The discovery of fraud in an auction sale determines the limitation period for setting aside the sale.

S. K. MOOKHERJEE, J.

( 1 ) THE present appeals arise out of Order No. 261 dated 12. 9. 1991, passed by the learned Chief Judge, City Civil Court, Calcutta in Misc. case No. 59 of 1972 allowing an application under Order 21, Rule 90 read with Section 151 of the Code of Civil Procedure at the instance of respondents 1 (a) and 1 (b ). The auction sale in question was confirmed on 20. 12. 71 and the application for setting aside the said sale had been filed on 19. 1. 1972. The records reveal that, at various stages of the auction sale, the judgement debtors had appeared, and, on deposits of different amounts, the sale was kept postponed from time to time. The records further reveal that in the application for setting aside the auction sale, fraud and irregularities in conducting the sale had been pleaded along with various other contentions. From the impugned Order, it appears that the learned Judge had adverted, amongst others, to the pleadings of fraud and the point about limitation of the application for setting aside the auction sale. It is also apparent from the impugned order that the learned Trial Judge had recorded his findings on the said two questions-inter alia, holding that the said application was not barred by limitation and that there had been material irregularity and fraud in publishing and conducting the sale in question. In the appeal, accordingly, all the findings of the learned Judge including the findings on the contentions mentioned above have been assailed.

( 2 ) THE learned Advocate representing the contesting parties before us invited us to hear out the appeal on the question of limitation as it was felt that our decision on the said question might indicate the necessity or absence thereof so far as adjudication of other contentions on merit was concerned. Accepting the said joint prayer, we have heard out the appeal on the question of limitation.

( 3 ) CRUX of the submission on behalf of the appellant has been that in view of the provisions of Article 127 (old Article 166 of the Limitation Act, 1908), the application made on behalf of the judgement debtor for setting aside the sale in question must be held to have been barred by limitation since admittedly, such application had been made long after expiry of 30-days (after amendment 60 days) period from the date of sale. On behalf of the respondents, however reliance had been placed on the language of Section 18 of the Limitation Act, 1908 (Section 17 of 1963 Act), and it was contended that the application had been filed well within time from the alleged date of discovery of fraud is conducting the sale in question. Various decisions had been referred to at the Bar.

( 4 ) WE have carefully considered the contentions of the contesting parties. We are of the view that the language of Section 18 (Present Section 17) makes it unequivocally clear that even in cases where specific periods of limitation have been prescribed such periods of limitation shall not begin to run until the applicant has discovered the fraud and once a fraud is found to exist the appellant becomes entitled to file an application for setting aside a fraudulent sale within three years from the date of discovery of fraud in terms of Article 181 of the Limitation Act, 1908 (Article 137 of Act of 1963 ).

( 5 ) WE, therefore, held against the appellants. The application under Order 21 Rule 90 of the Code of Civil Procedure read with Section 151 of the said Code cannot be said ex-facie to have become barred by limitation. The appeals, therefore, have to be heard on all points including question of limitation on merits. J. K. Mathur, J. I agree. Appeal allowed.

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