CHANDU KUNHAN PANIKKER Vs. UKKAPPAN

JUDGEMENT

(1.) The first defendant is the appellant. This appeal arises out of a suit instituted by the 1st respondent for a declaration that the decree in O.S. No. 45 of 1935 and the sale in E.P. No. 296 of 1940 on the file of the Subordinate Judge, South Malabar, are void and do not bind the plaintiff. The 1 defendant obtained the decree in O.S. No. 45 of 1935 on foot of a mortgage. The final decree was passed on 28 January, 1938. The present 1 respondent was the judgment-debtor and he on 12 August, 1940, filed an application under Section 4 of the Madras Debt Conciliation Act of 1936 for conciliation of his debts. The decree-holder filed execution petition No. 792 of 1940 and the judgment-debtor filed in the executing Court an application under Section 25 of the Debt Conciliation Act, on 15 August, 1940. The application after due notice to the decree-holder was heard by the learned Subordinate Judge and disposed of by him on 4 September, 1940. The application was dismissed by the learned Subordinate Judge on two grounds : firstly that the decree-holder was a creditor to whom more than 50 per cent, of the total amount of the debts was owing and without him there could be no amicable settlement through the intervention of the Board. Secondly, that the decree-holder was also a secured creditor and if he did not agree to the settlement there was no prospect of any settlement and that the filing of the execution petition was evidence of an intention not to agree.

(2.) After the dismissal of this petition the property was sold in execution of the decree on 2nd December, 1940 and the decree-holder, the appellant, became the purchaser. Against the order of the learned Subordinate Judge under Section 25 there was an appeal, C.M.A. No. 97 of 1941, to this Court. The appeal was dismissed on 7 April, 1941, on the ground that there was nothing to be stayed and that the appeal was not pressed. Ultimately on 2nd July, 1941, the petition under Section 4 of the Debt Conciliation Act was also dismissed. The judgment- debtor having failed in his attempts to thwart the execution of the decree filed the suit out of which this present appeal arises contending that the sale in pursuance of the decree was a nullity since after the filing of an application under Section 4 of the Debt Conciliation Act, the Court had no jurisdiction to proceed with the execution of the decree. The 1 defendant, i.e., the decree-holder-purchaser raised various objections by way of defence to the suit two of which alone arc material for the purpose of this appeal. He contended that the suit was incompetent as it was barred under Section 47 of the Civil P. C. and that in any event as the sale was not vitiated by any irregularity or fraud and as the application under Section 25 of the Debt Conciliation Act was dismissed the sale was valid but not void. These two contentions of the decree-holder were upheld by the learned Subordinate Judge and the suit was dismissed.

(3.) The plaintiff preferred an appeal to the District Court. In the Court of the learned District Judge it was practically conceded that the suit was not maintainable and that Section 47, Civil Procedure Code, was a bar. The learned District Judge, however, in exercise of his discretion converted the plaint into an application under Section 47. Following the decisions of this Court, he, however, held that in view of the language of Section 25 of the Debt Conciliation Act, the sale was a nullity and set aside the order of the learned Subordinate Judge after allowing the appeal. The first defendant was made liable for costs in both the Courts even though the plaintiff persisted till the last moment in his contention that the suit was the only proper remedy and not an application under Section 47, Civil Procedure Code.