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Merla Veeramma v. Villury Ramanna

Madras High Court
Dec 12, 1945
Smart Summary (Beta)

Structured Summary of the Opinion — Sir Lionel Leach, C.J.

Factual and Procedural Background

On 30 October 1937 the first defendant obtained a rent decree in Summary Suit No. 82 of 1937 (Deputy Collector, Kovvur) under section 77 of the Madras Estates Land Act. Prior to the execution application, the plaintiffs had purchased portions of the land covered by the patta by three sale deeds dated 18 August 1937, 7 September 1937 and 29 March 1938. They gave notice of those sales to the landholder under section 145(2) of the Act.

On 7 February 1939 the first defendant applied for execution of the rent decree but did not give notice of that application to the plaintiffs. The lands the plaintiffs had purchased were attached and sold at public auction on 28 August 1939; the purchaser was the second defendant.

The plaintiffs filed suit in the District Munsif Court, Kovvur, pleading that the second defendant was their benamidar and that the sale was invalid for want of notice to them of the execution proceedings. The defendants countered that the second defendant was their benamidar, that the plaintiffs had knowledge of the execution proceedings making notice unnecessary, and that the plaintiffs were estopped from challenging the sale because the first plaintiff attended the auction.

The District Munsif found the sale void for want of notice but held the plaintiffs estopped and dismissed the suit. The Subordinate Judge of Ellore reversed the estoppel finding and decreed the suit on the ground that the sale was illegal for want of notice. The defendants appealed; this second appeal was placed before a Bench because two prior judgments of the Court (Subbarayulu v. Arunachala Nadar and Appanna Sastri v. Raja Sobhanadri) appeared to conflict on the legal question.

Legal Issues Presented

  1. Whether a transferee who has given notice of transfer to the landholder under section 145(2) of the Madras Estates Land Act is bound by a sale in execution of a rent decree obtained against the original pattadar when the transferee was not given notice of the execution proceedings.
  2. Whether attendance by a transferee (or his representative) at an execution sale, or knowledge shortly before the sale, can cure the absence of formal notice and thereby estop the transferee from challenging the sale.
  3. How conflicting judicial authorities (notably Subbarayulu v. Arunachala Nadar and Appanna Sastri v. Raja Sobhanadri) should be reconciled in determining the necessity and effect of notice to transferees in execution of rent decrees.

Arguments of the Parties

Plaintiffs' Arguments

  • The sale in execution of the rent decree was invalid because notice of the execution proceedings was not given to them, although they had previously given notice of their transfer to the landholder under section 145(2).
  • The second defendant had purchased the lands as their benamidar (i.e., on their behalf), a fact alleged in the plaint and relied on to attack the sale.

Defendants' / Appellants' Arguments

  • The second defendant was the benamidar for the first defendant and thus the sale was effective.
  • Notice to the plaintiffs was unnecessary because they had knowledge of the execution proceedings (including a claim that the first plaintiff heard the sale was fixed the day before).
  • The plaintiffs were estopped from challenging the sale because the first plaintiff was present at the auction and signed the list of bidders.
  • Reliance was placed on the decision in Chandra Nath v. Nabadwip Chandra (Calcutta High Court) to argue that where a party in substance received notice and appeared, technical defects in the form of notice should not invalidate the sale.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Subbarayulu v. Arunachala Nadar Supported the proposition that where a transferee had given notice of transfer to the landholder (under section 146 as then in force) and the landholder had recognized the transfer, subsequent proceedings without notice to the transferee do not bind the transferee; sale held illegal for want of notice. The Court adopted Venkataramana Rao, J.'s interpretation and regarded Subbarayulu as correctly stating the law applicable to the facts, concluding the sale must be regarded as a nullity.
Appanna Sastri v. Raja Sobhanadri Wadsworth, J. rejected the need for personal notice under section 117 in the circumstances of that case; facts involved a purchaser who paid rent and had receipts but did not produce sale-certificate; relied upon different procedural sections (111–116) for summary sales. The Court distinguished Appanna Sastri, explaining that where execution proceeds from a rent suit (and not a Collector-ordered sale under section 116), section 145(2) read with section 147(1) requires notice to transferees; therefore Wadsworth, J.'s reasoning does not control the present case.
Sri Mahant Prayag Dossjee v. Sarangapani Chetty Quoted passage supporting interpretation that transferees, once having given the prescribed notice or produced sale-certificate and been recognized, are entitled to be impleaded and not to be affected by subsequent proceedings without notice. The Court cited the passage (from Oldfield and Ramesam, JJ.) in support of the interpretation of the pre-amendment section (section 146) that informed the Court's view aligning with Subbarayulu.
Kanchamalai Pathar v. Shahji Rajah Sahib Full Bench held that where no notice was served on the legal representatives of the judgment-debtor in accordance with Order XXI, rule 22(1) CPC, a sale was void (not merely voidable). The Court relied on this Full Bench decision to support the proposition that where notice is required and is not given, the sale is void; it reinforced the Court's conclusion that the sale in the present case was a nullity.
Raghunath Das v. Sundar Das Khetri (Privy Council) Held that an execution sale conducted behind the back of the Official Assignee was void. The Court invoked this Privy Council authority to buttress the view that sales conducted without requisite notice to interested parties are void.
Chandra Nath v. Nabadwip Chandra (Calcutta High Court) On its facts, where judgment-debtors received notice under Order XXI, rule 66 and appeared and contested for two years, it was held to be unreasonable to annul the sale on a technical absence of the specific notice contemplated by Order XXI, rule 22; sale upheld because parties had in substance received notice and appeared. The Court distinguished Chandra Nath and held it did not support appellants: in the present case the plaintiffs had not in substance received notice nor appeared to contest the execution prior to the sale as in Chandra Nath.

Court's Reasoning and Analysis

The Court began with the statutory framework. Section 145(1) and (2) (as then in force, incorporating section 146 after the 1934 amendment) binds the landholder to recognize transfers of holdings where notice is given to the landholder in writing by transferor and transferee. Section 147(1)(a) provides that acts and proceedings commenced against the transferor prior to the giving of notice under section 145(2), insofar as they affect the land, are valid as against the transferee; by implication the section also shows that proceedings taken after notice under section 145(2) without notice to the transferee are invalid.

The Court contrasted two procedural routes available to a landholder: (a) suing under section 77 and executing the decree (the route taken here), and (b) resorting to the more summary remedy under sections 111–116 for arrears within a revenue year. Where a sale is ordered by the Collector under section 116, the Collector himself is required to issue notice to all parties and complete specified formalities; in such a case further notice to the transferee is not necessary. However, the Court held it is different when the landlord proceeds in execution of a decree obtained in a rent suit: in that scenario section 145(2) read with section 147(1) makes notice to the transferee necessary, and failure to give notice renders subsequent sale invalid.

Evaluating precedents, the Court endorsed Venkataramana Rao, J.'s reasoning in Subbarayulu v. Arunachala Nadar that a transferee who had given notice to the landholder and been recognized could not be bound by later proceedings conducted without notice to him. The Court quoted and relied on a passage from Sri Mahant Prayag Dossjee v. Sarangapani Chetty that supported this interpretation of the (pre-amendment) provision.

The Court rejected the alternative view expressed by Wadsworth, J. in Appanna Sastri v. Raja Sobhanadri to the extent that it would dispense with notice in the present context. It explained that Wadsworth, J.'s conclusion was rooted in a different procedural context (sale under section 116 or the like) and thus was not applicable to execution of a decree in a rent suit where section 145(2) and section 147(1) are engaged.

On the estoppel/notice contention pressed by appellants' counsel (Mr. Raghava Rao) — that the first plaintiff had, on the eve of sale, heard of the sale and attended the auction, handing in a petition and signing the bidder list — the Court held such last-minute knowledge and attendance did not substitute for formal notice required by statute and did not validate the sale. The Court also considered and distinguished Chandra Nath v. Nabadwip Chandra, explaining that in that case the judgment-debtors had in substance received notice under a different rule and had actively contested for two years; those facts rendered Chandra Nath inapposite to the present matter.

The cumulative effect of statutory interpretation and precedents (including Full Bench authority and Privy Council authority) led the Court to the view that where notice is required by the Act and is not given to a transferee, subsequent sale in execution is void and cannot bind the transferee.

Holding and Implications

DISPOSITION: The second appeal is dismissed with costs.

Core holdings and direct consequences:

  • The sale in execution of the rent decree which was conducted without giving the plaintiffs notice of the execution proceedings is a nullity (void) as they had previously given notice of their transfer to the landholder under section 145(2) and the landholder had recognized the transfer.
  • The plaintiffs were not estopped from questioning the validity of the sale by reason of the first plaintiff's late knowledge of the sale or attendance at the auction; such attendance did not cure the statutory requirement of notice.
  • The Court affirmed the legal position articulated in Subbarayulu v. Arunachala Nadar and rejected the applicability of Appanna Sastri v. Raja Sobhanadri to these facts; Chandra Nath v. Nabadwip Chandra was considered distinguishable and not supportive of appellants' case.

Implications beyond the parties: The judgment applies statutory construction and existing authorities to hold that where the statute requires notice to a transferee in execution of a rent decree, absence of that notice renders the sale void. The decision aligns with the precedent in Subbarayulu v. Arunachala Nadar and relies on earlier authorities to affirm that absence of requisite notice deprives the sale of validity.

Show all summary ...

Sir Lionel Leach, C.J:— This second appeal has been placed before a Bench for hearing, as two judgments of this Court which have bearing on the question of law involved are in conflict. The first was delivered by Venkatakamana Rao, J. in Subbarayulu v. Arunachala Nadar and the second by Wadsworth, J. in Appanna Sastri v. Raja Sobhanadri.

Before turning to the law we will state the facts. On 30th October 1937, in Summary Suit No. 82 of 1937 filed in the Court of the Deputy Collector, Kovvur, under the provisions of section 77 of the Madras Estates Land Act, the first defendant obtained a rent decree against a pattadar. By three sale deeds, dated 18th August 1937, 7th September 1937 and 29th March 1938 respectively, the plaintiffs purchased portions of the land covered by the patta. Notice of the sales was duly given to the landholder under section 145(2) of the Act. On 7th February 1939 the first defendant applied for execution of the decree, but he gave no notice of the application to the plaintiffs. The lands purchased by the plaintiffs from the original pattadar were attached and on 28th August 1939 were sold in public auction. The purchaser was the second defendant. The plaintiffs then filed in the Court of the District Munsif of Kovvur the suit which has given rise to this appeal. They pleaded that the second defendant had bought the lands as their benamidar and that the sale was invalid for want of notice to them of the execution proceedings. The defendants averred that the second defendant was their benamidar, that notice to the plaintiffs was not necessary inasmuch as they had knowledge of the execution proceedings and that they were estopped from questioning the validity of the sale as the first plaintiff was present at the auction.

The District Munsif held that the second defendant was the benamidar for the first defendant and that the sale was void for want of notice, but the plaintiffs by their conduct were estopped from questioning its validity. Consequently he dismissed the suit. The plaintiffs appealed to the Subordinate Judge of Ellore. He held that the sale was illegal for want of notice to the plaintiffs and that they were not estopped from questioning the validity of the sale. On these findings he decreed the suit. The defendants have appealed.

Sub-section 1 of section 145 of the Madras Estates Land Act states that whenever a holding or a portion of it is transferred or whenever it devolves by operation, of law, the landholder shall, subject to the provisions of the section, be bound to recognize the transfer or devolution and enter into a fresh engagement. Sub-section 2 says that where a holding or a portion is transferred by the act of a ryot, the landholder on receiving notice in writing from the transferor and the transferee shall recognize the transfer. As we have already indicated, that notice was given before the execution proceedings were instituted.

Sub-section 1(a) of section 147 says that all acts and proceedings commenced or had under the Act against the transferor or his co-sharers prior to the giving of the notice under sub-section 2 of section 145; in so far as such acts and proceedings affect or purport to affect the land on which the arrear is due, the crops growing thereon and the produce gathered therefrom, shall as against the transferee or co-sharer be as valid and effectual as if such acts and proceedings had been commenced or had against the transferee or co-sharer himself and he had been the defaulter. The section clearly implies that proceedings taken after notice under sub-section 2 of section 145 are invalid if notice is not given to the transferee.

The plaintiffs' contention that as notice was not given to them of the execution proceedings they are not bound by the sale is supported by the judgment of Venkataramana Rao, J. in Subbarayulu v. Arunachala Nadar. In that case a holding was sold in 1918 to the plaintiff in execution of a mortgage decree obtained against the registered pattadar. The plaintiff gave notice of his purchase to the landholder under section 146 of the Madras Estates Land Act by producing the sale certificate before him. The landholder recognized the transfer and thereafter received rents from him. Before the plaintiff had purchased the property the landholder had obtained a rent decree against the registered pattadar. In 1926 he applied for the execution of this decree, giving notice only to the registered pattadar. The plaintiff, who had been paying rent to the landholder from 1918 onward, was entirely ignored. It was held that in such circumstances the sale was illegal for want of notice and therefore the plaintiff was not affected by it.

The appeal in Subbarayulu v. Arunachala Nadar was heard before the passing of the Madras Estates Land (Amendment) Act, 1934, which incorporated in section 145 the provisions of section 146, which was consequently omitted from the Act. Venkataramana Rao, J. said that, under sections 146 and 147, once the transfer had been notified to the landholder either by notice in writing or by the production of the sale certificate and the transfer had been recognized, the transferee could not be bound by any proceedings commenced thereafter without notice, to him. He quoted in support of his interpretation of these sections a passage from the judgment of Oldeield and Ramesam, JJ. in Sri Mahant Prayag Dossjee v. Sarangapani Chetty where they said with reference to section 146:

“We read the section as laying down that where there has been a transfer, whether before the commencement of the Act or after it, the transferee will be entitled to be impleaded in proceedings if he gives the notice which section 146 prescribes but that until he does so, the existing pattadar will still be the person with whom the landholder has to deal.”

The facts in Appanna Sastri v. Raja Sobhanadri were these. A landholder obtained decrees in two rent suits. At a sale held in execution of the earlier decree a portion of the holding was purchased by the appellant. He did not produce the sale certificate before the landholder, but he paid the rent to him and was given a receipt showing that it had been paid on his own account. In subsequent years the rent was paid by the appellant's agent, but the receipts wrongly indicated that it was paid on account of the registered pattadar. In 1933 the landholder proceeded to execute the second decree which he had obtained in 1924. Without notice to the appellant he brought the holding to sale and purchased it himself Subsequently the landholder ejected the appellant who filed a suit to recover possession. Two contentions were raised in the appeal. One was that the sale was bad for want of notice to the appellant and the other was that the sale was bad because a charge in respect of the arrears which had accrued due after the first decree must be deemed to have been wiped out by the first sale so far as the liability of the portion of the holding sold was concerned.

We are here concerned only with the decision on the first question. Wadsworth, J. rejected the plea of the appellant that the sale was bad for want of notice, because he considered that there was no necessity under section 117 of the Madras Estates Land Act to give to the defaulter personal notice of a sale in execution of a rent decree. The kind of notice contemplated was by beat of drum in the village and by an affixture in a conspicuous place in the village. If this had been a case of a sale by a sale officer under the orders of the Collector passed under section 116, we should have agreed with the learned Judge; but the sale was not under that section. A landholder has two remedies against a defaulting tenant. He can, if he wishes, file a suit to recover the arrears of rent under section 77 of the Act. If the tenant has only defaulted in respect of the current year's revenue the landholder can apply for the sale, of the holding under the more summary procedure provided by sections 111 to 131. Section 111 says that when an arrear is not paid within the revenue year in which it accrued due, it shall be lawful for the landholder to sell the holding or any part of it in the manner provided in the Act in satisfaction of the arrear and of interest and costs, if any, of the sale. Section 112 states that when the landholder intends to avail himself of the powers given by section 111 he shall serve upon the defaulter through the Collector a written notice stating the amount due for arrears, interest and costs, if any, the period for which and the holding in respect of which it is due and informing him that if he does not pay the amount or institute a suit before the Collector contesting the right of sale within thirty days from the date of the service of the notice the holding or any part specified in the notice will be sold. When this notice has been served on the tenant the Collector can take action under section 116 if no suit has been instituted. The section requires the Collector himself to issue notice to all the parties and hear such of them as appear before him. When this has been done it is the duty of the Collector to determine the extent of the land to be sold, the lots, if any, which shall be sold, the order in which the lots shall be sold and the estimated value of each of them. He shall then order the sale, appoint an officer to conduct it, draw up the proclamation of sale and direct notice of it in the vernacular of the taluk to be posted in his office and in the taluk office. When these formalities have been complied with the selling officer takes charge and conducts the sale.

It is quite clear that no further notice is necessary in the case of a sale which has been ordered in accordance with section 116, but it is quite a different matter to say that no notice shall be given to a transferee when there has been a rent suit and the landholder is proceeding in execution of the decree obtained by him therein. Section 145(2) read with section 147(1) makes it quite clear that notice is necessary. Where notice is required and is not given, the transferee cannot be affected by anything done behind his back. If the property is sold in such circumstances, the sale is invalid. In Kanchamalai Pathar v. Shahji Rajah Sahib a Full Bench of this Court held that a sale was void and not merely voidable where no notice had been served on the legal representatives of the judgment-debtor in accordance with Order XXI, rule 22(1), of the Code of Civil Procedure. In Raghunath Das v. Sundar Das Khetri the Privy Council, held that a sale, in execution which had taken place behind the back of the Official Assignee was void. We consider that the correct view of the law was taken by Venkataramana Rao, J. in Subbarayulu v. Arunachala Nadar, which means that the sale complained of by the plaintiffs must be regarded as a nullity.

While not suggesting that the doctrine of estoppel applies in this case, Mr. Raghava Rao on behalf of the appellants has contended that the plaintiffs did in effect get notice of the execution proceedings. He bases his contention on the fact that the day before the sale was due to be held the first plaintiff, heard that it had been fixed for the next day. The sale was held at the house of the second defendant and the first plaintiff attended at the time appointed. Before doing so he handed in a petition to the Deputy Collector in which he said that he was the purchaser of the land and asked that if the sale was to take place the upset price should be Rs. 100. At the sale the property was knocked down to the second defendant whose bid was Rs. 110. As he was present at the sale the first plaintiff was asked to sign the list of bidders and this he did. It is suggested that his presence at the sale obviated any necessity for notice of the execution proceedings. We cannot accept this contention. The first plaintiff was not served with notice. At the last moment he heard that the sale was going to take place and he did what he considered best for himself in the circumstances. This certainly did not validate the sale. Mr. Raghava Rao has pressed upon us the decision of the Calcutta High Court in Chandra Nath v. Nabadwip Chandra, but a perusal of the judgment makes it obvious that it renders no support to the appellants. There, notice was not issued to the judgment-debtors under Order XXI, rule 22, of the Code of Civil Procedure, but notice was issued under Order XXI, rule 66, and in pursuance of that notice they appeared. For two years they contested the right of the decree-holder to bring the property to sale. It was only when their objections were finally overruled that they pleaded the absence of notice under Order XXI, rule 22. While recognizing that, where a party entitled to notice under Order XXI, rule 22, does not in substance get notice, the sale which follows will be without jurisdiction, Rankin, C.J said on the facts of that case it would be merely piling unreason upon technicality to hold that the sale was not in order. There the judgment-debtors had in effect received notice and had appeared. That is not the case here.

For these reasons we dismiss the second appeal with costs.

N.S