CHANDRA REDDY,C. J.

( 1 ) THE question that calls for decision by this Full Bench is whether it is open to a Court auction-purchaser, on finding that the judgment-debtor has no saleable interest in the property sold, to sue for a refund of the purchase money on the ground of failure of consideration.

( 2 ) THE facts leading up to this litigation may be briefly stated. The appellant obtained a money decree against the second defendant on 3-3-1950 in the court of the District Munsif, Eluru, and in enforcement of the decree, brought Ac. 1-92 cents of land to sale in November 1950. The sale was recorded on 2-5-1951. Meanwhile, the defendant carried an appeal against that decree and succeeded in getting that judgment set aside and the matter remanded to the trial Court. Pending the re-trial of the suit, the judgment-debtor executed a registered gift deed of this property in favour of his daughter and son-in law.

( 3 ) ON re-trail, the suit was decreed and, in execution of the decree, this land was re-attached and was being brought to sale. At that stage, the donees intervened with a claim based upon the gift deed. The claim petition was dismissed as having been filed too late. On the same date, the sale was held. The respondent, who knew about this gift which was mentioned in the proclamation of sale and also of the claim proceedings, purchased the property for Rs. 4,275. 00 and the sale was confirmed on 19-2-1953. The sale certificate was issued in his favour. Shortly thereafter, the defeated claimants brought a suit to set aside the summary order. Notwithstanding the objection of the respondent and the appellant that the gift was a nominal transaction brought into existence to defeat the creditors the suit was decreed.

( 4 ) RESPONDENT filed petitions under Order 21, Rules 91 and 93 C. P. C. , to set aside the sale and to refund the sale amount. These applications were dismissed inter alia on the ground that they were barred by time. This led the respondent to institute the suit out of which this reference arises.

( 5 ) THE suit was resisted inter alia on the plea that the suit was incompetent by virtue of the relevant provisions of the Civil procedure Code.

( 6 ) THE trial Court relying on a Judgment of the Full Bench of the Madras High Court in Macha Koundan v. Kottora Koundan, ILR 59 Mad 202 : (AIR 1936 Mad 50) (FB) which held that where a judgment-debtor was proved to have had no saleable interest in the land sold and for that reason lost it the auction purchaser could sue the decree-holder for return of the purchase-money, overruled the objection of the defendant and decreed the suit. This judgment was confirmed on appeal by the Subordinate Judge, Eluru. The decree-holder dissatisfied with this decision, brought the second appeal to this court.

( 7 ) WHEN the second appeal came up for hearing before Seshachalapati, J. , he referred it to a Division Bench as the soundness of ILR 59 Mad 202 : (AIR 1936 Mad 50) (FB) was canvassed before him.

( 8 ) THEREAFTER, it came up before a Division Bench of this Court consisting of Satyanarayana Raju, and one of us (Venkatesam J.) As they thought that an authoritative ruling of the High Court was to be given as to the correctness of the opinion contained in the Full Bench decision, they referred the matter to a Full Bench.

( 9 ) THE Full Bench, in its turn, placed the matter before the present Bench of five Judges as it was contended that the judgments of the Full Bench in ILR 59 Mad 202 : (AIR 1936 Mad 50) (FB) (supra) required reconsideration.

( 10 ) THIS point has been the subject of judicial interpretation on many an occasion and there has been a sharp cleavage of judicial opinion on this controversy.

( 11 ) SINCE the problem has to be solved with reference to certain provisions of the Civil procedure Code, it is convenient to see what the law was with regard to the right of an auction-purchaser to obtain a refund of the purchase money under the Civil Procedure Code of 1859 which, in

Click Here to Read the rest of this document