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Beevor, J.—The plaintiff-appellants sued for declaration of title and confirmation or recovery of a certain property on the ground that they had purchased this property on 9th August 1932 in execution of a decree dated 6th March 1930 obtained against the family of defendants 2nd party which consisted of two brothers Ramcharan Goala and Nathuni Goala, the original defendants 3 and 4, and their sons and grandsons. The suit was contested by defendants 1st party who claimed the property on the basis of a purchase at an auction sale dated 16th March 1932 in execution of a decree dated 18th March 1930 obtained by defendants 3rd party against Nathuni Goala, the original defendant 4, who, according to them, was the karta of the joint family of defendants 2nd party so that the decree against him bound the family. The trial Court dismissed the suit on three grounds: first, that the plaintiffs'' decree dated 6th March 1930 created no charge over the property; secondly that the suit was barred by limitation as brought more than one year after the rejection of an application under Order 21, Rule 58, Civil P. ft, brought by the plaintiffs in respect of this property on 10th March 1932; and thirdly that in any case defendants 1st party were bona fide purchasers for value without notice of any prior charge in favour of the plaintiffs and that, therefore, the plaintiffs by their purchase dated 9th August 1932 could claim no priority over the contesting defendants'' purchase of 16th March 1932. The lower appellate Court held that the plaintiffs'' decree of 6th March 1930 created a valid charge over the property but agreed with the trial Court on the other two points and dismissed the appeal.
On appeal the plaintiff-appellants challenge the two findings which are against them and on behalf of the respondent-defendants 1st party an attempt was made to displace the finding of the lower appellate Court that the plaintiff-appellants'' decree of 6th March 1930 created a charge on the property. It will be convenient to deal with this third matter first. The decree of 6th March 1930 was passed on compromise. We were referred to the decision in P. Sivanna v. Venkata Krishanamurthi 19 Ind.Cas. 478 where it was held that a mere covenant not to" alienate property was insufficient to create a charge in a compromise decree. In the petition of compromise embodied in the decree (EX. 11), however, it was clearly stated that the property would remain attached "and liable" until satisfaction of the entire decree. The two words which I have placed in inverted commas to my mind clearly distinguish this decree from the facts of the case cited and show that a charge was created over the property. I next turn to the question of limitation. Exhibit I-2 is the entry in the Eegister of Miscellaneous Judicial Oases showing that Ramdhani Sao, brother of plaintiff 1 and father of plaintiff 5, filed an application on 10th March 1932 under Order 21, Rule 58, Civil P. C, for release of properties sought to be sold in execution case No. 1307 of 1931 which was rejected on 14th March 1982. It was not disputed that that application was filed in the execution case in which defendants 1st party purchased the property. It may be taken that that decision rejecting the application under Order 21, Rule 58 became final and the order was, therefore, conclusive under Order 21, Rule 63 as it is not the case of the plaintiff-appellants that any suit was filed to establish the plaintiffs'' right within one year. It is important to notice, however, that the application under Order 21 Rule 58 was filed and rejected not only before the property was purchased by the defendants 1st party but also before the plaintiff-appellants had any interest in the property beyond the charge created by the decree of 6th March 1930. That charge would not entitle the plaintiffs to have the property released though possibly it might entitle them to have the property sold subject to that charge. There is nothing to show that the question whether the plaintiff-appellants had a charge over the properties or the question whether the properties should be sold subject to any such charge was either directly or indirectly raised by the application under Order 21, Rule 58, Civil P. C. The decision or the rejection of that application, therefore, will not bar the plaintiff-appellants'' present suit which is based on a title which is independent of anything directly or indirectly decided by the rejection of the application under Order 21, Rule 58, Civil P.C.
Both the lower Courts held that defendants 1st party at the time of their purchase in execution on 16th March 1932 had no notice of the prior charge in favour of the plaintiff-appellants. At the beginning of the argument it was stated on behalf of the plaintiff-appellants that they would challenge this finding, but in the course of argument no attempt was made to show that this was not a valid finding of fact. It was conteneded that in any case defendants 1st party could not claim the whole property because the decree in execution of which they purchased was not a decree against the entire family of defendants 2nd party but only against Nathuni Goala. It is, however, in evidence that other members of defendants 2nd party brought a title suit on 14th April 1932, and tried to set aside the decree of the defendants 3rd party and the purchase made in execution thereof by defendants 1st party. There was a compromise made in that suit on 11th December 1933, between those of defendants 2nd party who were plaintiffs in the suit and defendants 1st party by which the sale was to be set aside on Rs. 950 being paid by a certain date failing which the sale would be confirmed. The money was not paid in accordance with the compromise and, therefore, the sale stood confirmed. Now no attempt has been made before us to show that the proceedings in that title suit were collusive and in the circumstances I consider that the lower appellate Court was right in thinking that the plaintiff-appellants cannot now challenge the fact that defendants 1st party purchased the entire interest of defendants 2nd party in the property. There remains, therefore, the question whether the charge created by the compromise decree of 6th March 1930, in favour of the plaintiffs could be enforced against defendants 1st party who were bona fide purchasers at an auction sale in execution of a decree binding on the family of defendants 2nd party without notice of the prior charge.
On behalf of the plaintiff-appellants it has been urged that a charge created by a decree differs from other charges and that whatever may be the position regarding other charges such a charge is enforceable against a subsequent transferee even if he purchases bona fide without notice of the charge. It has also been contended on behalf of the appellants that a purchaser at an auction sale in execution of a decree purchases subject to all charges even in circumstances in which bona fide purchasers at voluntary sales would be protected. Both these questions have in one form or another come up for decision before the Courts in India on a number of occasions both prior and after the amendment of Section 100, T. P. Act, by Act 20 of 1929. This amending Act came into force from 1st April 1930, which was after the date of the compromise decree which created a charge in favour of the plaintiff-appellants though before the purchase made either by the plaintiff-appellants or by defendants 1st party-respondents. I will deal first with the question whether a charge created by a decree is enforceable against a bona fide transferee for value without notice of the charge. I will deal with this question first irrespective of any amendment of the law by Act 20 of 1929. It has been suggested that charges created by decrees passed on compromise cannot be so enforced even though charges created by other decrees may be enforced (vide remarks of Meredith, J. in Mt. Basumati Kuer Vs. Mt. Harbansi Kuer and Another, , but as in my opinion, for which I will give my reasons below, no charge created by a decree is enforceable against a bona fide transferee for value without notice of the charge, I find it unnecessary to consider this point further.
Most of the cases in which it had been held that a charge created by a decree would bind a subsequent bona fide transferee for value without notice of the charge were considered in Fateh Ali v. Gobardhan Prasad A. I. R. 1929 Oudh 316 which actually went further and held that where right is charged on specific immovable property either by a decree or by contract a subsequent transferee though for valuable consideration and without notice takes it subject to that charge. This case was also reported under the name Razia Begam v. Israt Ali in Fateh Ali v. Gobardhan Prasad A. I. R. 1929 Oudh 316 and is a decision of the year 1929. It was overruled on the point just mentioned by a Full Bench of three Judges in AIR 1937 217 (Oudh) where it was held that there is no difference in principle between a charge created by a decree and one created by a contract, and that a charge in either case creates no interest in the property and it is in this respect that it differs from a mortgage. That Full Bench decision was reconsidered by a Full Bench of five Judges in Abdul Gaffar Khan v. Ishtiaq Ali AIR 1943 Oudh 354 which confirmed the decision of the previous Full Bench in AIR 1937 217 (Oudh) . In the judgment pf the later Full Bench reference was made to" many of the cases relied on in Fateh Ali v. Gobardhan Prasad A. I. R. 1929 Oudh 316 but they were not considered in any great detail though the later decisions of the Nagpur High Court in Mt. Maina v. Ahsan Hussain 169 Ind.Cas. 169, Ahsan Hussain v. Maina AIR 1938 Nag. 129 and AIR 1940 163 (Nagpur) were dealt with at some length. The first two of these decisions of the Nagpur High Court relate to the same case, the second being the judgment delivered in the Letters Patent appeal against the first. The judgment of Niyogi J. in 169 I.e. 1696 proceeded on three grounds: (1) that a charge created by a decree even under the provisions of the Transfer of Property Act before its amendment is binding on bona fide purchasers for value without notice; (2) the principle of lis pendens applied and that pre-e)uded a transfer that would limit the rights of parties to the suit and on that ground a bona fide purchaser would be bound by the charge; and (3) that the principle of estoppel applied. In the Letters Patent appeal in Ahsan Hussain v. Maina AIR 1938 Nag. 129 the decision was upheld on the third of these grounds. In my opinion there is great force in the criticism made in the judgment of the Full Bench of five Judges in Abdul Gaffar Khan v. Ishtiaq Ali A. I. R. 1943 Oudh 354 on the reasoning of the judgment in Ahsan Hussain v. Maina AIR 1938 Nag. 129 . In AIR 1940 163 (Nagpur) the previous decision in Ahsan Hussain v. Maina AIR 1938 Nag. 129 was distinguished on the ground that in the case before them in AIR 1940 163 (Nagpur) the decree was merely declaratory and unexecutable whereas in Mt. Maina v. Ahsan Hussain 169 Ind.Cas.169 the decree creating the charge was one capable of execution. In the judgment in AIR 1940 163 (Nagpur) there is a detailed consideration of most, if not all, of the older Indian decisions relied on in Fateh Ali v. Gobardhan Prasad A. I. R. 1929 Oudh 316 as well as certain English cases. In par ticular, the learned Judges in AIR 1940 163 (Nagpur) gave detailed consideration to the decisions in Kuloda Prasad Chatterji v. Jageshar Koer 27 Cal. 194, Maina v. Bachohi 28 ALL. 655 , Mahadeo Prasad Vs. Anandi Lal and Others, , Bhoje Mahadev v. Gangabai 37 Bom. 621, Kallappa v. Balwant A. I. R. 1925 Bom. 343, Srinivasa Raghava Aiyangar v. Ranganatha Aiyangar A. I. R. 1919 Mad. 528 and Hemlata Debi v. Bhowani Charan Roy 39 C. W. N. 725 . In my opi nion the criticism offered by the learned Judges of the Nagpur High Court in AIR 1940 163 (Nagpur) on these decisions is justified and the reasons given in those cases do not justify the conclusion that a charge created by a de cree has any greater effect than charge crea ted by act of parties. The reasoning of the judgment in AIR 1940 163 (Nagpur) appears to me equally applicable in the case of charges created by decrees capable of execution and in the case of charges created by declaratory decrees. I would therefore follow the decisions of the Full Benches of the Oudh Chief Court in AIR 1937 217 (Oudh) and Abdul Gaffar Khan v. Ishtiaq Ali AIR 1943 Oudh 354 and the decision of the Nagpur High Court in ILR (1941) Nag. 5138 and hold that a charge created by a decree is not enforceable against a bona fide transferee for value without notice. I am supported in my conclusion by the remarks of Meredith J. in 20 Pat. 862 at p. 92, who, after referring to the decision in Fateh Ali v. Gobardhan Prasad A. I. R. 1929 Oudh 316 and a number of the cases there cited, pointed out that they had been considered and expressly dissented from in A. I. R. 1987 Oudh 2174 and while finding it unnecessary to decide the general question stated:
I would like to express my own personal view which is that the Full Bench case in AIR 1937 217 (Oudh) is correct and the other rulings which have been cited, the reasoning of which I find in some places very difficult to follow, have taken an erroneous view.
I now turn to the second question. So far as I have ascertained, the first case in which it was suggested that in India an auction-purchaser at a sale in execution of a decree cannot avail himself of the plea that he is a bona fide purchaser for value without notice of an equitable claim in circumstances in which such a plea is open to other transferees is the case in J.C. Galstaun Vs. Sonatan Pal and Others, . That case dealt with an appeal in a suit to enforce an equitable mortgage by deposit of title deeds. The suit was contested by defendant 3 who had purchased the property mortgaged in execution of a decree obtained by defendant 2 against the mortgagor or his legal representatives. Towards the end of the judgment at page 494 of the report appears the following paragraph:
The learned Subordinate Judge has found that defendant 3 had purchased with notice of the mortgage. This point has not been contested before us. But in any case it seems to us that he, being a purchaser at a sale in execution of a decree, purchased the property subject to all the equities of the judgment-debtor and he cannot take up the position of a bona fide purchaser for value without notice.
In view of the finding that defendant 3 had notice of the mortgage, the latter part of this paragraph appears to be obiter and no further reasons were given.
The next case is that of Chaudhari Fateh Ali v. Gobardhan Prasad, a decision of the Chief Court of Lucknow of the year 1929 reported in Fateh Ali v. Gobardhan Prasad A. I. R. 1929 Oudh 316. The headnote of the report appears to be defective. The judgment dealt with two suits which explains how the same decision is reported under the name Razia Begam v. Israt Ali in 6 C. W. N. 493 and Fateh Ali v. Gobardhan Prasad A. I. R. 1929 Oudh 316. In both the suits charges were created by a decree over the same property which was subsequently purchased by Gobardhan Prasad in execution of a money decree obtained by him. It was found as a fact that he had no notice of the charges on the property. The Chief Court decided first that under the English law the execution-creditor buys subject to the liability created by the judgment-debtor prior to the sale in which case the question of notice was wholly immaterial. They held that this principle of English law should be followed as a rule of equity, justice and good conscience unless excluded by any rule of law of this country and they found nothing in the statute law by force of which a decree-holder purchasing the property of his judgment-debtor at an auction sale can avoid a specific charge created by the debtor on the property purchased on the ground of his being a bona fide purchaser without notice. A second point decided by that case was that where a right is charged on specific immovable property either by a decree or by contract, the subsequent transferee, though for valuable consideration and without notice, takes it subject to that charge. On the second point this decision was overruled by a Full Bench of three Judges in Fateh Ali v. Gobardhan Prasad A. I. R. 1929 Oudh 316, which was confirmed by a Full Bench of five Judges in Abdul Gaffar Khan v. Ishtiaq Ali A. I. R. 1943 Oudh 354. Neither of these Full Bench decisions, however, seem to have dealt with the first point decided in Fateh Ali v. Gobardhan Prasad A. I. R. 1929 Oudh 316.
The learned Judges in Fateh Ali v. Gobardhan Prasad A. I. R. 1929 Oudh 316 relied for their conclusion regarding the English law relating to execution creditors on a passage, in Ashburner''s Principles of Equity, Chap. IV, 1902, in which it was stated (as quoted by them) that:
It has long been settled that a judgment-creditor is to be treated as a volunteer under the judgment-debtor.
They also relied on a passage in Halsbury''s Laws of England, Vol. 13, Section 8, para. 87 dealing with the plea of purchase for value without notice, and finally on a passage from the judgment of Kay L. J. in Madell v. Thomas and Co. (1891) 1 Q. B. 230 . In L.A. Creet Vs. Firm Gangaraj-Gulraj and Others, it was held that
execution purchasers purchase subject to all the charges and incumbrances, legal and equitable, which would bind the debtors,
The learned Judges referred in this connexion to Wickham v. New Brunswick and Canada Rly., a decision of the Judicial Committee of the Privy Council in (1866) 1 P.C. 64, Madell v. Thomas and Co. (1891) 1 Q. B. 230 and Fateh Ali v. Gobardhan Prasad A. I. R. 1929 Oudh 316 and relied on those decisions. The next case is Harnarain Prasad v. Bank, Upper India AIR 1938 Oudh 84. It is said:
It has been repeatedly held that an auction-purchaser gets property subject to the same restriction which the judgment-debtor himself was subject to and if the property is subject to any valid incumbrance the purchaser gets it subjeot to the same. The doctrine of equity does not here apply because while in ''the private sales there is an implied warrantee of title, there is none in an auction sale. In this connexion we may refer to Mangal and Another Vs. Mathura Prasad and Others, J.C. Galstaun Vs. Sonatan Pal and Others, . There are many other cases but we do not think it necessary to refer to any more. An auction-purchaser cannot, therefore, assume the position of a bona fide transferee without notice.
I have not discovered the many other cases to which they have referred, if the search is restricted to cases dealing with equitable claims. Of course there are many cases dealing with legal incumbrances such as mortgages other than equitable mortgages. The case Mangal and Another Vs. Mathura Prasad and Others, , relied on in this decision hardly seems to be in point. This case dealt with an auction purchase in execution of a decree at a sale which was held during the pendency of a suit brought by a third party, who claimed to be the owner of the property, against the decree-holder and the judgment-debtor. That suit was finally decreed. Some of the sale proceeds were taken away by holders of other decrees against the judgment-debtor. The auction-purchaser brought a suit against thpse other decree-holders for refund of the money so taken away. It was held that the suit was not maintainable. Clearly the auction-purchaser had acquired no legal title. He was claiming, though unsuccessfully, in equity. He was not in the position of a bona fide purchaser of a legal estate without notice of a prior equitable claim. He had no legal title. The other decree, holders whom he was suing had acquired rights at law and not in equity and their rights arose subsequent to the sale in execution. Certainly at p. 705 of the Mangal and Another Vs. Mathura Prasad and Others, it was stated:
But in the present case it is not necessary to consider the position of a bona fide auction-purchaser who without notice and without knowledge of another litigation purchased the property and then found himself bound by the result of such a litigation without having had an opportunity to contest the claim.
The question there mentioned is quite a different question from the one now before us and'' no decision was given on it. Then in A. Surayya v. P. Yenkataramanamma AIR 1940 Mp. 701 Horwill J. followed the decision in L.A. Creet Vs. Firm Gangaraj-Gulraj and Others, and referred to the passage in Halsbury''s Laws of England, Vol. 13, para. 87, mentioned above. Clearly the main basis for these decisions is the English law regarding the position of execution creditors with reference to the plea of bona fide purchaser for value without notice. The position in England is summarised in Hals-bury''s Laws of England, Vol. 13, para. 87, p. 95, Edn. 2:
But the plea of purchase for value without noitoe still avails against a plaintiff who is not seeking to establish a claim to an equitable estate or interest, but merely to enforce an equity, such as an equity to set aside a conveyance. Ordinarily an assignee takes subject to all equities to which the assignor was subject; and this is the case where the assignee is a volunteer, and also where he is a purchaser for value if he has notice of the circumstances which raise the equity. But if he is a purchaser for value without notice, the equity cannot be asserted against him. Trustees in bankruptcy and judgment or execution creditors take only what was vested in the bankrupt or debtor; hence they do not rank as purchasers, but take subject to prior equities. A vendor''s lien appears to be not a mere equity, but an equitable interest, and it avails against the purchaser and persons claiming under him, whether as volunteers or for value, other than a subsequent purchaser who takes the legal estate without notice; but the vendor may be postponed by his conduct.
In a note to the statement that ''execution creditors take subject to prior equities, a reference is given to Whitworth v. Gaugain (1846) 1 Ph. 728 : 13 L. J. Ch. 433, Kindersley v. Jervis (1856) 22 Bea. 124, Beavan v. Oxford (Earl) (1856) 6 De. G. M. & G. 507 and Madell v. Thomas and Co. (1891) 1 Q. B. 230 at p. 238. I will deal with these cases in turn.
Whitworth v. Gaugain (1846) 1 Ph. 728. This was a case in which a plaintiff suing on an equitable mortgage created by the deposit of title deeds was seeking to enforce his mortgage against two judgment-creditors of the mortgagor who had obtained possession of the mortgaged property from the sheriff who had delivered to them legal seisin of the premises after elegits were sued out. It is clear from that decision that although by 1 and 2 Vict. c. 110, a judgment was made a charge upon various types of property of the judgment-debtor, that charge was held to be merely an equitable right. In this sense, as stated at p. 735 of the original report,
When therefore, it is enacted that the judgment shall operate as a charge upon the estate this must mean a charge upon the beneficial interest of the debtor. If he has a legal estate subject to an equity, it will be a charge upon the estate subject to the same equity; in the case of an equitable estate it will be a charge upon the equitable interest.
At page 732 of the original report it is stated: "If such then be the effect of the judgment, how does the elegit operate ? By Stat. 13 Edn. 1, c. 18, ''when a debt is recovered, the sheriff shall at the election of the plaintiff deliver to him all the chattels of the debtor, and a moiety of his land, until the debt be levied by a reasonable extent. The land of which a moiety is to be delivered is the land that is bound by the judgment. The judgment and the writ are in this respect co-extensive. If this is so in law, it is equally so in equity. The equitable interests which prevail against the judgment prevail equally against the writ.
Then at p. 733, it is said:
the argument on the part of the defendant, the case was put upon the footing of a purchaser for value without notice, who would be preferred to a prior equitable mortgagee. But distinction in this respect has always been made between a judgment obtained without notice of a previous charge and a purchase or mortgage.
It is clear that this decision was based on the effect of a judgment in English law (which, I think, is equivalent to a decree under the Indian Civil Procedure Code) and the writ of elegit and a clear distinction was drawn between a person having property under a writ of elegit and a purchaser. By subsequent statutes 13 Edn. 1 c. 18 was amended so that now chattels cannot ordinarily be taken on a writ of elegit but all the lands of a judgment-debtor may be so taken. But this does not affect the principles involved. Now the position of a judgment creditor in England holding property delivered to him by the sheriff in execution of a writ of elegit is exceptional and this form of execution is quite unlike any known in British India under the CPC of 1908, The right or title of the judgment-creditor so holding is known as tenancy by elegit. The details of the right of a tenant by elegit are complicated. The following extracts from para. 136, vol. 14, p. 81 of Halsbury''s Laws of England, Edn. 2, under the title "execution " will give some of the details of his rights:
Tenancy by elegit is a chattel interest in the land to continue as a legal estate for so long as is required to satisfy the judgment-debt at the annual value found and as an equitable estate for any further period required until the debt is in fact paid. The duration of such term is, however, subject to the rights of the judgment-debtor to regain possession as hereafter explained. The tenant by elegit is not a purchaser from the debtor, but a tenant under him, and, as against other persons, stands in his shoes, and is subject to all rights, whether equitable or legal, affecting him . .. The tenant by elegit also has a charge upon his debtor''s interest in the land, but such charge has not priority to any incumbrance existing at the date of its creation.
In these circumstances it seems to me very easy to understand why a tenant by elegit is not treated as a purchaser for value without notice in respect of equitable rights which are binding on the judgment-debtor; and I do not think any inference should be drawn from the decision in (1846) 1 Ph. 72823 regarding the position of auction-purchasers in execution in British India.
Kindersley v. Jervis (1856) 22 Beav. 1. This was a case which related to the administration of the estate of a man who died intestate and there was a dispute as to priority between the creditors of the heir who had obtained judgments against him and creditors in respect of simple contract debts of the intestate. It was held that although under the statute the judgments against the heir operated as charges upon all lands,
of or to which such person shall, at the time of entering up suob judgment or at any time afterwards, be seised, possessed or entitled, for any estate or interest whatever, at law or in equity, whether in possession, reversion, remainder or expectancy, or over which such person shall, at the time of entering up such judgment or at any time afterwards, have any disposing power, which he might, without the assent of any other person exercise for his own benefit (vide pages 3 to 4 of the original report);
still the creditors of the intestate had priority. It is to be noticed that in this case there was neither any question of any sale or transfer to the judgment-creditors of the heir apart from the charge created by the judgments nor did the matter arise strictly in execution of a decree but in an administration suit. It is also worthy of note that under the English Common law land or real property passed to the heir free of the simple contract debts of the intestate (not including what were known as speciality debts or judgment debts). This position had, however, been altered by Statute 3 & 4, will, iv, c. 104, the effect of which was to render the lands assessed to be administered in the Courts of Equity for the payment of the just debts of the intestate. The decision of the case turned on the construction of this statute and the statute 1 & 2 Vict. C 110, Section 13. It was held at page 23 of the original report that the devisee or heir at law takes no beneficial interest in the real estate or land of a deceased person "except subject to and after payment of the debts of the deceased testator or ancestor," according to the Statute of King William IV and that the charge created by the Statute of Queen Victoria only affected the beneficial interest of the judgment-debtor.
Beavan v. Oxford (Earl) (1856) 6 De G. M. & G. 507 This case arose out of a suit brought by a mortgagee against the late earl and various persons, being mortgage annuity and judgment-creditors, praying that the plaintiff might be declared entitled to redeem such incumbrances of the defendants as were prior to his mortgage, and that all proper accounts might be taken. Questions of priority arose between the trustees of a voluntary settlement and certain judgment-creditors whose judgments were obtained and registered after the date of the voluntary settlement. It was held that these judgment-creditors had no priority over the voluntary settlement. It will be noticed that here again there was no case of a sale to any judgment-creditor nor did the matter arise strictly in execution of any judgment or decree. The judgment-creditors claimed under Act 27 Eliz. c. 4. It was held that a judgment-creditor was not a purchaser within the meaning of that statute and that the, position had not been altered by the statute 1 & 2 Vict. C. 110 which gave the judgment-creditor a charge because the charge operated merely on the beneficial interest of the, judgment-debtor.
I can see nothing in these decisions to support the proposition that a person who has actually purchased the property of a judgment-debtor in execution of a decree against him is not entitled to put forward the plea that he is a bona fide purchaser for value without notice (if such is the case) as a defence against equitable claims which were binding on the judgment-debtor. It seems to me that in the decision, Beavan v. Oxford (Earl) (1856) 6 De G. M. & G. 507, there are remarks which suggest the contrary. The Lord Chancellor at page 517 of the report stated:
Independently of any authority, I confess I should have thought the proposition hardly arguable that a person who recovers a judgment is a purchaser
and later at page 523 he stated:
It is then said that if the debtor had executed a charge in favour of the judgment-creditors they would have been purchasers under the statute of Elizabeth. It is possible that it might be so, but we are now considering the effect of the statute of Victoria, and that statute does not say that judgment-creditors are to be in the same position as they would have been in if there had been a charge made for valuable consideration. What it says in effect is that they have the same rights as they would have had if the debtor had by writing under his hand agreed to charge the property.
From this it seems to follow that even where the statute provides that a judgment or decree shall operate as a charge on property that, charge may in some eases be less effective than a charge created by the voluntary act of the judgment-debtor himself. Yet a charge created by the judgment-debtor himself would under the English law as it stood at the time of this decision, merely have created an equitable right which could not be enforced against a subsequent bona fide purchaser for value without notice.
Madell v. Thomas and Co. (1891) 1 Q. B. 230. This was a case which came before the Court of Appeal and the facts as stated in the headnote are as follows. The plaintiff executed a deed, by which he assigned chattels absolutely to the defendants, and a hiring agreement, by which he hired the chattels from the defendants. These documents did not represent the real transaction between the parties, their intention being merely to create a security for money. The documents were not registered as required by the Bills of Sale Acts. The defendants having seized the goods for breach of the conditions of the hiring agreement, the plaintiff brought an action against them in respect of such seizure. It was held that the Court must disregard the form and look to the true nature of the transaction; that the documents amounted to a bill of sale within the Bills of Sale Act, 1882, and were void for want of registration; and that the plaintiff therefore was entitled to maintain the action. In a previous decision of the Court of Appeal in (1890) 25 Q. B. D. 2728 it had already been decided in a case between a trustee in bankruptcy of the supposed vendor and the supposed purchaser in similar circumstaces that the true nature, not the form, of the transaction must be regarded. It was clear therefore that unless the case in In re Watson (1890) 25 Q. B. D. 27 could be distinguished, the same rule must be applied in (1891) 1 Q. B. 280 The report of the latter case shows that an attempt was made to distinguish In re Watson (1890) 25 Q. B. D. 27 on the ground that the actual executant of the document was estopped from establishing the true nature of the transaction. The Master of the Rolls and Lopes and Kay L. JJ., all held that the executant of the document was not so estopped. The two former laid down no general principle regarding estoppel or equitable rights in general but in the judgment of Kay L. J. appears the following passage:
The decision in In re Watson (1890) 25 Q. B. D. 27, if I rightly understand it, is exactly to this effect. It was argued that that case was distinguishable, because there the question did not arise between the grantor and the grantee, but between the latter and the trustee in bankrupty of the former; but, assuming that there is an estoppel between the original parties, nothing is clearer than that on general principles a trustee in bankruptcy or an execution creditor would be bound by it just as much as the bankrupt or execution debtor himself. I will deal in a moment with the answer of the defendants'' counsel to this point. A trustee in bankruptcy or execution creditor is in privity with the bankrupt or execution debtor. He takes under the bankrupt or execution debtor not like a purchaser for valuable consideration, and it has been decided over and over again that he only takes what was vested in the bankrupt or execution debtor. Where property is subject to any rights by which it would be bound in the hands of the bankrupt or execution debtor, nothing can be more clear as a general proposition than that it would be subject to such rights as against the trustee in bankruptcy or execution creditor.
The reference to the "trustee in bankruptcy" in this passage is explainable as the decision in In re Watson (1890) 25 Q. B. D. 27 dealt with the case of a trustee in bankruptcy, but for the purpose of distinguishing In re Watson (1890) 25 Q. B. D. 27 it was entirely unnecessary to consider or refer to the case of an execution creditor. It also appears to me that as it was found by the Court of appeal that there was no estoppel against the executant of the document in Madell v. Thomas and Co. (1891) 1 Q. B. 230 it is difficult to draw any general conclusions from a dictum regarding the legal effect of such an estoppel (which ex hypothesi did not exist) as against a trustee in bankruptcy or execution creditor. Moreover, the dictum does not appear to be completely accurate if it is taken as applicable to all cases under the English law. In Richards v. Johnston (1859) 1 H. & N. 660 it was held that a sheriff who goes to seize the goods of a debtor under a writ of execution is not bound by an estoppel which might have prevented the debtor himself from claiming the goods. That case was followed by the Court of appeal in Richards v. Jenkins (1887) 18 Q. B. D. 451 a case between an execution creditor and a claimant to goods which had been seized by the sheriff in execution of his judgment. The decision proceeded on the assumption that the judgment-debtor was estopped from denying the title of the claimant to the goods. The Master of the Rolls and Bowen and Fry L. JJ., agreed that the judgment-creditor was not estopped from disputing the claimant''s title.
The remarks of Kay L. J., regarding the position of an execution creditor need not, however, be read as laying down anything more than was established by the decisions quoted above. In fact it is clear from his judgment that Kay L. J. did not intend to lay down any thing new. Most of those English decisions were considered by Bose J. in AIR 1940 163 (Nagpur) in slightly different connexion, but I think what he stated then fully supports my view. When the passage from Halsbury''s Laws of England, Vol. 13, para. 87, is read in the light of the above cases which are the authorities therein cited, I think it is quite clear that it affords no justification for the view that a person who has actually purchased the property of a judgment-debtor in execution of a decree against him is precluded from availing himself of the plea that he is a bona fide purchaser for value without notice in circumstances in which that plea would have been available to other classes of purchasers.
For the same reason I consider that the above passage from Halsbury''s Laws of England does not justify the conclusion drawn from it in Fateh Ali v. Gobardhan Prasad A. I. R. 1929 Oudh 316 and the later decisions which have relied on it in India for the same purpose. The learned Judges, who in Fateh Ali v. Gobardhan Prasad A. I. R. 1929 Oudh 316 relied on the decision in Madell v. Thomas and Co. (1891) 1 Q. B. 230 quoted part of the above passage from the judgment of Kay L. J. but unfortunately omitted the first portion which makes it clear that he was actually dealing with a case of estoppel and they, therefore, gave the impression that his remarks regarding equitable rights were necessary to the decision before him. Even if it be taken as correct, as Kay L. J. seems to have thought (contrary to the decision in Richards v. Jenkins (1887) 18 Q. B. D. 451) that an estoppel which binds a judgment-debtor will bind his execution creditor, I think that the argument that this propostion establishes that every equitable right which is enforceable against the judgment-debtor is enforceable against the execution creditor would prove too much. In Board v. Board (1873) 9 Q. B. 48 it was held that an estoppel binding on Robecca Board was binding on her son who purchased the property at a voluntary auction held by her. It is true that'' the facts of the case might suggest that her son knew of the facts, which raised the estoppel against her but none of the three Judges based his decision on this ground. If, therefore, the above argument were correct, it would follow from this decision that an equitable right binding on a transferor would bind the transferee under a voluntary conveyance for value even if the transferee had no notice of that claim. This conclusion, however, is known to be false. I come now to the case in (1866) L. R. 1 P. C. 64 which was relied on by the Calcutta High Court in A. I. R. 1937 Cal. 12918. The passage of the Privy Council judgment on which reliance was placed is at pages 75 and 76 of the report and runs as follows:
There is no doubt upon principle, as well as on the authority of the cases cited in the argument at the Bar, that the right of a judgment-creditor under an execution is to take the precise interest, and no more, which the debtor possesses in the property seized, and consequently that such property must be sold by the sheriff with all the charges and incumbrances, legal and equitable, to which it was subject in the hands of the debtor. In other words, what the debtor has power to give is the exact measure of that which the execution creditor has the right to take.
At first sight this decision may appear to be directly in point because the report shows that under the law of New Brunswick, with which their Lordships were dealing, the free hold lands of a debtor may in certain circumstances be sold under a writ of fieri facias which is a process whereby the property is sold by auction by the sheriff, but in England is not applicable to real property. The material facts of the case were, however, as follows. Certain creditors obtained judgments against the New Brunswick and Canada Railway Company and writs of fieri facias were issued at the instance of the judgment-creditors and placed in the hands of the sheriff who finding that no personal estate of the debtor was available proceeded to seize and advertise for sale certain lands of the company. The deben-ture-holders of the company claimed to be entitled to the lands seized and when the sheriff or sheriffs refused either to stay the, sale, or to agree to pay over the proceeds to the debenture-holders, the debenture-holders started legal proceedings to restrain the company, the sheriffs and the judgment-creditors from selling the lands until the debentures were paid and claiming in the alternative that in the event of a sale being allowed the sheriffs might be restrained from paying over the proceeds of such a sale to the judgment-creditors. It is quite clear, therefore, that the question which came before the Privy Council related to the rights of the parties before any sale in execution had taken place, and it is quite clear also that the sheriff and the judgment-creditors had notice of the debenture-holders'' claim before the property was brought to sale. In point of fact their Lordships of the Judicial Committee held that the claim of the debenture-holders was an invalid one but it seems to me that the passage of their Lordships'' judgment cited above deals merely with the question whether a judgment-creditor can enforce his judgment or decree against a person who has rights which are binding in equity on the judgment-debtor. I think that the emphasis must be laid on the words at the end of that passage "that which the execution creditor has the right to take." His rights are not increased by the fact that he has no notice of a particular equitable claim. The decision of their Lordships in this case, therefore, has no bearing on the question what are the rights of a purchaser at a sale which has already taken place in execution of a decree in respect of an equitable claim binding on the judgment debtor of which the purchaser has no notice.
The case in Rai Indra Narain Vs. Mohammad Ismail and Others, and the later Full Bench decision of the Allahabad High Court in Lala Nawal Kishore Vs. Municipal Board, which overruled the previous decision, both deal with the position of an aution-purchaser as it stands under the Transfer of Property Act as amended in 1929. The judgment in the Full Bench decision was delivered by Dar J. He referred to the position as it stood prior to the amendment of 1929 and referred to the above decision of the Privy Council in (1866) L. R. 1 P. C. 64, the judgment of Kay L. J. in Madell v. Thomas and Co. (1891) 1 Q. B. 230 and the passage in Halsbury''s Laws of England, Vol. 13, para. 87, as well as certain Indian decisions. He then stated as follows:
The position of an auction-purchaser of real property in this country is not exactly identical with the position of a judgment or execution creditor in England, who takes property of a debtor, subject to charges enforcible against the debtor. It may be that an execution creditor when he gets the property of the debtor in a Sheriff''s sale, gets the property by a process of execution and he may not be regarded as a purchaser for value under English law, but these considerations do not apply in this country where real property is sold by Court in a public auction and is purchased very often by strangers who pay full value for the property. Property may be sold in this country u/s 57, T. P. Act, free from enoumbrances or it may be sold by Court in enforcement of a simple or anomalous mortgage or it may be foreclosed by a decree in a mortgage on conditional sale and the purchaser or the person in whose favour the property is foreclosed may be the mortgagee. It cannot be denied that prior to the court sale the mortgagee was a transferee for consideration who would not be affected with charges of which he had no notice and there seems to be no reason why he should be any the less a transferee for consideration simply because he has purchased the property in a court sale in enforcement of the mortgage. It is true that in a court sale there is no warranty of title or of the property being sold free from charges or encumbrances as it is in a sale by private treaty. But both as a matter of law and as a matter of practice a search is made in the Registry prior to the court sale and every effort is made to notify the charges and encumbrances and very often the property fetches full price. On principle also, we can see no reason why a purohaser in court sale should be less favoured in the matter of enforcement of charges than a purchaser by private treaty and why should not one as much the other be regarded as a purchaser for value and therefore a transferee for consideration.
This passage clearly applies equally to the position as it stood before the amendment of 1929 as to later events. The first part of this passage may suggest that Dar J. was under the impression that strangers seldom or never purchase the property of a debtor in a sheriff''s sale in England. If so, his impression is incorrect. But the substance of his argument is, I think, strongly reinforced when it is found, as I have shown above, that none of the English authorities relied on deal with the case of a sale in execution of a decree or judgment which had actually taken place. I come, therefore, to the conclusion that even before the amendment of Section 100, T.P. Act, in 1929 a bona fide auction-purchaser at a sale in execution of a decree was not bound by the equitable rights binding on the judgment-debtor of which he had no notice. After 1929 the position remains the same whether Section 100, T. P. Act, applies to sales held in execution of decrees or not. Applying these principles to the fads of the case before us, I hold that the plaintiff-appellants have no title as against the contesting respondents. I would, therefore, dismiss this appeal with costs.
Manohar Lall, J.
I have had the advantage of perusing the exhaustive judgment prepared by my learned brother. I have read every one of the cases which were cited at the bar and which have been reviewed by my learned brother. But in my opinion the question is easy of solution by applying the provisions of Section 100, T. P. Act, as amended by Act 20 of 1929 --the amendment came into force" on 1st April 1930. It will be noticed that the charge in this case was created by a compromise decree on 6th March 1930, and, therefore, before the date of the amendment of the Act, whereas the execution sale in favour of defendants 1st party (who have been found to be bona fide purchasers without notice of the previous charge) took place on 16th March 1932. It has been held by a Full Bench decision of this Court, Tika Sao and Others Vs. Hari Lal and Others, that the provisions of Section 92, T. P. Act, as amended by Act 20 of 1929, are retrospective. In accordance with that view it has also been held by this Court that the provisions of Section 53A, T. P. Act, as amended by Act 20 of 1929, are also retrospective. It, therefore, follows, in my opinion, that the provisions of Section 100, T. P. Act, as amended are also retrospective. The amended Section 100 provides that no charge shall be enforced against any property in the hands of a person to whom such property has been transferred for consideration and without notice of the charge. It has been found as a fact in this case that the defendant had no notice of the charge of 6th March 1930. There is a conflict of opinion as to whether the words ''transfer for consideration'' which appear in this section apply only to a private transfer and not to a voluntary transfer in execution sale. But having considered the matter I am of opinion that the proper view is that which is expressed in the Full Bench case of the Allahabad High Court in Lala Nawal Kishore Vs. Municipal Board, . I respectfully agree with the observations of Dar J., who delivered the judgment of the Full Bench when he says that:
the words ''transferred for consideration'' are wide enough to include an auction sale in execution of a decree. No doubt, the Preamble of the Transfer of Property Act states that the Act is meant to define and amend laws relating to the transfer of property by act of parties and Section 5, T. P. Act, which defines the expression ''transfer of property'' contemplates also a transfer by act of parties and the language used in Section 100 as ''property transferred for consideration'' also suggests that the basis of the transaction is a contract of which consideration is the essential element, but Section 2 (d), T. P. Act, lays down:
''But nothing herein contained shall be deemed to affect... (d) save as provided by Section 57 and Chap. 4 of this Act any transfer by operation of law or by, or in execution of, a decree or order of a Court of competent jurisdiction.''
And Chap. 4 deals with mortgages and charges and Section 100 which specifically provides for charges is included in it. Section 2, therefore, provides that the Transfer of Property Act may affect a transfer by operation of law or by, or in execution of, a decree or order of a Court in matters relating to Section 57 and Chap. 4 of the Act, and it is a legitimate argument that in Chap. 4 and also in Section 100 which is included in Chap. 4, the expression ''transferred'' is used in a wider sense and includes both a transfer by act of parties and a transfer by operation of law or by or in execution of a decree.
The learned Judge then points out two views of the matter and after comparing the position of an auction-purchaser of real property in England with that which prevails in law in this country observes:
It is true that in a court sale there is no warranty of title or of the property being sold free from charges or encumbrances as it is in a sale by private treaty. But both as a matter of law and as a matter of practice a search is made in the Registry prior to the court sale and every effort is made to notify the charges and encumbrances and very often the property fetches full price. On principle also, we can see no reason why a purchaser in court sale should be less favoured in the matter of enforcement of charges than a purchaser by private treaty and why should not one as much the other be regarded as a purchaser for value and therefore a transferee for consideration. It cannot be denied that the words ''transferee for consideration'' used in para. 2 of Section 100, T. P. Act, unless restricted by other provisions of the Act, are wide enough to include an auction-purchaser who has purchased the property for a price in a court sale.
The learned Judge then deals with the contrary argument which was suggested by Sir Edward Bennet in Rai Indra Narain Vs. Mohammad Ismail and Others, and says:
the Legislature by the Amending Act of 1929 has amended Section 100 which occurs in Chap. 4 of the Act so as to include in it transfers for consideration and has not amended the saving clause in Section 2 so as to restrict the contents of Chap. 4 in any way, notwithstanding that Sections 85 to 90 of the Act had long ceased to be part of the Act at the time when the amendment was made. And, in the face of the plain language of the statute, as it stands to day, it is difficult to see how Section 100 can be excluded from the operation of the saving Clause (d) of Section 2, and how the saving clause can be restricted to the repealed Sections 85 to 90 of the Act. We have, therefore, come to the conclusion that the authority of Municipal Board Vs. Roop Chand Jain and Another, should be followed in preference to Rai Indra Narain Vs. Mohammad Ismail and Others, and the expression ''transfer for consideration'' used in para. 2 of Section 100, T. P. Act, should be taken to include an auction-purchaser in a court sale.
I respectfully agree with this view. The result is that the plaintiff cannot enforce his charge against the defendant who has been found to have purchased the property bona fide without the notice of that charge. The other questions raised on behalf of the appellants do not present any difficulty, and I agree with my learned brother in his conclusions. The result is that I would dismiss this appeal with costs.