Sudhir Chadra Ghosh vs Suresh Chandra Mukherjee

S.R. Das Gupta, J.—In this appeal several contentions were raised by the Appellant but only one of those contentions, in our opinion, should prevail. The Appellant has preferred this appeal against the order of the Subordinate Court refusing to set aside the sale. It has been contended before us that the learned Judge should have set aside the sale, firstly, because there were irregularities in publishing and conducting the sale and, secondly, because the price obtained at the sale was inadequate and as such there has been substantial injury to the Appellant and, lastly, the sale is invalid because of non-compliance of Section 35 of the Bengal Money-Lenders Act.

At the very outset I should mention that so far as the first and the second grounds are concerned we are not satisfied that there has been any substantial injury to the Appellant. Order XXI, Rule 90 of the CPC provides that a sale can be set aside if there were irregularities in publishing and conducting the sale provided there has been substantial injury to the judgment-debtor as a result of such irregularities. Thus it is essential to establish that there has been substantial injury before the judgment-debtor can succeed in an application to set aside the sale. Mere irregularities in publishing and conducting the sale even assuming that there were such irregularities, would not be sufficient to enable us to set aside a sale.

In this appeal it has been contended before us by the Appellant that the price fetched of the lots which were put up for sale was inadequate and there has been substantial injury to the Appellant who was the judgment-debtor and whose property had been put up for sale. We are not satisfied on the materials which are on record that the price which has been obtained as a result of the sale was inadequate or insufficient. In our opinion, the judgment-debtor has failed to establish that there was such inadequacy of price and as such he has suffered any injury.. On the materials on the record we are satisfied that the price which had been obtained on such sale was sufficient and as such there has been no injury to the judgment-debtor. That being our view, the first and the second grounds raised fail.

The only other point that remains to be considered and on which considerable arguments were advanced by the advocates for the parties before us relates to the question as to whether or not the sale should have been set aside because of non-compliance of Section 35 of the Bengal Money-Lenders Act and I shall presently deal with this question. Before dealing with this part of the contentions of the Appellant it would be necessary to set out some facts in broad outlines for the purpose of properly understanding the present contention of the Appellant. They are as follows:

The Appellant was the mortgagor. He executed a first mortgage in favour of one Frovas Chandra Mukherjee, and Respondents Nos. 1 and 2 are the executor and executrix of the estate of Provas Chandra Mukherjee. The amount for which the mortgage was executed was Rs. 12.000. There were 2nd, 3rd and 4th mortgages in favour of: one Dhirendra Nath Groral for a sum of Rs. 7,700. In 1948, a suit was filed in the Alipore Court by the executor and the executrix of Provas Chandra Mukherjee for sale of the properties. On May 24, 1948, a preliminary decree by consent was passed whereby the suit was decreed for Rs. 24,000, to be paid in 7 annual instalments beginning from August 31, 1948, in default the decree was to be made final. The judgment-debtor failed to pay the amounts in terms of the said preliminary decree. Thereafter on September 18, 1948, a final decree was passed. On September 16, 1949, the executor of Provas Chandra Mukherjee started an execution case being case No. 21 of 1949. The total claim of the decree-holder was Rs. 25,687-0-3p. I should have mentioned that the subject-matter of the mortgage consisted of several properties and it has not been disputed before us that the value of those properties taken together far exceeds the claim of the mortgagee. Only four items of the mortgaged properties would be sufficient to pay up the dues of the mortgagee. On December 14, 1949, an objection was filed by the judgment-debtor. In the prayer portion of the petition of objection filed on that date it was stated that if one of the properties be sold the whole of the decree-holder''s dues would be paid off and accordingly an order might be passed for sale of one lot of the properties and the remaining lots might be released from the liability of sale in auction. On January 14, 1950, which was the date fixed for hearing of that objection, the judgment debtor prayed for time to adduce evidence. The matter was adjourned till February 11, 1950. On that date the judgment-debtor did not appear and the trial court directed that in the sale proclamation both the valuation given by the judgment-debtor as also the valuation put by the decree-holder should be inserted and that was done. Thereafter a number of applications were made by the judgment-debtor for adjournment of the sale and the sale was adjourned from time to time. On June, 23, 1951, the sale took place. The judgment-debtor thereafter mode the application for setting aside the sale and one of the grounds taken therein was that the sale was invalid because of noncompliance of Section 35 of the Bengal Money-Lenders Act. That application was refused. Thereupon the present appeal has been preferred to this Court.

The learned advocate for the Appellant contended before us that the trial court should have complied with the provisions of Section 35 of the Bengal Money-Lenders Act: In other words, the contention was that inasmuch as the value of the entire lot of properties mortgaged far exceeded the amount of the decree, the trial court should have, in view of the provisions of Section 35, specified in the proclamation of sale only so much of the properties mortgaged as it considered to be saleable at a price sufficient to satisfy the decree. In other words, the learned advocate contended that the court should have made an enquiry and ascertained what portion of the properties, would be sufficient to cover the decretal claim and specified only those properties and put the valuation thereof in the sale proclamation. The trial court failed to make such an enquiry and has specified all the properties mortgaged irrespective of the fact that the price of those properties far exceeded the decretal claim. Further the trial court put both the valuations given by the judgment-debtor and the decree-holder. This, the learned advocate contended, the trial court should not have done in view of the provisions of Section 35 of the Bengal-Money Lenders Act.

The learned advocate appearing on behalf of the Respondents contended that the benefit u/s 35 of the Bengal Money Lenders Act is a benefit conferred upon the borrowers and if a borrower does not avail himself of the benefit conferred by the said section the court is not bound to act in accordance therewith. In other words, shortly put, the contention of the learned advocate appearing on behalf of the Respondents was that the Appellant had waived his rights u/s 37 and the Appellant cannot now complain of non-compliance of the said section.

The question for our decision really is whether or not the provisions of Section 35 are mandatory. In other words, do the provisions of Section 35 cast a duty upon the court which the court is bound to carry into effect irrespective of the fact that the court is not moved by the judgment-debtor? Can the judgment-debtor in such a case be said to have waived provisions of Section 35 of the Bengal Money-Lenders Act? This question came up for consideration before their Lordships Mukherjea and Pal, JJ, in the case of Asharam Thikador v. Bijoy Singh Chapra ILR (1944) Cal. 166 : 47 C.W.N. 666. Their Lordships in that case held as follows:

...it is incumbent upon the Court not only to specify so much of the property of the judgment-debtor which it considers saleable at a price sufficient to satisfy the decree, it must also specify the price of the property below which it cannot be sold. In our opinion in cases coming u/s 35 of the Bengal Money-Lenders Act, the Court has got to determine the price of the property which is to be put up for sale on proper evidence, and one and only one valuation can be given in the sale proclamation. The direction of Section 35 of the Bengal Money-Lenders Act cannot be complied with by mere insertion of the two valuations given by the decree-holder and the judgment-debtor respectively.

Thus it appears that the view taken by their Lordships in the said case, was that the provisions of Section 35 of the Bengal Money-Lenders Act are mandatory and it is not only incumbent upon the court to specify so much of the property of the judgment-debtor which it considers saleable but the court has also got to determine the price of the property which is to be put up for sale and only one valuation can be given in the sale proclamation. In our opinion, if a duty has been cast upon the court by the said section, the court is bound to carry out the said duty irrespective of whether or not the court is moved by the judgment-debtor. The court is bound in view of the provisions of the said section to specify so much of the property as it considers saleable at a price sufficient to satisfy the decree and put the valuation thereafter in the sale proclamation. If that is the position, then the question of waiver on the part of the judgment-debtor does not arise. It has been conceded before us by the learned advocates appearing for the Respondents that if we come to the conclusion, which we do, that the provisions of Section 35 of the Bengal Money Lenders Act are mandatory, then there would be no question of any waiver. But then the contention before us has been that those provisions are not mandatory but only directory and the court is not bound to act in accordance therewith unless moved by the judgment-debtor and if the judgment-debtor waives his rights under the said section, he cannot subsequently complain of the non-compliance thereof.

The learned advocates for the Respondents drew our attention to certain cases decided by this Court since the decision of Asharam Thikadar v. Bijoy Singh Chopra ILR (1944) Cal. 166 : 47 C.W.N. 666, and some difficulty has no doubt been created in view of the said decisions on which the learned advocates for the Respondents relied. The first case on which reliance was placed by the Respondents is Manindra Chandra Roy Chaudhury v. Jagadish Chandra Majumder (1945) 50 C.W.N. 266 decided by Akram, J. and Chakravartti, J. as he then was. In that case Chakravartti, J. took the view that any objection regarding non-compliance with Section 35 in specifying the property to be sold is a defect in the sale proclamation within the meaning of the second proviso to Order XXI, Rule 90, of the Code of Civil Procedure. His Lordship held that it follows there from that an objection that the sale proclamation did not conform to Section 35 of the Bengal Money-Lenders Act cannot avail a judgment-debtor in an application under Order XXI, Rule 90, if he was present at the drawing up of the sale proclamation and did not raise any such objection at the time, nor it? can avail a judgment-debtor who, after receiving notice, did not attend at drawing up of the sale proclamation at all. His Lordship further held that Section 35 is only supplementary to Order XXI, Rule 66 of the CPC and it affects one of the provisions of that Rule.

It appears that the decision of Mukherjea and Pal, JJ. in the case of Asharam Thikadar v. Bijoy Singh Chapra ILR (1944) Cal. 166 : 47 C.W.N. 666 was not cited before their Lordships in the case of Manindra Chandra Roy Chaudhury v. Jagadish Chandra Majumder (1945) 50 C.W.N. 266 and the point of-view which is now placed before us and which was accepted, in the case reported in Asharam. Talukdar was not placed before their Lordships Akram and Chakravartti, JJ. If the said decision had been placed it is difficult to say what view their Lordships would have taken about this matter.

In any event, we are minable to agree with the ''proposition that an objection regarding non-compliance with Section 35 in specifying the property to be sold is a defect in the sale proclamation within the meaning of second proviso to Order XXI, Rule 90 of the Code of Civil Procedure. In our opinion, Section 35 contemplates a stage prior to the settlement of the sale proclamation. In other words, the court has to decide judicially and on proper evidence what are the properties which would be sufficient to cover the decretal claim and what is the value of these properties. That would be a judicial act on the part of the court. After having done that the court has to settle the sale proclamation. It is true that in Order XXI, Rule 66 of the CPC it has been inter alia laid down that such proclamation shall specify the property to be sold but that does not mean that in settling the sale proclamation under Order XXI, Rule 66 the question as to which of the properties are to be sold can be gone into. This question, in our opinion, does not come within the purview of Order XXI, Rule 66 and we are unable to agree with the view taken in the case of Manindra Chandra Roy Chaudhury v. Jagadish Chandra Majumder (1945) 50 C.W.N. 266 that Section 35 is only supplementary to Order XXI, Rule 66 of the Code of Civil Procedure. As I have already indicated, it is to be ascertained judicially and on proper evidence the properties which should be sold and of what value these properties are. Having done that the court has to proceed with the settlement of the sale proclamation and in settling the sale proclamation the court has to put the property or properties which on previous investigation had been found to be sufficient to cover the decretal claim. The question as to which of the properties are to be sold does not, in our opinion, come within the provisions of Order XXI, Rule 66 of the Code of Civil Procedure.

The next case which has been cited before us is the case of Gayaprosad Vs. Seth Dhanrupmal Bhandari and Others, . In this case the question which was raised before their Lordships P.N. Mookerjee and Guha Ray, JJ. was whether or not Section 35 of the Bengal Money-Lenders Act is a mandatory provision to which the law of waiver does not apply. It was also argued before their Lordships that whatever the latches on the part of the judgment-debtor the court''s failure to observe the terms of the statutory provisions whatever the reason thereof vitiates the proceeding and is fatal to its validity. Their Lordships did not accept that contentions. The view which was taken in the said case of Gayaprosad Vs. Seth Dhanrupmal Bhandari and Others, was that although the Bengal Money-Lenders Act casts a duty upon the court, such a duty is solely for the benefit of the judgment-debtor, and it is, therefore, open to him to waive this benefit; or in other words, to waive his objection to non-observance of that statutory provision by the court. Reliance was placed on the Full Bench Decision in the case of Ashutosh Sikdar v. Behari Lal Kirtania ILR (1907) Cal. 61, 74-77. The case of Asharam Thikadar v. Bijoy Singh Chopra ILR (1944) Cal. 166 : 47 C.W.N. 666 appears to have been cited before their Lordships P.N. Mookerjee and Chiha Ray, JJ. Their Lordships sought to distinguish the said case on the ground that the objection u/s 35 of the Bengal Money-Lenders Act in the said case had been taken in proper time and, therefore, that case was clearly distinguishable from the case which was before their Lordships, a view with which we are unable to agree. P.N. Mookerjee, J. while delivering judgment in the case of Gayaprosad Vs. Seth Dhanrupmal Bhandari and Others, referred to the case of Pokhar Singh Vs. Tula Ram, where Sulaiman, C.J. and Mulla, J. took a contrary view. P.N. Mookerjee, J. in dealing with the said case observed:

The case in Pokhar Singh Vs. Tula Ram, which apparently takes a contrary view, is also distinguishable as there the statutory provision under consideration, namely, Section 60 of the Code of Civil Procedure, was of a fundamentally different character to which the rule of waiver could not apply. That provision was based upon public policy and cast a duty upon the Court on such consideration and not merely for the protection or benefit of the individual litigant, or as it has sometimes been otherwise expressed, for the protection or benefit of a particular person or a particular class of persons in the matter of his or their private rights.

As I have already indicated the view taken by P.N. Mookerjee, J. in Gayaprosad Vs. Seth Dhanrupmal Bhandari and Others, case was that although there was a duty cast upon the court the duty being solely for the benefit of the judgment-debtor the same can be waived.

With highest respect to their Lordships we are unable to agree with the view taken in Gaya Prosad''s case and we agree with the view expressed by Mukherjea and Pal, JJ, in Asharam Thikadar''s case ILR (1944) Cal. 166 : 47 C.W.N. 666. As I have indicated, P.N. Mookerjee, J. mainly relied on the Full Bench decision reported in Ashutosh Sikdar''s case. The question involved in that case was whether or not a sale held in contravention of the provisions of the old Section 99 of the Transfer of Property Act (which is equal to present Order XXXIV, Rule 14 of the Code of Civil Procedure) was a nullity.

That question, in our opinion, is quite different from the question which we have to decide in this case. Apart from this, it seems that the attention of P.N. Mookerjee, J. was not drawn to a material passage appearing in the judgment of Sir Ashutosh Mookerjee in the Full Bench case. Sir Ashutosh Mookerjee observed (at page 72),

The only rule, therefore, that may be adopted is that, when the provision of a statute has been contravened, if a question arises as to how far. the proceedings are affected by such contravention, it must be determined with regard to the nature, scope, and object of the particular provision which has been violated.

P.N. Mookerjee, J. in Gayaprosad Vs. Seth Dhanrupmal Bhandari and Others, did not take into consideration this aspect of the matter. The object of Section 35 of the Bengal Money-Lenders Act was certainly to protect the borrowers from unscrupulous lenders. That object, in our opinion, is based on public policy. The object of Section 35 is that although a number of properties may have been made the subject matter of mortgage sale, the decree-holder will not be permitted to put up all the properties to sale but only some portions thereof and he must rest content with those portions. The proviso to Section 35 also makes that object quite clear. If the property which is specified is put up for sale and if the highest bid for the property so specified is less than the price so specified, the court may sell that property for such amount if the decree-holder consents in writing to forego so much of the amount decreed as is equal to the difference between the highest amount bid and the price so specified, or otherwise, as is laid down in the main section, the property shall not be sold at a price which is less than the price specified in such proclamation. The net result of this section and of the proviso is that the judgment creditor is to be content with only portion of the property and the rest of the property although mortgaged shall be released from sale. We are unable to accept the view that the provisions of Section 35 were not based upon, public policy and did not cast a duty upon the court on such consideration but was merely for the protection or benefit of the individual litigant. In our opinion, the entire Money-Lenders Act and particularly Section 35 are based upon public policy and cast a duty upon the court which it is bound to carry out. In our opinion the true effect of Section 35 has been laid down clearly in the case of Asharam Thikadar v. Bijoy Singh Chapra ILR (1944) Cal. 166 : 47 C.W.N. 666 and it appears from the said decision that the provisions of Section 35 are mandatory and must be followed. That being so, we are of the opinion that this contention- of the learned advocate for the Appellant should prevail.

Before concluding this matter, I should mention here that a point was taken by the learned advocate for the Respondents as to the maintainability of this objection; in other words, what was contended by the learned advocate for the Respondents was that this question as to the non-compliance with Section 35 of the Bengal Money-Lenders Act cannot be gone into in an application to set aside the sale. The sale, it was urged, can be set aside under Order XXI, Rule 90 of the Code of Civil Procedure. In other words, a sale can be set aside if there were irregularities in publishing and conducting the sale and there was substantial injury. The question as to which of the properties would have been sold is not a question which comes within the purview of an application to set aside the sale. This contention, although ingenuous, is not, in our opinion, sound.

A similar question came up for consideration before their Lordships Sulaiman, C.J. and Mulla, J. in the case of Pokhar Singh Vs. Tula Ram, . There the objection was raised after the sale had taken place that a certain property was not saleable. Their Lordships held that the objection was not an objection which would fall within the scope of Order XXI, Rules 89 and 90 but was an objection to the execution of the decree governed by Section 47 of the Code of Civil Procedure. In delivering judgment their Lordships observed as follows:

To hold that, once a sale has taken place, however wrong and illegal it may be, there is a complete bar and the Court has no option, but to proceed to confirm the sale of a property, which is non-saleable u/s 60, will be nullifying the provisions of that section, which is a result that ought to be avoided.

This observation, in my opinion, applies with equal force to the present case. It can be well said that Section 35 is really an addition to Section 60 of the Code of Civil Procedure, because, the net result of the provisions of Section 35 of the Bengal Money-Lenders Act is that the portion of the mortgaged property other than those which on enquiry are found to be sufficient and have to be specified becomes non-saleable and is released from sale. That being so, if a property which is non-saleable has been sold it is idle to suggest that no objection can be taken thereto and the result of that suggestion would be that Section 60 of the CPC and Section 35 of the Bengal Money-Lenders Act would be nullified. In our opinion, this contention also must fail.

The result, therefore, is that this appeal succeeds and the order of the trial court is set aside and the sale is set aside. The Appellant is entitled to. his costs of this appeal the hearing-fee being assessed at three gold mohurs.

The auction-purchaser contends before us that as the sale has been set aside there ought to be a direction by this Court for repayment of the purchase money under Order XXI, Rule 93 of the Code of Civil Procedure. We direct the decree-holder to refund the purchase money which has been paid by the auction-purchaser with interest at 6 per cent, per annum from the date of payment until refund is made.

The decree-holder contends before us that the purchase money has not been received by the decree-holder and is lying in court. If that is the position, then no interest will run on the said amount and the auction-purchaser will be entitled to withdraw the amount from the court. If the decree-holder has withdrawn the amount after it has been deposited in court then he would refund the amount to the auction-purchaser with interest at 6 per cent, per annum from the date of such withdrawal.

Mallick, J.

I agree.