Judgement

Consolidated Appeal and Cross-Appeal (No. 7 of 1921) from a decree of the High Court (December 14, 1916) varying an order of the Subordinate Judge of Godda.

Upon an appeal to the Privy Council in 1913 (L. R. 411. A. 38.), a confirmation by the Subordinate Judge in 1904 of a sale of immovable property in execution of a money decree, and the sale certificate made thereunder, were set aside. The Order in Council reversed a decree of the High Court at Calcutta dismissing an appeal from the sale certificate. The present proceedings were commenced in 1915. The judgment-debtor (now represented by the first five appellants) petitioned the Subordinate Judge for restoration of the property, with mesne profits. The auction purchasers (now represented by the first two respondents) petitioned, claiming (inter alia) that the restoration of the property should be subject to the repayment to them of the purchase price, also the amount which they had paid to discharge two bonds secured upon the property. The facts appear more fully from the judgment of the Judicial Committee.

The Code of Civil Procedure, 1908, by s. 144, provides that where a decree is varied or reversed, the Court of first instance shall on application " cause such restitution to be made as will, so far as may be, place the parties in the position which they would have occupied but for such decree....."

The Subordinate Judge ordered the restoration of the property with mesne profits, making no order as to the purchase price or the amount paid in discharge of the bonds. An appeal to the High Court was allowed, the learned judges (Roe and Jwala Prasad JJ.) making a decree in the terms stated in the present judgment.

1922. Dunne K.C. and Kenworthy Brown for the appellants (judgment-debtors). That which was sold in 1904 was, as appears from the judgment of the Privy Council, part of the incumbered share of the property. The judgment of the Board did not affect that sale, and until it is set aside the purchasers are not entitled to the return of the price which they paid. Under s. 144 of the Code no order could be made which was not consequential upon the Order in Council.

De Gruyther K.C. and S. Hyam for the respondents (purchasers). The sale transaction was void, the parties never being ad idem, and under s. 65 of the Indian Contract Act the appellants were bound to restore the price. There was power under s. 144 of the Code to provide for the return of the price as a condition to the restoration of the property. But apart from that section, the Court had inherent jurisdiction to make the order as one equitably dealing with the position Rodger v. Comptoir dEscompte de Paris (L. R. 3 P. C. 465, 475.); Mookond Lal Pal v. Mahomed Sami Meah . (( 1887) I. L. R. 14 C. 484, 486.)

June 19. The judgment of their Lordships was delivered by

LORD CARSON. The question to be decided in this appeal arises out of an order on appeal made by His Majesty in Council dated December 19, 1913, which set aside an auction sale of certain landed property held on July 27, 1904, in execution proceedings in the Court of the Subordinate Judge of Godda. The case before this Board is reported at L. R. 41 I. A. 38.

Raja Thakur Barmha, since deceased, the predecessor in title of the appellants 1-5 (hereinafter referred to as the judgment-debtors) was the owner of a full 16-annas share of a village called Patsanda. Ten of the said shares were incumbered and six were unincumbered, save that two bonds had been executed by the Raja in favour of one Gobardhan Das and others, which purported to create a charge on a 3-annas share in the said mahal as security for the said Gobardhan Das for Rs.23,965 and Rs.532.

Six-annas share of the incumbered property was attached for a judgment debt in execution of a decree obtained by the respondents third party, and sold on July 27, 1904. The respondents first and second parties are the representatives of the original auction purchasers and are hereinafter referred to as the auction purchasers.

The purchase money was a sum of Rs. 1,12,000, and this sum was paid into Court and eventually distributed to various mortgagee decree holders and others holding money decrees against the judgment-debtor whose debts were thereby discharged to the extent of such payments.

The auction purchasers claimed to have purchased for the sum aforesaid the six unincumbered annas share, and on December 21, 1904, a sale certificate was granted to the auction purchasers, which declared the respective interest of the auction purchasers, in the 6-annas share, and also declared that the share was subject to the charge created by the aforementioned bonds, but was outside the 10-annas share hereinbefore described as the incumbered property.

On December 26, 1904, the auction purchasers were duly put into possession of the said 6-annas share and paid off on February 7, 1905, the amounts covered by the two bonds. An appeal was subsequently made by the Raja to the High Court of Calcutta against the order of the Subordinate Judge of December 21, 1904, granting the said sale certificate, and when this appeal was dismissed he appealed further to His Majesty in Council, and this Board on November 25, 1913, advised that the appeal should be allowed and that the order of the Subordinate Judge confirming the sale, together with the said certificate of sale of December 21, 1904, should be set aside, and added " this will, of course, have the effect of setting aside all subsequent proceedings on the part of the auction purchasers based thereon." In consequence of this order setting aside the sale the judgment-debtors applied to the Subordinate Judge claiming restoration to them of the said 6-annas share of the property, together with mesne profits.

The auction purchasers resisted the said claim, and contended (1.) that the auction purchasers could not be asked to restore the property until (a) the amount which they had deposited in Court to complete the sale ; and (6) the sum paid by them to satisfy the bonds given by the Raja to Gobardhan Das had been refunded and they also claimed that Chaturi Ram Marwari, one of the auction purchasers, who was a respondent in the appeal before the Privy Council, had died before the hearing, and that therefore the order of His Majesty in Council could not affect his share—namely, half an anna of the 16 annas.

The Subordinate Judge overruled all the contentions of the auction purchasers, and by an order dated August 20, 1916, ordered restitution to the judgment-debtors of the said 6-annas share, together with the mesne profits from the date of delivery of possession of the said property, after the auction sale on July 27, 1904.

From that order the auction purchasers appealed to the High Court of Judicature at Patna, who, by order dated December 14, 1916, set aside the order of the Subordinate Judge, and in lieu thereof, ordered that the Subordinate Judge should ascertain (1.) "Whether Chaturi Ram died before the hearing of appeal by the Judicial Committee ; (2.) that he do ascertain the amount of mesne profits due on the share in respect of which restoration is to be made ; and (3.) that he set off the sum due to the judgment debtors as mesne profits against the sum due to the auction purchasers in recovery of their deposit and in the event of the sum due to the judgment debtors being in excess of the sum due to the auction purchasers he do restore possession of the property forthwith to the judgment debtors and in the event of the sum due to the auction purchasers being in excess of the sum due to the judgment debtor he do refuse to restore possession of the property until the deficit due to the auction purchasers has been made up either of the decree holders or by the judgment debtors themselves."

It is to be observed that the Court made no order as to the claim of the auction purchasers to be paid as a preliminary to restoring possession the sum paid to Gobardhan Das in respect of the two bonds, creating a charge on 3-annas share of the unincumbered property sold to the auction purchasers.

The appellants (the judgment-debtors) have appealed to His Majesty in Council against the said judgment and decree of the High Court, dated December 14, 1916, and the auction purchasers (respondents first and second parties) have entered a cross-appeal relating to the payments to Gobardhan Das as aforesaid. On the main question—namely, whether the auction purchasers are entitled to repayment of the deposit paid into Court as a condition precedent to their handing over possession to the judgment-debtors, their Lordships are in agreement with the judgment of the High Court, and think the order already referred to should on this point be affirmed. It is the duty of the Court under s. 144 of the Civil Procedure Code to " place the parties in the position which they would have occupied, but for such decree .or such part thereof as has been varied or reversed." Nor indeed does this duty or jurisdiction arise merely under the said section. It is inherent in the general jurisdiction of the Court to act rightly and fairly according to the circumstances towards all parties involved. As was said by Cairns L.C. in Rodger v. Comptoir dEscompte de Paris (L. R. 3 P.

C. 465, 475.) " One of the first and highest duties of all Courts is to take care that the act of the Court does no injury to any of the suitors and when the expression the act of the Court, is used, it does not mean merely the act of the primary Court, or of any intermediate Court of Appeal, but the act of the Court as a whole from the lowest Court which entertains jurisdiction over the matter up to the highest Court which finally disposes of the case." The auction purchasers have parted with their purchase money which they paid into Court on the faith of the order of confirmation and certificate of sale already referred to. This money has been distributed amongst creditors of the judgment-debtor who had attached the unincumbered property in question and could have realized their judgment debts by a sale of this property in execution, and it would be inequitable and contrary to justice that the judgment-debtor should be restored to this property without making good to the auction purchaser the moneys which have been applied for his benefit.

It was argued that the remedy of the auction purchasers was either to apply for a certificate of sale of the unincumbered property, or to obtain from the judgment-creditors repayment of the sums paid out to them under the orders of the Court. Their Lordships cannot agree with either of these suggestions, and for the reasons stated by the judges of the High Court.

As regards the sums paid by the auction purchasers to Gobardhan Das to clear off the bonds charged on the property they had intended to purchase, their Lordships are in agree ment with the decision of the High Court that this payment stands on a different footing from the deposit of the purchase money. It was an optional payment, made without any order of the Court, and as it entitled them to stand in the shoes of Gobardhan Das as holders of the bonds, it entails no hardship ; but however that may be, these payments cannot be made a condition of restoration to the judgment-debtors.

A question was raised before this Board as to whether the mesne profits on the one hand, and the purchase price on the other, should under the order of the High Court carry interest. The order is silent upon this point, but in their Lordships opinion the equities of the case will be met by not allowing interest in either case.

There only remains the question as to the rights of Chaturi Ram, who was one of the auction purchasers at the said sale of the half-anna share of the mahal. It is alleged that he had died pending the hearing of the appeal before the Privy Council and that as his heir or personal representative was not brought upon the record, the order on the advice of their Lordships in the Privy Council cannot affect the half-anna share in his possession or that of his heir.

Their Lordships have no evidence before them of the facts alleged and no claim was presented on behalf of the said Chaturi Ram or his representative and they are of opinion that, under the circumstances, the order in this case should be made without prejudice to the rights, if any, of Chaturi Ram, or if he is deceased, of his heir or legal personal representative.

Their Lordships are of opinion that the order of the High Court, subject to the modification last hereinbefore mentioned, should be affirmed, and that the appeal and cross-appeal should be dismissed with costs, including in the case of the appeal the costs of the petition to add certain documents to those set out in the record as originally printed, and they will humbly advise His Majesty accordingly.