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Judgment
The judgment-debtors in EP No.334 of 1990 have filed this revision petition challenging the order in EA No.246 of 1994 on the file of First Additional District Munsif, Tirupati, dated 10-4-1996 on the ground that though the EP schedule property has been sold in execution of the decree, the sale was confirmed and the sale certificate was issued and full satisfaction of the decree was recorded, the lower Court erroneously held that the decree-holder was entitled to recover the E.P. amount.
The facts and circumstances leading to this revision petition in brief are :
The respondent - decree-holder No.1 obtained a decree on 7-9-1989 against late V. Srinivasulu Naidu, husband of revision petitioner No. 1 and father of other revision petitioners and subsequently, he filed EP No.334 of 1990 for recovery of the amount. An extent of Ac. 0.05 cents in S.No.142/6 belonging to him was brought to sale for a sum of Rs.9,000/- and the same was knocked down in favour of the respondent - decree-holder No.1. The said sale has been confirmed and sale certificate was also issued and then respondent No. 1 filed EA No.636 of 1993 for taking delivery of possession of the said property. When the Amin went to the land one Venkatarama Naidu filed a petition stating that he had already purchased the said property on 17-1-1984 from late V. Srinivasulu Naidu. The respondents had no knowledge of the above transaction as the same did not find place in the encumbrance certificate which was obtained by them before seeking sale of the said property. The revision-petitioners paid the balance of the decree amount over and above the amount realised from the Court auction, and the respondents filed full satisfaction memo under a bona fide belief that the auction was knocked down in their favour. Thus, the revision-petitioners intentionally suppressed the above fact and allowed the sale to go on. The decree is, therefore, not fully satisfied and hence the respondents are entitled to the balance amount of Rs.9,000/- with interest at 6% till the date of realisation alongwith poundage and sale certificate fee of Rs.450/-.
The revision petitioner No.2 filed a counter while the other revision-petitioners filed memo admitting that a decree was obtained by the respondents against Srinivasulu Naidu on 7-9-1989, that EP was filed against the revision petitioners who succeeded to the estate of late Srinivasulu Naidu, that an extent of Ac. 0.05 cents in S.No. 142/6 was brought to sale and Rs.9,000/- was realised from the Court auction which was knocked down in favour of the respondent No.1 and after the sale the revision-petitioners have paid the balance of the decretal amount and thereafter the respondent also filed full satisfaction memo. The revision-petitioners denied the remaining allegations that they suppressed that the property was sold by late Srinivasulu Naidu to Venkatarama Naidu and on the other hand, it is asserted that their father did not sell the said land to Venkatarama Naidu and that it is a vacant site and it is not in possession of Venkatarama Naidu. It is further stated that the petition u/s 47 CPC is not maintainable since the sale was confirmed and full satisfaction of decree was recorded and the appropriate provision for setting aside a sale is Order 21 Rule 91 of CPC and that the same should have been filed within thirty days from the date of sale under Article 127 of the Limitation Act.
During the enquiry, the petitioners got Exs.A1 and A2, sale deeds dated 24-12-1983 and 17-1-1984 in favour of Venkatarama Naidu executed by Srinivasulu Naidu marked on their behalf and the revision petitioner No.5 who is son of Srinivasulu Naidu examined himself as RW1.
The learned Munsif considered the above material and rival contentions and held that the vacant site measuring Ac. 0.05 cents in S.No.142/6, which is the subject-matter of Court auction, was sold by no other than late Srinivasulu Naidu to Venkatarama Naidu through registered sale deeds dated 24-12-1983 and 17-1-1984 which are marked as Exs.Al and A2 and that even on the date of attachment Srinivasulu Naidu had no saleable interest in the property but the revision-petitioners suppressed that fact and the same was not mentioned in the encumbrance certificate also. Therefore, the respondents purchased the same innocently and without knowing about the sale in favour of Venkatarama Naidu. It is further held that because EP was not closed by that day, and possession was not delivered to the respondent - decree-holders, the decree is not fully satisfied and that the revision petitioners have to pay a sum of Rs.9,000/- with subsequent interest at the rate of 6% from the date of petition till realisation besides Rs.450/-towards poundage and sale certificate fee. Thus, he allowed the petition filed by the respondents. This revision petition is filed by the judgment-debtors assailing the above findings.
Sri P.S. Narayana, learned Counsel for the revision-petitioners contended that Section 47 CPC has no application, since the sale was confirmed and sale certificate was issued and the only course open to the respondents was to file a petition under Order 21 Rule 91 CPC for setting aside the sale and he relied on a Full Bench decision of our High Court in Yadavalli Suryakanthamma and Another Vs. Maddipatla Dorayya and Another, and another Full Bench decision of Kerala High Court in Annamma Vs. Ouseph Tressiamma, . Whereas Sri Chandra Mouli, learned Counsel for the respondent - decree-holders contended that the revision petitioners have played a fraud upon the decree-holders by suppressing the fact that their father had already sold the EP schedule property to Venkatarama Naidu and hence it is not open to them to contend that the auction sale has become final. He also pointed out that there is no fault on the part of the respondents-decree-holders as the above transaction in favour of Venkatarama Naidu was not shown in the encumbrance certificate which was obtained before issue of proclamation of sale and moreover, neither the revision-petitioners had any saleable interest in the property even at the time of attachment, nor the EP was closed and hence they are entitled to continue the EP for recovery of the balance of decretal amount. He has distinguished both the decisions of Full Benches of this Court as well as Kerala High Court and contended that the revision-petition may be dismissed.
The question is whether Section 47 CPC or Ordcr21 Rule 91 CPC are applicable to this case.
The facts which arc not in dispute arc that a decree for recovery of money was obtained against late Srinivasulu Naidu and the property measuring Ac. 0.05 cents in S.No. 142/6 was attached and put to sale in execution of the decree and the sale was knocked down in favour of the respondent -decree-holder No.1 being the highest bidder. A sum of Rs.9,000/- was thus realised and the balance of the decretal amount was deposited by the revision-petitioners, the sale was confirmed and sale certificate was issued and then respondent No.1 filed EANo.636of 1993 seeking delivery of possession and when the Amin went there with warrant of possession, a third party by name Venkatarama Naidu obstructed the delivery stating that he has purchased the above property long back. It was only then that the respondent No. I came to know about the said sale. Immediately thereafter he filed this petition seeking recovery of Rs.9,000/- being the balance of decretal amount.
As regards the claim of third party, Venkatarama Naidu, the revision-petitioners are asserting that their father did not sell that property to him. Exs.Al and A2 registration copies of sale deeds in favour of Venkatarama Naidu are filed by the respondents, but no enquiry was held as to the genuineness or otherwise of the above transactions. When the revision-petitioners are contending that their father did not sell that property to Venkatarama Naidu but resistance or obstruction is offered to the respondents in taking possession of the property it was incumbent upon the lower Court to hold an enquiry under Order 21 Rule 101 CPC. It is no doubt true that some enquiry appears to have been held in this petition, but it was not directed towards the issue of objector''s title coupled with possession claimed by him. Except the registration copies of sale deeds of the objector, no evidence is adduced to prove his possession. It is possible that Srinivasulu Naidu might not have sold that property to third party at all and he might not have put him in actual possession of the same as contended by the revision-petitioners herein. If upon enquiry it is found that the objector is not at all in possession there can be no difficulty for the respondents-auction purchasers to take possession and in that case and in the event of third party approaching the Court complaining of such dispossession, all questions including questions relating to right, title and interest in the property arising between the parties shall be determined by the executing Court under Rule 101 of Order 21. It is noteworthy that the learned Munsif did not advert to these aspects and more so as to who was in possession of the property. Keeping this factual background in view, the contentions raised by Sri P.S. Narayana, learned Counsel for the revision petitioners may now be examined.
It is necessary to have a look at Section 47 CPC which is reproduced below :
"47. Questions to be determined by the Court executing decree :--(1) All questions arising between the parties to the suit in which the decree was passed, or their representatives and relating to the execution, discharge or satisfaction of the decree, shall be determined by the Court executing the decree and not by a separate suit.
(2) [x x x]
(3) Where a question arising as to whether any person is or is not the representative of a party, such question shall, for the purposes of this section, be determined by the Court.
Explanation I :-For the purposes of this section, a plaintiff whose suit has been dismissed and a defendant against whom a suit has been dismissed are parties to the suit.
Explanation II :--(a) For the purposes of this section, a purchaser of property at a sale in execution of a decree shall be deemed to be a party to the suit in which the decree is passed; and
(b) all questions relating to the delivery of possession of such property to such purchaser or his representative shall be deemed to be questions relating to the execution, discharge or satisfaction of the decree within the meaning of this section."
A bare reading of Section 47 CPC shows'' that its scope is very wide and comprehensive enough to include all questions relating to the execution, discharge or satisfaction of the decree. The question about the saleability of the judgment debtors'' interest in a property attached in the execution proceedings is held to be a question which fells within the four comers of Section 47 in Shiv Prasad and Another Vs. Smt. Tali Devi and Others, and in Virendra Kishore Srivastava v. Kesharinandan Prosad, AIR 1962 Patna 410.
A Full Bench of Madras High Court in Hamid Gani v. Amma Sahib, AIR 1941 Mad. 898, also examined the scope of Section 47 CPC in another spectrum. Although Order 22 Rule 4 CPC is not applicable to execution proceedings by virtue of Rule 12 the legal representatives of the deceased judgment-debtor were impleaded in the execution proceedings of a decree for specific performance by execution of sale deed. The question was whether a person was not entitled to raise defence in a suit can be held to be debarred from raising the same defence in execution and also whether a fresh suit is barred by Section 47 CPC. Suffice it for the purpose of this case that the Full Bench considered several complex facets of Section 47 CPC and held,
"When a person comes into Court in execution proceedings as the legal representative of a deceased party he cannot question the decree which has been passed. If the decree concerned property in which he claims an interest, the decree will not be binding upon him unless he was a party to the suit. If he was not a party to the suit or, as in this case, he had been dismissed from the suit, his rights will be entirely unaffected and he will be in a position to enforce them in a suit instituted by him for that purpose."
It is further held,
"Section 47, CPC only requires to be decided in execution proceedings those questions which arise between parties to the suit in which the decree has been passed or their representatives and which relate to the execution, discharge or satisfaction of the decree. Where a stranger to the suit claims as his, immovable property which has been the subject-matter of a decree, that claim cannot in law be regarded as being a question relating to the execution, discharge or satisfaction of the decree. There are decisions of this Court to the effect that in execution proceedings arising out of money decrees questions relating to the property attached must be decided in execution proceedings and not by a separate suit, but this is an entirely different matter because the correctness of the decree is not called into question. Therefore, the correctness of such decisions does not arise. We are here dealing with a case where it is said that a person who is not a party to the suit, but is brought into Court in execution proceedings as the legal representative of a deceased party, can in those proceedings be allowed to challenge the decree and if he fails to do so he has for ever lost the right claimed by him in the suit property. Obviously, the answer must be that he cannot in execution say the decree is wrong, and he has his remedy by suit."
In Prosanno Coomar Sanyal v. Kasi Das Sanyal, 19 IA 166 (PC), the Privy Council also held that the scope of Section 47 is wide enough and Lord Macnaghten held - "It is of the utmost importance that all objections to execution sales should be disposed of as cheaply and as speedily as possible."
Following are the illustrations of sales which are held to be liable to be set aside u/s 47 CPC :
(1) A sale in contravention of Section 99 of the Transfer of Property Act is void, notwithstanding that a third party is the purchaser and only a portion of the property sold was under mortgage. Such a sale may be set aside under the present section-vide Mayan v. Pakuran, 22 1LR Mad. 347.
(2) Where the decree-holder is himself the auction-purchaser and the ex parte decree in execution of which he purchased, has been subsequently set aside under Order IX, Rule 13, the sale cannot stand, even though it had been confirmed. An application to set aside the sale under such circumstances comes under this section-vide Umedmal v. Srinath, 27 ILR Cal. 810.
(3) A Court, in execution of a decree, has no jurisdiction to sell property, over which it had no territorial jurisdiction at the time it passed the order of a sale, such a sale may be set aside under this section-vide Prem Chand v. Mokhoda Devi, 17 ILR Cal. 699.
(4) Where, through inadvertence or otherwise, the Court orders sale of any property in execution of the decree, notwithstanding such previous discharge of it, the sale under such order would be null and void as ultra vires. Such a sale may be set aside under this section--vide Chunni v. Lala Ram, ILR All. 5.
(5) The question arising between a judgment-debtor and the auction-purchaser as to whether certain property was liable to attachment and sale, is one to determined under this section--vide Basti Ram v. Fothu, ILR 8 All. 146.
(6) Where a judgment impeaches the validity of execution proceedings which proceeded and led up to the sale of his property, and thus seeks to have sale set aside, his remedy lies by application under this section--vide Mohdi Begam v. Rasul Beg, 48 IC 39.
(7) An application to set aside an execution sale on the ground of fraud, the fraud being that the decree had been satisfied by payment to the husband of the decree-holder on the day before the sale, but the payment was not certified and the sale was held, conies within the scope of this section.--vide Alokeshi v. Mohini, 10 IC 625.
(8) An application by the judgment-debtor asking the Court to set aside the sale and to restore him to possession of the property not covered by the decree is an application relating to the execution, discharge or satisfaction of the decree under this section-Wife Raja Ram v. Itraj, 17 OC 94.
(9) An application to set aside an execution sale on the ground of absence of notice of the settlement of sale proclamation, as required by Order XXI, Rule 66 can only be considered under this section--vide Thakhedath v. Subramania, 53 IC 809.
The scope and ambit of Order 21 Rule 90 CPC on the other hand is also examined in the following cases :
In Seshagiri Aiyar Vs. Valambal Ammal and Others, , the distinction between Section 47 CPC and Order 21 Rule 90 CPC is considered and it is held,
"If a party impeaches a sale on grounds which attract the provisions of Order 21 Rule 90 he cannot escape from the period of limitation provided by Article 166, Limitation Act by framing his application as one u/s 47. The substance of the application must be considered in order to determine whether the application is one which falls u/s 47 or under Order 21, Rule 90 CPC. If the grounds alleged do not relate to matters in publishing or conducting the sale but are anterior or subsequent to the sale the application is outside the purview of Order 21, Rule 90."
In Tamma Venkata Pardhasaradhi Vs. Tamma Ramachandra Rao and Others, , it is held,
"When a person feeling aggrieved by a sale impugnes it on grounds stated in Rule 90 he is bound by the requirements and implications of that rule. For the purpose of finding out whether a particular application comes under Rule 90 or Section 47 the substance of the application must be considered. If the substance is that there were irregularities or illegalities in publishing or conducting the sale then the application must be treated as one under Rule 90. If on the other hand the grounds alleged are either anterior or subsequent to the publishing or conducting the sale it is outside the purview of Rule 90 and will come within Section 47.
A Full Bench of this Court in Satyanarayanamurthy v. Bhavanarayana, AIR 1957 AP 185, also considered the scope of Order 21 Rule 90 CPC and held that all its requirements must be satisfied in an application under Rule 90. It is held,
"Even if an attachment is a necessity preliminary to a sale the judgment-debtor if he receives a notice under Rule 66(2) has an opportunity of raising the question of absence of attachment. If, on the other hand, there is no attachment and no notice under Rule 66, then he may very well complain of the absence of notice under Rule 66 and on proof of substantial injury, may get the relief provided by Rule 90. Therefore, the question of absence of attachment by itself is immaterial both u/s 47 because it does not make the sale void and under Rule 90 because it cannot in the contemplation of the Code, by itself occasion substantial injury.
In the result, unless the matters alleged in an application for setting aside a sale are such that they would render the sale void (in which case no question of substantial injury could arise as the application falls u/s 47), it must come under Order XXI Rule 90 and can succeed only on proof of material violation of Rule 65 etc. followed by proof of consequential substantial injury to the applicant. Non-service of notice under Order 21 Rule 66(2) is an irregularity in publishing and conducting the sale.''''
I shall now turn to the Full Bench decision of this Court in Suryakanthamma ''s case (supra). The appellant in that case obtained money decree against the second defendant in the Court of District Munsif, Eluru and in execution of the decree, brought Ac. 1.92 cents of land to sale which was confirmed and full satisfaction of the decree was recorded. In the mean time, the defendant carried an appeal against the decree and succeeded in getting the decree as well as the sale set aside and the matter was remanded to the trial Court. Pending retrial of the suit, the judgment-debtor executed a registered gift deed of this property in favour of his daughter and son-in-law. The suit was once again decreed on retrial and this very land was re-attached in execution of the decree and was being brought to sale. At that stage, the donees intervened with a claim based upon the gift deed. The claim petition was dismissed as having been filed too late and the sale was held. The respondent, who knew about this gift which was mentioned in the proclamation of sale and also in the claim proceedings, purchased the property. Though the sale was confirmed and the sale certificate was issued by the executing Court. Thereupon he filed a separate suit for setting aside the summary order. The appellant resisted the suit on the ground that the gift was a nominal transaction brought into existence to defeat the creditors and yet the suit was decreed. Thereupon, the respondent filed petitions under Order 21, Rules 91 and 93 CPC to set aside the sale and to refund the sale amount and the same was dismissed on merits and also as barred by time, leading the respondent to institute the suit for recovery of purchase money on the ground of failure of consideration. The trial Court decreed the suit relying on a judgment of the Full Bench of the Madras High Court in Macha Koundan v. Kottora Koundan, AIR 1936 Mad. 50, which held that where a judgment-debtor was proved to have no saleable interest in the land sold and for that reason lost it, the auction-purchaser could sue the decree-holder for return of the purchase money. The decree was confirmed by the appellate Court and that led to the filing of the Second Appeal by the decree-holder. The soundness of Macha Koundan''s case (supra) was canvassed in the Second Appeal which came up before the learned single Judge which was referred to a Full Bench expressing opinion that an authoritative ruling of the High Court was to be given as to the correctness of the ratio and ultimately it came up for consideration before a five Judge Bench. On a consideration of a catena of decisions expressing divergent opinions, the larger Bench held,
"In our judgment, there is no scope for invoking the doctrine of money had and received since it could not be postulated that the executing creditor received money which he had no right to do and by a legal fiction the receipt by him was for the use of the plaintiff. If no one had guaranteed the title of the judgment-debtor to the property sold under a legal process and the purchaser had purchased only the judgment-debtor''s interest therein for what it was worth, it could not be predicted that there was any failure of consideration for the purchase of that or that the judgment-creditor either unjustly or inequitably had withdrawn the amount deposited by the purchaser. The question of failure of consideration would arise only if there was a covenant of title. In the absence of it, the principle of money had and received would be inapplicable and the suit for return of the money cannot be sustained on that ground."
After laying down the above dicta, the larger Bench conceived of cases of fraud and misrepresentation and it has further held,
"But the right to recover the auction price in cases of fraud and misrepresentation which have induced the purchaser to buy the property stands on a different footing. If there is a taint or a touch of fraud or deceit or misrepresentation that induced the purchaser to bid for the property successfully, that goes to the root of the sale and impairs its usefulness. Such sales are outside the scope of the relevant provisions of Order 21 and they fall within the principle enshrined in the material provisions of the Indian Contract Act."
The respondents - decree-holders in the case on hand have founded their claim upon fraud inasmuch as the encumbrance certificate, which was obtained prior to proclamation of sale, did not show the alleged sale transaction in favour of Venkatarama Naidu and the revision petitioners never brought it to their notice and on the other hand, they have been contending that their father never sold that property to Venkatarama Naidu. It can therefore be said that the respondents were induced to bid for the property. The larger Bench precisely conceived of such cases of fraud and misrepresentation and therefore carved out an exception to the ratio laid down by them. In my considered view, the impugned order falls within the above exception.
The conspectus of the catena of decisions on the subject is that the scope and ambit of Section 47 CPC is very wide whereas the scope of Order XXI Rule 90 CPC is limited to the extent of any material irregularity or fraud in publishing or conducting the sale. I, therefore, hold that the petition filed by the respondents/decree holders u/s 47 CPC is in order, inasmuch as the ground on which they are seeking remedy is not one of irregularity or fraud in publishing or conducting the sale. As regards larger Bench decision cited supra, it is the exception carved out therein by the larger Bench that is applicable to this case.
Returning to para 8 ante, I have held that further enquiry as to the genuineness or otherwise of the claim of Venkatarama Naidu is called for in this matter. I have also held that it is necessary to see whether Venkatarama Naidu is in actual possession of the said land or not. For that purpose, the matter is fit to be remanded to the lower Court by setting aside the impugned order.
In the result, civil revision petition is allowed and the impugned order in EA No.246 of 1994, dated 104-1996 is set aside and the matter is remanded to the lower Court for fresh enquiry keeping in view the observations of this Court. The lower Court may afford reasonable opportunity to both the parties to adduce further evidence and taking the evidence already on record into consideration together with fresh evidence that may be adduced by both the parties the lower Court may dispose of the EA afresh. The costs will abide by the result of the EA in the lower Court.