IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 5267-69 OF 2002

Chinnakarupathal & Ors. … Appellants

Vs.

A.D.Sundarabai & Ors. … Respondents

J U D G M E N T

R.V.RAVEENDRAN, J.

One Ammasai Gounder filed a suit against A.T.Krishnasami Mudaliar

and  another  for  recovery  of  amounts  due  towards  supply  of  jaggery  in

O.S.No.226 of 1946 on the file of the Sub-Court, Coimbatore. The suit was

decreed on 14.10.1947.  The defendants  in the suit  filed an appeal  in the

Madras  High  Court  in  A.S.No.713  of  1947.  On  an  application  by  the

defendants (appellants in that appeal), stay of execution of the decree was

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granted  subject to the defendants depositing the decretal amount in court.

The  High  Court  permitted  the  plaintiff  (respondent  in  that  appeal)  to

withdraw  the  said  decretal  amount  after  furnishing  security  to  the

satisfaction of the court. One Ramaswami Gounder became the surety and

gave  his  agricultural  lands  as  security  for  the  amount  permitted  to  be

withdrawn by the plaintiff.

2. The  appeal  by  the  defendants  was  allowed  by the  High  Court  on

31.10.1952 and the money decree granted in O.S.No.226 of 1946 was set

aside.  Consequently,  the defendants  in  the  suit  moved an application  for

restitution  under  section  144  of  the  Code of  Civil  Procedure (‘CPC’ for

short).  The  plaintiff  did  not  repay  the  amount  withdrawn  by  him  and

absconded. Therefore the defendants filed E.P.No.134/1957 for recovery of

the amount by sale of the lands offered as security by Ramaswami Gounder.

The  lands  offered  as  security  were  sold  by  auction  on  16.11.1960  and

6.9.1961. The fifth Respondent and predecessors of respondents 6 to 26 are

stated to be the auction purchasers.

3. During  the  pendency of  the  said execution  proceedings,  the  surety

Ramaswami Gounder died and his widow Rajammal was impleaded as his

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legal representative. On 14.12.1960, Rajammal moved an application (EA

No.148 of 1961) under Order 21 Rule 89 CPC for setting aside the auction

sale. But she did not deposit the amount mentioned in the sale proclamation

nor the amount equal to 5% of the purchase money, as required under the

said rule. By order dated 17.9.1966, her application for setting aside the sale

was rejected. Rajammal challenged the said dismissal before the High Court

in CMA No.337 of 1966. The High Court by its judgment dated 26.8.1971

dismissed the appeal of Rajammal and confirmed the order of the Executing

Court. Rajammal challenged the said judgment in an appeal by special leave

before this Court (CA No.382 of 1973).  During the pendency of the said

appeal,  Rajammal  moved  an  application  for  scaling  down  the  debt  and

setting  aside  the  auction  sale  under  the  provisions  of  the  Tamil  Nadu

Agriculturists Relief Act, 1938 (‘Act’ for short). This Court by order dated

7.11.1986  dismissed  Rajammal’s  appeal,  but  however,  referred  the

application for scaling down the debt and setting aside  the sale under the

Act,  to the Subordinate Court, Coimbatore, for disposal in accordance with

law.

4. It is stated that Rajammal settled the lands which had been offered as

security,  as  also  some  other  properties  in  favour  of  one  Chinna  Pappu

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Gounder,  brother  of  her  husband  Ramasami  Gounder  under  registered

settlement dated 3.6.1960. The appellants herein are the legal heirs of the

said Chinna Pappu Gounder. When the matter referred by this Court was

received by the Executing Court, Rajammal and the appellants herein filed

the following three applications :

(i) EA No.1612 of 1987 under 19A of the Act for determination of the amount to be paid by them to the decree holders (defendants in the suit) by scaling down the amount under sections 7 and 8 of the Act.  

(ii) EA No.1613 of 1987 under section 23C of the Act for setting aside the court auction sale held on 16.11.1960 and 6.9.1961.

(iii) EA No.782 of 1988 under Order 34, Rule 5 read with section 151 of CPC for fixing the date of depositing the amount found due by the legal representatives of the surety.

The said  three applications  were dismissed  by the Executing  Court  by a

common order dated 22.9.1992. It held that as the amount claimed in the

execution  petition  was  by  way of  restitution  under  section  144  CPC by

enforcing  the  security  under  section  145  CPC,  neither  section  19A  nor

section 23C of the Act was attracted. The court also held that the amount

recoverable by restitution secured by the properties of the surety Ramasami

Gounder, was  not a mortgage debt and therefore the provisions of Order 34

CPC  were  not  attracted.  The  executing  court  was  of  the  view  that  the

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remedy if  any of  the  surety  or  his  legal  representatives  was  only  by an

application under Order 21 Rule 89 CPC and that remedy had already been

exhausted  on account  of rejection  of  the application filed under the  said

provision.

5. The said order was challenged by the Appellants in CRP Nos.3162-64

of 1992. The High Court was of the view that consideration of other two

applications  would  depend  upon  the  decision  on  the  application  under

section  23C  of  the  Act.  The  High  Court  therefore  considered  the  said

application  first.  It  held  that  section  23C  would  apply  only  where

immovable properties of an agriculturist were sold or foreclosed on or after

1.3.1972;  and  as the sale in this case took place in the year 1960 and 1961,

the said section could not be invoked. Consequently, it found no error in the

rejection of the three applications. The High Court, therefore, by its order

dated 26.2.1998, dismissed the said revision petitions which is challenged in

this appeal by special leave.    

6. The application under Rule 5 of Order 34 CPC was misconceived, as

the  proceedings  did  not  relate  to  a  mortgage  suit.  Section  145  of  CPC

provides that where any person has furnished any property as security for

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the payment of any money (or for the fulfillment of any condition imposed

on any person) under an order of a court in any suit or in any proceedings

consequent thereon, such order may be executed in the manner provided in

the  Code  for  the  execution  of  decrees,  by  sale  of  such  property.

Consequently,  the  recovery  of  the  amount  due  to  the  defendants  was

governed by sections 144 and 145 read with provisions of Order 21 CPC.

The  provisions  of  Order  34  CPC  were  inapplicable  and  there  was  no

question of invoking Rule 5 of Order 34 to fix a date for depositing the

amount  due.   The  application  under  Order  34  Rule  5  CPC  was  rightly

rejected.

7. The application under section 19A of the Act was also misconceived

and  rightly  rejected.  Section  19A  of  the  Act  provides  for  filing  an

application  for  the  determination  of  the  amount  of  debt  due  by  an

agriculturist.  But  the  said  section  applied  only  in  regard  to  debts  of  an

agriculturist other than a decree debt. Having regard to the definition of the

term ‘decree’, any amount recoverable under section 144 read with section

145 CPC by way of restitution, will also be a decree debt.  

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8. Insofar  as  the  application  under  section  23C  of  the  Act,  learned

counsel for appellant submitted that the application was intended to be one

under section 23A of the Act, but due to a typographical error, the provision

of law was wrongly mentioned as section 23C. Though such a contention

was  not  urged  before  the  High  Court,  we  permitted  him  to  urge  the

contention. Section 23A of the Act reads as under:

“23-A.  Power  of  Court  to  set  aside  sale  of  immovable  property  in certain  cases  – Where  in  execution  of  any  decree,  any  immovable property, in which any person entitled to the benefits of the Tamil Nadu Agriculturists  Relief (Amendment) Act, 1948, had an interest,  has been sold or foreclosed on or after the 30th September, 1947, and the sale has not been confirmed before the commencement of the said Act or ninety days  have  not  elapsed  from  the  confirmation  of  the  sale  or  from  the foreclosure,  at  such  commencement,  then,  notwithstanding  anything contained  in  the  Indian Limitation  Act,  1908 Now the  Limitation Act, 1963 (Central Act 36 of 193), or in the Code of Civil Procedure, 1908, and notwithstanding that the sale has been confirmed,  any judgment-debtor claiming to be entitled to the benefits of the said Act, may apply to the Court within ninety days of such commencement or of the confirmation of the  sale,  whichever  is  later,  to  set  aside  the  sale  or  foreclosure  of  the property, and the Court shall, if satisfied that the applicant is a person entitled to the benefits of the said Act, order the sale or foreclosure to be set aside,  and thereupon the sale or foreclosure shall  be deemed not to have taken place at all:

Provided that no such order shall be made without notice to the decree- holder, the auction-purchaser, and other persons interested in such sale or foreclosure and without affording them an opportunity to be heard in the matter.”

[emphasis supplied]

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The fact that agricultural lands were sold in an auction and that the owners

of such lands were agriculturists, are not by themselves sufficient to invoke

the exercise of power under section 23A of the Act. The court can set aside

a sale  of  immovable  property under  the  said  section  only if  the court  is

satisfied that the applicant is a person entitled to the benefits of the Act.

9. As noticed above, the only benefit  claimed by the appellants under

the Act was scaling down of the debt and determination of the scaled down

amount.  We  have  already  held  that  the  said  application  was  not

maintainable. The appellants have not been able to demonstrate how they

are entitled to any of the benefits under the said Act. A perusal of the Act

shows that the reliefs that can be granted under the Act are: scaling down of

debts and rates of interest; relief in regard to the usufructuary mortgages;

concessions  in  regard  to  interest  payable  by  agriculturists  on  loans;

conditional  discharge  of  arrears  of  rent  due  to  land  holders  and  scaling

down of interest on arrears of rent. But none of these are applicable to the

recovery by way of restitution, by enforcing the security. Scaling down of

the debt is permissible only where the amount paid or payable by way of

principal and interest is more than twice the amount of the principal. That

does not apply in this case. This is not a case of usufructuary mortgage. Nor

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is any interest payable on any loan. Nor is the claim for any rent payable.

Therefore, we are not  satisfied that  appellants  are persons entitled to the

benefits  of  the  Act.  In  the  absence  of  such  satisfaction,  the  question  of

setting aside the auction sale under section 23A of the Act does not arise.

The  rejection  of  the  three  applications  is  proper.  As a  consequence,  the

auction sales will have to be confirmed in favour of the auction-purchasers.

10. The appeals have no merit and are accordingly dismissed.

…………………………..J. (R V Raveendran)

New Delhi; ………………………….J. October  24, 2008. (Aftab Alam)                       

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