PATNA HIGH COURT
S.K.Jha, J.
Most.Lagan Barta Devi
Versus
Suba Rai
Civil Revision No. 737 of 1970 ;
Decided On : APRIL 3, 1975
MARSHALLING - PRINCIPLE OF - APPLICABILITY - BONA FIDE PURCHASER FOR VALUE WITHOUT NOTICE - SALE SUBJECT TO MORTGAGE - SECTION 56 OF THE TRANSFER OF PROPERTY ACT, 1882.
Fact of the Case:
The petitioner, a subsequent purchaser of a mortgaged property, sought to invoke the principle of marshalling to protect her property from being sold in execution of a mortgage decree. The decree-holders opposed the application, arguing that the petitioner was not a bona fide purchaser for value without notice and that the property was sold subject to the mortgage.
Finding of the Court:
The court held that the petitioner was not a bona fide purchaser for value without notice and that the property was sold subject to the mortgage. Therefore, the principle of marshalling could not be invoked in her favor.
Issues: Whether the petitioner was a bona fide purchaser for value without notice.
Ratio Decidendi: The court relied on the principles laid down in Ramchandra Bhagat V/s. Mrs. Eva Mitra, AIR 1960 Pat 378 and Mt. Rajo Kuer V/s. Brij Bihari Prasad, AIR 1962 Pat 236 to hold that the principle of marshalling can be invoked by an auction-purchaser of a property in execution of a decree provided that he is a bona fide purchaser for value without notice or that there is a contract to the contrary.
Final Decision: The court dismissed the petitioner's application and discharged the rule.
1. This application in revision is directed against an order dated 6-6-1970 passed in Miscellaneous case 40 of 1970 arising out of Execution Case 147 of 1958 pending in the Court of 1st Subordinate Judge, Arrah. The objector to the execution proceeding is the petitioner.
2. The short facts giving rise to this application may be stated thus. The decree-holders opposite parties 1 to 11 obtained a mortgage decree against opposite parties 12 to 14 in a suit on the basis of a mortgage bond dated the 18th of March, 1952. The mortgage decree passed by the trial Court was substantially affirmed by a Bench of this Court in First Appeal 398 of 1959 by a Judgment and decree dated the 9th of August, 1963 (Pat). The effect of the decree as it stood affirmed by this Court in aforesaid first appeal was that the properties mortgaged, namely, a two-storey brick-built house in mohalla Shivaganj and 20 karis of land with a mudbuilt house having tiled roof situate in the same Mohalla were, inter alia to be sold in execution of the mortgage decree. In the proceeding for execution of the decree levied by the decree-holders (O. P. 1 to 11), opposite parties 15 and 16 raised an objection that they were purchasers of a part of the mortgaged properties and that the decree holders should proceed against the house bearing Cadastral survey khasra No. 4499 and the land bearing Khasra No. 4500 and municipal survey plot No. 1223 situate in the same mohalla, which were covered by the mortgage decree but not covered by the sale deed executed by opposite parties 12 to 14 in their favour. If after the sale of such properties the mortgage dues were not satisfied, the decree-holders should proceed against the properties sold to opposite parties 15 and 16 according to the law of marshalling. This objection was allowed by the learned Subordinate Judge who was the executing Court. The petitioner purchased a part of the mortgaged properties, which was also covered by the decree, sometime in the year 1966 lone after execution case was started. After her purchase, she also filed objections under Sec. 47 read with Sec.151 of the Code of Civil Procedure (hereinafter to be referred to as the Code) on the ground that she being a subsequent bona fide purchaser of one of the houses, namely, the two-storey brick-built house in mohalla Shivaganj aforementioned, the principle of marshalling should also be made applicable to her case. This objection was registered as Miscellaneous Case 40 of 1970 in Execution Case 147 of 1958. By the impugned order the executing Court has dismissed the objection. Being aggrieved by this order refusing marshalling in her case, the petitioner has come up to this Court under Sec.115 of the Code.
3. The sole ground taken in support of this revision application is that the executing Court had acted with material irregularity in the exercise of its jurisdiction in not applying the principle of marshalling in the petitioners case. A counter-affidiavit has been filed in this case on behalf of the decree-holders, in paragraph 3 of which it has been stated that the petitioner purchased the property from opposite parties 12 to 14 in 1966 during the pendency of the execution of the decree having knowledge of the same and hence she must be deemed to have purchased subject to the encumbrance and with obvious notice to her (petitioner) which is apparent from the fact that the purchase was made long after the execution was levied. It is also asserted that the decree having been confirmed by this Court in 1963, there could be absolutely no presumption in favour of the petitioner having been a bona fide purchaser for value and without notice of the decree in 1966.
4. Curiously enough, learned Counsel for both the parties placed reliance on two Bench decisions of this Court in Ramchandra Bhagat V/s. Mrs. Eva Mitra, AIR 1960 Pat 378 and Mt. Rajo Kuer V/s. Brij Bihari Prasad, AIR 1962 Pat 236. In the case of Ramchandra Bhagat this Court has held that where no
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