High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE S. S. SUBRAMANI
Shanmugham and Others - Appellant
Versus
Perumal Naicker and Others - Respondents
S. A. No. 26 of 1991
Decided On : 19 July 1996
AUCTION SALE - VALIDITY - FRENCH CODE CIVIL - APPLICABILITY - PONDICHERRY EXTENSION OF LAWS ACT, 1968 - CODE OF CIVIL PROCEDURE, 1908 - RETROSPECTIVE OPERATION - VESTED RIGHTS - PROCEDURE - AUCTION PURCHASER'S FAILURE TO DEPOSIT AMOUNT - CONSEQUENCES - RES JUDICATA - CONSTRUCTIVE RES JUDICATA - FRAUD - ADVERSE POSSESSION - FRENCH LAW - BONA FIDE TITLE.
Fact of the Case:
Plaintiff filed a suit for declaration that the auction sale held as per auction judgment dated 4-1-1972 in public auction suit No. 10/ 70 on the file of Principle Sub Court, Pondicherry is null and void and incapable of creating any interest in favour of the said auction purchaser referred to therein; pass a preliminary decree for redemption of the mortgage dated .... and record discharge of the said mortgage and the title of the plaintiff being free of discharge; pass a decree of permanent injunction restraining the defendants from in any manner interfering with the possession and enjoyment of the suit property or in the 25 alternative for possession of the suit property in the event of this Hon'ble Court holding that suit property is in possession of the defendants 2 to 4; direct the defendants 5 to 9 to deliver the antecedent titles to the plaintiff; direct defendants 5 to 9 to pay cost of this suit.
Finding of the Court:
The Court held that the auction sale conducted under the French Code Civil was invalid. It was held that the Indian Civil Procedure Code, 1908 was applicable to Pondicherry from 5-9-1968, and since attachment had been effected before that, proceedings initiated under the Pondicherry Code will have to be continued only under that Law, and the Code of Civil Procedure, 1908 cannot apply to the sale conducted pursuant to the attachment effected on 19-6-1968 since it gives a vested right, and the same cannot be divested. The Court also held that the non-deposit of the amount by the auction purchaser vitiated the entire sale, and even the resale was effected without notice to the plaintiff and, therefore, invalid. It was also held that the plaintiff had title to the property, and even possession is with him. A decree was granted as prayed for, for redemption.
Issues: 1. Whether the auction sale conducted under the French Code Civil was valid? 2. Whether the Indian Civil Procedure Code, 1908 was applicable to Pondicherry from 5-9-1968? 3. Whether the non-deposit of the amount by the auction purchaser vitiated the entire sale? 4. Whether the resale was effected without notice to the plaintiff and, therefore, invalid? 5. Whether the plaintiff had title to the property? 6. Whether the plaintiff was in possession of the property? 7. Whether the appellants had prescribed title by adverse possession?
Ratio Decidendi: 1. The Court held that the Indian Civil Procedure Code, 1908 was applicable to Pondicherry from 5-9-1968, and since attachment had been effected before that, proceedings initiated under the Pondicherry Code will have to be continued only under that Law, and the Code of Civil Procedure, 1908 cannot apply to the sale conducted pursuant to the attachment effected on 19-6-1968 since it gives a vested right, and the same cannot be divested. 2. The Court also held that the non-deposit of the amount by the auction purchaser vitiated the entire sale, and even the resale was effected without notice to the plaintiff and, therefore, invalid. 3. The Court further held that the plaintiff had title to the property, and even possession is with him.
Final Decision: The Court dismissed the second appeal with costs.
This Appeal is by defendants 2 to 4 and 10 in O.S. No. 648 of 1986, on the file of Subordinate Judge, Pondicherry. Reference to the parties in this Second appeal will be as per the array in the suit, for the sake of convenience.
2. Plaintiff filed the above suit for the following reliefs:-
"(a) Declare that the auction sale purported to have been held as per auction judgment dated 4-1-1972 in public auction suit No. 10/ 70 on the file of Principle Sub Court, Pondicherry is null and void and incapable of creating any interest in favour of the said auction purchaser referred to therein;
(b) Pass a preliminary decree for redemption of the mortgage dated .... and record discharge of the said mortgage and the title of the plaintiff being free of discharge;
(c) Pass a decree of permanent injunction restraining the defendants from in any manner interfering with the possession and enjoyment of the suit property or in the 25 alternative for possession of the suit property in the event of this Hon'ble Court holding that suit property is in possession of the defendants 2 to 4;
(d) Direct the defendants 5 to 9 to deliver the antecedent titles to the plaintiff;
(e) Direct defendants 5 to 9 to pay cost of this suit" *
Plaintiff filed the above suit, on the following averments :-
The property belonged to one Sabiyadal Bajsa Bibi. She mortgaged the property to secure loan of Rs.17,000/- in favour of one Nataraja Chettiar and executed a Notarial Deed by Mortgage. During subsistence of the mortgage, plaintiff purchased the property on 23-1-1962 for a consideration of Rs. 23,000/- -and the plaintiff became mortgagor. It is said that the plaintiff was paying interest on the mortgage amount to Nataraja Chettiar, and in 1968 there was some delay in payment of interest and, therefore, the mortgagee Nataraja Chettiar preferred proceedings in Vents No. 65/68 on the mortgage. Plaintiff also filed proceedings pointing out his existence of interest in the property and the proceeding which was subsequently taken in public auction, Suit No. 10/ 70 on the file of Sub Court, Pondicherry ended on 4-1-1972 with the conduct of an auction for a bid amount of Rs. 33,175/-. In accordance with French Code of Civil Procedure and not in accordance with Civil Procedure Code, 1908. It is further averred that on 5-9-1968, the Code of Civil Procedure was extended to Pondicherry, and thereafter, any proceeding in execution shall be only under the Indian Civil Procedure Code, 1908. It is further said that in the auction proceedings, the bid was made by defendant as per the procedure under the Franch Code and declaration was made that the said bid was on behalf of the first defendant in the suit. It is alleged that the advocate who bid at the auction was still engaged by him to defend his case. The said Counsel, after the bid made a declaration in view of the close relationship with the mortgagee. Plaintiff, without prejudice to his contentions, challenged the same since no amount was deposited pursuant to the auction. In the meanwhile, first defendant herein sought delivery of the property without any notice to the plaintiff, and thereafter claimed to have taken delivery. It is said that even though she claimed to have taken possession, no money was deposited. On the contrary, after 10 years, document was executed by the first defendant as on 9-11-1981 in favour of defendants 2, 3 and 4, purporting to have conveyed her interest in favour of defendants 2 to 4. In that document, first defendant has admitted that she has not deposited any amount, and subsequently defendants 2 to 4 discharged the debt by paying the legal representatives of Natarajan Chettiar. The legal representatives of deceased Natarajan Chettiar were also impleaded as defendants 5 to 9. Some other amount was also paid to others without any demand. It is said, that the entire proceedings of auction was fraudulent and contrary to law. Plaintiff, being a holder of title, is entitled to avoid the same, sin
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