TMI Blog1947 (4) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... vember, 1944, Sashi Bhushan Misra filed an application under Order 21, rule 91, of the Civil Procedure Code that the sale should be set aside upon the ground that the judgment-debtor had no saleable interest on the date of the sale. The reason for making the application beyond 30 days of the date of the sale was alleged to be that the petitioner was a resident of Darbhanga district and when he sent the rent to the landlord he was informed on 15th October, 1944, that the name of the judgment-debtor was not recorded in the landlord's serishta, but the name of one Ambica Singh was recently mutated in place of the judgment-debtor by virtue of a kabala executed in June 1941 regarding lot No. 2 and that lot No. I had long ago been purchased by the Banailly Raj in execution of a rent decree and the same had been settled with Ambica Singh who had sold it to one Munshi Sahu. It will be observed that all these alleged transactions took place long before the date of the sale. It was also asserted in para. 3 of the application that the applicant was assured by lawyers and agent of the decree-holder that the properties actually belonged to the judgment-debtor and that acting on this fraudulen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the Allahabad High Court in Rawat Rajkumar v. Benares Bank Ltd. [1941] AIR 1941 All. 154 , that clause 171 is as much applicable to appeals by persons who have been unsuccessful in suits brought against them by companies as to original suits brought by such persons. I have examined a large number of cases which have clustered round this difficult question and am inclined to accept the view of the Lahore High Court that clause 171 does not apply to appeals or applications by unsuccessful parties to a litigation brought by a company. In the Full Bench case in Kishen Singh v. Industrial Bank of India [1918] 47 I.C. 392, it was expressly held that an application for revision arising out of an action brought by a company does not come within the purview of clause 171 of the Companies Act. In Jiwan Das v. Peoples Bank of Northern India [1957] AIR 1937 Lah. 926, it was held that when once an action by a company in liquidation has been proceeded with and is successful, there is no necessity for the defendant in the action to obtain leave for any defensive proceeding on their behalf, and the filing of an appeal was not held to be proceeding with or commencing any l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nary acceptation of the term: Sir Dinshaw Mulla in the Privy Council case in Nagendra Nath Dey v. Suresh Chandra Dey [1932] 59 I.A. 283, at p. 287. It will be also noticed that the appeal by the defendant to the House of Lords in Humber v. John Griffiths Cycle Co. [1901] 85 L.T. 141 was filed after the winding up of the company had bean ordered during the pendency of the litigation and, therefore, the defendant would have been forced to take the leave of the Court before he was allowed to appeal to the House of Lords were it not for the fact that he was merely appealing against an order which the company had successfully obtained against him from the lower appellate Court, that is to say he was merely taking a defensive action. I would respectfully dissent from the view expressed by Braund, J. The matter may be looked at from another point of view which has been well expressed by Tek Chand, J., in the latter Full Bench case of the Lahore High Court, Shakuntla v. Peoples Bank of Northern India Ltd. [1941] AIR 1941 Lah. 392 , where he points out that the terms of clause 171 are clear and imperative : "They create an absolute bar against the commencement, or cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n-purchaser was not resisting the execution of the decree, but the auction-purchaser is a representative of the judgment-debtor and is expressly authorised under rule 91 to apply to the executing Court to have the sale set aside. This application has to be made within 30 days of the date of the sale but before its confirmation, and this application has to be made during the continuance of the execution proceedings started by the company. This application can be truly called a defensive application ; the auction-purchaser wants to safeguard his interest by seeking the aid of the executing Court that he should not be defrauded and deprived of his money which he has deposited by offering the bid for the property; in the circumstances alleged he gets no title on the completion of the sale. As a contrast attention may be drawn to the above noticed decision of the Lahore High Court in Shakuntla v. Peoples Bank of Northern India [1941] 11 Comp. Cas. 309 where it was held that a suit under Order 21, rule 63, of the Civil Procedure Code could not be instituted without the leave of the High Court against the company for a declaration of title of the plaintiff the reason being that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dinate Judge was right in overruling this objection of the decree-holder. The result is that the appeal must be dismissed. But in the circumstances I would direct that each party should bear his own costs of these proceedings both here and in the Court below. Mukharji, J. I agree. The application made by the auction-purchaser to have the sale set aside on the ground that the judgment-debtors had no saleable interest in the land did not require any leave of the Court such as is contemplated by clause 171 of the Companies Act. The miscellaneous case to which the application gave rise could not be called a suit; nor was it a legal proceeding of the nature of a suit. Further, as pointed out by my learned brother, it was a defensive proceeding. The auction-purchaser has to pay 25 per cent. of the purchase money when the property was knocked down to him. Under Order 2r, rule 85, of the Civil Procedure Code he had to pay the balance within a certain period. His case was that he bid at the sale on the fraudulent misrepresentation made to him on behalf of the decree-holder and he wanted back the money which he had paid in Court under order 21, rule 84, and Order 21, rule 85, of the Ci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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