Appeal No 1203 of 1977
From the Judgment and Order dated 4121973 of the Calcutta High Court in Appeal from Original Order No 624 of 1968
AKGanguli UR Lalit SKNandy Chandra Nath Mukher jee Gaurav Kumar Banerjee Ajit Chakravorty Narayan Sinha and BC Barua for the appellants
G Ramawamy Dr Shankar Ghosh RF Nanman PHParekh Ms Sunita Sharma BMMitra and Dhillon for the Respond ents
The Judgment of the Court was delivered by PUNCHHI J
This appeal by certificate poses an impor tant question of law as to whether a court sale held in execution of a final decree passed in a suit for recovery of mortgage money can be upset under the provisions of section 47 of the Code of Civil Procedure on the displace ment of the preliminary decree upon which such final decree was based
The question of law emerges on the facts summarized as follows 239 Raja Abhoy Narain Deb was the owner of premises No I 17 A Rash Behari Avenue statedly a fashionable quarter of Calcutta built on an area approximating 1 Bigha 6 cottahs with three storied building on it consisting of 32 spacious rooms and two out houses
On the demise of Raja Abhoy Narain Deb the appellant herein and the proforma respondents succeeded as heirs to the same on September 15 1949
The appellant and his co heirs mortgaged their two third inter est in the said property as security for a loan of Rs27000 obtained from the mortgagor Smt
Prokashini Biswas the predecessor in interest of the plaintiffs respondents
After her death some of the heirs and legal representatives of Smt
Biswas on March 13 1961 filed a mortgage suit for the recovery of the mortgage money etc
in the court of the 3rd Subordinate Judge at Alipore being title Suit No17 of 1961 seeking enforcement and sale of the mortgaged proper ty
To this suit the left out heir of Smt
Biswas original ly arrayed as a defendant was transposed as a co plaintiff
On July 25 1962 the trial court passed a preliminary decree in the sum of Rs27000 for the principal sum and a sum of Rs24570 for interest on the said principal totall ing Rs51570 together with costs
The sum of Rs51570 was proportioned in as much as two third was ordered as payable to the original plaintiffs and the remaining one third to the transposed co plaintiff
The decree stipulated that the mortgagors were allowed to pay the decrectal amount in 15 equal annual instalments to be deposited by the 30th June of each year in the afore mentioned proportions of two third and one third to the credit of the respective mortga gee plaintiffs the first instalment being payable by August 31 1962
The mortgagee plaintiffs were also allowed interest on the sums due from the date of institution of the suit till the date of realisation of the entire sum
It was further stipulated that in default of any one of the instal ments the mortgagee plaintiffs were at liberty to apply for making the decree final and in the event of such applica tion being made the mortgaged property or a sufficient part thereof shall be directed to be sold and for such purpose all necessary steps were required to be taken by the plain tiffs mortgagees
On December 18 1962 the present proforma respondent no8 Kumar Sudhendu Narain Deb filed FA No 902 of 1964 against the aforesaid preliminary decree in the Calcutta High Court praying as well for stay of execution of the decree which prayer was ultimately declined
Some deposits however were made to feed the preliminary decree but since there was a failure to deposit in the terms there of a final decree was passed by the Court of the 3rd Subor dinate Judge Alipore on March 6 1963 even though FA No 902 of 1964 the appeal against the preliminary decree was pending in the High Court
The group of the decree holders representing two third interest filed an execution petition for realisation of their own share under the decree 240 which was followed by another execution petition of the remaining decree holder representing one third interest seeking realisation of his onethird share of the decreetal amount
Both the execution petitions contained identical prayers for sale of the mortgaged property
The execution petitions were consolidated and numbered as Execution Peti tions 11 and 13 of 1963 respectively
On August 10 1963 proclamation of sale was drawn apparently in the presence of parties
The decree holders suggested the value of the mortgaged property as Rs75000
The appellant herein put its value at Rs3 lacs
In these circumstances the execut ing court ordered that both the valuations be incorporated in the sale proclamation
The sale however did not take place till March 15 1968 and a period of over 4  years passed by in the mean time
By that time the value of the property according to the appellant had risen to Rs6 lacs for which on March 4 1968 before the sale the appellant made a regular objection under section 47 of the Code of Civil Procedure
Within the intervening period of 4 12 years some more deposits apparently were made by the appel lant
The property was all the same sold on March 15 1968 on the proclamation of sale as was drawn on August 10 1963 for Rs 100500 in favour of the auction purchasers re spondents 6  7 herein
On April 11 1968 the appellant yet filed an application under Order 21 Rule 90 CPC for selling aside the sale and prayed for stay of its confirma tion basically on three grounds i the judgment debtors had no saleable interest in the mortgaged property ii legally two execution petitions could not be consoli dated and iii the provisions of section 35 of the Bengal Money Lenders  Act had been overlooked
This petition was treated as a part of the original objection under section 47 CPC
On April 11 1968 the objection under section 47 CPC was dismissed by the executing court against which the appellant preferred an appeal before the Calcutta High Court being FMA No624 of 1968
Later the petition under Order 21 Rule 90 CPC was formally dismissed in default in the above backgrround
On September 14 1968 the auction sale was confined
In FMA No902 of 1964 the appeal against the prelim inary decree the parties arrived at a settlement on Decem ber 13 1971 before the Calcutta High Court
In place of the preliminary decree dated July 25 1962 a new preliminary decree on settlement between the parties was passed by a division bench of the High Court whereunder the decrectal amount was principally agreed not to exceed Rs54000 being the double 241 of the original debt of Rs27000
The sums deposited by the appellant under interim orders of the court from time to time to the credit of the decree holders were adjusted and the final amount struck as unpaid was put at Rs44000 re garding which claim of the morttgagees was conceded by the appellant mortgager as well as to the manner of its payment and which sum in fact was deposited by him in Court for not only simultaneous passing of the decree but recording as well it satisfaction
Having cleared off in this manner the mortgage debt the appellant in his appeal FMA 624 of 1968 preferred against the rejection of objection raised the additional legal ground that after the displacement of the original preliminary decree by substitution the final decree did not survive and so did succumb the auction sale posing amongst others the question set out in the opening paragraph of the judgment
The High Court rejected all the legal pleas otherwise raised but certified as fit questions as raised to be answered by this Court without framing any one of them as such
It was pointed out by Mr Ganguli learned counsel for the appellant that the preliminary decree dated July 25 1962 was a preliminary decree for sale passed in terms of Order 34 Rule 4 of the kind covered under Clause c i of sub rule 1 of Rule 2 and the final decree dated March 6
1963 was final decree for sale under Order 34 Rule 5 3 of the Code of Civil Procedure
This is evident from the copies of both the decrees which are part of the additional documents submitted to this Court
The preliminary decrees for sale details apart besides striking the amount due payable in instalments mentions the time for payment further provides that in default of payment as provided the plaintiff may apply to the Court for final decree for the sale of the mortgaged property and on such application being made
The mortgaged property or sufficient part there of
shall be directed to be sold and for the purpose of such sale the plaintiff shall produce before the court or such officer as it appoints all documents in his posses sion or relating to the mgrtgaged property
It is evident from the terms of the final decree that it was passed on the basis of the preliminary decree dated July 25 1962 and the plaintiff making an application on September 19 1962 for a final decree and it appearing that the payment directed by the said decree and orders had not been made by the defend ant or any person on his behalf or any other person entitled to redeem the mortgage
the Court then ordered and decreed that the mortgaged property in the preliminary decree afore mentioned or a sufficient part thereof be sold and that for the purpose of such sale the plaintiff shall produce before the Court or such Officer as it appoints all the documents in his possession or power relating to the mortgaged property
 It is on the strength of terms of both the decrees that Mr Ganguli urged that the right to apply for the final decree arose from the terms of the 242 preliminary decree and on the failure of the defendant making payments in terms thereof
And since the preliminary decree of July 25 1962 was displaced and substituted by the preliminary decree passed by the High Court in appeal which was instantly satisfied the foundation under the final decree stood removed
It was further urged that the plain tiff had lost the right to ask for a final decree there was no compulsory need for the purpose or tee occasion to pass it It is also urged that the auction has become non est having no legal foundation or sanction in law
The well settled principle of the appeal being a continuation of the suit was pressed into service to contend that the final decree had no life of its own and could only be passed on an application moved by the plaintiff on the defendant s fail ure to comply with the terms of the substituted preliminary decree
Mr Nariman learned counsel appearing for the respondents on the other hand contended that there could not be a reverse process when the final decree had factually been passed and an auction sale in terms thereof had taken place bringing in the rights of the stranger auctionpurchas ers
In order to appreciate the respective contentions of learned counsel for the parties the scheme of Order 34 would be essential to be grasped
It would be seen that Rule 1 thereof enjoins that subject to the provisions of the Code all persons having an interest either in the mortgage security or in the fight of redemption shall be joined as parties to any suit relating to the mortgage
Confining to the relevant statutory provisions thereunder as are applicable to the case the preliminary decree was passed in the foreclosure suit in accordance with sub clause ci of Clause 1 of Rule 2
Further in terms of sub clause cii of Clause 1 of Rule 2 the Court held the plaintiffs entitled to apply for a final decree debarring the defendant from all right to redeem the property
The Court under sub rule 2 of Rule 2 can on good cause shown and upon terms to be fixed by the Court from time to time at any time before any decree is passed extend the time fixed for the payment of the amount found or declared due under sub rule 1 or of the amount adjudged due in respect of subsequent costs charges expenses and interest
Rule 3 of Order 34 provides that when an application is made by the defendant seeking a final decree the Court has two courses open depending on the defendant making payment in Court of all amounts due from him under sub rule 1 of Rule 2 and not making payment
Under sub rule 1 of Rule 3 a final decree of one kind may be passed in terms thereof
if pay ment is made
But if no payment is made a final decree of the other kind may be passed in terms of sub rule 2 of Rule 3
Sub rule 3 of Rule 3 enjoins that on the passing of a final decree under sub rule 2 all liabilities to which the defendant is subject in respect of mortgage or on account of suit shall be deemed to have been 243 discharged
Under Rule 5 the defendant is given another opportunity to make payment of all amounts due from him under sub rule 1 of Rule 4 if such payment
is made on or before the day fixed or at any time before the confirmation of sale in pursuance of the final decree
It is thus notice able that at every conceivable step opportunity is given to the defendant to redeem the property at any time before the confirmation of sale made in pursuance of the final decree and if such deposit is made the Court bas to accept the payment and make an order in favour of the defendam
The Court however has no power to go on fixing date after date in postponing confirmation of sale to accommodate the defendant as was held by this Court in Hukumchand vs Bansi lal  Ors  No right is given to the mort gagor defendant to ask for postponement of confirmation of sale in order to enable him to deposit the amount
Reference may also be made to Janak Raj vs Gurdial Singh and Anr 1967 2 SCR wherein it has been laid down that when no application for setting aside a sale has been made to the executing court or when one made under Rules 89 to 91 of Order 21 gets dis missed the court has no choice thereafter but to confirm the sale
This Court made significant observation by spell ing out the policy of protecting auction purchasers in the following words The policy of the Legislature seems to be that unless a stranger auction purchaser is protected against the vicissitudes of the fortunes of the suit sales in execution would not attract customers and it would be to the detriment of the interest of the borrower and the creditor alike if sales were allowed to be impugned merely because the decree was ulti mately set aside or modified
The Code of Civil Procedure of 1908 makes ample provisionfor the protection of the interest of the judgment debator who feels that the decree ought not to have been passed against hint
_ Underlining ours However this Court in Sardar Govindrao Mahadik  Ant vs Devi Sahai  Ors   carved out an excep tion in the case of the auction purchaser who was a decree holder himself denying to him the protection given in Janak Raj s case supra to the stranger auction purchaser
As is discernible Sardar Govindrao case supra and Hukumchand s case Supra are cases distinguishable as against Janak Raj s case supra
Whereas Sardar Govindrao s case supra is a case of a mortgagee decree holder  auction purchaser and Hukumchand s case supra relating to a mortgage suit Janak Raj s case supra is a case of a simple money decree in execution of which the auction purchaser got to buy the judgment debtors immovable property
Still the underlined words in the extract from Janak Raj s case supra conceiva bly leave to the judgment 244 debtor his rights under the Civil Procedure Code whereby he can have the decree passed against him set aside and to seek appropriate reliefs on the basis thereof
Now coming to the substituted preliminary decree even though by consent there is no denying the fact that the seal of adjudication gets affixed to it
The Court passing it has formally expressed the terms itself under its own authority even though at the suggestion of the parties
It conclusively determines the right of the parties with regard to the matters in controversy valid in the suit till the stage of passing of the preliminary decree
The Explanation to Section 22 of the Code of Civil Procedure defining the word decree goes to say that a decree is preliminary when further proceedings had to be taken before a suit can be completely disposed of
It is final where such adjudication completely disposes of the suit
It may be partly prelimi nary and partly final
The preliminary decree in the instant case whether as originally made or as substituted in ap peal had not disposed of the suit completely
It was to be enforceable on the terms it was drawn
There were obliga tions for the defendants to fulfil and on the violation to observe these obligations rights accrued to the plaintiffs
If we import this analysis into the understanding of the decree the defendants could obviously in appeal against the decree have their obligations altered and the scope and role of re defining the obligations definitely vested in the appellate court
It cannot thus be twistedly said that the obligations of the defendants may substitutedly be that as defined by the appellate preliminary decree but the right of the plaintiffs kept accrued on the failure of non fulfil ment of the obligations of the defendants under the prelimi nary decree of the Court of first instance
Is it then conceivable that the appellate preliminary decree was valid for the purposes of defining the obligations of the defend ants but was not valid since rights had accrued to the plaintiffs on the non fulfilment of obligations under the preliminary decree of the Court of first instance7 Such an interpretation or construction would render the substantive right of appeal redundant and choked defeating the ends of justice and would otherwise be iII fined in the scheme of Order 34 CPC Therefore
it must be held that in the field the only preliminary decree is the onewhich was passed by the Calcutta High Court substituting the original prelimi nary decree of the Trial Court and the final decree if at all required is to be passed in accordance therewith
The fact that the decree was consensualin in nature having been passed between the parties to the suit is of no consequence
It has the same binding force just as one which could be passed on contest
An objection was raised that to this settlement the auction purchasers were 245 not parties and hence not bound by it though their interest had appeared on the scene due to the auction purchase
Our attention was invited to Section 47 of the CPC and to Explanation IIa providing that  for the purposes of Sec tion 47 a purchaser of a property in execution of the decree shall be deemed to be a party to the suit in which the decree is passed
It was suggested that the plaintiffs and the defendants could not settle the suit without the consent and participation of the auction purchasers to their detriment
There is an obvious fallacy in the argument
Significantly for the purposes of Section 47 the auction purchaser deemingly is a party to the suit in which the decree is passed if he has purchased the property at the sale and execution of that decree
Instantly the auction purchasers had purchased the property in execution of the final decree and not in execution of the preliminary decree and on that basis can at best be deemed to be parties to the suit throughout only on the strength of the final decree if obtained on the terms of the existing preliminary decree
But here the property as said before was not put to sale in execution of the preliminary decree
The auction purchas ers cannot claim themselves to be parties to the suit at the time of or at any time prior to the passing of the prelimi nary decree
It is to be remembered that both the prelimi nary decree and final decree are passed under Order 34 of the Code of Civil Procedure in one and the same suit in which two decrees may be required to be passed at separate stages
And both being formal adjudications appropriate to the stage are formal expressions of decision of the Court
At the stage of the preliminary decree there arises no question of the property under mortgage being put to sale in execution of the decree and if that is so the ultimate auction purchaser cannot be held deemingly to be a party to the suit upto the stage of the preliminary decree
In our opinion the converse interpretation that the auction pur chaser at a sale and execution of the final decree shall be deemed to be party to the suit at and prior to the stage when preliminary decree is passed unless sustaining would be contrary to the spirit and scheme of Order 34 of the Code of Civil Procedure
And since all questions arising between the parties to the suit in which the decree was passed or their representatives and relating to the execution dis charge or satisfaction of the decree are required to be determined by the Court executing the decree and not by a separate suit the objection of the appellant judgment debtor with regard to the knocking out of the original preliminary decree was to our mind sustainable
In terms of the preliminary appellate decree and fulfilment of the obligations of the defendants of payment of the sum as struck there remained no occasion for entertaining main taining or sustaining the application of the plaintiff mortgagees for sale of the property mortgaged and on that basis the auction sale in favour of the auction purchasers and confirmation of that sale automatically becomes non est
We are thus of the considered view that the High Court went wrong in rejecting the objection of the appellant judgment debtor
246 For the view above taken it would not be necessary to go into the other two questions raised by Mr Ganguli and for which there is warrant in the order of the High Court grant ing certificate with regard to violation of section 35 of the Bengal Money Lenders Act as well as to settle the effect of the executing court not mentioning its own evalua tion of the property in the proclamation of sale and to have illegally incorporated both the evaluations as suggested by the decree holders and the judgmentdebtors rendering the auction sale void
But this is not the end of the matter
The auction purchasers are not on firm footing on the strength of the observations afore quoted in Janak Raj s case supra afore distinguished
In that case the relief in the suit was unconnected with the property sold in execution of the decree
Here the relief in the suit is inextricably connect ed with the property sold
The two cannot be divorced di verting them to different courses
The substituted prelimi nary decree is the one passed under Rule 4 of Order 34 and involves the property in dispute
It so happens that the stage of Rule 5 Order 34 stands withdrawn rendered non est and wiped out
No compensatory sum is due to the auction purchasers under the strict terms of subrule 2 of Rule 5 of Order 34 whereunder the defendant mortgagor in addition to the payment of all amount due from him under sub rule 1 of Rule 4
is required to deposit a sum equal to 5 of the amount of the purchase money paid into the Court by the auction purchaser which obviously is meant to compensate the auction purchaser
That stage in the eye of law has not arrived
Since in strict sense the provisions would not be applicable to the facts of the instant case we in exercise of the Court s inherent powers under the Code and powers otherwise under Article 142 of the Constitution to further the cause of complete justice confining it to the facts of this case and to be fair to the auction purchasers direct the appellant to burden himself in paying to the auction purchasers interest on their blocked sum of Rs 105000 the purchase money lying in Court since 1963 which we quantify as equivalent to the sum deposited
We thus allow this appeal on the condition that the appellant shall depos it in the executing Court a sum of Rs105000 within a period of two months from this date and direct that this sum together with the sum of Rs 105000 lying in deposit as auction money be paid over by the executing Court to the auction purchasers singularly or collectively at the convenience of the auction purchasers
In the facts and circumstances of the case however we leave the parties to bear their own costs in this Court
VPR Appeal allowed


Summary:
The land in question was granted by the Ruler of erst while State of Ratlam in favour of ancestors of respondents Pitaliyas for installation of a ginning factory
Ancestors of appellants Jhalanis entered into a partnership with Pitaliyas and started a ginning factory on a portion of the said land
In the revenue records in respect of the entire land the names of Jhalanis and Pitaliyas were entered
According to the Jhalanis in execution of a decree against Pitaliyas the above land was sold and Jhalanis purchased the said land in an auction
On an application moved by the Jhalanis the Tehsildar passed an order mutat ing the names of Jhalanis in respect of the entire land
The said mutation was allowed on the basis of compromise between the parties and on the basis of a sale certificate issued by the Civil Court
The Town Improvement Trust started acquisition proceed ings for a housing scheme and acquired certain lands includ ing the land in question
The Collector started suo motu proceedings issued notice to the Jhalanis and set aside the order of mutation passed by the Tehsildar
An appeal pre ferred by the Jhalanis before the Addi 258 tional Commissioner was dismissed
The Board of Revenue allowed the further appeal and held that pending mutation proceedings there was compromise between the parties objections were withdrawn by the Pitaliyas and no appeal or revision was filed against the mutation order nor any suit was filed challenging the order of the Tehsildar
The Pita liyas then filed a writ petition before the High Court which was allowed and the order of the Board of Revenue was set aside
Against the said judgment of the High Court the Jhalanis have preferred an appeal before this Court
In the acquisition proceedings the Tribunal gave a finding that Pitaliyas had no right to claim compensation and Jhalanis alone were entitled to the entire amount of compensation
The order of the Tribunal was challenged by the parties by filing separate appeals before the High Court
The High Court allowed the appeal filed by Pitaliyas and held that they were entitled to claim compensation in equal proportion with Jhalanis it dismissed the appeal filed on behalf of the Trust for reducing compensation and allowed the appeal filed by Jhalanis in part and increased the rate of compensation from 65 paise per sqft to 75 paise per sqft
Aggrieved against the aforesaid judgment of the High Court in acquisition proceedings the Jhalanis and the Trust have filed the other two appeals before this Court
Allowing the appeals on the questions of validity of the mutation made and entitlement to receive compensation and partly allowing the appeal on the question whether enhance ment of compensation was justified this Court HELD 11
There was a decree of a Civil Court and in execution of the same the properties were auctioned
Even if there was any dispute as to whether any share of Pitaliyas in the land was sold or not in the auction proceedings the same does not survive after the compromise between the parties
In the order of the Tehsildar passed as back as 20th February 1953 the Jhalanis alone were recorded as full owners of the properties and they continued to remain in possession
The Trust took possession from Jhalanis on 21st March 1968 in the land acquisition proceedings
There is nothing on record to show that Pitaliyas ever remained in possession of the land in question after 20th February 1953 till the time they made a claim of half share in the compen sation before the Tribunal
264 D E 12
The Collector had no justification at all to have initiated the proceedings suo motu in 1970 after 17 years of the order passed 259 by the Tehsildar
Even under the law of limitation no suit for possession could have been maintained after 12 years by Pitaliyas and they were not entitled to any share in the amount of compensation
There was also no justification for entering the names of Pitaliyas in the revenue records and to set aside the order of the Tehsildar dated 20th February 1953 after 17 years
The Tehsildar was perfectly justified in passing the order dated 2021953 on the basis of the sale certificate as well as compromise application and the statement made before him on 16101952
264 F G 2
One bigha is equivalent to 22500 sq
and no contention was raised before the Tribunal that one bigha was equivalent to 21511 sq
ft prevalent in the erstwhile State of Ratlam
For the first time this point was raised before the High Court
This being a controversial question of fact and the other side did not have the chance to lead any evidence on this point the High Court rightly negatived it and held that the compensation for one bigha of land would be calculated as equivalent to 22500 sq
265 A C 3
The District Judge after consideriug large number of documentary evidence placed on record by both the parties arrived at the conclusion based on good and valid reasons that the fair market price of the acquired land on 22nd August 1964 was 65 paise per sq
The High Court went wrong in increasing the rate from 65 paise to 75 paise without any valid reasons whatsoever
In the circumstances enhancement ordered by the High Court is set aside and the compensation determined by the District Judge at the rate of 65 paise per sq
ft is maintained
266 C E