Krishnaswami Ayyangar, J.:— This is an appeal from the order of the Subordinate Judge of Devakottai dismissing an application filed by the appellant for setting aside a sale of property in execution of the decree in Original Suit No. 9 of 1931 on the file of the same Court. The appellant was appointed interim receiver by the Court of the Subordinate Judge of Devakottai in Insolvency Petition No. 14 of 1937, which was a petition filed to adjudicate the judgment-debtors who are respondents 3 and 4 in this appeal. The order appointing the appellant as interim receiver was passed on 16th December 1938, the insolvency petition having been filed on 10th April 1937 and admitted on 30th July 1937. The sale of the property now sought to be impugned was held on 21st November 1938 at which the first respondent was declared the successful purchaser.
The application to set aside the sale was made under Order XXI, rule 90, of the Code of Civil Procedure on the ground of material irregularity and fraud in the publishing and conducting of the sale. The Subordinate Judge dismissed the application on the ground that the appellant had no locus standi to present it and also held on the merits that no case had been made out for setting aside the sale. In the appeal before us we considered it desirable to hear the parties in the first instance on the question as to whether the appellant had a right to apply to the Court under Order XXI, rule 90, of the Code of Civil Procedure.
A consideration of the language of the rule shows that the right to apply under it is conferred on (i) the decree-holder, (ii) any person entitled to share in the rateable distribution of the assets, and (iii) any person whose interests are affected by the sale. On behalf of the appellant it has been vehemently argued that the appellant comes within the class of persons indicated in Nos. (ii) and (iii). It is urged that the appellant, who is the interim receiver appointed in the insolvency petition, represented all the creditors of the judgment-debtors and, if the judgment-debtors are adjudicated insolvents, the creditors would be entitled to share rateably in the distribution of the assets in insolvency. In other words, the rule, according to the appellant, contemplates not only persons who are entitled to come in for rateable distribution under section 73 of the Code of Civil Procedure but also persons who are entitled to dividends in the administration in insolvency. For this proposition no authority has been cited. The Code of Civil Procedure is a self-contained code and, in the absence of language indicating that the expression “person entitled to share in a rateable distribution” is meant to include creditors proving in insolvency, we find ourselves unable to accept the contention. We are firmly of the opinion that the class of persons here intended are those to whom the right to share in the rateable distribution of the assets realized in execution is given by section 73. The appellant's argument is not that the interim receiver is himself a person entitled to share in the rateable distribution of the assets but that he represents the creditors who are entitled to that right. But, as we hold that the provisions of the Insolvency Act with reference to the distribution of an insolvent's assets are not to be deemed to have been in the mind of the Legislature which enacted rule 90, this argument makes no difference.
Next it is argued that the appellant is a person “whose interests are affected by the sale”. These words have been the subject of judicial interpretation by a number of decisions in this as well as in other Courts. The interpretation accepted by this Court is contained in the Full Bench decision in Ayyappa v. Kasiperumal. Although the actual decision was that a plaintiff who had obtained an attachment before judgment of the property subsequently sold is a person whose interests are affected by the sale within the meaning of Order XXI, rule 90, the Court considered the language of the section and held that the words must be taken to include not only persons having a proprietary or possessory title in the property sold but also any person whose pecuniary interests are directly and immediately affected by the sale. Mr. T.M Krishnaswami Ayyar, the learned Advocate for the appellant, urges that the appellant's pecuniary interests have been affected within the meaning of the Full Bench decision. According to him, the receiver is the representative of all the creditors of the judgment-debtors and consequently all the creditors, Whether they had attached the property sold or not, are entitled to apply under the rule, more especially if the assets of the judgment-debtor are insufficient to satisfy the claims of all his creditors.
It has to be observed at the outset that the interim receiver came on the scene only on 16th December 1938 when he was appointed, while the sale sought to be set aside took place much earlier, viz., on 21st November 1938. It is difficult, to understand on what principle his rights are to be antedated and made to take effect retrospectively so as to prejudice the rights of others, which had come into existence long before his appointment itself. It may be that, if a person has the right to apply under the rule and that right devolves by death or otherwise upon his legal representative, the latter is entitled to make this application in the exercise of a right which belonged to the party originally affected. But then the question is whether the creditors of a person, even when he has not assets enough to pay all his debts, can be regarded as persons whose pecuniary interests are affected by the sale of the debtor's property in execution at the instance of a decree-holder. We consider that it would be an unwarrantable extension of the meaning of the expression used in the rule if we are to accept the argument. Let us see what the class of persons is who are given the right to apply under this rule. There can be little doubt that the decree-holder is a person directly and immediately affected by the sale of the property, if it had been sold for anything less than its true value. The next class of persons referred to in Order XXI, rule 90, is of those who are entitled to rateable distribution, that is, persons who come within the language of section 73 of the Code. If we turn to section 73, what do we find? The right to share in the rateable distribution of the assets of a debtor is conferred upon a person who is not a mere creditor but upon a creditor who has sued for the recovery of his debt, obtained a decree and made his application for the execution of the decree; and, even then, the further condition is added that his application should have been made before the receipt of the assets by the Court in execution. In the face of the qualifications here insisted upon, it is impossible to accept the argument that every creditor, whether or not he has taken the steps indicated here, is a person entitled to apply to the Court under Order XXI, rule 90. If this extended meaning is to be given to the expression under consideration, it would result in attributing to the Legislature a contradictory intention. If a creditor is not qualified to obtain rateable distribution until he has done all that section 73 requires him to do, it is difficult to agree that the Legislature intended that any and every creditor, even without taking the steps which he is bound to take for the purpose of qualifying himself for rateable distribution, is still to have the right to apply under the rule. It is urged that the tendency of this Court has been to construe the rule in a liberal spirit. But we consider that it will be doing violence to the principle underlying the section to hold that the Legislature gave the right to apply under rule 90 to every creditor, if only there was the possibility of his not getting the full amount of his decree out of the assets of the debtor.
Our attention has been called to two other decisions, both of single judges, of this Court as having a bearing on the point. The earlier one is reported as Subramania Ayyar v. Dharapuram Janopakara Nidhi, Ltd. where Phillips, J. held that an interim receiver appointed under section 20 of the Provincial Insolvency Act can apply under Order XXI, rule 90, of the Code of Civil Procedure, for setting aside a Court sale as a person whose interests are affected by it. It does not clearly appear, so far as we have been able to see, whether the order of appointment was made before or after the sale. But we find language employed in the judgment which would seem to indicate that the appointment had been made before and not after. For instance, we find the following statement:—
“If, therefore, property passes away from the judgment-debtor to another person there is a distinct loss to estate entrusted to the receiver. The receiver has the duty of maintaining the property as it was when it came into his hands and it cannot be said that his interests are unaffected when such duties cannot properly be fulfilled.”.
The facts in the case before us are different because the interim officer was appointed twenty-five days after the sale. The second decision is a judgment of Stodart, J., reported as Govindasami Chetti, In re. The question in this case was whether a decree-holder, who had attached property after the execution sale sought to be set side but pending its confirmation, was entitled to apply under Order XXI, rule 90. The learned Judge held that the mere fact of his attachment, if it had been made after the sale but before confirmation, did not confer upon him the right to apply, as, when he attached the property, he knew that his attachment would disappear if the sale was in the ordinary course confirmed and would enure for his benefit only if the sale for some reason was set aside. In other words, he is a person whose interests were affected not by the sale but by the success or failure of his application. The learned Judge also held that a mere creditor has not got the right to apply under Order XXI, rule 90, to set aside the sale. This and another decision of the Calcutta High Court in Kiran Bala Shaha v. Suniti Prabha Shaha are also authority for the proposition that the person applying must possess an interest which can be said to have been affected at the date of the sale and not by reason of any subsequent event or act. With these judgments we entirely agree, and this is sufficient to dispose of the question.
But we may notice one or two other contentions which were advanced before us. Although the receiver was appointed long after the sale, it was contended that the word “sale” in Order XXI, rule 90, had reference not to the auction sale held in the first instance but to the confirmation of the sale by the Court to be made on a later date. In the present case the sale was confirmed only after the order of the lower Court. In the meantime the interim receiver had been appointed. It is therefore argued that the appellant had become entitled to apply under the rule as his interests had been affected by the confirmation of the sale. In support of the argument that the word “sale” means, and was intended to mean, confirmation of the sale, two decisions were brought to our notice. The first is the decision of the Privy Council in Raja Raghunandan Prasad Singh v. Commissioner of Income-tax, Bihar and Orissa where their Lordships of the Judicial Committee were called upon to decide when an assessee to income-tax received profits of the property which he had bought at an execution sale, and it was held that by the execution sale the purchaser does not obtain an indefeasible right, for, under Order XXI, rules 89, 90 and 91, the sale may be set aside on various grounds; and it is only where no application is made under these rules or where such application is made and disallowed that the Court makes an order confirming the sale under Order XXI, rule 92, whereupon the sale, becomes absolute. In this view the Privy Council ruled that the profits must be deemed to have been received not on the date of the sale but on the date of the confirmation. We regret we are unable to see how this ruling is applicable to a case such as the present in which the question is not when profits were received but when the sale took place which is a matter to be decided entirely upon the rules contained in Order XXI. of the Code of Civil Procedure. The other case is a decision of Wadsworth and Patanjali Sastri, JJ. reported as Nataraja Pillai v. Rangaswami Karamundar. There the question arose under the Madras Agriculturists Relief Act (IV of 1938) and the Court had to consider whether a decree became satisfied immediately on the sale in execution of the property of the judgment-debtor or only on confirmation. The Court held, relying upon the above Privy Council decision as well as certain other decisions, that the date on which the proceeds of the sale are received by the decree-holder is the date of the confirmation and not the date of the sale. In our opinion this decision is equally inapplicable to the present case.
It has been argued on behalf of the respondents that, even if the creditors of the judgment-debtors have a right to apply under the rule, still an interim receiver, who is in the same position as any other receiver appointed by the Court, is not a representative of the creditors of the judgment-debtor so as to enable him to make the application. In Hanmant v. Jainapur Beaumont, C.J and Wassoodew, J. have expressed the opinion that receivers appointed by Court are officers of the Court and are not the legal representatives or assignees of all or any of the parties to the suit. It may be that the receiver is appointed for the benefit of all concerned; but the true position of the receiver appears to be that he is an officer of the Court, his possession being the possession of the Court through the hands of the receiver and the property in his hands being in custodia legis. In a sense he may be regarded as the representative of all the parties interested in the litigation in which he is appointed. But we doubt whether the individual rights of creditors as a class, can be said to have vested in him. It is, however, not necessary to express a final opinion on this aspect of the question in view of our decision on the first point.
We are of opinion that the learned Judge in the Court below was right in his conclusion that the appellant was not entitled to file the application. That being so, it is unnecessary to go into the merits of the case.
The appeal fails and is dismissed with costs, one set.
[The appeal was set down for being mentioned and the Court delivered the following judgment:—]
We are not satisfied that this is a case in which we can or should reconsider our decision. The decree will issue.
N.S