& Ors Vs. A.D. Sundarabai & Ors  INSC 1829 (24 October 2008)
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS. 5267-69 OF 2002
Chinnakarupathal & Ors. ...
A.D.Sundarabai & Ors. ... Respondents
One Ammasai Gounder
filed a suit against A.T.Krishnasami Mudaliar and another for recovery of
amounts due towards supply of jaggery in O.S.No.226 of 1946 on the file of the
Sub-Court, Coimbatore. The suit was decreed on 14.10.1947. The defendants in
the suit filed an appeal in the Madras High Court in A.S.No.713 of 1947. On an
application by the defendants (appellants in that appeal), stay of execution of
the decree was 2 granted subject to the defendants depositing the decretal
amount in court.
The High Court
permitted the plaintiff (respondent in that appeal) to withdraw the said
decretal amount after furnishing security to the satisfaction of the court. One
Ramaswami Gounder became the surety and gave his agricultural lands as security
for the amount permitted to be withdrawn by the plaintiff.
2. The appeal by the
defendants was allowed by the High Court on 31.10.1952 and the money decree
granted in O.S.No.226 of 1946 was set aside. Consequently, the defendants in the
suit moved an application for restitution under section 144 of the Code of
Civil Procedure (`CPC' for short). The plaintiff did not repay the amount
withdrawn by him and absconded. Therefore the defendants filed E.P.No.134/1957
for recovery of the amount by sale of the lands offered as security by
The lands offered as
security were sold by auction on 16.11.1960 and 6.9.1961. The fifth Respondent
and predecessors of respondents 6 to 26 are stated to be the auction
3. During the
pendency of the said execution proceedings, the surety Ramaswami Gounder died
and his widow Rajammal was impleaded as his 3 legal representative. On
14.12.1960, Rajammal moved an application (EA No.148 of 1961) under Order 21
Rule 89 CPC for setting aside the auction sale. But she did not deposit the
amount mentioned in the sale proclamation nor the amount equal to 5% of the
purchase money, as required under the said rule. By order dated 17.9.1966, her
application for setting aside the sale was rejected. Rajammal challenged the
said dismissal before the High Court in CMA No.337 of 1966. The High Court by
its judgment dated 26.8.1971 dismissed the appeal of Rajammal and confirmed the
order of the Executing Court. Rajammal challenged the said judgment in an
appeal by special leave before this Court (CA No.382 of 1973). During the
pendency of the said appeal, Rajammal moved an application for scaling down the
debt and setting aside the auction sale under the provisions of the Tamil Nadu
Agriculturists Relief Act, 1938 (`Act' for short). This Court by order dated
7.11.1986 dismissed Rajammal's appeal, but however, referred the application
for scaling down the debt and setting aside the sale under the Act, to the
Subordinate Court, Coimbatore, for disposal in accordance with law.
4. It is stated that
Rajammal settled the lands which had been offered as security, as also some
other properties in favour of one Chinna Pappu 4 Gounder, brother of her
husband Ramasami Gounder under registered settlement dated 3.6.1960. The
appellants herein are the legal heirs of the said Chinna Pappu Gounder. When
the matter referred by this Court was received by the Executing Court, Rajammal
and the appellants herein filed the following three applications :
(i) EA No.1612 of 1987
under 19A of the Act for determination of the amount to be paid by them to the
decree holders (defendants in the suit) by scaling down the amount under
sections 7 and 8 of the Act.
(ii) EA No.1613 of
1987 under section 23C of the Act for setting aside the court auction sale held
on 16.11.1960 and 6.9.1961.
(iii) EA No.782 of
1988 under Order 34, Rule 5 read with section 151 of CPC for fixing the date of
depositing the amount found due by the legal representatives of the surety.
The said three
applications were dismissed by the Executing Court by a common order dated
22.9.1992. It held that as the amount claimed in the execution petition was by
way of restitution under section 144 CPC by enforcing the security under
section 145 CPC, neither section 19A nor section 23C of the Act was attracted.
The court also held that the amount recoverable by restitution secured by the
properties of the surety Ramasami Gounder, was not a mortgage debt and
therefore the provisions of Order 34 CPC were not attracted. The executing
court was of the view that the 5 remedy if any of the surety or his legal
representatives was only by an application under Order 21 Rule 89 CPC and that
remedy had already been exhausted on account of rejection of the application
filed under the said provision.
5. The said order was
challenged by the Appellants in CRP Nos.3162-64 of 1992. The High Court was of
the view that consideration of other two applications would depend upon the
decision on the application under section 23C of the Act. The High Court
therefore considered the said application first. It held that section 23C would
apply only where immovable properties of an agriculturist were sold or
foreclosed on or after 1.3.1972; and as the sale in this case took place in the
year 1960 and 1961, the said section could not be invoked. Consequently, it
found no error in the rejection of the three applications. The High Court,
therefore, by its order dated 26.2.1998, dismissed the said revision petitions
which is challenged in this appeal by special leave.
6. The application
under Rule 5 of Order 34 CPC was misconceived, as the proceedings did not
relate to a mortgage suit. Section 145 of CPC provides that where any person
has furnished any property as security for 6 the payment of any money (or for
the fulfillment of any condition imposed on any person) under an order of a
court in any suit or in any proceedings consequent thereon, such order may be
executed in the manner provided in the Code for the execution of decrees, by
sale of such property.
recovery of the amount due to the defendants was governed by sections 144 and
145 read with provisions of Order 21 CPC.
The provisions of
Order 34 CPC were inapplicable and there was no question of invoking Rule 5 of
Order 34 to fix a date for depositing the amount due. The application under
Order 34 Rule 5 CPC was rightly rejected.
7. The application
under section 19A of the Act was also misconceived and rightly rejected.
Section 19A of the Act provides for filing an application for the determination
of the amount of debt due by an agriculturist. But the said section applied
only in regard to debts of an agriculturist other than a decree debt. Having
regard to the definition of the term `decree', any amount recoverable under section
144 read with section 145 CPC by way of restitution, will also be a decree
8. Insofar as the
application under section 23C of the Act, learned counsel for appellant
submitted that the application was intended to be one under section 23A of the
Act, but due to a typographical error, the provision of law was wrongly
mentioned as section 23C. Though such a contention was not urged before the
High Court, we permitted him to urge the contention. Section 23A of the Act
reads as under:
"23-A. Power of Court
to set aside sale of immovable property in certain cases - Where in execution
of any decree, any immovable property, in which any person entitled to the
benefits of the Tamil Nadu Agriculturists Relief (Amendment) Act, 1948, had an
interest, has been sold or foreclosed on or after the 30th September, 1947, and
the sale has not been confirmed before the commencement of the said Act or
ninety days have not elapsed from the confirmation of the sale or from the
foreclosure, at such commencement, then, notwithstanding anything contained in
the Indian Limitation Act, 1908 Now the Limitation Act, 1963 (Central Act 36 of
193), or in the Code of Civil Procedure, 1908, and notwithstanding that the
sale has been confirmed, any judgment-debtor claiming to be entitled to the
benefits of the said Act, may apply to the Court within ninety days of such
commencement or of the confirmation of the sale, whichever is later, to set
aside the sale or foreclosure of the property, and the Court shall, if
satisfied that the applicant is a person entitled to the benefits of the said
Act, order the sale or foreclosure to be set aside, and thereupon the sale or
foreclosure shall be deemed not to have taken place at all:
Provided that no such
order shall be made without notice to the decree- holder, the
auction-purchaser, and other persons interested in such sale or foreclosure and
without affording them an opportunity to be heard in the matter."
8 The fact that agricultural lands were sold in an auction and that the owners
of such lands were agriculturists, are not by themselves sufficient to invoke
the exercise of power under section 23A of the Act. The court can set aside a
sale of immovable property under the said section only if the court is
satisfied that the applicant is a person entitled to the benefits of the Act.
9. As noticed above,
the only benefit claimed by the appellants under the Act was scaling down of
the debt and determination of the scaled down amount. We have already held that
the said application was not maintainable. The appellants have not been able to
demonstrate how they are entitled to any of the benefits under the said Act. A
perusal of the Act shows that the reliefs that can be granted under the Act
are: scaling down of debts and rates of interest; relief in regard to the
usufructuary mortgages; concessions in regard to interest payable by
agriculturists on loans; conditional discharge of arrears of rent due to land
holders and scaling down of interest on arrears of rent. But none of these are
applicable to the recovery by way of restitution, by enforcing the security.
Scaling down of the debt is permissible only where the amount paid or payable
by way of principal and interest is more than twice the amount of the
principal. That does not apply in this case. This is not a case of usufructuary
mortgage. Nor 9 is any interest payable on any loan. Nor is the claim for any
Therefore, we are not
satisfied that appellants are persons entitled to the benefits of the Act. In
the absence of such satisfaction, the question of setting aside the auction
sale under section 23A of the Act does not arise.
The rejection of the
three applications is proper. As a consequence, the auction sales will have to
be confirmed in favour of the auction-purchasers.
10. The appeals have
no merit and are accordingly dismissed.
(R V Raveendran)