BALLELAL S/O. NANHELAL Vs. MANOHARLAL GURU

JUDGEMENT

(1.) THIS is an application to revise an order of the Subordinate Judge, First Class, Damoh, holding that the non-applicants decree-holders in Civil Suit No. 11 of 1933 are entitled to rateable distribution. The applicant Ballelal purchased in execution of his own decree at a sale held on 2nd September 1939. On 15th October 1940, and after the right of the non-applicants to obtain rateable distribution was decided in their favour, the sale was set aside as the learned Judge refused to grant to the applicant further time to pay into Court the amount held to be rateably due to the non-applicants. This consequential order of 15th October 1940 forms the subject of Misc. Appeal No. 254 of 1940, and, in view of the fact that we have decided, for reasons given below, to set aside the order under revision, must itself be set aside, whether an appeal does or does not lie.

(2.) THE facts of the case are that on 30th August 1939, the applicant decree-holder obtained permission to bid at an auction sale if he bid the sum of Rs. 2000, and permission to set off the price if he paid the poundage fee at once. He accordingly purchased for Rs. 2000 on 2nd September 1939 and paid the poundage fee. This permission to set off was in view of Order 21, Rule 72(2) Civil P.C., subject to the rights of any person entitled to rateable distribution, but no application for execution by the decree-holders in Civil Suit. No. 11 of 1933 and no application by them for rateable distribution was made till 8th September 1939 when the case was fixed for report of the sale. On that date the applicant filed a receipt, and made a superfluous request for set off. He really desired the previous order of the Court to be implemented and the result of the previous permission to set off to be formally recorded.

(3.) IT has been decided in Punnamchand Chatraban Firm v. Satyanandam A.I.R. 1933 Mad. 804 that leave to set off can be legally given before the sale has been held and concluded and given at the same time as the permission to bid, and that when a decree-holder has been given permission to bid and set off and when the amount of the successful bid is less than the decree amount, the whole of the set-off must be deemed as made on the date of sale and the whole of the amount must be deemed to have been received or realized eo instanti the sale is made and Section 73, Civil P.C., will give no benefit to other decree-holders who apply for rateable distribution after the conclusion of the sale however soon after its conclusion their application may be made. It is not clear from this report whether those who applied for rateable distribution had or had not applied for execution prior to the sale. In Bindeshwari Narain v. Kirtyanand Singh A.I.R. 1931 Pat. 359 although the applications for rateable distribution appear to have been made after the sale was held and leave to set-off given (the date when set-off was allowed is not stated in the judgment), it is clear that those who were allowed rateable distribution had filed an application for execution before the sale was held. The same was the case in Firm Ganga Ram Gulraj Ram v. Muktiram A.I.R. 1931 Pat. 405 and in the cases Sri Krishna Doss v. Chandook Chand (09) 32 Mad. 334 and Bijoy Kumar v. Rama Nath A.I.R. 1918 Cal. 400, relied on in the second Patna case. These Patna authorities, so far from suggesting that the assets are not received by the Court on the date of the set-off, only established that where execution has been applied for before the receipt of the assets, any set-off allowed must be conditional on such claims as are advanced for rateable distribution after the set-off. What the learned Judge of the lower Court has done is to ignore the fact that in the case reported in Bindeshwari Narain v. Kirtyanand Singh A.I.R. 1931 Pat. 359 execution had been applied for before the set-off, and to assume that the assets were to be deemed to be received by the Court at the time when the decree-holder purchaser would, in consequence of the application for rateable distribution, be ordered to refund them. The case reported in Wali Muhammad Ayub v. Abdul Hamid A.I.R. 1926 Nag. 380, relied on by the learned Judge of the lower Court, in no way supports his conclusion. If anything, it goes against it, for the view there expressed seems to be that if an application for set-off is made to a Court and subsequently granted, the grant of permission relates back to the date of the application and the application is equivalent to the payment of a cheque into Court which is subsequently found to be in order and honoured. The decision in that case rested on the fact that the application for set-off was not made until the very day when application for rateable distribution was made, and it is only if the application made by the applicant in this revision on 8th September 1939 were held to be material that this decision could possibly apply in favour of the applicants for rateable distribution. All that was said in Ramchandra v. Ramchandra Gujaba A.I.R. 1938 Nag. 54 was that to allow the decree-holder to withdraw the proceeds of sale before the sale was confirmed would make proceedings for rateable distribution contemplated by Section 73, Civil P.C., impossible. This remark obviously has no relation to the point now under discussion, and it is hard to see how the learned Judge of the lower Court regarded it as an indication in favour of his decision. In Ahinath Ganguli v. Nepal Chandra it was held that an application for rateable distribution must be made before the sale in a case where the decree-holder has been allowed a setoff. This case was a case where the person who sought rateable distribution had made an application for execution before the sale in another Court, but it was held that Section 63(2) protected the proceedings of the Court to which no application for rateable distribution had been made before the sale. The decision was as follows: Now, the application for set-off is regulated by Order 21, Rule 72, Civil P.C., and Sub-section (2) expressly makes it subject to the provisions of Section 73, Civil P.C. If, therefore, more than one decree-holder applies for execution the amount due on the decree to the decree-holder purchaser is the amount to which he would be entitled on a rateable distribution under Section 73. But if there is no application before the Court which holds the sale and the Court allows a set-off for the whole amount, the sale is undoubtedly protected under Section 63, Sub-section (2), Civil P.C. In Shidappa Laxmamma v. Gurusangaya Akhandaya A.I.R. 1931 Bom. 350 was held that the words "any proceedings" in Section 63(2) would include an order made under Order 21, Rule 72, for set-off. The Calcutta case appears to be in conflict with the Patna cases.