S. Ramaswami Iyer vs Komalavalli Ammal

Patanjali Sastri, J.—This is a petition to revise an order of the subordinate Judge of Mayavaram whereby the sale held on 17th March 1938

in execution of the decree in O.S. No. 5 of 1933 on the file of that Court was set aside u/s 23, Madras Agriculturists'' Relief Act, on the

application of the respondent. The petitioner obtained the decree on foot of a mortgage executed in his favour by the respondent''s brothers. The

mortgage comprised in addition to certain other properties the six items of immovable property here in question to which the respondent claimed

title under a will of her deceased father which is marked Ex. A in these proceedings. The respondent was impleaded as defendant 4 in the suit and

her claim to have these properties exonerated from liability failed as she was held estopped from setting up her own title to them by reason of

having attested the mortgage, thereby leading the mortgagee to believe that the mortgagors had the right to mortgage the properties. Three

objections to the maintainability of the respondent''s application u/s 23, Madras Act 4, of 1938, were raised by learned Counsel for the petitioner.

The first was that out of the six items of property now in question, four were situated within the limits of Mayavaram Municipality and that therefore

the respondent was not an agriculturist within the meaning of the definition in Section 3(ii) of the Act. The other two items are admittedly

agricultural lands situated outside the municipality. The definition so far as it is material here says:

''Agriculturist'' means a person who (a) has a saleable interest in any agricultural or horticultural land in the province of Madras not being land

situated within a municipality.

This provision, it was said, means that any person who owns an agricultural land situated within a municipality is not an agriculturist although he

has such land outside the municipal limits. This construction is clearly wrong. All that the definition requires is that the person who claims to be an

agriculturist should have a saleable interest in an agricultural land situated outside a municipality, and if he has such land, it is wholly immaterial

whether or not he also owns agricultural lands within a municipality. Indeed, learned Counsel for the petitioner did not seriously press this

contention. It was next argued that all that the respondent obtained under this will (Ex. A) was a mere right to enjoy the properties during her

lifetime without any power of alienation, and that she had no saleable interest in them such as would bring her within the definition. Learned

Counsel laid stress on the words ""hold and enjoy during her lifetime"" used in connexion with the disposition in favour of the respondent while the

word ''get'' was used in the grant to the respondent''s male issue, and argued that this indicated that the testator''s intention was to confer upon the

respondent nothing more than a right of enjoyment. It was also urged that this construction should be adopted as it would give effect to the restraint

imposed on the respondent''s powers of alienation which otherwise would be defeated as being void for repugnancy. We are unable to construe

the will in the manner suggested. We do not consider that the testator used the words ""hold and enjoy"" in deliberate contradistinction to the word

''get'' with a view to make clear that he was not conveying an estate in these properties to his daughter. The latter word is used in the disposition in

favour of the respondent''s daughter which is also made subject to the same condition restraining alienation. We are of opinion that the testator

intended to confer the same kind of estate on the respondent as he conferred upon her daughter, namely a life estate in the properties, and that the

condition absolutely restraining the disponees from alienating their interest in the properties is void as being repugnant to the nature of the estate

granted. It follows that the respondent derived a saleable interest in these properties under her father''s will Exhibit A.

The last contention, which was also the main contention before us, was that inasmuch as the properties were sold on 17th March 1938, i.e., a

few days before the commencement of the Act, the respondent ceased to have any saleable interest in these lands at the commencement of the Act

or at the time of her application u/s 23, and was therefore disentitled to claim the benefit of that provision. This contention was not raised in the

Court below and the respondent had no opportunity to show that, apart from the properties sold in court-auction, she owned other agricultural

lands and was thus entitled to apply under the section. The point was however allowed to be raised as petitioner''s learned Counsel agreed that if

his contention was accepted, the case might be remitted to the lower Court for ascertaining whether the respondent owns other agricultural lands.

It has to be observed that though the respondent''s properties were sold in court-auction before the commencement of the Act, the sale had not

been confirmed when the respondent applied on 20th June 1938, u/s 23 of the Act, though the period of MO days prescribed for an application

under the CPC to set aside a sale in execution of a decree had expired, and no such application, it was said, had been made. The question for

consideration, therefore, is whether in these circumstances the respondent can be held to have a saleable interest in the properties at the time when

she instituted the proceedings out of which this revision petition has arisen. It was argued for the petitioner that when a judgment-debtor''s property

is sold in court-auction and no application to set aside the sale has been made within 80 days under Order 21, Rules 89, 90 and 91, he has no

saleable interest left in the property, as it must be deemed to have passed under the sale to the auction-purchaser. It was pointed out that

confirmation by Court is a mere ministerial act as the Court is bound to confirm the sale in such circumstances under Order 21, Rule 22. There are

no doubt indications in the provisions of the CPC that an auction-purchaser at a court-sale does not obtain title to the property immediately on his

purchase. Order 21, Rule 22(1) provides:

Where no application is made under Rule 89, Rule 90 or Rule 91, or where such application is made and disallowed, the Court shall make an

order confirming the sale, and thereupon the sale shall become absolute.

u/s 316 of the old CPC of 1882, the title to the property vested in the purchaser only from the date of the sale certificate while u/s 65 of the

present Code, when the sale has become absolute, the property shall be deemed to have vested in the purchaser from the time when the property

is sold and not from the time when the sale becomes absolute. Again, under Order 21, Rule 89, a judgment-debtor whose property has been sold

has been held entitled to apply to set aside the sale as the person ""owning such property"" in spite of the sale. In Pandurang Laxman Uphade Vs.

Govinda Dada Uphade, , the judgment-debtor effected a private sale of the property sold in court-auction before such sale was confirmed, and the

position was held to be not essentially ""different from a case where there is nothing more than an agreement for sale between the parties, as the

conveyance, in such circumstances, could not operate unless the auction sale was set aside. In Suudaram v. Mamsa Mavuthar (''21) 8 AIR 1921

Mad. 157, a Full Bench of this Court had to consider the question whether a judgment-debtor who after the sale of his property in court-auction

sold it privately to a third party was entitled to apply under Order 21, Rule 89. All the learned Judges proceeded on the view that after a court-

sale, the judgment-debtor continues to be the owner of the property, though they ex-pressed somewhat different opinions as to his position when

he effects also a private sale of such property after the court-sale. Wallis C.J., was of opinion that the private sale being valid as between the

parties though it would operate only subject to the auction sale being set aside, the judgment-debtor could no longer be regarded as the owner of

the property but was entitled to apply as a person holding an interest in the property by virtue of a title acquired before the court-sale. Oldfield and

Kumaraswami Sastri, JJ. took the view that the judgment-debtor, in such circumstances, continued to be the owner notwithstanding ''?the court-

sale and the private sale.

It is thus clear that a judgment-debtor whose property is sold does not cease to be its owner capable of selling it effectively under certain

conditions, so long as he can apply to have the sale set aside, that is to say, till the expiration of thirty days from the date of sale. But what is the

position after that period? Can he still dispose of the property so as to pass an effective title to the transferee against the auction-purchaser? In

other words, has he a ""saleable interest"" in the property? Whatever could be said In support of an affirmative answer to this question if the matter

were res integra, we consider that the decision of the Privy Council in AIR 1936 204 (Privy Council) requires that it should be answered in the

negative. In that case a decree-holder having purchased certain properties of his judgment-debtor at a court-sale in execution of a mortgage

decree entered into a compromise with the judgment-debtor''s guardian under which one of the properties purchased was to be left to the

judgment-debtor in consideration of the latter agreeing to pay a certain sum and to abstain from raising objections to the sale of the properties. The

compromise was sanctioned by the Court which confirmed the auction sale with the exception of the property which was agreed to be left to the

judgment-debtor, and issued a sale certificate covering the other properties. A mortgage of that property subsequently executed for the sum

agreed to be paid under the compromise having turned out to be inoperative for want of due attestation, the question arose whether the

compromise amounted to a sale by the decree-holder purchaser in respect of which a vendor''s lien for unpaid purchase money could be claimed.

In upholding the claim and overruling the objections that there could be no sale by the auction-purchaser to the judgment-debtor as the title to the

property in question never passed to the former under the auction sale which was not confirmed in respect of that property, their Lordships

observed:

That village, along with other mortgaged property, was, as stated, sold to the plaintiff on 28th October 1920; and the period within which the

judgment-debtor could apply to the Court for setting aside the sale was 30 days from the date of the sale. During that period no such application

was made by him, and the title of the auction-purchaser became unimpeachable.... It is obvious that after the expiry of the statutory period for

setting aside the sale, there was no person who could question, the title of the auction-purchaser, and a certificate of sale granted by the Court

would in such case be a formal document of title. In the absence of an order setting aside the sale the Court is bound to confirm it, and the law

does not prescribe any special period for an application for an order of confirmation.

These observations are, in our view, decisive of the point now under consideration. They show that after the expiry of the period for an

application to set aside an auction sale, the auction-purchaser can effectively sell the property purchased even in the absence of a confirmation of

the auction sale by the Court or in other words, that he has a ""saleable interest"" in the property. If he has acquired such interest it is difficult to see

how the judgment-debtor can also be said to have a saleable interest in the same property, there being no question here of subordinate interests

carved out of the property being owned by different persons. It was urged by Mr. Seshagiri Sastri for the respondent that the abovementioned

decision must be taken to have been based upon the rules made by the Local Government for the administration of the Agency tracts of the

Madras Presidency as the property there in question lay within those tracts, and it was pointed out that those rules do not provide for confirmation

by the Court of an auction sale or for issue of a sale certificate and that, on the other hand title to the property vested under the rules in the

purchaser immediately on his purchase. Our attention was drawn to the argument of the learned Counsel for the appellant before this Court where

this aspect was emphasized : see Zamindar of Polavaram v. Maharaja of Pittapur (''31) 18 AIR 1931 Mad. 140 . The decision could, no doubt,

have been based on the provisions of those rules, but it is plain that the case was throughout dealt with on the footing that the CPC was applicable.

The original auction sale was in fact confirmed and a sale certificate was also issued, though in respect of the other properties, and the discussion

relevant to the present issue, both in the judgment of this Court see Zamindar of Polavaram v. Maharaja of Pittapur (''31) 18 AIR 1931 Mad. 140

and in that of the Privy Council, proceeded having the provisions of the CPC in view, as the reference to confirmation by Court and sale certificate

clearly shows. Indeed in the arguments of counsel before the Board as reported, no reference was made to the Agency Rules, while the relevant

provisions of the Code were cited. We cannot therefore regard the decision of their Lordships as inapplicable here.

Mr. Seshagiri Sastri placed reliance on AIR 1933 101 (Privy Council) as showing that the title of a purchaser in court-auction becomes

complete only on confirmation by Court. The case related to an Income Tax assessment and the question was when the assessee, a moneylender

who had purchased certain properties of his judgment-debtor in execution for the amount payable to him under a decree, could be said to have

realized his debt. It was held that the interest on the debt could be deemed to have been realized only when the sale was confirmed. Their

Lordships did not have to consider the position of a judgment-debtor in relation to the property sold in court-auction after the expiry of the period

prescribed for setting aside the sale where no confirmation follows, and the decision is no authority for the view that he has, in such circumstances,

a saleable interest in the property.

It was said that apart from Order 21, Rules 89, 90 and 91, the Court can set aside auction sales u/s 47 on other grounds (see the cases

collected in Mulla''s Civil Procedure Code, Edn. 10, p. 185) and can also refuse to confirm such sales under its inherent powers, Raghavachariar

v. Murugesa Mudali (''23) 10 AIR 1923 Mad. 635 and Govinda Padayachi v. Murugayya Chettiar (''33) 20 AIR 1933 Mad. 399 and that

therefore it cannot be said that the auction-purchaser acquires an indefeasible title before confirmation. These cases proceed on the ground that the

sale was either a nullity or was tainted by fraud on Court to which the purchaser was-privy, and have not, in our opinion, much bearing upon the

narrow point arising for consideration before us. In the result, the order of the Court below is set aside and the case is remitted to that Court for

disposal, after enquiry as to whether the respondent had a saleable interest in other agricultural lands apart from the properties sold in court-

auction, and also whether in fact no application for setting aside the sale had been made before the proceeding u/s 23 of the Act was instituted, no

finding having been recorded on these points. Both parties will be at liberty to adduce fresh evidence. Costs in this Court will abide and follow the

result.