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Lachmi Narayan Lal v. Bhupendra Prasad Shukul
Structured Summary of the Opinion (Meredith, J.)
Factual and Procedural Background
The three connected appeals arise from proceedings concerning a single tenure created by a lease dated 13-11-1906. A rent suit was instituted in November 1938 for rent up to the Asin kist of 1345 Fasli. On 2-7-1940 that suit was decreed for approximately Rs. 16,000. Execution was pursued in Execution Case No. 3 of 1941 before the Subordinate Judge, Gaya. A sale proclamation was issued on 28-4-1941 and on 5-7-1941 the tenure was sold; the decree-holders (landlords) purchased the tenure for about Rs. 18,000. Delivery of possession took place on 4-9-1941.
More than two years later, on 21-12-1948, an alleged mortgagee of the tenants (judgment-debtors) applied under Section 47 of the CPC to have the sale declared void and without jurisdiction on the ground that statutory provisions (referred to as Sections 158B and 163 of the Bihar Tenancy Act) had not been complied with. The Subordinate Judge allowed that application and held the sale void; that order was challenged by the decree-holders in Miscellaneous Appeal No. 261. Separately, the judgment-debtors made an application under S.47 on 9-6-1944 (impugned in Miscellaneous Appeal No. 390). There was also a subsequent rent suit (the subject of First Appeal No. 58) seeking rent claimed to have accrued before the sale, which raised issues about whether the sale operated so as to bar later suits for rent of the pre-sale period.
Legal Issues Presented
- Whether the sale in execution was void and without jurisdiction for non-compliance with Section 163 (particularly S.163(2)(b) and S.163(5)) of the Bihar Tenancy Act and related valuation requirements.
- Whether failure to give the notice required by Section 158B(2) of the Bihar Tenancy Act rendered the sale a nullity, or whether issuance and service of notice under O.21, R.22 of the Code of Civil Procedure could validate the sale as a money sale.
- Whether the applications to set aside the sale (under Order 21, Rule 90 or Section 47) were time-barred given the lapse of time and the character of the sale.
- Whether a subsequent suit for rent (for periods alleged to have accrued before the sale) could be maintained against the former tenants after the landlord-purchaser had bought the tenure in execution of a money decree.
Arguments of the Parties
Mortgagee (applicant under Section 47)
- Contended that the sale should be declared void and without jurisdiction because of non-compliance with the provisions of the Bihar Tenancy Act — specifically the requirements said to arise under Sections 158B and 163 (the judgment notes that the applicant actually meant 158B and 163).
Decree-holders / Landlords (appellants in Misc. Appeal No. 261)
- Appealed from the Subordinate Judge's order holding the sale a nullity; they relied on the fact that notice was in fact issued and served under Order 21, Rule 22 of the CPC (the procedure for money executions), and that the sale should therefore at least operate as a money sale.
Judgment-debtors / Tenants (applicants in earlier S.47 application and appellants/respondents in related appeals)
- Applied under Section 47 seeking to set aside the sale (one such application dated 9-6-1944). Their application was rejected at the Subordinate Judge level on the ground that the sale had already been set aside on the mortgagee's application.
- In the subsequent rent suit (subject of First Appeal No. 58), the defendants (landlords) advanced two defenses: (a) the tenure had been purchased at the sale subject to liability for rent due at the time of sale, precluding a further suit for that rent; and (b) alternatively, the claim for rent for certain kists of 1938 was barred by Order 2, Rule 2 of the CPC as it ought to have been claimed in the previous suit.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Sonu Lal v. Bartram Keightley, 22 Pat. 628 | Held that sub-s. (5) of Section 163 operates only when the property to be sold is a holding; the court must value the whole tenure before ordering its sale under S.163(2)(b). | The court relied on this ruling to conclude S.163(5) did not apply to a tenure (as distinct from a holding) and to recognise the legal duty under S.163(2)(b) to value the whole tenure before sale; but even assuming valuation had not been properly done, the court held that omission did not render the sale wholly without jurisdiction in the present facts. |
| Chandra Sekhar v. Bhagwan Das (A.I.R. 1941 Pat. 440) | One of two Patna High Court rulings under the Money-Lenders Act holding that omission to value after hearing parties does not make a sale without jurisdiction. | The court analogised these rulings to S.163(2)(b) (Bihar Tenancy Act) and used them to support the conclusion that failure to comply with valuation requirements would not necessarily produce a complete nullity of the sale. |
| Sheo Dayal Narain v. Musammat Moti Kuer, 21 Pat. 281 | The other Patna High Court ruling under the Money-Lenders Act to the same effect (sale not a nullity for omission to value). | Used in the same analogy to support the conclusion that omission to observe S.163(2)(b) would not render the sale a complete nullity. |
| Kameshwar Singh v. Bishwanath Jha, 25 Pat. 267 | Held that Section 158B(2) of the Bihar Tenancy Act corresponds to Order 21, Rule 22 of the CPC; failure to comply with the mandatory notice requirement under S.158B(2) would have the same consequence as failure under O.21, R.22 and render a sale a nullity. | The court accepted that general principle but distinguished the present facts on the ground that notice had in fact been issued and served under O.21, R.22; accordingly, the sale could operate at least as a money sale and was not wholly without jurisdiction. |
| Kalyani Prasad v. Surendra Nath, 24 Pat. 95 (Full Bench) | Full Bench rule that a landlord who purchases a tenure in execution of a money decree takes the property subject to arrears of rent accruing due between the date of the suit and the date of sale, even if such liability was not notified in the sale proclamation. | The court treated this Full Bench ruling as binding and decisive for the First Appeal: it held that after the sale (characterised as a money sale) no subsequent suit for the pre-sale rent period could be maintained against the former tenants, and therefore the suit should have been dismissed. |
| Midnapur Zamindary Co. Ltd. v. Mrinal Kanti Roy (42 C.W.N. 967) | Quoted passage by Ghose, J. observing that a landlord purchaser stands in the tenant's position and cannot claim arrears from the person whose right he purchased; also noting that auction-purchaser landlord requires no notice of arrears. | The court cited the observation as supportive authority for the proposition that a landlord purchaser cannot later claim arrears from the person whose right he purchased; it reinforced the application of Kalyani Prasad to the present facts. |
| Kesho Prasad Singh v. Paranjota Koer (6 P.L.J. 354) | Held that where a landlord obtains two rent decrees and first executes one decree by sale of the holding without notifying that the sale is subject to the other decree and purchases the holding himself, he is not debarred from executing the other decree against the remaining properties of the tenant. | The court considered this authority but found it inapplicable to the present case because that ruling concerns rent sales (where holdings pass free of encumbrance absent notification), whereas the present sale was treated as a money sale. |
Court's Reasoning and Analysis
The court heard the three connected appeals together because they concerned the same tenure and connected matters. The reasoning proceeds in clear analytical steps, applying statutory provisions and precedents cited in the opinion:
-
Analysis of Section 163:
- The court examined S.163(2)(b) (sale proclamation must state the value of the tenure) and S.163(5) (requiring hearing and valuation before proclamation when the property is a holding or portion sufficient to satisfy the decree).
- Relying on Sonu Lal v. Bartram Keightley, the court concluded S.163(5) applies when the property is a holding; it does not apply to a tenure in the present sense. Therefore, the duty under S.163(2)(b) to state the value of the tenure remained the focal point.
- Although the sale proclamation formally stated a value, that valuation was the decree-holder's valuation accepted without hearing the judgment-debtor. Even if that amount did not qualify as a proper valuation under S.163(2)(b), the court held (by analogy to the Money-Lenders Act precedents Chandra Sekhar and Sheo Dayal Narain) that omission to observe the valuation requirement did not render the sale a complete nullity.
-
Analysis of Section 158B(2):
- S.158B(2) prescribes the procedure and mandatory notice when the decree-holder wishes to proceed against the tenure (a "rent sale")—the court recognised prior authority (Kameshwar Singh) that failure to comply with this mandatory notice would ordinarily render the sale a nullity, analogous to failure under O.21, R.22 of the CPC.
- However, the court emphasized the factual peculiarity: the decree-holders had initially chosen to proceed by the money-execution route, and a notice under O.21, R.22 was issued and served. Later the Court observed that a mistake had been made by treating the decree as a money decree and, supposedly correcting this, combined the sale proclamation and attachment.
- The court held that because a proper notice under O.21, R.22 had been issued and served, the sale could not be categorised as wholly without jurisdiction; at least it operated as a money sale (a sale of the judgment-debtor's right, title and interest) rather than a rent sale transferring the tenure free of liabilities.
- The court further relied on Section 158AA which permits the decree-holder to elect between proceeding via rent execution against the tenure or proceeding against the property of the judgment-debtor, thus reinforcing that a money-execution route could lawfully have been pursued.
-
Consequences for the applications to set aside the sale:
- Because the sale was not wholly without jurisdiction, any challenge to set aside the sale would have to be made within the one-month period under O.21, R.90 (or governed by the relevant time limits). The applications in question were made long after that period and were therefore time-barred.
- Accordingly, Miscellaneous Appeal No. 261 (by decree-holders) succeeds and the order holding the sale a nullity is set aside; Miscellaneous Appeal No. 390 (by judgment-debtors) fails and is dismissed.
-
The First Appeal (No. 58) — effect on a subsequent rent suit:
- There was a subsequent suit against the tenants for rent alleged to have accrued before the sale (four kists of 1938). The trial Court had held that the suit was under the Bihar Tenancy Act and dismissed the claim for that period on procedural grounds and because a notice to quit was ineffective.
- The appellate court considered the defence that the tenure had been purchased subject to liability for rent due at the time, and (alternatively) that the claim was barred by O.2, R.2 of the CPC.
- The court concluded the trial Judge should have accepted the first defence: because the sale operated as a money sale (sale of the judgment-debtors' rights only), the purchaser takes subject to existing encumbrances including liability for rent accruing between the date of the suit and the date of sale. The court relied on the Full Bench authority in Kalyani Prasad v. Surendra Nath and the quoted observation from Midnapur Zamindary Co. Ltd. to support that principle.
- Consequently, the court held that after the sale no suit for the pre-sale rent period could be maintained against the former tenants and ordered that the suit be dismissed.
Holding and Implications
Holding (core rulings):
- Miscellaneous Appeal No. 261: Allowed. The order of the Subordinate Judge holding the sale a nullity is set aside; the sale is not wholly without jurisdiction and, on the facts, operated at least as a money sale.
- Miscellaneous Appeal No. 390: Dismissed. The judgment-debtors' S.47 application was rightly rejected by the Subordinate Judge and in any event was time-barred.
- First Appeal No. 58: Allowed. The subsequent suit for rent (period claimed to have accrued before the sale) should have been dismissed because the landlord-purchaser, having bought in execution of a money decree, takes subject to the liability for arrears accruing between the date of the suit and the date of sale.
Implications:
- The direct effects on the parties are (1) the sale stands and is not treated as a complete nullity on the statutory grounds raised, (2) the mortgagee's and judgment-debtors' late applications to set aside the sale fail, and (3) the landlord-purchaser cannot recover pre-sale rent from the former tenants as a separate action where he purchased under a money sale — the purchaser takes subject to that liability.
- The court applied existing authorities (including a Full Bench decision) and did not purport to lay down a new general precedent beyond applying those authorities to the particular facts. The opinion demonstrates how distinctions between a rent sale and a money sale, and the factual presence of notice under CPC provisions, determine whether a sale is wholly void or operates as a money sale subject to encumbrances.
Order: As recorded in the opinion, orders were accordingly made (Misc. Appeal No. 261 allowed with costs; Misc. Appeal No. 390 dismissed with costs; First Appeal No. 58 allowed with costs and the suit ordered dismissed).
Meredith, J.:— All these three appeals are connected, and so have been heard together. They relate to various matters in regard to the same tenure. This tenure was created by a lease of 13-11-1906. In November 1938, a rent suit was brought for rent up to the Asin kist of the year 1345, and on 2-7-1940, this suit was decreed for a sum of Rs. 16,000 and odd. Execution was taken out in Execution Case No. 3 of 1941 in the Court of the Subordinate Judge, Gaya. On 28-4-1941 sale proclamation was issued, and pa 5-7-1941, the property was sold, and the landlords, decree-holders purchased the tenure for Rs. 18,000 and odd. On 4-9-1941, delivery of possession was taken.
2. On 21-12-1948, more than two years later an alleged mortgagee of the tenants judgment-debtors made an application under Section 47 of the CPC, to have the sale declared void and without jurisdiction. The learned Subordinate Judge said that the contention was that the sale was void for non-compliance with the provisions of Sections 158 and 163A of the Bihar Tenancy Act. He obviously meant Ss. 158B and 163. The opposite party did not appear, and the learned Subordinate Judge allowed the application and held that the sale was void and without jurisdiction. This order is the subject-matter of Miscellaneous Appeal No. 261, which is, of course, by the decree-holders and which I shall deal with first. It is quite clear that as an application under O. 21, R. 90 the application could not succeed as it was long out of time. It would be in time, however, if the sale was without jurisdiction and the application could be treated as one under S. 47. Taking first S. 163, S. 163(2)(b) provides that the sale proclamation, inter alia, shall state the value of the tenure or the holding or, if the property to be sold is a portion of a holding, the value of such portion as determined by the Court in the manner specified. Section 163(5) provides that before issuing the sale proclamation, the Court executing the decree shall hear the parties and estimate the value of the holding or of that portion of the holding the proceeds of the sale of which it considers will be sufficient to satisfy the decree.
3. It is significant that whereas in S. 163(1) reference is made to a tenure or a holding, and so also in S. 163(2)(b), in S. 163(5) the reference is to a holding only. It seems, therefore, that S. 163(5) has no reference to the case of a tenure with which we are concerned at present. The same has been so held by a Bench of this Court is Sonu Lal v. Bartram Keightley 22 Pat. 628.1 The Bench held that sub-s. (5) of the section only comes into operation when the property to be sold is a holding, and by valuing it or a part thereof the entire decree will be satisfied by the proceeds of the sale thereof. It is clear that sub-s. (5) is not applicable. The position, therefore, merely is that under S. 163(2)(b) it was incumbent to state the value of the tenure in the sale proclamation. Formally this was done, but it was merely the decree-holder's valuation which was accepted by the Court without hearing the judgment-debtor. In the ruling I have just cited, it has been laid down that a Court is bound under Section 163(2)(b) of the Bihar Tenancy Act, to value the whole of a tenure before ordering its sale in execution of a decree. Let us assume, without deciding, that what was done did not amount to valuation within the meaning of S. 163(2)(b). The question is what is the legal effect? Will it render the sale without jurisdiction? In my opinion, it will not. The position will be similar to cases of omitting to value the property after hearing the parties under Section 13 of the Money-Lenders Act. In the latter case, we have two rulings of this Court laying down that the sale will not be without jurisdiction, first, Chandra Sekhar v. Bhagwan Das (A.I.R 1941 Pat. 4402) and second, Sheo Dayal Narain v. Musammat Moti Kuer* (21 Pat. 281.3) The failure to observe the provisions of S. 163(2)(b), if there has been such a failure, does not render the sale a complete nullity.
4. I now come to S. 158B. The first part of S. 158B prescribes the conditions under which the tenure or holding Bhall pass to the purchaser. In other words, the sale will be a rent sale. The second part lays down the procedure that must be followed by the decree-holder if he wants the sale to be a rent sale. It is in these terms:
“When the application mentioned in 8.158AA is made and the decree-holder wants to proceed against the tenure or holding or portion of the tenure or holding in respect of which the decree was obtained, the Court executing the decree shall, before proceeding to sell the tenure or the holding or a part of the holding, give to the parties to the decree notice of the application and of the date on which the sale proclamation shall be drawn up, and may, notwithstanding anything contained in the Code of Civil Procedure, 1908, simultaneously issue attachment.”
5. It has been held by a Bench of this Court in Kameshwar Singh v. Bishwanath Jha (25 Pat. 2674) that S. 158B(2) is a corresponding provision to o. 21, R. 22 of the CPC, and the reason why under Section 148(1) of the Bihar Tenancy Act the notice under O. 21, R. 22, has been dispensed with in rent executions is because a corresponding mandatory notice has been prescribed under S. 155B(2), and failure to comply with the section would have the same consequence as failure to comply with the provision of O. 21, R. 22 in cases where that provision is applicable. That is to say, as held by this Court, the sale would be a nullity.
6. In the present case, no notice was issued under S. 158B(2), and, therefore prima facie it would appear under this ruling that the sale was without jurisdiction. But the circumstances in which this notice was not issued are peculiar. It appears that the decree-holders of their own choice chose to adopt the procedure for the execution of money decrees and so applied for issue of notice under O. 21, R. 22, and such notice was issued and served as appears from the order-sheet. Then there was an order for attachment, and only after that the Court observed that the order had been passed by mistake as the decree was a rent decree; so the order would be recalled and the sale proclamation and attachment would be issued together, and this was done. It is to be noticed that the mere fact that sale proclamation and attachment were issued together would not in itself make it a rent execution, because even under O. 21, R. 67 of the CPC, as amended by this Court, it is possible to issue attachment and sale proclamation simultaneously in money execution.
7. The question is, in these circumstances, what is the effect of the omission to issue the notice under S. 158B(2)? It is, in my opinion, quite clear that having regard to the fact that notice was issued and served under O. 21, R. 22, the sale could not be a nullity, or without jurisdiction. It would at least take effect as a money sale, that is to say a sale of the right, title and interest of the judgment-debtor, because under Section 158AA of the Bihar Tenancy Act, it is quite open to the decree-holder to elect whether he will proceed by way of rent execution against the tenure or holding itself or merely against the property of the judgment-debtor, and there would be nothing illegal in proceeding under the Code of Civil Procedure and issuing the notice under O. 21, R. 22, the Court in each case being the same. The Court will thereby acquire full jurisdiction to sell the property of the judgment-debtor. This being so, it cannot be said in the present case that the failure to issue the notice under S. 158B(2) rendered the sale wholly without jurisdiction. In that view if the sale could be set aside at all it would be only within one month under O. 21, R. 90, and the application to set aside sale, apart from the fact that it was without merit, was long barred by time the result is that Miscellaneous Appeal No. 261 succeeds, and I would allow it with costs and set aside the order holding the sale a nullity.
8. I now come to Miscellaneous Appeal No. 390. On 9-6-1944, the judgment-debtors made a similar application under S. 47. The learned Subordinate Judge rejected their application, because he said the sale had already been set aside on the application of the mortgagee, and there was nothing further to set aside. Against this order the judgment-debtors have come in appeal. In view of what I have already said it is clear that in any view that application was rightly rejected. It also was long out of time. This appeal, therefore, fails and must be dismissed with costs.
9. Lastly, there is the First Appeal No. 58. At the time when the sale took place a second suit was pending against the tenants for rent which was said to have accrued due before the sale, namely, the period from the January kisht of 1938 to the January kisht of 1941. The previous suit had been brought under the Transfer of Property Act. It was alleged that a notice to quit had been served. Rent was claimed up to the time of the quit notice, and for the subsequent period damages for use and occupation were claimed. The Court held that the suit was one under the Bihar Tenancy Act. The notice to quit was ineffective. Therefore, damages could not be allowed, and as rent had not been claimed in the alternative that suit was dismissed with regard to the period in question which was the four kishts of the year 1938.
10. The defence in the suit then was, first that at the sale referred to the tenure had been purchased subject to the liability for rent due at the time, and, therefore, no suit could subsequently be brought against the tenants for the rent of that period. Secondly, the claim was, in any event, barred for the four kists of 1938 because under the provisions of O. 2, R. 2 of the CPC, rent for that period should have been claimed in the previous suit.
11. Both contentions were rejected by the learned Subordinate Judge, but, in my opinion, he should certainly have accepted the first contention and dismissed the suit on that ground. I have already stated the circumstances in which the sale took place and given my reasons for holding that the sale would take effect as a sale only of the right, title and interest of the judgment-debtors. The property would, therefore, be sold subject to existing encumbrances including the liability for rent. In the sale proclamation reference was made to that liability, but it was in somewhat ambiguous terms. It was stated:
“Be it known that the mobarari rent of the said tenure for January kisht of 1345 Fasli up to January kisht of 1348 Fasli is due by the judgment-debtors for the recovery of which a suit being Rent Suit No. 1 of 1941 has already been instituted in the first Court of the Subordinate Judge at Gaya against the judgment-debtors and is pending trial.”
12. In the sale certificate it was also notified that the rent for this period was due by the judgment-debtors, and in the bid sheet it is mentioned that the encumbrance was read out Obviously all this is ambiguous. On one reading it might be a notification that the sale was subject to the liability, on another reading it might be taken as an indication that it was intended by the landlord to saddle the judgment-debtors with the liability. However that may be, once it is held that the sale was a money sale the landlord's wishes would become irrelevant, since all he could sell would be the right, title and interest of the judgment-debtors. The position has been clearly laid down by a Full Bench of this Court in Kalyani Prasad v. Surendra Nath (24 Pat. 95) wherein it is held that a landlord, who purchases a tenure in execution of a money decree obtained by him in a suit for recovery of arrears of rent of a tenure takes the property subject to the liability for the arrears of rent accruing due between the date of the suit and the date of the sale, though such liability may not have been notified in the sale proclamation. That is exactly the position in the present case, and we are bound by the ruling of the Full Bench. It is true that was a case under the Chota Nagpur Tenancy Act, but there is no significant difference between the two Acts in this regard. The proviso to Section 60 of the Chota Nagpur Tenancy Act, which does not occur in the Bihar Tenancy Act, is irrelevant, because as pointed out by the Full Bench, that proviso obviously refers to a rent decree and rent sale, and in the present case we are dealing with a money sale. In the course of the judgment the learned Judges referred to an observation of Ghose, J. with regard to the Bengal Tenancy Act upon this point in Midnapur Zamindary Co. Ltd. v. Mrinal Kanti Roy (42 C.W.N 9676). Ghose, J. said:
“The tenant was liable for those arrears. The landlord has now placed himself in the position of that tenant by purchasing his right, title and interest. Then can the Landlord still say that he can claim these arrears from the person whose right, title and interest he has purchased?…. Moreover so far as the landlord auction-purohaser is concerned, he does not require any notice that arrears of rent are due.”
13. That I apprehend, correctly states the position. Moreover, the Full Bench has expressed the opinion that the position with regard to Bales in money executions would be the same under the Bihar Tenancy Act. Mr. Prem Lall for the respondents relies upon Kesho Prasad Singh v. Paranjota Koer (6 P.L.J 3547) but all that was laid down in that case was that if the landlord obtains two rent decrees against a tenant and first executes one decree by sale of the holding without notifying that the sale is subject to the other decree, and purchases the holding himself, he is not debarred from executing the other decree against the remaining properties of the tenant. That seems to me, with respect, obviously correct, because in a rent sale, without any notification that the sale was subject to any encumbrance, the holding will pass free from encumbrance, and, therefore, the tenant and not the landlord, would be liable for any rent due at the time of the sale. But this ruling quite clearly, is inapplicable to a case like the present one where the sale is not a rent sale. In my opinion, after the sale no suit for rent of the previous period could lie against the former tenants, and the suit should have been dismissed. As the appeal succeeds on this ground, it is unnecessary to express any opinion with regard to the point taken under O. 2, R. 2. I would, therefore, allow First Appeal No. 58 with costs, and direct that the suit be dismissed with, costs.
Sinha, J.:— I agree.
G.N
14. Order accordingly.
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