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1998 Supreme(Mad) 139

High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE K. GOVINDARAJAN
K. Veereswaran
Versus
N. Subramanian Chettiar and others
C.R.P.No.3387 of 1992 and C.M.P.No.17316 of 1992 10.02.1998
Decided On : 10-02-1998

Advocates:
Mr. K. Srinivasan, Advocate for Petitioner. Mr. Jyothimani, Advocate for Respondent No.l, Mr. R. Kannan, Advocate for Respondent Nos.6 to 8 and 10 to 12.

A lessee has an interest in the property and can maintain an application under Order 21, Rule 89 of the Code of Civil Procedure to set aside a sale held in execution of a decree.

Headnote:

ORDER 21 RULE 89 OF THE CODE OF CIVIL PROCEDURE - APPLICATION TO SET ASIDE SALE ON DEPOSIT - INTEREST IN THE PROPERTY - LEASE IS A TRANSFER OF INTEREST IN THE PROPERTY AND CREATES A RIGHT IN REM - LESSEE CAN APPLY TO SET ASIDE THE SALE UNDER ORDER 21 RULE 89 OF THE CODE OF CIVIL PROCEDURE.

Fact of the Case:

The petitioner purchased properties in an auction sale held in execution of a decree. The first respondent, who was a tenant in respect of a portion of the building in the suit properties, filed an application under Order 21, Rule 89 of the Code of Civil Procedure to set aside the sale, depositing the entire auction sale amount within 30 days from the date of the sale. The petitioner resisted the application on the ground that the first respondent had no interest in the said property and could not maintain the application.

Finding of the Court:

The court held that the first respondent, as a lessee, had an interest in the property and could maintain the application under Order 21, Rule 89 of the Code of Civil Procedure.

Issues: Whether a lessee can maintain an application under Order 21, Rule 89 of the Code of Civil Procedure to set aside a sale held in execution of a decree.

Ratio Decidendi: A lease is not a mere contract but is a transfer of interest in the property and creates a right in rem. Such an interest of a tenant is a right to property. Therefore, a lessee can maintain an application under Order 21, Rule 89 of the Code of Civil Procedure to set aside a sale held in execution of a decree.

Final Decision: The court dismissed the revision petition filed by the petitioner and upheld the order of the lower court allowing the application filed by the first respondent to set aside the sale.

Judgment :

1. The first respondent herein obtained a decree in O.S.No.622 of 1972 against the respondents 2 to 23. After obtaining the decree he filed E.P.No.366 of 1978 and brought the properties of the respondents 2 to 23 for sale. The sale was conducted on 110. 1990.The petitioner hereinpurchased the said properties. The first respondent filed an application in E.A.No.866 of 1990 in E.P.No.366 of 1978 in the above suit on the file of the learned III Additional Sub-Judge at Madurai, to set aside the said sale held on 110. 1990, and deposited the entire amount within 30 days from the date of the said sale, which is in time. That application was resisted by the petitioner on the ground that the applicant in E.A.No.866 of 1990 has no interest in the said properties and so he cannot entertain that application to set aside the sale. The court below rejected the case of the petitioner herein and respondents 2 to 23, and allowed that application. Aggrieved against the same, the petitioner herein has filed the above revision.

2. Admittedly, the first respondent deposited the entire auction sale amount within 30 days from the date of the said sale. The only question arises in this revision for consideration is whether the first respondent can maintain the said application under Order 21, Rule 89 of the code of Civil Procedure.

3. It is not in dispute that the first respondent is the tenant in respect of a portion of the building in the suit properties. The learned counsel appearing for the petitioner has submitted that the first respondent who is only a lessee cannot sustain the application as he has no interest in the said property.

4. Under Order 21, Rule 89 of the Code, a person who is having title or interest in the property can come forward with such application. Order 21, Rule 89 of the Code reads as follows:-

Application to set aside sale on deposit:- (1) Where immovable property has been sold in execution of a decree, (any person claiming an interest in the property sold at the time of the sale or at the time of making the application, or acting for or in the interest of such person), may apply to have the sale set aside on his depositing in Court:-

.(a) for payment to the purchaser, a sum equal to five percent of the purchase-money, and

.(b) for payment to the decree-holder, the amount specified in the proclamation of sale as that for the recovery of which the sale was ordered, less any amount which may, since the date of such proclamation of sale, have been received by the decree-holder.

(High Court Amendment: (Madras):- In sub-rule (1) as it stood before A.A. No. 104 of 1976 for the word any person, either owning, before such sale, substitute the words the judgment-debtor or any person deriving title from the judgment-debtor or any person holding an interest in the property".

At the end of sub-rule (1), insert the following proviso:

Provided that where the immovable property sold liable to discharge a portion of the decree debt, the payment under clause(b) of this sub-rule need not exceed such amount as under the decree the owner of the property sold is liable to pay (1936)

.(2) Where a person applies under Rule 90 to set aside the sale of his immovable property, he shall not, unless he withdraws his application, be entitled to make or prosecute an application under this rule.

.(3) Nothing in this rule shall relieve the judgment-debtor from any liability he may be under in respect of costs and interest not covered by the proclamation of sale.

5. A lease is not a mere contract but is a transfer of interest in the property and creates a right in rem. Such an interest of a tenant is a right to property. In Kally Dass Ahiri v. Monmohini Dassee, 1897 (24) Cal. 440 it has been held as follows:-

A man who being owner of land grants a lease in perpetuity carves a subordinate interest out of his own and does not annihilate his own interest. This result is to be inferred by the use of the word lease, which implies an i



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