We are invited in this appeal to discharge an order made by the Court below, the effect of which is to reverse a sale of a mortgage-decree in execution of a money-decree against the decree-holders. The circumstances which render necessary a decision upon the question of the legality of this sale, are all matters of record, and do not admit of serious controversy. On various dates between the 20th March 1893 and 30th March 1895, Pamela Lambart, the widow of one William Mackeon, borrowed large sums of money from Dwarka Nath Mitter of this city and hypothecated the interest she had obtained in the estate of her deceased husband under the will of the latter. After the death of Dwarka Nath, his brother Amrita Nath as administrator and his widow Madhabmoni as administratrix of the estate left by him commenced an action on the 30th September 1901 to enforce the mortgage securities. They joined as parties Defendants the mortgagor, one, Sarat Kumari, the purchaser of the equity of redemption, and two daughters of the mortgagor Mary and Rachel who, subject to the life-interest of their mother, had apparently a right to maintenance out of the estate of their father. On the 30th March 1904, the suit was decreed against the first two Defendants, the mortgagor and her assignee; and the usual directions for foreclosure of the life-interest of the mortgagor in the mortgaged premises was given. The suit was, however, dismissed against the third and fourth Defendants, the daughters of the mortgagor, and a decree was made in their favour for costs of the litigation. The result was that there was a decree for foreclosure of the life-interest of the mortgagor in favour of the representatives of the mortgagee, and there was also a decree for costs against the latter in favour of the daughters of the mortgagor. An appeal was preferred against this decree by Amrita Nath alone to this Court but on the 5th March 1907 the Appellant obtained leave to withdraw the appeal. This conduct on the part of Amrita Nath is explained by events which had happened in the meanwhile. Shortly after the mortgage-decree had been made on the 30th March 1904, disputes broke out between Amrita Nath and his sister-in-law, Madhabmoni, and the latter commenced an action against the former in the Original Side of this Court for administration of the estate of her husband, for possession thereof as beneficiary, for appointment of a Receiver pendente lite and for incidental reliefe. On the 21st August this Court appointed the Receiver of the Court to be Receiver of the moveable properties and of the rents, issues and profits of the immoveable properties comprised in the estate of Dwarka Nath Mitter. The Receiver took possession accordingly, and continued to act till on the 30th July 1908 he was directed by an order of the Court to deliver possession of the immoveable properties to Madhabmoni. This he did towards the end of August 1908 and continued as Receiver thereafter in respect of the moveable properties only. While the Receiver was thus in possession of the entire estate, the daughters of the mortgagor, on the 6th May 1908, applied for execution of the decree for costs in their favour and they prayed that the foreclosure decree might be attached and sold. As more than one year had elapsed from the date of the decree, notice was directed to be served upon the judgment-debtors under sec. 248 of the Code of 1882. The judgment-debtors mentioned as such in the application for execution were of course Amrita Nath and Madhabmoni. The Court was not apprised that a Receiver had been appointed by the High Court, and had taken possession of the estate of Dwarka Nath, although there is evidence to show that as early as February or March 1908, the daughters of the mortgagor were aware of the appointment of the Receiver. The notices directed to the two judgment-debtors were served on the 15th May 1908 at the residence of Amrita Nath Mitter, but the evidence shows conclusively that Madhabmoni of that time resided at a different place in the suburbs, on account of the disputes which had broken out between herself and her brother-in-law. On the 27th May 1908, notices of attachment under sec. 273 of the Code of 1882 were similarly served in Calcutta at the residence of Amrita Nath. On the 8th July 1908 the sale appears to have been proclaimed on the mortgaged house, and on the day following, the sale-proclamation was fixed up in the Court house under sec. 283. In the sale-proclamation it was stated that the property to be sold was the life-interest of the widow of Mackeon and that she was an old lady of 73. The sale was held on the nth August 1903. There were two bidders only of whom one Mrs. Ashton, the aunt of the daughters of mortgagor, purchased the mortgage-decree for Rs. 450. It is worthy of note that the decree was for a sum of over Rs. 45,000 while the costs recoverable by the daughters of the mortgagor did not exceed Rs. 1,000. On the 4th November 1908 the sale was confirmed. In the interval, Madhabmoni having obtained delivery of possession of the immoveable properties from the Receiver, applied to the Court for an order absolute on the basis of the foreclosure decree. On the 19th December 1908, Mrs. Ashton preferred an objection on the ground that she had purchased the decree at the execution-sale and was consequently the only person entitled to ask for an order absolute. Madhabmoni thus apprised of the execution-sale, applied on the 23rd December 1908 for reversal of the sale on the grounds that no notice under sec. 248 had ever been served upon her and that the sale of the foreclosure-decree, while the entire estate was in the hands of a duly appointed Receiver, was illegal. On the 27th March 1909, the Receiver with the leave of the High Court applied for permission to join Madhabmoni in her application to set aside the sale and the Subordinate Judge made a provisional order to enable him to prosecute the application jointly. On the 7th July 1909, the Court below held that the Receiver had no locus standi; but directed the sale to be set aside at the instance of Madhabmoni on the ground that notice under sec. 248 had not been served upon her. The validity of this order is the subject of controversy in this appeal preferred by the auction-purchaser.
In support of the appeal, it has been contended that the omission to serve a notice under sec. 248 does not necessarily invalidate a sale, specially when the purchaser is a stranger to the proceedings, that, in any event, the sale cannot be set aside without strict proof that the judgment-debtor has been in Some way prejudiced by the irregularity, that the mere fact that a Receiver had been appointed does not affect the validity of the sale; and finally, that in any view the judgment-debtor cannot urge any objection on this ground. All these points have been strenuously contested on behalf of the Respondents and it has further been suggested that the proceedings were throughout fraudulent and the purchase was really for the benefit of the daughters of the mortgagor.
The first point which requires consideration is the effect of the execution proceedings taken at a time when the Receiver appointed by this Court was in possession of the estate of Dwarka Nath Mitter. On behalf of the Appellant, it has been contended that although execution against property in the custody of a Receiver may amount to a contempt of the authority of the Court by which the Receiver had been appointed, it does not necessarily invalidate the sale and that the judgment-debtor has in the present case no legitimate ground for complaint. In our opinion, this contention is not well-founded and cannot be allowed to prevail. The general rule is well settled that property in the hands of a Receiver is exempt from judicial process, except of course to the extent permitted by the appointing Court, Try v. Try(1), De Winton v. Brecon(2), Lane v. Sterne(3). It has even been affirmed that though an attachment was levied on property before the appointment of the Receiver, it is within the sound discretion of the appointing Court to refuse to permit a sale of the property thereunder. On this principle, it has been held that property in the hands of a Receiver, though subject to a paramount judgment, cannot be sold under execution without leave of Court. A purchaser of such property at an execution sale buys at his peril, and the sale may be cancelled upon an appropriate application to the execution Court. The question was elaborately examined by the Supreme Court of the United States in Wiswall v. Sampson(4), and it was ruled that where real estate is in the custody of a Receiver appointed by a Court of Chancery, a sale of the property under an execution issued by virtue of a judgment-at-law is illegal and may on this ground be avoided. The decision was based on the ground that the property is in the custody of the Court through its Receiver as a fund abiding the result of the pending suit and all proceedings affecting such fund should be under the control of the Court having its custody; hence a sale of such property under execution or otherwise without leave of such Court is illegal and may be set aside. The same view was emphasised in the cases of Heedritter v. Elizabeth(5) and In re Tyler(6) in which the doctrine was laid down that if the contrary view Were maintained, the very object of the appointment of a Receiver might be defeated; the whole fund may pass out of the hands of the Court before the final decree and the litigation thus become fruitless. This doctrine has been recognised and applied in numerous cases, which will be found collected in Rosi's notes, Vol. V, p. 228. In two of these Walling v. Miller(7), and Texas Trank Railway v. Lewis(8), it was pointed out that while a levy upon property in the pessession of a Receiver may be punished by an appropriate procedure for contempt of Court, that is not the only remedy open to the party aggrieved, but as the levy upon and sale of the property upon such circumstances is absolutely illegal because unauthorised by law, the sale may be avoided and possession recovered in any appropriate action commenced against the purchaser at the execution sale or against any other person to whom possession of such property has come. To the same effect is the opinion of leading text-writers on the subject, amongst whom reference may be made to Freeman (Executions, Vol. I, sec. 129, and Vol. II, sec. 287), and Kleber (Void Judicial Sales, sec. 309). On the principles explained above, we must hold that the sale held on the nth August 1908 after the Receiver had been appointed and before he had relinquished charge of the property ought to be set aside. We may add that it was faintly suggested at one stage of the argument on behalf of the Appellant that the Receiver had not been appointed in respect of the foreclosure-decree and there was some discussion upon the question, whether a foreclosure-decree should be deemed to be moveable or immoveable property. It is needless to examine this matter in detail, because we are satisfied that the Receiver was appointed in respect of the whole estate of Dwarka Nath Mitter in controversy in the administration action it is well-settled under the English Law that a Receiver of lands does not take actual possession but he only receives the rents and he does so, not by virtue of the estate vested in him, but merely as an officer of the Court authorised to collect the rents upon the title of persons who are parties to the action; Exp. Evans(9), Vine v. Raleigh(10). The direction, therefore, to the Receiver to take possession of the moveable property and of the rents and profits of the immoveable properties does not justify the conclusion that the Receiver was not appointed in respect of the foreclosure-decree. Besides, as he was expressly authorised to get in and collect all debts and claims due to the estate, he had ample authority to apply for an order absolute on the decree nisi for foreclosure. Upon the first question, therefore, we must hold in favour of the Respondents.
The second question which requires consideration is the effect of the omission to issue a notice under sec. 248, C.P.C upon one of the judgment-debtors, Madhabmoni. On behalf of the Appellant it has been contended that on the authority of the decision of their Lordships of the Judicial Committee in Malkarjun v. Narhati that such omission is a mere irregularity and does not necessarily invalidate the sale. On the other hand, on behalf of the Respondents, reliance has been placed upon the cases of Rajbullub v. Gossain Dass(12), Ramessuree Dassee v. Durgadas(13), Imamunnissa v. Liakat Hussain(14), Gopal Chunder v. Gunamoni(15) and Sahadeo v. Ghasi Ram(16) to show that a sale held in execution of a decree without issue of a requisite notice under sec. 248 is, on that ground alone, invalidated. We have carefully examined the cases relied upon on both sides, as also the decision of the Bombay High Court in Parashram v. Balmukund It may be conceded that there are expressions in some of these judgments which are not easy to reconcile with the decision of the Judicial Committee in Malkarjun v. Naihari. This case is an authority for the proposition that a sale held without issue of notice under sec. 248 is not a nullity and cannot be ignored by the party whose property has been sold as if the sale had never taken place; but such omission is a serious irregularity. In one passage in their judgment, their Lordships observe that omission to serve notice on the legal representative is a serious irregularity sufficient by itself to entitle the Plaintiff to vacate the sale and then they add that there may be defences to such a proceeding and justice cannot be done unless those defences are examined by legal methods. In the case then before their Lordships, no proceedings had been taken to impugn the sale within one year thereof, and with reference to this circumstance the following observation is made:— “If the sale is a reality at all, it is a reality defeasible only in the way pointed out by law; and it seems to their Lordships that the case must fall either within sec. 311 of the Code or within Article 12(a) of the Limitation Act of 1877 or within both; any way there exists a bar by one year's delay.” In other words a sale impeached for such irregularity must be set aside either by a suit [Gopal Chunder v. Gunamoni] or by an appropriate application in the execution proceedings [Sakadeo v. Ghasi Ram]. It may be observed, however, that sec. 311 of the Code of 1882 would hardly be applicable as the irregularities mentioned in that section refer to the publication or conduct of the sale, that is, to the proclamation of the sale under sec. 287 and to the action of the officer by whom the sale is held. In this view the proceeding would be one under sec. 244 [Parashram v. Balmukund], and the matter could not be made the subject of controversy in a regular suit. In the present proceeding, therefore, the judgment-debtor is entitled to impeach the validity of the sale. What defence, then, in the language of the Judicial Committee, is open to the auction-purchaser in such a proceeding? It was faintly suggested on behalf of the Appellant that the judgment-debtor has not been prejudiced by the omission to serve notice under sec. 248, C.P.C We are unable to accept this contention as sound. As observed by Farran, C.J, in Erava v. Sidramappa, the object of a notice under sec. 248 is not merely to give the judgment-debtor opportunity to show cause why the decree should not be executed, because, for instance, it is time-barred or has been adjusted, but also to give him an opportunity to satisfy it before execution issues. In the case before us, the wisdom of such a provision in the law is very forcibly illustrated. The estate of Dwarka Nath was in the hands of two administrators, one of whom, the widow, was the ultimate beneficiary. Disputes had broken out between them and the estate had passed into the hands of a Receiver. Execution was taken out for a small sum and the only notice attempted to be served was upon the one administrator who in the events which had happened had no interest in the preservation of the property. Neither the beneficiary nor the Receiver was apprised of the execution. The result was that a foreclosure-decree for over Rs. 45,000 was purchased by a near relation of the decree-holders for the insiguificant sum of Rs. 450. It was suggested, indeed, that the property was not undersold. This suggestion proves to be obviously groundless when we remember that the rent of the house was Rs. 150 a month, and a sale of the life-interest for three months' purchase, could hardly be seriously defended as adequate. Besides, in the sale-proclamation, it had been stated that the age of the lady whose life-interest was to be sold was 73, a recital of which upon the evidence that she was about 60 years old, was grossly inaccurate and would effectually frighten away intending bidders. Under these circumstances the conclusion appears to us to be irresistible that an application made to set aside the sale on the ground of want of the requisite notice under sec. 248 must succeed. We may add that the view we take, namely, that the omission to serve a notice under sec. 248 is a serious irregularity which makes the sale voidable in an appropriate proceeding, has been recognised as sound in cases of the highest authority. As explained by this Court in the case of Jogendra Chandra v. Sham Das, the provisions of sec. 248 have been borrowed from the English procedure for a writ of scire facias. In England, it is well-settled, that if execution is issued on a judgment without issue of a notice where such notice is essential, the execution is not necessarily a nullity, though it would be set aside as wholly irregular if proceedings had duly been taken in that behalf. Blanchenay v. Burt(20), Good Title v. Badtitle(21). The same rule has been adopted in the American Courts, as is shown by the cases of Eddy v. Caldwall(22), De Loach v. Robberies(23) and Gardner v. Mobile(24) in which it was ruled that if a writ of scire facias has not been served out, the sale is nevertheless valid till it is avoided, in other words, it is an irregularity which is waived by failure to move to quash the writ. In the present case, on the principle explained above, the judgment-debtor was amply justified in his application to set aside the sale and as no valid defence has been suggested, the sale must be reversed.
Two arguments were addressed to us on behalf of the Appellant which require some notice. It was contended in the first place that as the application to set aside the sale had been made after its confirmation, the sale could not be attacked on the ground of any irregularity. In the second place it was contended that as the auction-purchaser was a stranger to the execution proceedings the sale could not be impeached at all. The first of these positions was sought to be supported by a reference to the decision in Balkrishna v. Masuma Bibi(25) and Muhesh Narain v. Kishnand Misr(26). The cases referred to, however, are clearly distinguishable. Even if it is assumed that the grant of the sale-certificate cures all irregularities in the proceedings antecedent to the sale, the principle cannot be applied where the person affected has no notice of the proceedings, and is thus prevented from attacking the legality of the proceedings before the sale is actually held. In fact there are numerous cases in the books in which the validity of sale has been allowed to be impeached after confirmation. Bhubon Mohan v. Nund Lal(27), Durga Charan v. Kali Prosanna(28) and Thathu Naik v. Konden Reddi(29). The principle was also expressly recognised by this Court in the Full Bench decision in Ashutosh v. Behari Lal. The contention of the Appellant to the contrary must consequently be negatived. In support of the second contention, namely, that the sale cannot be impeached as the purchaser is a stranger to the execution proceedings, reference has been made to the cases of Rawa Mahton v. Ram Kissen(31), Culvert v. Godfrey(32) and Bennett v. Hamill(33). These cases, however, are clearly distinguishable and are not authorities for the broad proposition that a purchase at an execution sale by a stranger can under no circumstances be set aside. The authorities on the subject are reviewed in the judgment of this Court in Janukdhari Lal v. Gossain Lal(34). No doubt if at an execution sale the property has passed into the hands of a stranger, and the decree is ultimately set aside because made ex parte or is reversed on appeal, the validity of the sale is not affected thereby, nor his title affected if the sale has taken place on the basis of a decree the claim under which ought to have been set off against another judgment-debt. But it cannot be mentioned that if there are good grounds for reversal of the sale under sec. 244 or 311, C.P.C the sale cannot be set aside because the purchaser happens to be a stranger to the proceedings. The second contention of the Appellant must therefore be overruled.
We may add that on behalf of the Respondents, it was suggested that as the language of the sec. 248, C.P.C is mandatory, a sale held without issue of the requisite notice is in contravention of an express provision of the law and is consequently a nullity. This argument, in our opinion, is not well-founded. As was pointed out by this Court in Ashutosh v. Behari Lal, no general rule can be laid down to determine whether a provision in a Statute is absolute or directory, and although the language used may be mandatory, it is by no means conclusive. One test which may usefully be applied is whether a party may waive the benefit of the particular provision. If it can be waived, a sale held in contravention of such a provision, is not a nullity, it stands good till it has been avoided by an appropriate proceeding. From this point of view, the conclusion appears to be irresistible that the sale held in this case is open to successful attack, both on the ground that notice under sec. 248, C.P.C was not served upon one of the judgment-debtors and that the execution proceedings culminating in the sale were taken when the estate was in the hands of a Receiver.
The result, therefore, is that the order of the Court below must be affirmed and this appeal dismissed with costs. We assess the hearing fee at five gold mohurs.
N.G
Appeal dismissed.