Nidamarti Venkata Narasimham vs Pogaku Nagojirao

Koman, J.—The first respondent was the judgment-debtor in O.S. No. 18 of 938 on the file of the Court of the District Judge, East

Godavari. Some of the first respondent''s properties were sold in execution of the decree and were purchased by the decree-holder and two

others who are the appellants before this Court. In E.A. No. 298 of 1941 the first respondent applied for setting aside the sale on the grounds of

certain irregularities in the conduct of the sale. A compromise petition was filed by which the parties agreed to the petition being allowed on

payment of the decree amount with poundage interest and commission, etc. The first respondent deposited a sum of Rs. 16,500 and applied in

E.A. No. 296 of 1942, for setting aside the sale under Order 34, Rule 6. The auction purchasers opposed the applications on the ground that the

correct amount had not been deposited. ?On 25th February, 1943, when the petition came on for hearing as the first respondent was not present

they were dismissed for default and the sales confirmed. On two subsequent applications, E.A. Nos. 71 and 72 of 1943 for setting aside the

default orders the order of dismissal for default was set aside on 2nd March, 1943. By way of abundant caution the first respondent also filed E.A.

No. 93 of 1943 for setting aside the confirmation of the sales.

The learned District Judge has held that the order dated 2nd March, 1943, setting aside the orders of dismissal for default had become final. He

also held that the fact that the order confirming sale was not set aside would not stand in his way of disposing of the applications on their merits as

the effect of setting aside the orders of dismissal for default was that the confirmation of the sale was automatically set aside. On the merits he held

that the word interest referred to in the consent order related only to the interest due to the decree-holder, that no interest was payable to the

auction purchasers as they were compensated by payment of commission and that the amount deposited in Court was in excess of the correct

amount.

These appeals and revisions are by the two auction purchasers other than the decree-holder who is also an auction purchaser.

The main ground of attack by the appellants is that the learned District Judge had no jurisdiction to set aside the order of dismissal for default.

But the first respondent contends that they were precluded from raising this objection as those orders restoring the petitions had become final.

In Alagappa Ghetty v. Annamalai Chetty (1916) 4 L.W. 411, it was held that the principle of Section 105 of the CPC would apply not only to

decrees and interlocutory orders which lead up to the final order. In Radha Mohan Datt v. Abbas Alt Biswas ILR (1931) All. 612 , a Full Bench

of the Allahabad High Court held that the words ""affecting the''decision of case"" in Section 105 of the CPC are equivalent to ""affecting the merits

of the case"" and that the correctness of an order cannot be challenged in an appeal against the decree unless the order affected the case on its

merits and that an order setting aside an ex parte decree is not one that affects the case on merits but merely ensures a re-hearing of the case on

merits. In Athamsa Rowther Vs. Ganesan and Another, , a Bench of this Court observed:

It seems to us that the present case is another in which an order setting aside an ex parts decree may be properly attacked. It is clear that, when

the result of the setting.aside of the order has been the hearing of the suit de novo on its merits, no injustice would be done to any one by the

decision of the case and the final result is not affected.

In such circumstances we cannot but hold'' that an order setting aside the ex parte final decree while retaining the ex parte preliminary decree as an

order affecting the decision of the case. In Paidapati Venkatanarasu Vs. Vikram Kotayya and Others, , a Letters Patent Appeal, a Bench of this

Court held that the proper test is "" does the order in question lead to an enquiry and investigation of the case as a result of the enforcement or does

it prevent such an enquiry? In the former case the final decision of the case is not affected merely by reason of the enquiry being held, whereas in

the latter the result is different. In arriving at a decision as to whether an interlocutory order affects the decision of the case within the meaning of

Section 105, Clause (1) of the CPC the nature of the order in relation to the facts of the particular case has to be considered.

The principle that is deducible from the above cases seems to us to be that where the effect of the order is to prevent an enquiry into merits such

an order would come within the scope of Section 105 of the CPC as affecting the case on merits but where the orders do not affect the decision of

the case on merits such orders would not come within the scope of Section 105 of the Code of Civil Procedure. Applying this principle it is clear

that the orders setting aside the dismissal for default as it only reopens an enquiry and does not affect the decision of the case cannot be questioned

in these appeals against the final orders.

We agree with the learned Judge that the effect of setting aside the orders of dismissal for default operates automatically to set aside the orders

of confirmation of the sales.

The only other point to be considered is whether the judgment-debtor had complied with the terms of the consent memo, in making a deposit of

Rs. 16,500. The dispute as regards this depends on whether interest was payable to the auction purchaser. The learned Judge rightly held that the

word interest in the consent memo, refers only to the interest payable to the decree-holder and not to the auction purchasers as they were

sufficiently compensated for by deposit of commission.

The appeals and revision petitions are dismissed with costs of first respondent who will receive half costs in each civil miscellaneous appeal.