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citation codes
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  • Section 311 of the Code of ,1882 to which Order 21, Rule 90 of the present Code
  • Order 21, Rule 2 of the Code of Civil Procedure.
  • Sub-rule (3) of Rule 2 of Order 21
  • Section 244, to which Section 47
  • Clause (3) of Order 21, Rule 2; (2)
  • Rule 89, Rule 90 or Rule 91
  • Sub-rule (1) of Rule 92
  • Order 21, Rule 92.
  • Sub-rule (3)
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
Judges
Acts
  • Section 311 of the Code of ,1882 to which Order 21, Rule 90 of the present Code
  • Order 21, Rule 2 of the Code of Civil Procedure.
  • Sub-rule (3) of Rule 2 of Order 21
  • Section 244, to which Section 47
  • Clause (3) of Order 21, Rule 2; (2)
  • Rule 89, Rule 90 or Rule 91
  • Sub-rule (1) of Rule 92
  • Order 21, Rule 92.
  • Sub-rule (3)
Smart Summary

Structured Summary of the Provided Opinion

Factual and Procedural Background

This appeal arises from a dispute over whether an uncertified adjustment of a prior decree can be relied upon as a defence to a suit for possession brought by a purchaser who bought property in execution of that decree. The appeal was heard by a Full Bench because of conflicting authority on the point.

Key factual events as recorded in the opinion:

  • On 16 March 1911, Lakshmi Narasamma obtained a decree for maintenance against two brothers of her deceased husband and was given a charge over the property now in suit. The decree was later satisfied by a lump-sum payment, but that adjustment was not certified under Order 21, Rule 2 of the Code of Civil Procedure.
  • In 1927 one brother (Jogayya Sastri) was adjudicated insolvent; in 1932 the Official Receiver sold his share to Subbarayudu; Subbarayudu's sons conveyed to the defendant on 19 July 1933. On 4 November 1935 the defendant purchased the interest of the other brother (Kameswara Rao), and thereby became entitled to the whole property subject to the charge in favour of Lakshmi Narasamma.
  • The property was in the physical possession of a tenant, Y. Virraju. The defendant sued Virraju for rent and later for ejectment, obtaining a decree on 15 March 1937 and possession.
  • Separately, Virraju induced the decree-holder in the maintenance suit to proceed in execution for arrears. Execution proceedings were instituted on 15 March 1936; the judgment-debtors did not appear and on 8 December 1936 the property was sold in execution to the plaintiff for Rs. 375. Notice of those execution proceedings was not served on the defendant, who was unaware of them. Symbolic possession was given to the plaintiff on 23 March 1937, though Virraju remained in physical possession.
  • On 14 July 1937 the plaintiff filed a suit for an injunction restraining the defendant from interfering with his possession; the suit was converted into one for possession on 4 July 1938. The District Munsiff found that the maintenance decree had long been satisfied, that the sale in execution had been obtained by fraud by the decree-holder and Virraju, that the plaintiff was not a bona fide purchaser but a benamidar for Virraju, and that the defendant was a bona fide purchaser for value without notice of the charge or of the execution proceedings. The District Munsiff dismissed the suit.
  • The Subordinate Judge concurred in those findings. The plaintiff appealed to this Court; Happell, J., relying on the Full Bench of the Calcutta High Court in Lakshmanchandra Naskar v. Ramdas Mandal, allowed the plaintiff's appeal and ordered the defendant to deliver possession to the plaintiff. The defendant then appealed under Clause 15 of the Letters Patent. The present Full Bench judgment disposes of that appeal.

Legal Issues Presented

  1. Whether an uncertified adjustment (i.e., a payment or settlement of a decree that has not been certified under Order 21, Rule 2 of the Code of Civil Procedure) can be pleaded as a defence by a judgment-debtor or his representative to a suit for possession instituted by a purchaser of property sold in execution of the decree.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Lakshmanchandra Naskar v. Ramdas Mandal (1929) I.L.R. 57 Cal. 403 (F.B.) Held that a judgment-debtor could not set up an uncertified adjustment as a bar to a purchaser's suit for possession; the debtor's remedy is to sue for damages or recovery of money paid under the adjustment. Relied upon by Happell, J., to allow the plaintiff's appeal. The Full Bench in the present opinion endorses the view in this case and treats it as authoritative for the proposition that uncertified adjustments cannot be pleaded in bar of execution.
Rama Iyer v. Rama Iyer (1898) I.L.R. 21 Mad. 356 Held by Shephard and Boddam, JJ., that where a decree-holder falsely prevented certification and obtained execution (including leave to bid), the judgment-debtor could have the sale set aside. The present Full Bench states this decision was "clearly wrong and has not been followed" and expressly overrules Rama Iyer v. Rama Iyer.
Budrudeen v. Gulam Mohideen (1911) 24 M.L.J. 541 : I.L.R. 36 Mad. 357 Expressed the view that the Rama Iyer decision could be regarded as right if the judgment-debtor's first application were treated as an application for recording the adjustment. Mentioned as part of the historical discussion. The opinion notes the view but does not adopt Rama Iyer; it distinguishes and does not treat Budrudeen as displacing the prevailing rule.
Periatambi Udayan v. Vellayya Goundan (1898) 8 M.L.J. 51 : I.L.R. 21 Mad. 409 Held that a judgment-debtor could not object to execution where there had been an uncertified adjustment, but could sue to recover what he had paid if too late to certify the adjustment. Affirmed as consistent with the present Full Bench's conclusion that uncertified adjustments cannot be pleaded to defeat execution; cited as supporting authority.
Subramaniam v. Ramaswami (1932) 62 M.L.J. 562 : I.L.R. 55 Mad. 720 (Full Bench) Held that an uncertified adjustment could not be pleaded as a defence; indicated the Court might treat such an objection as an application for certification if taken within the period of limitation. Cited as consistent precedent; the present Full Bench notes it does not preclude treatment of a timely objection as an application for certification but upholds the substantive rule that uncertified adjustments cannot be used to resist execution.
Venkataramachariar v. Meenatchi Sundaram Iyer (1908) 19 M.L.J. 1 Held that where a decree-holder purchases property in execution and sues for possession, the defendant may raise a defence that the sale-certificate is inaccurate (e.g., items included not comprised in the decree). Noted by the Court as an instance where a defendant could challenge the accuracy of the sale-certificate; the opinion records its reliance on an earlier Calcutta case which was subsequently overruled by Lakshmanchandra Naskar.
Bhiram All Shaik v. Gopi Kanth Shaha (1897) I.L.R. 24 Cal. 355 Earlier Calcutta decision relied upon in Venkataramachariar (regarding accuracy of sale-certificate). Recorded as relied upon in earlier cases but observed to have been overruled by the Full Bench decision in Lakshmanchandra Naskar v. Ramdas Mandal.
Munishi China Dandasi v. Munishi Peda Tatiah (1920) 41 M.L.J. 261 Followed Venkataramachariar in allowing a defendant to raise certain objections regarding the sale-certificate. Mentioned as a case that followed Venkataramachariar; included in the historical survey of authorities and thus part of the landscape of conflicting decisions.
Thathu Naick v. Kondu Reddi (1909) I.L.R. 32 Mad. 242 (F.B.) Contains a Full Bench discussion disclosing a difference of opinion on whether a sale could be set aside in a suit by answer or only by statutory application where the decree-holder had bid and the sale price was less than the minimum fixed by the Court. Recounted by the present Full Bench as showing conflicting views among judges; used in the opinion to demonstrate past divergence of approach on execution-sale challenges.
Kulathu Aiyar v. Vaithilingam Iyer (1927) 26 L.W. 349 Held that a defendant could plead an uncertified adjustment by way of defence provided he was not one of the parties to the decree. Mentioned by the Full Bench as one of the authorities taking a contrary view; the present opinion rejects that line of authority insofar as it permits uncertified adjustments to be pleaded in defence to a purchaser's suit.

Court's Reasoning and Analysis

The Full Bench's analysis proceeds from statutory text and established doctrine to the conclusion that uncertified adjustments cannot be used to defeat execution sales.

  1. Statutory starting-point: The Court places emphasis on the unambiguous language of the Code of Civil Procedure. It cites sub-rule (3) of Order 21, Rule 2, which provides that a payment or adjustment not certified or recorded shall not be recognised by any Court executing the decree. This rule, the Court says, is "most emphatic in its language."
  2. The Court next examines Order 21, Rule 92 (sub-rules (1) and (3)) which govern confirmation of sales made in execution: where no application is made under the relevant rules (Rule 89–91) or such application is disallowed, the Court shall make an order confirming the sale and the sale becomes absolute; and no suit to set aside an order made under Rule 92 shall be brought by any person against whom such order is made. The effect is to finalise titles once the Court confirms the sale.
  3. The Court invokes Section 47 of the Code, as interpreted in Lakshmanchandra Naskar, to stress that questions as to whether a decree has been satisfied or whether execution is properly due are matters "which relate to the execution" and are to be determined by the Court executing the decree. Section 47 confers exclusive jurisdiction to the executing Court over such matters and forbids determination of those questions by a separate suit.
  4. On these statutory foundations the Court reasons that, once a sale has been confirmed in execution, even deliberate fraud by the decree-holder in abstaining from certifying an adjustment cannot be used by the judgment-debtor to defeat the sale. Fraud in preventing certification does not revive the judgment-debtor's right to resist a purchaser's suit for possession after confirmation.
  5. Applying the law to the facts before it: although the lower courts found that the maintenance decree had been satisfied earlier and that the sale had been procured by fraud (with the plaintiff acting as a benamidar for Virraju), the Full Bench concludes that such uncertified adjustments and related fraud cannot be permitted to defeat the purchaser's title once the sale is confirmed. The statutory scheme and precedents require that the purchaser obtains an absolute title from confirmation, provided there was title in the judgment-debtor.
  6. Consequently, the Court explicitly overrules earlier authority (notably Rama Iyer v. Rama Iyer) that had allowed a sale to be set aside in similar circumstances, and reaffirms the rule established by the Full Bench in Lakshmanchandra Naskar that the correct remedy for an uncertified adjustment is a suit for recovery of money or damages, not a defence to a purchaser's suit for possession.

Holding and Implications

Holding:

The Full Bench held that a judgment-debtor or anyone standing in his shoes cannot plead an uncertified adjustment of a decree by way of defence to a suit for possession filed by an auction purchaser. The Court expressly overruled Rama Iyer v. Rama Iyer and similar earlier decisions to the contrary.

DISMISSED — The defendant's appeal fails and is dismissed with costs.

Implications (as stated in the opinion)

  • Direct effect on the parties: The order of the lower appellate judge (Happell, J.) ordering the defendant to deliver possession to the plaintiff is upheld by implication through dismissal of the defendant's Letters Patent appeal; the auction purchaser's title, upon confirmation of the sale, remains effective despite the uncertified adjustment.
  • Legal consequence for precedent: The Court overrules Rama Iyer v. Rama Iyer (1898) and disapproves decisions of this Court which permitted a judgment-debtor or his representative to resist a purchaser's suit for possession on the ground of an uncertified adjustment.
  • Remedies preserved for judgment-debtors: The opinion reiterates the established rule that the appropriate remedy for a judgment-debtor who has paid under an uncertified adjustment is a suit to recover the money or to sue for damages, and not to resist execution or to defeat the purchaser's possession by pleading the uncertified adjustment.

    Chowdhari Abdul Subhan Sahib v. Kante Ramanna

    1. The question in this appeal is whether an uncertified adjustment of a decree can be pleaded by way of defence to a suit for possession instituted by the purchaser of property sold in execution of the decree against the judgment-debtor or his representative. The appeal has been heard by a Full Bench as there is considerable conflict of authority.

    2. On the 16th March, 1911, one Lakshmi Narasamma, the widow of a deceased member of an undivided family, obtained a decree for maintenance against the two brothers of her husband and was given a charge on the property now in suit and other properties belonging to the joint family. Sometime before 1924--the record does not disclose the exact date--the decree was satisfied by a lump sum payment, but the adjustment was not certified under Order 21, Rule 2 of the Code of Civil Procedure. In 1927, in insolvency proceedings No. 20 of 1927 on the file of the Subordinate Judge of Rajahmundry one of the brothers, Jogayya Sastri, was adjudicated an insolvent. In 1932 the Official Receiver sold the insolvent's share in the property in suit to one Subbarayudu, whose sons conveyed it on the 19th July, 1933, to the defendant. On the 4th November, 1935, the defendant purchased the interest of the other brother, Kameswara Rao. The property had been let to a tenant named Y. Virraju and in 1933, the defendant filed a small cause suit (No. 1071 of 1933) in the Court of the District Munsiff, Cocanada,for the rent due in respect of a half share of the property and obtained a decree. After the defendant had purchased the interest of Kameswara Rao and thereby had become entitled to the whole property subject to the charge in favour of Lakshmi Narasamma, he gave notice to Virraju to vacate. Virraju denied the defendant's title and consequently the defendant filed O.S. No. 89 of 1936 in the Court of the District Munsiff of Cocanada for the ejectment of Virraju. On the 15th March, 1937, he was granted a decree and as a result obtained possession. '

    3. In the meantime, Virnaju had induced the decree-holder in the maintenance suit to proceed in execution for arrears of maintenance for three years. This petition was filed on the 15th March, 1936, for the recovery of the sum of Rs. 258. The judgment-debtors did not enter any appearance and on the 8th December, 1936, the property was sold by the Court to the plaintiff for Rs. 375. Notice of these proceedings was not served upon the defendant and he was entirely ignorant of what was happening. On the 23rd March, 1937, the plaintiff was given symbolical possession of the property. Virraju was still in physical possession. On the 14th July, 1937, the plaintiff filed the present suit in the Court of the District Munsiff of Ramachandrapur for an injunction restraining the defendant from interfering with his possession. On the 4th July, 1938, the suit was converted into one for possession of the property. The District Munsiff found that the maintenance decree had been satisfied long ago, that the sale in execution which took place on the 8th December, 1936, had been obtained as the result of fraud on the part of the decree-holder and Virraju, that the plaintiff was not a bona fide purchaser, but merely a benamidar for Virraju and that the defendant was a bona fide purchaser for value without notice of the charge on the property or of the execution proceedings. On these findings the District Munsiff dismissed the suit. On appeal, the Subordinate Judge concurred in all the findings of fact arrived at by the District Munsiff and cornfirmed the decree passed by him. The plaintiff then appealed to this Court. The appeal was heard by Happell, J., who, relying on the judgment of the Full Bench of the Calcutta High Court which decided Lakshmanchandra Naskar v. Ramdas Mandal1, allowed it and consequently ordered the defendant to deliver possession of the property to the plaintiff. The present appeal is by the defendant under Clause 15 of the Letters Patent.

    4. Mr. Justice Happell accepted as being well established the following propositions of law stated in Mulla's Commentary on the Code of Civil Procedure, nth edition, pages 744 and 745:

    (1) Where the adjustment of a decree has not been certified the judgment-debtor cannot successfully resist execution of the decree by pleading that it has been satisfied, because of the bar imposed by Clause (3) of Order 21, Rule 2; (2) a judgment-debtor cannot' maintain a suit for an injunction restraining the decree-holder from executing the decree or a suit to set it aside, because such suits relate to execution within the meaning of section 47 of the code; and (3) a judgment-debtor can maintain a suit to recover back the' money paid to the decree-holder but uncertified as damages for breach of contract, because such a suit does not fall within the purview of Section 47.

    5. We agree that these propositions must now be regarded as being well established. Sub-rule (3) of Rule 2 of Order 21 is most emphatic in its language. It says that a payment or adjustment which has not been certified or recorded shall not be recognised by any Court executing the decree. Sub-rule (1) of Rule 92 says that where no application is made under Rule 89, Rule 90 or Rule 91 or where such application is made and disallowed, the Court shall make an order confirming the sale and thereupon the sale shall become absolute and Sub-rule (3) that no suit to set aside an order made under Rule 92 shall be brought by any person against whom such order is made. Therefore, fraud on the part of the decree-holder in abstaining from certifying an adjustment will not help the judgment-debtor, once the sale has been confirmed in execution. In these circumstances it is difficult to see any foundation for the opinion expressed in some of the reported cases that a judgment-debtor or his representative can plead an uncertified adjustment of the decree in answer to a suit for possession by the auction purchaser.

    6. In Lakshmanchandra Naskar v. Ramdas Mandal (1929) I.L.R. 57 Cal. 403 (F.B.), the question whether an objection to the sale in execution On the ground that the decree, in execution of which property was sold, was satisfied before the sale, can be pleaded by the judgment-debtor by way of defence in the purchaser's suit for possession of the property was fully discussed. It was held that the judgment-debtor could, not set up an uncertified adjustment as a bar to the suit. His only remedy was to sue for damages or for the recovery of the money paid under the adjustment. In the course of his judgment Rankin, C.J., pointed out that a question between plaintiff and defendant as to whether the decree had been satisfied or was a decree of which the plaintiff was entitled to have execution was one of a class of questions which section 47 of the code said " shall be determined by the Court executing the decree". Section 47 did not mean merely that the execution Court must determine it, if it was raised in the course of the execution proceedings. It meant that the Court executing the decree was given exclusive jurisdiction over the matter as being one which related to the execution. The words " and not by a separate suit " showed clearly that the section was forbidding for this purpose the use of the ordinary means whereby rights were determined. Later in his judgment the learned Chief Justice observed that as between parties and their representatives the act of the Court in effecting a sale was to confer title to property and not merely to litigation. It was part of the purpose of Section 47 to ensure that, so far as regards parties to the suit, the executing

    7. Court should, where the decree itself was valid, settle and determine the right to have execution and give a title to the purchaser. It was no part of its purpose to put a premium upon the forceful or wrongful seizure of possession or to make titles valid or invalid according as the one party or the other was plaintiff or defendant in any litigation subsequent to the sale--a thing which was a matter of pure enhance.

    8. We will now examine the decision of this Court. In Rama Iyer v. Rama Iyer (1898) I.L.R. 21 Mad : 356 a decree had been adjusted, but the decree-holder had not caused the adjustment to be certified. He had falsely stated to the judgment-debtor's agent that the requisite petition certifying the adjustment had been presented. Having made this statement and thereby having prevented the judgment-debtor himself taking the necessary steps he proceeded to apply for execution. Having obtained leave to bid at the sale, he purchased the property at the auction. When the judgment-debtor discovered what had happened, he filed an application under Section 311 of the Code of ,1882 to which Order 21, Rule 90 of the present Code corresponds, and later another application under Section 244, to which Section 47 corresponds on the ground that a fraud had been practised on the Court. Shephard and Boddam, JJ., held that the judgment-debtor was entitled to have the sale set aside and observed that if the Court had been appraised of the facts, the decree-holder would not have been given leave to bid and the sale would never have taken place. This decision was clearly wrong and has not been followed. In Budrudeen v. Gulam Mohideen (1911)24 M.L.J. 541 : I.L.R. 36 Mad. 357, Sundara Aiyar and Ayling, JJ., expressed the opinion that the decision in Rama Iyer v. Rama Iyer1 could be regarded as right if the first application which the judgment-debtor made were considered as an application for recording the adjustment. The learned Judges in Rama Iyer v. Rama Iyer (1898) I.L.R. 21 Mad : 356 did not, however, treat the application as one for the recording of the adjustment.

    9. In Periatambi Udayan v. Vellayya Goundan (1898) 8 M.L.J. 51 : I.L.R. 21 Mad. 409, this Court held that a judgment-debtor could not object to execution where there had been an uncertified adjustment, but he could sue to recover what he had paid to the decree-holder if it were too late to have the adjustment certified. In Budrudeen v. Gulam Mohideen (1911)24 M.L.J. 541 : I.L.R. 36 Mad. 357, the Court held that a judgment-debtor's objection to execution on the ground that the decree had been satisfied could be treated as an application to certify if the objection were filed within 90 days of the adjustment. The question whether an uncertified adjustment can be pleaded as an objection to execution was considered by a Full Bench of this Court in Subramaniam v. Ramaswami (1932) 62 M.L.J. 562 : I.L.R. 55 Mad. 720, and the answer was that it could not, but the judgment does not preclude the Court treating such an objection as an application for certification if taken within the period of limitation.

    10. In Venkataramachariar v. Meenatchi Sundaram Iyer (1908) 19 M.L.J. 1, White, C.J. and Davies, J., held that where a decree-holder has purchased property sold in execution of his decree and he sues for possession, the defendant is entitled to raise the defence that the sale certificate is inaccurate in that certain items of property not comprised in the decree have been included in it. They relied on a decision in Bhiram All Shaik v. Gopi Kanth Shaha (1897) I.L.R. 24 Cal. 355 which was overruled by the Full Bench which decided Lakshmanchandra Naskar v. Ramdas Manda (1929) I.L.R. 57 Cal. 403 (F.B.). this Court followed Venkataramachariar v. Meenakshi Sundara Iyer (1908) 19 M.L.J. 1 in Munishi China Dandasi v. Munishi Peda Tatiah (1920) 41 M.L.J. 261.

    11. The judgments delivered by this Court in Thathu Naick v. Kondu Reddi (1909) I.L.R. 32 Mad. 242 (F.B.), disclosed a difference of opinion. There, the holder of a mortgage decree applied for execution and asked for permission to bid at the sale. Permission was given, but the Court fixed an amount as the minimum at which he was to start bidding. The decree-holder bought the property in the name of a third person for less than the minimum fixed by the Court and less than the principal amount secured by the mortgage. The Court confirmed the sale and symbolical' possession was given to the purchaser, who was resisted by the persons inactual possession. The auction purchaser then brought a suit for possession. The defendants pleaded that the decree-holder had acted fraudulently in that he had induced the Court, to confirm the salet without having brought to its notice the fact that he had paid less than the amount fixed. It was held by Miller and Sankaran Nair, JJ., that it was open to the defendants to have the sale set aside in the suit by way of answer to the plaintiff's claim. Abdur Rahifn, J., dissented. He was of opinion that the sale could not be set aside except on an application under sections 294 and 244 of the code then in force. Sankaran Nair, J., considered that as a plaint in a suit in the Court executing the decree might be treated as an application under Section 244, a written statement containing an answer to the plaintiff's claim could be treated as an application under Section 244.

    12. In Kulathu Aiyar v. Vaithilingam Iyer (1927) 26 L.W. 349 it was held that a defendant could plead an uncertified adjustment by way of defence to a suit provided that he was not one of the parties to the decree.

    13. In our judgment it is not open to a judgment debtor or any one standing in his shoes to plead an uncertified adjustment of the decree by way of defence to a suit filed by the auction purchaser for possession. We are in accord with all that was said in Lakshmanchandra Naskar v. Ramdas Mandal (1929) I.L.R. 57 Cal. 403 (F.B.). An uncertified adjustment cannot be pleaded in bar of execution and once the sale has been confirmed by the Court it confers an absolute title on the auction purchaser, whether he be the decree-holder or a stranger, provided there was title in the judgment-debtor. This is clearly the effect of Order 21, Rule 92. It matters not whether the decree-holder has deliberately deceived the judgment-debtor and by false statements prevented him from taking steps himself to have an adjustment certified. To hold that a judgment-debtor or his representative can resist a suit for possession by the auction purchaser would mean a disregard of statutory provisions expressed in unambiguous language.

    14. The decision in Rama Iyer v. Rama Iyer (1898) I.L.R. 21 Mad. 356 is overruled and also those decisions of this Court which say that a suit for possession by the auction purchaser can be resisted by the judgment debtor or his representative on the ground that there has been an uncertified adjustment.

    15. The appeal fails and is dismissed with costs.

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    Chowdhari Abdul Subhan Sahib v. Kante Ramanna
    (Feb 13, 1945)