Case: Amiya Prosad Sanyal Vs. Bank of Commerce Limited (in liquidation)

2. These appeals are directed against the order dated May 17, 1991 and June 18, 1991 passed by a Division Bench of the Calcutta High Court in Appeal No. 436 of 1986 (Samarendra Nath Dass v. Bank of Commerce Limited (in liquidation) and Appeal No. 437 of 1986, Smt. Anjali Paul v. Bank of Commerce Limited (in liquidation). By the first order dated May 17, 1991 both the said appeals were allowed whereby certain properties numbering nine out of nineteen properties earlier sold to the appellants pursuant to the courts sale in execution proceedings are excluded from such sale on the finding that the said nine properties belonged to the respondent Nos. 2 to 13. By the subsequent order dated June 18, 1991 passed in the said two appeals leave was granted by the Division Bench to the Official Liquidator to take steps for setting aside the auction sale by the Court and confirmed in favour of the appellants in respect of the remaining properties and to reauction the said properties.3. In or about 1949, the Bank of Commerce Limited (now in liquidation) had filed a suit against one Bagala Prosad Sanyal being Suit No. 1794 of 1949 to recover a sum of Rs. 1,51,939.86 being the amount due for monies lent and advanced on an overdraft account. The said Bank of Commerce Limited having gone in liquidation, it is being represented by the Official Liquidator.4. On May 20, 1954, the said Suit was decreed in favour of the Bank for a sum of Rupees 1,67,378.36 with interest @ 6% per annum from the date of decree until realisation together with costs. The Official Receiver of the Calcutta High Court was appointed Receiver over certain shares of certain companies which were hypothecated by the judgment debtor Bagala Prasad with the said Bank and it was directed that the said shares would be sold in the event that the decretal dues were not paid. The Receiver was also directed to hand over the sale proceeds of such sale of shares to the Bank with liberty to the Bank to appropriate the sale proceeds in protanto satisfaction of its claim under the said decree. The said shares were however of defunct companies and as such were not marketable. No amount therefore could be realised by sale of the said shares. The decree holder was not aware about the fact that there were immovable properties owned by the judgment debtor. The Official Liquidator caused enquiries pursuant to the orders passed by the Court and it was revealed that the judgment debtor owned nineteen several properties. After ascertaining the title of the judgment debtor in respect of the said nineteen properties, the Official Liquidator proceeded against the immovable properties belonging to the Judgment debtor Bagala Prosad in execution of the said decree and an application was taken out by the Official Liquidator for appointment of a Receiver over the said immovable properties and for the sale of the same. It may be noted here that the judgment debtor Bagala Prosad had died in the meantime and steps were taken to serve the notice of sale of the immovable properties on the heirs and legal representatives of the said Begala Prosad. A notice under Order 21 Rule 22 of the Code of Civil procedure was issued by the Master of the Calcutta High Court for the purpose of sale of the immovable properties requiring the Judgment debtor to show cause why the said decree should not be executed by selling the said properties.5. In the said execution proceedings, an order was passed on May 20, 1970 whereby the Official Receiver of the Calcutta High Court was appointed as Receiver over the right, title, and interest of the said heirs and legal representatives of the deceased judgment debtor in respect of nineteen properties with power to sale the same. Pursuant to the said order dated May 20, 1979 a notice was also published in October, 1986 in three leading newspapers of Calcutta for the sale of the said properties. The properties were then put up for sale in the Court of the Company Judge. A joint offer was given by the appellants and such offer was found to be the highest and the same was accepted by the High Court. In compliance with the direction of the High Court, the appellant also deposited a sum of Rs. 1,40,000/- being the 25% of their offer by October 3, 1987.6. Prior to that in or about November, 1986, two applications were filed, one by the respondent Nos. 2 to 6 and the other by the respondent Nos. 7 to 13 claiming right, title and interest in respect of nine properties out of nineteen properties advertised in the said notice. A prayer was made in the said applications for exclusion of the nine properties from the sale notice for being auctioned. The properties sought to be excluded by the respondent Nos, 2 to 13 are properties under Item Nos. 1, 2, 4, 5, 8, 16, 17, 18 and 19 of the sale notice.7. The respondent Nos. 2 to 6 claimed for exclusion of the said properties on the ground that they had purchased the same from the heirs and legal representatives of the deceased judgment debtor between 6th May to 8th May, 1970. The respondent Nos. 7 to 13 claimed exclusion of the other properties on the ground that their vendor Manik Sanyal and others had purchased the said properties from the heirs and legal representatives of the deceased judgment debtor between 6th May and 8th May, 1970 and the said respondents thereafter purchased the said properties from the said Manik Sanyal and others between 14th May and July 23, 1986. The said two applications filed by the respondent Nos. 2 to 6 and 7 to 13 were disposed of by the learned Single Judge of the Calcutta High Court. No order was passed on the said applications but leave was granted to the respondents to take appropriate steps in accordance with law against the Official Liquidator.8. Being aggrieved by such order passed by the learned Single Judge, two appeals were preferred to the Division Bench of the High court being appeal Nos. 436 of 1986 and 437 of 1986. It has already been indicated that the orders impugned in these appeals have been passed by the Division Bench in the said two appeals.

Court's reasoning:
17. After giving careful consideration to the facts and circumstances of the case and the submissions made by the learned counsel for the parties, it appears to us that the decree holder Bank did not claim any mortgage right in respect of the said nine properties. A simple money decree was obtained by the Bank in 1954. Initially, the attempt was made to sell certain shares which had been hypothecated with the Bank for realisation of the decretal amount but such shares were issued by defunct companies and therefore they had no marketable title. It was only after a long lapse namely after thirty two years from the date of decree an attempt was made by the Official Liquidator in 1986 to sell the nineteen properties which were owned by the Judgment debtor after ascertaining the title to such properties. On the prayer of the Official Liquidator that the decretal amount would be satisfied by the sale of the said properties belonging to the Judgment debtor, the Court appointed a Receiver on May 20, 1970, in respect of the nineteen properties which were owned by the Judgment debtor. It, however, appears that between 6th and 8th May, 1970, the said properties had been sold by the heirs and legal representatives of the deceased Judgment debtor. On the dates of sale of the said nine properties, there was no legal bar for the said heirs of the Judgment debtor to execute sale deeds in respect of the said properties. Such properties had not been attached on the dates between 6th May and 8th May, 1970. The Receiver was appointed only on May 20, 1970. The Division Bench has also clearly come to the finding that no notice about the proposed auction sale had been served on the legal representatives of the deceased Judgment debtor between 6th May and 8th May 1970. As a matter of fact initially a notice was issued in the name of the deceased judgment debtor. There is also no material warranting a finding that the respondent Nos. 2 to 13 were aware about the steps taken to effect the sale of the immovable properties of the Judgment debtor in execution of the money decree on the dates when the nine properties had beenthe aforesaid facts and circumstances of the case, we do not find any reason to interfere with the impugned decision of the High Court.