1956 (4) TMI 74 - HC - Insolvency and Bankruptcy

Summary

Issues Involved:
1. Validity of the sale held on 16-08-1955.
2. Revival of ancillary orders upon restoration of the appeal.
3. Nature and effect of interlocutory orders such as stay orders.
4. Mistake in the order dated 11-08-1955 regarding the stay of sale versus stay of delivery of possession.

Detailed Analysis:

1. Validity of the Sale Held on 16-08-1955:
The appeal was directed against the order dated 01-09-1955, by the executing Court, which refused to annul the sale held on 16-08-1955. The judgment debtors contended that the sale was void due to the revival of the stay order upon the restoration of the appeal. The Court concluded that the executing Court had no jurisdiction to hold the sale on 16-08-1955, as it was under the wrong impression that the stay order dated 05-10-1953 did not revive when the appeal was restored on 11-05-1955. Thus, the sale held on 16-08-1955 was deemed void.

2. Revival of Ancillary Orders Upon Restoration of the Appeal:
The Court held that on the restoration of a suit or appeal dismissed for default, all ancillary orders passed therein also revive. This principle was supported by precedents such as Veeraswami v. Ramanna, AIR 1935 Mad 365, and other cases. The stay order dated 05-10-1953, which was in effect before the dismissal of the appeal, revived upon its restoration on 11-05-1955. Therefore, the execution proceeding should have remained stayed, rendering the sale held on 16-08-1955 void.

3. Nature and Effect of Interlocutory Orders Such as Stay Orders:
Interlocutory orders, including stay orders, are considered ancillary orders meant to aid the ultimate decision in the main suit or appeal. The Court emphasized that such orders revive and operate with all their legal implications once the main suit or appeal is restored. The stay order dated 05-10-1953, being an ancillary order, revived upon the restoration of the appeal, thus invalidating the sale held during the period it should have been in effect.

4. Mistake in the Order Dated 11-08-1955 Regarding the Stay of Sale Versus Stay of Delivery of Possession:
The Court recognized that the order dated 11-08-1955 by the learned Registrar mistakenly referred to the stay of delivery of possession instead of the stay of sale. The judgment debtors had applied for the stay of sale, not delivery of possession. The Court concluded that the mistake was due to confusion during the hearing. The order intended to stay the sale, and thus, the sale held on 16-08-1955 could not stand. The Court reiterated that the effective order is the one the Court decides to pass, not one resulting from a mistake.

Conclusion:
The appeal was allowed, and the sale held on 16-08-1955 was declared void. The Court held that the ancillary stay order revived upon the restoration of the appeal, and the mistake in the order dated 11-08-1955 should be corrected to reflect the intended stay of sale. There was no order as to costs.