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Case Number
Attorney(S)
  • P. Pathak
  • P.N. Goswami
Judges
  • J.M Srivastava, J.
Acts
  • Sub-rule (3) of R. 2 of O. 21
  • provision of sub-rule (3)
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Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • P. Pathak
  • P.N. Goswami
Judges
  • J.M Srivastava, J.
Acts
  • Sub-rule (3) of R. 2 of O. 21
  • provision of sub-rule (3)
See more information ...
Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

The plaintiff (now appellant) challenged an auction-sale of her land (area 2 Bighas 10 L), which had been sold in Execution Case No. 41 of 1966. The sale took place on 27-9-67 and was alleged by the plaintiff to have been for a nominal sum (the plaintiff asserted Rs. 255/-, while the record showed Rs. 225/-) and to have been procured by fraud and in disregard of Order 21, Rule 85 of the Code of Civil Procedure ("the Code").

Background facts established in the opinion: the respondent was the decree-holder in Title Suit No. 228/61 and obtained a decree (with costs assessed at Rs. 199/-). The decree-holder filed Title Execution No. 41/66 to realise decretal money; the appellant's land was auctioned and sold to the decree-holder. The appellant filed an application under Order 21, Rule 90 (Misc. (J) Case No. 154/67) to challenge the sale. During pendency of that Misc. Case the appellant alleged an out-of-court settlement (payment of Rs. 205/-) which, the appellant contended, had not been certified/recorded; the appellant alleged that the decree-holder suppressed this and obtained confirmation of sale without depositing any alleged excess sale proceeds as required by Order 21, Rule 85.

Procedural history set out in the opinion: the learned Sadar Munsiff initially dismissed the suit; on appeal the matter was remanded for fresh decision and then, by judgment and decree dated 8-2-78, the trial Court decreed the suit (i.e., set aside the sale). The learned Assistant District Judge No. 1, Gauhati allowed the defendant respondent's appeal (Appeal No. 7 of 1978) by judgment and decree dated 16-5-79, dismissing the plaintiff's suit. The present opinion is from the subsequent appeal by the plaintiff.

Legal Issues Presented

  1. Whether there was any fraud in the auction sale as alleged by the plaintiff-appellant.
  2. Whether the suit was barred by Section 47 of the Code and/or by the provisions of Order 21, Rule 92(3) of the Code (i.e., whether the matter should have been raised by application under Order 21, Rule 90 instead of by a separate suit).

Arguments of the Parties

Appellant's Arguments (Plaintiff)

  • The land (2 Bighas 10 L) was sold for an inadequately low price (appellant contended Rs. 255/-, but record shows Rs. 225/-) as a result of collusion and fraud.
  • The decree-holder (respondent), being purchaser, had to deposit the balance amount of sale price into Court under the mandatory provision of Order 21, Rule 85 of the Code after adjusting decretal amounts; failure to do so amounted to fraud and misled the Court into confirming the sale.
  • The sale should therefore be set aside and should not be allowed to prevail.

Respondent's Arguments (Defendant)

  • There was no fraud in the auction sale.
  • The suit was barred by Section 47 and by Order 21, Rule 2 and Order 21, Rule 92(3) of the Code because the matter related to auction-sale in execution, and the proper remedy was an application under Order 21, Rule 90; consequently, no separate suit could be maintained.
  • Matters raised related to execution, satisfaction and discharge of the decree and thus fell exclusively within the jurisdiction of the executing Court under Section 47.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Nichhattar Singh v. Babu Khan (cited as AIR 1972 Punj and Har 204) This authority was cited by learned counsel for the appellant (specific rule/principle from the case is not detailed in the opinion). The Court found that this authority had no application to the facts of the present case because the sale had been confirmed by the Court and the court-record indicated set-off and confirmation procedures had been followed; consequently the cited authority did not aid the appellant.
Bhojai v. Salim Ullah (cited as AIR 1967 All 221) This authority was cited by learned counsel for the appellant (specific rule/principle from the case is not detailed in the opinion). The Court held that this authority likewise had no application to the facts because the sale was confirmed by the executing Court and material facts (set-off, confirmation steps) were shown on the record; therefore the precedent did not advance the appellant's case.

Court's Reasoning and Analysis

The Court structured its analysis around the two principal issues identified in the appeal:

  1. Alleged out-of-court payment and the effect on recognition by the executing Court:
    • The Court observed Rule 2(3) of Order 21 (sub-rule (3) of R.2) which provides that a payment or adjustment not certified or recorded in Court shall not be recognised by any Court executing the decree. The opinion quotes the mandatory effect of that sub-rule and concludes that even if an out-of-court payment of Rs. 205/- (as alleged by the appellant) had been made, it could not be recognised by the executing Court because it was not certified/recorded as required by R.2 of O.21. On that basis, the Court concluded the appellant's allegation of fraud based on an uncertified out-of-court payment was not tenable.
  2. Examination of the record concerning the auction sale and alleged non-deposit of balance under O.21 R.85:
    • The Court examined the certified order-sheet of the Sadar Munsiff in Title Execution 41/66. The order-sheet showed the sale proceedings ran from 22-9-67 to 27-9-67, that bids reached Rs. 200 on 22-9-67, and that on 27-9-67 the property was sold to the decree-holder for Rs. 225/- (not Rs. 255/- as alleged by the appellant).
    • The record also showed the decree-holder filed a petition to set off sale money with the decretal amount (petition No. 522) which was allowed; poundage fee paid; the confirmation process and the handling of the appellant's objection under O.21 R.90 (registered as Misc. Case 154/67) which was ultimately dismissed for default and the sale later confirmed.
    • Because the execution record reflected set-off and subsequent confirmation steps by the Court, the appellate Court considered there was no evidence of fraudulent conduct in the conduct of the sale or in the confirmation by the Court.
    • The Court emphasised that the appellant bore the burden of proving any balance left to be deposited under O.21 R.85 after set-off and that the appellant had failed to establish how much, if any, remained to be deposited. Accordingly, the contention of violation of O.21 R.85 was not demonstrable on the record.
  3. On the point of alleged inclusion of appeal cost in execution and correction:
    • The opinion notes the appellant's contention that the decree-holder included appeal costs which were not allowed; the record showed the execution application was corrected to exclude the cost of appeal. The Court said this correction did not materially favour the appellant's contention because the appellant had not shown any remaining balance that ought to have been deposited under O.21 R.85 after set-off.
  4. Jurisdictional bar under Order 21, Rule 92(3) and Section 47:
    • The Court analysed Rules 90 and 92 of Order 21 and Section 47 of the Code. It noted Rule 90 provides the proper mechanism for challenging a sale on grounds of irregularity or fraud (application to executing Court) and Rule 92(3) bars suits to set aside an order made under that rule by a person against whom such order is made.
    • The Court observed that because the order confirming the sale was against the appellant (the judgment-debtor), any allegation of irregularity or fraud in the auction-sale should have been pursued under Order 21, Rule 90 before the executing Court; thus a separate suit was barred by Rule 92(3).
    • Further, Section 47 makes clear that questions relating to execution, discharge or satisfaction of the decree must be determined by the executing Court and not by a separate suit. The Court concluded that the matters the appellant raised concerned execution, satisfaction and discharge of the decree and therefore fell within Section 47's bar on separate suits.

Holding and Implications

Holding: The Court dismissed the appeal. The core ruling is:

APPEAL DISMISSED.

The Court ordered that the parties shall bear their own costs and expressly dismissed the appellant's contentions that the auction-sale was procured by fraud or that the decree-holder had failed to deposit any balance amount required under Order 21, Rule 85.

Implications:

  • The direct effect is that the appellate judgment which allowed the defendant's appeal and dismissed the plaintiff's suit is upheld; the suit to set aside the auction-sale is dismissed.
  • The Court concluded no fraud sufficient to set aside the sale was shown on the record and that the correct procedural remedy for alleged irregularity or fraud in auction-sale execution is an application before the executing Court under Order 21, Rule 90 (and suits are barred by Order 21, Rule 92(3) and Section 47 where the matter concerns execution, satisfaction or discharge of a decree).
  • The opinion does not purport to lay down a new legal principle; it applies existing provisions of the Code (Order 21, Rules 2, 85, 90, 92 and Section 47) to the facts and concludes on those grounds. No broader precedent-creating holding is expressed beyond the decision's application to the facts before the Court.
Appeal dismissed. Parties shall bear their own costs.
Show full summary ...

    Smt. Bhabani Dasya And Others v. Tulsi Ram Keot (Deceased By L.Rs) And Others

    1. This is plaintiff's appeal against the judgment and decree dated 16-5-79 passed by the learned Assistant District Judge No. 1, Gauhati, whereby the defendant respondent's Appeal No. 7 of 1978 against the judgment and decree dated 8-2-78 passed by the learned Sadar Munsiff, Gauhati was allowed, and the plaintiff appellant's suit was dismissed.

    2. The plaintiff had filed suit challenging the auction-sale of her 2 B.10 L. of land in Execution Case No. 41 of 1966 allegedly for Rs. 255/- on 27-9-67, on grounds of fraud and in disregard of the provisions of R. 85 of O. 21 of the Code of Civil Procedure, hereafter the ‘Code’.

    3. Briefly, the undisputed facts are that the present respondent had obtained decree against the present appellants in Title Suit No. 228/61 with costs, which was assessed at Rs. 199/-. The present appellant's appeal was dismissed. The present respondent filed Title Execution No. 41/66 for realisation of the cost decretal money. The appellant's land — 2 B. 10 L. was sold in auction on 27-9-67. The appellant filed application under O. 21, R. 90 of the Code, being Misc. (J) Case No. 154/67 challenging the said sale. During the pendency of the said Misc. Case, it was stated by the appellant that the matter was settled between the parties and the decree was satisfied out of Court, in that an amount of Rs. 205/- had been paid in satisfaction thereof. The appellant alleged that suppressing that fact, the defendant the present respondent had the said sale confirmed on 19-5-69 without having deposited ‘the excess amount’ of sale proceed, as required under the mandatory provision of O. 21, R. 85 of the Code. The plaintiff appellant, therefore, filed the suit for setting aside the said auction-sale. The present respondent contested the suit and stated that the suit was not maintainable being barred by the provisions of S. 47, O. 21, R. 2 and O. 21, R. 92(3) of the Code.

    4. Earlier, the learned trial Court had dismissed the suit. In appeal, however, the matter was remanded for fresh decision. Thereafter, the learned trial Court by judgment and decree dated 8-2-78 decreed the suit. The learned Assistant District Judge No. 1, Gauhati by the impugned judgment and decree allowed the appeal and dismissed the suit. Hence this appeal.

    5. Shri P. Pathak, learned counsel for the plaintiff appellant has strenuously submitted that the plaintiffs' valuable land, area 2 B.10 L. had been sold for almost nothing for Rs. 255/-, that it was result of nothing, but collusion and fraud, that the defendant respondent who was the decree-holder in the said Execution Case No. 41/66 had to deposit the balance amount of the sale price in Court under the mandatory provisions of O. 21, R. 85 of the Code, and that having not been done, the sale was obviously a result of fraud also on Court which had been misled to confirm the sale which should, therefore, be set aside. The learned counsel for the appellants has also submitted that such auction-sale should not be allowed to prevail.

    6. On the other hand, Shri P.N Goswami, learned counsel for the defendant respondent, has submitted that there was no fraud in auction sale, that the suit was barred by the provisions of S. 47, O. 21, R. 2 and also O. 21, R. 92(3) of the Code inasmuch as the matter raised by the plaintiff appellant related to auction sale in execution, and the proper remedy for the plaintiff appellant was under O. 21, R. 90 of the Code, and no suit could lie. Besides, the matter, in any case, related to execution, satisfaction and discharge of the decree, and hence the suit was barred under S. 47 of the Code.

    7. I have considered the respective submissions for the parties.

    8. The main points which arise for consideration are firstly that whether there was any fraud in auction sale as alleged by the plaintiff appellant, and secondly whether the suit was barred under S. 47 and also under the provisions of O. 21, R. 92(3) of the Code.

    9. In so far as the first point is concerned, it may be noted that the appellant had come with the allegation that during the pendency of the Misc. (J) Case No. 154/67, there had been a compromise and the matter had been settled, when the appellants had satisfied the decree by payment of Rs. 205/- out of Court, but the defendant respondent fraudulently suppressing the fact had proceeded with the execution and obtained confirmation of sale, Under R. 2 of O. 21 of the Code payment made by the judgment-debtor to the decree-holder has to be certified in Court in accordance with the procedure laid down therein. Sub-rule (3) of R. 2 of O. 21 provides that “a payment or adjustment, which has not been certified or recorded as aforesaid, shall not be recognised by any Court executing the decree.” In view of the clear mandatory provision of sub-rule (3) noted above, a payment or adjustment made out of Court, which has not been certified or recorded, cannot be recognised by the Court executing the decree. Admittedly, in this case, no such payment, as has been alleged by the plaintiffs, out of Court, had been certified or recorded as required in the provision of R. 2 of O. 21 of the Code, and accordingly there is absolutely no doubt that the same even if made could not be recognised by the Court executing the decree. It should follow that the plaintiff appellant's allegation of fraud on the said score is just not tenable and cannot be accepted.

    10. The further contention of the learned counsel for the appellant that the decree-holder, i.e the present respondent not having deposited the balance amount of the sale price after adjustment of the decretal amount, i.e satisfaction of the decree, which had been put in execution, there was clear violation of the mandatory provision of R. 85 of O. 21 of the Code, and hence there was fraud on the Court. Order 21, R. 85 reads as under:

    “Time for payment in full of purchase-money. The full amount of purchase-money payable shall be paid by the purchaser into Court before the Court closes on the fifteenth day from the sale of the property;

    Provided, that, in calculating the amount to be so paid into Court, the purchaser shall have the advantage of any set off to which he may be entitled under Rule 72.”

    The decree-holder himself having been the purchaser had the advantage of set off to which he was entitled under R. 72.

    11. The appellate Court below has taken the view that the plaintiff had not proved the fact that how much the amount exactly due was and for how much the property had been sold in auction, and that the plaintiff appellant who had to prove the said facts having failed to do so, the contention of the plaintiff appellant could not be accepted. Shri P. Pathak, learned counsel for the appellant submitted that this fact could be clear from the record and the learned appellate Court should have seen the records for the said facts, and the matter could not be disposed of by the observation that the plaintiff appellant should have proved the said facts which were apparent from the record which were available to the Court. Without entering into this controversy, it may be noted that there is on record certified copy of the Order Sheet of the Court of Sadar Munsiff in Title Execution 41/66 and this document clearly shows that on 22-9-67 the said sale opened, and bid came up to Rs. 200/- when it was directed to continue till the next day. On 23-9-67, there was no bid and the sale was ordered to continue till 25-9-67. On 25-9-67, there was no bid and the sale was directed to continue till the next day. On 27-9-67, the sale opened and it was sold to the decree-holder for a sum of Rs. 225/- as he was the only bidder. It is significant that the property was sold for a sum of Rs. 225/- and not Rs. 255/-, as con-tended by the learned counsel for the appellant and which appears to have been accepted by the Courts below. The order sheet further shows that the decree-holder filed petition No. 522 with prayer to set off sale money with the decretal amount, which was allowed. Poundage fee of Rs. 6/- was paid 7-11-67 was fixed for confirmation. On 7-11-67, the judgment-debtor filed a petition No. 543 praying for stay on the ground that objection under O. 21, R. 90 of the Code had been filed. Confirmation of sale was stayed till 17-11-67. On 17-11-67, the matter was ordered to be put up on 18-11-67 for orders. The order sheet of Misc. 154/67 shows that on 18-11-67, the judgment-debtor's petition under O. 21, R. 90, was registered as Misc. Case. Notice was issued to the O.P fixing 23-12-67 for objection and execution proceeding were stayed till disposal of the Misc. Case. On 23-12-67, O.P had entered appearance and filed objection, 17-2-68 was fixed for hearing. On 17-2-68, the petitioner was absent without step and Misc. Case was dismissed for default. The decree-holder was directed to take steps fixing 5-3-68 and later finally the sale was confirmed. The above document clearly bears out that the auction sale was for a sum of Rs. 225/- and not for Rs. 255/-, that the decree-holder's application for set off of the sale money with the decretal amount had been allowed, that the judgment-debtor's application under O. 21, R. 90 of the Code was dismissed. It is clear from consideration of the above facts that in the conduct of the sale which continued from 22-9-67 to 27-9-67, there was no fraud, that in the confirmation of sale by the Court there was no element of fraudulent action by the decree-holder, i.e the present respondent, and that the Court had confirmed the sale after having considered the materials before it.

    12. Shri P. Pathak, learned counsel for the appellants, has cited Nichhattar Singh v. Babu Khan, AIR 1972 Punj and Har 204 and Bhojai v. Salim Ullah, AIR 1967 All 221. The said authorities have no application in the facts of this case because the sale had been confirmed by the Court which is expected to have been aware if any amount was due after set off was allowed by it. It is not clear how much amount, if any, was left after set off of the decretal amount which was allowed by the Court against the sale price of Rs. 225/. It may be noted that even according to the appellants Rs. 205/- was due and besides there could be some cost of execution, so that it is not clear as to how much was the balance amount, if any, as required to be deposited under O. 21, R. 85 of the Code. In any case, it was obviously the plaintiffs appellants' burden to prove the said fact, and on the evidence on record it cannot be said as to how much the said balance, if any, was required to be deposited.

    13. The learned counsel for the appellant has argued that the respondent decree-holder had included the cost of appeal while executing the decree which was not allowed and even the respondent had amended the execution application to that effect. While it does appear that in the appeal against the judgment, cost had not been allowed, the fact remains that the respondent had corrected the execution application by excluding the cost of appeal. In any case this fact does not make any substantial difference to the appellant's contention, because as said before the plaintiff appellant had not established that there was any balance amount to be deposited by the decree-holder and since the execution court's order dated 27-9-67 shows that the decree-holder's application praying to set off decretal amount against sale money had been allowed, it may even be said that no balance was there as required to be deposited under O. 21, R. 85 of the Code.

    14. In so far as the next question is concerned, it may be clear that the plaintiff appellant made allegations of fraud and the settlement of the matter out of Court having not been found tenable, the sale on the said score could not be set aside. All that remained were matters relating to auction sale and execution, satisfaction and discharge of the decree. In so far as the irregularity or even fraud in relation to auction sale was concerned, the provision of O. 21, R. 92(3) clearly barred the suit and the matter should have been agitated before the execution Court by an application under O. 21, R. 90 of the Code, which reads:

    “90. Application to set aside sale on ground of irregularity or fraud— (1) Where any immovable property has been sold in execution of a decree, the decree-holder, or the purchaser, or any other person entitled to share in a rateable distribution of assets, or whose interests are affected by the sale, may apply to the Court to set aside the sale on the ground of a material irregularity of fraud in publishing or conducting it.

    (2) No sale shall be set aside on the ground of irregularity or fraud in publishing or conducting it unless, upon the facts proved, the Court is satisfied that the applicant has sustained substantial injury by reason of such irregularity or fraud.

    (3) No application to set aside a sale under this rule shall be entertained upon any ground which the applicant could have taken on or before the date on which the proclamation of sale was drawn up.”

    The sale was confirmed under O. 21, R. 92(1) of the Code and O. 21, R. 92(3) reads:

    “No suit to set aside an order made under this rule shall be brought by any person against whom such order is made.”

    The order confirming the sale was against the present appellant who was the judgment-debtor. I have, therefore, no doubt that in relation to any allegation of irregularity and fraud relating to sale in execution, the suit did not lie, and the proper remedy was by application under O. 21, R. 90 of the Code.

    Besides, the matters raised by the plaintiff appellant relate to execution, satisfaction and discharge of the decree. S. 47 of the Code reads as under:

    “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) *********

    (3) Where a question arises 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.”

    It should be clear from the above provision that for the matters agitated in the suit, the remedy was by an objection under S. 47 of the Code and not by a separate suit which was clearly barred by the provisions of S. 47 of the Code.

    15. For the aforesaid reasons, this appeal has no merits and is dismissed. Parties shall bear their own costs.

    Appeal dismissed.

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    Comments

    Smt. Bhabani Dasya And Others v. Tulsi Ram Keot (Deceased By L.Rs) And Others
    (Feb 28, 1989)