed from him the

knowledge of his right to object to the sale, Section 18, Limitation Act was applied and the learned Judges observed that there was a continuing

fraud which commenced with the decree-holder''s failure to serve the judgment debtor and that justified the application of Section 18 Limitation

Act. Therefore it will be seen that in that decision the fraud practised by the decree-holder was relied upon by the judgment-debtor to get the

benefit of Section 18. That Section 18, Limitation Act, can be invoked to extend the period of limitation where fraud is committed by the decree-

holder finds support in the Calcutta decisions in Azizannessa and Others Vs. Dwarika Prosad Boral and Others, , Kedar Hura-v. Ashutosh Roy,

44 Oal. L. J. 665 and Mahipathi Haldar v. Atul Krishna, A. I. R. 1949 Cal. 212 : 53 C. W. N. 587. Though in the view taken by the learned

Judges of the Calcutta High Court in the said decisions there seems to be some difference of opinion as to whether the fraud must be only of the

decree-holder and not of the auction purchaser it is clear that what is contemplated with reference to the plea of fraud u/s 18, in relation to an

application under Order 21, Rule 90, is the fraud of the decree holder that could be primarily relied upon by the judgment-debtor for extension of

time. In view which I have taken and following the decision of the Bench in Pulla Reddi v. Pattabhirami Reddi, 56 Mad. 734: A. I. R. 1933 Mad.

626, I am of opinion that the judgment debtor who was kept out of the knowledge of the sale by fraud can, in an application under Order 21, Rule

90, Civil P. C., to set aside the sale invoke the aid of Section 18, Limitation Act to extend the period of limitation where fraud is proved to have

been committed by the decree-holder or the auction purchaser or both.

In the result the petitions are dismissed with costs. One advocate''s fee.