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Sital Chandra Bose Judgment-Debtor v. Ramesh Chandra Mitter And Others Opposite Party.

Calcutta High Court
May 31, 1938
Smart Summary (Beta)

Summary of Legal Opinion — Costello, J. (with Biswas, J. concurring)

Factual and Procedural Background

The petition under consideration challenged an order of the Subordinate Judge of the 24-Parganas dated 4 May 1938 in "Money Execution Case No. 1 of 1938". The petitioner in the present proceedings was the judgment-debtor who complained about the Subordinate Judge's rejection of a petition filed by the decree-holder seeking to withdraw the execution proceedings on grounds of alleged irregularity.

Key events and timeline recorded in the opinion:

  • 9 February 1938: Order directing issue of a sale proclamation fixing 19 April 1938 for sale of properties subject to execution; decree-holder ordered to file finally published Record of Rights and valuation roll.
  • 19 April 1938: On the date fixed for sale, the decree-holder sought and was allowed permission to bid. The judgment-debtor appeared and asked for time; the decree-holder assented and two weeks' time was allowed; sale postponed until 3 May 1938.
  • 3 May 1938: Nazir's report recorded that Sm. Raj Lakshmi Mitter purchased the property at Rs. 32,000 and the bid was to be put up for Court's acceptance. Judgment-debtor sought time until the next day; the Judge permitted the judgment-debtor to deposit the decretal amount before acceptance of the bid.
  • 4 May 1938: Decree-holder put in a petition to withdraw the execution proceedings (expressing fear of irregularity). The Subordinate Judge rejected that petition on the ground that the property had been knocked down and a bid was pending for the Court's acceptance; the Judge recorded that a third party had acquired a position/interest to be considered. The Judge also recorded acceptance of another (contested) bid—Sm. Baj Lakahmi's bid for Rs. 82,000—and receipt of poundage fee and an Rs. 8,000 deposit (chalan) from the auction-purchaser.
  • Thereafter the matter was adjourned for argument (10 May, then 19 May), and in the meantime the judgment-debtor obtained a rule from the higher Court challenging the Subordinate Judge's order.

Legal Issues Presented

  1. Whether the Subordinate Judge had jurisdiction to reject the decree-holder's application to withdraw the execution proceedings.
  2. Whether a decree-holder has an absolute and indefeasible right to withdraw execution proceedings at any stage, or whether withdrawal can be refused where a third party has acquired a right or interest in the property subject to execution.
  3. Whether the judgment-debtor (who is not the party seeking withdrawal) had locus standi to challenge the Subordinate Judge's order rejecting the decree-holder's petition to withdraw.
  4. Whether the Subordinate Judge's exercise of discretion (in refusing withdrawal because of a third party's position) was reviewable in proceedings under Section 115 of the Code.

Arguments of the Parties

Judgment-Debtor's Arguments

  • The judgment-debtor (petitioner) argued that the learned Subordinate Judge was wrong in rejecting the decree-holder's application to withdraw the execution case and that in doing so the Judge exercised jurisdiction not vested in him by law.
  • Counsel for the judgment-debtor relied on an observation in the reported citation "1 Pat 2321 at p. 234" (Jwala Prasad, J.) to the effect that “He had the right to withdraw the execution petition at any moment he liked” — advancing a broad proposition that a decree-holder may withdraw at will.
  • It was also contended (in a refined form later in argument) that the decree-holder retains a right to withdraw at any stage unless and until a third party has acquired some right or interest in the property.

Decree-Holder's Position (as described in the opinion)

  • The decree-holder sought leave to withdraw the execution proceedings because he was apprehensive that some irregularity might be present which the judgment-debtor could later take advantage of; the petition to withdraw appears motivated by concern about possible irregularity and not by desire to prevent sale or to avoid obtaining satisfaction of the decretal amount.
  • The decree-holder had earlier agreed to allow the judgment-debtor time to pay and had been active in the execution process (including bidding or permitting bidding).
  • The Subordinate Judge recorded that the decree-holder did not, in fact, complain about the eventual order rejecting withdrawal (the decree-holder himself was not challenging that order before the higher Court).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
1 Pat 2321 at p. 234 Quoted passage where Jwala Prasad, J. is recorded as saying: “He had the right to withdraw the execution petition at any moment he liked.” The Court observed that this statement, taken out of context, might appear categorical but was in fact made in relation to the particular facts of that case. The Court rejected treating the passage as establishing an absolute rule in favour of the decree-holder.
18 CLJ 532 Authority for the proposition that a decree-holder cannot, as a matter of right, discontinue execution proceedings at any stage at his option. The Court relied on this authority to support the proposition that a decree-holder does not have an unqualified right to withdraw; it underpinned the conclusion that the Subordinate Judge must exercise judicial discretion where third parties may have become involved.

Court's Reasoning and Analysis

The Court's analysis proceeded in the following steps:

  1. Jurisdiction: The Court first rejected the contention that there was any question of jurisdiction. The Subordinate Judge was dealing with Money Execution Case No. 1 of 1938 and was therefore authorized to make orders necessary for dealing with those proceedings.
  2. Factual assessment: The Court reviewed the sequence of events (sale proclamation, postponements, nazir's report, bids, deposits, and the decree-holder's petition to withdraw). The Subordinate Judge had recorded that a third party (the auction-purchaser) had made a bid and a position or interest had arisen which needed to be considered.
  3. Purpose of the decree-holder's withdrawal petition: The Court noted that the decree-holder sought withdrawal because of apprehension about irregularity, not to obstruct sale or avoid satisfaction of the decree; the decree-holder did not himself challenge the Subordinate Judge's refusal to allow withdrawal.
  4. Precedential analysis and limits: The Court examined the authorities cited by the judgment-debtor's counsel. It declined to accept a categorical principle that a decree-holder can always withdraw an execution petition at any moment. The Court relied on 18 CLJ 532 for the contrary proposition that a decree-holder cannot, as of right, discontinue execution proceedings at any stage at his option.
  5. Role of third-party interest: The Court emphasised that where circumstances show that a third party has become involved or acquired some right or interest in the subject property, the Subordinate Judge must exercise judicial discretion before allowing withdrawal. The learned Judge had taken the view — rightly or wrongly — that a third party had acquired an interest and that the bid was pending acceptance; on that footing he refused withdrawal.
  6. Standard of review under S.115: The Court noted that even if the Subordinate Judge was wrong in his conclusion about the third party's legal interest, such an error of law or fact was not an appropriate subject for review under Section 115 of the Code in the circumstances of this case.
  7. Locus standi and motive: The Court found that the judgment-debtor had no locus standi to complain of an order the decree-holder did not challenge, and characterised the petition as an attempt by an obstructive judgment-debtor to delay payment of a just debt.

Holding and Implications

Holding: The rule obtained by the judgment-debtor was discharged. The Court ordered that the records be sent down and directed payment of costs quantified as five gold mohurs.

Implications:

  • The direct effect is that the Subordinate Judge's order of 4 May 1938 rejecting the decree-holder's petition to withdraw the execution proceedings was upheld by the higher Court, and the judgment-debtor's challenge was dismissed with costs.
  • The Court reaffirmed that a Subordinate Judge has jurisdiction to regulate execution proceedings and must exercise judicial discretion before allowing withdrawal where a third party has become involved; a decree-holder does not possess an absolute and indefeasible right to withdraw at any stage.
  • The opinion states that the present decision does not proceed to set a broader new precedent beyond applying established principles — in particular the principle from 18 CLJ 532 — and emphasises that errors of fact or law by a trial judge about third-party interest are not necessarily appropriate for interference under S.115 in the circumstances described.

Disposition and Formal Order

The Court ordered as follows:

  • Rule discharged.
  • Costs: five gold mohurs.
  • Let the records be sent down without delay.
  • Biswas, J. agreed with Costello, J.

This summary is strictly confined to the content and reasoning contained in the provided opinion and does not add facts or inferences beyond that text.

Show all summary ...

Costello, J.:— The petition on which this rule was granted stated that the petitioner was aggrieved by the order of the Subordinate Jndge of the 24-Parganas, being an order dated 4th May 1938, in the proceedings which are described as Money Execution Case No. 1 of 1938. The order complained of is in these terms:

Decree-holders put in a petition praying that the execution case may be struck off on non-satisfaction for reasons stated therein. The petition is rejected, as the property advertised for sale has been knocked down and the bid is pending for Court's acceptance.

2. The present proceedings before us are remarkable in that the petitioner was the judgment-debtor and he is complaining against an order made by the learned Sub-ordinate Judge, an order which the decree, holder himself does not complain of, though it was made on a petition put in by the decree-holder. It has been argued before us that the learned Subordinate Judge was wrong in rejecting the application of the decree-holder for withdrawal of the execution case and in so doing, he exercised a jurisdiction not vested in him by law. There is the further usual allegation in cases of this kind that the Subordinate Judge Acted illegally in the exercise of his jurisdiction in rejecting the said application. It is further contended that his reasons therefor were entirely unsound. In my opinion there is here no question of jurisdiction.

3. The learned Subordinate Judge was dealing with the matter, which is described as Money Execution Case No. 1 of 1938, and he therefore was empowered and authorized and had jurisdiction to make such, orders as he thought necessary for the purpose of dealing with those proceedings. Apart altogether from the question of jurisdiction however, in my opinion, the learned Judge was perfectly justified in making the order which he made on 4th May last. The petition was this: Going back to 9th February 1938, we find that there was an order directing the issue of a sale proclamation fixing 19th April 1938, for sale of the properties which are the subject-matter of the execution proceedings. There was a further order made on that date that the decree-holder was to file the finally published Record of Rights and the valuation roll of the properties. On the date for which the sale was fixed, viz. 19th April, the decree-holder put in a petition asking, for permission himself to bid at the sale and that was allowed. On the same date-the judgment-debtor appeared and filed a petition asking for time.

4. To that petition the decree-holder assented and two weeks' time was allowed to the judgment-debtor to discharge the judgment debt, and the sale was put off until 3rd May 1938. On that date, an order was recorded: “Nazir to conduct the sale and, report.” Then followed two other orders. The first is in these terms: “Received Nazir's report. One Sm. Raj Lakshmi Mitter purchased the property at Rupees 32,000. Put up tomorrow for acceptance of the bid.”

5. Then we find this recorded: “At this stage, judgment-debtor puts in a petition praying for time till tomorrow for payment of the decretal dues. Put up tomorrow for order.” So, once again, the judgment-debtor obtained time in which to pay. On the next day in accordance with that order, the judgment-debtor's petition came before the learned Judge and he made this order: “He (that is to say the judgment-debtor) is permitted to deposit the decretal amount before the acceptance of the bid.”

6. Now, it seems quite apparent from the behaviour of the judgment-debtor that he was, to say the least of it, obstructive and was doing his very best to prevent the sale being completed, and I think one can, not unreasonably, come to the conclusion that the decree-holder was rather nervous as to what might happen if the sale was in fact confirmed, having regard to the attitude which the judgment-debtor was then taking up. Accordingly he put in a petition which is the one on which the order complained of is based. It appears that the decree-holder was asking to be allowed to withdraw the execution proceedings, because he was afraid that there might have been some irregularity which the judgment-debtor would be able to take advantage of. It seems quite clear from the endorsement on the order-sheet that the decree-holder was only concerned to withdraw from the proceedings, because he was afraid that there was some irregularity and not because he desired to stop the sale or to do anything which would prevent himself from obtaining satisfaction of the decretal amount from the judgment-debtor. It is abundantly clear from the statement in the order recorded on 4th May 1938, that the learned Judge was of opinion that he ought not to allow the decree-holder to with, draw, because in some way or rather, to some extent at any rate, a third party had entered on the scene and had acquired a position, if not an interest which had to be taken into consideration. The real situation seems to have been this that from the very outset, the learned Judge had in his own mind decided that the bid of Raj Lakshmi was one which he might properly accept. The only reason why he did not accept it on 3rd May was because the judgment-debtor intervened and applied for further time. We find it recorded at the end of the order of 4th May “… and the bid is pending for Court's acceptance.” That seems to be a statement that so far as the property is concerned, the bid would be accepted. On the same date the learned judge recorded this:

No money paid by the judgment-debtor. Sm. Baj Lakahmi's bid for Rs. 82,000 put up for orders. As the bid is a contested one and does not appear to be low, it is accepted. Poundage fee of Rs. 380 filed.

7. The learned Judge had given to the judgment debtor ample opportunity of escaping the situation in which he might find himself obliged to pay some compensation to the purchaser at the auction sale and we are told that the real reason for this application is because the judgment-debtor wishes to avoid having to pay a sum of money by way of compensation to the lady who was the purchaser at the execution sale. We find it recorded under date 4th May:

At this stage decree-holders put in a petition certifying full satisfaction of the decretal dues. Put up tomorrow for orders in presence of pleaders for the decree-holder, judgment-debtor and the auction-purchaser.

8. So that the judgment-debtor with his eyes open waited to make payment until after the Judge had definitely decided to accept the bid. Further on the same date, we find this order:

Judgment-debtor 1 files an application stating certain facts. Let it be kept with the record. Chalan showing deposit of Rs. 8000 filed by the auction-purchaser.

9. And then the matter was put over until 10th May for hearing arguments. The matter was further postponed until 19th May. In the meantime, the judgment-debtor rushed up to this Court and succeeded in obtaining a rule. It is clear beyond all question that the learned Judge was holding the view that a third party was concerned in the matter and so he was-quite right in refusing to the decree-holder at that stage leave to withdraw from the proceedings. No question of jurisdiction and, indeed, no question of the propriety of the Judge's order can possibly arise, unless it can be argued successfully that a decree, holder has an absolute and indefeasible right to withdraw from execution proceedings at any stage no matter what the situation may be. Mr. Bagohi appearing on behalf of the judgment-debtor took up that attitude at the outset, and on the strength of an observation in 1 Pat 2321 at p. 234 where Jwala Prasad, J. said: “He had the right to withdraw the execution petition at any moment he liked”. The learned Judge was referring, of course, to the decree-holder; but it is quite obvious on a perusal of the judgment that although taken out of its context that seems a categorical statement that a decree-holder has the right to withdraw an execution petition at any moment he likes, it is clear enough that the learned Judge was dealing with the particular facts of the case then before him and not making a generalization. It is clearly laid down in 18 CLJ 532 that a decree-holder cannot, as a matter of right, discontinue the execution proceedings at any stage at his option. That, indeed, seems to be a matter of common sense. Faced with that authority, Mr. Bagchi found himself obliged to qualify his original broad proposition, and he then argued that at any rate the decree-holder has a right to withdraw at any stage of an execution proceeding unless and until a third party has acquired some right or interest in the property which is the subject-matter of the execution proceeding. It is clear beyond all question that what happened in the present case is that when the learned Judge made the order complained of, be was dealing with the matter upon the footing that a third party had acquired some sort of interest in the property. He may have been right or he may have been wrong either on the law or on the facts or on both. But if the law is that a decree-holder has not an unqualified and absolute right to withdraw at any moment of time, then it is obviously the bounded duty of the Judge dealing with an execution matter to exercise his judicial discretion and to determine as a Judge whether in his opinion in the circumstances and upon the facts of the particular case, the decree-holder ought to be allowed to withdraw. Now, it does not seem to have been disputed by Mr. Bagchi at any rate in the later stages of his argument that it is the law that a decree-holder cannot of his own volition withdraw from execution proceedings where the circumstances are such that some third party has become involved or has acquired some interest.

10. I have said that in the present instance the learned Judge rightly or wrongly took the view that a third party had acquired an interest. We are not now concerned to enquire whether that was a right or whether it was a wrong view of the matter. Obviously, if the learned Judge took the view that there was somebody who had made a bid which be himself intended to accept, it was open to him to come to the conclusion that the decree-holder ought not to be allowed to withdraw at that particular stage. If the learned Judge was wrong in coming to the conclusion, as he may have been, that this lady had acquired some legal interest as regards the property, that is not a matter which is a fit subject for review in proceedings taken under S. 115 of the Code. In my opinion, the judgment-debtor had no right to come here at all: he is complaining of an order which the decree-holder himself does not complain of. This is plainly an attempt on the part of an obstructive judgment-debtor to delay payment of his just debt. It is clear that this applicant has no locus standi. If he has, he has nothing to complain of on the order made in the execution proceedings. The rule accordingly must be discharged with costs, five gold mohurs. Let the records be sent down without delay.

Biswas, J.:— I agree.

K.S/R.K

11. Rule discharged.