1966 (11) TMI 85 - SC - Indian Laws

Whether a sale of immovable property in execution of a money decree ought to be confirmed when it is found that the ex parts decree which was put into execution has been set aside subsequently? Held that - Appeal is allowed. The order of the High Court is set aside and that of the executing court affirmed as on the facts of this case the sale must be confirmed. Although we have noticed some decisions where the right of the auction-purchaser decree-holder in circumstances similar to the case before us was discussed or the right of a purchaser in regard to a sale held after the setting aside of the decree was touched upon our judgment must not be taken as adjudication upon any of these points.

Summary

Issues Involved:
1. Confirmation of sale of immovable property in execution of a money decree.
2. Validity of sale after the ex parte decree is set aside.
3. Application of relevant provisions of the Code of Civil Procedure, particularly Order XXI, Rules 89 to 92.

Issue-wise Detailed Analysis:

1. Confirmation of Sale of Immovable Property in Execution of a Money Decree:

The primary issue is whether the sale of immovable property in execution of a money decree should be confirmed when the ex parte decree, which was the basis for the sale, has been subsequently set aside. The appellant purchased the property for Rs. 5,100/-, but the judgment-debtor objected, claiming the property was worth Rs. 25,000/- and the sale was improperly conducted. The executing court initially stayed the execution pending the application to set aside the ex parte decree. Once the ex parte decree was set aside, the auction purchaser sought confirmation of the sale. The court overruled the judgment-debtor's objections and confirmed the sale, a decision upheld by the first appellate court but reversed by the Punjab High Court, leading to this appeal.

2. Validity of Sale After the Ex Parte Decree is Set Aside:

The judgment explores whether a sale should be confirmed if the decree under which it was ordered is reversed before the sale's confirmation. The court noted that once a sale is confirmed, the judgment-debtor cannot reclaim the property even if the decree is later reversed. The Code of Civil Procedure does not explicitly provide that a sale should not be confirmed if the decree is reversed before confirmation. The court found no valid reason to distinguish between sales confirmed before or after the reversal of the decree, emphasizing the elaborate provisions in the Code for setting aside sales and the lack of legislative intent to prevent confirmation in such scenarios.

3. Application of Relevant Provisions of the Code of Civil Procedure:

The judgment delves into the relevant provisions of the Code of Civil Procedure, particularly Order XXI, Rules 89 to 92. Rule 89 allows a judgment-debtor to set aside a sale by depositing a sum equal to 5% of the purchase money and the amount specified in the sale proclamation. Rule 92 mandates the court to confirm the sale if no application under Rules 89 to 91 is made or if such applications are disallowed. The court emphasized that the purchaser's title relates back to the date of sale, not the confirmation date. The judgment also reviewed historical provisions and case law, noting that the Code of 1908 omitted a proviso from earlier codes that required a decree to be subsisting at the time of sale confirmation.

Historical and Comparative Case Law Analysis:

The judgment reviewed various cases under different codes, noting a consistent judicial approach to protect bona fide purchasers at auction sales. Cases like Sorimuthu v. Muthukrishna, Nanhelal v. Umrao Singh, and others consistently upheld the auction purchaser's rights, emphasizing that a sale should be confirmed unless successfully challenged under specific provisions. The court also noted that the legislative policy aims to protect auction purchasers to ensure fair bidding at execution sales, which ultimately benefits judgment-debtors by fetching proper prices for their properties.

Conclusion:

The Supreme Court concluded that the appellant-auction purchaser was entitled to confirmation of the sale despite the decree being set aside before confirmation. The judgment underscored the legislative intent to protect auction purchasers and the procedural safeguards available to judgment-debtors under the Code. The appeal was allowed, the High Court's order was set aside, and the executing court's order confirming the sale was affirmed, with costs awarded to the appellant.

Appeal Allowed.