KOORAPATI SESHAVATHARAM Vs. THALASILA RAMAYYA

JUDGEMENT

(1.) This appeal raises a question connected with Section 24 of Madras Act IV of 1938. The appellant here was the judgment-debtor in a decree on a mortgage under which he was required to pay Rs. 1,300 and odd. The decree-holder is the second respondent. In execution of that decree the properties of the appellant were sold on 29 November, 1937, and realised Rs. 1,900 and odd. On 17 March, 1938, the decree-holder drew out of Court from the sale proceeds an amount necessary to satisfy his decree. A small sum was also drawn, by an attaching decree-holder and the balance remained in Court. On 25 February, 1939, on an application under Section 23 the sale was set aside, apparently without objection on the ground of the decree having been fully satisfied before Act IV of 1938 came into force. We are informed that the decree has since been scaled down under Section 19 so as to make the judgment-debtor liable only for Rs. 548-7-7 with interest at six per cent. from 1 October, 1937.

(2.) After the sale was set aside, an application was filed by the judgment-debtor for re- delivery of the properties and another application by the purchaser for the re-payment under Section 24 of the balance of the sale proceeds, he having already drawn the amount remaining in Court deposit. The latter application was ordered. and on the former application for re-delivery the lower Court held that the principle of Jai Berhnia v, Kedar Nath Marwari (1922) 44 M.L.J. 735 : L.R. 49 I.A. 351 : I.L.R. 2 Pat 10 (P.C.). applied and that the judgment-debtor should not be entitled to obtain re-delivery of the property without paying to the Court auction-purchaser the whole of the amount which had gone in discharge of the decree. We are not now concerned with the correctness of the orders under sections, 23 and 19 of the Act.

(3.) It seems to us clear that the order refusing re-delivery to the judgment-debtors cannot be supported. The case on which the lower Court relied has really no application to the peculiar position resulting from the setting aside of a sale under Madras Act IV of 1938. Such a sale is set aside with a view to the reopening of the decree, which may result either in the complete satisfaction of the decree after it has been scaled down or in the passing of what is in effect a fresh decree for a different amount. The auction-purchaser is given under Section 24 the right to get back his money in full from the person to whom it has been paid and Section 23 expressly \ states that the sale shall be deemed not to have taken place at all. That is to say, i the satisfaction of the decree out of the purchaser's money is cancelled just as the sale is cancelled. The decree-holder has to give back the money which he has drawn, and he remains at liberty to execute any amended decree which may be passed in fresh proceedings. There can be no question in such circumstances of the payment made by the auction-purchaser having benefited the judgment-debtor. The decree towards which the payment was made is one that has been into the melting pot and as a result of the application of Section 19 it may well disappear entirely. The decree-holder is not debarred by reason of his having drawn the proceeds of the sale from executing any revised decree which may be passed, but he is 1 required to refund the sale proceeds to the auction-purchaser. In such circumstances, there can be no question of any refund of the sale price by the judgment-debtor. Nor is there any necessity to allow the auction-purchaser to retain possession of the property pending a payment by the judgment-debtor of the amount due from him under the mortgage-decree. The decree towards which the purchaser's money has gone has, in fact, by the setting aside of the sale, come to be treated as a decree which necessarily has to undergo a process of revision and the proper remedy for the purchaser is the remedy laid down in the Act of applying for a refund under Section 24 of the money by the person to whom it has been paid.