RAM KISHEN SINGH Vs. REWA MAHTON

JUDGEMENT

(1.) THIS is an appeal from a decree of the High Court at Calcutta in a suit in which the respondent, Mussamat Radheh Koeri, was the plaintiff, and Khub Lal and the appellant Rewa Mahton, and others, were the defendants. Koeri died pending this appeal, and Ram Kishen Singh, her son and heir, was substituted for her. It appears that on the 7th of September 1877 the Munsif of Jamoi, in the district of Bhagalpur, made two decrees, one in favour of the resnondent against Khub Lal for Rs. 788-0-9, and the other in favour of Khub Lal against her for Rs. 661. On the 10th November 1877 the respondent took out execution against Khub Lal for the whole amount of her decree without giving him any credit for the Rs. 661 which he had recovered against her. Under that execution Khub Lal was arrested and detained in prison for a period of about, two months, at the expiration of which time he was released on the failure of the respondent to lodge the necessary diet-money. Subsequently, on the 26th March 1878, the respondent made another application for execution against Khub Lal upon her decree, and in that application she gave him no credit for the Rs. 661 which he had recovered against her. Upon that execution being granted, an application was made to the Munsif by Khub Lal to set it aside. The Munsif granted that application, but his decision was, on the 26th July 1878, reversed by the District Judge, who held that the respondent was entitled to execute her decree ,for Rs. 788, notwithstanding all that had previously taken place. Upon that Khub Lal appealed to the High Court, and whilst the matter was pending before that Court, viz., on the 31st of August 1876. he applied for execution against the respondent for the total amount of his decree for Rs. 661. The execution was issued, and under it the property of the respondent, consisting of a 2 annas share of mouzah Mokandpur Mohamda, was attached and sold to the appellant for a sum of Rs. 9,775. Application was made to set aside that sale under Sections 311 and 312 of Act X of 1877. The Munsif disallowed the application and confirmed the sale, and his order was on appeal affirmed by the Judge. By the last paragraph of Section 312 it is enacted that "No suit to set aside on the ground of such irregularity an order passed under this section, shall be brought by the party against whom such order has been made."

(2.) THE present respondent, however, brought a regular suit against Khub Lal, and the present appellant, the purchaser under the execution, and others alleging that, owing to her having a decree against Khub Lal for an amount greater than that of his decree against her, the latter decree was not fit to be executed; that the sale under it was contrary to the powers of the Court, and was not binding upon her; and that the purchaser acquired no right under the sale; and, further, that, the purchase by the present appellant took place in collusion with Khub Lal, that Khub Lalwas really the purchaser ; that he, by fraud, had kept her from knowing that the execution had issued; and consequently that the sale in execution ought to be set aside. She prayed: "(1) that the Court will be pleased to hold that the processes of execution of decree of Khub Lal, the defendant No. 1, were carried out entirely in contravention of law; and that in reality, according to law and justice, the defendant afore-said had nothing to obtain from your petitioner, the plaintiff; and that the sale which has been held is invalid. (2) That the Court will be pleased to hold that the processes of the sale aforesaid, and the sale in question, were executed and held fraudulently. (3) That the Court will be pleased to cancel this sale." Written statements were put in on the part of the several defendants, and issues were settled. The Subordinate Judge in the first instance settled two issues in bar. The first was : " Is this case in the regular department,"--that is, is this suit which is brought as a regular suit--"unfit for hearing under the last portion of Section 312 of the Code of Civil Procedure, or not?" Second: "Was it necessary for the defendant, first party, to set off the amount of the decree of the plaintiff against his own decree under Section 246 of the Code of Civil Procedure, or not?" Subsequently he settled further issues of fact. He said: "To-day the arguments of the pleaders for both parties on the first issue were heard. After hearing the arguments of the pleaders for both parties, I come to the conclusion that issues on facts also ought to be framed ; that, after receiving the evidence, I shall try, on all the issues, as to whether this sale has been held fraudulently or not, and determine whether, in case fraud be proved, a regular suit will lie for cancelment of the sale in question." Then he settled the following issues of fact: "1st, Did the defendant No. 1 take the proceedings for execution of decree and service of attachment processes and a sale notification fraudulently (and) surreptitiously, with a view that the plaintiff might not be aware of it or were the proceedings of execution of decree and the issue of attachment processes and sale notifications executed in a bona fide manner without fraud? 2nd. Is the defendant No. 2"--that is the present appellant--'furzi for the defendant No. 1 in the auction-purchase, or is he the real purchaser; and were the defendants Nos. 2 and 3 aware of the fraud stated by the plaintiff at the time of the auction-purchase or not? 3rd. Has the property sold at auction been sold for a small value owing to the fraud alluded to or not? Those issues came on for trial. Witnesses were heard on both sides, and the Judge delivered judgment, by which, after stating that the pleas in bar were overruled by his predecessor, he decided in favour of the defendants. With regard to the principal point as to the fraud, he said: "There is no proof of the allegation that Khub Lal purchased the share in question in the name of Rewa Mahton." And again: "In my opinion Rewa Mahton is the real purchaser, who made the other defendant, Omed Ali, a partner in his purchase. I do not think that Khub has any interest in the property." He also held that the property was not sold for an inadequate price. An appeal was preferred to the High Court, and that Court, without entering into the question of fraud, or no fraud, but assuming that the defendant, the present appellant, was a bona fide purchaser at the sale, proceeded to consider the question whether the sale in execution was valid or not in consequence of the Munsifs having granted Khub Lal's execution when the plaintiff held a decree for a larger amount against him.

(3.) THE High Court determined the question simply upon Section 246. They said: "The provisions of Section 246 are explicit, that if cross-decrees between the same parties and for the payment of money be produced to the Court, execution shall be taken out only by the party who holds the decree for the larger sum, and for so much only as remains after deducting the smaller sum. It was not; competent to the Munsif by his judgment to modify this provision of the law, even if it were his intention to do so which is by no means clear." The High Court does not say that the decree of the plaintiff was brought before the Munsif, or that the two decrees were before him at the time when he awarded execution for the smaller decree. They go on: "Nor does it appear to us that there was anything in the plaintiff's conduct which could render legal and valid proceedings of the defendant, which were without the sanction of law. When the defendant, on the 31st August, applied for execution of his cross-decree for a smaller amount, he must have been aware that the plaintiff's decree had been produced to the Court, and that since the order of the Appellate Court, 26th July 1878, it was capable of execution. The defendant accordingly had no right to execution, except as provided by Section 246, and the whole of the subsequent proceedings taken in execution of the defendant's decree were, in our opinion, a nullity, and must be sat aside." The Court, therefore, notwithstanding the finding of the lower Court that the defendant--the present appellant--was a bona fide purchaser at the sale under the execution, and without themselves entering into the question of fraud or no fraud, held that the execution issued by the Munsif and all the subsequent proceedings, were a nullity, and must be set aside. The defendant-appellant purchased bona fide, and for a fair value, property exposed for sale under an execution issued by a Court of competent jurisdiction upon a valid judgment.