TMI Blog1990 (1) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... g rid of the unjust decree. - Civil Appeal No. 140 of 1990. - - - Dated:- 17-1-1990 - SHETTY, K.J. AND THOMMEN, T.K., JJ. For the Appellant: A.K. Sen, N.D.B. Raju, K. Rajeshwaran and N, Ganapathy For the Respondent: K.R. Choudhary and V. Balachandran. JUDGMENT: K. JAGANNATHA SHETTY, J. Special Leave is granted. This appeal is from a decision of the Madras High Court which denied the appellants claim for setting aside a judicial sale. The facts giving rise to the appeal, as found by the Courts, may be summarised as follows. Arumugham-respondent-1 obtained money decree on the basis of a promissory note from the Subordinate Judge, Salem, in O.S. No. 388/1968. Sethuramalingam the judgment debtor appealed to the High Court but could not get the decree stayed. He could not furnish security for the decretal amount which was a condition for stay. The decree was put into execution notwithstanding the pendency of the appeal. In February 1973, his two items of properties; (i) three houses and (ii) 10.93 acres of land were brought to court sale. They were purchased by Kuppa Goundar, respondent No. 2 for Rs.7550 and Rs.15,050 respectively. In October 1975, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Anr. v. Devi Sahai Ors., [1982] 2 SCR 186. In Janak Raj case, the appellant was a stranger to the suit in which there was an ex-parte money decree. In the execution of the decree, the immovable property of the judgment debtor was brought to sale in which the appellant became the highest bidder. The judgment-debtor filed an application for setting aside the ex-parte decree and the court allowed it before confirming the sale. Thereupon the judgment-debtor objected to the confirmation of sale on the ground that the auction purchaser was in conspiracy and collusion with the decree-holder and as such not entitled to have the sale confirmed. The execution court, however, overruled the objection and confirmed the sale, Mitter, J., agreed with that view and observed (at 79): "The result is that the purchaser s title relates back to the date of sale and not the confirmation of sale. There is no provision in the Code of Civil Procedure of 1908 either under O. XXI or elsewhere which provides that the sale is not to be confirmed if it be found that the decree under which the sale was ordered has been reversed before the confirmation of sale. It does not seem ever to have been doubted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er and if the execution of the decree was not stayed of which he may have assured himself by appropriate enquiry, the court auction held and sale confirmed and resultant sale certificate having been issued would protect him even if the decree in execution of which the auction sale has been held is set aside. This proceeds on the footing that the equity in favour of the stranger should be protected and the situation is occasionally reached on account of default on the part of the judgment debtor not obtaining stay of the execution of the decree during the pendency of the appeal." The learned Judge further said: "But what happens if the auction-purchaser is the decree holder himself? In our opinion, the situation would materially alter and this decree holder-auction purchaser should not be entitled to any protection. At any rate, when he proceeds with the execution he is aware of the fact that an appeal against the original decree is pending. He is aware of the fact that the resultant situation may emerge where the appeal may be allowed and the decree which he seeks to execute may be set aside. He cannot force the pace by executing the decree taking advantage of the ec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... based on a fair and proper classification. The innocent purchaser whether in voluntary transfer or judicial sale by or in execution of a decree or order would not be penalised. The property bona fide purchased ignorant of the litigation should be protected. The judicial sales in particular would not be robbed off all their sanctity. It is a sound rule based on legal and equitable considerations. But it is difficult to appreciate why such protection should be extended to a purchaser who knows about the pending litigation relating to the decree. If a person ventures to purchase the property being fully aware of the controversy between the decree holder and judgment debtor, it is difficult to regard him as a bona fide purchaser. The true question in each case, therefore, is whether the stranger auction purchaser had knowledge of the pending litigation about the decree under execution. If the evidence indicates that he had no such knowledge he would be entitled to retain the property purchased being a bona fide purchaser and his title to the property remains unaffected by subsequent reversal of the decree. The Court by all means should protect his purchase. But if it is shown by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y if the decree is subsequently reversed. There is one other aspect which is more important than what we have discussed hitherto. It was emphasized by Lord Cairns in Rodger v. The Comptoir D Escompte De Paris, [1869-71] LR 3 P.C. 465 at 475: "... that one of the first and highest duties of all Courts is to take care that the act of the Court does no injury to any of the suitors, and when the expression "the act of the Court", is used, it does not mean merely the act of the Primary Court, or of any intermediate Court of Appeal, but the act of the Court as a whole, from the lowest court which entertains jurisdiction over the matter up to the highest Court which finally disposes of the case. It is the duty of the aggregate of those Tribunals, if I may use the expression, to take care that no act of the Court in the course of the whole of the proceedings does an injury to the suitors in the Court." This is also the principle underlying Section 144 of the Code of Civil Procedure. It is the duty of all the Courts as observed by the Privy Council "as aggregate of those tribunals" to take care that no act of the court in the course of the whole of the proceedings does an in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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