VARGHESE Vs. MATHAI VARGHESE

JUDGEMENT

(1.) The decree holder in O. S. No. 389 of 1112 of the Pathanamthitta Munsiff's Court is the appellant in this Second Appeal. The decree is based on a hypothecation bond executed by one Vareed Thoma, the deceased brother of the first defendant. Defendants 2 to 5 are persons who purchased portions of the equity of redemption of the property after the date of the hypothecation, and they were impleaded in the suit as subsequent encumbrancers. In execution of the decree the property was proclaimed for sale and purchased by the decree holder himself in satisfaction of the decree debt. The third defendant applied, under O.21 R.87, Civil Procedure Code, for setting aside the sale on the ground of material irregularity. That application was rejected and the sale was confirmed on 29.3.1115. An application made by the third defendant to review that order was also rejected. The decree holder applied for delivery of possession of the property on 9.7.1115. Then the third defendant obstructed contending that it was the right, title and interest of Vareed Thoma that were sold in auction and that the sale did not convey to the decree holder auction purchaser the third defendant's right in the property. The obstruction petition was dismissed by the execution court. But, the appeal filed by the third defendant in the District Court as A. S. No. 380 of 1115 was allowed by that court. It was held by that court that only the right, title and interest of Vareed Thoma in the property were sold in court auction and that the third defendant's right in the property was not sold. No Second Appeal was preferred from this decision. It has, therefore, become final. The decree holder applied on 23.12.1118 for fresh sale of the property alleging that the first sale had become infructuous by reason of the fact that Vareed Thoma had no interest in the property on the date of sale. The fifth defendant objected to the execution petition contending that the decree holder was not entitled to execute the decree again since the decree has been satisfied by the court sale and that the execution petition was barred by limitation. This objection was upheld by the execution court and the decree holder's execution petition was dismissed. The appeal filed from this order was also dismissed. Hence this second appeal.

(2.) The question for decision in the second appeal is whether the decree holder is entitled to execute the decree again and to bring the decree schedule property to sale so long as the first sale has not been set aside in due course of law. The appellant's case is that the first sale has become infructuous by reason of the decision in A. S. No. 380 of 1115 of the Quilon District Court and that he is, therefore, entitled to execute the decree afresh as if that sale had not taken place. We find ourselves unable to accept this argument. In the first place we do not agree with the view taken in A. S. No. 380 of 1115 that it was the right, title and interest of Vareed Thoma as on the date of sale that were sold in court auction. It is settled law that in the case of a sale in execution of a mortgage decree what is sold is the right, title and interest of the mortgagor as on the date of the mortgage and not as on the date of the sale. Reference may, however, be made to the decision of the Travancore High Court in Thomas v. Alexandrayos Kathanar (18 T.L.T. 463). That was a suit instituted on a hypothecation bond executed by the first defendant in that case in favour of the fourth defendant and assigned by the latter in favour of the plaintiff. Defendants 2 and 3 were impleaded in the suit as subsequent encumbrancers. The decree passed in the case allowed the plaintiff to realise the decree amount from the first defendant and the plaint schedule property. In execution of the decree, the property was sold in court auction and purchased by the decree holder. When he applied for delivery of possession of the property the second defendant obstructed contending that only the first defendant's right in the property was sold in auction and not that of the second defendant. This objection was upheld by the execution court as also by the first appellate court. But the High Court held that what was sold in court auction was the right, title and interest of the hypothecator as they existed on the date of the hypothecation and that whatever right the second defendant had in the property on the date of the sale was extinguished by the court sale. Since the law on the point is so well settled we do not think it necessary to refer to any other authority. The auction sale in this case conveyed to the purchaser the right, title and interest of Vareed Thoma as they stood on the date of the hypothecation bond. It is true that the decision in A. S. No. 380 of 1115 of the Quilon District Court has become final and is binding on the parties thereto. But that is no reason why we should take a different view on the question of law. Only the third defendant and the decree holder were parties to that appeal. The third defendant is entitled only to a portion of the decree schedule property. It is, however, not necessary to decide in this second appeal whether the decree holder is entitled to recover possession of the remaining portion of the property purchased by him in court auction from the other defendants in the case. So far as this second appeal is concerned the only question for decision is whether the decree holder is entitled to execute the decree and to bring the property again to sale ignoring the sale which has already taken place. We are clearly of opinion that so long as the sale has not been set aside by means of appropriate proceedings taken in time in pursuance to the provisions of the Code of Civil Procedure the decree must be deemed to have been satisfied by the sale and that the decree holder is not entitled to execute the decree afresh.

(3.) It is true that there has been conflict of opinion on this point so far as the Travancore High Court was concerned. In Madhavan Namboori v. Narayanan Namboori (24 TLJ 1116) the facts were more or less similar to those of the present case. In execution of a hypothecation decree the hypothecated properties were sold in auction and purchased by the decree holder in full satisfaction of the decree. When he applied for delivery of the properties he was resisted by a third party who was in possession of the properties under a sale deed executed by the hypothecator before the date of the suit but subsequent to the hypothecation. The obstruction was allowed by the execution court. A suit filed by the decree holder auction purchaser against the obstructor was also dismissed. The decree holder then applied for fresh execution of the decree. The judgment debtor contended that since the decree had been satisfied by the sale of the properties the execution petition was maintainable. This contention was repelled by the High Court which held that the effect of refusing delivery of the properties to the decree holder auction purchaser was to declare that the auction sale was invalid and that consequently it would revive the right of the decree holder to execute the decree as if no sale had taken place.