Decided on March 15,1944

G.F.F. Foulkes, Administrator Of Estate Of Robert Foulkes By Agent A. Kailasam Pillai Appellant
A.S. Suppan Chettiar And Anr. Respondents


King, J. - (1.) THE appellant here is the administrator of the estate of the late Mr. Robert Foulkes. In that capacity, he was the judgment -debtor in O.S. No. 35 of 1937 on the file of the Ramnad Temporary Subordinate Court and a part of the estate was brought to sale in execution and was sold on 18th June 1942 for a sum of Rs. 2,01,700. Shortly after the sale was held the appellant filed an application under Order 21, Rule 90 to set it aside. Three days after the filing of the application, that is on 10th July the learned Subordinate Judge called upon the applicant to deposit in Court the amount realized by the sale under the proviso to Rule 90. The appellant protested against this and on 20th July the Court modified its order by dispensing with the production of cash and asking instead for the security of immovable property for the total amount of the sale proceeds. This security was not furnished. So far therefore as the petition alleged that the sale ought to be set aside on the ground of material irregularities the learned Judge refused to enter into the merits. The petition however also raised matters which fell Under Section 47. It was contended that the sale was ab initio void as the property which was sold was in the hands of the appellant himself as Receiver in another suit, O.S. No. 29 of 1936 on the file of the Subordinate Judge of Madura, and that no leave had been granted by that Court for the holding of the sale. The learned Subordinate Judge therefore decided to confine his disposal of the application to this question of the jurisdiction of the Court to hold the sale. Before the application was disposed of an order was obtained by the respondents from the Subordinate Judge of Madura granting permission to sell the property. This order was on 28th September 1942. Subsequently the petition was Dismissed and the sale was confirmed. This is an appeal against the order dismissing the petition and confirming the sale.
(2.) IN his order the learned Subordinate Judge has given two reasons for dismissing the petition. One is that the sale was not void in the circumstances but only void able and that there was no sufficient reason to set it aside and the second that the contention of the appellant that the sale was void was barred by the principle of constructive res judicata as he had not raised it during the execution proceedings prior to the sale. This second point has not been argued before us and we do not propose to deal with it. The arguments of the learned counsel for the appellant in this Court have turned upon two points. The first is that it is open to this Court to consider whether the action of the learned Subordinate Judge in calling upon the appellant to furnish security under Order 21, Rule 90 was in the exercise of proper judicial discretion and that if we can agree that it was not, we can ourselves call for further investigation into the merits of the petition. The second argument was that the sale was void and must be set aside in the circumstances. The first argument will obviously depend upon a consideration of the terms of Order 21, Rule 90. The portion of the rule which permits the Court to call for security is para. 2 which runs as follows: Provided that the Court may after giving notice to the applicant, call upon him before admitting the application either to furnish security to the satisfaction of the Court for an amount equal to that mentioned in the sale warrant or that realized by the sale whichever is less, or to deposit such amount in Court. The obvious meaning of these words is that the Court is granted the option of taking one of three courses, either it may demand no security at all or it may demand the deposit of money in Court or it may call for security in some other form. In either of the two latter alternatives it seems clear from the wording of the sub -rule that the amount of cash or the amount for which security must be demanded must be one of two definite sums, either the amount mentioned in the sale warrant or that realized by the sale. It is, however, now contended for the appellant that the discretion is still wider and that the executing Court can call for security for any sum it pleases which is not greater than that laid down by the sub -rule, and in support of this argument we have been referred to the third portion of the rule. That runs as follows: Provided also that the security furnished or the deposit made as aforesaid shall be liable to be proceeded against only to the extent of the deficit on a re -sale of the property already brought to sale.
(3.) IT is contended that as this para. 3 in the rule contemplates the forfeiture of money or the enforcement of the security to only a limited extent the Court cannot exercise its discretion properly without calling upon the applicant to furnish security only to what it considers likely to be that limited extent. We are quite unable to accept this argument. We are of opinion that there is nothing in Sub -rule (3) of the rule to govern or in any way modify what is laid down so plainly in Sub -rule (2) and apart even from this, it is clear that Sub -rule (3) cannot in the nature of things occupy any such prominent place in the administration of the rule. It will be obvious from a consideration of Sub -rule (3) that it can come into operation only in very extraordinary circumstances, namely, when the Court has demanded security and then has proceeded to consider the merits of the petition1 and has come to the conclusion that the grounds urged in the petition justified the setting aside of the sale, in other words, when the property sold has owing to certain irregularities fetched a sum far less than it ought to have done. It is obvious in these circumstances that if the Court's decision is right the result of a re -sale is almost certain to result in a much larger sum being realized, so that there will be no opportunity in the ordinary course for the enforcement of the security against the person who has furnished it. Sub -rule (3) of Rule 90 therefore can come1 into operation only in the extraordinary circumstances of the Court being first satisfied that there are good grounds for setting aside the sale and then finding, no doubt to its extreme surprise, that the result of the re -sale is even less satisfactory in the matter of the sale proceeds than the result of the sale which it has set aside. This will show conclusively that Sub -rule (3) in Rule 90 can in no sense be taken as controlling the general interpretation of the rule. We must once more repeat that according to the plain language of Sub -rule (2) in Rule 90 if the Court decides to demand security at all it must demand it for one or other of the exact sums mentioned in that sub -section.;

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