RAMNATH CHUNILAL Vs. GRANDHI SATTIRAZU

JUDGEMENT

(1.) Two questions arise in this petition: (1) Before an execution sale is set aside under Order 21, Rule 92 on an application under Order 21, Rule 89, is notice of the application necessary to other decree-holders who have applied for rateable distribution of the purchase-money deposited by the purchaser? (2) If such notice: is necessary, but has been given to some but not to all such decree-holders, can the purchaser whose sale has been set aside enforce repayment of the purchase- money under Rule 93 against these decree-holders who have not received notice but have received their share of the purchase-money?

(2.) The facts are as follows: In execution of the decree in O.S. No. 38 of 1920 in the District Court of East Godavari immovable properties belonging to the debtors were sold on or about 5 January, 1925 and purchased in different lots of which one lot was purchased by the petitioner, a stranger to the decree, for Rs. 4,000 and he deposited the purchase-money in the usual course. There were a number of other decrees against the same judgment-debtors, the holders of which including the respondents 2 to 4 and the petitioner himself who held one of them had applied under Section 73 for rateable distribution of the assets when realised. The sale was never confirmed because on 4 February, 1925, i.e., within 30 days of the sale, the 5 respondent who had obtained a mortgage from the judgment- debtors of the property prior to the sale but after its attachment deposited the amount of the decree in O.S. No. 38 of 1920 for payment to that decree-holder together with 5 per cent, of the purchase-money for payment to the purchasers and applied under Order 21, Rule 89 and Rule 92 (2) for the sales being set aside. To that petition the decree-holders in O.S. No. 38 of 1920, the judgment-debtors and the auction-purchasers including the present petitioner were added as respondents. Of the holders of other decrees two had the notice of the petition, i.e., the present petitioner who was impleaded was himself the holder of another decree. The 3 respondent, another decree-holder, intervened with a petition objecting to the sale being set aside as he had attached the money paid by the mortgagee to set aside the sale. The petition was dismissed by the District Judge on the ground that the 5 respondent had no right to apply as his mortgage though before the sale was subsequent to the attachment of the property sold. But this Court in appeal on 25 February, 1926, set aside that decision and held that 5 respondent had a right to apply and set aside the sale. See Viranna v. Sattiraju (1926) 52 M.L.J. 157. In the appeal the same persons were impleaded as in the first Court and though 3 respondent was not formally impleaded it is impossible to believe that he being a local pleader of position and having intervened in the Lower Court was not aware of the proceedings in appeal. After the decision in appeal, the petitioner on 16 August, 1926, applied to the District Court under Rule 93 for repayment of the purchase-money and for payment of the 5 per cent. on it to which he was entitled and as in the meanwhile the respondents 2 to 4 had received their rateable shares, they were impleaded. The learned Judge has held that the respondents 2 to 4 having received rateable distribution out of the purchase-money are persons affected under the proviso to Rule 92 (2) to whom notice of the application to set aside the sale should have been given, that they had no such notice and that therefore they are not bound by the order in the appeal or liable to repay what they received under R.93.

(3.) The learned Judge's order results, as he himself says, in the obvious injustice that the purchaser by Court sale whose sale has been set aside by the Court not at his own instance as in applications under Rule 91 but at the instance of the judgment-debtor's alienee and who according to the law applicable both to private and Court sales has the right to get back his money if the sale falls through without his default is deprived both of the property and his money. The only decision referred to by the learned Judge is the one reported in Komandur Krishnamacharlu V/s. Danoji . That was a case of an application under Rule 91 by the purchaser himself on the ground that the judgment-debtors had no saleable interest in the property sold. He succeeded in his application but did not make parties to the proceeding certain other decree-holders who had obtained orders for rateable distribution of the sale proceeds before the application was made to set aside the sale. The District Munsif held on an application by the purchaser under Rule 93 that those decree-holders were not bound by the order setting aside the sale and therefore were not bound to repay the money they had received. Abdur Rahim, J., in upholding this order did so on the ground that even if the District Munsif had erred in law he was not disposed to interfere in revision. He however made the observation that: if it were necessary to express my view on this point, I should be inclined to hold that persons who had obtained orders for rateable distribution are persons affected by an application to set aside the sale within the meaning of Rule 92, and an order made behind their back cannot bind them for the purposes of Rule 93.