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1962 Supreme(Mad) 132

MADRAS HIGH COURT
GANAPATIA PILLAI,VEERASWAMI
A.L.V.R.S.T.Veerappa Chettiar
Versus
Mohamed Mytheen Mana Pillai
Second Appeal No. 705 of 1959
Decided On : 17 April, 1962

Advocates Appeared:
K. Parasaran, for Appellant; T.R. Ramachandran, for Respondent.

A sale of property in custodia legis without the leave of the court which appointed the receiver is only voidable and not void.

Headnote:

CIVIL PROCEDURE CODE - ORDER 40 RULE 1 - SALE OF PROPERTY IN CUSTODIA LEGIS - VOID OR VOIDABLE - SALE WITHOUT LEAVE OF COURT APPOINTING RECEIVER - EFFECT - VOIDABLE NOT VOID.

Fact of the Case:

Plaintiff purchased property at a court auction in execution of a money decree. The property was in the possession of a receiver appointed by the District Court in another suit. The plaintiff did not take possession of the property. The first defendant purchased the property from the receiver. The plaintiff sued for a declaration of title and recovery of possession.

Finding of the Court:

The court held that the sale in favor of the plaintiff was only voidable and not void. The court further held that the first defendant was entitled to avoid the sale by offering to pay the plaintiff the entire price which he had paid for the purchase of the property at the court auction, with interest at six per cent thereon from the date of the sale certificate.

Issues: Whether the sale in favor of the plaintiff was void or voidable.

Ratio Decidendi: A sale of property in custodia legis without the leave of the court which appointed the receiver is only voidable and not void. The sale is voidable at the instance of the person who is entitled to the property.

Final Decision: The second appeal was allowed and the judgments and decrees of both the courts below were set aside. There was a decree in terms that the first defendant would pay to the plaintiff the sum of Rs. 600 with interest at six per cent per annum from 2-3-1115. In default of payment within the specified time, the judgment and decree of the trial court would stand restored.

Judgement

VEERASWAMI, J. :- This is a plaintiffs second appeal against the reversing judgment of the Subordinate Judge of Nagarcoil, holding that his purchase of the suit property at a Court auction in execution of a money decree obtained in O. S. No. 658 of 1101 M. E. on the file of the Additional District Munsif, Nagarcoil, against one Pavankusam Anachaperumal, the original owner of the property, was invalid for want of sanction of the District Court, Nagarcoil, which had appointed a receiver in O. S. No. 64 of 1109 M. E. on its file. On 26th January 1108, the judgment-debtor in O. S. 658 of 1101 M. E. pending an appeal which he had filed, furnished security for due payment of the amount covered by the decree in that suit, the security including the suit property. On February 1, 1108, the security was accepted by the Additional District Munsif, Nagarcoil. On August 16, 1112, there was an attachment of the same property by the District Court, Nagarcoil in O. S. No. 64 of 1109. In that suit, the District Court appointed a Receiver on 30-11-1113, who took possession of the property of the judgment-debtor in O. S. No. 658 of 1101, including those now in question.

On 10-7-1114 the plaintiff purchased the suit property in execution of the decree in O. S. No. 658 of 1101. The sale was confirmed on 18-8-1114 and the sale certificate was issued on March 2, 1115. On 22-11-1121, apparently without knowledge of the earlier Court auction sale, the Receiver appointed in O. S. No. 64 of 1109 sold the suit property to the first defendant, pursuant to orders of Court in seisin of conciliation proceedings. Though in the courts below there was a controversy as to whether the plaintiff had taken actual delivery of the suit property, in view of the concurrent findings, it is no longer disputed that he did not take possession. It does not also appear to be in dispute that the first defendant, since his purchase from the Receiver, has been in possession of the suit property. In such circumstances, the plaintiff, coming to know of the sale by the receiver to the first defendant, brought the suit out of which this second appeal arises for a declaration of his title to the suit property based on his Court auction purchase and for recovery of possession thereof with mesne profits. The first defendant resisted the suit mainly on the ground that the court auction sale in favour of the plaintiff was illegal and void and conveyed no title to the plaintiff in the suit property.

2. In the courts below, the question turned upon whether the execution sale in favour of the plaintiff, inasmuch as it was effected without leave of the District Court, Nagarcoil, which had appointed the receiver in O. S. No. 64 of 1109 M. E., was void or voidable. On that question, the courts below have taken conflicting views, the lower appellate court, as already indicated by us, holding that the sale was invalid for want of sanction. The lower appellate Court proceeded to say that, as the want of sanction has not been cured by the plaintiff getting sanction subsequently and before confirmation of the sale, the sale had become invalid, and the plaintiff could not recover the property on the strength of the invalid sale.

3. For the plaintiff, it is contended that the view of the lower appellate Court on the effect of the sale in his favour cannot be supported. It is well settled that where property has gone into the possession of a receiver appointed by a Court, its sale either by private treaty or by its owner or in invitum as in a court sale without the leave of the Court which appointed the Receiver, is only voidable. This is not because the person who is the owner or the Court which brings the property to sale has no right or jurisdiction, as the case may be, to effect such a sale. But the property being in the possession of the receiver and, therefore, in custodia legis, no process without the leave of the Court which appointed the receiver can be levied upon such property. This










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