T.L. Jagannatha Iyer vs B.H. Krishna Iyer and Another

Ramachandra Iyer, J.

(1) This revision petition raises the question whether making reference to the existence of certain antecedent or collateral proceedings and the

reservation of rights in regard to the same in a petition accompanying a deposit under O. 21, R. 89, C.P.C. Could be said to make the deposit

otherwise than an unconditional one. The auction purchaser who resisted the application to set aside the sale is the petitioner. In E. P. No. 570 of

1956 on the file of the District Munsif of Madurai taluk, the decree holder applied in execution of a small cause decree, for attachment and sale of

a certain immovable property belonging to the judgment-debtor. Execution was resisted on the ground that the decree had been previously

satisfied. An application, E. A. No. 1430 of 1956, was also filed to record satisfaction of the decree. The latter application dismissed for default of

appearance and execution was directed on the former. An application was then filed to restore E. A. No. 1430 of 1956; that too had to be

dismissed for non-appearance of the judgment-debtor. Yet another application, E. A. No. 1008 of 1957 was filed to restore the previous one.

In the meanwhile the decree-holder proceeded with the execution, and, in the sale by the court on 27-9-1957, the petitioner purchased the

property. Within the time limited by law, the judgment-debtor, depositing the amount specified in the sale proclamation together with 5 per cent of

the purchase money as solatium to the auction purchaser, filed an application under O. 21, R. 89, C.P.C. For setting aside the sale. The lodgment

schedule accompanying the deposit was unconditional; but in the petition, there was a statement to the following effect :

The property mentioned in the execution petition was sold in auction on 27-9-1957 for Rs. 1030, and the application is posted to 30-10-1957

for hearing. As the petitioner''s minor son has a share in the property, the sale should not be confirmed, as per the order of the District Court,

Madurai. Notwithstanding that, having regard to the interest of the aforesaid minor and of the petitioner himself and with a view to protect the same

and for the benefit of the minor, the amount mentioned in the lodgment schedule has been deposited with the minor''s mother. This petition is filed

without prejudice to the petition in E. A. Nos. 631 and 632 of 1957.

The application to set aside the sale was opposed by the auction purchaser who evidently wished to retain the benefit of his purchase. The learned

District Munsif dismissed the application on the ground that the reservation of the rights of the judgment-debtor in regard to E. A. Nos. 631 and

632 of 1937 was inconsistent with the unconditional nature of the deposit required under O. 21, R. 89, C.P.C. This view, however, was not

accepted by the learned District Judge on appeal, who, considering the statement as merely of an existing fact, namely, the pendency of E. A. Nos.

631 and 632 of 1937, held that the deposit was not conditional one. The sale was accordingly set aside. In so doing the learned District Judge

followed the decisions of Viswanatha Sastri, J. In Ramayya Chetti v. Krishnayya Chetti, 1958-1 Andh WR 369 and distinguished that of Govinda

menon, J. In Dr. Edward Mathuram and Others Vs. G.T.S. Abdul Latiff Sahib and Others, . We are however unable to appreciate how the

former decision which, expressly dissenting from the latter, holds that reference to collateral proceedings and the reservation of rights in regard

thereto in an application under O. 21, R. 89, would not make the deposit a conditional one, can be followed if the latter, namely Dr. Edward

Mathuram and Others Vs. G.T.S. Abdul Latiff Sahib and Others, , is taken as containing a correct statement of the law. It has therefore to be seen

which of the two views is correct.

(2) In Dr. Edward Mathuram and Others Vs. G.T.S. Abdul Latiff Sahib and Others, , the judgment-debtor, while making a deposit under O. 21,

R. 89 stated by his affidavit that the deposit was made ""without prejudice to his contentions in the appeal against the decree in the suit and to his

right to recover the sum from the decreee-holder, in the event of his success therein"". The learned Judge held that the deposit should be deemed to

have been made under protest, and thus not being unconditional, could not be considered as a valid one to entitle the judgment-debtor to have the

sale set aside.

(3) The question whether the reference to pending proceedings or the reservation of the rights of the judgment-debtor in regard to other collateral

matters would make the deposit made one not in accord with the provisions of O. 21, R. 89, C.P.C. Has to be considered in two aspects, (1) on

the terms of O. 21, R. 89 and (2) whether under the law a deposit under that rule would take away the right of the debtor to challenge such

antecedent proceedings; for if under the law the deposit has not the effect of prejudicing the debtor''s other rights a mere statement of that law or

about the pendency of the proceedings, cannot make the deposit any the less a proper one. Rule 89 states :

(1) Where immovable property has been sold in execution of a decree, the judgment-debtor, or any person deriving title from the judgment-

debtor. Or any person holding an interest in the property may apply to have the sale set aside on his depositing in court:

(a) for payment to the purchaser, a sum equal to 5 per cent of the purchase money, and (b) for payment to the decree-holder, the amount specified

in the proclamation of sale as that for the recovery of which the sale was ordered, less any amount which may since the date of the proclamation of

sale, have been received by the decree-holder:

Provided that where the immovable property sold is liable to discharge a portion of the decree debt the payment under cl. (B) of this sub-rule need

not exceed such amount as under the decree the owner of the property sold is liable to pay;

(2) Where a person applies under R. 90 to set aside the sale of his immovable property, he shall not, unless be withdraws his application, be

entitled to make or prosecute an application, under this rule.

(3) Nothing in this rule shall relive the judgement-debtor from any liability he may be under in respect of costs and interest not covered by the

proclamation of sale.

(4) Sub-rule (1) requires that money should be deposited for payment to the decree-holder and the auction purchaser. That necessarily implies that

no impediment or restraint should be placed on those persons withdrawing the amount deposited as it as made for the specific purpose of being

paid over to them. Therefore, nothing should be said or done which would impair their right to draw the respective amounts, e.g. there should be

no payment under protest nor could they be required to give security etc. Sub-rule (2) requires that an application under R. 89 can be filed only, if

the applicant does not challenge the sale under R. 90, i.e., he should accept the regularity of the sale.

Thus, the rights given to a judgment-debtor under O. 21, R. 89 and O. 21, R. 90 are mutually exclusive. On the terms of the former rule, no

question of the correctness of either the decree in execution of which the sale is made, or even of legality of the order for sale arises. A mere

payment under R. 89 is one for setting aside the sale and not for the final determination of the dispute between the parties. The rule assumes the

existence of a valid decree and order for sale and provides for a case where sale ensues as a result thereof. It does not provide for a contingency

where that assumption is found to be wrong i.e., if in appropriate proceedings the decree or the order for sale has been set aside. In such a case

the Code provides for restitution and there is nothing in R. 89 to nullify or take away that right. There are no words in the rule which expressly

deny the judgment-debtor his right to challenge either the correctness of the decree or of the order for sale or of his other rights under the law, for

example, one under O. 21, R. 2, for recording satisfaction of the decree.

The question then is, can such a disability be implied? It is contended that the deposit being one made to pay the decree-holder and the auction

purchase, there can be no dispute thereafter outstanding between the parties and that what a deposit under R. 89 was intended to achieve was a

termination of all outstanding disputes between the decree-holder and the judgment-debtor in regard to that litigation. Therefore, the judgment-

debtor could never get back the deposit and any statement made which would derogate from qualified right of the decree-holder to retain that

money would be inconsistent with the rule. In other words, the argument ran thus: Rule 89 affords an indulgence to the debtor who defaulted in

paying off the decree; payment thereunder is purely voluntary; It should be held to be in satisfaction of such rights as the decree-holder and auction

purchaser then possessed. Being a payment in discharge of such rights as the decree-holder then possessed, no question of restitution can

thereafter arise even if it turns out that the decree or order for sale was wrong and all disputes between the parties should be deemed to have been

put to an end by the payment. This contention is opposed to the provision of R. 89 itself. Sub-rule (3) contemplates a further liability of the debtor

in regard to costs and interest not covered by the proclamation of sale, thereby indicating that the deposit is not to be in liquidation of all such rights

as the decree-holder had. Reliance is however placed on the observations of Venkatasubba Rao, J. In Unnaithanakath Puthan Veettil Kummakutty

alias Kunhutti and Another Vs. Munnodath alias Mangat Manakkal Karnavan and Manager, Neelakandan Nambudri, , where, the learned Judge,

after referring to the rule, observed at pages 947 and 948 (of ILR Mad) :)at p. 923 of AIR) :

It object is to put an end to every kind of contention and dispute. The judgment-debtor is saved from the threatened deprivation of his property;

the decree-holder''s claim is satisfied and the auction purchaser is compensated. The section would be frustrated if the person paying money under

it is permitted to do so under protest. Clause 2 of R. 89 enacts............... This shows that the two proceedings referred to in this clause are utterly

incompatible. If the debtor wants to keep a dispute open, he cannot claim the benefit of this section. In fact, this accords to him a special

indulgence. While, he is thus favoured, care is taken to provide that the interests neither of the decree-holder nor of the purchaser are sacrificed. It

follows from this that, when the judgment-debtor pays the amount specified, he pays it unconditionally. The payment followed by the order setting

aside the sale has the effect of automatically extinguishing the decree debt. If an application is made under R. 89 and the deposit required by that

rule is made within 30 days from the date of the sale, the court has no option but to make an order setting it aside (see R. 92). This assumes that

the decree debt is discharged and the decree-holder''s remedy is gone. The section, then, is inconsistent with the notion that payment can be made

either under protest or coupled with conditions.

These observations cannot be read as laying down that, one a deposit under O. 21, R. 89 is made, the judgment-debtor could not, thereafter,

agitate his rights in regard either to the validity of the decree which resulted in the sale, or of the order directing the sale. That no such absolute

proposition was intended to be laid down, is made clear by the learned Judge himself in a later case. P.M.V.P. Pappu Reddiar (deceased) and

Another Vs. S.A. Pichu Aiyar, , where, referring to the foregoing observations, he observed at pages 832 and 833:

In the former case, it has been held that O. 21, R. 89 is inconsistent with the notion that payment can be made either under protest or coupled

with conditions. True, but the whole judgment proceeds upon the footing, first that there was a subsisting decree, that is subsisting in fact and

secondly, there was a decree-holder, one who really answered that description......O. 21, R. 89 assumes the existence of a ''decree'' and of a

''decree-holder'' and where the very foundation is gone, namely, subsisting decree, it would be futile to contend that the decisions which refer to

unconditional payment can apply.

The actual decision in Unnaithanakath Puthan Veettil Kummakutty alias Kunhutti and Another Vs. Munnodath alias Mangat Manakkal Karnavan

and Manager, Neelakandan Nambudri, , related to the validity and enforceability of a security bond executed by the decree-holder in compliance

with a conditional deposit made under O. 21, R. 89. It was held that an executing court had no jurisdiction to impose conditions by way of

demanding security or otherwise when money deposited under R. 89 was withdrawn by the decree-holder. Learned counsel for the petitioner

contends that once a sale takes place the title of the judgment-debtor is lost and what he can do thereafter is only to purchase the property back as

it were, by taking advantage of Rule 89. We are of opinion that, that approach to the question is wrong. The rule statutorily provides for the setting

aside of a sale in execution while the jurisdiction thereunder can be exercised only if the prescribed conditions are satisfied; it would be wrong to

call it a mere privilege or indulgence. The Code which provides for the sale provides also for setting it aside. Rule 89 provides for an opportunity to

the debtor to save his property from a forced sale. The object of the rule is to set aside the sale and not to put an end to all disputes between the

parties. That rule would apply irrespective of the fact that the decree etc. Has been appealed against or not. The scope and utility of the rule would

be impaired and its object frustrated if it were to be held to apply only to cases where there is no appeal or if there is one where the debtor

withdraws his right to prosecute it.

(5) A mere filing of appeal does not operate as a stay of execution of the decree appealed from. Per contra, the levy of execution cannot prejudice

the right of the debtor to obtain restitution in case he succeeds in the appeal. It is not and indeed cannot be disputed that if a judgment-debtor pays

voluntarily the amount due under a decree, he could on a reversal of the same recover back the money so paid. Equally would be he entitle to

restitution if a property of his is sold in execution of a decree which is set aside later. The result cannot be different, if the debtor makes a payment

under the provisions of O. 21, R. 89 after the sale for even that is only the consequence of a forced court sale. The right to appeal from a decree

or an order in execution determining the rights of the parties, is a statutory one. So too is the right to file an application under O. 21, R. 2, C.P.C.

A rights to have the sale set aside under O. 21, R. 89 is also one conferred by the statute. Both the rights are independent, arising at different states

of a litigation. They are not mutually exclusive, in the sense that resorting to one remedy would preclude the availing of another or of an earlier right.

In other words a right to appeal against a decree or an order for sale or a right to have satisfaction of a decree recorded cannot be lost, unless the

statute expressly says so. Section 144, C.P.C. And the inherent power of the court to grant restitution contemplate that, in case of reversal of the

decree or of the order, the aggrieved person should obtain restitution. That right cannot be prejudiced by doing something which a debtor is forced

by circumstances to do i.e., to have the sale set aside under R. 89. That a contrary view would lead to unjust results will be clear from an

illustration. Suppose a (third party) bona fide claimant to a property which is attached in execution of a decree makes a deposit under R. 89,

pending a suit under O. 21, R. 63, C.P.C. And that amount is withdrawn by the decree-holder and auction purchaser. Can it be said that either

under the law or any principle of justice, he should be precluded from getting back the money, in case he succeeds in the suit and that he should for

saving his property from being taken away wrongfully, pay up another person''s liability under the decree unconditionally? The answer can only be

in the negative.

In P.M.V.P. Pappu Reddiar (deceased) and Another Vs. S.A. Pichu Aiyar, , by the fraud of the decree-holder a satisfied decree was executed;

the sale in execution was set aside by a deposit under O. 21, R. 89, C.P.C. The learned Judges held that the money paid under that rule could be

recovered back by the person making payment as it was not a voluntary payment. In Thatathil Nayippatiyil Raman Adiyoty Vs. Chirikandoth

Kunnath Kaitheri Kannan Nambiar and Another, , a person, who made claim to a property sought to be sold in execution of a decree, avoided the

sale by making a deposit under O. 21, R. 89, C.P.C. Subsequently, he succeeded in the suit. Patanjali Sastri, J. (As he then was) held that the

claimant would be entitled to recover the money back. The learned Judge held that a payment made in such a case could not be regarded as a

voluntary one observing that some of the observations in Unnaithanakath Puthan Veettil Kummakutty alias Kunhutti and Another Vs. Munnodath

alias Mangat Manakkal Karnavan and Manager, Neelakandan Nambudri, , might be said to be too broadly stated to be accepted as correct. As

noticed in the earlier case, there is no case which has taken the view that whenever a judgment-debtor makes a deposit under O. 21, R. 89 in

order to enable him to have the sale set aside, he would be precluded from obtaining restitution in case the decree in execution of which the sale

was made was set aside in appeal or otherwise.

In V.E.R.M.K. Krishnan Chettiar by Agent Rama Aiyangar Vs. Nachimuthu Goundar, , an execution sale took place, while an application for

scaling down the decree debt was pending. The debtor deposited the amount under O. 21, R. 89, C.P.C. ; but nevertheless he pursued the

application for scaling down the decree debt. It was found that the amount of decree as scaled down had been fully paid off even before the sale.

The debtor thereupon applied to get back the amount deposited to set aside the sale. Patanjali Sastri, J. (As he then was) upheld the right of the

debtor to get back the money, negativing the contention that the payment under O. 21, R. 89 was a voluntary one. This view was accepted and

followed by Viswanatha Sastri, J. In 1958 1 AWR 369. The learned Judge observed at p. 373 :

It is not necessary that the judgment-debtor who deposits the money under O. 21, R. 89, C.P.C. Should acknowledge the right of the decree-

holder to draw out and retain the money deposited under all circumstances. Order 21, R. 89 does not require the judgment-debtor to for go his

right of restitution in case the decree against which he has appealed is reversed after the court sale is set aside under that rule. The money was

available to be drawn out by the decree-holder forthwith without any condition or obstacle. The pendency of an appeal from the decree was no

bar to the execution of the decree or the sale of the judgment-debtor''s property. Nor was it a bar to an application under O. 21, R. 89, C.P.C. It

was not a condition prescribed by law that an application under O. 21, R. 89, C.P.C. Should abandon his appeal from the decree just as he has to

abandon an application under O. 21, R. 90, C.P.C.

We are in respectful agreement with the foregoing observations. Once it is held that a deposit under O. 21, R. 89 will not prejudice the person

making the deposit from pursuing the proceedings instituted or to be instituted (other than one under R. 90), it follows that a statement that such

proceedings are pending or contemplated cannot make it a conditional deposit. The learned Chief Justice who delivered the judgment of the Full

Bench in L.A. Krishna Ayyar Vs. Arunachalam Chettiar, , indicated his view that a mere reservation of right to impeach the validity of a sale in

execution in other proceedings might not vitiate an application under O. 21, R. 89 (vide page 978 (of ILR Mad) : (at p. 844 of AIR)). That

decision was concerned with the question whether the debtor could pursue the petition under R. 90 after making a deposit under R. 89. The

answer was in the negative.

In C. R. P. No. 1391 of 1945, Kuppuswami Aiyar, J. Held that where a deposit under O. 21, R. 89, C.P.C. Was made stating that the decree

was a collusive one and the deposit was subject to the rights of the depositor, in respect of which he was entitled to take certain steps, it was a

conditional one, and an application under O. 21, R. 89 would not lie. That decision was based on the somewhat wide observations contained in

Unnaithanakath Puthan Veettil Kummakutty alias Kunhutti and Another Vs. Munnodath alias Mangat Manakkal Karnavan and Manager,

Neelakandan Nambudri, . Those observations were also relied on in Dr. Edward Mathuram and Others Vs. G.T.S. Abdul Latiff Sahib and

Others, , where Govinda Menon, J. Held that the statement accompanying the deposit ""without prejudice to his contentions in the appeal"" made it

a conditional one; but the learned Judge did not consider the two decisions referred to earlier, viz., P.M.V.P. Pappu Reddiar (deceased) and

Another Vs. S.A. Pichu Aiyar, and Thatathil Nayippatiyil Raman Adiyoty Vs. Chirikandoth Kunnath Kaitheri Kannan Nambiar and Another, .

With great respect, we are unable to share the opinion expressed in C. R. P. No. 1391 of 1945 (Mad), and in Dr. Edward Mathuram and Others

Vs. G.T.S. Abdul Latiff Sahib and Others, , or to accept them as correctly decided.

In our opinion, a deposit under O. 21, R. 89, C.P.C. Should be unconditional in this sense, namely, that it should not contravene the terms of that

rule or frustrate its object, i.e., the deposit should not be accompanied by any request or statement to prevent the decree-holder and auction

purchaser from unconditionally drawing the respective amounts payable to them under the rule; the sale is deemed to have been conducted without

any material irregularity and no application to set aside a sale under R. 90 could lie; therefore there could be no reservation of any right to challenge

the sale under the rule. This however cannot preclude the judgment-debtor from seeking to set aside a void sale under S. 47, C.P.C. A void sale

cannot be validated by a deposit which on the principle of the decision in 1939 1 MLJ 829 : AIR 1938 Mad 439, could only be held to be made

under coercion. Nor would it disentitle him to relief under other provisions of law, e.g. restitution. A statement in an affidavit accompanying the

petition under O. 21, R. 89 that the deposit was made without prejudice to his rights in collateral proceedings (not being those under O. 21, R. 90)

can only be a statement of fact or of certain legal rights; that cannot contravene the provisions of O. 21, R. 89, C.P.C. The conclusion reached by

the learned District Judge is therefore correct.

(6) The civil revision petition fails and is dismissed with costs.

(7) Revision dismissed.