Judgment:
ORDER
1. The unsuccessful defendants 1 and 2 in both the courts below are the appellants.
2. The case in brief is as follows:- The plaintiff filed a suit for declaration that the execution proceedings in O.S. 1008 of 1971 on the file of District Munsif Court, Nagercoil with reference to the sale of the plaint schedule property in favour of the plaintiff upto and inclusive of the delivery of possession are fraudulent, illegal and void and sought a decree for recovery of a sum of Rs. 10,492-65 (Rs. 7852-15 principal and Rs. 2640-50 interest) together with future interest at 12% till decree and thereafter at 6%. The plaintiff is employed as a mechanic in Nesamani Transport Corporation and the second defendant is the husband of the first defendant, who is also working as electrician in the same Corporation. They are well known to each other and were friends. For the money due from the third defendant to the first defendant the first defendant filed a suit in O.S. No. 1008 of 1971 on the file of Additional District Munsif Court, Nagercoil and obtained decree. The First defendant/ decree holder with the assistance of the 2nd defendant attached some properties alleging to be the properties of the 3rd defendant and brought them for sale after due publication and auction was proclaimed on 7.10.1982 and as there was no bidder, it was brought for sale on 25.11.1982. The 2nd defendant brought to the notice of the plaintiff about the court sale of the properties in three items and advised him to bid item No. 1 which is scheduled in the plaint and it belonged to the third defendant, the judgment debtor in that suit. Believing the representation if defendants 1 and 2, the plaintiff successfully bid in the auction held on 25.11.1982 for Rs. 7,105 and deposited 1/4th purchase money as well as poundage, etc. The plaintiff thereafter applied for loan in the Corporation and paid the balance amount on 4.12.1982. The plaintiff also deposited a sum of Rs. 504 towards stamp paper and the sale was confirmed on 29.1.1983 and the sale certificate was also issued. The plaintiff took steps for getting delivery of the property through court and filed execution application in E.A. No. 1031 of 1983 and at the time of delivery also the 2nd defendant intervened and accompanied the plaintiff and the Amin and pointed out paddy field which the plaintiff thought belonged to the judgment debtor, namely, the 3rd defendant. The plaintiff came to know about the fraud played only about a month after delivery. The plaintiff went to the spot on 30.9.1983 to do agricultural operation and there was obstruction by the strangers. On an enquiry with the local revenue authority disclosed that, there was no property available belonging to the third defendant as covered by the sale certificate and that a huge fraud has been practised on the plaintiff by defendants 1 and 2 with the help of the third defendant. Defendants 1 and 2 have attached a property non-existent in the name of the 3rd defendant and have proclaimed it for sale and have fraudulently induced the public and plaintiff to purchase it in court auction. The plaintiff took copy of the settlement register and also correlation register copy and found that in the revenue records, the third defendant is not entitled to any property as covered in R.S. No. 901 of 1977. Defendants 1 to 3 are mutually and jointly responsible for the fraud played. The money deposited into the court by the plaintiff has been withdrawn both by defendants 1 and 3 and they are not entitled to enrich themselves out of their fraudulent acts. The first defendant had withdrawn Rs. 3,762 and the balance amount of Rs. 3,343 was realised by the third defendant. Hence, the suit.
Defendants 1 and 2 contended that neither the 1st defendant nor the 2nd defendant informed the plaintiff about the sale or advised him to bid the auction. The allegations are invented after long time to suit his own case. The plaintiff had purchased the property on his own accord. They did not accompany the plaintiff to the spot to take delivery. No fraud was ever committed by them in conducting the sale. The plaintiff sought to have filed a petition under Order XXI, Rule 91 of Civil Procedure Code within a prescribed period to set aside the sale and then only the auction purchaser is entitled to refund of money. The present suit is barred by Section 47 of Civil Procedure Code. The plaintiff already filed a petition under Order 47, but it was dismissed and, as such, the present suit is barred by res judicata. Further the suit is also barred by limitation. The third defendant contended that the first defendant filed a suit against him as O.S. 1008 of 1971 and obtained a decree. She also took out execution petition and attached 3 items of properties and brought to sale of the items. Item No. 1 alone in the case was sold under court auction for the satisfaction of the decree amount and items 2 and 3 were left out and they were released from attachment. The court sale for item No. 1 was conducted on 25.11.1982 and the plaintiff was the successful bidder and his auction was confirmed on 29.01.1983. The auction purchaser before purchasing the property perused all the records, visited the property, made proper enquiries and bid it in auction. After confirmation of auction, he obtained sale certificate, from the court and got delivery of the property on 22.07.1983 through court. The plaintiff filed E.A.1-31 of 1983 for correction of the survey number. The plaintiff attempted to include 2 other items of the properties, which were not sold out in the court auction and it was dismissed on 7.11.1985. Then the plaintiff filed another application as E.A. 485 of 1984 to set aside the sale and to direct the first defendant to deposit the money which was withdrawn from court and that was also dismissed on 7.11.1985. The present suit was filed on 17.9.1985. The principles of caveat emptor is applicable and the plaintiff is estopped from making the contentions. The third defendant is not at all responsible for any fraud played on the plaintiff and defendants 1 and 2. The 3rd defendant never withdrew or received any money from court and he never committed any fraudulent act. The 3rd defendant is not liable to pay any amount much less any interest. There is no privity of contract between the plaintiff and the 3rd defendant and he is an unnecessary party to the suit.
The trial court framed 6 issues and on behalf of the plaintiff, P.Ws.1 to 5-were examined and Exs.A-1 to A-13 were marked and on the side of the defendants, D.Ws.1 and 2 were examined and Exs.B-1 to B-5 were marked. The trial court decreed the suit and aggrieved against, this, defendants 1 and 2 preferred A.S. 39 of 1988 on the file of Sub Court, Nagercoil and the learned Judge after hearing the parties, dismissed the appeal and aggrieved against this, the present second appeal is filed.
3. At the time of admission of the second appeal, this Court framed the following substantial question of law for consideration:
Whether the learned subordinate Judge is right in holding that the present suit is maintainable in the face of Order XXI, Rule 90 and Section 47 of Civil Procedure code?
4. Heard the learned counsel for the parties.
5. It is not in dispute that the plaintiff is employed as a Mechanic in Nesamani Transport Corporation wherein the second defendant is also working as an Electrician. The first defendant is the wife of the second defendant. It is also not in dispute that the first defendant filed a suit in O.S. No. 1008 of 1971 against the third defendant for realisation of money and obtained a decree. The first defendant also attached properties alleged to be belonging to the third defendant and brought them for sale after publication and brought for sale on 25.11.1982. Believing the representation of the defendants 1 and 2, the plaintiff successfully bid in the action and took the properties for Rs. 7,105 and deposited all the amounts. The plaintiff has also filed execution petition in E.A. No. 1031 of 1983 and the second defendant also accompanied the plaintiff at the time of taking delivery. The plaintiff came to know about the fraud played only one month after the delivery as there was obstruction by the strangers. The enquiry revealed that the property did not belong to the third defendant/judgment debtor in that suit and fraud has been practiced on the plaintiff by the first and the second defendant with the help of the third defendant. Moreover, the money deposited by the plaintiff had been withdrawn by the first and the third defendant.
6. Per contra, the first and the second defendant/appellants contended that they did not accompany the plaintiff to the spot for taking delivery and they never induced the plaintiff also to bid in the auction and no fraud, was committed by them. Furthermore, the plaintiff ought to have filed a petition under Order 21, Rule 91 CPC within the prescribed period to set aside the sale and then only the plaintiff/auction purchaser would be entitled to refund half of the money. The suit filed by the plaintiff is not maintainable under law. In fact the plaintiff already filed a petition under Section 47 CPC, but it was withdrawn and the suit is also barred by limitation.
7. The third defendant contended that the plaintiff/successful bidder in the auction held on 25.11.1982 and the auction was confirmed on 29.1.1983. The auction purchaser perused all the records and made proper enquiries and thereafter bid in the auction after getting the sale certificate. He got the delivery through Court on 22.7.1983. The principles of Caveat Emptor is applicable and the plaintiff is estopped from making any further contentions. The third defendant never withdrew or never received any money from the Court and he never committed any fraudulent act. There is no privity of contract between the plaintiff and the third defendant.
8. Both the Courts below gave a concurrent finding in favour of the plaintiff. The learned counsel for the appellants mainly contended that the suit filed by the Plaintiff/ Auction purchaser is not maintainable and the only course available to the auction purchaser is to file a petition under Order 21 Rule 90 as well as under Section 47 of CPC. Order 21, Rule 90 relates to application to set aside the sale on the ground of irregularity or fraud. Order 21, Rule relates to application by purchaser to set aside the sale on the ground of Judgment debtor having no saleable interest. It reads as follows:
'The purchaser at any such sale in execution of decree may apply to the Court to set aside the sale on the ground that the judgment debtor had no saleable interest in the properties sold'.
9. The language employed under Order 21, Rule 91 clearly indicates that the auction purchaser may apply to the court to set aside the sale on the ground that the judgment debtor had no saleable interest in the property sold. Now, the third defendant has not taken any stand that the property belonged to him. Similarly, the defendants 1 and 2/appellants also did not state that the property belong to the third defendant - and he had saleable interest in the property. The plaintiff had positively established that the property purchased in the Court auction do not belong to the third defendant and he had no saleable interest. It is open to the auction purchaser to file an application under Order 21, Rule 91 CPC, but at the same time the non filing of any such application would not affect his right in any way. 'The language employed may only indicate that it is only discretionary and not mandatory. Similarly, Rule, 92 also cannot be made applicable to the case of the auction purchaser, because according to Rule 92(3), no suit to set aside the Order made under this Rule shall be brought by any person against whom such order is made.' This is not applicable to the case on hand. It is stated that the auction purchaser already filed an application invoking Section 47 CPC, but the saint; was withdrawn. Hence, the withdrawal of the application by the auction purchaser would not operate as res judicata.
10. The learned counsel for the respondent relied on a Judgment reported in Triveni and Ors. v. Swarcopchand and Ors. wherein it is observed that;
'Execution proceedings come to an end when symbolic possession has been given and accepted. Therefore, Section 47 will not come in the way of subsequent suit for actual possession. The contention that the auction purchaser, decree holder who had applied for possession under Order 21, Rule 95 and accepted symbolic possession (under the wrong impression that defendants were tenants), ought to have applied again only under Order 21, Rule 95 for actual possession and that therefore Section 47 barred the instant separate suit was negatived .'
11. It has also been held in a Judgment reported in Janata Cinema, Puri and Anr., v. Cineram Private Limited., that the question as to territorial jurisdiction and validly of decree on ground of fraud cannot be entertained by executing Court.
12. It has been held in Thakar Lal v. Nathulal and Ors., , that;
'An auction purchaser is entitled to recover/ back the purchase money from the decree holder after the confirmation of a sale in his favour if it is discovered in a suit brought by a third party that the judgment-debtor had no saleable interest in the property purchased by the auction-purchaser, and, therefore, he is deprived of the possession of such property, unless he has disentitled himself to such relief by any fraud or inequitable conduct on his part .................. The remedy of the auction-purchaser is not by an application in execution. Once the sale stands confirmed, then no return of the purchase money can be made so far as the execution department is concerned. Nor can Section 144 or Section 151 be pressed into use to achieve this result. The remedy of the auction-purchaser is by an independent suit.
This decision is applicable to the case on hand.
13. It has also been held in A.N. Marudachalam Chettiar v. S.A. Veera Bovan, , that;
'Where the auction purchaser, subsequent to the confirmation of the Court sale, finds that no right, title or interest has passed, and he loses possession of the property, he has a right to recover back the purchase money from the decree-holder by a separate suit under the common law. Such a suit is not barred because of the remedies provided for under the procedural law, or because of any provisions of Order 21, or Section 47 of the CPC.. It is no doubt true as a general proposition that a court sale. Per se, does not carry with it any guarantee in respect of title, or any covenant of title; the right, title and interest of the judgment-debtor alone are proclaimed for sale, and sold, and the risk is that of the auction purchaser. But where risk is that of the auction purchaser. But where that right title and interest, but actually equivalent to nothing, the auction purchaser has a right, by virtue of a separate action, to recover back the purchase money from the decree-holder.
This decision is also applicable to the case on hand.
14. It is therefore, clear from the aforesaid decisions and discussion that the suit filed by the plaintiff/auction purchaser is proper and correct. The respondent had positively established that the judgment debtor had no saleable interest in the property and the auction purchaser was induced to purchase the property and in the circumstance, the lower appellate court correctly came to the conclusion that the auction purchaser is entitled to get back the money deposited by him into the Court. However, the learned counsel for the appellants contended that they have received only a portion of the amount and at best they can be directed only to repay the amount. But the learned counsel for the third defendant stated that he had not withdrawn any money from the Court and it is available in the Court itself and if that be so, the auction purchaser can get back that amount also. Now, the plaintiff filed a suit for recovery of a sum of Rs. 10,492 which includes 1/4th of the auction amount and poundage paid in the Court, the balance of auction amount deposited on 4.12.1982 and the stamp paper value of Rs. 504 as well as interest from 7.12.1982 to 12.9.1982 at 12 per cent which works out to Rs. 2,640.50. It is seen from para-9 of the plaint that the first defendant had withdrawn Rs. 3.672 and the third defendant withdrawn Rs. 3,343. Under the circumstance, I am of the view, that the first and the third defendant are liable to return the amount received by them from the Court with interest at 9 per cent per annum. However, the trial Court decreed the suit in entirety and the same was also confirmed by the lower appellate Court. In my view, the plaintiff is entitled to get a decree only for the amount deposited by him with interest at 9 per cent per annum from the first and the third defendant.
15. For the reasons stated above, the second appeal is allowed in part and the Judgment and Decree of the Courts below are modified holding that the plaintiff/purchaser is entitled to get Rs. 7,326 from the first defendant and Rs. 3343 from the third defendant with interest at 9 per cent per annum from 7.12.1982 till date of decree and thereafter at the rate of 6 per cent per annum till realisation. The plaintiff is also entitled to get cost of the suit. However, there will be no order as to costs.