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N. Agarwala v. M. Rajgarhia
Structured Summary of the Provided Opinion
Factual and Procedural Background
The appeal was brought by the plaintiff, Nathmal Agarwala, challenging an order of the Subordinate Judge of Sasaram refusing to grant a temporary injunction restraining the defendant 1st party from taking delivery of possession of certain properties in an execution proceeding.
The properties in dispute comprised plots nos. 842 and 843 situated in Mohania, together with a rice, oil and flour mill (including the Gola and mill machinery). Nathmal Agarwala alleged that on 5 March 1949 he had purchased those plots, the standing structures, the Gola and the mill machinery from the judgment-debtors (Nagarmal Agarwala, Jagdish Prasad Agarwala and Arjun Das Agarwala) for Rs. 60,000 and that he was in exclusive possession; accordingly he claimed the properties were not liable to be sold in execution of the decree against those judgment-debtors.
Procedural history (as stated in the opinion):
- Nathmal Agarwala filed an objection under Order 21, rule 58 of the Civil Procedure Code to the attachment of the properties. That application was dismissed by the Subordinate Judge on the ground that the judgment-debtors were in possession on their own account and that the asserted sale of 5 March 1949 was a sham transaction.
- The judgment-debtors (it is said) preferred a revision to the High Court, which was dismissed by a Bench of this Court on 20 August 1952.
- Thereafter Nathmal Agarwala instituted a suit under Order 21, rule 63 asking for a declaration that the properties were his and not liable to attachment and sale; he also applied for a temporary injunction restraining the defendant 1st party from taking delivery of possession in the execution case. The Subordinate Judge dismissed the injunction application on 11 September 1952.
- This appeal challenges that refusal to grant the temporary injunction.
Legal Issues Presented
- Whether the plaintiff can be granted a temporary injunction under Order 39, rule 1 of the Civil Procedure Code to restrain delivery of possession in an execution proceeding in the circumstances of this case.
- How the second proviso (added on 8 October 1937) to Order 39, rule 1 — which prevents granting an injunction to restrain sale, confirmation of sale, or delivery of possession except where the applicant "cannot lawfully prefer, and could not lawfully have preferred, a claim to the property or objection to the sale, or to the attachment preceding it, before the Court executing the decree" — is to be construed, specifically whether it applies only to a "temporary injunction" in the strict sense or also to orders in the nature of an injunction.
Arguments of the Parties
Respondents' Arguments (as presented by Mr. G. C. Mukherji)
- The second proviso to the amended Order 39, rule 1 operates as a bar to the plaintiff's seeking an injunction restraining delivery of possession because the plaintiff had earlier objected under Order 21, rule 58 in the execution proceedings and that objection was dismissed (on the ground that judgment-debtors were in possession and the sale was a sham).
- Given that the plaintiff had an opportunity to prefer his claim or objection in the executing court and failed, the proviso prevents him from obtaining the requested injunction in the subsequent suit.
- Reference was made to the case Rai Bahadur Dalip Narayan Singh v. Srimati Amarbas Kuer, which (per the respondent's counsel) held that Order 39, rule 1 could not be applied where a person defeated in an executed proceeding later claimed that the property belonged to him.
Appellant's Arguments (as presented by the Advocate-General)
- The second proviso should be read narrowly: it applies to an "injunction proper" (i.e., an injunction to stay proceedings in execution) but does not apply to an "order in the nature of an injunction" which the court may make under Order 39, rule 1 to prevent alienation, removal or disposal of the property.
- On this view, the plaintiff could seek an order (not characterized as a technical injunction) to prevent delivery of possession or sale even after failing under Order 21, rule 58 in the executing court.
- The Advocate-General also relied on earlier authorities (Jodhan Prosad Bhakat v. Heeralal Agarwulla & Co. and Inayat Ullah v. Gurdit Singh) to support the contention that such orders should be available, though the Court did not find it necessary to examine these authorities in detail in view of the amendment to Order 39, rule 1.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Rai Bahadur Dalip Narayan Singh v. Srimati Amarbas Kuer | Held (as cited) that Order 39, rule 1 could not be applied where a person, after being defeated in an execution-related claim, later asserts that the property is his; in such cases it was said not possible to treat the property as being wrongfully sold in execution. | The Court noted this authority but observed that the decision was given prior to the amendment of 8 October 1937 and that the amendment has materially changed the position; accordingly the earlier principle cannot be applied as it stood before the amendment. |
| I.L.R. 16 Patna 738 | Referenced as a decision pronounced on 14 September 1937 (i.e., before the amendment of 8 October 1937) bearing on application of Order 39, rule 1. | The Court treated this decision as pre-amendment authority and stated that the amendment effected on 8 October 1937 produces a "drastic change" in the application of the rule, so the pre-amendment decision does not control the present case. |
| Jodhan Prosad Bhakat v. Heeralal Agarwulla & Co.; Inayat Ullah v. Gurdit Singh | Referred to by the Advocate-General in support of a narrower construction of the proviso to Order 39, rule 1. | The Court recorded that these cases were relied upon by the appellant's counsel but stated it was "not necessary at present to examine this question" because the amendment of 8 October 1937 changes the position raised by those authorities. |
Court's Reasoning and Analysis
The Court's analysis focused on the correct construction of Order 39, rule 1 as amended by the proviso added on 8 October 1937. The key steps in the Court's reasoning, drawn from the opinion, are:
- The text of Order 39, rule 1 allows a court, where it is proved that any property in dispute is in danger of being wasted, damaged or alienated or wrongfully sold in execution of a decree, to "grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal or disposition of the property as the Court thinks fit." The Court emphasized that the rule itself expressly contemplates both (a) granting a temporary injunction; and (b) making "such other order" for the same protective purpose.
- The second proviso to Order 39, rule 1 (inserted 8 October 1937) provides that "an injunction to restrain a sale, or confirmation of a sale, or to restrain delivery of possession, shall not be granted except in a case where the applicant cannot lawfully prefer, and could not lawfully have preferred, a claim to the property or objection ... before the Court executing the decree." The Court framed the central interpretive question: whether that proviso excludes only an "injunction proper" (in the strict technical sense) or also excludes "orders in the nature of an injunction."
-
The Court rejected the Advocate-General's narrow construction for several reasons:
- If the proviso were read to apply only to an "injunction proper" and not to an "order in the nature of an injunction," a litigant who failed under Order 21, rule 58 in the executing court could simply bring a suit under Order 21, rule 63 and seek an order styled as an "order in the nature of an injunction" to restrain sale or delivery of possession. That would effectively nullify the proviso.
- Rules 3, 4 and 5 of Order 39 consistently use the word "injunction"; the Court reasoned that these provisions must be read to include orders in the nature of injunctions that the court is competent to make under Order 39, rule 1, otherwise the coherence and effect of Rules 3–5 would be undermined.
- The Court concluded that to give effect to the purpose of the proviso and the statutory scheme, the proviso must be construed to bar not only a technical temporary injunction but also an order in the nature of an injunction restraining delivery of possession where the applicant could have lawfully preferred a claim before the executing court.
- The Court observed that pre-amendment decisions (e.g., the cited I.L.R. 16 Patna 738 / Rai Bahadur case) had applied the earlier version of the rule but that the amendment of 8 October 1937 "makes a drastic change" in the rule's application; therefore those pre-amendment decisions did not control the present case.
- On this construction of the proviso and in light of the procedural history (the plaintiff had already preferred an objection under Order 21, rule 58 which was dismissed), the Court held that the second proviso barred the plaintiff's application for a temporary injunction (or an order in the nature of an injunction) to restrain delivery of possession in the execution proceeding.
Holding and Implications
HOLDING: The appeal is dismissed. The Court held that the second proviso to Order 39, rule 1 (as added on 8 October 1937) bars the grant of a temporary injunction, and also bars an order in the nature of an injunction, restraining delivery of possession in an execution proceeding where the applicant could lawfully have preferred a claim or objection to the executing Court. The appeal was dismissed with costs. (The opinion records that Sarjoo Prosad, J. agreed and the appeal was dismissed.)
Implications:
- Direct effect on the parties: The plaintiff's application for a temporary injunction (and any order in the nature of an injunction) restraining delivery of possession in the execution case is barred by the second proviso; the plaintiff's appeal against refusal of the injunction was dismissed with costs.
- Scope and precedent: The Court emphasized that the amendment of 8 October 1937 materially altered the law governing Order 39, rule 1; the opinion construes the proviso to include orders in the nature of injunctions and therefore narrows the availability of such remedies where the applicant could have raised the claim before the executing court. The opinion did not advert to setting out a novel general principle beyond this statutory construction; it applied the amended provision to the facts and dismissed the appeal.
Note: This summary is based exclusively on the material contained in the provided opinion. No information beyond the opinion has been added.
Ramaswami, J.:— This appeal is brought on behalf of the plaintiff Nathmal Agarwala against an order of the Subordinate Judge of Sasaram refusing to grant a temporary injunction restraining the defendant 1st party from taking delivery of possession of certain properties in an execution case.
It appears that Nathmal Agarwala had preferred an objection under Order 21, rule 58 of the Civil Procedure Code to the, attachment of the properties in question in the case. These properties consisted of plots nos. 842 and 843 situated in Mohania and the properties included also a rice, oil and flour mill and a Gola Nathmal Agarwala objected to the attachment on the ground that on 5th March, 1949, he had purchased the plots with the standing structures and the Gola and the machinery of the mill for a consideration of Rs. 60,000 from judgment-debtors Nagarmal Agarwala, Jagdish Prasad Agarwala and Arjun Das Agarwala. It was alleged by Nathmal Agarwala that he was in exclusive possession of the properties and that they were not liable to be sold in execution of the decree obtained against Nagarmal Agarwala and the other two judgment-debtors. The application under Order 21, rule 58 was dismissed by the Subordinate. Judge on the ground that the judgment-debtors were in possession on their own account. There was a further finding that the alleged sale of 5th March, 1949, was a sham transaction. Aggrieved by the order of the Subordinate Judge the judgment-debtors preferred, an application in revision to the High Court but the application was dismissed by a Bench of this Court on 20th August, 1952. Thereafter Nathmai Agarwala instituted a suit under Order 21, rule 63 asking for a declaration that the properties in question were his properties and were not liable to attachment and sale in execution of the decree obtained by the defendant 1st party against the defendants 2nd party. The plaintiff also filed an application for issue of a temporary injunction against defendant 1st party restraining him from taking delivery of possession of the properties in the execution case. This application was dismissed by the learned Subordinate Judge on the 11th of September 1952.
The important question to be determined in this appeal is whether the plaintiff can be granted an order of temporary injunction under the provisions of Order 39, rule 1, which states that the Court may grant temporary injunction
“if in any suit it is proved by affidavit or otherwise that (a) any property in dispute in a suit is in danger of being wasted, damaged or alienated by any party to the suit, or wrongfully sold in execution of a decree”.
A proviso was added to this rule on 8th October 1937. The proviso states as follows:—
“Provided that no such temporary injunction shall be granted if it would contravene the provisions of section 56 of the Specific Relief Act (Act I of 1877).
Provided further that an injunction to restrain a sale, or confirmation of a sale, or to restrain delivery of possession, shall not be granted except in a case where the applicant cannot lawfully prefer, and could not lawfully have preferred, a claim to the property or objection to the sale, or to the attachment preceding it, before the Court executing the decree”.
On behalf of the respondents Mr: G.C Mukherji stressed the argument that in view of the second proviso of the amendment the plaintiff is not entitled to the grant of an injunction restraining the respondents from taking delivery of possession. It was pointed out by the learned counsel that in the execution case the plaintiff had preferred an objection under Order 21, rule 58 but the application was dismissed by the Subordinate Judge on the ground that the judgment-debtors were in possession of the properties on their own behalf and that there was prima facie evidence to suggest that the transaction of sale between the plaintiff and the judgment-debtors entered into on 5th of March 1949 was a sham transaction. On behalf of the appellant the learned Advocate-General submitted that the second proviso of the amendment enacted by the Patna High Court will not operate as a bar in this case. It was contended that the second proviso would apply only in a case where the plaintiff prays for injunction to restrain delivery of possession and not in a case where the plaintiff asks the Court for grant not of a temporary injunction but such other order for the purpose of staying or preventing alienation, sale, removal or disposition of the property as the Court thinks fit. To put it differently, the learned Advocate-General attempted to draw a distinction between a temporary injunction to restrain a particular act and “such other order” which may be made by the Court for the purpose of staying or preventing waste, damage, alienation or sale of the property. The question depends upon proper construction of Order 39, rule 1, which states—
“Where in any suit it is proved by affidavit or otherwise—(a) that any property in dispute in a suit is in danger of being wasted, damaged or alienated by any party to the suit, or wrongfully Bold in execution of a decree,……………the Court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staging and preventing the wasting, damaging, alienation, sale, removal or disposition of the property as the Court thinks fit…………”.
The learned Advocate-General argued that the second proviso would apply to a case of, what he called, an injunction proper, that, is, an injunction issued to a Court to stay proceeding in execution. It was said that when a Court issues an order to a party restraining him from taking delivery of possession in an execution case, the said order was not injunction in the technical sense but was an order in the nature of an injunction. In my opinion this argument is not correct. It is true that the second proviso to Order 39, rule 1 refers only to a temporary injunction and does not expressly mention an order in the nature of an injunction, but the whole purpose of the proviso would be defeated if the argument of the learned Advocate-General is accepted to be correct. In such a case it would be open to a party who has failed in a claim case under Order 21, rule 58 to institute a suit under Order 21, rule 63 and to apply to the Court for injunction, or, to use the language of the learned Advocate-General, an order in the nature of injunction for restraining the decree-holder from applying to the Court for sale of the attached properties or from taking possession of the properties sold by the Court in the execution case. It would be only necessary for the plaintiff in such a case to label his application as an application for an order in the nature of an injuction and not for an injunction proper and to ask the Court to grant an order restraining the decree-holder from applying for sale or taking possession of the properties. In my opinion the argument of the learned Advocate-General is not correct and the amendment enacted by the Patna High Court must be construed to mean not merely that injunction but also an order in the nature of an injunction to restrain delivery of possession shall not be granted except in a case where the plaintiff cannot lawfully and could not have lawfully preferred a claim to the property before the Court executing the decree. Any other interpretation would nullify the effect of enacting the second proviso in the amendment. There are further considerations which support the view I have taken. For instance, Order 39, rule 3, states that
“the Court shall in all cases, except………direct notice of the application for the same to be given to the opposite party.”
Order 39, rule 4 states that any order for an injunction may be discharged or varied or set aside by the Court, on application made thereto by any party dissatisfied with such order. Order 39, rule 5 provides that an injunction directed to a corporation is binding not only on the corporation itself, but also on all members and officers of the corporation whose personal action it seeks to restrain. It is evident that in rules 3, 4 and 5 the word ‘injunction’ is used but it is manifest that the word ‘injunction’ in these Rules must be construed to mean not merely an injunction but also an order in the nature of an injunction which the Court is competent to make under Order 39, rule 1. Any other interpretation would nullify the effect of Rules 3, 4, 5 and would be against all sound principle of interpretation. For these reasons 1 think that the argument of the learned Advocate-General on this point cannot be accepted as valid. On the contrary, the second proviso of Order 39, rule 1, would be a bar to the application for injunction filed in the present case on behalf of the plaintiff.
In the course of argument Mr. G.C Mukherji referred to Rai Bahadur Dalip Narayan Singh v. Srimati Amarbas Kuer in which it was held that Order 39, rule 1 cannot be applied to a case where the decree-holder has a decree against his judgment-debtor which he is executing against that judgment-debtor in a proper proceeding and somebody else institutes a suit, and after being defeated in his claim case, an claims that the property is his and not that of the judgment-debtor. It was observed by Wort, J., that in such a case it was not possible to hold that the property was being wrongfully sold in execution of a decree and the proviso to Order 39, rule 1 will not therefore apply. On behalf of the appellant the learned Advocate-General submitted that the principle laid down in this case is not correct and referred to Jodhan Prosad Bhakat v. Heeralal Agarwulla and Co. and Inayat Ullah v. Gurdit Singh. It is not necessary at present to examine this question for the position is changed by the amendment of 8th October, 1937, made to Order 39, rule 1. The decision in I.L.R 16 Patna 738 was pronounced on September 14, 1937, prior to the publication of the amendment. As I have indicated, the amendment makes a drastic change in the application of the rule and the plaintiff in the present case cannot ask for a temporary injunction restraining the respondent from taking delivery of possession of the properties in question.
For these reasons I think that the appeal must be dismissed with costs.
Sarjoo Prosad, J.:— I agree.
S.H
Appeal dismissed.
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