Case: Janak Raj Vs. Gurdial Singh And Anr

3. The facts are simple. One Swaran Singh obtained an ex parte decree on February 27, 1961,against Gurdial Singh for Rs.519. On an application to execute the decree a warrant for the attachment of house belonging to the judgment-debtor was issued on May 10,1961. At the sale which took place, the appellant before became the highest bidder for Rs. 5100 on December 16, 1961. On the 2nd of January 1962 the judgment-debtor made an application to have the ex parte decree set aside. On January 20, 1962, he filed an objection petition against the sale of the house on the ground that the house which was valued at Rs. 25,000 had been auctioned for Rs.5,000 only and that the sale had not been conducted in a proper manner inasmuch as there was no due publication of it and the sale too was not held at the proper hour. By an order, dated April 19, 1962. The executing Court stayed the execution of the decree till the disposal of the application for setting aside the ex parte decree. On October 26, l962 the ex parte decree against the defendant-judgment-debtor was set aside. On November 3,1962 the auction purchaser made an application for revival of the execution proceedings and for confirmation of the sale under Or. XXI, R. 92 of the Code of Civil Procedure. On November 7, 1962 the judgment-debtor filed. an objection thereto contending that the application for revival of execution proceedings was not maintainable after setting aside the ex parte decree and that the auction purchaser was in conspiracy and collusion with the decree-holder and as such not entitled to have the sale confirmed. It is to be noted here that the case of collusion was not substantiated. On August 31, 1963 the executing Court overruled the objection of the judgment-debtor and made an order under 0. XXI, R. 92 confirming the sale. This was affirmed by the first appellate Court. On Second Appeal to a single Judge of the Punjab High Court, the auction purchaser lost the day. An appeal under C1. 10 of the Letters Patent in the Punjab High Court met the same fate. Hence this appeal.

Court's reasoning:
So far as sales of immovable property are concerned there are some specie provisions in O. XXI beginning with R. 82 and ending with R. 103. If a sale had been validly held, an application for setting the same aside can only be made under the provisions of Rr. 89 to 91 of O. XXI. As is well known, R. 89 gives a judgment-debtor the right to have the sale set aside on his depositing in Court a sum equal to five per cent of the purchase money fetched at the sale besides the amount specified in the proclamation of sale as that for the recovery which the sale was ordered, less any amount which may, since the date of sale, have been received by the decree-holder. Under sub-r . (2) of R.92 the Court is obliged to make an order setting aside the sale if a proper application under R. 89 is made accompanied by a deposit within 30 days from the date of sale. Apart from the provision of R. 89, the judgment-debtor has the right to apply to the Court to set aside the sale on the ground of a material irregularity or fraud in publishing or conducting it provided he can satisfy the Court that he has sustained substantial injury by reason of such irregularity or fraud. Under R. 91 it is open to the purchaser to apply to the Court to set aside the sale on the ground that the judgment-debtor had no saleable interest in the property soldRule 92 provides that where no application is made under any of the rules just now mentioned or where such application is made and disallowed the Court shall make an order confirming the sale and thereupon the sale shall become absolute. Rule 94 provides that where the sale of immovable property has become absolute, the Court must grant a certificate specifying the property sold and the name of the person who at the time of sale was declared to be the purchaser. Such certificate is to bear date the day on which the sale becomes absolute. Section 65 of the Code of Civil Procedure lays down that where immovable property is sold in execution of a decree and such sale has become absolute, the property shall be deemed to have vested in the purchaser from the time when it is sold and not from the time when the sale becomes absolute. The result is that the purchasers title relates back to the date of sale and not the confirmation of sale. There is no provision in the Code of Civil Procedure of 1908 either under O. XXI or elsewhere which provides that the sale is not to be confirmed if it be found that the decree under which the sale as ordered has been reversed before the confirmation of sale. It does not seem ever to have been doubted that once the sale is confirmed the judgment-debtor is not entitled to get back the property even if he succeeds thereafter in having the decree against him reversed. The question is, whether the same result ought to follow when the reversal of the decree takes place before the confirmation of sale5. There does not seem to be any valid reason for making a distinction between the two cases. It is certainly hard on the defendant-judgment-debtor to have to lose his property on the basis of a sale held in execution of a decree which is not ultimately upheld. Once, however, it is held that he cannot complain after confirmation of sale, there seems to be no reason why he should be allowed to do so because the decree was reversed before such confirmation. The Code of Civil Procedure of 1908 contains elaborate provisions which have to be followed in cases of sales of property in execution of a decree. It also lays down how and in what manner such sales may be set aside. Ordinarily, if no application for setting aside a sale is made under any of the provisions of Rr. 89 to 91 of O. XXI, or when any application under any of these rules is made and disallowed, the Court has no choice in the matter of confirming the sale and the sale must be made absolute. If it was the intention of the Legislature that the sale was not to be made absolute because the decree had ceased to exist, we should have expected a provision to that effect either in O. XXI or in Part II of the Code of Civil Procedure of 1908 which contains Ss. 36 to 74 (inclusive)6. It is to be noted, however, that there may be cases in which, apart from the provisions of Rr. 89 to 91, the Court may refuse to confirm a sale, as, for instance, where a sale is held without giving notice to the judgment-debtor, or where the Court is misled in fixing the reserve price or when there was no decree in existence at the time when the sale was held. Leaving aside cases like these, a sale can only be set aside when an application under R. 89 or R. 90 or R. 91 of O. XXI has been successfully made22. All the judgments so far noticed are against the contention of the respondent. Our attention was, however, drawn to a judgment of the Calcutta High Court in Baburam Lal v. Debdas Lala, AIR 1959 Cal 73  . There is an observation to the effect that where the lower Courts decree has been reversed in appeal, the execution proceedings cannot go on. In that case, there was no sale in execution and the question before the Court was, whether the plaintiff should be allowed to proceed with the execution of a decree for Rs. 1,493-1-6 when as the result of the final decree it was found that the defendant was entitled to Rs. 1,589-0-8 as owelty money from the decree-holder23. The decision in Ariatullah v. Seshi Bhusan, AIR 1920 Cal 99, cited by the respondent is really of no help. There a sale was held in execution of a decree for an amount in respect of which there was no decree existing at the time. It was observed that the fact that subsequently to the sale the decree-holder obtained a decree entitling him to the amount for which the sale was held would not validate the sale24. For the reasons already given and the decisions noticed, it must be held that the appellant-auction purchaser was entitled to a confirmation of the sale notwithstanding the fact that after the holding of the sale the decree had been set aside. 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 credition alike if sales were allowed to be impugned merely because the decree was ultimately set aside or modified. The Code of Civil Procedure of 1908 make ample provision for the protection of the interest of the judgment-debtor who feels that the decree ought not to have been passed against him. On the facts of this case, it is difficult to see why the judgment debtor did not take resort to the provision of O. XXI, R. 89.The decree was for small amount and he could have easily deposited the decretal amount besides 5 per cent of the purchase money and thus have the sale set aside. For reasons which are not known to us he did not do so25. Lastly, it was contended that the amendment of S. 47 of the Code of Civil Procedure altered the whole situation inasmuch as by the Amending Act of 1956 auction purchasers are to be treated as parties to the suit. We are not here concerned with the question as to whether restitution can be asked for against a stranger auction purchaser at a sale in execution of a decree under S. 144 of the Code of Civil Procedure and express no opinion thereon. In our opinion, on the facts of this case, the sale must be confirmed26. Although we have noticed some decisions where the right of the auction purchaser decree-holder in circumstances similar to the case before us was discussed or the right of a purchaser in regard to a sale held after the setting aside of the decree was touched upon, our judgment must not be taken as adjudication upon any of these points.