CALCUTTA HIGH COURT
Page, J., Cuming, J.
Raja Risheecase Law - Appellant
Versus
Manik Molla & Ors. - Respondent
Decided On : 23-03-1926
auction-purchasers - recovery of purchase money - Code of Civil Procedure, Order 21, Rule 93 - Section 315 of the Code of 1882 - equitable principles - Dorab Ally Khan v. Abdool Azeez [1877] 3 Cal. 806 - Doyal Krishna Naskar v. Amirta Lal Das [1902] 29 Cal. 370; Parvathi Ammal v. Govindasami Pillai [1916] 39 Mad. 803; Balvant Raghunath v. Bala AIR 1922 Bom. 205
Fact of the Case:
The auction-purchasers sought khas possession of property bought at a sale in execution of a decree or a refund of the purchase price if the judgment-debtors had no saleable interest in the property. The trial Court dismissed the claim for khas possession but decreed the suit for a refund of the purchase money and interest. Defendant No. 35 appealed, contending that no suit lies for the recovery of the price paid for property purchased at a sale in execution of a decree.
Finding of the Court:
The Court analyzed the provisions of the Code of Civil Procedure, Order 21, Rule 93, and Section 315 of the Code of 1882, and discussed the equitable principles established in Dorab Ally Khan v. Abdool Azeez [1877] 3 Cal. 806 and subsequent cases. The Court found that the auction-purchaser is entitled to recover the purchase money under equitable principles if it is against reason and conscience for the person to whom the purchase money has been paid to retain it.
Issues: The issues revolved around the entitlement of auction-purchasers to recover the purchase money for property bought at a sale in execution of a decree, and the applicability of statutory and equitable rights in such cases.
Ratio Decidendi: The Court held that the auction-purchaser is entitled to recover the purchase money under equitable principles if it is against reason and conscience for the person to whom the purchase money has been paid to retain it. The Court also emphasized the importance of considering the rights of the auction-purchaser as against the execution creditor to recover the purchase money.
Final Decision: The appeal was allowed, the decisions of the lower Courts were reversed, and the plaintiffs' suit was dismissed. The Court held that the plaintiffs had misconceived their remedy and ordered them to pay the costs in all the Courts.
JUDGMENT
Page, J. - The suit out of which this appeal arises was brought by certain auction-purchasers to recover khas possession of property which they had bought at a sale in execution of a decree obtained by Defendant No. 35 against Defendants Nos. 1 and 2. In the alternative the plaintiffs claimed that they were entitled to be refunded the amount of the purchase price if in the event it transpired that the judgment-debtors possessed no saleable interest in the property.
2. The trial Court dismissed the claim for khas possession, but decreed the plaintiff's suit for a refund of the purchase money and interest thereon. Defendant No. 35, the decree-holder, preferred an appeal, but the lower appellate Court affirmed the decree of the trial Court and dismissed the appeal.
3. The learned advocate for Defendant No. 35, who has prosecuted a further appeal to this Court, contended that no suit lies for the recovery of the price paid for property purchased at a sale in execution of a decree. In support of his contention the learned advocate referred to Order 21, Rules 89 to 93, Code of Civil Procedure, and urged that the only mode by which a purchaser at an execution sale is entitled to obtain a refund of the purchase money "from the person to whom it has been paid" is by preferring an application to set aside the sale as provided in Order 21, Rules 89 to 93. Now, these is authority for the proposition that the provisions of Section 315 of the Code of 1882 were repealed by Order 21, Rule 93 of the Code of 1908 and that except under the Code of 1908 there is no mode in which an auction-purchaser at a Court sale can recover the purchase price that he has paid. I find myself unable to give my assent to that view. In Section 315 of of the Code of 1882 it is provided that
when a sale of immovable property is set aside under Sections 310A, 312 or 313, or when it is found that the judgment-debtor had no saleable interest in the property which purported to be sold and the purchaser is for that reason deprived of it the purchaser shall be entitled to receive back his purchase money with or without interest as the Court may direct from any person to whom the purchase money has been paid. The repayment of the said purchase money and of the interest, if any, allowed by the Court may be enforced against such parson under the rules provided by this Code for the execution of a decree for money.
4. Order 21, Rule 93 of the Code, 1908, provides that
where a sale of immovable property is set aside under Rule 92 the purchaser shall be entitled to an order for repayment of his purchase money, with or without interest, as the Court may direct against any person to whom it has been paid.
5. In my opinion, the effect of Order 21, Rule 93, is that the only method tinder the Code by which an auction-purchaser at a Court-sale is entitled to obtain a refund of the purchase money is by applying to set aside the sale as therein provided. The reason that the Code was passed in this form is that the Legislature intended that after a sale was confirmed and the execution had been concluded the sale should not further be questioned; for by that time the purchase money may have been distributed, and it may have become a matter of great difficulty to trace the persons into whose hands it has come. On the other hand, I am of opinion that Rule 93 does not, and does not affect to, repeal any right which, prior to the enactment of the Code of 1908, a purchaser of property at an execution sale may have possessed under the law and apart from the Code to recover the purchase price of the property which he purported to have bought, but in which afterwards it has been discovered that the judgment-debtor had no saleable interest. Now what other right to recover the purchase money does an auction-purchaser at a Court sale possess tinder the law in such circumstances. Clearly he has lost the statutory right to proceed by suit which was granted specifically u/s 315 of the old Code becaus
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