Civil Appeal No 342 of 1959
Appeal by special leave from the judgment and decree dated April 29 1959 of the Calcutta High Court in appeal from Original Order No 188 of 1958
H N Sanyal Additional Solicitor General of India
T section Venkatarama K R Sarma and K R Chaudhry for the appellants
section N Mukherjee for respondent No 1
N C Chatterjee section K Acharyya and R section Narula for respondent No 2 1959
November 10
The Judgment of the Court was delivered by GAJENDRAGADKAR J
The principal question which Gajendragadhar J which this appeal by special leave raises for our decision is Whether the provisions of section 21 r 89 of the Code of Civil Procedure apply to a sale held by a receiver appointed by the court and authorized to sell the property in question
The learned Single Judge on the Original Side of the Calcutta High Court as well as the Division Bench of the said High Court have answered this question in the negative
The appellants contend that the view taken by the Calcutta High Court is erroneous
This question arises in this way
In Suit No 1024 of 1953 on the Original Side of the Calcutta High Court a decree for the payment of Rs 18497 15 0 was 200 passed by consent in favour of the New Bheerbhum Coal Co Ltd hereinafter called respondent 1 and against  the Benares Ice Factory Ltd hereinafter called appellant 2 on December 5 1955
The decree provided for the payment of the decretal amount by six equal instalments and it directed that in case of default of any one of the instalments the balance of the decretal dues would at once become payable
A first charge was created by the decree on the plant and machinery of appellant 2 for securing the payment of the decretal amount
A default having occurred in the payment of instalments respondent I applied for the execution of the decree on April 10 1956
On this application an interim order was made on May 17 1956 appointing Mr A K Sen as Receiver of the properties charged
The said application was finally decided by an order passed on May 30 1956 by which the appointment of the receiver was confirmed and he was given liberty to sell the said properties either by private treaty or by public auction
It is common ground that the receiver took possession of the said property in December 1956
Subsequently on March 10 1958 the receiver entered into an agreement with Sukhlal Amarchand Vadnagra hereinafter called respondent 2 for the sale of the said property for Rs 30000
The terms and conditions embodied in the said agreement provided inter alia that within one month from the date of the receipt by the purchaser of intimation from the receiver that the sale bad been confirmed by the High Court the purchaser shall deposit with the said receiver the full price of Rs 30000
On March 31 1958 respondent I applied to the court for confirmation of the said agreement and on May 9 1958 GK Mittter J allowed the application
He ordered that the appellants should deposit the sum of Rs 3000 with the attorneys of the decree bolder towards its claim under the said decree and further directed that if the said amount was paid within the time aforesaid and the balance of the decretal amount was paid within ten weeks thereafter the agreement of sale shall not be confirmed
The order further provided that in default 201 of the appellants paying the amounts as directed within the respective due dates the sale of the charged property by the receiver to the second respondent as get out in the agreement shall be confirmed
Pursuant to this order the appellants deposited with the attorneys of the decreeholder Rs 3000 on May 30 1958
They had also paid to the receiver Rs 3500 in August 1957 towards the decretal dues
It appears that when the appellants were unable to pay the balance as directed by the court appellant 2 applied to the court praying that the agreement of sale should be cancelled and the time within which he was directed to pay the balance of the decretal amount should be extended
The application also sought for certain other directions
GK Mitter J who heard this application dismissed it on July 29 1958 and confirmed the agreement of sale
On August 20 1958 appellant 2 took out a notice of motion of an application made by him on the same day praying that leave may be granted to him to deposit the whole of the balance of the decretal amount and that the receiver should be restrained from receiving any money from the intending purchaser in terms of the agreement of sale
It appears that on August 22 1958 respondent 2 tendered a cheque for Rs 30000 to the receiver towards the payment of the purchase money under the agreement of sale
Soon thereafter however respondent 2 took back the cheque and paid Rs 30000 in cash on September 1 1958
The application made by appellant 2 for leave to pay the balance of the decretal amount was dismissed by G K Mitter J on September 4 1958
The learned judge however stayed the delivery of possession of the property to respondent 2 for a week from the date of his order
The appellants then filed an appeal against the order of the learned judge before a Division Bench of the High Court and obtained an order for stay of delivery pending the decision of the appeal
On April 29 1959 the Division Bench dismissed the appeal and refused to grant certificate to the appellants to file an appeal in this Court
The appellants 26 202 then applied for and obtained special leave from this Court on May 20 1959
That is how this appeal has come before us and the main point which Mr Sanyal for the appellants has raised for our decision is that the courts below were in error in refusing to give relief to the appellants under 0 21 r 89 on the ground that the said rule was inapplicable to the sale held by the receiver
It is common ground that the receiver was appointed with power to him to get in and collect the outstanding debts and claims due in respect of the charged property and with all powers provided for in 0 40 r 1 cl
d of the Code of Civil Procedure 
The order appointing the receiver also expressly directed that the receiver shall be at liberty to sell the said property charged in favour of respondent 1 either by private treaty or by private auction to the best purchaser or purchasers that can be got for the sale but he shall not hold such sale before the 13th day of August 1956
In other words the receiver was appointed in execution proceedings under section 51 and was given all the powers under 0 40 r 1d of the Code
It is by virtue of those powers that he entered into the agreement of sale with respondent 2 and sold the property to him and gave him its possession
Section 51 which deals with the powers of the court to enforce execution provides for the execution of the decree by five alternative modes specified in cls
a to e
One of the modes of execution is the appointment of a receiver which means that a decree for the payment of money can be executed by the appointment of a receiver
He may either collect the income of the property belonging to the judgment debtor and thereby satisfy the decree or if so authorised he may sell the property of the judgment debtor and thereby arrange for the satisfaction of the decree
Thus in dealing with the question as to whether the ale held by the receiver is a sale ordered by the court to which 0 21 r 89 applies it is necessary to remember that the appointment of the receiver itself is a mode of execution of the decree
203 When the receiver so appointed is given all the powers under 0 40 r 1d it is these powers which he seeks to exercise when selling the judgment debtor s property in execution of the decree
The sale held by the receiver under such conditions would no doubt be governed by the provisions of 0 40 and the court may supervise or issue directions in respect of such a sale under the provisions of the said order
Prima facie the sale held by the receiver appointed in execution proceedings in pursuance of the powers conferred on him under 0 40 r 1d would be governed by the powers conferred on him and the terms and conditions on which the said powers may have been conferred and by other relevant provisions of 0 40
It does not seem to attract the provisions of 0 21
Courts have had occasion to consider questions about the applicability of several provisions of 0 21 to sales held by receivers and opinions expressed on such questions have differed more particularly in the Calcutta High Court as we will presently indicate
In the present appeal we do not propose to consider or decide the general question about the character of the sale held by the receiver nor do we propose to attempt to specify which provisions of 0
21 will apply to such sales and which will not
We are dealing with the narrow question as to whether 0 21 r 89 applies to such a sale and it is to the decision of this narrow question that we will address ourselves in the present appeal
Order 21  r 89 enables the persons specified in subr
1 to apply to have the sale held in execution proceedings set aside on two conditions a the applicant must deposit for payment to the purchaser a sum equal to 5 of the purchase money and b for payment to the decreeholder the amount specified in the proclamation of sale as that for the recovery of which the sale was ordered less any amount which may since the date of such proclamation of sale have been received by the decreeholder
The second requirement immediately raises the question as to whether it is necessary for the receiver in selling immoveable property in execution proceedings to issue 204 a proclamation as required by 0 21 r 66 of the Code
In our opinion there can be no doubt that the provisions of the said rule do not apply to sales held by receivers
No decision has been cited before us where a contrary view has been expressed
The provisions of the said rule apply where property is ordered to be sold by public auction in execution by the court and the order for the sale of such property must be made by any court other than the Court of Small Causes as provided by r 82
Where the court appoints a receiver and gives him liberty to sell the property the receiver may either sell the property and thereby realise the money for the satisfaction of the decree or he may even without selling the property seek to satisfy the decree by the collection of rents due from the property or other ways open to him under the law
In such a case it is difficult to hold that by the very appointment of the receiver clothing him with the power to sell the property if he thought it necessary to do so the court had ordered the sale of the said property within the meaning of 0 21 r 82
If the provisions of r 66 of 0 21 are inapplicable to sales held by receivers it is obvious that the second condition prescribed by r 891b is equally inapplicable and it is undoubtedly one of the two essential conditions for the successful prosecution of an application under the said rule
In our opinion this fact clearly emphasises the inapplicability of the whole rule to sales held by receivers
We are therefore satisfied that the High Court was right is refusing to entertain the appellants  application under 0
21 r 89
It is then argued that the High Court should have considered the appellants  prayer under section 151 of the Code
It is no doubt a hard case where the appellants have to lose their property though presumbly at the time when they made the present application in the High Court they were able to produce for the payment to the decreeholder the whole of the balance of the decretal amount
As the judgment of the Division Bench shows the learned judges themselves have observed that it was difficult not to feel sympathy for the appellants but on the other hand it is clear 205 from the record that the appellants were given enough opportunity to pay the decretal amount
The decree was passed by consent and included a default clause
The appellants committed default and incurred the liability to pay the whole of the decretal amount
When the agreement of sale executed by the receiver came before the court another opportunity was given to the appellants to pay the decretal amount on the specified conditions
The appellants again committed a default
It is only later when it was too late that they rushed to the court with a prayer that they should be allowed to pay the decretal amount themselves and their property should be saved
Under such circumstances if the learned judge who heard their application as well as the appellate court came to the conclusion that the court s jurisdiction under section 151 cannot be invoked by the appellants we do not see how we can interfere with the said decision
It is true that section 151 is not specifically mentioned in the judgment of either of the courts below but that must be obviously because no specific plea under section 151 was raised
Even so the Division Bench has observed that it could not interfere with the order of the learned judge when in his discretion he refused to make an order as asked for by the appellants
This must inevitably refer to the discretion under section 151 because if 0 21 r 89 had applied and the appellants had satisfied the conditions prescribed by it there would be no discretion in the court to refuse such an application
It would then have been a right of the appellants to claim that the sale should be set aside
We are therefore unable to accede to the plea raised before us by Mr Sanyal under section 151 of the Code
There is another point which Mr Sanyal attempted to raise
He contended that the sale had not been properly confirmed before he moved the court for leave to pay the decretal amount and so the courts below were in error in not allowing his application
This argument is based on a decision of the Calcutta High Court in SM Sudevi Devi vs Sovaram Agarwallah1
In that case Woodroffe J was dealing with a 1 206 conditional decree which entitled the decreeholder on the default of the defendant to apply to the court which passed the decree to direct the ejectment of the defend ant
It appears that when disputes arose between the decreeholder and the judgment debtor in regard to the performance of the conditions imposed by the decree the decreeholder obtained an order for ejectment of the defendant without notice to the judgment debtor
The judgment debtor then applied for setting aside modifying or reviewing the said order
Woodroffe J held that a court had inherent power to deal with an application to set aside an order made ex parte on a proper case being substantiated
Mr Sanyal contends that the sale in the present case being conditional in the sense that it was subject to the confirmation by the court it was open to the court to refuse to confirm it when the appellants applied for leave to pay the balance of the decretal amount
This argument necessarily assumes that the order passed by Mitter J on May 9 1958 was a conditional order
In our opinion this assumption is not well founded
The said order no doubt gave an opportunity to the appellants to pay the decretal a mount in the manner prescribed by it but it clearly provided that in default of the appellants complying with the said conditions within the respective due dates the sale of the property by the receiver to respondent 2 be confirmed and that the said receiver do make over possession of the said property to the said purchaser
It is clear that this order is not a conditional order at all
It is a composite order
It provided for the payment of the decretal amount by the appellants and in that sense gave an opportunity to the appellants to avoid the sale of their property but on the other hand it also provided that on their default to comply with the order the sale do stand confirmed and the receiver do make over the possession of the property to the purchaser
Therefore in our opinion there is no scope for applying the principle laid down by Woodroffe J in the ease of section M Sudevi Devi 1
1 207 Before we part with this appeal we may very briefly indicate the nature of the divergence of views expressed in the Calcutta High Court on the question about the character of sales held by receivers appointed by courts to which our attention has been invited
In Minatoonnessa Bibee  Ors
vs Khatoonnessa Bibee  Ors
1 Mr Justice Sale held that the purchaser at a receiver s sale is entitled to obtain the assistance of the court in obtaining the possession under the provisions of the Code relating to sales in suits
In coming to this conclusion the learned judge referred to a precedent in the Calcutta High Court in that behalf and made an order for possession of the property in favour of the receiver
It may be pointed out that the learned judge in dealing with the question has referred to the important fact that in that particular case the sale had been already treated as a sale by the court inasmuch as the registrar had been directed under the provisions of the Code to execute the conveyance on behalf of some of the parties to the suit
Thus the question was in a sense res judicata
However in dealing with the general question the learned judge has no doubt observed that sales by receivers  are in all essential particulars similar to sales by the registrar and that if they are sales by a civil court in a suit the procedure prescribed by the Code for sales in a suit would be applicable
 We do not think that these observations should be divorced from the facts of the particular case with which the learned judge was dealing and read as laying down a general proposition that sales held by receivers attract the application of all the provisions in the Code in regard to sales held by the court
If such a proposition was really intended to be laid down we would hold that it is not correct at least in regard to the provisions of 0 21 r 89
In Gulam Hossein Cassim Ariff vs Fatima Begum 2 Mr Justice Fletcher has taken a contrary view
He has held that  a sale by a receiver under the direction of court is not a sale by court and in such a sale the court does not grant a sale certificate nor does it confirm the sale
 The learned judge referred to the 1 Cal 479
2 208 earlier decision of Sale J and dissented from him
It is unnecessary for us to consider the correctness or otherwise of this decision
Fletcher J adhered to the same view in Jogemaya Dasee vs Akhoy Coomar Das 1
In that case the learned judge was dealing with the sale of properties by the Commissioner of Partition and he held that such a sale is not one by the court but is one made by the Commissioner of Partition under the authority of the court
Chaudhuri J considered the same question in Basir Ali vs Hafiz Nazir Ali 2  and held that in all sales whether by the court or under the court or by direction of the court out of court the purchaser is bound to satisfy himself of the value quality and title of the thing sold just as much as if he were purchasing the same under a private contract
According to this decision the sales certificate does not transfer the title
It is evidence of the transfer
Accordingly he directed
the receiver to execute a conveyance in favour of the purchaser
This decision is not quite consistent with the view taken by Mr Justice Fletcher
In Rani Bala Bose vs Hirendra Chandra Ghose Chakravarti J as he then was has incidentally referred to this conflict of judicial opinion in the Calcutta High Court and has indicated his preference for the view taken by Sale J though he has been careful enough to add that he was not deciding the point and that the case with which he was concerned was not covered by the actual decision of Fletcher J
These decisions show that there has been a divergence of opinion as to the character of the sale held by a receiver as to whether it is a sale by the court or under the court or under the directions of the court
It is because our attention has been invited to these decisions that we have thought it necessary to make it clear that our present decision is confined to the narrow question as to whether the sale held by a receiver attracts the provisions of 0 21 r 89
We 1 Cal
2 Cal
3 209 hold that r 89 of 0
21 does not apply to such a sale and that the High Court was right in rejecting the appellants  claim based on the said rule
The result is the appeal fails and is dismissed with costs
Appeal dismissed


Summary:
Section 281 of the authorised the State Government to grant sanction to a non licensee to engage in the business of supplying energy on  such conditions in this behalf  as it may fix
By a notification dated May 26 1948 issued under section 281 the first respondent granted sanction to the first petitioner to engage in the business of supplying energy to Muktsar
Clause 11 of the notification provided that the Provincial Government shall have the option of acquiring the undertaking at anytime after October 21 1950 after giving one year s notice and that it shall pay the price of lands buildings works material and plant that may be acquired at the fair market value
On January 3 1958 the first respondent issued a notice exercising the option given under cl 11 and intimated to the first petitioner that upon expiry of one year its undertaking shall vest and become the absolute property of the first respondent
On January 4 1959 the first respondent took possession of the undertaking in pursuance of the notice
The petitioners contended that cl 11 of the notification was ultra vires section 28 and that if cl 11 was justified by section 28 then section 28 was void as it offended articles 19 and 31 of the Constitution
Held that cl
11 of the notification was intra vires section 28
A statutory provision which dealt with the grant of sanction to 240 a person to engage in the business of supplying energy must having regard to the special features of the business necessarily deal with the position which would arise on the termination of the sanction  so it could be assumed that such statutory provision would make adequate provision empowering the State Government to provide for the compulsory acquisition of the assets of the supplier on payment of proper compensation
Though section 281 did not specifically provide for compulsory acquisition on payment of compensation the expression  such conditions in this behalf  in section 281 in the context would include conditions dealing with the position which would inevitably arise when the business came to an end
The sanction under section 28 being necessarily temporary it was in the interest of thegrantee himself that some provision was made for payment of compensation to him
A condition for acquisition like cl 11 was therefore within the scope of section 281
New Orleans Gas Light Co vs Louisiana Light and Heat Producing and Manufacturing Co   29 L Ed 516 referred to
Held further that section 28 was valid and did not offend either article 19 or article 31
The Act could not be challenged on the ground of violating article 312 as it was an existing law which was saved by clause 5 of the article 31
Similarly it was saved by section 2994 of the Government of India Act 1935 from an attack under section 2992
The restrictions imposed by section 28 of the Act were reasonable restrictions imposed in the interests of the general public within the meaning of article 195
Such limitations were generally imposed on the business of supplying energy