PEIRIS, Appellant, and SENEVIRATNE et al. Respondents

050-NLR-NLR-V-45-PEIRIS-Appellant-and-SENEVIRATNE-et-al.-Respondents.pdf


164
HOWARD C.J.—Peiris and Seneviratne.
1944Present: Howard C.J. and Soertsz J.
PEIRIS, Appellant, and SENEVIRATNE et al. Respondents.
57—D. G. ([Inty.) Kalntara 16,934.
Mortgage sale—Execution of mortgage decree—Directions of Court—-No materialirregularity—No injustice to applicant—Sale upheld.
Where an application is made to set aside a sale of property held inexecutionof a mortgagedecreein accordancewiththe provisions ofthe
Civil Procedure Code and further directions of Court—
Held, that the sale should not be set aside where there has been nomaterialirregularity orwhereno injusticehasbeen caused tothe
applicant.
A PPEAL from an order of the District Judge of Kalutara.
The facts appear from the judgment.
H. V. Perera, K.C. (with him C. V. Ranatoake), for the petitioner,appellant.
N. E. Weerasooria, K.C. (with him E. B. Wikremenayake), for therespondent.
Gur. adv. vult.
March 17, 1944. Howard C.J.—
The appellant in this ease who was the original plaintiff applied for anorder to set aside a sale held on November 29, 1941, at the instance ofthe second respondent who was substituted plaintiff on the ground that hehad seized the decree in this case as against the appellant. The secondrespondent did not interest himself in the appellant’s application whichwas opposed by the purchaser the 1st respondent. The appellantobtained judgment against the defendant in February, 1932, and ahypothecary decree was entered directing that the mortgaged propertyshould be sold in default of payment of Rs. 2,500. No further directionsfor the conduct of the sale were given. The Court by its order of May 22,1933, allowed the substitution of the second respondent only for the purposeof enabling the latter to enforce his decree against the appellant. Condi-tions were attached that the second respondent should enforce his decreeearly, that the name of one of the court auctioneers and draft conditionsof sale should be submitted with notice to the plaintiff and that the saleshould be held under the supervision of the Court. These conditionswere attached as the appellant had suggested that the second respondent andthe defendant might act in collusion. The appellant appealed fromthe order of substitution. His appeal was dismissed, but the Supreme
HOWARD C.J.—Peiris and Seneviratne.
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Court approved the conditions formulated by the District Court in itsorder of May 22, 1933. Later the name of Mr. Abeyesinghe, the auctioneerwho conducted the present sale, was sumbitted. The appellant raisedno objection to Mr. Abeyesinghe conducting the sale. The sale, afterobjections by the appellant, was held on April 21, 1934, by Mr. Abeye-singhe on conditions and an appraisement approved by the Court. Onthe motion of the appellant the sale was set aside by the Court onDecember 6,1934, on the ground that the defendant had published
leaflets keeping away would be purchasers. On September 11, 1935, thesecond respondent applied to have the order to sell re-issued to the sameauctioneer, free of stamps. This application was refused. On March 11,1936, ar. arrangement was made whereby one property was sold privatelyand the second respondent received Us. 2,400 towards the settlement of hisdebt. On November 9, 1939, second respondent moved to have the orderto sell re-issued. The defendant was dead and the names of the heirswere mentioned in his application. The original plaintiff, the appellant,was also made a respondent. The second respondent was ordered to issuenotice on all parties. The appellant appeared by h;s Proctor, Mr. Peiris,and on April 25, 1940, asked for time to file objections. On June 14,1940, Mr. Peiris stated he was not filing objections. On October 30, 1941,the order to sell was issued. On November 20, 1941, Mr. Abeyesinghe,the auctioneer, moved that the Court be pleased to allow him permissionto sell the lands on the same conditions, the only alteration being thatone-tenth purchase money be paid instead of one-fourth. OnNovember 25, 3941, Mr. Peiris for the appellant moved to withdraw planNo. 8,923 dated May 16, 1922, made by B. M. Caldera, Licensed Surveyor.This application was allowed. On November 27, 1941. Mr. Abeyesinghe,the auctioneer, moved to file a fresh valuation of the properties mortgagedin view of the bad condition of the house and the disappearance of themill and its machinery. On December 2, 1941, Mr. Abeyesinghe filed hissale report and deposited the sum of Rs. 457.50 being purchase moneyrecovered- On December 17, 1941, the balance of the purchase moneyamounting to Rs- 3,892.50 was deposited by the purchaser, the firstrespondent to this appeal. On December 20, 1941, the appellant movedto have the sale set aside. At the hearing in the District Court it wascontended on behalf of the appellant that the sale in question, apart frombeing subject to the provisions of the Civil Procedure Code, was alsosubject to special directions laid down by the Court. Except for anapplication made on November 9, 1939, by the second respondent for anorder to sell of which the appellant had notice, nc notice was served on theappellant as to the subsequent steps especially as regards the auctioneerwho was to conduct the sale, the appraisement of the properties soldand the conditions attaching to the sale. It was contended that this wasin contravention of the directions of the Court. It was also maintainedthat the conditions of sale and the appraised value had not been approvedby the Court at the time of the issue of the Gazette Notice of sale (P 2),that the auctioneer was not a proper person to have conducted the sale,that there was no proper advertisement of the sale, that as a result ofthese irregularities the sale fetched a price grossly disproportionate to itstrue value, that there were no bidders at the sale when the property was
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HOWARD C.J.—Peiris and Seneviratne.
knocked down without much ado to the first respondent by an unfairarrangement with the auctioneer and that the appellant has sufferedsubstantial injury.^
The order to sell was re-issued to Mr. Abevesinghe, the previousauctioneer, without the previous submission of his name to the Court,The ordei directed him to sell after due publication, but does not prescribethe kind of publication. Mr. Abeyesinghe advertised the sale in theGazette on November 7, 1941, twenty-two days prior to the actual sale onNovember 29, 1941. He also published the notice in the “ Daily News ”of November 19, 1941. He also stated in evidence that tom-tom wasbeaten and handbills distributed. The Court approved the alteration inthe deposit and in the valuation of the property to be sold. The learnedDistrict Judge held that the Court can adopt the provisions of the CivilProcedure Code as to publication and conduct of sales governed by section12 of the Mortgage Ordinance, and give directions accordingly. IE it doesadopt such provisions, it will follow the cases bearing on such provisions.If no such directions are given it will not lightly set aside sales nor will itconfirm a sale when it sees that a manifest injustice has been done to someparty concerned. In the present case, the learned Judge, for reasons whichhe has given, came to the conclusion that no manifest injustice has beendone to the appellant and dismissed his application with costs.
On behalf of the appellant Mr. Perera has contended that there havebeen material irregularities in the sale. Those irregularities are asfollows: —
The auctioneer's name was not submitted to the Court in contra-
vention of the Court’s order. Nor did the appellant havenotice of his appointment. 2 3 4
(2)The modifications in the deposit and the valuation made bv the
auctioneer and approved by the Court were so approved withoutnotice to the appellant.
(3)The auctioneer was not a proper person to conduct the sale, not
being licensed .to conduct sales at Panadure, but only atKalutara.
(4)The sale was not properly advertised and the property was
fraudulently knocked down to the first respondent by theauctioneer without proper bidding.
In connection with these irregularities Mr. Perera has maintained thatit is not incumbent on the appellant to establish that he has sufferedinjury bv reason thereof and has referred us to the case of Koetman v.Amorasekere1. The headnote of this case is as follows: —
“ To set aside a Fiscal's sale on the ground of material irregularity undersection 282 of the Civil Procedure Code, it is not necessary thatin all cases there should be direct evidence of the connectionbetween the irregularity and the injury. Where the injuryappears to be one which, may be reasonably and logically inferredto be the natural consequence of the irregularity, the connectionneed not be further established by ' direct evidence ’.
1 23 N. L. R. 327.
HOWARD C.J.—Peiris and Heneviratne.
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It is only in cases where there is no such reasonable connection betweenthe irregularity and the injury that the necessity for directevidence is insisted upon
The irregularity in this case was a misdescription of the property to besold, the extent being described as 1^- acres instead of three. The sub-stantial injury was that it sold much below its real value, being valued inthe inventory at Us. 9,000, by the Fiscal at Rs. 5,000 whereas it sold forEs. 1,100. In Koelman v. Amarasekere which was followed in UkkuAmma v. Punchi Ukku1, Bertram C.J. adopted the principle formulatedby Pereira J. in Cassim v. Andris2 that the connection between irregula-rity and the injury can be established by presumptions as by directevidence and held that the price realized was- so low and the mis-description so considerable that the trial Judge could justifiably haveconcluded that the inadequacy of price was a consequence of themisdescription.
It- has certainly not been established in the present case by directevidence that the appellant has suffered injury by reason of any of thealleged irregularities. Can it be said that the injury if suffered by theappeliant is one that can be reasonably and logically inferred to be thenatural consequences of any irregularity ? In order to answer thisquestion it is necessary to consider first of all whether any of theseirregularities have been proved. The Court approved the conditions ofsale petting out that they would be governed by the relevant sections ofthe Civil Procedure Code. Notice of sale was given in accordance withthe provisions of the Civil Procedure Code. There was evidence thattom-tom was beaten in addition to publication in the Gazette and the“ Bailj News ”. A notice of the sale was affixed in the Court-house.The deposit was altered from twenty-four per cent, to ten per cent, byorder of the Court. The lowering of the appraisement or valuation of theproperty also received the approval of the Court. Having regard to theevidence of the Rev. T. C. J. Peiris, it cannot be said that the auctionwas a put up job and that the property was knocked down to the firstrespondent as the result of collusion between him and the auctioneer. Ido not consider that there was any material irregularity in the sale byreason of the fact that Mr. Abeyesinghe was not registered to conductsabs at Panadure. The failure of the Court to notify the appellant beforeapproving the modifications in the deposit and valuation, even if irregula-rities, are not so material as to lead to the reasonable and logical inferencethat the appellant is injured thereby. There only remains the questionof the failure on the part of the Court to approve the name of Mr. Abeye-singhe. as auctioneer and his conduct of the sale without formal notice tothe appellant. In the absence of any evidence to establish collusion orfraud on the part of Mr. Abeyesinghe and the first respondent, there is noground for the contention that the plaintiff has- suffered injury by reasonof Mr. Abeyesinghe’s conduct of the sale. It may be said that absoluteand strict compliance has not been made with the District Judge's orderof May 22, 1933, as approved by the Supreme Court order of January 22,1934. But it cannot be said that the irregularity was material or that ithas lead to any injustice.
1 30 N. L. R. 305.
* 17 N. L. R. 1<U.

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HOWAED C.J.—-Petris and Seneviratne.
'There is also a further bar to a successful prosecution of the appellant’sclaim. In view of Mr. Peiris’ application of November 25, 1941, on behalfof the appellant to withdraw plan No. 8,923, it must be inferred that thelatter had notice that Mr. Abeyesinghe was to conduct the sale. Theappellant had notice of the application for sale and failed to file objections.He was cognizant of the fact that Mr. Abeyesinghe had previously beenappointed to conduct the sale and it is in evidence that he was aware ofthe fact that Mr. Abeyesinghe was making arrangements for the sale.He could have applied to the Court for the appointment of anotherauctioneer. In these circumstances I do not consider that he can nowbe heard to object to the sale on the ground that he had no opportunity toobject tc Mr. Abeyesinghe’s appointment. In this connection I wouldinvite attention to Samarasinghe v. Amaradewakare1 and Aninachellamv. Arunachellam,2.
Further considerations affecting the appellant’s right to take advantageof any irregularity in the sale has been brought to our notice by Mr. Weera-sooria. The property was bought by the first respondent and nofraudulent conduct by way of collusion with the auctioneer or secondrespondent has been established. In these circumstances he cannot bedeprived of his property. Perera v. Lebbe3 was cited in support of thisproposition. The headnote of this case is as follows: —
“ A property, the sale of which the owner had prohibited by his lastwill, and which was subject to a trust, was sold under the authority ofthe Court, and was purchased by defendant from one of the executors.
The plaintiff, who is the sole surviving executor and trustee under thelast will, brought this action for declaration of title.
Held, defendant could not be deprived of the property on the groundof any irregularities in the order for sale, or in the procedure by whichthat order was obtained, if he purchased the property bona fide for valueand without notice of the trust.”
The same principle was also formulated in the Privy Council case of RewaMahton v. Ram Kishen Singh4-.
For the reasons I have given, I have come to the conclusion that theDistrict Judge came to a right conclusion and the appeal must be dismissedwith costs.
Soertsz J.-—-I agree.
Appeal dismissed.
1 11 C. L. R. 13.
* I. L. R. 12 Mad. 20.
» 19 N. L. R. 308.
* J. L. R. 14 Calc. 19.