Ramchandra v. Raghopati

Chatterji, J.:— This is an appeal by the defendant no. 3 in a suit under Order XXI, rule 63 of the Code of Civil Procedure against an order of remand made under Order XLI, rule 23 of the Code.

The Secretary of State had a decree for court-fee passed in a pauper suit against defendant no. 2. In execution of that decree the Secretary of State attached the property now in suit. The plaintiff preferred a claim under Order XXI, rule 58, which was dismissed. The disputed property was then sold at auction and was purchased by the defendant no. 3. Thereafter the plaintiff brought the present suit. The Secretary of State was impleaded as defendant no. 1, but when at the hearing of the suit it appeared that notice under section 80 of the Code of Civil Procedure had not been served on him, the plaintiff filed a petition for expunging him from the record which was allowed.

Thereupon objection was taken on behalf of defendant no. 3, the auction purchaser, that the suit was not maintainable in the absence of the Secretary of State as he was a necessary party. This objection was upheld by the learned Munsif, and the suit was dismissed without trial on the merits.

On appeal by the plaintiff, the learned Subordinate Judge held that the Secretary of State was not a necessary party. He accordingly set aside the Munsif's decision and remanded the suit for trial on the merits. Hence this appeal.

The question for determination in this appeal is whether the suit can proceed in the absence of the Secretary of State.

In the plaint, as originally presented, there was a prayer for confirmation or, in the alternative, recovery of possession. The plaint was stamped with a court-fee of Rs. 15, but in view of this prayer, the Stamp Reporter demanded ad valorem court-fee. Thereupon the plaintiff filed a petition stating that the suit being under Order XXI, rule 63, the court-fee of Rs. 15 paid was sufficient. At the same time the plaintiff asked for amendment of the plaint by expunging the said prayer which was allowed. As the prayer now stands, the substantial relief claimed is as follows:

“That on adjudication of the title of the plaintiff and want of title in the defendants the sale by auction dated…………………… may be declared illegal, null and void and ineffectual and set aside by the Court.”

Though there is a prayer for setting aside the sale, the suit is undoubtedly one under Order XXI, rule 63. That rule is in these words:

“Where a claim or an objection is preferred, the party against whom an order is made may institute a suit to establish the right which he claims to the property in dispute, but, subject to the result of such suit, if any, the order shall be conclusive.”

This rule, of course, does not specifically provide who should be parties to the suit, but the words

“the order shall be conclusive”

clearly suggest that the party in whose favour the order has been made must be impleaded.

The nature and scope of a suit under Order XXI, rule 63 (which corresponds to section 283 of the Code of 1882) was considered by the Privy Council in Phul Kumari v. Ghanasyam Misra. There the question was as to the court-fee payable on a plaint in such suit. Their Lordships held that such suit is a suit to set aside a summary decision or order of a Civil Court.

If a suit under Order XXI, rule 63, is a suit to set aside the order passed on the claim petition, it follows that the person in whose favour the order stands must be made a party. Where the suit is by the defeated claimant, the decree-holder in whose favour the order stands must be impleaded.

The question then arises whether there will be any difference where, as in the present case, the property has been sold after the dismissal of the claim and purchased by a stranger and the suit is brought against the auction-purchaser. In such case the person actually interested in the property is the auction-purchaser. The decree-holder who was interested in the property in the sense that he had a right to attach and sell the property in satisfaction of his decree has no longer any concern with the property. But he is certainly interested in the result of the suit, because if the suit is decreed and the sale is set aside, he may be liable to refund the purchase-money. It has been held by this Court in Mst. Bas Kuer v. Gaya Municipality that “a suit brought under Order XXI, rule 63, is a mere continuation of the proceedings in a claim petition”. Therefore, if the suit by the unsuccessful claimant, is decreed, the effect of the decree will be to place the parties in the same position which they would have occupied if the claim petition had been allowed in the first instance. Thus the rights of the decree-holder will be affected by the decree.

Again, if the suit is decreed and the sale is set aside, the decree-holder who is not a party to the suit will not be bound by the decree. On the contrary, the order dismissing the claim becomes after the lapse of the one year's period of limitation, conclusive as between the claimant and the decree-holder. The result will be that after the sale is set aside the decree-holder will be free to bring the property to sale again on the strength of the order dismissing the claim. Thus the decree passed in the suit will be ineffective.

In the present case the claim was dismissed on the 20th December, 1937, and the suit under Order XXI, rule 63, was instituted on the 20th December, 1938. The Secretary of State was expunged from the record on the 28th November, 1941, and the suit was dismissed on the preliminary ground on the 29th November, 1941. One year having already elapsed from the date of the order dismissing the claim, that order has become conclusive as between the claimant and the Secretary of State. Therefore, if the suit under Order XXI, rule 63, is decreed, the decree will be ineffective as against the Secretary of State.

No doubt Order 1, rule 9 of the Civil Procedure Code provides:

“No suit shall be defeated by reason of the misjoinder or non-joinder of parties, and the Court may in every suit deal with the matter in controversy so far as regards the rights and interest of the parties actually before it.”

But in applying this rule the distinction between a necessary party and a proper party must be borne in mind. A person is a necessary party if in his absence no effective decree can be passed. In Sital Prasad Ray v. Asho Singh* it was held by this Court that if no decree can be passed without affecting the rights of absent parties, the suit cannot proceed in their absence and should be dismissed.

I have already shown that no effective decree can be passed in the present suit in the absence of the Secretary of State. He is, therefore, a necessary party and in his absence the suit cannot proceed.

Mr. Bramhadeo Narain on behalf of the respondent relies on the cases of Shiboo Narain Singh v. Mudden Ally, Subbaraya Mudaliar v. Kandasamy Mudaly, Tuisi Das v. Shiv Dat and Amar Nath v. Chhotelal.

In the Calcutta case [Shiboo Narain Singh] the question arose whether a suit under section 283 of the Code of 1882 (now Order XXI, rule 63) could be in the Small Cause Court where the property in dispute was movable property and was valued at an amount cognizable by such Court. It was held “Section 283 of the Civil Procedure Code enables a party, against whom an order has been made in execution-proceedings, to bring a suit to establish his rights, whatever, they may be but it says nothing as to the nature of the suit, or the Court in which it is to be brought. Whether the party is to sue in the Civil Court or in the Small Cause Court, depends entirely upon the nature of the claim and the right which is sought to be enforced.” On the facts of that case their Lordships said “If he (the plaintiff) had simply sued the purchaser under the execution for his goods or their value, he might have enforced his claim as a matter of course. But he has chosen to make, both the decree-holder and the judgment-debtor defendants in the suit, for which there was clearly no occasion, and which was obviously a mistake. In sending this case back, therefore, to the Small Cause Court, we would recommend that the names of the decree-holder and judgment-debtor should be struck out of the record, the plaintiff paying their costs, which he avows his readiness to do; and the plaintiff may then proceed to enforce his claim, if it is a just one, against the purchaser only.” In their Lordships' view if the suit were for a declaration of right, it would be in the Civil Court. But their Lordships said nothing as to whether the decree-holder was or was not a necessary party in such suit. This decision, therefore, cannot be regarded as an authority for the proposition that the decree-holder is not a necessary party in a suit under Order XXI, rule 63, brought by the unsuccessful claimant.

In the Madras case [Subbaraya Mudaliar the claimant's suit was against the decree-holder and the auction-purchaser in which a decree was passed for recovery of possession of the suit property from the purchaser and there was also a joint decree for costs against both the defendants. The decree-holder and the auction-purchaser filed a common appeal and the trial Court's judgment was reversed although one of the appellants was dead at the time of the appellate judgment and his legal representatives had not been brought on the record. In the High Court it was contended that the appeal had abated, that the Court had no power to pass a decree in favour of the deceased appellant and the decree was a nullity. Spencer, J. overruled this contention on the ground that under Order XLI, rule 4 of the Code of Civil Procedure an appellate Court has power to reverse a judgment in favour of a deceased defendant as regards the whole of the plaintiff's claim and not only as regards that part of it in which the surviving defendant was particularly interested. Ramesam, J. agreed with Spencer, J. but he further held, relying on the above Calcutta case [Shiboo Narain Singh], that the decree-holder was not a necessary party to the claimant's suit. With all respect, I do not agree that the Calcutta case is an authority for this proposition.

In the Lahore case [Tulsi Das] the claimant's suit was against the decree-holder as well as the auction-purchaser. The auction-purchaser had taken possession but the suit was brought for a mere declaration. The decree-holder was a bank which had gone into liquidation by the time, the suit was brought and the liquidator as representing the bank was impleaded. Subsequently the liquidation proceedings having terminated, the name of the bank was struck off from the record. On behalf of the auction-purchaser the objection was taken that the suit for a mere declaration was not maintainable as it was open to the plaintiff to sue for possession. This objection was upheld by the trial Court and the suit was dismissed. On appeal to the High Court, their Lordships set aside the trial Court's decision, holding that the suit which was brought under Order XXI, rule 63, was maintainable. One of the contentions raised on behalf of the respondent was that the suit could not be treated as a suit under Order XXI rule 63, inasmuch as the decree-holder had ceased to be a party. This contention was disposed of by Agha Haider, J., with whom Tek Chand, J. agreed, in the following words “As to the objection raised by the learned Counsel for the respondent that the decree-holder ought to have been impleaded as a party, it has already been pointed out that it was not possible to bring the said decree-holder before the Court in any shape or form. But apart from this and as an abstract proposition of law I may refer to a recent case, Subbaraya Mudaliar v. Kandasamy Mudaly where Mr. Justice Ramesam observed that the decree-holder is not a necessary party to a claimant's action, under Order XXI, rule 63, Civil Procedure Code, though he may be made a party in such a suit for recovery of possession from an auction-purchaser”. There was no discussion of the point and having regard to the actual decision this observation seems to be an obiter.

In the Allahabad case [Amar Nath] the question for consideration by the Full Bench was whether a decree-holder whose decree was satisfied by the sale of some property which was confirmed under Order XXI, rule 92, was entitled to re-open the matter by an application for further execution where as a result of a decree passed in a suit under Order XXI, rule 63, a part of the property was held to belong to a third party. The Full Bench held “As regards a decree-holder who has purchased at the auction sale in execution of his decree, his rights are limited to those granted by the Civil Procedure Code in Order XXI, rules 91 and 92, and if the auction sale is confirmed, that becomes res judicata between him and the judgment-debtor and he cannot re-open the matter by the mere-Application for further execution or by any other means unless he can get the order confirming the sale set aside.” This decision implies that if the sale is set aside, the decree-holder will be entitled to apply for further execution. In the present suit there is a prayer for setting aside the sale, and if the suit were decreed and the sale set aside, the decree-holder would be entitled to apply for fresh execution if he were to be held liable to refund; the purchase-money. But in order that the decree-holder may be bound by the decree that may be passed in the suit, he must he a party to it.

The view I take namely, that the decree-holder may be liable to refund the purchase money, if the suit is decreed and the sale is set aside, is in no way inconsistent with the Full Bench decision of this Court in Surendra Kumar Singh v. Srichand Nahata in which it was held that the decree-holder, if he purchases the property cannot successfully maintain an application for the revival of the execution proceedings on the ground that the sale has not in fact satisfied his decree to the extent of the sale price unless he gets the sale set aside by applying under Order XXI, rule 91. In that case the decree-holder, after the confirmation of the sale, made a fresh application for execution of his decree on the ground that the property which he had purchased had previously been sold in execution of a rent decree. Dhavle, J. who delivered the judgment of the Full Bench in which Courtney Terrell, C.J, and Agarwala, J. concurred, based his decision mainly on Order XXI, rule 92, sub-rule (3), which provides:

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

But this sub-rule does in no way control the provisions of Order XXI, rule 63. If the sale is set aside in a suit under Order XXI, rule 63, the same consequences, in my opinion, will follow as if the sale had never been confirmed. In Radha Kishun Lal v. Kashi Lal* it was held that Order XXI is not exhaustive of the procedure for setting aside an execution sale. In that case the suit was brought by a third party against the auction-purchaser, who happened to be the decree-holder, and the judgment-debtor for a declaration of his title to the property and for possession, and the suit was decreed. It was held that the effect of the decree in favour of the third person was to set aside the execution sale and revive the decretal debt, and that no formal order setting aside the sale was necessary. This decision was referred to in Surendra Kumar Singh v. Srichand and was distinguished, but not overruled.

In my opinion the decision of the learned Munsif was correct. I would, therefore, set aside the decision of the learned Subordinate Judge and restore that of the Munsif. In the circumstances, I would make no order for costs in this Court or in the lower appellate Court.

Shearer, J.:— I agree.

K.D

Appeal allowed.