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Sheikh Ariatullah Judgment-Debtor, v. Sashi Bhusan Hazrah Decree-Holder, .
Factual and Procedural Background
Two rent suits were brought in 1912 in which the plaintiff claimed rents of Rs. 22 and Rs. 18 respectively (rents as entered in Settlement proceedings). The defendants pleaded lower rents of Rs. 12-9 and Rs. 11. The suits were decreed on 18 February 1913 with an order that permitted execution to the extent of the jama admitted in the defence after one month, and as to the balance that execution should wait pending the outcome of a review (if review were rejected) or be postponed for two years and nine months if review were granted, or earlier when the settlement suits were disposed of. In fact, no review application was pending when the decree was passed and the order was based on a mistake of fact.
The decree-holder took out execution for the full amounts on 12 April 1913. On 16 May 1913 the judgment-debtor applied for review and for postponement of the sale; the sale was postponed twice and ultimately took place on 23 June 1913 because the decretal amounts were not deposited. The judgment-debtor applied on 21 July 1913 to have the sales set aside on deposit of the decretal amounts; the amounts were deposited on 22 July and the sales were set aside on 31 July 1913.
The decree-holder appealed; the Appellate Court remanded the cases on 4 June 1914 for resettlement of decretal amounts. Following resettlement, the order setting aside the sales was confirmed by the trial court; the Appellate Court confirmed that order on a subsequent appeal. The decree-holder then moved "this Court" and on 3 April 1917 this Court set aside the order setting aside the sales on the ground that the amounts mentioned in the sale proclamation had not been deposited.
Meanwhile the review application made on 16 May 1913 had been allowed on 18 November 1913, the court substituting an order that execution of the balance should await disposal of the appeal or be postponed for two years and six months, and that the decree of the appeal would govern the cases.
After the 3 April 1917 order, the decree-holder (on 29 September 1917) applied for confirmation of the sales. The judgment-debtor applied under section 47 and Order XXI, rule 90 of the Civil Procedure Code to set aside the sales and objected to confirmation. The trial court set aside the sales, but on appeal that order was reversed. The judgment-debtor appealed the reversal to this Court.
Legal Issues Presented
- Whether the sales held on 23 June 1913 were illegal because execution had been taken for the full decretal amounts even though, by reason of the pending review/appeal and the subsequent order on review, execution for the full amounts was not then authorised.
- Whether the Court is bound to confirm a sale under Order XXI, Rule 92 of the Civil Procedure Code even when the decree under which the sale purported to be held no longer subsists or never authorised the sale.
- Whether an application under section 47 of the Code to set aside the sale is barred by limitation under Article 181 of the Limitation Act, and when the right to apply for setting aside accrued (i.e., whether it accrued on 18 November 1913, or on 3 April 1917, or was suspended between 31 July 1913 and 3 April 1917).
- How to reconcile the omission of the proviso to section 366 of the earlier Act (Act XIX of 1882) from the present Code with the operation of Order XXI, rules 89–92.
Arguments of the Parties
Appellant's (judgment-debtor's) Arguments
- The original decree was set aside or amended on review on 18 November 1913 so that the decree-holder was entitled to execute only for a portion of the decreed amount and could not execute for the entire amount until disposal of the appeal then pending.
- The sale held in execution of the decree was therefore illegal and the Court could not confirm an illegal sale; limitation does not bar this objection to confirmation of the sale.
- Even if limitation is held to arise, the right to apply to set aside the sale arose on 3 April 1917 when the High Court set aside the orders of the Court below which had set aside the sales; alternatively, the period between 31 July 1913 (when the trial court set aside the sales) and 3 April 1917 should be deducted, leaving the present application within three years under Article 181.
Respondent's (decree-holder's) Arguments
- Under the present Civil Procedure Code a sale does not require confirmation if there is no application under Order XXI, rules 89–91, or if such an application is made and disallowed; the proviso to section 366 of Act XIX of 1882 (which required that the decree under which the sale took place be still subsisting) has been omitted from the present Code, and thus the Court is bound to confirm the sale in the absence of a successful application under those rules.
- This omission means that the Court must confirm the sale even if the decree under which the sale was held is no longer subsisting; if there is no subsisting decree the sale must be set aside under section 47 of the Code.
- The sale was set aside under Order XXI, rule 89 on 31 July 1913, and therefore the judgment-debtor could not then apply under section 47 to set aside a sale which had already been set aside; limitation therefore applies against a later section 47 application.
- As a factual matter, the suit pending at the date of the sale was later decided against the judgment-debtor yielding to the decree-holder the full decretal amounts.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Court analysed whether the sales held on 23 June 1913 were lawful in light of the status of proceedings at that date. It found that an application for review was pending at the time of the sale and that the order subsequently passed on review (18 November 1913) showed that execution for the full decretal amounts could not lawfully have been taken until the disposal of the pending suit or appeal. Accordingly, the sales realised amounts for which at the time there were no existing decrees authorising execution, and were therefore illegal.
The Court then examined the contention that under the present Code the omission of the proviso to section 366 of Act XIX of 1882 meant that Order XXI, rule 92 compelled confirmation of a sale when there is no application under rules 89–91 (or when such application is disallowed), even if the decree authorising the sale has ceased to exist. The Court rejected that contention. It read Order XXI, rules 89–92 together and held that these rules presuppose a valid decree under which the sale is held. Rules 89–91 provide for setting aside sales; rule 92 states that if there is no application for setting aside, or such an application is disallowed, the sale shall be confirmed. But rule 92 does not and cannot be interpreted so as to take away the Court's power to refuse to confirm a sale where the Court finds that the sale was held under a decree that did not authorise the sale. The Court considered it unreasonable that a court must first confirm a sale under rule 92 and then immediately set it aside under section 47 on the ground that the foundation for the sale is gone.
The Court explicitly noted that a later favourable decision in the title suit (decided against the judgment-debtor after the sale) in favour of the decree-holder could not retrospectively validate a sale which at the time was held in execution of a decree that did not authorise execution for the full amount.
On the limitation issue, the Court identified Article 181 of the Limitation Act as the applicable provision (three years from when the right to apply accrues). It concluded that before the review order of 18 November 1913 the judgment-debtor could not have applied under section 47 because the sale had already been set aside by the trial court on 31 July 1913 (under Order XXI, r. 89). The respondent's argument that that fact barred a later section 47 application was considered, but the Court held that whether the right to apply arose only on 3 April 1917 (when the High Court set aside the order setting aside the sales) or whether the limitation was suspended between 31 July 1913 and 3 April 1917, in either view the present application was not barred by limitation under Article 181.
Applying these legal conclusions to the record, the Court held that the Court of Appeal's order (which had reversed the trial court's setting-aside order) was incorrect and accordingly set aside that order and restored the order of the trial court setting aside the sales.
Holding and Implications
Core Ruling: Appeal allowed; the order of the Court of Appeal is set aside and the order of the Court of first instance setting aside the sales is restored.
Implications:
- Direct effect on the parties: The sales held on 23 June 1913 are treated as set aside (the trial court's order setting aside the sales is restored), and each party is directed to bear his own costs in all Courts.
- On legal doctrine: The Court held that Order XXI, rule 92 does not compel confirmation of a sale where the Court finds that the sale was held under a decree which did not authorise the sale; the Court retains power to refuse confirmation and to set aside such a sale under section 47. The decision turned on the application of the existing procedural rules to the specific facts; the opinion does not purport to establish a broader new precedent beyond this reasoning.
This summary is based exclusively on the content of the provided opinion and does not add information beyond that text.
The Judgment of the Court was as follows:—
Chatterjea, J.:— These appeals arise out of proceedings for setting aside two sales held in execution of two decrees for rent on the ground that the sales were illegal.
It appears that in two rent suits brought in the year 1912 the Plaintiff claimed rent at the rate of Rs. 22 and Rs. 18 respectively, those being the rents entered in the Settlement proceedings. The Defendants pleaded that the rents were Rs. 12-9, and Rs. 11 only. The suits were decreed on the 18th February 1913 on the following terms:—“The suits be decreed with costs, but the Plaintiff will be at liberty to execute the decree to the extent based on the jama admitted in the defence after one month. As regards the balance of the decretal sums, the Plaintiff will execute them as soon as the review be rejected: if the review be granted the Plaintiff should postpone execution of the balance for two years and nine months or earlier when the settlement suits were disposed of.” As a matter of fact there was no application for review pending at that time, and the order was based on a mistake of fact. The decree-holder on the 12th April 1913 took out execution for the full amounts. On the 16th May the judgment-debtor applied for review of judgment stating that no application for review was pending when the decree was passed, and applied for postponement of the sale pending the disposal of the application for review. The sale was postponed till the 16th June if the decretal amounts were deposited by that date, and again postponed till the 23rd June 1913, but the money not being deposited the sale took place on that date. The judgment-debtor on the 21st July 1913 applied to have the sales set aside on deposit of the decretal amounts. The amounts to be deposited were settled by the Court, and they were deposited on the 22nd July and the sales were set aside on the 31st July. The decree-holder appealed against the said order, and the Appellate Court remanded the cases on the 4th June 1914 for resettlement of the decretal amounts. As a result of the resettlement the order setting aside the sales were confirmed. The decree-holder again appealed but the Appellate Court confirmed the order of the Court of first instance setting aside the sales. The decree-holder moved this Court, and this Court on the 3rd April 1917 set aside the order setting aside the sales on the ground that the amounts mentioned in the sale proclamation had not been deposited.
In the meantime the application for review made on the 16th May 1913 was allowed on the 18th November 1913, and the following order was passed:—“This is an application for review. The ground is that there is a palpable error in the judgment. In the order portion of judgment it is stated that ‘the Plaintiff will execute them (the decrees) as soon as the review be rejected.’ But I am informed by the pleader on both sides that at the time the judgment was delivered or at any time no review regarding any suit concerning the jamas in dispute was pending. The review was with regard to other jamas in dispute in a number of analogous suits. With regard to the disputed jamas a title suit was pending and is still pending between the parties. The reference to review is evidently a mistake and on this ground a review may be granted. Evidently what the Court meant is that the parties should wait till the suits are disposed of or for a reasonable time. Ordered that the application be allowed but without costs. In the order portion of judgment instead of the words ‘as regards the balance of the decretal sums, etc.,’ the following words will be substituted in the judgment and the decree. ‘As regards the balance of the decretal sums Plaintiff will execute them as soon as the appeal be disposed of or within two years and six months if the appeal be disposed of earlier and it is further ordered that the decree of the appeal will govern these cases.’”
As stated above the order of the Courts below setting aside the sales was set aside by the High Court on the 3rd April 1917, and the decree-holder on the 29th September 1917 applied for confirmation of the sales. The judgment-debtor thereupon put in an application to have the sales set aside under sec. 47 and Or. XXI, r. 90 of the Civil Procedure Code, and also objected to the confirmation of the sale applied for by the decree-holder. The Court of first instance made an order setting aside the sales, but on appeal that order was reversed. The judgment-debtor has appealed to this Court.
It is contended on behalf of the Appellant that the original decree was set aside or amended on review on the 18th November 1913. Under that decree the decree-holder was entitled to take out execution only for a portion of the amount decreed and could not take out execution for the entire amount until the disposal of the appeal in the suit then pending. The sale therefore held in execution of the said decree was illegal, and the Court could not confirm such illegal sale, and that no question of limitation applies with respect to the objection to the confirmation of the sale. Secondly, that even if the question of limitation arises, the right to apply to set aside the sale arose on the 3rd April 1917, when the High Court set aside the orders of the Court below setting aside the sales, and that in any case the judgment-debtor is entitled to a deduction of the period between the 31st July 1913 when the sales were set aside by the Court of first instance, and the 3rd April 1917, the date of the order of the High Court; and deducting the said period the present application under sec. 47 was well within three years under Art. 181 of the Limitation Act.
With regard to the first contention it appears that at the time when the sales took place (23rd June 1913), the application for review was pending, and the order passed upon the application shows that the decree-holder was not entitled to take out execution for the entire decretal amount until the disposal of the suit (or the appeal in the suit) which was then pending. The sale held for realisation of the entire amount of the decree according to the order passed on review was therefore illegal, and the question is whether the Court would be justified in refusing to confirm the sale if it finds that the decree under which the sale was held has subsequently been set aside or amended. It is contended on behalf of the Respondent that under the present Civil Procedure Code the sale really does not require confirmation if there is no application under Or. XXI, rr. 89, 90 and 91 or if there is any such application and the application is disallowed. It is pointed out that the proviso to sec. 366 of Act XIX of 1882 has been left out from the present Code. That proviso ran as follows:—“Provided that the decree under which the sale took place was still subsisting at that date.
It is contended that the result of the omission of the proviso is that the Court is bound to confirm the sale if there is no application under rr. 89, 90 or 91 or if such an application is made and disallowed, whether or not there was a subsisting decree under which the sale is held. Now, if there is no subsisting decree, the sale must be set aside under sec. 47 of the Code, and although there may be an application under sec. 47 to set aside the sale on such a ground pending the sale must (according to the Respondent's contention) be affirmed under Or. XXI, r. 92 though the next moment the sale will have to be set aside under sec. 47 on the ground that there was no subsisting decree. We do not think that is contemplated by Or. XXI, r. 92. Or. XXI, rr. 89, 90, 91 and 92 presuppose a valid decree under which the sale is held, and the first three rules provide for setting aside the sales, and r. 92 says that if there be no application for setting aside the sale, or such an application is made and disallowed, the sale shall be confirmed.
R. 92 does not affect the power of the Court to refuse to confirm a sale, or make it compulsory to confirm the sale when the Court finds that the sale is held under a decree which did not authorise the sale. It seems unreasonable that the Court must confirm a sale under Or. XXI, r. 92 although it finds that the foundation for the sale is gone, and then proceeded to set aside the sale which it has confirmed being fully aware that the sale was illegal. In the present case having regard to the order passed on review it must be held that execution could not be taken out for the amount for which execution was taken out, and the sales took place for amounts in respect of which there were no decrees existing at the time.
In these circumstances we think the Court would be justified in refusing to confirm the sale. The learned Pleader for the Respondent has brought to our notice that the suit which was pending at the date of the sale has been decided against the judgment-debtor, the result of which is that the decree-holder is entitled to the full amounts of the decrees passed in the rent suits, but the decision of the title suit was subsequent to the sale and cannot validate the sale held in execution of the decree under which the full amount could not at that time be recovered.
The next question for consideration is whether the application under sec. 47 is barred by limitation. The article applicable is Art. 181 of the Limitation Act which provides for a period of three years from the time, “when the right to apply accrues.” Now before the 18th November 1913 when the order was passed in review, the judgment-debtor could not apply under sec. 47, and before that order was passed the sale had been set aside by the Court, of first instance on the 31st July 1913. It is contended on behalf of the Respondent that the sale was set aside under Or. XXI, r. 89. That is so, but the judgment-debtor could not apply under sec. 47 to set aside a sale which had already been set aside on the 31st July 1913, though under Or. XXI, r. 89, the order setting aside the sales was ultimately set aside by this Court on the 3rd April 1917. Whether it be held that the right to apply to set aside the sales under the circumstances did not arise until the 3rd April 1917, when the order of the High Court was made, or that the limitation remained in suspense between the 31st July 1913 and the 3rd April 1917, the application is not barred by limitation.
The order of the Court of appeal below is accordingly set aside, and that of the Court of first instance restored. Having regard to all the circumstances of the case we direct that each party do bear his own costs in all Courts.
Woodroffe, J.:— I agree.
S.C.M
Appeal allowed.
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