Hadjtar v. Kuddoos.
1935Present: Koch J. and Soertsz A.J,
HADJIAR et al. v. KUDDOOS et el.
37—D. C. Colombo, 47,499.
Fiscal’s sale—Failure of Fiscal to demand payment of amount of writ fromjudgment-debtor—Substantial irregularity—Purchase by holder ofmoney decree—No sanction of Court—Application to set aside sale—Civil Procedure Code, ss. 226, 272, 282, and 344.
The failure of the Fiscal to demand from, the judgment-debtor theamount of the writ in terms of section 226 of the Civil Procedure Code isa substantial irregularity, which renders the sale held thereafter null andvoid.
Such a sale may be set aside under section 344 of the Civil ProcedureCode.
The holder of a money decree is bound by the provisions of section 272of the Civil Procedure Code which forbid the execution-creditor to buythe property sold in execution without the sanction of Court or incontravention of the terms imposed under the section.
De Silva v. Upasaka Appu1 and Chellappa v. Selvadurai’ followed.
^PPEAL from an order of the District Judge of Colombo.
N. E. Weerasooria (with him Chelvanayagam), for plaintiffs, appellants.
H. V. Perera, for purchaser, respondent.
H. E. Garvin, for defendant, respondent.
Cur. adv. vult.
'SC. W. ft. 227.
J 15 N. L. ft. 139.
KOCH J.—Hadjiar v. Kuddoos.
October 25, 1935. Koch J.—~*
The plaintiff (appellants) in this case sued the defendant (firstrespondent) for a declaration of title to a house and grounds, presentlybearing assessment No. 14, Hulftsdorp street, Colombo. On March 16,1934, when the case was taken up for trial, the defendant raised thequestion of misjoinder which was upheld by the learned District JudgeThe plaintiff’s counsel thereupon elected to confine the claim to thesecond plaintiff alone. There was an order as to costs also made infavour of the defendant. The defendant lost no time in pressing hisadvantage, and having issued writ for these costs, seized this veryproperty and sold it. The purchaser at this sale was the second respond-ent. The price realized was only Rs. 100, although the property wasvalued by the plaintiffs for the purposes of their plaint at Rs. 4,000.Considering that the premises No. 14 consisted of a house and groundsand that the valuation put upon it was necessary for regulating thestamp duty payable on the pleadings, &c., it is not likely that any buta conservative value would have been imposed on the subject-matter ofthe action. It follows that there is every reason to. regard the case asone of great hardship to the appellants.
The grievance of the appellants, who have made an application to setaside the sale, is that neither the Fiscal nor his deputy who was entrustedwith the execution of the writ had repaired to the second plaintiff’sdwelling house or place of residence and had required him to pay theamount of the writ, and that, in consequence of this omission, he knewnothing about the sale and only came to hear of it when the purchasergave notice to the appellant’s proctor of an application by him to Courtto be substituted in room of the second appellant as the second plaintiff,and, that further, as the result of ignorance on his part, he was unable toapply under section 282 of the Civil Procedure Code within thirty daysof the report of the sale to Court, to have the sale set aside on this groundas well as on the ground that the purchaser was a mere nominee and thatthe actual buyer was the first respondent who, acting in conspiracy withthe buyer, procured the purchase in the name of the nominee.
Now, had such an application been made under this section in time,it is conceded that it was possible for both these points to have beenraised by the appellants, although it is argued by the respondents’counsel that the contention on the first point must fail as section 226of the Civil Procedure Code is not imperative in its terms but merelydirectory, and that the second point also cannot succeed as the sale nothaving been held in pursuance of a hypothecary decree, there was nothingto prevent the judgment-creditor from purchasing the property himselfor through an agent without first obtaining the permission of the Courtto do so. I regret I cannot agree with this argument on either of thepoints. The language in section 226 is, in my opinion, imperative in itsnature, at any rate so far as the enjoinment on the Fiscal to proceed tothe dwelling house of the debtor and there make demand of him. Thesection runs thus:—“Upon receiving the writ the Fiscal or his deputyshall within forty-eight hours after delivery to him of the same ….repair to his (debtor’s) dwelling house or place of residence and there
KOCH J.—Hadjiar v. Kuddoos.
require him, if present, to pay the amount of the writ It may be thatthe requirement that the demand should be made within forty-eighthours is merely directory—The King v. Migel Kangany'. The fact thatthe demand is made seventy-two or more hours after such a writ isreceived and not within forty-eight hours, one can understand, shouldnot necessarily invalidate proceedings held thereafter, but the necessityfor the demand itself goes to the root of the interests of the judgment-debtor. He surely should be given an opportunity of paying and dis-charging the writ and this can only happen if he be apprised of tftfe issueof that writ.
De Sampayo J. was of this opinion in Andris Appu v. Kolande Asariet al.s He there fully appreciated the necessity for such a demand in thefirst instance, although in his opinion if this was once done, it was no:necessary that the demand should be repeated on a re-issue of the writ.
In de Silva v. Upasaka Appu ' the same Judge was definitely of opinionthat a demand should be made of the judgment-debtor and that thefailure to do so amounted to an irregularity that was substantial. A saleheld thereafter, he said, was liable to be set aside either under section344 or under section 282 of the Civil Procedure Code. Schneider J.agreed.
These views are strengthened by local decisions under an analogoussection of the Code, viz., section 347. That section provides that whenthere is no respondent named in an application for execution, when ayear has elapsed between the date of the decree and such application,the Court shall cause the petition embodying the application to be servedon the judgment-debtor. It was sought to be argued that this require-ment was purely directory.
Schneider J. in Perera v. Novishamy ‘ pointed out the necessity underthis section for the insistence of even the right formula to be used. Hestressed the necessity for a strict compliance with the requirements of thatsection.
In a later case Kannangara v. Peries 5 Drieberg J., basing his remarkson the decisions in Rajunath Das v. Sundar Das “ and Gopal Chander v.Gunamoni Dasi1 said “ Notice is required in the interests of partiesagainst whom execution is sought and the absence of notice makes theexecution proceedings void as against them and not merely voidable
I cannot help feeling that the intention of the legislature was to regarda demand by the Fiscal of payment of the sum stated in the decree anessential, and that it gave this intention its full effect by using the words“ shall require him to pay the amount of the writ ”. If therefore theFiscal has failed in this duty and this has been established to the satis-faction of the Court, I am of opinion that the sale held under the writis null and void.
The learned District Judge in his order refusing the second appellant'sapplication saysthat“ it does not appear….that the
' 4 C. W. R. 127.‘29 X.L.R. 242.
• 19 N. L. R. 227, atp. 233.530 N.L.R. 78 alp.80.
3 c C. W. R. 227.6(1914)42Cal. 72.
■ <1892) 20 Cnl. 370.
KOCH J.—Hadjiar v. Kuddaos.
judgment-debtor was not to be found and therefore no demand couldhave been made from him The learned Judge in saying so is no doubtpurporting to act under the words “ and there require him, if present ”in the section.
There can be no doubt that the Court has to satisfy itself as to thepresence of the debtor in the house at the time before it can be heldthat the Fiscal’s failure to demand is an irregularity ; but the complaintof the second appellant is that although he brought out this pointexpressly in paragraph 5 (b) of his petition and affidavit, the learnedDistrict Judge has refused to allow him the opportunity of establishinghis allegations and proceeded to decide the point as well as the otherpoints raised on his behalf without recording any evidence whatsoever.
In connection with this matter it was further urged by the respondentsthat even if there was substance in the contention of the appellants,the point must fail as the default of the Fiscal amounted to a mereirregularity that could only be relieved by means of an applicationto set aside the sale under section 282. This has to be done, he argued,within thirty days of the report of the sale to Court and before confirma-tion, and the present application is therefore too late. I have alreadystated that the default of the Fiscal amounted to more than a mereirregularity for it rendered the sale null and void, and I also agree withde Sampayo J. in de Silva v. Upasaka Appu (supra) that relief can beclaimed under section 344 and not necessarily under section 282.
In a recent case of importance Anamally Chetty v. Sidambaram ChettyGarvin J. looked upon section 344 as a procedural provision which couldbe availed of by a party who seeks to set aside a sale, not on the groundof a material irregularity in the publishing and conducting of it, but onother grounds which refer to matters relating to the execution of a decree.He instances cases of fraud and also explains that, although a purchaseby a decree holder in the name of a nominee may often be treated as anirregularity within the contemplation of section 282, there may be caseswhere such purchases may be made in circumstances which may amountto a fraud which vitiates the whole proceeding, from which the Court willgive relief notwithstanding the sale was confirmed under section 282 inignorance of the fraud. It becomes clear therefore that such fraud willdepend on circumstances that have to be established by evidence.There is a sufficient disclosure of that fraud set out in paragraph 5 (d) ofthe petition and affidavit. But, as I have said before, the learnedDistrict Judge has not permitted the second plaintiff to establish it byevidence.
In view of the decision I have arrived at on the first point, it is hardlynecessary to decide the second point, but as some argument was addressedto us regarding it, I may as well decide that point too.
I do not agree that it is only in respect of hypothecary decrees thatpermission to bid and buy under certain conditions must be obtainedby the judgment-creditor. I think it is necessary to obtain thispermission even in the case of a sale under a simple money decree.Section 272 of our Code sets out the requirements thus : —“ A holder of a
33 N. I.. n. 277.
KOCH J.—Hadjiar v. Kuddoos.
decree in execution of which property is sold may, with the previoussanction of and subject to such terms as to credit being given him by theFiscal and otherwise as may be imposed by the Court, bid for or purchasethe property Does this section only refer to the necessity for suchan application, if credit to be given him is desired by the judgment-creditor ?
The implications of this section came up for consideration in the caseof Chellappa v. Selvadurai and Lascelles C.J. there stated “ I am clearlyof opinion that section 272 of the Civil Procedure Code must be construedto mean what it says, namely, that the decree holder may only bid forand purchase the property with the previous sanction of the Court andsubject to such terms as the Court may impose
Wood Renton J. in his judgmerit in the same case said that the meaningof section 272 did not present to his mind any difficulty. He was unableto agree with Lawrie J. in Silva v. Uparis' that this section did notexpressly forbid an execution-creditor from purchasing without thesanction of the Court. He could not see how the Roman-Dutch law orthe practice prior to the enactment of the Civil Procedure Code couldhelp. He emphasized that his concern was only with the languageadopted in the section and that it was, in his opinion, entirely unambi-guous. He decided that the meaning of the enactment was that theholder of a decree in execution although merely for money can only bidfor or purchase property sold under that decree with the previoussanction of the Court, and that the Court in granting such sanction couldsubject the decree holder to conditions as to credit or otherwise as itdeemed fit.
This judgment has met with approval in the case of Weeraman v. deSilva*. De Sampayo J. there stated that it would be an evasion ofsection 272 for an execution-creditor to purchase at an execution saleeither without the sanction of the Court or in contravention of the termsimposed by the Court, whether he does so himself or through an agent.It is true that he felt in this case that if the application was made undersection 282 and the Court was considering it under that section, such anapplication would be out of order if made after the confirmation of thesale. But in view of this learned Judge’s previous opinion and thedecision in Anamally Chetty v. Sidambaram Chetty (supra), I have littledoubt' that the application may rightly be made in these circumstancesand considered under section 344.
The case will have to go back for the reception of evidence on thepoints raised by the appellant’s counsel in the District Court. The orderof the learned District Judge will be set aside and the case remitted forthat purpose. The appellants will be entitled to the costs of appeal.The costs already incurred in the District Court and the further costs willabide the result of the inquiry.
Soertsz A.J.—I agree.
15 N. L. R. 139.* (2894) 3 C. L. R. ?6.
* 22 .V. L. R. 107.
HADJIAR et al. v. KUDDOOS et al