SUBRAMANIAM CHETTY v. SOYSA

077-NLR-NLR-V-25-SUBRAMANIAM-CHETTY-v.-SOYSA.pdf


( 344 )
1928.
Present: Bertram C.J., Ennis J., and Garvin A.J.
SUBRAMANIAM CHETTY v. SOYSA.
167—D. C. Colombo, 5,789.
Fiscal*a sale—One of the main gates of estate where sale took place closed—Inability of judgment-creditor to bid at sale—Material irregu-larity—Sale set aside—Application for leave to appeal to PrivyCouncil by creditor—Property valued by Fiscal at six lakhs—Salefor Rs. 1,991—Was proceedings to set aside sale' an “ action ’*—
“ Final judgment ’*—Value—Ordinance No. 31 of 1909.
The execution-creditor caused the Fiscal to seize and sell asbelonging to the judgment-debtor a property which he had trans-ferred to his eon. The public had no access to the place of sale,as one of the gates of the estate was closed, and some of the in-tending purchasers, including the execution-creditor, were unableto bid at the sale. The estate, though valued by the Fiscal atRs. 600,000, fetched at the sale Rs. 1,991.
Held (per Bertram C.J. and Ennis J.) that the failure on thepart of the Fiscal’s officer to secure a proper public entrance to theplace where the sale was conducted was a material irregularityin the conduct of the sale.
The Supreme Court set aside the sale. The purchaser appliedfor conditional leave to appeal to the Privy Council.
Held [per Bertram C.J. and Garvin A.J. (Ennis J. dissentiente)],that an appeal lay.
The proceeding which resulted in the sale being set aside was anaction within the meaning of section 4 of Ordinance No. 31 of 1909,and the order setting aside the sale was a final judgment withinthe meaning of rule 1 (a) in schedule I. of that Ordinance ; thesubject-matter in dispute was of the value of Rs. 5,000 or over.
rpHE plaintiff, execution-creditor, moved to set aside a Fiscal'ssale on the ground of an alleged irregularity in the conductof the sale. The District Judge refused ^the application. Theplaintiff appealed, and the appeal was argued before Bertram C.J.and Ennis J. The Supreme Court delivered the judgment reportedbelow allowing the appeal. The purchaser applied for leave toappeal to the Privy Council. The application was reserved for.argument before a bench of three Judges, and the hearing camebefore Bertram C.J., Ennis J., and Garvin A.J.
The following was the argument before three Judges on theapplication for conditional leave to the Privy Council :*—
H. J. C. Pereira, K.C. (with him Samaraunckreme), for thepurchaser, applicant.
The amount involved is over the value specified for appeals tothe Privy Council—Rs. 5,000.-
The value for the purposes of the appeal is the value of the land—
1 S. C. R. 1.
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[Enkis J.—You have purchased the debtor’s interests for aboutRs. 2,000.]
We made a bargain*
The creditor himself having valued the property at Rs. 600,000he is estopped by it.
The proceeding is an aotion as defined in sections 5 and 6 of theCivil Procedure Code. The judgment in question is a final judgment.Counsel cited 40 Cal 635 at 647,9 N. L. R. 129,6 C. W. R. 157.-
Hayley (with him Choksy), for the creditor, respondent.—Thevalue of the matter involved in this appeal does not amountto Rs. 5,000. It is the question or claim to the property, or thecivil right that has to be of the value of Rs. 5,000. If “ amountingto ” qualifies only “ property,” then the words “ claim or questionto or respecting ” might be omitted from rule 1 (a).
The value for the purposes of appeal must be judged by theextent to which the appellant suffers by the judgment. He broughtthe property for Rs. 1,991 at a sale, which, according to him, wasregularly conducted.^
He cited 13 App. Cos. 780.
“ Amounts to or is ” means a specific amount, and not what itmight amount to. Leave cannot be given in the latter case(12 N. L. R. 367).
This is a proceeding in the course of an “ action ” and is not an“ action.” The Code only contemplates two kinds of actions, viz.,an action in Regular Procedure and an action in Summary Pro-cedure. Proceedings to set aside a sale are merely “ Applications ”incidental to and in the course of an action. They cannot be“ actions ” because there cannot be an action within an action.The purchaser who now seeks to appeal is not a party to theaction.
The judgment in question is not a final judgment (4 Bee. 71 and5 A. C. 371). He also cited 4 Q. B. D. 459 and (1910) 1 Ch. 489 at493.
December 18,1923. Bertram C.J.—
This is an appeal against the order of the learned District Judgerefusing to set aside a sale under section 282 of the Civil ProcedureCode on the ground of an alleged irregularity in the conduct of thesale. The sale took place upon a coconut estate in the ChilawDistrict. It was advertised as a public sale. On the date of the,sale the execution-creditor, accompanied by his proctor and anothergentleman, came to the entrance of the estate upon the old Chilawroad, and found the gate at that entrance locked. Persons whoappeared to be watchers were on the other side of the estate andrefused to admit him. He says that that entrance was the mainentrance of the estate. The name of the owner of the estate was
1923,
Subra-maniamChetty v.Soyea.
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1928.
Bertram
C.J.
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maniam
Chetty v.Soysa
displayed near the gate. He further says that there was a crowd ofsome 20 people waiting inside near the gate. One would assumethat they were all interested in the sale proceeding. A short timebefore this, Mr. F. R*. Senanayake, accompanied by a relation ofthe judgment-debtor, also appeared in a car at this same gate,found it locked, and was turned away. Their object in visiting theestate and attending the sale was a purely benevolent one. Mr.Senanayake says that the gate was closed, and that it was a fairlylarge one. He obviously regarded it as the proper entrance to theestate on which the Bale was being carried on. The occupants ofboth these cars tried to get into the estate by going round it, butboth were unsuccessful. Mr. Senanayake arrived at the other gatenear to which the sale commenced, apparently after the sale or asubstantial part of the sale was over. We have, then, the factthat two independent .members of the publio approached whatthey considered to be the main entrance of the estate, and foundthat entrance barred against them. There can be little doubt thatthe gate in question was the main entrance. The Fiscal's officerhimself says that had he known that one of the main entrances wasclosed, he would have taken steps to prevent it. I may mentionthat the legal ownership of the estate was not vested in thejudgment-debtor, but, five years ago, had been transferred by himto his son, who had written a letter to the Fiscal claiming theproperty. A public sale, therefore, could not be held upon theproperty without his acquiescence.
Objections were duly lodged to the irregularity of the sale, andthey may be reduced to two heads. Under the first of these headsthe judgment-creditor alleges fraud on the part of the judgment-debtor. He alleges that the gate was fraudulently closed, with aview to keep him and, I suppose, other bidders out. I do not thinkthat this charge is made out. • The judgment-creditor had visitedthe estate on another occasion when the property was seized, andhe had on that occasion gone to the other gate. The judgment-debtor had no reason to believe that the creditor would come to anygate, but the one to which he came the first time. Certainly, therewas no reason to believe that he desired to exclude from the salethe occupants of the other car who, as I said, attended the salefrom purely benevolent motives. There is, however, anotherground to the objection, namely, that the sale was not a public sale.We have these undoubted facts: that two intending bidders werenot able to get access to the estate in time for the sale because oneof the main entrances to the estate, if not the main entrance, waskept closed. How is it possible under these circumstances to saythat the sale was publicly conducted ? It was surely the duty ofthe Fiscal who was conducting a public sale , upon a property to seethat the main entrances to that property were available to thepublic. Mr. Pereira suggests that this was not a real effective
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entrance) inasmuoh as it may regularly have been kept closed. Thefact that after the sale varioul people were seen emerging in motorcars from the estate through] this gate seems to contradict thatsuggestion- He further suggests that the legal owner of the estatemay quite possibly, in the exercise of his undoubted rights, havedirected that particular entrance to be closed to the persons attendingthe srie. That may have been so. But that only emphasizes thefact that the sale was not a public sale. It seems to me that thisfailure on the part of the Fiscal’s officer to secure a proper public,entrance to the place where the sale was conducted is a materialirregularity in the conduct of the sale.
Mr. Pereira further argues that, even if this were so, it causedthe judgment-creditor no substantial injury. The estate had beenconveyed five years ago by the judgment-debtor to his son- Thesoil had mortgaged it to the extent of five lakhs of rupees. Thejudgment-creditor if he bought the estate was merely buying anequity of redemption subject to a law suit. Mr. Pereira urges thatwhat he was seeking to buy would probably prove worthless. Thatmay very well be the case. But he attended the sale as a bidder1;he desired to bid ; he had a right to bid ; and, as he was preventedfrom bidding by the irregularity, he sustained a substantial injury.For these reasons I am of opinion that the judgment-creditor hasmade out his case, and the appeal must be allowed, with oosts.
Eimts J.—I agree.
1928.
Bertram
C.J.
Svbra-maniamChetty v.Soysa
The purchaser applied for conditional leave to appeal to thePrivy Council.
The application was argued before three Judges, and the followingjudgments were delivered :—
March 7,1923. Bertram C. J.—
This is an application for conditional leave to appeal to the•Privy Council against the judgment of this Court upon an appli-cation made in the District Court to set aside a sale in executionof the judgment in the original action. I may briefly refer to thefacts of the case. The judgment was given against the judgment-debtor, and the judgment-creditor denounced to the Fiscal a certainestate as being his judgment-debtor’s property. Now, the estate,as a matter of fact, had been conveyed by the judgment-debtor tohis son some years before the action, and the son had mortgaged itto the extent of over four lakhs of rupees. It is not clear on whatprecise ground the execution-creditor says that this property wasthe property of his debtor. It may have been that he intendedto bring a Paulian action to set aside the conveyance as having beenmade in fraud of creditors, in which case I venturi to think thatthe present proceeding is misconceived, or it may be that he
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C.J.
Subra-mamamCheUy t>.8oyaa
contended that, although the title was nominally in the son, yet heheld property under an arrangement in trust for his father, who wasthus the real beneficial owner. The property was advertised forsale. The sale took place, and the purchaser, who is a son-in-lawof the judgmentdebtor, bought in the property for the compara-tively small prioe of Bs. 1,991. It had been valued by the Fiscalas worth six lakhs of rupees, subject to the mortgages above referredto, and the principal execution-creditor in his evidence has statedthat he was prepared himself to bid a lakh for the property if hehad been able to attend the sale. He and other members of thepublic were in fact prevented from attending the sale, becauseone of the principal entrances to the property where the sale washeld was kept dosed. The result was that he was not able to reachthe place of the sale until the sale was over. It was on this groundthat he applied to the District Court to set aside the .sale. TheDistrict Judge disallowed his application, but we held that the salewas not a publio sale, and gave judgment accordingly, allowing hisappeal. The purchaser now seeks to appeal from the judgment ofthis Court to the Privy Council. The execution-creditor opposeshis application.
He oontends, in the first place, that the proceeding in whichthe judgment setting aside the sale was given was not a suit oraction within the meaning of section 4 of the Appeals (Privy Council)Ordinance, 1909 ; and, in the second place, he says that it is not afinal judgment within the meaning of rule 1 (a) in schedule I. ofthat Ordinance. He further says that the appeal is not one whichinvolves a claim respecting property amounting to or of the valueof Bs. 5,000.
I will deal with these points in order. Was this proceeding a ■suit or action ? In determining that question, we must have regardto the nature of Ordinance No. 31 of 1909. It is intended tosupplement our Code of Civil Procedure. It would be highly in-convenient if the word “ action ” in this Ordinance were given adifferent meaning from that which is given to it in our Code ofCivil Procedure. But there is a further reason. The principalsections of this Ordinance replaced and re-enacted certain repealedseotions of our Code of Civil Procedure, and there is a very stronginference that the words used in an enactment so passed shouldhave the same meaning as they bore in the sections which theenactment replaced.
Now, in our Code of Civil Procedure, a very wide meaning is givento the word " action.” Ia section 5 an action is defined as a pro-ceeding for the prevention or redress of a wrong. In section 6 it issaid that every application to a Court for relief or remedy obtain-able through the exercise of the Court’s power or authority, orotherwise to invite its interference, constitutes an action. It seems
( 349 )
clear to me, therefore, that this application to the Court to set asidethe sale instituted by a petition to the Court was an action withinthe meaning of section 4..
Mr. Hayley has addressed to us a very able contrary argument.He says that the Code contemplates three proceedings—a regularaction, an action in summary procedure, and an incidental appli-cation which may be made either in the course of a regular actionor in an action in summary procedure. He relies upon section 373and certain of the following sections. I do not take this view. Inmy opinion, with regard to summary procedure, the Code contem-plates the possibility of an action within an action.' An applicationmade to a Court in the course of, and incidental to, an action insummary procedure is, in my opinion, regarded by the Code asitself being an action. Sections 375 and 390, I think, support thisview. I hold, therefore, that the proceeding was an action.
The second question is whether the order of this Court settingaside the order of the District Court was a final judgment. Itseems to me very difficult to consider our judgment as an inter-locutory judgment. It was a judgment which finally disposed ofthe case between the parties to the proceedings, that is to say,the purchaser and the execution-creditor. I cannot help beinggreatly impressed by the remarks of the Privy Council in a casecited to us by Mr. Pereira (Krishnan Pershand Singh v. MotiGhand1). On page 648 it is observed by Their Lordships thatappeals of this nature have frequently been heard by that Board intimes past, and they also observed that no reason can be givenwhy orders of so important a character which deal finally with therights of parties should be excluded from the privilege of anappeal. These words, it seems to me, are very forcible words inthe present case. It appears to me, therefore, that the order isa final order.
' There is another point which I should mention and to whichI have not at present referred. It is contended that the purchaser,who is the respondent to these proceedings, was not a party to theaction. It is pointed out that section 4 of Ordinance No. 31 of1909 only concedes the right of appeal to parties to suits or, actions.Mr. Hayley contends that this must mean only parties to theoriginal action. To this point I think there is more than oneanswer. In the first place, supposing one of the parties to theoriginal action institutes a proceeding against such a person as thepurchaser and brings him into the action for the purpose ofdetermining, a claim against him, then it seems to me that such apurchaser may well be regarded as being a party to the originalaction. That has been expressly determined by a judgment ofthis Court, namely, Fernando v. Fernando,2 where Lascelles A.C.J. *
1923,
Bertram
C.J.
Subra-maniamChetty v.Soyea
1 (1913) 40 Cal. 60S.
* (1906) 9 N. L. R. 129.
( 350 )
1023*
Bbhtbau
CJ.
Subra-maniamCheUy v.Soysa
said : “ Any person who is prejudicially affected by a judgmentor order of this Court is in my opinion a party to the action forthe purpose of appealing to the Privy Council.”
Mr. Hayley has pointed out that we had on previous occasionsruled that it is not possible for a person to be made a party afterjudgment. That principle, I think, applies to cases where it issought to make a person a party for the purpose of dealing withthe original claim. It has no application, I think, to a person who isadded as a party for the purpose of determining a question inci-dentally arising in the execution. But even supposing this view isnot upheld, there is another way of regarding the matter, and that isthat our Code contemplates, as. I have already said, an actionwithin an action, and the parties to proceedings so regarded areparties to an action.
This brings to me to what is the real question at issue in theappeal, namely, what is the manner in which the subject-matterof the appeal should be valued. What Was being sold in thecase was the land itself. The Civil Procedure Code containsin form No. 56 a form which states precisely what it isthat the Fiscal conveys. It purports to convey the land seized.It is quite true that in effect he conveys nothing more than theinterests of the execution-debtor. But what is sold is, in fact, theland. Now that purchaser has bought that land. The execution-creditor declared that that land was the property of his execution-debtor and the purchaser bought it on that footing. The execution-creditor now seeks to take away from the purchaser the landwhich he claims to have bought. What is the extent of hisprejudice if this claim is allowed as it was allowed by thisCourt. In my opinion the only possible measure of the value forthe purpose of this appeal is the actual value of the land sold.
It appears to be contended that in determining this question wemust not consider that actual value, but the value of the land inthe circumstances in which it was sold and with regard to the personwho bought it. I am quite unable to take this view. It would bequite impossible for a Court in our position in determining a questionof this kind to attempt to value such a speculative matter as theactual title of the judgment-debtor to the land. Where the judg-ment-creditors cause land to be seized and sold as property of theirdebtors, I think any subsequent proceeding in relation to the exe-cution must proceed upon that footing. Mr. Hayley suggests thispoint of view. He says that in his hands the property might beworth a lakh of rupees, because he would be able to bring a Paulianaction to get the conveyance to the execution-debtor’s son set aside,whereas the purchaser is not in thiB position. I doubt this. APaulian action surely implies that the property has passed from thedebtor. In any case, I think, it is impossible to go into consider-ations of that sort. The only practical way of dealing with the
( 361 )
question of value is to regard the appeal as involving a questionrespecting the actual concrete land itself. As 1 read paragraph (a)of section 1, what it declares is that an appeal lies as of right, whereit involves some question respecting property of the value ofRs. 5,000 or upwards. It seems agreed that the value of the actualproperty is about Rs. 100,000. It seems to me, therefore, that thepurchaser is entitled to conditional leave to appeal, and that theapplication must be allowed, with costs.
1928.
Bebtbam
C.J.
Subra-maniamChetty v.Soyaa
Ennis J.—
In my opinion this application should be refused. The valueof the property is not such, in my opinion, as to give a rightof appeal under rule 1 in the schedule to the Ordinance No. 31of 1919. The applicant in this case is the purchaser at an executionsale and he bought all that the creditor could seize under- section 218 of the Civil Procedure Code and under the Fiscal's sale,namely, the right, title, and interest of the judgment-debtor in theland. The question then arises whether the second part of rule 1is such as to make the total value of the property the basis of thevaluation for the purpose of the appeal, or whether one shouldtake the actual value of the right, title, and interest of thejudgment-debtor which should betaken into account. It will be seenthat rule 1 makes a distinction between a matter in dispute andquestions affecting property. The second part of rule (a) seems toapply to abstract rights, i.e., individual rights (proprius) which arepeculiar to the individual. That these rights may bear a value verymuch less than the real value of the land is shown by the fact thatthe property in this case is heavily mortgaged. It is next shownby the fact that, at what purported to be a sale of the judgment-debtor's right, title, and interest in the land, a sum of Rs. 1,991only was realized. It seems to me that the best criterion of thevalue of any given property is the sum it will fetch when it is soldin the market. Both the parties in this case seem to be in accordthat there is some value in the particular rights sold, although it isdifficult to see what rights were sold ; the land in question does notbelong to the judgment-debtor, but to his son, and there is noadmission by the son that he holds it in trust for or on behalf ofthe judgment-debtor, and it is only such that can be seized undersection 218 of the Civil Procedure Code. The value to be ascer-tained for the purpose of the appeal is the value of the property/to the party seeking to appeal. In this case there was a sale by'auction, and it was set aside on the ground that it was not a public$ale. The appellant contends that it should not have been setLfeside, and if, as he would contend, the sale was a public one, thenthe price obtained must be regarded as the value of the property,Ipom his point of view, for the purpose of this appeal. For theseJasons I am of opinion that the application should 4)6 refused.
( 352 )
1923.
Subra-
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Chetty v.Soysa ,
Garvin A.J.—
I agree with my Lord the Chief Justice on all points. Theparties to this proceeding are the .execution-creditor and thepurchaser at the execution sale. The dispute between them relatesto the sale in execution. The execution-creditor is seeking to setaside the sale on the ground of material irregularity. In the lowerCourt the learned Judge held that the sale had been validly con-ducted. On appeal, however, the judgment was set aside. Now,what the Fiscal purported to sell, and what the purchaser claims tohave purchased, was a certain land. It seems to me, therefore,that the dispute between the parties is one with respect to property,and I think both parties are agreed that the land in this case isworth substantially more than Rs. 5,000. It i§ true that anytransfer by the Fiscal could only pass such rights as the judgment-debtor possessed, and it may be that in some future proceeding itmay be established that the judgment-debtor had an interest whichis less than Rs. 5,000 in value, and possibly that he had no saleableinterest in the property. But it is impossible for us at this stageto determine whether or no the judgment-debtor has any interest,or to estimate the value of such interest as he may be entitled to.
Application allowed.