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Jatindra Mohan Sarkar Judgment-Debtor v. Mahipal Nayek And Others

Calcutta High Court

Dec 5, 1947

Judgment

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Structured Summary of the Opinion (R.C. Mitter, J.)

Factual and Procedural Background

The suit originated from a mortgage-decree execution. On 13 February 1939 the mortgaged properties of the appellant were sold; some lots were purchased by the decree-holder and others by strangers. The sale did not realise the decretal amount, and on 24 April 1940 the mortgagee obtained a personal decree for Rs. 7,198 under Order 34, Rule 6 of the Code of Civil Procedure (CPC). In execution of that personal decree, eighteen other items of the mortgagor's property were put up for sale by the Subordinate Judge on 17 January 1941. One lot remained unsold, five were purchased by the decree-holder, and the rest by other respondents (strangers). The sale was confirmed on 30 January 1942.

The judgment-debtor attacked the validity of the sale of the seventeen lots sold on 17 January 1941. The sale proceeded on the basis of a sale proclamation issued on 21 August 1940 (which had fixed the sale for 12 November 1940). That proclamation was issued ten days before the Bengal Money-lenders Act, 1940 came into operation.

After the Bengal Money-lenders Act came into force, the judgment-debtor applied under Section 36 of that Act for relief (seeking re-opening of decrees). During the miscellaneous proceedings he sought multiple postponements of the sale and at times waived publication of a fresh sale proclamation — initially unconditionally for adjournments from 12 November to 29 November and from 29 November to 16 December 1940, and later (on 16 December 1940) conditionally (waiver valid only if he did not obtain relief under the Money-lenders Act). The Subordinate Judge dismissed the Section 36 application on 4 January 1941. On the scheduled sale date the judgment-debtor applied for adjournment to enable an appeal and a stay application; the sale was postponed one day, the adjournment request was refused on 15 January, the properties were put up on 16 January 1941 on the basis of the 21 August proclamation, and were actually sold on 17 January 1941.

The judgment-debtor filed an application for reversal of the sale under Order 21, Rule 90 CPC within 30 days (filed 12 February 1941), but that application was dismissed for default on 18 July 1941. The sale was later confirmed by the executing Court (30 January 1942). On 18 June 1943 the judgment-debtor filed another application (the subject of this appeal) framing his attack under Section 47 and Order 21, Rule 90 of the CPC.

Legal Issues Presented

Whether the sale of the seventeen lots held on 17 January 1941 in execution of the personal decree was legally valid.
Whether the judgment-debtor's waiver (either unconditional or conditional) of the publication of a fresh sale proclamation was effective to permit the sale to proceed on the basis of the proclamation issued on 21 August 1940.
Whether an adjournment/holding of the sale beyond a month from 16 December 1940 without publishing a fresh sale proclamation invalidated the sale.
Whether Section 35 of the Bengal Money-lenders Act, 1940 applied to a sale proclamation validly issued before the Act came into force, and if non-compliance with Section 35 could be raised under Section 47 of the CPC despite the lapse of more than 30 days.
Whether purchasers (strangers) who took possession after confirmation could be deprived of that possession on the basis that delivery was obtained while the Court had ordered a stay of delivery of possession.

Arguments of the Parties

Judgment-debtor's Arguments

The waiver of publication of a fresh sale proclamation was ineffective because his application under the Bengal Money-lenders Act ultimately succeeded; therefore the sale could not be lawfully held on 16 January 1941 on the basis of the proclamation issued on 21 August 1940.
Even if a waiver existed, the unconditional waiver made on 29 November 1940 could not validate a sale held on 16 January 1941 because the bidding commenced beyond a month from 16 December 1940 (i.e., the sale was beyond the permissible one-month period without a fresh proclamation).
The sale proclamation on the basis of which the sale was held did not comply with Section 35 of the Bengal Money-lenders Act and therefore the sale was a nullity; this ground could be raised under Section 47 of the CPC.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
18 Cal. 496	Cited to support the proposition that certain grounds (relating to irregularities such as non-publication of proclamation or suppression of service) are matters for application under Order 21, Rule 90 and not objections under Section 47 of the CPC.	The Court relied on this authority to hold that the first two grounds raised by the judgment-debtor could only be pursued under Order 21, Rule 90 and, since the application was time-barred, could not be raised under Section 47.
11 Cal. 658 (at p. 660)	Similarly cited in support of the distinction between procedural irregularities (Order 21, Rule 90) and jurisdictional defects (Section 47), as regards reversal of sales.	Applied by the Court alongside other Calcutta cases to conclude that the first two grounds were not maintainable under Section 47 and were barred by limitation for Order 21, Rule 90 relief.
43 C.W.N. (F.R.) 683 (pp. 71–72)	Held that non-compliance with Sections 16 & 17 of the Bihar Moneylenders Act affected a valuable right of the judgment-debtor and that the right lost by non-compliance differed from remedies under Order 21, Rule 90.	The Court used this Federal Court decision to support the proposition that non-compliance with provisions analogous to Section 35 of the Bengal Act affects a substantive right and therefore such non-compliance can be the subject of an objection under Section 47 (i.e., not simply a matter for Order 21, Rule 90).
46 C.W.N. 275 (Division Bench)	The Division Bench held that Section 35 of the Bengal Money-lenders Act does not apply to a case where a valid sale proclamation had been issued before the Act came into force; the section does not state that pre-existing proclamations cease to have effect.	The Court respectfully agreed with this conclusion and applied it to hold that Section 35 did not apply to the proclamation issued on 21 August 1940 and thus the third contention of the judgment-debtor failed.
22 Cal. 767	Cited for the principle that a statutory provision which takes away or affects substantive rights ordinarily has prospective operation only, absent express retrospective words or necessary implication.	The Court invoked this authority to conclude that Section 35, which affected substantive rights of decree-holders, could only have prospective operation and therefore did not apply retrospectively to proclamations validly issued before the Bengal Act came into force.

Court's Reasoning and Analysis

The Court addressed each contention in turn, following a stepwise analysis grounded in procedural rules and precedents cited in the opinion.

On the effectiveness of the waiver(s):
The waiver made on 16 December 1940 was conditional (effective only if the judgment-debtor did not obtain relief under the Money-lenders Act) and that condition ultimately occurred (the application under the Act succeeded in substance later). Therefore that conditional waiver was not effective. However, the earlier waiver contained in the petition of 29 November 1940 was unconditional and, on the facts, would have allowed the sale to be held on 15 December 1940 on the basis of the proclamation dated 21 August 1940.
On computation of the "one month" period:
The Court observed that whether 16 January 1941 was beyond a month from 16 December 1940 depended on the rule of computation (inclusion or exclusion of the initial date). The Court expressly stated it need not decide that precise arithmetical question for the present determination.
On the legal effect of non-issue of a fresh sale proclamation:
The Court treated non-issue of a required sale proclamation, and the adjournment of a sale beyond a month without publishing a fresh proclamation, as material irregularities analogous to non-service or suppression of service of a proclamation. Such irregularities are material but do not affect the jurisdiction of the executing Court to hold the sale. Consequently, these irregularities, if relied upon, are matters properly raised under Order 21, Rule 90 rather than under Section 47 of the CPC.
On limitation and appropriate remedy:
The Court held that the first two grounds advanced by the judgment-debtor — relating to the effectiveness of waivers and timing of the sale without fresh proclamation — fell within the scope of Order 21, Rule 90. Because the appellant's application under that provision was filed beyond the prescribed period, those grounds were time-barred and could not be pressed as objections under Section 47. The Court relied on Calcutta case law (as noted) to support this procedural distinction.
On Section 35 of the Bengal Money-lenders Act:
The Court recognized that non-compliance with provisions analogous to Section 35 affects a valuable right of the judgment-debtor and is therefore different in character from matters remedied under Order 21, Rule 90. That meant the third ground — non-compliance with Section 35 — could properly be raised under Section 47 and could not be disposed of on limitation grounds applicable to Order 21, Rule 90 applications.

The crucial question then became whether Section 35 applied to the present case. The sale rested on a proclamation validly issued on 21 August 1940, before the Bengal Money-lenders Act came into force. The Court accepted the reasoning of a Division Bench (46 C.W.N. 275) that Section 35 does not state that previously valid proclamations cease to have effect and that the section directs conduct only when a proclamation is about to be drawn up or for sales pursuant to proclamations drawn up under the Act. Because Section 35 affected substantive rights of decree-holders (it limited the decree-holder's prior freedom to select properties for sale), it was held to have prospective operation only (citing 22 Cal. 767). Accordingly, Section 35 did not apply retrospectively to a proclamation validly issued before the Act came into force. The Court therefore overruled the third contention.
On purchasers' possession:
Having held the sale to be valid, the Court concluded that purchasers (including strangers) acquired good title that related back to the date of sale. They had a right to possess the property on the date they took possession; consequently, they could not be deprived of possession. Although the judgment-debtor might have other remedies, restoration of possession to him could not be allowed on the basis advanced.

Holding and Implications

APPEALS DISMISSED WITH COSTS

Holding:

The Court dismissed the appeal(s) and upheld the validity of the sale of the properties sold on 17 January 1941; the sale was confirmed and purchasers obtained good title relating back to the date of sale.
The first two grounds of attack (ineffectiveness of waiver and adjournment beyond a month without fresh proclamation) were matters for Order 21, Rule 90 and were time-barred; they could not be sustained under Section 47 of the CPC.
The third ground (non-compliance with Section 35 of the Bengal Money-lenders Act) failed because Section 35 was held not to apply to a proclamation validly issued before the Act came into force; Section 35 was treated as affecting substantive rights and therefore as having prospective operation only.
Purchasers who took possession after confirmation could not be dispossessed on the grounds advanced by the judgment-debtor.

Implications:

Direct effect on the parties: The sale is upheld; purchasers retain title and possession; the judgment-debtor's applications attacking the sale were dismissed and he was not entitled to restoration of possession.
On the interpretation of the Bengal Money-lenders Act: The Court applied and agreed with a Division Bench view that Section 35 does not operate retrospectively to invalidate proclamations validly issued before the Act came into force, reasoning that the section affects substantive rights and therefore has prospective operation only.

This summary is strictly confined to the facts, arguments, authorities, reasoning and conclusions contained in the provided opinion. No information has been inferred or added beyond the text supplied.

Show all summary ...

R.C Mitter, J.:— In execution of a mortgage-decree the properties mortgaged by the appellant were sold on 13th February 1939. Some of them were purchased by the decree-holder and the rest by strangers. The price fetched at that sale, however, did not cover the decretal amount with the result that the mortgagee obtained on 24th April 1940 a personal decree for Rs. 7198 under O. 34, R. 6 of the CPC. In execution of this decree eighteen items of the mortgagor's other properties were ultimately put up to sale on 17th January 1941 by the Subordinate Judge who had passed the personal decree in the mortgage suit. One lot was not sold, five were purchased by the decree-holder respondent and the remaining lots were purchased by the other respondents in the appeal who are strangers. The sale was confirmed on 30th January 1942. The legality of the sale of the seventeen lots sold on 17th January 1941 in execution of the said personal decree is the question to be decided in this appeal. The application of the judgment debtor in which the sale has been attacked was filed as late as 18th June 1943. The challenged sale was held on a sale proclamation issued on 21st August 1940, that is to say ten days before the Bengal Moneylenders Act 1940, had come into operation. By that proclamation the sale was fixed for 12th November 1940.

2. Soon after the Bengal Money-lenders Act had come into force the judgment-debtor made an application to the Subordinate Judge under S. 36 of that Act for relief. In that application he prayed inter alia for reopening the decrees passed against him. During the pendency of that miscellaneous case started on this application he applied for postponement of the sale from time to time, at first unconditionally waiving publication of fresh sale proclamation in respect of the sale adjourned from 12th November to 29th November and from 29th November to 16th December 1940. On 16th December 1940 he again applied for postponement of the sale waiving the publication of a fresh sale proclamation but this time subject to the condition that waiver would be valid only if he did not get relief in the proceedings started by him under the Bengal Money-lenders Act. His prayer was allowed and the sale was postponed to 14th January 1941.

3. His application under Section 36 of the Money, lenders Act, was dismissed by the Subordinate Judge on 4th January 1941. On the very date fixed for the sale the judgment-debtor applied for adjournment of the sale on the ground that he intended to appeal to this Court against the order rejecting his application for relief under the Money-lenders Act and to bring an order from the appellate Court staying the sale. This application for postponement of the sale was opposed at once by the decree-holder. It was, however, not disposed of on 14th January 1941 and was ordered to be put up for consideration to the following day. The Subordinate Judge at the same time postponed the sale to the next day. On the next day the 15th January, the judgment-debtor's application for postponement of the sale was refused and the properties were put up to sale on the next day, that is to say, on 16th January 1941 on the basis of the sale proclamamation which had been issued on 21st August 1940. They were actually sold on 17th January 1941.

4. It is not necessary to recite the course of the proceedings under Section 36 of the Bengal Moneylenders Act. Ultimately it terminated substantially in favour of the judgment debtor on 30th October 1942. The judgment-debtor had on 12th February 1941, that is within 30 days of the sale, filed an application for reversal of the sale under O. 21, R. 90 of the Code, but that application was allowed by him to be dismissed for default on 18th July 1941. The sale was confirmed, as we have already said, by the executing Court on 30th January 1942. On 18th June 1943 the judgment-debtor filed another application (which is the subject-matter of the appeal before us) for reversal of the sale heading his application as one made under S. 47 and O. 21, R. 90 of the Code. The grounds in support of his application as pressed before the Subordinate Judge and also before us are as follows: (1) that waiver of fresh sale proclamation was not effective, inasmuch as his application for relief under the Money-lenders Act had succeeded, and so the sale could not be held on 16th January 1941 on the sale proclamation issued on 21st August 1940, which had fixed the sale for 12th November 1940; (2) that in any event, the sale could not be held on 16th January 1941, on the basis of his unconditional waiver as made in his petition of 29th November 1940, inasmuch an the bidding commenced on a date which was beyond a month from 16th December 1940; and (3) that in any event the sale was a nullity as the sale proclamation on the basis of which the sale was held was not in terms of Section 35 of the Bengal Money-lenders Act.

5. On the facts which we have recited it is possible to hold that the waiver on his part as to the publication of a fresh sale proclamation as made in his petition filed on 16th December 1940, was not effective. The waiver was a conditional one, and the condition has not been fulfilled as his application under the Money-lenders Act ultimately succeeded, though not fully. In view of his conditional waiver regarding the publication of a fresh sale proclamation as made on 29th November 1940, the sale could be held on 15th December 1940, on the basis of the proclamation issued on 21st August 1940, and the Court could postpone the sale without publishing another sale proclamation to any date which was not beyond a month from 16th December 1940. We need not decide the question whether 16th. January 1941, when the sale commenced would be beyond a month from 16th December 1940, or just within the month. It would be the one or the other according as in making the computation the date, 16th December is taken into account or excluded. In our judgment, however, non-issue of a sale proclamation when the law requires the publication of a fresh sale proclamation stands on the same footing as the non-service or suppression of service of a sale proclamation in the matter of the reversal of a sale. They would be material irregularities and would not affect the jurisdiction of the executing Court to hold the sale. The adjournment of a sale beyond a month without publishing a new sale proclamation would stand on the same footing. The first two grounds urged by the judgment-debtor can only be the subject-matter of an application under O. 21, R. 90 of the Code and so cannot be the subject-matter of an objection under S. 47 of the Code. This view of ours is supported by the decisions in 18 Cal. 496,1 11 Cal. 6582 at p. 660 and many other cases to be found noted in annotated editions of the Code of Civil Procedure noticed under O. 21, R. 69. The appellant before us cannot urge the first two grounds for attacking the sale as his application was beyond the period of limitation prescribed for an application under O. 21, R. 90 of the Code.

6. It has been laid down by the Federal Court in 43 C.W.N (F.R) 683 at pp. 71 and 72 that non-compliance with Sections 16 and 17 of the Bihar Moneylenders Act, 1938, which are pari materia with Section 35 of the Bengal Money-lenders Act, 1940, does not concern a rule of mere procedure, but affects a valuable right of the judgment-debtor and that right which the judgment debtor loses by reason of the non-compliance with the provisions of those two sections is different from what is available to him under O. 21, R. 90 of the CPC. The third ground on which the sale has been attacked by the judgment-debtor can only be the subject-matter of an objection by him under S. 47 of the Code. This ground of attack cannot therefore be disposed of on the ground that his application was made not within 30 days of the sale but about two and half years thereafter. The material question, however, is whether Section 35 of the Bengal Money-lenders Act, applies to the case before us.

7. The sale was held on the basis of the proclamation issued on 21st August 1940. The Bengal Money-lenders Act, 1940, was not in force then. But before the sale date fixed in the said proclamation the said Act had came into operation. The contention of the judgment-debtor is that as soon as the said Act came into force the executing Court ought to have recalled the said sale proclamation and to have issued a fresh sale proclamation in compliance with the provisions of S. 35. A similar contention was overruled by a Division Bench in 46 C.W.N 2754 where it was held that S. 35 of that Act does not apply to a case where a valid sale proclamation had been issued before that Act had come into force. The reason in support of that conclusion is stated thus:

“The section (S. 35) nowhere says that a sale proclamation validly issued before the Act would cease to have effect after the Act, nor does it say that such sale proclamation should be amended in accordance with its provisions. It merely directs what should be done when a sale proclamation is about to be drawn up and at a sale held pursuant to such proclamation.”

8. Section 35 of the Act does not enunciate a mere rule of procedure. It creates a valuable right in the debtor, but at the same time the right so created takes away a valuable right which the decree-holder, who had obtained a decree on a loan, had before the said enactment. He had under the general law the right to choose the properties of the judgment-debtor which in his opinion would have afforded him the best and expeditious means of realising his decree. He could have asked for sale of as many of the properties of the judgment-debtor as he wished to choose. In the case of a decree on a secured loan he could have asked for sale of all the secured properties even if their total value far exceeded the decretal amount, and the Court would have been bound to include all of them in the proclamation of sale. Where the decree was on an unsecured loan the choice of the decree-holder in the matter of the inclusion of the judgment-debtor's properties could not also have been limited by the executing Court. Moreover in view of the last sentence of para. 1 of Section 35 of the Money-lenders' Act, and the proviso, there cannot be any doubt that section has encroached upon the rights which the decree-holder had before. It is thus a case where the section has taken away or affected a substantive right of the decree-holders. The section can therefore have prospective operation only (22 Cal. 7675), as the Legislature has not given it retrospective operation either by express words or by necessary implication. On this ground we respectfully agree with conclusions of the Division Bench in 46 C.W.N 275 as embodied in the passage which we have quoted above. The third contention of the judgment-debtor appellant is also overruled. The result is that this appeal is dismissed with costs.

F.M.A No. 190 of 1944.

9. In this appeal the question is whether possession of certain items of property which had been purchased by strangers at the said sale held on 17th January 1941, should be restored to the judgment-debtor on the ground that the said purchasers had obtained possession through the Court, at a time when the Court had ordered stay of delivery of possession. They got delivery of possession after the sale had been confirmed.

10. As we have held the sale to be a good one those purchasers had acquired good title relating back to the date of the sale. They had thus a right to possess the property on the date they took possession. They cannot be deprived of their possession. The judgment-debtor may have had other remedies but their claim for restoration of possession cannot be allowed. This appeal accordingly fails. It is dismissed with costs.

Sharpe, J.:— I agree.

K.S

11. Appeals dismissed.