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PETITIONER: HARNANDRAI BADRIDAS

       Vs.

RESPONDENT: DEBIDUTT BHAGWATI PRASAD & ORS.

DATE OF JUDGMENT04/05/1973

BENCH: MUKHERJEA, B.K. BENCH: MUKHERJEA, B.K. PALEKAR, D.G. MATHEW, KUTTYIL KURIEN

CITATION:  1973 AIR 2423            1974 SCR  (1) 210  1973 SCC  (2) 467

ACT: Code  of Civil Procedure-Order XXI Rule 95  to  102-Whether- after  an auction sale in execution of a decree,  a  decree- holder  auction-purchaser can move the executing  Court  for delivery of vacant possession of an immovable property.

HEADNOTE: In  May  1956, One D obtained a money decree against  H.  in January  1958,  T was appointed Receiver  in  an  insolvency proceeding against one G, a partner of the defendant firm in respect  of premises No. 99 and 128 Cotton Street,  Calcutta for  the purpose of selling those properties.  On  April  3, 1958,  Mr T was also appointed receiver in execution of  the decree obtained by D for the sale of the two premises.   The properties  were  put  up  for sale by  auction  and  K  was declared tile purchaser of premises No. 128, Cotton  Street. K  made  a  deposit of earnest money.   There  were  various proceedings thereafter but on May 19, 1964, the receiver was directed  to  complete the sale within one month and  K  was directed  to  pay the balance of the  purchase  money.   The Receiver  was directed to execute and register a  conveyance on  behalf or the judgment-debtors in case of  refusal.   On June  17,  1964,  the Receiver executed  the  conveyance  on behalf  of  the judgment-debtor and the  insolvent.  in  due course,  the  Court  made  an order  to  deliver  up  vacant possession  to  the  auction-purchaser and  on  appeal,  the appellate Court ’Confirmed the original order. The  main contention of the appellant was that as soon as  a receiver in execution has executed a conveyance in favour of an auction purchaser, the decree stands satisfied and  there is  an  end of the execution proceedings.  For  delivery  of vacant possession of the immovable property he has to file a separate suit to get that possession. Dismissing the appeal and agreeing with the decision of  the Calcutta  High  Court in Kailash Chandra Tarafdar  v.  Gopal Chandra Poddar, I.L.R. 53 Calcutta 781, HELD  :  (i)  if a confirmation of the  sale  would  finally terminate  all questions as to the execution of the  decree, it  is  difficult to appreciate why  the  legislature  would frame  such rules as rules 95 to 102 under order XXI of  the Code of Civil Procedure.  The legislature must have  thought

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that the duty of the executing court should not end with the confirmation  of the Sale as it is because  the  legislature thought "that the auction purchaser should have the right of applying for possession under the provisions of r. 95 and r. 96  that proceedings for obtaining possession were  included in  the  catena of rules relating to the  execution  of  the decree". [213G] (ii) Sec.  47  of  the Code of  Civil  Procedure  should  be construed  liberally.  If such a construction is put  it  is difficult  to understand why a decree holder who has been  a party  to the decree will shed his character as  such  party merely  upon purchasing the property at the execution  sale. After  all,  a  decree  holder  purchases  the  property  in execution  of his decree with the permission of  the  Court. There is no reason why he should not retain his character of a party to the suit until the delivery of possession to  him of  the  property purchased by him.  Having  regard  to  the consideration,  if any question is raised by  the  judgment- debtor at the time of delivery of possession concerning  the nature  of the rights purchased and if  the  judgment-debtor offers any resistance to delivery of possession the question must  be  one which in our view relates  to  the  execution, discharge and satisfaction of the decree and arises  between the parties to the suit. [213 H] Kailash  Chandra Tarafdar v. Gopal Chandra Podder I.L.R.  53 Calcutta  781  referred  to and Ram Singh  Gopal  Singh  and others v. Abdullah Habilullah I,L.R. 26 Lah. 252 over ruled. 211

JUDGMENT: CIVIL  APPELLATE JURISDICTION         Civil Appeal No.  1323 of 1967. Appeal  by  certificate from. the judgment and  order  dated April 29, 1966 of the Calcutta High Court in Appeal No.  109 of 1965. S.   C. Manchanda and V. Maya  Krishnan, for the appellant. B.   P. Maheshwari and Suresh Seth, for Respondent No. 1. Sharad Manohar and B. P. Maheshwari, for Respondent No. 3. The Judgment of the Court was delivered by MUKHERJEA, J.-This appeal by certificate from a judgment  of the  Calcutta High Court raises an important question as  to whether  after  an auction sale in execution of a  decree  a decree-holder auction-purchaser can move the executing court for  delivery of vacant possession of an immovable  property or  whether  he  has to file a separate  suit  to  get  that possession.  The short facts of the case are as follows.  In May  1956  one  Debidutt Bhagwati.Prasad  obtained  a  money decree against Harnandrai Badridas.  In January 1959 Mr.  S. Tibrewal,  a  member  of  the  Calcutta  Bar  was  appointed Receiver  in  an  insolvency proceeding  against  one  Durga Prasad Goinka, a partner of the defendant firm in respect of premises  No.  99 and 128 Cotton Street,  Calcutta  for  the purpose  of selling those properties.  On 3 April  1958  Mr. Tibrewal  was  also appointed receiver in execution  of  the decree obtained by Debidutt Bhagwati Prasad for the sale  of the two premises.  On 26 April 1958 the properties were  put up  to  sale by auction and one Kanta  Prosad  Chotaria  was declared  the purchaser of premises No. 128,  Cotton  Street for  Rs.  52,000/-.   Kanta Prosad made  a  deposit  of  Rs. 13,000./- as earnest money.  There were, it appears, various proceedings after this at the end of which, on 19 May  1964, there  was an order directing the receiver to  complete  the sale  within one month from that date and Kanta  Prosad  was

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directed  to  pay the balance of the purchase  money  within that  time.   The  receiver  was  directed  to  execute  and register a conveyance on behalf of the judgment-debtors  who were  the owners of premises No. 128, Cotton Street in  case they refused to register the same.  The purchaser was by the same  order directed to pay interest on the balance  of  the purchase money from 13 June 1963 to 19 March 1964 in default whereof  there was an order not to execute  the  conveyance. On  17  June 1964 the receiver executed  the  conveyance  on behalf of the judgment-debtor and the insolvent.  On 19 June 1964  the  purchaser  through  his  attorney  requested  the receiver to make over possession of premises No. 128, Cotton Street.  On 23 July 1964 the receiver was further  requested by  the attorney to make over possession of the premises  by the issue of letters of attorney addressed to each tenant in respect  of  portions which were tenanted and to  make  over vacant possession of that portion of the premises which  was in  the occupation of the judgment-debtor to the  purchaser. On 17th November 1964 an application was made praying  inter alia for an order upon the judgment-debtor to deliver vacant possession  of  the  premises in  their  occupation  to  the receiver  and  also a direction to the receiver  to  deliver vacant  possession  of the same to the  purchaser.   In  due course, the court made an order in terms of 212 that  prayer..On appeal against that order in the  appellate court the  original order was confirmed.  Hence this present appeal. The  main contention of the appellant before  the  appellate court as well as before, us is that as soon as a receiver in execution  has executed a conveyance m favour of an  auction purchaser  the decree stands sates fled and there is an  end of  the  execution proceedings so that the question  of  the auction-purchaser  getting possession of the property is.  a matter which has nothing to do with the execution, discharge or  satisfaction  of the decree.  Such a question  does  not fall  to  be determined by the executing court  but  can  be decided only in a separate suit.  The question that has been raised by the appellant is one which has formed the  subject matter  of a long series of decisions  which  unfortunately have  followed two divergent  streams.  There is on  the one hand  a  full bench decision of the Calcutta High  Court  in Kailash  Chandra  Taraf  dar  v.  Gopal  Chandra   Poddar(1) followed  by the Madras High Court while on the  other  hand there is the decision of the Lahore High Court in Ram  Singh Gopal  Singh  and Anr. v. Abdullah Habibullah(2)  which  has been followed in various full bench decisions by the Allaha- bad  High  Court and also by the Patna High  Court  and  the Bombay  High Court.  In the present case, the Calcutta  High Court  has followed,- as indeed they were bound  to  follow, the  full  bench  decision  in  Kailash  Chandra  Tarafdar’s case(1).  G. K. Mitter J. who delivered the judgment of  the appellate  court after referring to the various  conflicting decisions of different High Courts in India on this question makes the following observation :               "It  is somewhat surprising that in  spite  of               great   divergence   of  opinion   among   the               different  High  Courts  the  matter  has  not               reached  the Supreme Court as yet and one  can               only hope that it will do so at an early date,               so that the question can be resolved once  for               all." In Kailash Chandra Tarafdar’s case(1) the  auction-purchaser who  was also the decree-holder has made an application  for delivery  of  possession under O.XXI r.95 of  the  Code of

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Civil Procedure.  The executing court held that he ’was only entitled to possession under r. 96 that is, through a tenant in possession.  Upon an appeal by the decree-holder  auction purchaser  the appeal was resisted mainly on the  contention that  no appeal lay.  The lower appellate court allowed  the appeal and ordered the auction-purchaser to be put into khas possession under r. 95.  Upon appeal by the  judgment-debtor to the High Court, the principal contention of the judgment- debtor  was that no appeal lay to the District  Court.   The Division Bench who heard the appeal referred the case to the Full  Bench on account of certain conflicting  decisions  in the  High  Court  of Calcutta.  While making  the  order  of reference the Division Bench held that no appeal lay  before the District Court because the matter did not come within r. 97 on two grounds, namely (i) because it was not a  question arising between the parties to the suit and (ii) it was  not a   matter   relating  to  the   execution,   discharge   or satisfaction   of  the  decree.   Chatterjee,  Acting   C.J. ,delivering the judgment on behalf of himself and four other learned (1) I.L.R 3 Cal. 781. (2) I.L.R. 26 Lab. 252. 213 Judges  answered the question as to whether a  decree-holder auction   Purchaser  is  a  party  to  the  suit,   in   the affirmative.   Relaying among others on the  observation  of the Judicial Committee in the case of prosunno Coomar Sanyal v. Kalidas Sanyal(1) the learned acting  Chief Justice put a wide  and liberal construction on sec. 47 of Code of  Civil- Procedure and decided that the decree-holder was undoubtedly a  party to the suit and did not lose that status after  the sale.   As for the second question, his Lordship  held  that the weight of authority was in favour of the view that where an  auction-purchaser  is  the  decree-holder  any  question relating to delivery of possession is a question relating to the  "execution,  discharge or satisfaction of  the  decree" within the meaning of sec. 47. In  Ram Singh Gopal Singh & Anr. v.  Abdullah  Habibullah(2) the Lahore High Court came to an entirely contrary decision. According  to the Lahore High Court, sec. 47 of the Code  of Civil  Procedure  does not apply to an order  passed  on  an application  under O.XXI r. 95 by an  auction-purchaser  who was also the decree-holder.  This view which is supported by a  stream  of  decisions of the High  Courts  of  Allahabad, Patna,  Bombay  and Rangoon makes no distinction  between  a decree-bolder  purchaser and a stranger purchaser.   In  the case  of a decree-holder purchaser it is, according to  this view,  a mere accident that the purchaser was also  a  party before the auction sale and that advantageous factor  should not therefore have the effect of making his position  better or worse than that of a purchaser who had been a stranger in the  suit.   Further, according to this view, as soon  as  a judgment  debtor’s  property  is sold  in  auction  and  the decremental amount realised by the decree-holder, the decree stands satisfied and after that stage there can be no  scope for  any question arising as to the execution, discharge  or satisfaction  of the decree.  The question whether the  auc- tion  purchaser gets possession of the property is a  matter which has nothing to do with the question of satisfaction of the decree. As  we have already said, the appellant relied on  the  Full Bench decision of the Lahore High Court.  We have  carefully gone  through the various decisions cited before us  and  we find  ourselves  in agreement with the opinion of  the  full bench  of  the  Calcutta High Court  in  Kailash  Tarafdar’s

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case(3).   If  a  confirmation of  the  sale  would  finally terminate all questions as to execution of the decree it  is difficult to appreciate why the legislature would frame such rules  as rules 95 to 102 under o. XXI of the Code of  Civil Procedure.  We are in respectful agreement with G. K. Mitter J,  that the legislature must have thought that the duty  of the executing court should not end with the confirmation  of the sale and it is because the legislature thought "that the auction  Purchaser  should have the right  of  applying  for possession  under  the provisions of r. 95 and  r.  96  that proceedings  for obtaining possession were included  in  the catena of rules relating to the execution of the decree". Sec.  47 in our view should be construed liberally.  As  far back  as in 1892 (4),  the Privy Council spoke  strongly  in favour of putting a (1)  19 I.A. 160. (2)  T.L.R. 26 Lah. 252. (3)  I.L.R. 53 Cal. 781. (4)  19 I.A 166. 214 liberal  construction  on sec. 244 of the  Code  of.   Civil Procedure. of 1882 which corresponded to present sec. 47  of the  Code, of 1908. The Privy Council   reiterated  this  in Ganapathy v Krishnamachariar  (1) If a liberal  construction be  put  upon sec. 47 it is difficult to  understand  why  a decree-holder  who has been a party to the decree will  shed his  character  as  such party merely  upon  purchasing  the property at the execution sale.  After all, a  decree-holder purchases  the property in execution of his decree with  the permission  of the court.  There is no reason why he  should not  retain his character of a party to the suit  until  the delivery  of possession to him of the property purchased  by him.   Having regard to this consideration, if any  question is raised by the judgment debtor at the time of delivery  of possession concerning the nature of the rights purchased and if the judgment debtor offers any resistance to delivery  of possession  the  question  must be one  which  in  our  view relates to the execution, discharge and satisfaction of  the decree and arises between the parties to the suit. Speaking  of the two conflicting, views on this section  the learned  commentator  of  the 13th Edition  of  Sir  Dinshaw Mulla’s   Code  of  Civil  Procedure  makes  the   following observation :               "The  cases in which it has been held that  an               auction  purchaser even if he is  the  decree-               holder  is  not a party to the  suit,  require               reconsideration in view of the ruling of  the,               Judicial   Committee  that  such  in   auction               purchaser is a party to the suit."  The  decision of the Judicial Committee which  the  learned commentator   had   in  mind  is  that   of   Ganapathy   v. Krishnamachariar(1). It  is important to remember that after the decision of  the Privy  Council  in  Ganapathy’s  case  there  has  been   an amendment of sec. 47 as a result of which the purchaser at a sale  in  execution of a decree, whether he is  the  decree- holder or not, is unquestionably a party to the suit for the purpose  of sec. 47.  Having regard to this,  all  questions arising  between  the auction purchaser  and  the  judgment- debtor must in our view be determined by the executing court and not by a separate suit. In   view  of  the  foregoing  considerations  we  have   no hesitation in upholding the view taken by the Calcutta  High Court.   In  the circumstances we dismiss  the  appeal  with costs.

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S.C. Appeal dismissed. (1) 45 1. A. 54. L944 Sup C.1.173-2500-4-11-74-GIPF 215