- Bookmark
- Share
- CaseIQ
Smith v. Kailash Chandra Chakraverty
Structured Summary of the Opinion
Factual and Procedural Background
This appeal arises from an order of the Subordinate Judge of Dhanbad dated 25 May 1929 in execution proceedings. The decree-holder had conducted a sale in execution; the judgment-debtor, Mr. C.J. Smith, had died, and the decree-holder filed petitions seeking substitution of Mrs. D. Smith and Mr. T. Smith as legal representatives. An application under Order XXI, rule 90 of the Code of Civil Procedure sought to set aside the execution sale. The judgment-debtor's representative objected on the ground that no notice had been served in accordance with Order XXI, rule 22. The Subordinate Judge rejected an application by the judgment-debtor for an adjournment to call evidence, found on the basis of an affidavit sworn by the peon (and an identifier) that notice had been served (by handing to and then affixing on the outer door after Mr. Sen allegedly refused to accept it), and also found no evidence that the sale price was inadequate; the application under Order XXI, rule 90 was therefore dismissed. The appeal challenges those findings and the validity of the sale.
Legal Issues Presented
- Whether a notice in the form actually issued and relied upon (a notice for substitution / to show cause for substitution) satisfied the requirements of Order XXI, rule 22 (and its sub-clause) when execution was originally issued against the judgment-debtor and the judgment-debtor subsequently died.
- Whether the notice that was issued was properly served in accordance with the relevant rules (including the substituted service order, the affidavit of service and the factual description of the person who purportedly accepted or refused it).
- Whether the learned Subordinate Judge erred in refusing the judgment-debtor's application for an adjournment to call evidence on the service and related matters.
Arguments of the Parties
Appellant's Arguments (on behalf of the judgment-debtor's representative)
- That no notice as required by Order XXI, rule 22 was served (i.e., the form and content of the notice were insufficient).
- That the notice which was issued was not properly served in accordance with the order permitting substituted service.
- That the learned Subordinate Judge should not have rejected the application for an adjournment to permit the judgment-debtor's side to call evidence on these matters.
Respondent's Arguments (on behalf of the decree-holder)
- The decree-holder argued that the procedure adopted (issuing a notice to substitute legal representatives) was the appropriate step once the judgment-debtor had died, and that Order XXI, rule 22 applies only where execution is issued against the legal representative in the first instance, not where the judgment-debtor originally faced execution and later died.
- The respondent relied on a Madras High Court decision, Ramanathan Chettiar v. Ramanathan Chettiar, in support of the narrower construction of rule 22.
- The Subordinate Judge relied on the affidavit of the peon who purportedly served the notice (presented to Mr. Sen and then affixed to the outer door), treating that affidavit as proof of service.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Raghunath Das v. Sundar Das Khetri (Judicial Committee of the Privy Council) | Held that omission of the notice required by the provision corresponding to Order XXI, rule 22 (section 248 of the 1882 Code) rendered an execution sale void; required strict application of the statutory form of notice (a notice to the party against whom execution is applied for requiring him to show cause why the decree should not be executed against him). | The Court treated this decision as decisive: it concluded that Order XXI, rule 22 applies where execution was taken out against a judgment-debtor who later died and substitution is sought, and that if no notice as contemplated by sub-clause (b) of Order XXI, rule 22 is issued, the sale is invalid. |
| Ramanathan Chettiar v. Ramanathan Chettiar (Madras High Court) | Quoted by respondents for the proposition that rule 22 applies only where execution is first issued against the legal representative (attempt to distinguish Raghunath Das). | The Court considered the attempt to distinguish Raghunath Das and rejected the Madras High Court's differing observations, concluding that Raghunath Das correctly applies and that the omission of the specific notice renders the sale void. |
Court's Reasoning and Analysis
The Court's analysis proceeds in two main strands: (A) the proper construction and application of Order XXI, rule 22 (and its relation to the older section 248 of the 1882 Code), and (B) whether, on the facts and evidence before the Subordinate Judge, service of the notice could properly be treated as proved.
A. Construction and application of Order XXI, rule 22
- The Court noted that Order XXI, rule 22 requires that where execution is sought against the legal representative of a party to the decree the executing court "shall issue a notice to the person against whom execution is applied for requiring him to show cause ... why the decree should not be executed against him." The current rule contains a proviso permitting omission of notice where issuing it would cause unreasonable delay or defeat the ends of justice; the Court found that no such proviso-based justification existed in this case.
- The Court considered the respondents' argument (supported by a Madras High Court case) that rule 22 did not apply where execution was originally taken out against the judgment-debtor and only later, after death, was substitution sought. The Court held that this argument was answered by the decision in Raghunath Das v. Sundar Das Khetri (decided under section 248 of the 1882 Code, which corresponds to Order XXI, rule 22).
- Relying on Raghunath Das and Lord Parker's reasoning, the Court concluded that the rule must be strictly applied: substitution notices that merely call upon a representative to show cause why they should be substituted are not equivalent to the notice contemplated by the rule, which must call upon the person to show cause why the decree should not be executed against him. The failure to issue the proper notice under the specific provision (sub-clause (b) / corresponding rule) renders the sale void and the purchaser acquires no title.
- The Court rejected the attempted distinction by the Madras High Court and endorsed the view that the statutory scheme requires strict compliance; the present rule's proviso did not apply to excuse the omission in this case.
B. Adequacy of proof of service (Wort, J.)
- Wort, J. examined the evidence relied on by the Subordinate Judge: a report and affidavit by the peon and an affidavit of the identifier stating that the peon presented the notice to "Mr. Sen" (described respectively as "an officer competent to accept the notice in the name of the defendants" and "the proper officer of the judgment-debtors"), that Mr. Sen refused to accept the notice and give a receipt, and that the notice was affixed to the outer door of the judgment-debtor's office.
- Wort, J. held that the Subordinate Judge was entitled to treat these affidavits as prima facie evidence of service. In the absence of any evidence from the judgment-debtor or their representative to contradict or rebut the peon's affidavit (or to show that Mr. Sen was not a proper officer), it was not incumbent on the decree-holder or the peon to set out detailed reasoning for their view that Mr. Sen was the proper officer.
- Wort, J. also observed that the documentary material before the appellate Court (a petition of the receiver and a petition of the petitioner) could not be used to establish that the property was in the hands of a receiver for the purpose of defeating the service proof; therefore, if it were necessary to reach a concluded view on service, the proof before the Subordinate Judge was sufficient to entitle the Court to proceed.
- On this basis Wort, J. concluded that, although the omission of the statutory form of notice rendered the sale void, the evidence of service of the notice that had been relied upon was sufficiently established as prima facie proof; nonetheless, because the absence of the proper statutory notice was decisive, the appeal was to be allowed and the sale set aside.
C. Concurring observations on service (Fazl Ali, J.)
- Fazl Ali, J. emphasised the principle in Raghunath Das that a notice to an official assignee to show cause why he should be substituted is not a proper notice under section 248 (corresponding to Order XXI, rule 22); the notice should call upon the person to show cause why the decree should not be executed against him.
- Fazl Ali, J. expressed doubt whether the particular notice of 30 August 1928 could properly be construed as a notice under Order XXI, rule 22. Even if it were so treated, he doubted whether service was properly proved on the materials before the Court.
- He analysed the material relied upon for service and observed that the peon's report and the identifier's affidavit merely expressed an opinion that Mr. Sen was competent or the "proper officer" but did not explain in what capacity Mr. Sen represented the persons to whom notice was addressed.
- Fazl Ali, J. drew attention to Order V, rule 12 (service on an agent is effective if the agent is empowered to accept service) and Order V, rule 17 (circumstances permitting affixation); he found nothing on the record proving Mr. Sen's authority to accept service, and records inconsistencies as to the defendants' places of residence and the fact that the colliery might have been in the hands of a court-appointed receiver. On these grounds he was inclined to think the notice was neither a valid Notice under Order XXI, rule 22 nor properly served.
- Fazl Ali, J. therefore agreed with the result that the appeal should be allowed with costs.
Holding and Implications
Holding: The appeal was allowed with costs; the execution sale was set aside and the purchase money paid and distributed among the creditors was ordered to be refunded to the decree-holder.
Implications:
- Direct effect on the parties: The sale conducted in execution was declared invalid and set aside; the decree-holder is to receive back the purchase money that had been paid and distributed among creditors.
- Legal principle reaffirmed: The Court reaffirmed (following Raghunath Das v. Sundar Das Khetri) that strict compliance with the form of notice required by the provision corresponding to Order XXI, rule 22 is essential and that omission of the required notice (sub-clause (b) / corresponding provision) renders an execution sale void. The Court rejected a narrower construction that would treat a substitution notice as satisfying the statutory requirement in such circumstances.
- No novel precedent beyond reaffirmation: The decision applies the cited precedent and statutory provisions to the facts; the Court did not purport to lay down a new principle beyond the strict application and reaffirmation of earlier authority, although it clarified that Order XXI, rule 22 applies where execution is originally against a judgment-debtor who later dies and substitution is sought.
Wort, J.:— This is an appeal from an order of the Subordinate Judge of Dhanbad made on the 25th May, 1929, in execution proceedings. There was an application under Order XXI, rule 90 of the Code of Civil Procedure to set aside a sale held in execution. It appears that in the first place there had been an application on the side of the judgment-debtor for an adjournment with a view to calling evidence. That prayer was rejected. At the same time the learned Judge came to determine the question which arose under Order XXI, rule 90. It appears that the objection on the part of the representative of the judgment-debtor was that no notice had been served under Order XXI, rule 22. The learned Judge came to the conclusion, on the basis of an affidavit sworn by a person who had served the notice, that a notice had been served. He also decided that there was no evidence that the price which had been obtained in the sale was inadequate and, therefore, he dismissed the application under Order XXI, rule 90.
Three points are raised by Mr. Chaudhuri on behalf of the representative of the judgment-debtor; first, that there was no notice under Order XXI, rule 22, secondly, that such notice as was issued was not properly served in accordance with the order for substituted service made by the Subordinate Judge, and, thirdly, that the learned Judge should not have rejected the application on the side of the judgment-debtor for adjournment of the hearing of the application. The second and third questions, in the view I take of the case, do not arise. As regards the argument relating to Order XXI, rule 22, what appears to have happened was that when Mr. C.J Smith, the judgment-debtor, died there was a petition on the part of the decree-holder to substitute Mrs. D. Smith and Mr. T. Smith as the legal representatives of the judgment-debtor. Petitions to that effect were filed before the Subordinate Judge and ultimately, after the notice which has been questioned in this case had been served, an order was made on the 21st September, 1928, substituting the persons I have named in place of Mr. C.J Smith Order XXI, rule 22, provides that
“where an application for execution is made against the legal representative of a party to the decree the court executing the decree shall issue a notice to the person against whom execution is applied for requiring him to show cause, on a date to be fixed, why the decree should not be executed against him.”
It is admitted, and cannot be denied, that no such notice as is contemplated by Order XXI, rule 22, was ever served upon any person. I have already referred to the nature of the notice which in fact was alleged to have been served, that being a notice for substitution and from one point of view it has been argued that because the decree-holder has done something an excess of what is necessary in the circumstances it cannot be held that the sale was invalid.
The learned Advocate on behalf of the respondents in this case argues that Order XXI, rule 22, applies only to those cases in which execution is issued for the first time against the illegal representative of a party to the decree and it is not contemplated by that rule that such a notice should for issued in a case where execution has been taken out against a judgment-debtor, as in this case, where subsequently the judgment-debtor dies and then execution is sought to be taken out against the legal representatives. The argument, therefore, appears to be that in these circumstances the proper application to be made was in fact made, namely, an application for substitution. A case in the Madras High Court, Ramanathan Chettiar v. Ramanathan Chettiar, is quoted in support of that argument. This matter, however, appears to have been finally decided in the case of Raghunath Das v. Sundar Das Khetri. In the first place I must state that the case just mentioned was decided under the Code of 1882, section 248 being similar to Order XXI, rule 22 of the present Civil Procedure Code. There is this difference. There is a difference in the arrangement of the sentences and in the present rule there is a proviso or sub-clause which gives the Court jurisdiction to omit the notice in cases where the issue of such notice would cause unreasonable delay or defeat the ends of justice. In dealing with the point which has been argued on this provision it must be said that it cannot be denied that this is not a case in which the Judge considered that unreasonable delay had occurred or that the ends of justice would be defeated which, therefore, excused the issue of such notice. I have already pointed out, in an earlier part of my observations, that the parties and the Court appear to have been under the impression, that they were, carrying out the provisions of the Code by issuing a, notice upon the legal representatives to shew cause why they should not be substituted. It is, therefore, quite clear that this, is not a case which comes under the sub-clause of Order XXI, rule 22. Apart from that sub-clause I have already stated that the provisions of the rule are similar to those of section 248. Now to go back to the case of Raghunath Das v. Sundar Das Khetri, Lord Parker of Waddington, delivering the opinion of the Judicial Committee of the Privy-Council stated that the omission of a notice under section 248 resulted in the sale being void. In the case of the Madras High Court it was sought to differentiate the case of the Judicial Committee of the Privy Council, to which I have just referred, on two grounds, first that the expression “legal representative” was not used by the learned law Lord who delivered the decision of the Judicial Committee, and, secondly, that there was no explicit statement by him that the sale was void. Always assuming that the decision of the Madras High Court was correctly reported I would say with great respect that I do not agree with the observations to which I have just referred. First, so far as the fact that Lord Parker did not mention the expression “legal representative” is concerned, the answer is that he was dealing with section 248 which expressly used those words in sub-clause (b) and which he was applying to the facts of the case, and, secondly, so far as not stating that the sale was void, he expressly came to the conclusion that a purchaser who had purchased property in an execution sale in which a notice under sub-clause (b) had been omitted had got no title from his purchase.
As regards the main question which has been argued on behalf of the respondents, namely, that Order XXI, rule 22, applies only to those cases in which execution is taken out against the representative of the judgment-debtor in the first instance, the answer is also contained in the case of Raghunath Das v. Sundar Das Khetri. That was a case in which execution was taken out against the judgment-debtor. He then became insolvent. An official receiver or assignee was appointed and the notice which was taken out by the decree-holder was the same kind of notice which was taken out in the case before us, namely, a notice to shew cause why he should not be joined or substituted in place of the judgment-debtor. It was pointed out by the Judicial Committee that notice was not correct. A form of notice was provided for by section 248, that is to say, a notice to the party against whom execution is applied for requiring him to shew cause, within a period to be fixed, why the decree should not be executed against him. The reasons why the section should be strictly applied were pointed out by Lord Parker and in any event the I have already stated, definitely decides the two questions before us, first, that Order XXI, rule 22, applies to a case of this kind, and, secondly, that if no notice has been issued as contemplated by Order XXI, rule 22, sub-clause (b), then the sale was invalid.
Arriving at this conclusion as I do, the other two questions argued by the appellant do not arise but I propose to express my view on the first. The question was whether the notice in fact was served. The learned Subordinate Judge relied upon the affidavit of the peon who purported to serve the notice. He said that he went to Bagdigi colliery and, on identification, the peon, finding Mr. Sen the proper officer of the judgment-debtor present, gave him the notice. The affidavit goes on to say that on the refusal of Mr. Sen to accept the notice and give a receipt it was affixed to the outer door of the judgment-debtor's office. The learned Subordinate Judge, in my opinion, was entitled to rely upon this as prima facie evidence of service. It is said that there was no evidence that Mr. Sen was the proper officer but in the absence of evidence on the part of the judgment-debtor or his representative it was not for the decree-holder or the officer of the Court, whoever he might be, to set out in detail the reasons why he came to the conclusion that Mr. Sen was the proper officer of the judgment-debtor. It was further argued that the address was not the proper address of the judgment-debtor, that the colliery was in the hands of a receiver and that in all probability Mr. Sen was the officer or manager of the receiver. I have already stated, and repeat, that no evidence at all was given in the court below and the only documents relied upon in this Court are a petition of the receiver and a petition of the petitioner before us. In my opinion we cannot look to these to establish the fact that the property was in the hands of a receiver. For these reasons, if it were necessary to express an opinion, I should be satisfied that the proof which was given was sufficient to entitle the Court to proceed. In these circumstances the, appeal must be allowed with, costs and the sale must be set aside. The purchase money paid and distributed amongst the creditors will be refunded to the decree-holder.
Fazl Ali, J.:— It was held by the Judicial Committee in Raghunath Das v. Sundar Das Khetri that a notice calling upon the official assignee to shew cause why he should not be substituted for the insolvent judgment-debtor was not a proper notice under section 248 of the Code of Civil Procedure of 1882 (a provision to which Order XXI, rule 22 of the present Code corresponds) and that the notice under that section should have called upon him to shew cause why the decree should not be executed against him. In view of this decision, it is difficult to construe the notice, dated the 30th August, 1928, issued by the Subordinate Judge as a notice under Order XXI, rule 22. Assuming, however, that it may be treated as such, I am not at all sure whether on the materials on the record it can be held that the notice was properly served. It is true that primarily it is for the judgment-debtor to prove that the notice was not served, but it is open to the judgment-debtor to argue on the materials placed on the record on behalf of the decree-holder that there was no proper service of the notice. In this case all that we have before us is the report of the peon and an affidavit of the identifier who accompanied the peon to serve the notice. The peon says in his report that the notice was presented to one Mr. Sen
“an officer competent to accept the notice in the name of the defendants.”
but he refused to accept it and give a receipt and so the notice was affixed on the outer door of the office. The same facts are repeated in the affidavit of the identifier who describes Mr. Sen as
“the proper officer of the judgment-debtors.”
One would have expected some clearer description as to who Mr. Sen is and what connection he has with the heirs of the judgment-debtor to whom the notice was addressed and, after all, the description given of this gentleman by the peon as well as by the identifier merely represent their opinion that he was a person competent to accept notice on behalf of the judgment-debtors but they do not shew in what way he represented them. Order V, rule 12, provides
“Wherever it is practicable, service shall be made on the defendant in person, unless he has an agent empowered to accept service, in which case service on such agent shall be sufficient.”
There is nothing on the record to shew, beyond the mere opinion of the peon and the identifier that Mr. Sen was empowered to accept service on behalf of the persons to whom the notice was issued. Again Order V, rule 17, says that the notice may be affixed on the outer door or some other conspicuous part of the house in which the defendant ordinarily resides or carries, on business or personally works for gain, if the defendant or his agent refuses to sign the acknowledgment. It cannot be said that the persons to whom the notice was addressed resided at the colliery where the notice was sent, because in the application-filed by the decree-holder, dated the 30th August, 1928, it is: said that Mr. T. Smith resides at Khorassi Estate, Purnea, and Mrs. D.M Smith resides at 10 Anwar Sha Road, Calcutta. It is also urged on behalf of the appellant, and the statement is supported by the second order recorded in the order-sheet of this case, that Bagdigi colliery was in the possession of a receiver appointed by the Court and so it is difficult to say that the persons who were being proceeded against were at the moment carrying on business or personally working for gain at this, colliery, I am, therefore, inclined to think that there was neither a valid notice under Order XXI, rule 22, in this case nor was the notice which was regarded as such by the learned Subordinate Judge properly served. In this view I agree that the appeal should be allowed with costs.
Appeal allowed.
Alert