091-NLR-NLR-V-72-V.-T.-JOSEPH-and-another-Appellants-and-A.-J.-THIRUCHELVAM-and-another-Respon.pdf
426
Joseph v. Thiruchelvam
1969Present: Sirimane, J., and de Kretser, J.
'V. T. JOSEPH and another, Appellants, and A. J. THIRUCHELVAM
and another, Respondents
S.C. 57(1907 {Inly.)—D.G. Jaffna, 4SS5(MB
.Mortgage—Hypothecary sale—Conditions of sale—Whether they can be varied after salehas taken place—Mortgage Act (Cap. <S9), ss. 50 (3), 50 (4) (d), 61—CivilProcedure Code, ss. 260 to 262.
Where a hypothecary sale of mortgaged property has already taken place,subject to the coiiditions of snlo prescribed by Iho Court, tho provisions ofsection 00 (4) (d) of the IVfortgago Act dchar tho Court from, varying thoconditions of sale at the instance of tho purchaser, except with the consent ofall tho parties who would bo affected by such variation.
..A.PPEAL from a judgment of the District Court, Jaffna.
S. Sharoananda, with 21. A. 21. Bali and 21. Waniappa, for the 7th• and the Sth respondents-appcllants.
O.lianganalhan, Q.C., with K. Kanag-Isicaran, for the 3rd and the 4th•defendants-respondents…
Cur. ado. vult.
SiRIMAXE, J.—Joseph v. Thiruehctvam
427
October 11, 19G9. Sirimane, J.—
This is an appeal by a purchaser from an order by the District Judgesetting aside a mortgage sale.
According to the Conditions of Sale on which the property was put upfor sale by public auction, l/4th of the purchase price had to be depositedimmediately after the sale, and the balance paid within one month. Ifthis was not done, the purchaser had to foifeit the deposit, and theproperty had to be put up for re-sale.
These conditions were made known to the purchaser and all otherbidders, and in addition the purchaser had also signed these conditions-of sale.
After 30 da3'S had elapsed, the 3rd and the 4th defendants (who are therespondents to this appeal) moved that the deposit be forfeited and theproperty put up for re-sale in accordance with the conditions referred toabove. Though the 3rd and the 4tli defendants had conveyed -their-rights in this property to the Sth defendant, and litigation had followed onthis sale yet there was sufficient evidence to show that they (3rd and 4thdefendants) were still vitally interested in the property.
Before the lapse of the 30 days, the purchaser had obtained an order■enlarging the time for the payment of the balance purchase money,without notice to the 1st, 2nd, 3rd and 4th defendants who were the ownersof the property mortgaged.
It was submitted for the purchaser that under section 50 (3) of theMortgage Act, Chapter 89, the Court had power to alter the earlierdirections given to the Fiscal.
Conditions of Sale are prescribed by the Court before a sale takes place,and there can be no doubt that by subsequent directions the Court mayalter those conditions. But once a sale has taken place subject to theconditions so prescribed the purchaser is bound b}r those conditions.
Section 50 (4) (d) enacts that
“ Every person making a bid at the sale shall be bound by theConditions of Sale prescribed by the Code under the precedingprovisions of this section whether or not he signs an agreement to bebound thereby; ”
After the sale has taken place, a condition can be altered by the Court•only with the consent of all the parties affected by such alteration.
At the argument, Counsel for the purchaser conceded that if sections'260-262 of the Civil Procedure Code were applicable, the order setting aside4he sale was correct. Section 2(50 provides for the deposit of l/4th of
428
SLRIMAX.E, J.—Joseph t*. Thirucheiam
the purchase money, and section 2G1 for the payment of the balance within.30 days. Section 2G2 provides as follows :—.
‘‘In default of payment within the period mentioned in the *Iastpreceding section, the deposit, after defraying the expenses of-.thesale, shall be forfeited to, and shall go in reduction of, the claim of thejudgment-creditor, and the pnoperty shall be rc-sold, and -thedefaulting purchaser shall forfeit all claims to the property and to any'part of the same for which it may subsequently be sold. ’*"
(Condition 5 is in practically the same terms as this section).
It was argued that the trial Judge was in error when he referred: tothese sections of the Civil Procedure because they are not applicable1 tomortgage sales, as provided by section 61 of the Mortgage Act, Chapter 89.
But section 60(4) (d) of that Act read with the Conditions of Sale hasthe same effect as section 262 of the Civil Procedure Code. •,
The case of Zahcm v. Fernando1 was decided under the provisions of theold Mortgage Ordinance 21 of 1927. The purchaser bought the propertyqn the 14th of October, and paid the deposit. He brought in the balancepurchase money on the 14th of November. At the highest he was lateby a few hours, and the Court held that it would be inequitable to penalisethe purchaser for the breach of a Condition of.Sale which may be regardedas a mere technicality. Garvin, J. said,
“ I think that this is a case in which the Court is entitled in it&discretion to accept the balance purchase money and direct the issueof the conveyance even if in law the purchaser is out of time by a fewhours. ”
Under the Mortgage Ordinance of' 1927 there was no sectioncorresponding to section 50 (4) (d), and the Court appears to have beeninfluenced by the fact that the objection to the confirmation of salewas very highly technical.
But in the later case of Suleha Umma v. NagoorJlohamadtt2 i t was held(in a partition sale) that the Court had no discretion to allow the moneyto be deposited after the time fixed had elapsed.
I think that this case sets out the better view. Once the purchaserbuys, subject to conditions which are binding on him, the Court is leftwith no discretion “to give vent to its own generous and good-naturedimpulses ” as Soertsz, J. put it, and vary the conditions, except withthe consent of all the parties who would be affected by such variation.
The appeal is dismissed with costs.
de Kretser, J.—I agree.
Appeal dismissed.
1 (1931) 33 -V. L. n. 179.
5 (1915) 16 N. L. It. 415.