Kanda Veloo vs Kumaran Govindan

Subramania Iyer, J.—The Petitioner in the revision is the Appellant in the second appeal.

One Kandan Vava gave a usufructuary mortgage of certain properties to one Gopalan Nair and took them back on lease. The lease deed created a charge over the equity of redemption for rent. The transaction was of the year 1107. The mortgagee-lessor filed O.S. 120/11 on foot of the lease for recovery of possession as also for arrears and future rent by sale of the equity of redemption. Pending the suit, the rights of the Plaintiff over the mortgage as also as regards the lease including the rent claimed, became vested in Govindan who is the Respondent in the C.R.P. and the second appeal. There was a decree as sued for in favour of the Respondent pursuant to which he obtained delivery of possession on 7-3- 1121.

After the suit, Kandan Vava assigned his rights over the property which, as a result of several assignments, (the details whereof are not material for this case) became vested in the Petitioner (Appellant). The transaction under which the Petitioner gets title is of the year 1115.

On 16-3-1121 he filed O.S. 263/1121 for redemption of the mortgage. The Respondent contended that the Plaintiff has no right to redeem because the transfer in his favour was ''benami'' for the judgment-debtor. He contended further that the claim preferred by the Plaintiff on foot of the assignment in his favour when the properties were attached in execution of the decree obtained by Anr. person against Kandan Vava as belonging to the judgment-debtor in O.S. 1211/1107 was rejected and that the original suit and the appeal filed by him were both dismissed. (See Ext. I, II and IV). It was, therefore, urged that the Plaintiff is debarred by the principle of ''res judicata'' from claiming that he got title pursuant to the assignment in his favour.

Pending the suit, that is O.S. 263/1121, the remaining part of the decree in O.S. 120/1111 ordering payment of rent was executed. There was a court sale on 29-3-1122 when the decree- holder became the purchaser of the equity of redemption. There having been an attachment of this decree in O.S. 263/1121 which comprised a claim for mesne profits, the decree-holder deposited the purchase price in Court. On 28-4-1122 the Petitioner (Appellant) filed an application under Order 21, Rule 86, Travancore CPC (corresponding to Order 21, Rule 89 of the Indian Code) for setting aside the sale, depositing an amount of Sirkar Rs. 150-27-8 cash being the amount shown in the proclamation of sale for payment to the decree- holder as also 5 per cent payable to the purchaser. There is no dispute as to the correctness of the amount. The application and the deposit were within time. Notice upon this application was ordered by the Court and it was made returnable on 25-6-1122. The Court in its order directed the Petitioner to deposit batta for notice within ten days. After the expiry of the 10th day, that is on 12-6-1122 the Court took up the case and dismissed the petition, no batta for notice having been deposited up till then.

Soon after that, there was an attachment of the aforesaid amount in deposit in execution of the decree in O.S. 1770/1118 of the same Court which was one for money against the Petitioner. Notice on the application for attachment, copy of which is produced before this Court on behalf of the Respondent, contains an endorsement of refusal. On 16-9-1122 the amount deposited was withdrawn by the decree-holder in O.S. 1770/1118 pursuant to the attachment. On 16-10-1122 the Petitioner applied for restoration of his application to set aside the sale accompanied by an affidavit sworn to by him to the effect that the decree-holder-purchaser had notice of his application for setting aside the sale and of the deposit made by him on the very day on which the said application was made. In the counter-affidavit filed by the Respondent there was no repudiation of this averment. The Court restored the application believing the affidavit of the Petitioner. It however did not allow the application for setting aside the sale on the ground that the deposit of the amount shown in the proclamation of sale as also the 5 per cent, on the sale price which is a ''sine qua non'' for the sustainability of an application under Order 21, Rule 86 is not in Court and therefore the petition could not be allowed. Reliance was also placed on the circumstance that the claim made by the Petitioner to title Was found against in O.S. 1211/1107 (Exs. I, II and IV). The appeal made by the Petitioner to the District Judge did not yield any better result though the Judge took a different view as regards the effect of Exs. I, II and IV. The Petitioner has theerfore come up here in revision.

By the time that the suit O.S. 263/21 came up for disposal, the sale in O.S. 120/11 as aforesaid had taken place though there was an application for setting it aside which, though dismissed: had been restored. The Munsiff was of the view that on account of the sale of the equity of redemption in O.S. 120/11 the Plaintiff had no title to redeem. The Plaintiff''s appeal to the District Judge did not succeed and he has therefore come up here in Second Appeal. Neither the Munsiff nor the Judge considered the questions that arose between the parties on the basis of the Plaintiff having a right to redeem.

When a deposit and an application are properly made under Order 21, Rule 86 for setting aside a court; sale by a person competent to make the application and within time, the Court has no option and is bound to set the sale aside. No doubt, the order setting aside the sale cannot be made without notice to all the parties affected thereby, under the proviso to Clause (ii) of Rule 86 (Rule 92 of the Indian Code). When the only person, affected is the decree-holder who is the purchaser and he is in fact aware of the application and deposit, no formal notice is necessary. The High Court of Calcutta has taken this view in Charan Chandra Ghosh Vs. Rai Behari Lal Mitra Bahadur, . In this case, as already stated, there is evidence afforded by the affidavit presented by the Petitioner to the effect that the decree-holder purchaser was aware of the application and deposit on the very day on which the, application was made which stands uncontroverted by the Respondent in his counter-affidavit. We have, therefore, to proceed on the basis that the Respondent, was aware of the application and deposit on the day on which they were made. The result is that no formal notice to him was necessary thought one was ordered by the Court. The disposal by the Court of the application on 12-6-1122, on a day to which the case was not posted and before the day to which the case stood posted, cannot be supported. The case stood posted to 25-6-1122. By this date it was open to the Petitioner either to serve formal notice directly upon the decree-holder purchaser or to intimate to the Court that the decree-holder-purchaser has in fact actual-notice even on the day on which the application was made. He had also time to deposit batta even for getting notice issued through Court. The order passed by the Court on 12-6-1122 was not one made after intimation to the Petitioner. The error committed by the Court in having dismissed the application on that day was, however, rectified by its order restoring the application.

The restoration, however, has not had any effect in the view of the Courts below because by the time the petition stood restored the deposit had disappeared. The Petitioner has deposited in this Court Rs. 148 and annas 8 which is equal to Sirkar Rs. 150-27-8 cash. It is a bit more. The ground on which the application for setting aside the sale was disallowed by the Court below, viz. the non-existence of the requisite deposit does not now exist. The question is whether the continued existence in Court of the amount deposited from the date of the deposit until the time the order is passed by the Court is necessary. No authority was cited before us for the position that it is. The disappearance of the amount from Court was not due to any fault of the Petitioner who made the deposit. The Petitioner urges that he had really no notice of either the attachment of the amount or of its withdrawal Had he any notice lie urges that he would have avoided the withdrawal and made arrangements to discharge the decree debt for which the attachment was levied, or otherwise obtained a withdrawal of the attachment. We are not inclined to accept the endorsement regarding the refusal by the Petitioner of the notice of attachment. He is hardly likely to have refused notice because the attachment that was sought to be levied was on the amount deposited in Court for the purpose of setting aside the sale.

But whatever that may be, we consider that the continued existence of the amount in deposit in Court is unnecessary provided that the nonexistence of the amount is not due to any fault of the person making the deposit. We are not, on the facts disclosed in this case, able to attribute any fault to the Petitioner in the matter of the disappearance of the amount deposited. The disappearance of the amount in this case was really on account of a fault of the Court. In our view it was not competent for the Court to disburse the money deposited by the Petitioner to achieve a specific object otherwise than in furtherance of that purpose without, at any rate, notice to the Petitioner and the decree-holder purchaser who are the parties interested in and affected by the deposit. It is a fundamental principle of law that no party should be adversely affected by a mistake committed by the Court. This principle applies to the facts of this case and applying it, we consider that the Petitioner is entitled to have the sale set aside even though the amount originally deposited was not in court for some time. The amount deposited by the Petitioner in this Court will, under the special circumstances of this case be regarded as the amount deposited by him in connection with his petition for setting aside the sale of which the Respondent had notice and there being no other person affected by setting aside the sale, we reverse the orders passed by the Courts below, allow the revision petition and set aside the sale. The amount deposited in this Court will be sent to the Court of the Munsiff co be dealt with by it according to law.

''S.A. No. 607/1124'': The dismissal of the suit by the Munsiff and the appeal by the Judge was based on the fact that the Plaintiff had no right to redeem on account of the extinction of his title by the auction sale in O.S. 120/11 which we have set aside by our order in the C.R.P. Another ground relied upon by the Munsiff is that the claim made is barred by ''res judicata''. The learned Judge in appeal did not share this view of the Munsiff. We consider that the application of the principle of ''res judicata'' is not attracted by the facts in this case. A. Full Bench of the Madras High Court in Kandadai Narasimhachariar Vs. Raghava Padayachi, decided that orders passed in a claim under Order 21 and decrees made in a suit consequent thereon would ordinarily have no effect beyond the proceedings in which the attachment is levied. Their Lordship expressly reserved a case where the principle of res judicata applies as outside the rule. The decision of this Court in ''Krishna Velayudhan v. Narayana Pillai'' 6 BomLR 259 was a case corning under the exception. The present case falls within the rule and not the exception.

The contention urged by the Respondent is that he is a person claiming under Kandan Bava who is a Defendant in O.S. 1211/1107 within the meaning of Section 11, CPC relating to ''res judicata''. The Respondent has two capacities, one that of a mortgagee and the other that of an auction purchaser. The mortgage was of the year 1107 and the adjudication put forward as constituting the bar of res judicata is of the year 1119 or 1120. In order that a person may be said to claim under a party within the meaning of Section 11, the claim must be derived subsequent to the suit in which the adjudication is made. A mortgagee of the year 1107 will not be affected by an adjudication made between the mortgagor and Anr. person without the mortgagee on record in a suit filed subsequent to the creation of the mortgage. The mortgagee no doubt is a person claiming under the mortgagor but for that reason he is not a person claiming under a party because of the mortgagor becoming a party in a proceeding subsequently instituted. Having created a mortgage, the mortgagor could, in a subsequent proceeding only represent the equity of redemption which alone vests in him and not the mortgage interest which vests in the mortgagee. See Ghanshyam Das and Others Vs. Ragho Singh and Another, ; ''Ramchandra Dhondo v. Malkapa Narsapa'' AIR 1916 Bom 204 (D); Marudamuthu Asari Vs. Kumaraswami Asari and Others, and Mt. Katori Vs. Om Prakash and Another, The other capacity of the Respondent is that of an auction purchaser. An auction purchaser does not obtain any title to the properties purchased until confirmation of the sale by the Court so as to render him a claimant under the person whose rights are sold. (See ''M.L.A.I. Co. v. Darapali'' 47 Cal WN 539 at p. 541 (G). ). In this case though there was an order passed by the court confirming the sale, that must be deemed to have been vacated on the court having allowed the application by the Petitioner to restore his application to set aside the sale which had been dismissed for default. The order of confirmation was consequent on the dismissal of the application to set aside the sale and when that application was restored to file, the order of confirmation became automatically cancelled. (See Nidamarti Venkata Narasimham Vs. Pogaku Nagojirao, ). The position of the Respondent is, therefore, merely of a person who has bid at a court auction sale which is sought to be set aside by an application filed in that behalf and which is pending. The confirmation of the sale can only be after that application is dismissed. The Respondent, therefore, has no title to the properties at the present moment and he cannot be regarded as a person claiming under Kandan Vava.

The decisions passed by the Courts below to the effect that the Plaintiff has no title to redeem cannot be supported and are set aside. The case is remanded to the Munsiff for disposal on the basis that the Plaintiff has a right to redeem.

Refund court-fee in the Second Appeal to the Appellant.

Costs in this Second Appeal will be provided for by the trial Court in its revised decree. As regards the costs in the C.R.P. we direct the parties to pay themselves their respective costs here and below.