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1941 Supreme(SC) 7
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD ATKIN, LORD THANKERTON, LORD ROMER, SIR GEORGE RANKIN AND CLAUSON L.J.
JAGAT NARAYAN SINGH - Appellant
Versus
KHARTAR SAH - Respondents
On appeal from the High Court at Patna.
Decided On : April 3, 1941.
Solicitors for appellant: Hy. S. L. Polak & Co.
A party challenging the liability of attached property for another's debt must apply under Order XXI, Rule 58 of the Code of Civil Procedure; an application under Order XXI, Rule 90 for irregularities in the sale is an improper remedy for challenging the court's jurisdiction to sell.
Headnote:(A) Code of Civil Procedure - Order XXI, Rule 58 and Rule 90 - Section 47 and Section 146 - Attachment and sale of property in execution of decree - A third party claiming that property attached in execution of a decree is not liable to such attachment must proceed under Order XXI, Rule 58. An application under Order XXI, Rule 90 to set aside a sale on the ground of material irregularity or fraud in publishing or conducting the sale is not the appropriate remedy for a party challenging the jurisdiction of the court to sell the property or claiming to be a stranger to the decree. (Paras 1, 2, 11)
(B) Execution Proceedings - Effect of Compromise - Where a party to an execution proceeding enters into a compromise undertaking that a decretal sum shall be paid and that certain properties shall be answerable for the debt, such party cannot subsequently seek the court's assistance to disregard those promises. (Para 11)
Facts of the case:
A money decree was obtained against a debtor who had previously assigned his estate to his brother. In the first execution proceeding, the brother challenged the attachment of the estate. The court held the brother was a representative of the judgment-debtor. A compromise was subsequently entered into where the brother agreed that the estate would be answerable for the debt. In a second execution proceeding, the estate was sold. The brother applied to set aside the sale under Order XXI, Rule 90, alleging irregularities in the sale and challenging the court's jurisdiction. The High Court confirmed the sale, holding that the previous finding of the brother being a representative acted as res judicata.
Findings of Court:
The application to set aside the sale under Order XXI, Rule 90 was misconceived because the objection was essentially that the property was not liable to be sold, which should have been raised under Order XXI, Rule 58. Furthermore, the party was precluded from challenging the liability of the property due to the prior compromise agreement.
Issues: Whether a party claiming to be a third party whose property is wrongfully sold for another's debt can apply under Order XXI, Rule 90 to set aside the sale on grounds of irregularity, and whether a prior finding of representative status in a previous execution case binds subsequent proceedings.
Ratio Decidendi: A challenge to the right of the court to attach or sell property must be made under Order XXI, Rule 58, not under Order XXI, Rule 90, which is limited to irregularities in the conduct of the sale. A party who has formally undertaken in a compromise that property is answerable for a debt cannot later claim the property is not liable to attachment.
Result: Appeal dismissed.
Legal Category Hierarchy
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practice and procedure
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civil procedure
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execution of decrees
- attachment of property
- sale of immovable property
- representative of judgment debtor
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execution of decrees
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civil procedure
Judgement
Appeal (No. 53 of 1939), by special leave, in forma pauperis, from an order and decree of the High Court (April 14, 1936) which had reversed an order of the Subordinate Judge of Jilmara (November 12, 1932).
The facts appear fully from the judgment of the Judicial Committee.
By Order xxi ., r. 58, of the Code of Civil Procedure " (1.) Where any claim is preferred to, or any objection is made "to the attachment of, any property attached in execution of "a decree on the ground that such property is not liable to "such attachment, the Court shall proceed to investigate the "claim or objection with the like power as regards the examination of the claimant or objector, and in all other respects, "as if he was a party to the suit."
Order xxi ., r. 90, provides that "Where any immovable "property has been sold in execution of a decree, the decree-" holder, or any person entitled to share in a rateable distribution of assets, or whose interests are affected by the "sale, may apply to the Court to set aside the sale on the "ground of a material irregularity or fraud in publishing or "conducting it."
C. Sidney Smith for the appellant.
The respondents did not appear.
1941. April 3. The judgment of their Lordships was delivered by Sir George Rankin. The appellant is the legal representative of one Madhusudan Singh, deceased. The appeal, which is brought in forma pauperis, arises out of proceedings to enforce a money decree, dated March 23, 1926, obtained against Madhusudans brother, Shyam Lal, by one Soshi Bhusan in the Court of the Subordinate Judge at Jamtara, in the Sontal Parganas. The execution case which has given rise to this appeal was brought in the same court on September 15, 1930, by the first and second respondents, who had in 1929 purchased the rights of Soshi Bhusan in the decree. It is numbered Money Execution Case No. 14 of 1930. It was the second case brought to enforce the judgment of 1926, the first (Money Execution Case No. 12 of 1928) having been brought in the same court by the original decree holder, Soshi Bhusan, on May 22, 1928. The main question raised before the Board is as to the effect to be given in the second case to certain orders passed against Madhusudan in the first.
Shyam Lal was the owner of an impartible estate known as the Jamtara estate, and, being involved in debt, he assigned his immovables to Madhusudan by deed, dated January 10, 1923, reserving only a maintenance allowance to himself.
The deed recited Shyam LaVs indebtedness, and that he was ill, and made it clear enough that the purpose of the assignment was to enable the debts to be paid off by proper management of the estate. Shyam Lal having failed to give Madhusudan possession according to the deed, Madhusudan in 1924 sued Shyam Lal in the Court of the Subordinate Judge at Asansol to enforce the deed. This suit was compromised in 1927. By the compromise decree, dated March 17, 1927, Madhusudan was declared to be the owner of the estate, and a receiver was appointed to manage it, Shyam Lal being declared entitled to a monthly maintenance allowance. Madhusudan got himself recorded as proprietor. A considerable fortification was thus erected against any attack by Shyam LaVs creditors upon the Jamtara properties. Though the exact position of Madhusudan in relation to his brother is not quite clear, their Lordships will not assume that he was a mere agent trustee or benamidar.
When the first execution application was made on May 22, 1928, the names of Madhusudan and the receiver were added thereto as judgment debtors,” though it does not appear from anything on the record submitted to the Board that Soshi Bhusan had at any time obtained judgment against Madhusudan. Certain portions of the Jamtara estate having been attached in execution, Madhusudan on September 18, 1928, applied under r. 58 of Order xxi . of the Code of Civil Procedure that they be released from attachment. Not content, however, with this step, he followed it up on O
