V. Macha Koundan vs V.K. Kottora Koundan

Ramesam, J.—The facts out of which this Civil Miscellaneous Second Appeal arises are these. One T.K. Nambiar mortgaged a property to

the appellant''s father. The mortgagee sued for the mortgage money and obtained a decree for sale. The appellant as his legal representative

executed the decree and in the sale that followed, the property was purchased by the respondent for Rs. 825. Meanwhile the junior members of

T.K. Nambiar''s tarwad sued for a declaration that the mortgage decree and sale were not binding on them and for possession. They obtained a

decree and in execution got possession of the property. Thus the respondent was deprived of the possession of the property which he had

purchased and he filed an application under Sections 47, 147 and 151, CPC for a refund of the purchase money. The District Munsif ordered the

refund. On appeal, the District Judge deducted only the poundage fee and otherwise confirmed the District Munsif''s order. The appellant, that is

the legal representative of the decree-holder in the mortgage suit, has filed this appeal. He contends that the respondent is not entitled to a refund at

all even by way of a regular suit; but his chief contention is that the respondent is not entitled to obtain a refund by way of an application in

execution. Accordingly these two questions have been referred to the Full Bench in the order I have stated.

Taking the first question, namely, whether the respondent is entitled to a refund at all even by way of a suit, the question depends upon the rights

of the parties as they flow out of the circumstances of the case and not upon whether a provision for such a suit is made in the Civil Procedure

Code. The CPC is a Code of adjective law and cannot create rights of action though it may recognise them or take them away. Forgetting for a

moment all technicalities and the Codes of Procedure, one would think on the facts that the auction-purchaser should have a right of action for

money-had and received. The facts are that a decree-holder brings a certain property to sale bona fide believing it to belong to his judgment-

debtor. The Court also under the same belief orders the sale of property. The auction-purchaser also under the same bona fide belief purchases it.

Afterwards it turns out that the property does not belong to the judgment-debtor at all. Thus the auction-purchaser purchases nothing though he

paid consideration for it under a mistake. The decree-holder gets a certain amount without really having brought any of the properties of the

judgment-debtor to sale that is, under a similar mistake. Under the circumstances it is unconscionable that the decree-holder should retain the

benefit of the money so obtained and the auction-purchaser should lose it and one would think that the auction purchaser would have a right of

action for money had and received under the general law and not under any Code of Procedure.

Mr. Ramakrishna Aiyar, the learned Advocate for the appellant, refers to a decision in Sowdaminee Chowdrain v. Kishen Kishore Poddar

(1869) 12 W.R. 8 (F.B.). This decision was passed under Act VIII of 1859 but the general right was discussed and it was negatived on the

ground that there was no warranty by the Court or by the decree-holder.

In (1878) L.R. 5 I.A. 116 (Privy Council) the plaintiff sued for refund of the purchase money on the ground of failure of consideration. Under a

writ of fieri facias issued to the Sheriff of Calcutta, he seized property without jurisdiction and conveyed it to the plaintiff''s predecessor-in-title,

who was afterwards deprived of his possession. There was a conveyance by the Sheriff and the whole discussion before the Courts turned upon

the covenants in the conveyance. But on the ground that the Sheriff had no jurisdiction to sell property in Oudh, the High Court''s judgment was set

aside by the Privy Council and the suit was remanded for trial on the merits. I do not think this case can help the appellant. It was not a case of sale

under the CPC by the Court. Whatever might be the theory of law in the minds of the framers of the Code of 1859, it is now clear that the

Legislature were unwilling to adopt the view of the law laid down in Sowdaminee Chowdhrain v. Kishen Kishore Poddar (1869) 12 W.R. 8

(F.B.) and (1878) L.R. 5 I.A. 116 (Privy Council) and they procedeed to frame the language of the corresponding section in the Codes of 1877

and 1882 (Section 315) on a different theory. Section 315 contained a clause ""the purchaser shall be entitled to receive back his purchase money

from any person to whom the purchase money has been paid"". It is clear that this clause recognises the right of auction-purchaser to obtain a

refund of his purchase money if there is no saleable interest though there is no warranty of title. What is meant is that though in a Court sale there is

not such a warranty as to the extent of title as we find in a private transaction between a vendor and a purchaser, still the Code adopts the view

that there is a limited kind of warranty, namely, that the judgment-debtor possesses some little interest however small it may be. If the judgment-

debtor''s interest turns out to be nothing, the Court practically makes a promise that the decree-holder will have a refund of his purchase money.

This is the theory underlying Section 315 of the Code of 1882. If once such a right in the purchaser is recognised, on the principle that every right

should be capable of being enforced by a suit, a regular suit lies to obtain a refund of the purchase money but the legislature proceeded to give a

remedy in execution also u/s 315. Accordingly under the Code of 1882 Courts have held that in a case where the judgment-debtor has no saleable

interest, the auction-purchaser can obtain a refund of his purchase money u/s 315 or by a regular suit. Where it is sought to be obtained by a suit, it

is improper to describe it as a suit u/s 315, Civil Procedure Code. As already observed the right to obtain a refund being recognised by the Code,

the remedy by way of suit exists not because the Code gave it but because every right can be enforced by a suit. When the present CPC was

passed, the Legislature limited the right of the auction-purchaser to obtain a refund in execution to cases where the sale was set aside by the

executing Court under Order 21, Rule 92, that is, where an application is made under Rules 89, 90 or 91. But in cases where the executing Court

does not set aside the sale, but the sale turns out to be futile by the finding in another litigation that the judgment-debtor has no saleable interest, this

provision, namely Order 21, Rule 93, cannot apply.

The question that now arises is whether the auction-purchaser can recover the purchase money at least by a regular suit. It follows from the

observations already made that such a suit exists unless it is taken away by an express provision of law. The object of the Code is to provide a

speedier remedy in execution under certain special circumstances. The right of suit under other circumstances remains under the general law.

When we look at the decisions, it is true that there is some conflict of authority. In Mohideen Imbrahim Vs. Mahomed Mura Levai through his

agent Mahomed Mira Sahib, , Tirumalasami Naidu v. Subramaniam Chettiar I.L.R.(1916) 40 Mad. 1009 and Makar Ali v. Sarfuddin I.L.R.

(1922) 50 Cal. 115 the right of suit accrued when '' the old Code remained in force though the suit was brought under the new Code. Accordingly

in the second and third cases it was held that the suit was maintainable. In the first case the learned Judges differed. Though the conclusion of

Ayling, J., in the first case and the conclusions in the other two cases are correct, I venture to think that the reasoning by which they were arrived at

is not sound. The learned Judges who held that the suit was maintainable thought that the right was given by the Code of 1882 and taken away by

the Code of 1908. The Code of 1882 did not create the right of suit nor was it taken away by the Code of 1908. The remedy by way of suit exists

as a corollary to the recognition of the right to obtain a refund.

In Parvathi Ammal v. Govindasami Pillai I.L.R.(1915) 39 Mad. 803 : 1915 29 M.L.J. 467 the sale was set aside on account of a material

irregularity and the purchase money was returned to the auction-purchaser but not the poundage. It was held that a regular suit lies to recover the

poundage fee, though all the facts occurred under the present Code.

In Subbu Reddy v. Ponnambala Reddi (1918) M.W.N. 655 it was held that no regular suit lay. The learned Judges followed Napier, J''s view in

Mohideen Imbrahim Vs. Mahomed Mura Levai through his agent Mahomed Mira Sahib, .

The decision in Muthukumarasami Pillai v. Muthuswami Thevan (1926) 52 M.L.J. 148 has no bearing on the present discussion. There the

auction-purchaser filed a petition under Order 21, Rule 91, but beyond the thirty days provided by the Limitation Act.

Thus the only Madras case reported in the authorised reports in which all the facts happened under the present Code, namely, Parvathi Ammal

v. Govindasami Pillai I.L.R.(1915) 39 Mad. 803 : 1915 29 M.L.J. 467 is in favour of the view that a suit lies, though in that case the sale was set

aside in execution.

In Juranu Mohamad v. Jathi Mahamad 22 C.W.N. 760 it was held that a suit does not lie. But the opposite conclusion was arrived at in the

same Court in Prasanna v. Ibrahim (1917) 36 C.L.J. 205.

In Rishikesh Laha v. Manik Molla I.L.R.(1916) 39 All. 114 it was held that a regular suit lies if there are circumstances like fraud but not

otherwise.

In Nannulal v. Bhagwan Das I.L.R.(1916) 39 All. 114 it was held that a suit does not lie.

In Bindeshri Prasad Tiwari v. Badal Singh I.L.R.(1923) 45 All. 369 (F.B.) Full Bench held that an auction-purchaser can obtain a refund of

the purchase money u/s 47, Civil Procedure Code, that is, in execution though it is by an application other than one under Order 21, Rule 93. This

case has been distinguished in Deputy Shankar v. Mangal Sen I.L.R.(1932) 54 All. 114 on the ground that in the facts of that case the decree in

execution of which the sale was held was itself set aside in another suit. It may be on account of this distinction that the decision in Bindeshri Prasad

Tiwari v. Badal Singh I.L.R.(1923) 45 All. 369 (F.B.) must be confined to the special facts of the case. But I do not agree with the decision in

Deputy Shanker v. Mangal Sen I.L.R.(1932) 54 All. 948 holding that a regular suit does not lie, the only ground for the decision being that there is

no warranty in a Court sale.

Amba Lal v. Ramgopal Madhoprasad I.L.R.(1932) 55 All. 221 is also a case where the decree was varied and it affords no guide to us in

facts like the present.

The decision in Balvant Raghunath v. Bala I.L.R.(1922) 46 Bom. 833 is like the decision in Rishikesh Laha v. Manik Molla I.L.R.(1926) 53

Cal. 758 the learned Judges holding that fraud or misrepresentation must be necessary to sustain a claim for refund in a regular suit.

In (1875) L.R. 2 I.A. 131 (Privy Council) the auction purchaser sought to obtain a refund not from the person who obtained the payment but

from the judgment-debtor on the ground that he had the benefit of the payment to the decree-holder. It was held that the connection of the

judgment-debtor with the matter is too remote and speculative to sustain an action for money had and received. That decision has again no bearing

on the matter before us.

In Nagendra Nath Ghosh v. Sambhu Nath Pandey ILR (1924) 3 Pat. 947 and Maung Naung v. Maung Ba Gyi I.L.R.(1928) 6 Rang. 468 it

was held that no regular suit lies, the main ground being that there is no warranty.

The whole case-law has been reviewed by the Lahore High Court in Mehr Chand v. Milkhi Ram ILR (1932) 13 Lah. 618 (F.B.), where it

was held that an action for a refund of money had and received is maintainable. According to this decision there is an implied warranty in Court

sales to the extent that there is some little title in the judgment-debtor and it is not a case of no title at all though it is still true that there is no

warranty of the kind in private purchase as to the extent of the title conveyed. I agree with this decision.

The result is in a case where the sale is set aside in execution by an application under Rules. 89, 90 or 91, the auction-purchaser can obtain a

refund on an application under Order 21, Rule 93, Civil Procedure Code. But where the sale turns out to be futile by a finding in another suit the

only remedy that the party has is a regular suit and not an application under Order 21, Rule 93. There may be defences in that suit, for example,

that the case was not properly conducted and that the finding-is not binding.

I accordingly answer question No. 1 in the affirmative and question No. 2 in the negative.

The respondent tried to argue before us that the present execution application may be regarded as a regular suit. This is not a matter referred

to us and the Division Bench must deal with such an argument.

Horace Owen Compton Beasley, Kt., C.J.

I agree.

King, J.

I agree.

ORDER

Even in the original application a request was made to treat the petition as a suit. We see no objection to this being done, but it will be

necessary that Court-fee be paid as for a suit, the same being fixed on the amount claimed in the application in the first Court. We allow one

month''s time for the present respondent to pay the court-fee payable in the Court of First Instance.

JUDGMENT

The necessary court-fee has been paid in accordance with the above direction. According to the opinion of the Full Bench the Respondent is

entitled to the relief given to him by the Lower Appellate Court. The Civil Miscellaneous Second Appeal is therefore dismissed with costs. The

lower Appellate Court''s decree will be treated as a decree passed in a suit and the respondent will be entitled to add to his costs the extra court-

fee he had to pay in accordance with our order of the 11th February, 1935.