RAM SAROOP Vs. DALPAT RAI

JUDGEMENT

(1.) This is a plaintiff s appeal arising out of a suit brought by an auction-purchaser for recovery of the purchase-money paid by him, and taken away by the decree- hold as well as for the surplus sale proceeds still in deposit in Court, on the ground that the judgment debtor had no saleable interest in the property sold at all. It appears that Dalpat Rai and Basant Rai, who are now represented by defendants Nos. 2 to 6. held a simple money decree against one Durga Prasad for a sum of Rs. 1,206 and odd. In execution of that decree certain property was attached as belonging to the judgment-debtor and put up for sale and purchased by the present plaintiff-appellant The appellant paid the purchase-money and the sale was confirmed on the 27th of July 1911. One Jawahir Lal brought a suit for a declaration of his own title and for setting aside the sale against the decree holders, the judgment debtor and the auction-purchaser. This suit was decreed on the 1st of December 1911. The decree holders took out part of the sale-proceeds, deposited in Court in satisfaction of their decree leaving a sun of Rs. 617-12-8 as the surplus sale precedes. In 1917, the present suit, was filed for recovery of the purchase money on the ground that the judgment debtor had no saleable interest in the property at all. The Court of first instance decreed the suit with respect to the amount which was still in deposit in Court, bat dismissed it as against the decree-holders. The plaintiff appealed to the Court of the District Judge and the defendants filed cross objections. The learned Judge affirmed the decree of the Court of first instance, holding that the suit was pot maintainable. The defendants have submitted to the decree. The plaintiff bar come up to this Court in second appeal. On his behalf it is contended that he is, in equity, entitled to recover the amount paid by him when he is not able to retain the property, and that legally there is no bar to such a claim.

(2.) As the appeal raises an important question of law it is necessary to consider it at some length. Under Section 258 of Act VIII of 1859 it was provided that,-- "whenever a stale of immoveable property if set aside, the purchaser shall be entitled to receive back his purchase-money, with or without interest, in such manner as it may appear proper to the Court to direct in each instance." It is clear that, although under that Code, there was an express provision entitling the auction-purchaser to receive back his purchase money in case the sale was set aside, there was no such provision in the case where the sale had not been set aside, even though it were found that the judgment debtor had no saleable interest in the property at all Again, the Code did not expressly specify the manner in which the right to recover this money could be enforced. It was open to the Court to direct the auction-purchaser to recover his money by an application in that Court or by a separate regular suit. The rulings under this Code seem to have recognied as an established principle of law, that a purchaser at a sale in execution of a decree could not recover his purchase money if it turned out that the judgment debtor had no saleable interest in the property put up for sale, and that Section 258 solely applied to these cases in which the sale had been set aside for irregularity in publishing and conducting it; vide, Soydamini Chowdhrain v. Krishna Kishore Poddar 4 B.L.R. 11 (F.B.) : 12 W.B. 8 (F.B.), (where the sale had taken plate even prior to the Act) Hira Lal v. Karimunnissa 2 A. 780 : 1 Ind. Dec. (N.S.) 1082 and Ram Narain Singh v. Mahtab Bibi 2 A. 828 : 1 Ind. Dec. (N.S.) 1114. While, therefore, the Code of 1859 was in force, the Courts did not recognise any independent rule of equity, justice or good conscience under which an auction-purchaser could recover his purchase-money if it turned out that the judgment-debtor had no saleable interest at all. The case of Dorab Ally Khan v. Abdool Azeez 5 I.A. 116 at p. 124 : 2 C.L.R. 529 : 3 Suth. P.C.J. 519 : 3 Sar. P.C.J. 818 : 3 C. 808 : 8 Ind. Jur. 426 : 1 Ind. Dec. (N.S.) 1097 requires special consideration, because the learned Advocate for the appellant places great reliance on it and has urged that the full significance of this case has not been appreciated in subsequent rulings. His contention is, that it has not been clearly borne in mind that the Privy Council did ultimately remand the case for the trial of the question whether the auction purchaser s representative had shown a case which, if proved, would entitle him to recover back the purchase money, "as money had and received to his use as upon a total failure of consideration." In that case, in execution of a simple money decree, certain property belonging to a judgment- debtor, situated in Oudh, had been seized by the Calcutta Sheriff at the instance of the decree holder and put up for sale and sold. Subsequently, the judgment debtor, in some proceedings in the Oudh Courts, obtained a decree declaring that the sale was null and void. On this the auction-purchaser s representative brought a suit against the decree holder for the recovery of the purchase-money paid by him. The question in that case was not, whether the auction purchaser was entitled to receive back his purchase money if it was found that the judgment debtor had no saleable interest in the property at all, but the question was, whether he was entitled to recover the money if it was found that the Sheriff had no jurisdiction to sell the property although the property did in fact belong to the judgment debtor. In Dorab Ally Khan v. Abdool Azeez 5 I.A. 116 at p. 124 2 C.L.R. 529 : 3 Suth. P. C.J. 519 : 3 Sar. P.C.J. 818 : 3 C. 808 : 8 Ind. Jur. 426 : 1 Ind. Dec. (N.S.) 1097 the question for consideration is stated to be as follows: "The question then arises, can the purchaser, at a sale by the Sheriff under a writ of fi. fa, upon being evicted b the execution debtor, recover the purchase-money, which he has paid, from the execution-debtor if it should turn out that the Sheriff had no authority to execute the writ at the place where the properly was situate." The High Court of Calcutta vide Dorab Ally Khan v. Khajah Moheeooddeen 1 C. 55 : 24 W.B. 372 : 1. Ind. Dec. (N.S) 35 had assumed that if the defendant was to be treated as a principal in the trans-action the case was governed by the ordinary rules relating to vendors and purchasers upon voluntary sales, and had applied the rule that a purchaser, who, after the execution of the conveyance, is evicted by a title to which the covenants in the conveyance do not extend, cannot recover the purchase-money from his vendors. Their Lordships of the Privy Council held that the rule, which governed sales by private contracts, was not properly applicable to sales by the Sheriff. At the same time, on page 126, their Lordships remarked, "Now it is, of course, perfectly clear that when the property has been so sold under a regular execution, and the purchaser is afterwards evicted under a title paramount to that of the judgment-debtor, he has no remedy against either the Sheriff or the judgment-creditor. This, however, is because the Sheriff is authorised by the writ to seizs the property of the execution-debtor which lies within his territorial jurisdiction and to pass the debtor s title to it without warranting that title to be good. The Sheriff, how-ever, if he acts ultra vires cannot invoke the protection which the law gives to him when acting within his jurisdiction." That the decision of that case turned on the absence of jurisdiction in the Sheriff to sell the property is further borne out. by the remarks on page 127 that, "Their Lordships think that, upon a similar principle, the Sheriff may be held to undertake by his conduct that he has seized and put up for sale the property sold in the exercise of his jurisdiction, although when he has jurisdiction he does not in anyway warrant that the judgment-debtor had a good title to it, or guarantee that the purchaser shall not be turned Out of possession by some person other than the judgment-debtor. In the present case, the subject-matter of the sale was the estate of the execution-debtor, so that, if the Sheriff had had jurisdiction, his conveyance would have passed the title. It was solely because he was acting beyond his territorial jurisdiction that the sale became inoperative and wholly ineffectual." As the case had not been approached by the Courts below from the correct point of view their Lordships felt that the action should not be determined without further investigation into the facts. It is true that, in the concluding portion of the judgment, their Lordships say, They only decide that the plaintiff has not wholly failed to disclose a good cause of action on the face of the record;" but their Lordships also say that they, "of course, offer no opinion whether the plaintiff will ultimately succeed in establishing his right to any relief." The distinguishing feature of that case is that there, at the instance of the decree holder, the Sheriff had tried to sell property situated outside his jurisdiction, and in this he was "in the position of an ordinary person who has sold that which be had no title to sell." In my opinion, this case is no authority for the proposition that, independently of any provision of the Code, an auction purchaser has a right to recover his purchase-money by a regular suit when it is found that the judgment- debtor had no saleable interest at all, though the property is situated within the jurisdiction of the execution Court. Act X of 1877, and the consolidating Act XIV of 1882, introduced material alterations in the Code. Section 315 of Act XIV of 1882 provided two things,- (1) It gave the purchaser a right to receive back his purchase-money from any person to whom the purchase-money had been paid, in case the sale was set aside under Section 312 or 313 : and (2) It also gave him such right when, although the sale was not set aside, it was found that the judgment debtor had no saleable interest in the property which purported to be sold and the purchaser was, for that reason, deprived of it. The section then went on to provide that the re- payment of the said purchase-money might be enforced against the person to whom it had been paid under the rules provided by the Code for the execution of a decree for money.

(3.) A controversy naturally arose as to whether the auction purchaser s remedy was limited to an application in the execution department, or whether he could maintain a separate suit. This controversy was set at rest by a decision of the Full Bench of this Court, reported as Munna Singh v. Gajadhar Singh 5 A. 577 : A.W.N. (1883) : 130 : 3 Ind. Dec. (N.S.) 491 where it was clearly laid down that there was no bar to a separate suit. The learned Advocate for the appellant has strongly contended that this Full Bench case recognises a rule of equity, independently of the provisions of any Code, that a separate Suit is maintainable. In my opinion, the judgments of all the Judges who decided that case proceeded on the assumption that a right to recover the purchase-money was given to the auction- purchaser by Section 315 of the Code, and I do not find any passage which would support the contention that they decided that there was a right to recover the money independently of the provisions of that section. On the other hand, the judgment of Stuart, C.J., on page 582, makes it quite clear that the case was held to be governed by the third Clause of Section 315. That case has, of course, been followed by this Court in subsequent cases,--vide Kishan Lal v. Muhammad Safdar Ali Khan 13 A. 383 : A.W.N. (1891) 188 : 7 Ind Dec. (N.S.) 244; Shanto Chandar Mukerji v. Nain Sukh 23 A. 355 : A.W.N. (1901) 101 and Sidheswari Prasad Narain Singh v. Goshain Mayan and 19 Ind. Cas. 986 : 11 A.L.J. 606 : 35 A. 419 in which it was clearly held to at, outside the provisions of the Code of Civil Procedure, an auction purchaser had no right to recover back, his purchase-money merely by showing that the judgment-debtor had no saleable interest.