Madras High Court
V.P. Venkataswami Chettiar vs A. Mariasusai And 5 Ors. on 26 June, 1997
Equivalent citations: 1997(2)CTC140, (1997)IIMLJ389
ORDER S.M. Abdul Wahab, J.
1. This Letters Patent Appeal has been preferred by the auction purchaser against the order dated 12.1.1994 by a single Judge of this court in C.M.A. No. 769 of 1993.
2. A third Party, namely the first respondent in the Letters Patent Appeal, filed E.A. No. 487 of 1992 in E.P. No. 91 of 1990 on the file of the Principal Subordinate Judge, Tirunelveli, for setting aside the auction in favour of the appellant under Order 21, Rule 89 and Under Section 151 of Civil Procedure Code.
3. The case of the first respondent third party is that on 31.10.1988 a preliminary decree was passed for partition. The persons to whom the properties, including the auction property was allotted, offered to sell to him for a total sum of Rs. 3 lakhs. The agreement was entered into on 10.6.1990. He paid Rs. 5,000 on that day and another sum of Rs. 60,000 on 16.7.1990. According to him, the third item, which was sold in auction to the appellant, alone would fetch Rs. 2,25,000. But in another suit O.S. No. 40 of 1982 for recovery of Rs. 30,392, a preliminary decree was passed and subsequently final decree also was passed on 25.1.1990. The decree-holders in the said suit, brought the third item of the suit property, which is the subject matter of the present dispute, to auction, pursuant to the final decree in E.P. No. 91 of 1990 in O.S. No. 40 of 1982. The appellant purchased the property in the auction for Rs. 50,010 on 24.4.1992. The third party filed a petition to set aside the auction sale offering to deposit the necessary amounts. The appellant, who is the sixth respondent auction purchaser in the execution petition, filed a counter. According to him, the petition has been filed in collusion with the defendants in O.S.No. 40 of 1982. It is also stated that the petition is barred by limitation. The Principal Subordinate Judge, Tirunelveli, by his order dated 9.7.1993, dismissed the petition. The main reason given by him for dismissing the petition is that the application to set aside the sale was beyond the limitation period. As against the said order of the learned Principal Subordinate Judge, the aggrieved third party filed the appeal C.M.A. No. 769 of 1993 in this Court. The Learned Single Judge of this Court allowed the Appeal by his order dated 12.1.1994 in C.M.A. No. 769 of 1993. Hence, the auction purchaser has preferred this Letters Patent Appeal.
4. The main contention urged before us by the learned counsel for the appellant is that the first respondent has not specifically pleaded and proved that there was fraud in the conduct of the auction sale and only on such pleading and proving the fraud, the normal period of limitation can be got over.
5. In this case, the sale has taken place on 24.4.1992. The petition for setting aside the sale ought to have been filed on or before 25.6.1992 as per Article 127 of the Indian Limitation Act. The petition to set aside the auction sale was filed on 3.7.1992. As per Article 127 of the Act the normal period of limitation prescribed for filing a petition to set aside the auction sale is sixty days from the date of such sale.
6. The learned single Judge has relied on the judgment reported in Ismail Rowthar v. Mynoon Bivi, . In the said Judgment, another learned single Judge of this Court has held that even though the petitioner had no locus standi to file an application for setting aside the sale, the sale can be set aside at his instance by the court exercising inherent power, if the court is satisfied that there was material irregularity or fraud. But we are not concerned in this case about the locus standi of the first respondent. What we are concerned is with the period of limitation.
7. At this junction, the learned counsel for the respondents sought to rely upon Section 17 of the Limitation Act and contended that since the executing court as well as the learned Single Judge of this Court has found that there was fraud, the limitation will begin to run only from the date on which the fraud was discovered. But in our view, there is no specific finding by the executing court or by the learned single Judge of this Court with reference to the fraud. It is also to be noticed that there is no specific plea in the petition filed by the first respondent with reference to Section 17 of the Limitation Act, There is also no pleading as to how it was committed and when he came to know about the fraud. In the petition for setting aside the court auction sale there is a simple statement that Deiveekalingam and Natarajalingam, the sons of the respondent colluded with the auction purchaser in order to cheat him and also to escape from the contractual obligation as per the sale agreement. Apart from this there is also an allegation that the price of the property sold would be Rs. 3 lakhs, but the auction purchaser has purchased the property for a sum of Rs. 50,010.
8. Section 17(1) of the Limitation Act, reads as follows:
"(1) Where, in the case of any suit or application for which a period of limitation is prescribed by this Act,
(a) the suit or application is based on the fraud of the defendant or respondent or his agent; or (b) the knowledge of the right or title upon which a suit or application is founded is concealed by the fraud of any such person as aforesaid; or (c) the suit or application is for relief from the consequences of mistake; or (d) where any document necessary to establish the right of the plaintiff or applicant has been fraudulently concealed from him;
the period of limitation shall not begin to run until the plaintiff or applicant has discovered the fraud or the mistake or could, with reasonable deligence, have discovered it; or in the case of a concealed document, until the plaintiff or the applicant first had the means of producing the concealed document or compelling its production:- Except from stating that the sons of some respondent colluded with the auction purchaser to cheat him, the first respondent has not shown how he was cheated or defrauded. Further, he has also not specifically stated when he discovered the fraud. In our view, the vague allegation of fraud is not sufficient to an applicant to get over the normal period of limitation prescribed under the Limitation Act, 1963. It is needless to state that in a case where exemption is claimed, the person claiming exemption must specifically plead and prove the facts which enable him to claim the exemption. In this case, he first respondent has miserably failed in this regard.
9. The first respondent has also stated that the value of the property is worth Rs. 3 lakhs and it was sold for only Rs. 50,010. If really the value of the property was so high, what prevented the first respondent from taking part and bidding for higher amount is not known. Nothing prevented him to bid for higher amount and got the property knocked down to him. He cannot pretend ignorance of the auction sale, because in the evidence as P.W.1 he has made the following admission in the cross- examination:
Therefore, it is clear that he was aware of the mortgage decree with reference to the property in dispute and ought to have taken care to find out as to what happened to the mortgage decree. When he says that he paid for the discharge of the mortgage decree he ought to have taken care to see that the mortgage decree was satisfied. On the other hand, he has not done so. But the mortgaged property came to be sold in execution proceedings. After allotting the mortgaged property to be sold, he has moved the court after the period of limitation, to set aside the auction sale as if he was not aware of the sale. This is unbelievable from his own evidence.
10. Another important point to be noted is that he himself has entered into an agreement to purchase the mortgage decree. This is admitted. Therefore, his agreement itself is after the filling of the suit and especially after the preliminary decree was passed. Therefore, the said agreement to sell the mortgaged property, even if it is true, has been executed during the pendency of the suit. Hence, much weight cannot be given to such an agreement and the same cannot be put against the decree holder or the auction purchaser, as the agreement is hit by the doctrine of lis pendens enunciated Under Section 52 of the Transfer of Property Act, 1882.
11. Here it is worthwhile to mention that the appellant has specifically stated in his counter to E.A.No. 487 of 1992 in paragraph 3 that the agreement dated 10.6.1990 was entered into only for the purpose of the application. The facts and circumstances of the case go to show that it is the first respondent who has colluded with the judgment debtors in O.S. No. 40 of 1982.
12. The contention of the counsel for the first respondent that the executing court as well as the learned single Judge of this Court has found that there was fraud in the auction sale, is not fully correct. As for as the executing court is concerned, there is only a passing reference to the effect that even assuming that there has been fraud, the petition has to be dismissed as it is barred by limitation. There is no discussion of evidence on the question of fraud and a specific finding given on the same by the executing court. The learned Judge of this court has also not discussed the evidence and arrived at a finding on this aspect. The learned single Judge has simply stated that he concurred with the view taken by the executing court that there was fraud. Therefore, in our view, there is no specific finding either by the learned single Judge of this Court or by the executing court that there was fraud in the conduct of the sale. In such circumstances, we are not in a position to agree with the contention of the first respondent that there is a specific finding that there was fraud and therefore the first respondent is entitled to rely upon Section 17(1) of the Limitation Act.
13. The learned counsel for the first respondent cited the decision reported in Ismail Rowthar v. Mynoon Bivi, . In the said decision a learned single Judge of this Court has held that court has inherent power to set aside the sale on the ground of material irregularity or fraud, even though the petitioner has locus standi or not to file application for setting aside the sale. We are not disputing the proposition of law laid down by the learned Judge. A we have seen above, there is no specific finding of fraud in this cause. Therefore, the said cause is not helpful.
14. The other judgment cited by the learned counsel for the first respondent is reported in Rajendran v. Sundarajan, 1980 (I) MLJ 198. In the said decision, a Full Bench of this court has held that when there was a defect or irregularity in the preparation and settlement of sale proclamation, it was an irregularity in publishing or conducting the sale within the meaning of Order 21, Rule 90 of Civil Procedure Code. Further, the learned Judges have held that though the judgment debtor has filed an application to set aside the sale Under Section 47 of Civil Procedure Code, it should be treated as an application under Order 21, Rule 90 of Civil Procedure Code. We are not able to appreciate how the Full Bench judgment is helpful to the first respondent. The facts of the Full Bench case are entirely different.
15. The learned counsel for the first respondent also cited a judgment reported in S. Pechiyammal v. N. Gnanasundaran Nadar, . In the said case, there is a finding that the judgment debtor committed fraud by which the decree holder was prevented from filing the execution petition and realise the decree amount within the period of limitation. In that circumstances, it was held that Section 17(2) of the Limitation Act is applicable. In the said case, there is a specific finding about the fraud. But in the case on hand, as we have seen above, there is no specific finding of fraud. Therefore, this case is also not helpful to the first respondent.
16. On a consideration of the facts and circumstances of the case, we are of the opinion that the application to set aside the court auction sale was filed beyond the period of limitation and hence it has to be dismissed as rightly held by the executing court. Therefore, the appeal is allowed. The order of the learned single Judge is set aside. However, there will be no order as to costs.