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Civil Appeal from Appellate Decree No. 150 of 1962, decided on 2nd August 1966.
‑Sale‑Certificate sale held without serving notice‑Not void but voidable‑Certificate‑debtor, in such circumstances, can bring suit in civil Court for setting aside sale.
Tarangini Debi v. Govinda Mallik and others 9 D L R 57; Purna Chandra Chatterjee v. Dinabandhu Mukerjee I L R 34 Cal. 811; Sheorution Singh v. Net Loll Sahu I L R 30 Cal. 1; Pratap Chandra Jana v. Secretary of State for India‑in‑Council 35 C L J 304; Tikendrajit Ghosh and another v. Jadav Mandal and others 44 C W N 1103; The Secretary of State v. Mask & Co. 44 C W N 70 (P C); 18 C L J 628 and 11 C W N 745 distinguished.
A I R 1940 Pat.328;33 C W N 305; 43 C W N 1177; A I R 1954 Cal. 113; Ananda Chandra Nandy and another v. Jhulon Singh and others A I R 1929 Cal. 409 and Gopal Chandra Rudra and another v. Khatar Karikar and others 33 C W N 1207 rel.
Md. Nurul Haq for Appellant.
Ahmad Sobhan and Qazi Safiuddin for Respondent No. 5.
D. C. Bhattacharyya : Amicus curiae.
Dates of hearing: 27th June and 2nd August 1966.
This appeal is by the defendant and it arises out of a suit for setting aside a certificate sale, or in the alternative for getting a kabala from defendant No. 2 on the declaration that defen dant No. 2 purchased the property from the plaintiffs and other co‑sharers. There were originally two plaintiffs in the suit but plaintiff No. 1 compromised the suit with defendant No. 2, and for that reason, the suit was proceeded with by plaintiff No. 2 alone. His case is that the plaintiffs and defendants Nos. 3 to 22 were the owners of the disputed holding which is worth about Rs. 10,000 and defendant No. 2 used to deposit the cess and education cess by realising the same from all the co‑sharers. Defendant No. 2 in collusion with defendants Nos. 3 to 7 and officers of the Collectorate has (sic) auction purchased the mahal for a nominal price of Rs. 25 in a certificate sale, plaintiff No. 2 came to learn about the sale from defendants Nos. 2, 3, 4 and 6 and thereafter obtained definite information about the same on 31‑7‑58. Processes were fraudulently suppressed by defen dants Nos. 2 to 8 in collusion with the officers of defendant No. 1.
contested the suit and affirmed that the processes in the certificate case were duly served and there was no fraudulent suppression thereof. His further defence was that the mahal was in arrear and the suit is barred by limitation. Defendants Nos. 3 and 32 filed another written statement support ing the plaint case and contended that the plaintiffs are not entitled to get any costs from them.
, the auction purchaser, filed another written statement claiming that he himself purchased the mahal with his own money and for his benefit without any collusion with any body or fraudulent suppression of the processes of the certificate case.
The trial Court hold that the plaintiff had failed to prove any fraud vitiating the sale or any illegality in the sale itself. He also found the suit barred by limitation. In the result he dismissed the suit.
On appeal, the learned Subordinate Judge came to the conclusion that the suit was not barred by limitation and that the requisite notices under the Public Demands Recovery Act (hereinafter referred to as the Act) were not served but fraudulently suppressed. Hence, reversing the decision of the trial Court, he decreed the suit and set aside the sale held in the
Certificate Case No. 5/1953/ C/1954
This appeal was actually heard on the 27th June 1966, and the judgment was dictated by me in open Court dismissing the appeal. When the typed script of the judgment was placed before me, I gave a second thought to the questions of law involved in this appeal and it appeared to me that the judgment which was made ready for my signature was based on inadequate discussion of the law on the subject due mainly to the fact that the learned lawyers for the parties were unable to place decisions which would have a bearing on the questions of law that arise in this case, I, therefore, decided to give a further hearing to the appeal and requested Mr. D. C. Bhattacharyya to help the Court as amicus curiae which he has so kindly done to‑day.
Only two points of law are involved in this appeal, namely, (1) whether the suit is barred by limitation, and (2) whether a certificate sale held without serving a notice under section 7 of the Act was a mere irregularity or whether it is a void sale and as such a nullity.
The accepted facts in this case are that the sale was held on 24‑7‑54 and confirmed on 27‑9‑54, while delivery of possession under the sale was taken on 26‑6‑57. The present suit was instituted on 3‑11‑58. Section 36 of the Act reads:
"Notwithstanding anything hereinbefore contained, a sale of immovable property in execution of a certificate shall not be held to be void on the ground that the notice required by section 7 has not been served; but a 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, and that the plaintiff has sustained substantial injury by reason of irregularity:
Provided that no such suit shall be entertained‑
(a) if instituted more than one year from the date on which possession of the property was delivered to the purchaser
Thus under section 36, proviso (a), the limitation prescribed for a suit in a civil Court to set aside such a certificate sale on the ground of non‑service of notice as required by section 7 is one year from the date of delivery of possession. In the present case the suit was filed more than one year after the delivery of possession. Plaintiff No. 2, however, sought to make out a case that he came to know definitely about the sale on 31‑7‑58and the suit was brought a little after three months from that date. He accordingly sought the protection of section 18 of the Limitation Act. The learned Munsif considered some materials on this point and concluded that the plaintiff could not prove his alleged date of knowledge.
The learned Subordinate Judge, however, proceeded on a different line. He found that all the requisite notices under the Act were not served but suppressed.
He accordingly held on the authority of the case of Tarangini Debi v. Govinda Mallik and others (9 D L R 57) that a sale without service of notice under section 7 is a nullity. He then observed: -
"In view of what has been said above the impugned sale cannot be allowed to stand. It is void ab initio and as such in the eyes of law the position would be as if there were no sale. That being so the certificate sale sought to be set aside cannot be held to be binding upon the plaintiffs."
The learned Subordinate Judge further held that where the sale is found to be a nullity, there is no scope of a suit being hit either by proviso (a) of section 36 or by section 37 of the Public Demands Recovery Act and that the sale sought to be set aside being void, the suit should be governed by the residuary Article 120 of the‑ Limitation Act, which prescribes 6 years as limitation. Thus he held that the present suit was not barred by limitation.
Of course in a Single Bench decision of this Court in the case of Tarangini Debi v. Govinda Mallik and others, the learned Judge after a review of a number of cases including the case of Purna Chandra Chatterjee v. Dinabandhu Mukerjee (I L R 34 Cal. 811), held as follows: -
"On a review of the cases referred to above, I am unable to agree with the learned Judge when he says that the certificate sale held without serving notice under section 7 was a mere irregularity. On the other hand, my view is that a sale of immovable property in execution of a certificate without the service of notice under section 7 is a nullity."
This observation was made with reference to the case of Sheorutton Singh v. Net Loll Sahu (I L R 30 Cal. 1), wherein it was held by a Division Bench of the Calcutta High Court
"Omission to serve notice under section 7 of Act XI of 1859 can hardly render a sale for arrears of revenue liable to be annulled under section 33 of that Act, specially after issue of the certificate of title to the purchaser."
The previous Public Demands Recovery Act was Act I of 1895. The Act was repealed and a new enactment was promulgated as Act III of 1913 in place thereof. Section 10 of Act I of 1895 was similar to section 7 of the present Act. Notice under section 10 of Act I of 1895 became a fruitful source of limitation and that was mainly due perhaps to the fact that the section was badly worded. There were certain judicial controversies as regards the effect of non‑service of notice under section 10 of the old Act and the divergence of judicial decisions became patent. One line of decision was that non‑service of notice under the said section makes the sale void, while another line of decision was that it was a merely irregularity and did not make the sale a nullity. In view of the numerous conflicting decisions on this point, the question was ultimately referred to a Full Bench of the Calcutta High Court and heard by a Full, Bench of 5 Judges. That was the case of Purna Chandra Chatterjee v. Dinabandhu Mukerjee. The view taken in that case was that the sale held without service of notice under section 10 of Act of 1895 was wholly without authority and was a nullity. It was further held that the new Act (Act III of 1913) came into force and this Act brought about certain important changes and certain sections were recast. Service of notice was provided in section 7 of the Act which reads: -
"When a certificate has been filed in the office of a Certificate officer under section 4 or section 6, he shall cause to be served upon the certificate‑debtor, in the prescribed manner, a notice in the prescribed form and a copy of the certificate,"
It will be useful in this connection also to refer to section 23, subsection (1) of the Act which runs as follows: -
"Where immovable property has been sold in execution of a certificate, the certificate‑holder, the certificate‑debtor or any person whose interests are affected by the sale may, at any time within sixty days from the date of the sale, apply to the Certificate‑officer to set aside the sale on the ground that notice was not served under section 7 or on the ground of a material irregularity in the certificate proceedings or in publishing or conducting the sale
Provided as follows‑
(a) no sale shall be set aside on any such ground unless the Certificate‑officer is satisfied that the applicant has sustained substantial injury by reason of the non‑service or irregularity ; and
(b) an application made by a certificate‑debtor under this section shall be disallowed unless the applicant either deposits the amount recoverable from him in execution of the certificate or satisfies the Certificate‑officer that he is not liable to pay such amount."
It is abundantly clear that the Legislature laid down certain conditions under which a sale can be set aside by the Certificate officer. One of the grounds for setting aside the sale is non‑service of notice under section 7, but no sale shall be set aside on such ground unless the Certificate‑officer is satisfied that the applicant sustained substantial injury by reason of the non service. The deposit of the amount recoverable from the certificate‑debtor in execution of the certificate has been made a condition precedent to the setting aside of the certificate sale on the ground of non‑service of notice under section 7. There is a third limitation prescribed by the section and it is this that the application for setting aside the sale shall be made within 60 days from the date of the sale. This section clearly indicates that the sale for non‑service of notice prescribed by section 7 is not a nullity, for had it been such, there would be no necessity for providing for setting aside the sale. In that case the sale would be void ab initio and would not require to be avoided. Having regard to the conflict of judicial opinions on the effect of non‑service of notice under section 7 and the Full Bench decision of the Calcutta High Court referred to above, the Legislature did not rest content by promulgation of section 23, subsection (1) that the sale was not a nullity but laid down further by a clear and unambiguous provision on this point in section 36, which I have already quoted. Section 36 has laid down in the clearest terms that such a sale shall not be held to be void but may be avoided by institution of a suit in a Civil Court for setting aside the sale on the ground of non‑service of notice. For a suit under section 36, limitation of one year from the date on which possession of the property was delivered to the purchaser has been prescribed in proviso (1).
It appears that in the 9 D C. R case, sections 23 and 36 have been quoted by the learned Single Judge but the changes affected and the reasons for those changes were lost sight of. The decisions on which the learned Judge based his findings were cited without reference to the dates of those decisions; or in other Words, without taking due care to see whether those were decisions prior to the enactment of Act III of 1913. The decisions relied on in case 9 D L R are those of Pratap Chandra Jana v. Secretary of State .for India in‑Council (35 C L J 304); Tikendrajit v. Jadav Mandul and others (44 C W N 1103) and The Secretary of State, Ghosh and another v. Mask & Co. (44 C W N 709). A close and careful reading of the decision In the case of Tarangini Debi v. Govinda Mallik would leave no room for doubt that the Full Bench decision of the Calcutta High Court already referred to, was the sheet‑anchor of this decision. The other decisions to which pointed references were made are of cases reported in 18 C L J 628 and 11 C W N 745. The Full Bench decision of the Calcutta High Court reported in I L R 34 Cal. 811, is dated May 31, 1907. The case of Bepin Behary Bewa and others v. Sosl Bhusan Datta and another (18 C L J 628) was decided in February 1931, i.e., on the eve of the promul gation of Act III of 1913. The case of Hari Charan Singh v. Chundra Kumar Dey and another (11 C W N 745), was decided by Woodroffe, J. on 30th April 1907. There is thus no manner of doubt that these cases were decided at a time when the old Public Demands Recovery Act, namely, Act I of 1895 was in vogue and not after the coming into force of Act III of 1913 which made a radical change with regard to the effect of non‑service of notice under section 7 of the new Act.
Reliance was placed on several cases by the learned Advocate in support of the vie w that the sale in the absence of service of notice under section 7 was not a nullity but a mere irregularity but the learned Judge distinguished those cases from the facts of the case before him. I do not feel called upon to discuss those cases here. It may, however, be observed in passing that in the case reported in A I R 1940 Pat. 328 their Lordships of the Patna High Court approved of this position that mere non‑service of notice is an Irregularity and does not make the sale void.
Reference may be made to three decisions of the Calcutta High Court reported in 33 C W N 305 3 43 C W N 1177 and A I R 1954 Cal. 113: The latest of these cases is that reported in A I R 1954 Cal. 113. In that case it was observed with reference to the case of Ananda Chandra Nandy and another v. Jhulon Singh and others (A I R 1929 Cal. 409), by Chakrabartti C. J. as follows
"In my opinion, the first appellate Court read the decision correctly and although there are certain differences in the fact the decision is still undistinguishable. What their Lordships kept open in that case was only whether the certificate‑debtor could set up as a defendant the plea that no arrears were due at all, in view of the fact that section 35 of the Act prescribed a suit for such a contention. But their Lord ships did clearly hold that so far as the sale might be impugned on the ground that notice under section 7 of the Act had not been served, it could be done by the certificate‑debtor only by bringing a suit for the purpose and could not be done by way of setting up a defence. The provisions of section 36 seem tome fully to warrant that view. The section says that a certificate‑sale shall not be held to be void on the ground that the notice required by section 7 has not been served, but immediately proceeds to say that a suit may be brought to set aside such sale on that very ground. The effect of the section, so expressed, seems to me to be that a certificate‑sale, without service of notice under section 7, is not void but only voidable and that until it is avoided by the certificate‑debtor by a suit brought for the purpose, it must be taken to be a good sale and cannot be either attacked collaterally in other suits as a void sale nor held by the Court in other suits to be void."
A similar view was taken in the cases of Gopal Chandra Rudra and another v. Khater Karikar and others (33 C W N 1207), and Jogesh Chandra Banerjee and another v. Digendra Chandra Bannerjee and others (43 C W N 1177).
Although the learned Judge in the 9 D L R case in the beginning of the judgment quoted section 36, it appears to me that he lost sight of it while discussing the decisions on the effect of non‑service notice of under section 7 of the Act. Besides, he also seems not to have taken into account the fact that the rulings on which he mainly based his decision, particularly the Full Bench Decision of the Calcutta High Court were of a time prior to the enactment of Act III of 1913 which changed the whole position as to the effect of non‑service of notice. It is for these reasons that he ultimately held in a brief few sentences that the sale is a nullity where notice under section 7 of the act has not been served. In view of the clear and unambiguous language of section 36 of the Act, I am positively of the opinion that where no notice has bee served under section 7 of the Act, the sale is not void but voidable; or in other words, the sale is not a nullity but the certificate‑debtor can bring a suit in the Civil Court for setting aside the sale in terms of section 36.
The finding of the learned Munsif in this case is that the plaintiff could not prove his alleged date of knowledge and it has not been disturbed by the Court of appeal below. The plaintiffs are not entitled to the benefit of section 18 of the Limitation Act. The suit is, therefore, barred by limitation.
Before parting with the case, I like to place on record my deep appreciation of the pains taken by Mr. D. C. Bhattacharyya to enlighten the Court on the points of law involved in the case.
The result, therefore, is that the appeal is allowed. The judgment and decree of the lower appellate Court are set aside and those of the learned Munsif are restored. In the circumstances of the case, I leave the parties to bear their own costs of this Court.
The prayer for leave to appeal under clause 15 of the Letters Patent is refused.
A. E.
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