1942 (10) TMI 9 - HC - Indian Laws

Summary

Issues Involved:
1. Representation of Venkataramiah in the mortgage suit after annulment of his insolvency.
2. Competency of the appeal filed by the appellants.
3. Binding nature of the decree and sale on Venkataramiah and subsequent purchasers.
4. Applicability of Order 21, Rule 103 and Section 146 of the Civil Procedure Code.
5. Principle that no person can be bound by proceedings taken behind their back.

Detailed Analysis:

1. Representation of Venkataramiah in the Mortgage Suit:
The core issue revolves around whether Venkataramiah was properly represented in the mortgage suit after the annulment of his insolvency. Initially, the Official Receiver was impleaded as a defendant due to Venkataramiah's insolvency. However, upon the annulment of the insolvency on 17th February 1933, the properties revested in Venkataramiah, but he was not added as a party to the suit. The Court emphasized that "nobody can be bound or prejudiced by an order made in a proceeding to which neither he nor the person under whom he claims was a party." This principle was reinforced by referencing the Privy Council's decision in Khiarajmal v. Daim, which stated that the Court has "no jurisdiction to sell the property of persons who were not parties to the proceedings or properly represented on the record."

2. Competency of the Appeal:
The respondents argued that the appeal was incompetent as the appellants were neither parties to the suit nor representatives of the parties within the meaning of Section 47 of the Civil Procedure Code. However, the Court held that an appeal is maintainable if the Court purports to make an order under a provision of law wrongly assumed to be applicable. The Court concluded that the respondents cannot bar the maintainability of the appeal by arguing that the appellants were not representatives of a party to the suit, especially after having invited the Court to pass the order on the footing that they were.

3. Binding Nature of the Decree and Sale:
The appellants contended that the decree and the subsequent sale did not bind Venkataramiah as he was not brought on record after the annulment of his insolvency. The Court agreed, stating that if a creditor seeks to sell the property of his judgment debtor after insolvency, he must either implead the Official Receiver before the decree or take necessary steps in execution to bind him. The Court emphasized that "no person can be prejudiced by proceedings taken behind his back," and thus, the sale did not bind Venkataramiah or the appellants who purchased the property from him.

4. Applicability of Order 21, Rule 103 and Section 146 of the Civil Procedure Code:
The respondents relied on Order 21, Rule 103, arguing that any person other than the judgment-debtor questioning an order under Rule 98 must do so by suit, not by appeal. However, the Court clarified that Section 146 allows a representative to take any proceedings or make any application that the person under whom he claims could have made. Therefore, the preliminary objection was overruled.

5. Principle of Representation and Binding Nature of Proceedings:
The Court reiterated that for a person to be bound by proceedings, it must be shown that at the time the order was passed, the representative character was subsisting. The Court cited several cases, including Raghu-nath Das v. Sundar Das Khetri and Kala Chand Banerjee v. Jagannath Marwari, to illustrate that the failure to bring the proper representative on record results in the proceedings not binding the person whose interest has devolved. The Court distinguished the present case from those involving de facto trustees, emphasizing that the broad principle remains that no decree or order binds a person who was not a party to the suit or properly represented.

Conclusion:
The Court set aside the learned Judge's order and dismissed the first respondent's petition with costs, reinforcing the principle that no person can be bound by proceedings taken without their proper representation.