Fazl Ali, C.J:— This is an appeal from an order passed by the Subordinate Judge of Hazaribagh in certain proceedings under Section 144 of the Code of Civil Procedure.

The circumstances under which these proceedings were instituted were these:

Sometime in 1936 the respondent no. 2 instituted a suit in which he claimed in the first instance the ejectment of the respondent no. 1 from a certain building as well as the compound and the out-houses attached to it and in the alternative he claimed for assessment of fair and equitable rent and for recovery of the rent so assessed for a period of three years. The claim for ejectment was dismissed by the trial Court, but a decree for a sum of Rs. 14,000 was passed in favour of respondent no. 2 as representing the arrears of rent for three years. The respondent no. 1 thereupon appealed to the High Court and the respondent no. 2 preferred a cross-objection. Ultimately the appeal of the respondent no. 1 was allowed and the entire suit was dismissed with costs. While the appeal was pending in the High Court the respondent no. 2 applied for the execution of the decree passed by the trial Court and got the property which was the subject-matter of the ejectment suit sold on the 4th February, 1939, and this property was purchased by the appellant who subsequently took possession of the same through Court on the 18th April, 1939. Subsequently on the 8th May, 1941, after the appeal of the respondent no. 1 was allowed by the High Court he filed an application for setting aside the sale and for restitution as well as for recovery of damages and mesne profits under sections 144 and 151 of the Code of Civil Procedure in the Court of the Subordinate Judge of Hazaribagh. Upon this application the learned Subordinate Judge passed the following order:

“All things considered I hold that the applicant is entitled to get the auction, sale set aside and take back possession of the property under claim from the opposite party no. 2. His petition is silent as to the amount of damage or mesne profits claimed by him and neither did he see his way to adduce any evidence on the point. This part of his claim is therefore rejected. The petition is allowed accordingly in part and the auction sale is hereby set aside. The applicant will be restored to possession of the disputed property and he is allowed full costs……… It may be noted that in the circumstances of the case the Bank opposite party no. 2 is entitled to get a refund of the sale proceeds.”

The Chota Nagpur Banking Association who are referred to in the above order as opposite party no. 2 have now preferred this Miscellaneous Appeal and the point which has been raised on their behalf is that the order of the learned Subordinate Judge directing them to restore possession of the disputed property to respondent no. 1 is illegal and therefore fit to be set aside.

The learned Advocate for the appellant in this Court has in support of the appeal relied on a number of decisions notably the decisions of the Privy Council in Zain-ul-abdin Khan v. Muhammad Ashgar Ali Khan and Rewa Mahton v. Ram Kishen Singh.

It was held in Zainul-abdin's case that a sale having duly taken place in execution of a decree in force at the time cannot afterwards be set aside as against a bona fide purchaser not a party to the decree on the ground that on further proceedings the decree has been subsequently to the sale reversed by an appellate Court. In that case a suit had been brought by the judgment-debtor to set aside sales of his property in execution of a decree against him in force at the time of the sales. That decree was afterwards modified as the result of an appeal to the Privy Council with the result that it would have been satisfied without the sale of some of the properties which had already been sold. In the suit which the judgment-debtor brought he impleaded both those who were purchasers at some of the sales as well as the holders of the decree to satisfy which the sales had taken place. One of the purchasers was found to be a bona fide purchaser who was no party to the decree and so far as he was concerned the Privy Council held that the sale could not be set aside.

In Rewa Mahton's case, upon which reliance has been placed on behalf of the appellant, it was held that if a Court ordering a sale in execution of a decree has jurisdiction to do so, a purchaser of the property sold is not bound to enquire into the correctness of the order for execution any more than into the correctness of the judgment upon which the execution issues, and that where the property had been sold in execution of a valid decree under the order of a competent Court and had been purchased bona fide and for fair value, the mere existence of a cross-decree for a higher amount in favour of the judgment-debtor, without any question of fraud, would not support a suit by the latter against the purchaser to set aside the sale.

From these two cases a rule has been evolved which has been followed by almost all the High Courts in India that while as against a decree-holder when he is himself the auction-purchaser, a sale can be set aside and restitution made, an innocent purchaser through Court cannot ordinarily be so disturbed. [See Piari Lal v. Hanif-un-nisa Bibi; Paresh Nath Mullick v. Hari Charan Dey; Narendra Chandra Mondol v. Jogendra Narain Rai, T.S Rama-swami, Ayyangar, Official Receiver, Madura v. Chettiappa Chetty]. Now relying upon these cases the learned Advocate for the appellant contends that in the present case the sale cannot be set aside because the appellant Banking Association were not a party to the suit. In my opinion, however, in order to apply the principle which underlies the decisions it will be necessary to refer to certain important facts. It appears that the appellant Banking Association had a mortgage upon the property purchased by them for a sum of Rs. 2,50,000. It was conceded before us that in the mortgage deed which they held it is clearly recited that the property in question is rent-free. It has further been brought to our notice that they were fully cognizant of the execution proceedings while they were pending and they had made an application in the first instance for the notification of their encumbrance at the time of the sale. We have also been referred to an affidavit which was filed on their behalf on the 16th November, 1938, that is to say, before the sale but after an appeal had been filed to the High Court in which it was stated on their behalf by one of their employees that they held, a mortgage of the property in dispute and were looking after the appeal on behalf of the appellant, that is to say the respondent no. 1 in the present appeal. It may be stated that the appeal was preferred in the High Court on the 18th July, 1938, and the sale in controversy in this appeal did not take place until the 4th February, 1939. This affidavit, as I have already stated, was filed on the 16th November, 1938. Subsequently even after the property had been purchased by the appellant, Banking Association, they made an application to the High Court on the 29th April, 1940, asking for their being substituted in the appeal with the following prayer:

“That a rule may be issued on the parties to the appeal to show cause why the petitioner should not be substituted in place of the appellant and after hearing your petitioner substitute him in place of the appellant or pass such orders as may seem fit and proper.”

On this application the appellant, Banking Association, were impleaded as respondent and the appeal was heard and the judgment delivered in their presence. Now the question which arises is whether in view of these special circumstances the appellant can successfully invoke the rule which has been laid down in regard to bona fide purchasers for value and maintain that they are not bound by the decree and they are not bound, to restore the property to the respondent no. 1 even though the decree in execution of which they purchased the property was set aside in the appeal to which they were party. In my opinion the answer to this question must be given in the negative. Section 144 of the Code of Civil Procedure embodies a well established rule of equity that on the reversal of a decree the party against whom the wrong decree is passed should, as far as possible, be placed in the same position which he would have occupied but for such decree, because it is the duty of the Court to act rightly and fairly according to the circumstances towards all the parties involved and to remove as far as possible the consequence of a wrong or unjust decree. One can understand this rule being relaxed in those cases where it conflicts with another rule of equity, namely, that a bona fide purchaser for value should not be allowed to suffer on account of the mistakes or irregularities committed by a Court of law; but I do not see why it should be relaxed in favour of a party who had due notice of the fact that the decree in execution of which he was proceeding to purchase the property was liable to challenge and had been challenged because he cannot be deemed to have acted with due care and caution if in spite of such notice he proceeded to purchase the property. Mr. De contends that the rule laid down by the Privy Council is an absolute one and should be applied to everyone who is not a party to the proceeding in which the wrong decree was passed irrespective of whether he was cognizant or not of the merits of the plaintiff's claim or the validity of the decree in question. In my opinion, however, the cases which have been cited on his behalf do not lend support to this sweeping conclusion. It is true that a stranger to the decree is not bound to enquire into the merits of the plaintiff's claim or into the validity of the decree and therefore ordinarily the presumption is that such a person is unaware of these matters, but where there is clear and cogent evidence that he was fully aware of the merits of the controversy in regard to the property purchased by him and was also aware that the validity of the decree was under challenge, there is no room for that presumption. In my opinion the case before us is precisely one to which the rule laid down by the Privy Council, cannot be made applicable. The appellant, Banking Association, being a mortgagee of the very property which has been purchased must be deemed to have known all about the property and were on their own affidavit looking after the case for the appellant in the High “Court on a date prior to the sale. The appellant-bank further became a party to the appeal and courted a decision in the case in their own presence. If in these circumstances the decree in execution of which the property was purchased by the appellant is set aside, I find it difficult to hold that the appellant can still invoke the benefit of the doctrine which applies only to a bona fide purchaser for value. In my opinion, therefore, the order passed by the learned Subordinate Judge was correct and the property must be restored by the appellant to the respondent no. 1.

It was also contended in the alternative that the appellant is entitled to get a refund of the sale proceeds and that there should be an order upon the respondent no. 2 to pay back the sum which has been withdrawn by him as the price of the sale. In my opinion this contention is quite sound and I also find that the learned Subordinate Judge was of the same opinion because he has stated in so many words that “the Bank is entitled to get a refund of the sale proceeds”. Unfortunately, however, the order passed by the learned Subordinate Judge may give rise to the misconception that there being no precise order directing the respondent no. 2 to refund the money, it cannot be recovered in this proceeding. I would, therefore, while dismissing the appeal, make it clear that the appellant is entitled to recover such sum as may have been withdrawn by the respondent no. 2 and may be legally recoverable from him in the present proceeding.

It is contended on behalf of the appellant that the appellant should be awarded interest on the sum, but no interest can be awarded because the appellant is admittedly in possession of the property and the claim of the respondent no. 1 for mesne profits has been disallowed. It may, however, be made clear that the appellant-bank will be entitled to interest at six per cent, per annum from the date they give up possession of the property until the date when the money is realised from the respondent no. 2.

The respondent no. 1 is entitled to the costs of this appeal as against the appellant.

Sinha, J.:— I entirely agree.

Appeal dismissed.

K.D