http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 8  

PETITIONER: TRIBHUVANDAS PURSHOTTAMDAS THAKUR

       Vs.

RESPONDENT: RATILAL MOTILAL PATEL

DATE OF JUDGMENT: 05/09/1967

BENCH: SHAH, J.C. BENCH: SHAH, J.C. SIKRI, S.M. SHELAT, J.M.

CITATION:  1968 AIR  372            1968 SCR  (1) 455  CITATOR INFO :  RF         1968 SC 822  (5)  R          1969 SC  69  (3)  R          1974 SC2192  (117)

ACT: Code  of  Civil  Procedure, 1908,  O.  29,  r.  89--Mortgage decree--Sale  in execution  of--Judgment-creditor  extending time  for  payment of mortgage amount--Amount  specified  in proclamation  of  sale not deposited--If condition  of  rule satisfied. Bombay  Public  Trusts  Act, ss. 36(a)  and  56B--’Sale’  if includes court sale in execution of decree--Suit to  enforce mortgage  decree  if  suit or  proceeding  affecting  public religious    or   charitable    purpose--Precedents--Binding nature--Nature of order of reference to Larger Bench.

HEADNOTE: The property of a trust was sold in execution of a  mortgage decree.  The trustees sought to set aside the sale under  0. 21,  r.  89 of the Code of Civil Procedure,  They  deposited five  per  cent  of the purchase money for  payment  to  the auction purchaser and claimed that the mortgagee had  agreed to  give them time for payment of the mortgage  amount,  and has  agreed in the meantime to abandon the  application  for execution.   The subordinate judge set aside the  sale.   In appeal  the District Court reversed that order holding  that since  the  trustees failed to comply with r. 89  of  0.  21 requiring  the  judgment-debtor  to  deposit  in  court  for payment  to  the decree-holder the amount specified  in  the proclamation of sale for the recovery of which the sale  was ordered,  the  executing court had no  jurisdiction  to  set aside  the  sale.   A single Judge of  the  High  Court,  in revision, set aside the order on the ground that the sale of the  mortgaged property, which belonged to a  public  trust, without  the  sanction  of  the  Charity  Commissioner   was prohibited  by s. 36 of the Bombay Public Trust Act and  was on that account invalid.  The ,High Court remanded the  case to the District Court.  In appeal to this Court, HELD:The  order  of the High Court should be set  aside  and that of the District Court restored. (i)Transactions  of mortgage, exchange or gift or  lease  of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 8  

any  immovable property in clauses (a) and (b) of s.  36  of the Bombay Public Trusts Act contemplated to be made by  the Trustees  are voluntary transactions and in the  absence  of any clear provision in the Act, the expression ’Sale’ in cl. (a)  only means transfer of property by the trustees  for  a price  and does not include a Court sale in execution  of  a decree. [457F-G] A  suit to enforce a mortgage or a proceeding to  enforce  a mortgage decree against property belonging to a public trust is  not a suit or proceeding in which a  question  affecting public  religious or charitable purpose is  involved  within the  meaning  of s. 56B of the Act and therefore it  is  not obligatory  upon  the court to issue notice to  the  Charity Commissioner. [458C-D] (ii)  An order setting aside a Court sale in execution of  a mortgage decree cannot be obtained under 0. 21 r. 89 of  the Code  of Civil Procedure by merely depositing five per  cent of  the purchase money for payment to the auction  purchaser and  persuading the decree holder to abandon  the  execution proceeding. [459G-H] 456 (iii)A  Single Judge of a High Court is ordinarily bound  to accept   as  correct  judgments  of  Courts  of   coordinate jurisdiction and of Division Benches and of the Full Benches of his Court and of this Court.  Any reference to s. 165  of the Evidence Act or the Oath of Office of a High Court judge is  irrelevant and will not justify a judge in ignoring  the rule relating to the binding nature of precedents. Jaisri  Sahu  v. Rajdewan Dubey, [1962] 2 S.C.R.  558;  Lala Shri Bhagwan v. Shri Ram Chand, [1965] 3 S.C.R. 218; Pinjare Karimbhai v. Shukla Hariprasad, 3 Guj.  L.R. 529; Haridas v. Ratansey,  23  Bom.   L.R. 802; and  State  ’of  Gujarat  v. Gordhandas, 3 Guj.  L.R. 269.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 500 of 1965. Appeal  by special leave from the judgment and  order  dated February  5114,  1963  of the Gujarat High  Court  in  Civil Revision Application No. 597 of 1961. M.   V. Goswami, for respondents Nos. 1 to 3. M.S.  K.  Sastri,  S.  P. Nayar for  R.  H.  Dhebar,  for respondent No. 7. The Judgment of the Court was delivered by Shah,  J.  Respondents 1 to 4 and respondent No. 6  are  the trustees  of a public trust, styled "Shri Tricumraiji".   In March  1950 the trustees mortgaged a house belonging to  the trust  to one Saheba to secure repayment of Rs.  5,000.   An action  instituted by the mortgagee against the trustees  to enforce  the  mortgage was compromised, and it  was  decreed that the trustees do pay Rs. 3,910 due under the mortgage by monthly instalments of Rs. 100 each and in default of  three instalments the entire amount remaining unpaid shall  become due  and  recoverable  from  the  mortgagee  property.   The trustees  did not pay the instalments due under the  decree, and  in  an application for execution by the  mortgage(  the mortgaged  property was put up for sale and the bid  of  the appellant was accepted for Rs. 5,000 by the executing Court. The,  trustees thereafter applied under 0. 21 r. 89  of  the Code  of  Civil  Procedure for setting aside  the  sale  and deposited  Rs.  250  being 5 %  of  the  purchase-money  for payment  to  the  appellant and Rs. 6  for  payment  to  the mortgagee,  claiming  that  in consideration  o  the  latter amount the mortgagee had agreed to "give to them six months’

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 8  

for  payment of the mortgage amount", and had agree, in  the meantime  to  abandon the application  for  execution.   The Subordinate Judge passed an order disposing of the execution application  and  directed that Rs. 250 out  of  the  amount deposit, by the trustees be paid over to the appellant.   In appeal  against  that order by the appellant,  the  District Court reversed the order holding that since the trustees bad failed  to  comply with the requirements of r. 89 of  0.  21 Code  of  Civil  Procedure,  the  executing  Court  had   no jurisdiction to set aside the sale.  The High 457 Court  of Gujarat in exercise of powers under s.115  of  the Code of Civil Procedure set aside the order of the  District Court.  Raju, J.., held that sale of the mortgaged  property which  belonged to a public trust. without the  sanction  of the  Charity Commissioner being prohibited by s. 36  of  the Bombay  Public  Trusts Act, was invalid, and  on  that  view remanded the case to the District Court "for decision on all the  points correctly arising out of the  matter".   Against that  order,  this appeal has been  preferred  with  special leave. The mortgaged property belongs to a public trust within  the meaning of the Bombay Public Trusts Act.  Section 36 of  the Bombay Public Trusts Act reads as follows:               "Notwithstanding  anything  contained  in  the               instrument of trust-               (a) no sale, mortgage, exchange or gift of any               immovable property, and               (b) no lease for a period exceeding ten  years               in  the  case of agricultural land  or  for  a               period  exceeding three years in the  case  of               non-agricultural land or a building,               belonging  to a public trust, shall  be  valid               without  the previous sanction of the  Charity               Commissioner." Raju,  J., was of the opinion that the expression ’sale’  in s.  36(a) includes a sale of the property of a public  trust in execution of a decree of a civil Court for recovery of  a debt  due  by  the  trust, and on that  account  a  sale  in execution of a decree held without the previous sanction  of the  Charity  Commissioner must be deemed invalid.   We  are unable   to   agree   with   that   view.    Obviously   the transactions  of mortgage, exchange or gift or lease of  any immovable property in cls. (a) & (b) contemplated to be made by  the  trustees  are voluntary transactions,  and  in  the absence  of any clear provision in the Act,  the  expression "sale"  in cl. (a) would only mean transfer of  property  by the  trustees  for  a price.  Section 36 occurs  in  Ch.   V relating  to  ’Accounts  and  Audit’,  and  is  one  of  the provisions  which imposes restrictions on the powers of  the trustees.  There is nothing to indicate, either in the words of  the section, or in the context in which it occurs,  that the   sale  prohibited  without  sanction  of  the   Charity Commissioner includes a Court sale in execution of a decree. For  the  purpose  of the present case. we do  not  deem  it necessary  to express any opinion on the question whether  a sale  in  exercise of authority derived from  the  trustees, e.g. a covenant for sale under an English mortgage  executed by  the  trustees  or a sale in terms of  a  consent  decree attracts  the application. of s. 36 of the Act.  We have  no doubt,  however, that the Legislature did not intend to  put any restriction upon the power of the Civil Court  executing a decree for recovery 458 of money due from the trust, by sale of the property of  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 8  

trust.   The section imposes a fetter upon the power of  the trustees:  it  is not intended thereby to  confer  upon  the Charity Commissioner an overriding authority upon actions of the Civil Court in execution of decrees. The learned Judge also held that s. 56B of the Bombay Public Trusts  Act  which  provides  that "in  any  suit  or  legal proceedings  in  which  it appears to  the  Court  that  any question affecting a public religious or charitable  purpose is  involved, the Court shall not proceed to determine  such question  until after notice "has been given to the  Charity Commissioner",  made it obligatory upon the Court  to  issue notice  to  the Charity Commissioner, and  if  that  officer desires  to  be  joined  as a party, to  implied  him  in  a proceeding  to enforce a mortgage by sale of  the  mortgaged property.   In  our  judgment,  that  view  also  cannot  be sustained.  A suit to enforce a mortgage or a proceeding  to enforce  a mortgage decree against property belonging  to  a public trust is not a suit or proceeding in which a question affecting  a  public  religious  or  charitable  purpose  is involved. The  District Court was, in our judgment, right  in  holding that  the requirements of 0. 21 r. 89 of the Code  of  Civil Procedure were not complied with and the Subordinate,  Judge had no power to set aside the sale held in execution of  the decree.  Order 21 r. 89 of the Code of Civil Procedure which in terms applies to sale of immovable property in "execution of a decree" which expression includes execution of a decree for  sale of mortgaged property, enables any  person  either owning  such  property  or holding an  interest  therein  by virtue of a title to apply to have the sale Set aside on his depositing in Court,-               (a) for payment to the purchaser, a sum  equal               to five per cent. of the purchase-money, and               (b)  for  payment to  the  decree-holder,  the               amount  specified in the proclamation of  sale               as that for the recovery of which the sale was               ordered, less any amount which may, since  the               date  of such proclamation of sale, have  been               received by the decree-holder. Rule  89  requires that two primary conditions  relating  to deposit must be fulfilled: the applicant must deposit in the Court  for  payment  to the auction purchaser  5  %  of  the purchase-money: he must also deposit the amount specified in the  proclamation  of sale less any amount received  by  the decree-holder  since  the date of proclamation of  sale  for payment  to  the decree-holder.  In the  present  case,  the trustees  of the trust had deposited Rs. 250 for payment  to the  auction  purchaser.   They also deposited  Rs.  63  for payment  to the decree-holder, but it is common ground  that the  claim  of  the mortgagee was  not  satisfied,  by  that deposit.  The 459 first  condition was, therefore, fulfilled, but  the  second condition of 0 .21 r. 89 was not fulfilled. It was urged, however, that the mortgagee having agreed  to, abandon the execution proceeding and to wait for six  months for  receiving  payment  of  the  mortgage  dues  from   the trustees, abandonment of the execution proceeding was in law equivalent  to, payment to the decree-holder of  the  amount specified  in the proclamation of sale for the  recovery  of which  the  sale  was ordered.  This in our  Judgment  is  a futile argument.  By abandoning the execution proceeding the claim of the creditor is not extinguished: he is entitled to commence  fresh proceedings for sale of the property.   Rule 89 of 0. 21 is intended to confer a right upon the judgment-

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 8  

debtor,  even  after the property is sold,  to  satisfy  the claim  of  the decree-holder and to compensate  the  auction purchaser  by  paying him 5 % of  the  purchase-money.   The provision,  is  not  intended to defeat  the  claim  of  the auction  purchaser,  unless  the  decree  is  simultaneously satisfied.  When the judgment creditor agrees to extend  the time for payment of the amount for a specified period and in the meanwhile agrees to receive interest accruing due on the amount  of the decree, the condition requiring the  judgment debtor  to deposit in Court for payment to the  decreeholder the  amount  specified in the proclamation of sale  for  the recovery of which the sale was ordered. cannot be deemed  to be complied with. Our  attention was invited to several decisions in which  it was held, that if the judgment-debtor instead of  depositing in  Court the amount specified in the proclamation  of  sale for  recovery of which the property is sold,  satisfies  the claim   of   the  decree-holder  under   the   decree,   the requirements of 0. 21 r. 89 are complied with: Subbayya   v. Venkata  Subba  Reddi(1), Muthuvenkatapathy Reddy  v.  Kuppu Reddi and Others(2), Laxmansing Baliramsing v.  Laxminarayan Deosthan(3).   Rabindra  Nath v. Harendra Kumar(4).   M.  H. Shivaji  Rao  v.  Niranjanaiah and  Ant-.(,").  These  cases proceed  upon  interpretation of the  expression  ’less  any amount  which  may since the date of  such  proclamation  of sale, have been received" occurring in cl. (b) of r. 89.  It is  unnecessary  to venture an opinion whether  these  cases were correctly decided.  It is sufficient to observe that an order setting aside a court sale, in execution of a mortgage decree cannot be obtained, under 0. 21 r. 89 of the Code  of Civil  Procedure by merely depositing 5 % of  the  purchase- money  for payment to the auction purchaser  and  persuading the decree-holder to abandon the execution proceed-- (1) A.I.R.1935 Mad. 1050. (2) A.I.R.1940 Mad. 427: I.L.R. [1940] Mad. 699. (3) I.L.R.[1947] Nag. 802. (4) A.I.R.1956 Cal. 462. (5) A.I.R.1962 Mys. 36. 460 Before  parting with the case, it is necessary to deal  with certain   questions   of  fundamental  importance   in   the administration  of justice which the judgment of  Raju,  J., raises.   The  learned Judge observed-(I) that  even  though there  is a judgment of a Single Judge of the High Court  of which  he  is a member or of a Division Bench of  that  High Court, he is not bound to follow that precedent. because  by following  the precedent the Judge would act contrary to  s. 165 of the Indian Evidence Act, and, would also violate  the oath of office taken by him when entering upon his duties as a Judge under the Constitution; and (2) that a judgment of a Full Bench of the Court may be ignored by a Single Judge, if the  Full Bench judgment is given on a reference made  on  a questionof law arising in a matter before a single  .Judge or a DivisionBench.    Such  a  judgment,   according   to Raju.J..  would  "Dot  be  a judgment at all"  and  "has  no existence in law". The  observations  made  by the learned  Judge  subvert  the accepted notions about the force or precedents in our system of  judicial  administration.   Precedents  which  enunciate rules  of  law  form the  foundation  of  administration  of justice under our -system.  It has been held time and  again that a single Judge of ,,a High Court is ordinarily bound to accept   as  correct  judgments  of  Courts  of   coordinate jurisdiction and of Division Benches and of the Full Benches of  his  Court and of this Court.  The reason ,of  the  rule

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 8  

which   makes  a  precedent  binding  lies  in  the   desire to .secure uniformity and certainty in the law. We may refer to the observations made by Venkatarama  Aiyar. J..  in Jaisri Sahu v. Rajdewan Dubey and Others(1) and  the cases  referred to therein.  If decisions of the same  or  a superior Court are ignored, eventhough directly  applicable. by  a  Judge in deciding a case arising before him,  on  the view  that every .Judge is entitled to take such view as  he chooses  of  the  question  of law  arising  before  him  as Venkatarama Aiyar, J., observed, the "law will be bereft  of all  its  utility  if it should be thrown into  a  state  of uncertainty by reason of conflicting decisions". The effect of a precedent of the Gujarat High Court fell  to be considered indirectly in this case.  Before Raju, J.,  it was  urged  -for  the  first time  in  the  course  of  this litigation  that  in  the absence .of the  sanction  of  the Charity  Commissioner the Court sale was  invalid.   Counsel for  the auction purchaser contended that this question  was not raised before the District Court and that Court  ,cannot be   said   to  have  acted  illegally  or   with   material irregularity in not deciding the question.  Counsel for  the auction  purchaser relied upon two decisions in  support  of that proposition: Pinjare Karimbhai v. Shukla  Hariprasad(2) and  Haridas  v. Rataney(2) He urged that under  the  Bombay Reorganization Act, 1960, the (1)  [1962] 2 S.C.R. 558 at pp. 567-569. (2)  3 Guj.  L.R. 529. (3)  23 Bom.  L.R. 802, 461 jurisdiction  of  the  Bombay High  Court  which  originally extended over the territory now forming part of the State of Gujarat,  ceased  when a new High Court was set  up  in  the State  of  Gujarat, but it was held by a Full Bench  of  the High  Court of Gujarat in State of Gujarat v.  Gordhandas(1) that the decision of the Bombay High Court will be  regarded as  binding since the Gujarat High Court had  inherited  the jurisdiction.   power  and  authority  in  respect  of   the territory  of Gujarat.  When pressed with  the  observations made in the two cases cited at the Bar, Raju.  J.. found  an easy  way  out.  He observed that the judgment of  the  Full Bench  of the Gujarat High Court had "no existence in  law". for  in the absence of a provision in’ the Constitution  and the  Character Act of 1861, a Judge of a High Court  had  no Power to refer a case to a Full Bench for determination of a question of law arising before him. and a decision given  on a  reference "had no existence in law".  The  learned  Judge also  though that if a Judge or a Division Bench of a  Court makes  a reference on a question of law to a Full Bench  for decision.  it Would in effect be assuming  the  jurisdiction which  is  vested by the Charter of the Court in  the  Chief justice of the High Court. In so observing the learned Judge completely misconceived the nature of a reference made by  a Judge  or  a  Bench of Judges to a  larger  Bench.  when  it appears to a Single Judge or a Division Bench that there are conflicting  decisions  of  the same  Court.  or  there  are decisions  of other High Courts in India which are  strongly persuasive  and  take a view different from the  view  which prevails in his or their High Court.. or that a question  of law  of importance arises in the trial of a case, the  Judge or  the  Bench  passes an order that the  papers  be  placed before the Chief Justice of the High Court with a request to form a special or Full Bench to hear and dispose of the case or  the  questions raised in the case.  For  making  such  a request   to  the  Chief  Justice,  no  authority   of   the Constitution or of the Charter of the High Court is  needed.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 8  

and  by  making such a request a Judge does  not  assume  to himself  the  powers of the Chief Justice.  A  Single  Judge does  not by himself refer the matter to the Full Bench:  he only  requests the Chief Justice to constitute a Full  Bench for hearing the matter.  Such a Bench is constituted by  the Chief Justice.  The Chief Justice of a Court may as a  rule, out  of deference to the views expressed by  his  colleague, refer the case: that does not mean. however, that the source of  the  authority is in the order of reference.   Again  it would  be impossible to hold that a judgment delivered by  a Full  Bench of a High Court after due consideration  of  the points  before it is liable to be regarded as irrelevant  by Judges  of  that  Court  on  the  -round  of  some   alleged irregularity in the constitution of the Full Bench The judgment of the Full Bench of the Gujarat High Court was binding upon Raju J., If the learned Judge was of the view (12) 3 Guj.  L.R. 269. 462 that  the  decision of Bhagwati, J.. in  Pijare  Karimbhai’s case(1) and of Nacleod, C. J.. in Haridas’s case(2) did  not Jay  down the ’correct law or rule of practice, it was  open to him to recommend ,to the Chief Justice that the  question be   considered  by  a  larger  Bench.   Judicial   decorum, propriety and discipline required that lie should not ignore it.   Our  system  of  administration  of  justice  aims  at certainty  in  the  law and that can be  achieved  only  if, Judges  do  not  ignore decisions by  Courts  of  coordinate authority or of superior authority.  Gajendragadkar, C.  J.. observed In Lala Shri Bhagwan & Anr. v.  Shri Ram Chand  and Anr. (3).               "It  is  hardly necessary  to  emphasise  that               consideration   of  judicial   propriety   and               decorum require that if a learned single Judge               hearing a matter is inclined to take the  view               that the earlier decisions of the High  Court,               whether  of  a Division Bench or of  a  single               Judge,  need ,to be re-considered,  he  should               not  embark  upon that enquiry  sitting  as  a               single Judge, but should refer the matter  ’to               a Division Bench. or, in a proper case,  place               the  relevant papers before the Chief  Justice               to enable him to -constitute a larger Bench to               examine the question.  That is the proper  and               traditional way to deal with such matters  and               it   is  founded  on  healthy  principles   of               judicial decorum and propriety." In considering whether a precedent of a Court of  coordinate ,authority  is binding reference to s. 165 of  the  Evidence Act  is  irrelevant.  Undoubtedly, every  judgment  must  be based  upon  facts  declarded  by the  Evidence  Act  to  be relevant  and  duly proved. But when a Judge in  deciding  a case  follows a precedent, he only regards himself bound  by the  principle underlying the judgMent and not by the  facts of that case. It is true that every Judge of a High Court before he enters upon  his office takes an oath of office that he  will  bear true  faith -and allegiance to the Constitution of India  as by law established and that he will duly and faithfully  and to  the best of his ability, knowledge and judgment  perform the  duties of office without fear ,or favour, affection  or illwill  and  that he will uphold the Constitution  and  the laws:  but  there  is nothing in the oath  of  office  which warrants  a  Judge  in ignoring the  rule  relating  to  the binding  nature,  of  the  precedents  which  is   uniformly followed.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 8  

The appeal is allowed and the order passed by the High Court set  aside  and  the  order passed  by  the  District  Court restored. In the circumstances, there will be no order as to costs  in this -Court and in the High Court. Y.P.                              Appeal allowed. (1) 3 Guj.   L.R. 529. (2) 23 Bom.  L. R. 802. (3) [1965] 3 S.C.R. 218. 463