Patna High Court
Sukhi Sahu vs Prayag Sah And Ors. on 5 January, 1959
Equivalent citations: AIR1959PAT508, AIR 1959 PATNA 508
JUDGMENT Raj Kishore Prasad, J.
1. The sole question presented for determination, in the present appeal, is, whether a certificate sale can be attacked on the ground of fraud collaterally by way of defence?
2. The present appeal is by the plaintiff from the judgment of Mr. A.K. Saran then District Judge of Motihari, reversing the judgment and decree of the first court, and, dismissing his suit under Order 21, Rule 103 of the Code of Civil Procedure.
3. The disputed land previously belonged to the defendants first and second parties. In 1947-48, at the instance of the Bettiah Raj, the certificate holder, a certificate proceeding was started in respect of the land in suit for arrears of rent against both the defendants first and second parties. In the said proceeding, the plaintiff purchased the land in suit at the certificate sale on the 19th August, 1948 and obtained delivery of possession over it through court on the 27th July, 1949.
4. Earlier, in 1941, a partition suit between the defendants first and second parties in respect of the lands in suit and other lands was decreed on the 27th November, 1943. The suit lands were allotted to the defendants first party, and, thereafter, on the 28lh September, 1952, they obtained delivery of possession over the same and dispossessed the plaintiff from the lands in suit. The plaintiff thereupon filed a petition under Order 21, Rule 100 of the Code of Civil Procedure which was, however, rejected after contest. The plaintiff then brought the present suit, out of which the present appeal arises, under Order 21, rule 103 of the Code of Civil Procedure.
5. It appears that on the 9th August, 1952, before getting delivery of possession, the major defendants first party sold the disputed land to defendants 21 and 22 under a registered sale deed. The plaintiff's suit was contested mainly by defendants 1 to 4 of the first party and defendants 22 and 23 of the third party who were the appellants before the court of appeal below. According to them, the disputed land belonged to the defendants first party & the defendants second party had never any concern therewith, &, defendants 22 & 23 cultivated the land throughout through their bataidar, defendant 24. It was further said that the defendants second party, who were on inimical terms with the defendants first party, got fraudulently in collusion with the Amlas of the landlord, the certificate-holder, the disputed lands sold at the certificate sale, and, they themselves purchased the land in suit in the name of the plaintiff who was their close relation. They also maintained that the defendants first party had absolutely no knowledge about the certificate preceding, as no notice was served on them. They also denied the plaintiff's possession.
6. The trial Judge decreed the plaintiff's suit, but on appeal it has been dismissed.
7. The findings of fact, which have not been challenged in the present appeal, arrived at by the learned District Judge, are: (1) that the disputed land was the self-acquired property of the defendants first party, and, therefore, it was allotted to them at the partition suit and it always remained in their exclusive possession from the date of its acquisition by Kishun Sah, the ancestor of the defendants first party, (2) that the disputed land since its acquisition, remained all along in possession of the defendants first party till it was sold to defendants 22 and 23 under the sale deed of the 9th August, 1952, (3) that no notice under Section 7 of the Bihar and Orissa Public Demands Recovery Act, 1914, hereinafter referred to as "the Act", was served on the defendants first party, who were also certificate debtors to the certificate proceeding, (4) that the plaintiff is a close relation of some members of the defendants second party, and, (5) that the defendants second party brought about the sale in collusion with the Amlas of the Bettiah Raj, at whose instance the certificate was issued and purchased the property in the benami name of the plaintiff, their relative, by keeping the defendants first party completely in dark about the certificate proceedings.
On the above findings, the learned District Judge found that the sale and purchase by the plaintiff were fraudulent, and, as such, dismissed the suit.
8. The first argument presented by Mr. Shree Deo Narain, on behalf of the plaintiff-appellant, was that a certificate sale on the ground of non-service of notice under Section 7 of the Act, was voidable, and not void, and such a sale can be avoided, even on the ground of fraud, only by a suit, and not by way of decree in another suit. In support of his contention, he relied on a Bench decision of the Calcutta High Court in Sri Bansi Copal Jiu v. Uday Chand Mahatab, AIR 1954 Cal 113. arid, on a Bench decision of this Court in Darsan Raut v. Chandraman Raut, AIR 1951 Pat 610.
9. There can be no dispute, and, it has also not been disputed, that a sale of immovable property in execution of a certificate is not void on the ground that the notice required by Section 7 of the Act has not been served as provided by Section 45 of the Act. This section itself, however, immediately thereafter provides that suit may be brought in a Civil Court to recover possession of such property or to set aside such sale on the ground that such, notice has not been served. It is manifest, therefore, that the effect of Section 45 is that a certificate sale without service of notice under Section 7 is not void, but only voidable. The further effect of this section so expressed seems to be that until such sale is avoided by a certificate debtor by a suit brought for the purpose, it must be taken to be a good sale, and, it cannot be either attacked collaterally in other suits as a void sale, nor held by the Court in other suits to be void on the ground of non-service of notice under Section 7 of the Act. This view is supported by the just mentioned decision of the Calcutta High Court relied upon by Mr. Narain. In that case, it was clearly held by their Lordships, following an earlier Bench decision of the same Court in Ananda Chandra Nandy v. Jhulan Singh, AIR 1929 Cal 409. that so tar as the certificate sale might be impugned on the ground that notice under Section 7 of the Act had not been served it can be done by the certificate debtor only by bringing a suit for the purpose and could not be done by setting up a defence.
10. In the above mentioned Paina case, it was held that a suit to set aside certificate sale under Section 45 of the Act will not be maintainable on the ground of irregularity in service of notice, because the words "notice has not been served" in Section 45 of the Act cannot be understood to mean "notice has not been duly served or served according to law", because there is some distinction between "irregular service" and "non-service".
11. The propositions of law laid down in the above two cases are not disputed in the present appeal. In those cases, the only question involved was the question of non-service or irregular service of notice under Section 7 of the Act, but there was no question of fraud, and, therefore, in my opinion the above authorities are no guide to the solution of the question under consideration.
12. Even the case of AIR 1929 Cal 409, referred to also in the judgment under appeal, and, rightly distinguished by the learned District Judge, has also no application here. In that case, it was held that it was not open to a certificate debtor to challenge a certificate sale by way of defence in a suit for possession brought by the purchaser, his remedy being limited to the procedure indicated in the Act itself. In the above case also, the defendants did not challenge the sale by way of defence on the ground of fraud.
13. Another contention of Mr. Narain in this connection was that the fact that, on the finding of the Court of appeal below, the defendants second party, who were also certificate debtors, purchased the disputed land in the name of their benamidar, the plaintiff, was also not a ground on which the certificate sale could be held to be void. In support of his contention, he relied on a Bench decision of this Court in Mamomed Amirul Hasan v. Mahomed Tewad Hus-sain, AIR 1924 Pat 318 in which it was held, while considering Section 173(2) of the Bengal Tenancy Act, that a sale in execution of a decree to the judgment-debtor himself is voidable under Sub-clause (2) of Section 173, and remains valid until duly set aside. This principle also is not in dispute, because Mr. Baidyanath Jha, the learned Counsel for the respondents, has not disputed it.
14. It is useful to read at this sfage Section 46 of the Act, Section 46 with its Proviso is in the following terms:
''46. Except as otherwise expressly provided in this Act, every question arising between the certificate-holder and the certificate debtor, or their representatives, relating to the making, execution, discharge or satisfaction of a certificate duly filed under this Act, or relating to the confirmation or setting aside by an order under this Act of a sale in execution of such certificate shall be determined, not by suit, but by order of the Certificate-officer before whom such question arises, or of such other Certificate-officer as he may determine:
Provided that a suit may be brought in a Civil Court in respect of any such question upon the ground of fraud."
It is manifest, therefore, from the Proviso to Section 46 that a suit to set aside a certificate sale in the civil Court will lie on the ground of fraud. The controversy, therefore, narrows down only as to whether a certificate sale, on which the plaintiff relies in a suit for his title, can be impeached collaterally by way of defence by the defendant on the ground of fraud.
15. Mr. Baidyanath Jha, who appeared for the defendants 1st party, respondents 1-6, however, argued that if a certificate sale can be attacked on the ground of fraud by a suit, it can also be attacked collaterally on that ground by way of defence. He lelied on two Bench decisions of this Court in Harakali Bose v. Sm. Janaki Devi Choudharani, 1955 BLJtl 583: (AIR 1956 Pat 161) and Bishunath Tewari v. Mst. Mirchi, (S) AIR 1955 Pat 66.
16. In the first case, it was held by their Lordships C.P. Sinha and Ahmad, JJ. that in a suit for declaration that a certificate sale is null and void on the ground of fraud of a co-certificate debtor and where the whole proceeding is attacked from the beginning to the end on the ground of fraud and where fraud is alleged against some of the certificate debtors themselves, the general jurisdiction of the civil court to entertain suits of civil nature in such a case is not barred. In my opinion, this decision also has no application to the present case, because there the certificate sale was attacked on the ground of fraud by a suit, and not by way of defence as here.
17. The second case, however, is more to the point as I will presently show, and, it furnishes the correct guide to the solution of the problem in hand.
18. The crux of the matter is, whether a certificate sale can be avoided on the ground of fraud by way of defence in a suit.
19. In the instant case, the plaintiff relied on the certificate sale as the basis, and the very foundation of his title, and, he, therefore, affirmed that the said certificate sale was a valid sale which conferred a valid title on him. The sale, however, was impeached by way of defence by the defendants as a nullity on the ground of fraud on the part of co-certificate debtors. Section 44 of the Evidence Act permits a judgment, order or decree to Be challenged collaterally on the ground that it was obtained by fraud. In the approach to this question, it is important to remember that fraud does not make a judicial act or transaction void, but only voidable at the instance of the party defrauded. The judicial act may be impeached on the ground of fraud or collusion in an active proceeding for rescission by way of suit or the defrauded party may also apply for review of the judgment to the court which pronounced it, but the judgment may also be impeached in a collateral proceeding in which fraud may be set up as a defence to an action on the judgment or as an answei to a plea of estoppel or res judicata founded upon the judgment. As observed by Willes, J, in Queen v. Saddler's Co., (1863) 10 H. L.C. 404 at P. 431:
"a judgment or decree obtained by fraud upon a Court binds not such Court nor any other; and its nullity upon this ground, though it has not been set aside or reversed, may be alleged in a collateral proceeding."
This question has been considered exhaustively if I may say so with respect by his Lordship Mr. Justice Ramaswami, as he then was, on a difference of opinion between Lakshmikanta Jha. C. J. and Reuben, J., and, his Lordship, after a review of all the cases, including the case just mentioned, held that all the cases demonstrate the principle that though a judgment is only voidable for fraud, and. though no suit has been brought to set aside, the judgment can be impeached in a collateral proceeding by a party who has suffered on account of the fraud. His Lordship also observed that a similar principle was enacted also in Section 44 of the Evidence Act mentioned before. In the above case, the defendant relied on the previous decree in a money suit and the sale certificate as plea barring either estoppel or res judicata to the suit for redemption of a usufructuary mortgage and for possession brought by the plaintiff. One of the main issues, therefore, in the suit for redemption of the mortgage was concerned with the title of the plaintiff to redeem the mortgaged property. The question, therefore, arose if the plaintiff was entitled under Section 44 of the Evidence Act to show that both the decree and the sale in the execution proceeding relied upon by the defendant of the suit were vitiated by fraud of the mortgagee & should be ignored and treated as a nullity in the suit before their Lordships. It was held that the plaintiff was entitled to do so.
20. In my judgment, the principles laid down in the above mentioned case apply with equal force to the present case also.
21. Applying the principle to the present case it is clear that Section 40, Evidence Act, applies, and, the defendants first party are entitled under Section 44, Evidence Act, to show that both the certificate sale and purchase of the plaintiff were vitiated by fraud of the defendants second party, who were co-certificate debtors with them who were the appellants before the court of appeal below, and, therefore, should be ignored and treated as nullity in the present suit.
22. When a plaintiff can attack on the ground of fraud collaterally a sale relied upon by the defendant, there is no reason why the defendant also cannot impeach on the ground of fraud the auction sale relied upon by the plaintiff collaterally by way of defence. In my judgment, therefore, the true position in law is that a certificate sale obtained by fraud is vitiated, and, it is not binding on any party, and, its nullity upon the ground of fraud, althought it has not been set aside or reversed, may be alleged in a collateral proceeding by way of defence. In the presence, (present case?) therefore, the defendants first party were in law entitled to impeach the certificate sale collaterally by way of defence, although no suit had been brought to set it aside on the ground of fraud and, therefore to treat it as a nullity and not binding on them. I would, therefore answer the question posed by me in the affirmative by saying that a certificate sale can be attacked on the ground of fraud not only by a suit, as provided by Section 46 of the Act, but also collaterally by way of defence in another suit. I, therefore, overrule the contention of Mr. Narain.
23. For the reasons given above, I hold that the appeal has been correctly decided by the learned Judge of the Court of appeal below, and, that he has not committed any error of law in deciding the appeal before him.
24. In the result, the appeal fails, and is dismissed with costs.