CHELLAPPA v. SELVADURAI

035-NLR-NLR-V-15-CHELLAPPA–v.-SELVADURAI.pdf


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Present : Lascelles C.J. and W ood Renton J.
1912.
CHELLAPPA r. SELYADURAI.23—D. ('. Trincomalee, 3S9.
Civil Procedure Code, ss. 272, 282, 283, ond 26b—Decree-holder way bidfor or purchase property only with the sanction of Court—Courtmay imposeterms—Irregularity in conductingsale—Objectionto
sale must be made within thirty days.
A decree-holder may only bid fororpurchasethe property at.
the execution salewith theprevioussanctionofthe Court, and
subject to such terms as the Court may impose.
Sections 282and 283 ofthe Civil ProcedureCode requirethat
the grounds of each irregularity on which a person desiring to setaside a sale reliesshould beexpresslynotifiedtothe Court within
the period ofthirty dayscontemplated by thesections, andthe
Court has nopower to set aside (whatever hardship the particular
circumstances of the case may disclose) any sale on the ground ofan irregularity which has not been so notified.
Wherethe FiscalignoredtheconditionimposedbytheCourt,
directing that no bid be accepted from the decree-holder below theappraised value, and sold the property to the decree holder at amere fraction of the appraised value—
Held, that there was an irregularityinthe conducting ofthe sale
within the meaning of section 282.
Held,furtherthat-as thesalewas notimpeachedontheground
of this irregularitywithin theperiod prescribed bysection282,
the objection came too late.
Section 265 expressly empowersthe Fiscal,beforeaccepting
anybidat a sale inexecution', tosatisfy himself as tothe bona,fidcs
of the bidder and hi§ ability to pay down the amount of the depositrequired.
Aperson seekingto set asidea Fiscal's sale onthe ground of
materialirregularitymust lead directevidence to prove that the
sale ofthe propertyat anunder-value was due totheirregularity;
the mere allegationof inadequacyofprice, without proof that it
wasthe effect of the irregularityon the ground on which thesale
is impeached, is not sufficient evidence ofsubstantialdamage
caused by such irregularity.
I
Nthiscase therewere twoappeals.The appellantmoved,
under* section 282 of the Civil Procedure Code, to set aside the
sale of a land belonging to him in execution of the respondent'swrit. In the petition by which, in conformity with the provisionsofsec.tion282 of theCode, thatapplication was brought before
the Court, the only ground of irregularity alleged was that therehad beenno publication of thesalein a certain village; that
several intended purchasers had had no notice of it; and that in
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1912.
OheUappa
Selvadura
consequence of this there were no bidders, and the sale wasv. concluded on the solitary bid of the respondent, the appellant’s* judgment-creditor for Rs. 100.
The District Judge refused to set aside the sale. The judgment-debtor appealed. On November 30, 1911, the Supreme Court(Wood Renton and Grenier JJ.) affirmed the judgment of thelower Court by the following judgment, but without prejudice tothe right, if any, of the appellant to object to the confirmation ofthe sale on the ground that the decree-holder had bought theproperty, in contravention of the order of Court, for a sum belowthe appraised value.
Wood Renton J.—His Lordship set out the facts, and continued: —
The appraised value of the land is Rs. 2,510, and there is, I think,every reason to regard the present case as one of great hardship tothe appellant. At the inquiry into the appellant’s, petition nodirect evidence was led showing that the absence of bidders and thesale of the land for Rs. 100 were due to the irregularity in regardto the publication. It follows from the case of Silva v. Dias,'a decision of two Judges, which is binding upon us, and which itselffollows the decision of the Privy Council in MacNaghten v. PershadSingh,2 that the sale here , in question cannot be set aside on theonly, ground of irregularity alleged in the petition. It was held inSilva v. Dias1 that a person seeking to set aside a Fiscal’s sale onthe ground of material' irregularity must lead direct evidence toprove that the sale of the property at an under-value was due tothe irregularity, and that a mere allegation of inadequacy of price,without proof that it was the effect of the irregularity on theground on which the sale is impeached, is not sufficient evidenceof substantial damage caused by such irregularity. In his argumentin support of the appeal, however, Mr. Bawa has relied on twoadditional alleged irregularities: in the first place, that the bid ofa man Sabapathy, who offered an advance of Rs. 10 on the upsetprice of Rs. 2,510, was rejected by the Deputy Fiscal; and in thenext place, that by the very terms of the order permitting theexecution-creditor to bid, he had no right to acquire the propertyat less than its appraised value. Section 265 of the Civil ProcedureCode expressly empowers the Fiscal, before accepting any bid at asale in execution, to satisfy himself as to the bona fides of the bidder,and his ability to pay down the amount of the deposit required.The evidence in the present 'case shows that that condition wascomplied with, and that there were reasonable grounds for notregarding Sabapathv’s bid as a serious one. But in addition tothat fact, which is itself sufficient to dispose of the irregularity inquestion as a ground for setting aside the sale, it appears to tiu*that the fact that this ground of alleged irregularity was not notified
• i (.1910) 13 N. L. R. 195.* (1882) 1. L. R. 9 Cal. G56.
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1912'
to the Court within thirty days of the receipt of the Fiscal’s report——
precludes us from taking account of it now. Sections 282 and 283of the Civil Procedure Code, if they are read together, require,in my opinion—and the same view was taken obiter by Sir CharlesLayard C.J. in the case of Muttu Camp-pen Chetty v. de Mel1—-thatthe grounds of each irregularity on which the appellant relies shouldbe expressly notified to the Court within the period of thirty dayscontemplated b$ the section, and the Court has no power to setaside (whatever hardship the particular circumstances of the casemay disclose) any sale on the ground of an irregularity which has notbeen so notified. This omission is equally fatal to the second groundof additional alleged irregularity above referred to. There is goodreason for the requirement that irregularities should be promptlynotified to the Court dealing with applications of this kind, inasmuchas their determination frequently depends on viva voce evidencewhich can be led at the inquiry. The case of Muttu CaruppenChetty v. de Mel1 and’ the present case offer illustrations of thatproposition. It might quite well be that, if the point' had been takenin the appellant’s original petition, the respondent might have beenin a position, as was the judgment-debtor in the case of MuttuCaruppen Chetty v. de Mel.,1 to meet it by viva voce evideuce. Onthe grounds that I have stated J. would dismiss this appeal withcosts, but without prejudice to the right, if any, of the appellantto object to the confirmation of the sale on the ground that, underthe order of Court empowering the. execution-creditor to bid, hewas bound to accept the appraised value as the initial basis ofhis bidding. I would express no opinion as to whether such anobjection, if taken, would be entitled to prevail.
Grenier J.—I agree.
The judgment-debtor then moved that the sale be not confirmed,as the decree-holder had'bought the property, in contravention ofthe order of Court, for a sum below the appraised value. Thelearned District Judge disallowed the motion. The judgment-debtor appealed.
• Bawa, K.C., for the appellant.—The decree-holder applied forsanction of Court to bid for and purchase the property to be sold inexecution and to obtain credit for the purchase amount to the extentof his claim. The Court granted the sanction, subject to the provisothat the bidding was to commence at the appraised value, and thatno bid below the amount was to be accepted. The Deputy Fiscaldid not comply with the requirements of the order of Court, thoughhe was aware of the order, and permitted the judgment-creditor to bidfor and purchase the property for a sum much below the appraisedvalue. The sale is therefore bad, and should not be confirmed.
1 {1902-3) 6 N. L. R. 239 and 241.
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1912.' The words of the section of the Indian Code corresponding' to(fheUapj-a v section 272 of our Code are: “ No holder of a decree … shall;
SUvadvrai without the express permission of the Court, bid for or purchase theproperty …” Our section (272), though expressed differently,must be interpreted to mean the same. Under our section a decree-holder “ may, with the previous sanction of and subject to suchterms as to credit .. and otherwise as may be imposed by the
Court, bid for or purchase the property.” It is clear that under oursection th<e judgment-creditor may not bid for or purchase propertywithout the sanction of Court, and that the Court may, when it givesthe creditor sanction to bid, impose any conditions.
The District Judge was wrong in reiying on the practice atTrincomalee, as the custom on which he relies has the effect ofover-riding the provisions of section 272.
Counsel relied on Piloris v. Don Bastion.'
Sampayo. K.C. (with him Balasingham), for the respondent.—Before the Supreme Court decided the first appeal the DistrictJudge had confirmed the sale, as the appellant, though noticed,did not show any reasons to the contrary. It is now too late for theappellant to move that the sale be not confirmed. The SupremeCourt was not aware that the sale was confirmed when it deliveredits judgment of November 30. 1911.
Silva v. Uparis2 is a direct authority for the proposition thatsection 272 of the Civil Procedure Code does not forbid an execution-creditor from purchasing without the sanction of the Court. It isonly when the judgment-creditor wants credit that he should obtainthe sanction of Court.
The judgment-creditor in this case did not ask for credit from the. Fiscal. The Fiscal was,, therefore, right in selling the property to thejudgment-creditor for a sum below the appraised value.
The District Judge of Trincomalee is the most competent personto interpret the orders of his Court. He holds that the order of theCourt, permitting the creditor to purchase the property at theappraised value, only refers to the case of the creditor asking forcredit from the Fiscal. That is the practice at Trincomalee as shownby numerous records.
The objection was not raised within thirty days, and it is nowtoo late.
Bawa, K.C., in reply.—The District Judge had no right to confirmthe sale after the filing of the appeal. De Mel v. Dharmaratne.*
The sale is a nullity, as the orders of the Court were ignored.The non-observance of the order of .Court is not a mere irregularitywhich should be notified to Court within thirty days.
Cur. adv. vult.
» (1893) 3 C. L. R. 75 (footnote).2 (1894) 3 C.. L. R. 75.
2 (1903) 7 N. L. R. 274.
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March 18, 1912. Lascelles C.J.—*918*
I entirely concur in the judgment of my brother Wood Benton, Cheiuifmt/ithough I much regret that we are precluded by sections 282 and Set>> ' *283 of the Civil Procedure Code from setting aside this sale, whichwas carried out in flagrant violation of the order of the Court.Notwithstanding the judgment of this Court in Silva v. XJparis,1 Ijun clearly of opinion that section 272 of the Civil Procedure Code-must be construed to mean what it says, namely, that the decree-holder may only bid for or purohase the property with the previoussanction of the Court, and subject to such terms as the Court mayimpose. The language of the section is too clear to admit ofany other interpretation, and the provisions of the section whichempower the Court to impose terms are in themselves reasonable:md useful.
I entirely concur in the observations of ray brother with regardto the personal responsibility of an officer of the Court who disregardsspecific orders of the Court, as the Deputy Fiscal has done in this-case.
Wood Renton J.—
Thn case came before Mr. Justice Grenier and myself on Novem-ber SO. 1911. The appellant moved under section 282 of the CivilProcedure Code to set aside the sale of a land belonging to him inexecution of the respondent’s writ, on the ground that there hadbeen no publication of the sale in a certain village; that severalintending purchasers had no notice of it; and that in consequenceof this there were no bidders, and the sale was concluded on thesolitary bid of the respondent, the appellant’s judgment-creditor,for Rs. 100, while the appraised value of the land was Rs. 2,500.
The learned District Judge dismissed the motion, and my brotherGrenier and I affirmed his decision in appeal, without prejudice,however, to the right, if any, of the appellant- to object to theconfirmation of the sale on the ground that under an order of Courtempowering the execution-creditor to bid he was bound to acceptthe appraised value as the initial basis of his bidding. It was notbrought to our notice at the argument of the appeal that after thepetition of appeal had been presented, but before the date of theargument, the sale had in fact been confirmed by the District Judgeunder section 282 of the Civil Procedure Code. It appears fromthe record that the sale was confirmed by an order made interpartes. The learned District Judge says, in the order confirming it,
“ no reasons to the contrary having been adduced, this sale ishereby confirmed ”. The fact that the appellant offered no objec-tion to the confirmation of the sale must be taken account of inconsidering his present claim to have the confirmation of the sale-set aside.
1 (1894) 3 C. L. R. 75.
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1912.
Wood
BbsttonJ.
Ohdlappa v.Stlvudurai
The proctor for the plaintiff-appellant, who is the execution-creditor, moved in the proceedings “ for the sanction of the Courtfor his client to bid for and purchase the property to be sold inexecution, and to obtain credit for the purchase amount to theextent of his claim,” provided there were no competing execution-creditors. This motion was allowed, subject ’to the proviso thatthe bidding was to commence at the appraised value, and that nobid below that amount was to be accepted. The terms of this orderwere communicated by the Secretary of the District Court to theDeputy Fiscal. The order of the Court, however, was disobeyedat the sale. The respondent’s motion and the terms of the orderitself show clearly that the sanction of the Court was asked, notonly to the respondent’s obtaining credit for the purchase amountto the extent of his claim, but also to his bidding for. and purchasingthe property i'tself. The Deputy Fiscal, who conducted the sale,was aware of the order which the Court had made. He did not,however; comply with its requirements. The property was not putup for sale at the appraised value, and the respondent was allowedto purchase it for a mere fraction of that value. This open dis-obedience of the order of the Court has been defended on- the groundthat it has not been the practice in Trineomalee to carry out suchorders, except where credit is asked for. The respondent in thepresent case did not produce the credit order on the date of thesale, nor did he apply for credit. Apart from judicial decisions,the meaning of section 272 of the Civil Procedure Code, underwhich the respondent’s application for the sanction of the Courtwas made presents to my mind no difficulty.
” A holder ”, says that section, “ of a decree in execution of whichproperty is sold may, with the previous sanction of and subject tosuch terms as to credit being given him by the Fiscal, and otherwiseas may be imposed by the Court, bid for or purchase the property.”
In my opinion the meaning of this enactment is that the holderof a decree in execution can only bid for or purchase property soldunder that decree with the previous sanction of the Court, andsubject to any conditions, whether as to credit or otherwise, thatthe Court may impose. I am quite unable to adopt the view takenby Lawrie J. in Silva v. Uparis1 that section 272 of the CivilProcedure Code does not expressly forbid an execution creditorfrom purchasing without the sanction of the Court. Dawrie J.sought to justify this interpretation of the section by reference tothe Roman-Dutch law and to the practice prior to the enactmentof the Code of Civil Procedure. With the greatest respect, I wouldpoint out that we are now concerned only with the language ofsection 272 itself. It seems to me to be entirely unambiguous.I would hold that the order made by the Court on the respondent smotion for its sanction was an order made under section 272; that
i (1894) 3 C. L. B. 75.
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it was binding alike on the respondent and on the Deputy Fiscal; 1W2.and that no practice of the District Court of Trincomalse could wooojustify a Deputy Fiscal in disregarding it. I desire to point out as Rgygoyemphatically as possible that officers of Court who fail to comply Chellappa v.with such orders, in reliance upon such a practice as was set up in Selvadura*the present case, are assuming a very serious personal responsibility.
Although it may no doubt be argued that the failure of theDeputy Fiscal to carry out the sale in accordance with the orders ofthe Court made the sale itself a nullity, it still, I think, amountedto an irregularity in conducting the sale within the meaning ofsection 282 of the Civil Procedure Code. If this view is correct,the appellant is not entitled to rely on it now. inasmuch as he didnot impeach the sale on that ground within the period prescribedby section 282 of the Code. Under section 283 of the Code of CivilProcedure, where an application under section 282 to set aside asale has either not been duly made or has been disallowed, the Courtis required, on the application of the decree-holder or of thepurchaser, to ^ass an order confirming the sale, as regards the partiesto the suit and Mie purchaser, unless it is proved that the judgmentdebt was satisfied at the time the writ of execution issued. On noother ground can an order confirming a sale under chapter XXII.of the Civil Procedure Code be opposed under the Code. Undersection 284 the sale when confirmed may be set aside on the groundthat the person whose property purported to be sold had no salableInterest therein. Here, again, no other ground for setting aside asale under chapter XXII. that has been duly confirmed is prescribed.
It was held both by the Privy Council (see Sillery v. Harmanis1)and by this Court (see Sinnetampi v. Kandapodi2) that an order madeunder section 53 of “The Fiscals' Ordinance. 1867 ", confirmingor disallowing a sale in execution, is a final order. Subject to theproviso contained in it, I think that the same interpretation mustbe- placed on section 284 of the Code of Civil Procedure. We arenot concerned in the present case with sales effected under otherprovisions of the law than chapter XXII. of the Code of CivilProcedure.
The appellant’s counsel argued that in any case the DistrictJudge had no right to confirm the sale pending an appeal. Herethe. order of confirmation was made after the presentation of thepetition of appeal, but before the hearing of the appeal itself. Thiscircumstance differentiates this case from De Mel v. Dharmaratne3,where the sale, although confirmed, was set aside on the groundthat before confirmation the Supreme Court had reversed in appealthe decree in pursuance of which execution had-issued and the salehad taken place. But I do not think that it is necessary to dealwith this point further, for, as I have already shown, the order of* {1882) 8 A. C. 99.-2 (IS’89) 9 S. C. C. 9.
* (1903) 7 N. L. R. 274.
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1912.
. WoosRbnton J.
ChtUappa v.■ Seivadurai
confirmation was made inter partes, and without any cause againstit having been, shown by the appellant. The construction thatthis judgment places on sections 282 and 288 of the Civil ProcedureCode may involve hardship in particular cases. But I think thatit is in law a correct interpretation of those sections, and that it issound in principle also. If the view were to be sanctioned thatparties dissatisfied with sales in execution should be free to attackon any ground of statutory objection, not only a sale itself, but alsothe confirmation of that sale, proceedings of this character wouldbe conducted piecemeal, with a great increase of delay and expenseto suitors. There is nothing unreasonable in the law providingthat all the objections to a sale in execution, except those as towhich it makes special provision, shall be taken under section 282of the Code, and that, when once a sale has run the gauntlet of suchobjections, it shall be confirmed as a matter of course, subject to theprovisions in sections 283 and 284 of the Code. As I have alreadypointed out, we are concerned here only with sales under chapterXXII. of that Code, and with grounds of. statutory objection tosuch sales. I would dismiss the appeal with costs.
Appeal dismissed.
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