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Shiv Narain Tewari v. District Magistrate
Structured Summary of the Legal Opinion (R.A. Sharma, J.)
Factual and Procedural Background
The petitioner (Sheo Narain Tiwari) took a loan from the U.P. Financial Corporation to establish a factory under the name M/s. Nisha Oil Udyog (an unregistered concern of which the petitioner is the sole proprietor) for production of mustard oil. Loan repayment default led the Corporation to initiate recovery proceedings by treating the amount as arrears of land revenue. In execution of those proceedings, the petitioner's bus (registration UPO 3327) was attached by actual seizure on 22-8-1990 and was sold at public auction on 6-9-1990 to Sri Ghanshyam (respondent No. 8) for Rs. 1,75,000/-. The purchaser (respondent No. 8) deposited the sale amount through respondent No. 6, was issued a sale certificate and given possession.
The petitioner initially filed Writ Petition No. 21900 of 1990 in the name of M/s. Nisha Oil Udyog and thereafter, after the auction, filed Writ Petition No. 25120 of 1990 in his personal name seeking quashing of the attachment and auction sale. At the admission stage respondents filed a counter-affidavit and the petitioner filed a rejoinder. The Court heard counsel for the petitioner and for the Corporation and proceeded to dispose of the writ petitions in accordance with court rules.
Legal Issues Presented
- Whether the petitioner's bus could be validly attached and sold in recovery proceedings against M/s. Nisha Oil Udyog given that the concern was an unregistered firm and the petitioner claimed the firm was not the owner of the bus (i.e., whether the sale was void ab initio).
- Whether the petitioner was denied opportunity to be heard in violation of the procedural requirements of Order 21 of the Civil Procedure Code (specifically Order 21, Rule 66 CPC, regarding notice and sale proclamation).
- Whether the petitioner could seek relief directly under Article 226 of the Constitution of India without first availing statutory remedies made available under the relevant recovery and execution provisions.
Arguments of the Parties
Petitioner's Arguments
- The bus of the petitioner (Sheo Narain Tiwari) could not be attached and sold to recover the loan of M/s. Nisha Oil Udyog because that firm was not the owner of the bus; therefore, attachment and sale were void ab initio and should be set aside.
- No opportunity of being heard was afforded to the petitioner under Order 21, Rule 66 of the CPC before the preparation and publication of the sale proclamation.
Respondents' Position (as reflected in the opinion)
- Respondents filed a counter-affidavit denying the allegations made by the petitioner and asserting that formalities for attachment and sale (including preparation of sale proclamation) were observed.
- The petitioner had full knowledge of the actual seizure (22-8-1990) and did not avail the procedure for objection under Order 21, Rule 58 CPC or object to the sale proclamation or at the auction; the purchaser paid the auction price and was issued a receipt, sale certificate and delivered possession, thereby making the sale absolute in his favour.
- The firm M/s. Nisha Oil Udyog was unregistered and being a name under which the petitioner carried on business, the petitioner (as sole proprietor) could not claim that his property was immune from attachment for the firm's debt.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Hira Lal v. State of U.P., 1978 All WC 538 (1978 All LJ NOC 69) | Interpretation of Rule 77, Order 21 CPC — payment of price and receipt make a sale of moveable property absolute; no further confirmation required. | The court relied on this authority to support the proposition that once the auction purchaser paid the purchase money and was given a receipt, the sale became absolute and did not require any further order for confirmation. |
| Bal Krishna v. Swadeshi Polytex Ltd., (1985) 2 SCC 167 : AIR 1985 SC 520 | On sale under Order 21 Rules 76/77, the purchaser acquires title. | The court cited this Supreme Court observation to reinforce that the auction purchaser acquired title upon the sale under the Rules quoted. |
| Smt. Shanti Devi v. State of U.P., 1979 Rev. Dec. 203 | Permissibility of writ relief where the petitioner had no knowledge of attachment/sale and statutory remedies became time-barred through no fault of the petitioner. | The court distinguished this case: unlike Smt. Shanti Devi, the present petitioner had notice and opportunity and statutory remedies were available; therefore the exception allowing writ relief did not apply here. |
| Khaki v. Harsinghpur Sadhan Sahkari Samiti, 1979 All WC 1 : 1979 All LJ 289 | Writ petition filed after exhausting available statutory remedies (context of appeal against arbitration award under U.P. Co-operative Societies Act). | The court noted the procedural posture in that case and used it to illustrate situations where statutory remedies were first pursued; it distinguished the present facts where statutory remedies were available but not used by the petitioner. |
| Ashok Kumar v. State of U.P., 1979 All LJ 203 | Interference under Article 226 where sale was without jurisdiction. | The court cited this authority to explain that interference is available where sales are without jurisdiction; it found the present sale was not shown to be without jurisdiction and therefore Ashok Kumar did not assist the petitioner. |
| Jalaluddin v. State of U.P., 1985 All LJ 437 | Interference where property was attached and sold without giving notice of demand — service of notice of demand is a condition precedent to attachment and sale. | The court relied on this principle to emphasize that lack of notice can vitiate a sale; but on the facts of the instant case the petitioner had notice and opportunity, so Jalaluddin was distinguished. |
Court's Reasoning and Analysis
The Court proceeded by identifying the statutory and procedural framework governing attachment and sale of movable property in recovery proceedings:
- Section 282 of the U.P. Zamindari Abolition and Land Reforms Act requires that attachments and sales to recover amounts treated as arrears of land revenue shall be carried out according to the law then in force for attachment and sale of movable property in execution of a civil court decree.
- Order 21 of the Civil Procedure Code (CPC) sets out the procedure for attachment and sale of movable property: Rule 43 (actual seizure of movable property in the judgment-debtor's possession), Rule 58 (objections against attachment on grounds of non-liability to attachment and the procedure to decide such objections, including appeal/suit remedies), Rule 66 (proclamation of sale by public auction to be drawn up after notice to decree-holder and judgment-debtor), Rule 77 (payment of purchase-money makes sale absolute once receipt is given), and Rule 78 (irregularities in publication/conduct of sale do not vitiate sale, though injured persons may sue for compensation).
Applying these principles to the facts before it, the Court observed:
- The bus was attached by actual seizure on 22-8-1990; the petitioner had full knowledge of that seizure and therefore the opportunity to invoke the objection procedure under Order 21, Rule 58 CPC. The petitioner did not file such an objection.
- Sale proclamation and other formalities were prepared and the allegations of irregularity against the sale proclamation were specifically denied by respondents; the petitioner did not challenge the proclamation or the auction proceedings at the time they occurred nor before the officer conducting the sale.
- The auction purchaser deposited the purchase-money and obtained a receipt; pursuant to Rule 77 the sale thereby became absolute and the purchaser was vested with ownership, having also been delivered possession and a sale certificate.
- Rule 78 was cited to note that mere irregularities in sale procedure do not automatically vitiate a sale of movable property — available relief for those injured is a suit for compensation — and the court emphasized that the statutory procedure for redress was not bypassed by the petitioner.
- On the substantive question of ownership/liability, the Court reasoned that M/s. Nisha Oil Udyog was an unregistered concern and that a firm which is not registered lacks distinct juristic personality; it is merely a name under which the proprietor carries on business. Because the petitioner was the sole proprietor, he could not claim that his property was immune from attachment for the firm’s liability.
- The Court considered authorities where writ relief had been granted — for example where the affected person had no knowledge of attachment and statutory remedies were time-barred — and distinguished those cases from the present facts where the petitioner had knowledge, had not utilized statutory remedies, and the sale was not shown to be without jurisdiction.
Based on these findings, the Court concluded that the petitioner could not, as a matter of course, bypass the statutory remedies and invoke Article 226 to set aside an absolute sale which resulted from the purchaser having paid the purchase money and taken possession.
Holding and Implications
Holding: Both writ petitions were dismissed with costs.
Implications:
- Direct effect on the parties: The auction sale of the bus to respondent No. 8 stands; respondent No. 8 became the absolute owner on deposit of the purchase money, receipt issuance, delivery of possession and issuance of sale certificate, and the Court refused to set aside that sale.
- Procedural consequence: The opinion emphasizes that when the statute and rules supply specific remedies (e.g., objection under Order 21, Rule 58; suits for compensation under Rule 78), a litigant who has knowledge and opportunity to use those remedies should not bypass them by seeking relief straightaway under Article 226.
- Broader legal precedent: The opinion does not purport to lay down a novel legal principle; it applies existing statutory rules and established authorities to the facts and distinguishes prior cases where writ relief was available because statutory remedies were ineffective or time-barred. No new legal doctrine was announced beyond the application of the cited authorities to the facts.
Disposition: Petitions dismissed.
R.A Sharma, J.:— Petitioner had taken loan from U.P Financial Corporation for establishing a factory in the name and style of M/s. Nisha Oil Udyog village Shah Tahsil and District Fatehpur for producing mustard oil M/s. Nisha Oil Udyog is not a registered body and the petitioner is its sole proprietor. Loan of the Corporation not, having been paid in accordance with the agreement, recovery proceedings for recovering the loan as arrears of land revenue were initiated and in pursuance thereof bus number UPO 3327 belonging to the petitioner was attached by its actual, seizure on 22-8-1990 and it was sold on 6-9-1990 by a public auction to Sri Ghanshyam, respondent No. 8 for a sum of Rs. 1,75,000/- and this amount having been deposited by the respondent No. 6, sale was completed and sale certificate was issued in his favour who was also given its possession.
2. Petitioner had first filed a writ petition No. 21900 of 1990 in the name of M/s. Nisha Oil Udyog through himself as proprietor for a writ in the nature of mandamus commanding the respondents to supply necessary notices of the outstanding amount and for quashing the entire recovery proceedings. After the bus was auctioned on 6-9-1990 the petitioner filed another writ petition No. 25120 of 1990 in his own name for quashing of attachment and auction sale of the bus in favour of respondent No. 8 At the admission stage, the respondents have filed counter-affidavit and the petitioner filed rejoiner-affidavit in reply thereto. We have heard Sri S.K Verma learned counsel for the petitioner and Sri H.R Mishra learned counsel for the Corporation and also learned Standing Counseland the writ petition is being disposed of in accordance with Rules of the Court. Learned counsel for the petitioner has challenged the attachment and auction of the bus on the grounds that (i) for recovering the loan of M/s. Nisha Oil Udyog the bus of the petitioner (Sheo Narain Tiwari) cannot be attached and sold in as much as the aforesaid firm is not its owner and attachment and sale being void ab initio is liable to be set aside by this court; (ii) no opportunity of being heard was given to the petitioner under Order 21, Rule 66 CPC before preparation and pubiication of sale proclamation.
3. Section 282 of the U.P Zamindari Abolition and Land Reforms Act (hereinafter referred to as Act) provides for attachment, and sale of moveable property for realising any amount as arrears of land revenue and its sub-section (2) lays that every attachment and sale shall be made according to the law in force for time being for attachment and sale of the moveable property in execution of decree of Civil Court. Sub-section (2).of Section 282 of the Act is quoted below:—
“Every attachment and sale under this section shall be made according to the law in force for the time being for the attachment and sale of moveable property in execution of a decree of a civil court.”
4. Order 21, Rule 43 CPC lays down that moveable property in the possession of the judgment-debtor is to be attached by the actual seizure Rule 58, of the same Order provides for objection against the attachment of any property, attached in excution of a decree, on the ground that such property is not liable to attachment, and if such objection is made the same is liable to be decided in accordance with provisions contained therein. Clauses (4) and (5) of this Rule provide for appeal against the adjudication and if objections have been refused to be entertained a provision for suit has been laid down. Rule 66, which deals with proclamation of sale by public auction of the attached property, requires such proclamation to the drawn-up after notices to the decree-holder and judgment-debtor. Rule 77 of Order 21 lays down that where moveable property is sold by public “auction its priceghall be paid at the time of sale or within such time as the officer conducting the sale directs. Clause (2) of this Rule further provides that on payment of purchase money the sale shall become absolute. This clause is quoted below:
“On payment of the purchase-money, the officer or other person holding the sale shall grant a receipt for the same, and the sale shall become absolute.”
5. Rule 78 declares that no irregularity in publication and conducting the sale of moveable property shall vitiate the sale, but the persons who sustain injury by reasons of such irregularity, have been given liberty to institute suit fo compensation. It is thus clear that after moveable property is sold by public auction and its price has been paid by auction-purchaser, the sale becomes absolute and the property stands vested in the purchaser. A Division Bench of this Court in the case of Hira Lal v. State of U.P, 1978 All WC 538: (1978 All LJ NOC 69) has, while considering the provisions of Rule 77 of Order 21 laid down that,
“Provisions contained” in Rule 77 of the CPC make it amply clear that if the price is paid at the time of sale or afterwards with the permission of the officer holding the sale and a receipt is issued to the auction purchaser, the sale shall become absolute. No order of any other authority is necessary for confirming the sale in case of moveable property.”
6. Supreme Court also in the case of Bal Krishna v. Swadeshi Polytex Ltd., (1985) 2 SCC 167 : AIR 1985 SC 520 has observed that:
“On such sale either under Rule 76 or under Rule 77, the purchaser acquires title.”
7. The bus in questionm was attached on 22-8-1990 by its actual seizure. It wqs open to the petitioner to file objection under Order 21, Rule 58 CPC but he did not do so, even though admittedly he had full knowledge of the actual seizure of the bus on the aforesaid date. Sale proclamation was also prepared after observing, all the formalities and allegations made by the petitioner against-the sale proclamation have been denied. The petitioner could have raised objection against sale-proclamation also, but he did not do so Petitioner also did not raise any objection at the time when auction sale was conducted and even thereafter before the officer who conducted the sale. The auction purchaser respondent No. 8 deposited the auction money and sale of the bus became absolute in his favour and he became its owner. Not having raised any objection at any stage of the procee dings, it is not open to the petitioner to challenge the recover proceedings before this court for the first time. When law provides forum and the method for redress of the grievance, the affected person concerned should take recourse to these forum and the methods and it is not open to him to by-pass them and straightaway file the writ petition under Article 226 of the Constitution of India. As mentioned hereinbefore the respondent No. 8 has become absolute owner of the bus after he deposited the auction money and he has also been delivered its possession alongwith sale certificate. We cannot undo the sale under Article 226 of the Constitution of India, thereby depriving the auction purchaser of the right which he acquired law fully without any objection from the side of the petitioner. We are as such not inclined to interfere in exercise of power under Article 226 of the Constitution of India.
8. Even on the merits we do not find any substance in the submission of learned counsel for the petitioner. M/s. Nisha Oil Udyog is not registered firm and the petitioner. Sheo narain Tiwari is its sole proprietor. A firm which is not registered does not have any juristic personality and cannot be said to be different from its proprietor. Such firm is nothing but a name under which its proprietor carries on business. The petitioner, being its sole proprietor, cannot escape the liability on the ground that he is different froip the firm and his property cannot be attached and auctioned.
9. Learned counsel for the prtitioner has cited, before us, several decisions in order to demonstrate that the petitioner can challenge, the attachment and sale straight away under Article 226 of the Constitution of India, without taking recourse to remedies provided by the statutes. It cannot be disputed that under Article 226, this court can interfere at any stage of the proceedings but as mentioned above law itself provides the forum for redress of the grievances, this court insist that grievance should at first be raised before the statutory forum. The authorities cited by the learned counsel for the petitioner do not help him inasmuch as in those cases sales were held to be nullity and/or statutory, remedies became barred by time for no fault of the person concerned. In the case of Smt. Shanti Devi v. State of U.P, 1979 Rev. Dec. 203. the petitioner Smt. Shanti Devi had no knowledge of the attachment and auction sale and she came to know only when she was dispossessed on account of which remedy given under Rule 285-H and 2851 of Z.A Rules became barred by time. In these cricumstances this Court interfered because no alternative remedy was available to the petitioner and she was deprived of her right to hold the property under Article 1911)(f) of the Constitution of India without authority of taw as the sale was found to be without jurisdiction. In the cast of Khaki v. Harsinghpur Sadhan Sahkari Samiti, 1979 All WC 1 : 1979 All LJ 289) the writ petition was filed after exhausting alternative remedy of appeal against the Arbitration Award under U.P Co-operative Societies Act. In the case of Ashok Kumar v. State of U.P, 1979 All LJ. 203 sale of the property was found to be without jurisdiction and this court accordingly interfered under Article 226. In the case of Jalaluddin v. State of U.P, 1985 All LJ 437 this court interfered as the property was attached and sold without giving any notice of demand to the petitioner, inasmuch as the service of notice of demand on the defaulter is a condition precedent for attachment and sale of the property.
10. In the instant case, the petitioner had full knowledge and notice of the attachment and auction proceedings and he had full opportunity to raise objection within time under relevant provisions. He not having raised such objection and sale not being withuot jurisdiction it is not proper for this court to interfere under Article 226 of the Constitution of India. Both the writ petitions lack merit and are dismissed with costs.
11. Petitions dismissed.
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