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Rajasthan High Court
S.S. Byas, J.
Firm Jethmal - Appellant
Versus
Ram Nath - Respondents
S.B. Civil Regular Second Appeal No. 484 of 1972
Decided On : August 06, 1984
There is a sharp divergence of judicial opinion on the point whether an auction purchaser can recover the purchase money from the decree-holder after the confirmation of sale and subsequently if it is found that the property purchased by him did not belong to the judgment debtor or that the judgment debtor had no saleable interest in it. Some of the High Courts have taken the view that the auction purchaser is not entitled in law or in equity to file a suit for the recovery of his purchase money. The High Courts which took this view are those of Allahabad, Bombay, Patna and Calcutta. The other High Courts are of the view that an auction purchaser is entitled to file a suit for the recovery of his purchase mony. In other words, where the judgment debtor has no saleable interest at all, nothing has been sold and if nothing is sold, there is no sale. Thus, it is a case where there is simply a payment of money in return for nothing. The courts which took this view are those of Lahore,Madras, Andhra Pradesh, the Chief Court of Oudh, Rangoon and Travancore Cochin. So far this court is concerned, the auction purchaser is entitled to maintain the suit and recover the purchase money if subsequently it is discovered that the judgment debtor had no saleable interest in the property purchased by him. The suit of the plaintiff is, therefore, maintainable and he, both in law and equity is entitled to have a return of his money from the decree-holder. (Paras 17,18 & 20)
Mr. Moondra struggled hard to impress that the re-sale by auction of the property in dispute is not contemplated by the Rules. The contention is not tenable. Rule 90(14) vests a power in the officer conducting sale of the evacuee property to set aside the auction and forfeit the initial deposit, if any, made by the auction purchaser. The powers thus to set aside the sale and re-sale are there. Section 27 of the Act under which Rules, 1955 have been framed, gives a complete finality to the orders passed under the Act and the Rules and put a restriction on any court to call in question the act performed under the aforesaid Act and Rules. As such the auction made in favour of Diwan Chand by the Assistant Custodian cum Managing Officer cannot be assailed is a civil court. A sale of property forming part of the compensation pool cannot be, thus, challenged in a civil court on any ground. (paras 13 & 14)
2. The case set up by the plaintiff, though simple, is of unusual nature and gives an interesting reading. As per averments disclosed in the plaint, defendant Ramnath (who passed away during the pendency of this appeal and whose legal representatives have been substituted in his place) obtained a money decree being No. 2 of 1956 against Ram Niwas on June 6, 1957. In execution of that decree. Ram Niwas get attached and sold a shop described in para 9 of the plaint situate in the city of Bikaner. In the auction conducted by the Executing Court it was purchased by the plaintiff firm on July 15, 1959 for a sum of Rs. 3601/-. The sale was confirmed and sale certificate was issued to the plaintiff on September 9, 1959. The possession of the shop was also delivered to the plaintiff on Oct. 22, 1959 and since then he continued to be in possession of it. On December 23, 1961, the Assistant Custodian cum Managing Officer, Ganga-nagar taking the said shop as forming part of the property of the compensation pool under the Displaced Persons (Compensation and Rehabilitation) Act. 1954 (hereinafter referred to as the Act) sold it by auction and it was purchased for a sum of Rs. 7700/- by Diwan Chand (PW4). The sale certificate was issued by the said Officer in favour of Diwan Chand on September 7, 1963. The plaintiff raised objections against the said auction but his objections were over-ruled on the ground that Ram Niwas (against whom the defendant Ramnath had obtained a money decree) had no saleable interest in it. The Assistant Custodian cum Managing Officer held that the aforesaid shop was an evacuee property bearing Number 386-EP. As Ram Niwas had no saleable interest in the shop, it was not available for attachment and sale in execution of decree which the defendant had obtained against him. It was, therefore, got wrongly attached and sold by the defendant. The plaintiff had purchased it in the Court auction under the bonafide belief that it really belonged to Ram Niwas. Since Ram Niwas had no saleable interest in it,the sale made in favour of the plaintiff was null and void on account of the failure of consideration. The plaintiff was, therefore, entitled to get the refund of his amount of Rs.3601/- which the defendant had withdrawn from the executing court. It was also alleged that the auction of the shop through the court in execution of the decree took place due to the mutual mistake of fact which was that the Judgment debtor Ram Niwas was taken as the owner of it. The plaintiff moved an application in the Executing Court for the refund of his purchase money of Rs. 3601/- but that application was dismissed on July 17, 1963 by the District Judge, Bikaner. The plaintiff came to this court in revision against that order of the District Judge, which was decided by a Division Bench on April 20, 1968. Since the sale of the shop in favour of the plaintiff was confirmed, his application was held not maintainable and the revision was dismissed. The learned Judges of the Division Bench were, however, of the view that justice and equity spoke in favour of the plaintiff and as such his application for refund of money may be treated as a suit. He was allowed to introduce necessary amendments in his application, and to pay court fee thereon so that it may be treated as a plaint. The plaintiff thereupon, after introducing the necessary avaendments in his application, presented it as a plaint with requisite court fee. It was registered as a suit. The relief claimed by the plaintiff was the recovery of a sum of Rs. 3601/- as principal and Rs. 72/- as interest thereon, that is for a sum of Rs. 3673/- in total from the defendant.
3. The suit was resisted by defendant Ramnath. It was admitted by him that he had obtained a money decree against Ram Niwas and the shop in dispute was attached and sold in ex
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