Auction Purchasers be on the alert –

LL : A  Nizam : 27 July 2013

Lawmaker is unmindful of the injustice imprint in Article 134 of the Limitation Act R/W Section 47 CPC

Whether an auction purchaser who purchased the property in execution of a decree of a civil court could file a separate suit for delivery of vacant possession of immovable property or whether his remedy is limited to an application under O.21, R.95, Civil Procedure code is an important issue where unfortunately one could find conflicting views among different benches of the Hon’ble Supreme Court of India.

Section 47 of the Civil Procedure code provides that all questions arising between the parties to the suit in which the decree was passed, or their representatives, and relating to the execution, discharge or satisfaction of the decree, shall be determined by the court executing the decree and not by separate suit. By virtue of explanations to S.47 as it stands now, a purchaser of property at a sale in execution of a decree shall be deemed to be a party to the suit in which the decree is passed so also all questions relating to delivery of possession of such property to such purchaser or his representative shall be deemed to be a question relating to the execution, discharge or satisfaction of the decree within the meaning of S.47.

The object of S.47 is to preclude the unnecessary expense and delay that fresh trials entail. Obviously Section 47 would bar a suit when the same relief could be obtained by an application therein. 

Prior to the insertion of explanations to S.47 a stranger auction purchaser was not considered as a party to the suit, therefore S. 47 was not applicable to him and separate suit for possession was not barred. But there were conflicting views as to whether a decree holder who purchased the property in auction, with the permission of the court under O.21 R. 72 would retain his character of a party to the suit until the delivery of possession to him of the property.  In Ganapathy v. Krishnamachariar, 45 Ind App 54: (AIR 1917 PC 121) the Judicial Committee of the Privy Council putting a liberal construction on S.47 answered the question in the affirmative and held that S.47 would apply to a decree holder auction purchaser.  

In Harnandrai Badridas v Debidutt Bhagwathi Prasad (1973 KHC 593 : 1973 (2) SCC 467 : AIR 1973 SC 2423) a 3 judges bench of the Honourable Supreme Court comprising  A. N. Grover; K. K. Mathew; A. K. Mukherjea, JJ considered the question whether, a decree holder auction purchaser can move the executing court for delivery of vacant possession of an immovable property or whether he has to file separate suit to get that possession and held as follows.

“It is important to remember that after the decision of the Privy Council in Ganapathy’s case, (45 Ind App 54 : (AIR 1917 PC 121) there has been an amendment of S.47 as a result of which the purchaser at a sale in execution of a decree, whether he is the decree holder or not, is unquestionably a party to the suit for the purpose of S.47. Having regard to this, all questions arising between the auction purchaser and the judgment debtor must in our view be determined by the executing Court and not by a separate suit.”

In K.R Lekshminarayana Rao v New Premier Chemical Industries (2005(9) SCC 354) a division bench of the Hon’ble Supreme Court comprising  S.B Sinha; S.H Kapadia,jj, following ‘Harnandrai’, held that a proceeding under O.21, R.95, Civil P.C. for delivery of possession is a proceeding “relating to execution of the decree” and steps for obtaining delivery of property in occupancy of the judgment debtor is required to be taken by the auction purchaser in terms of O.21 R.95 CPC and, thus, a separate suit to enforce such a right would be not maintainable. But another division bench comprising M. M. Punchhi; Sujata V. Manohar, JJ. in Pattam Khader Khan v. Pattam Sardar Khan and Another (1996 (5) SCC 48)without referring to ‘Harnandrai’, or the provision in Section 47 CPC, opined that the period of one-year limitation, now prescribed under Art.134 of the Limitation Act, 1973, in substitution of a three-year period prescribed under Art.180 of the Indian Limitation Act of 1908, is reflective of the legislative policy of finalising proceedings in execution as quickly as possible by providing a quick forum to the auction purchaser to ask delivery of possession of the property purchased within that period from the date of the sale becoming absolute, rather than from the date of issuance of the sale certificate. On his failure to avail of such quick remedy the law relegates him to the remedy of a suit for possession in a regular way.” This view was again quoted with approval in Balakrishnan v Malaiyandi Konar 2006(3) SCC 49: AIR 2006 SC 1458:2006(1)KLT926. Arijit Pasayat; R. V. Raveendran, JJ. ( Supreme Court )

It is a well settled proposition of law that, If any smaller bench unfortunately overlooks or omits to refer to an earlier binding precedent of a larger bench such later decision has no binding effect and must be reckoned as rendered per incuriam. Therefore law laid down by the Hon’ble Supreme court in ‘Harnandrai’, will prevail over the contrary view in ‘Pattam Khader Khan’.

However, the above amendments adding explanations to Section 47 CPC and the Law enunciated by the Hon’ble Supreme Court in ‘Harnandrai’ pose more questions than answers. In law relating to Adverse Possession, Section 27 of Limitation Act provides that at the determination of the period limited to any person for instituting a suit for possession of any property his right to such property extinguishes and therefore the trespasser will acquire title to the property. But here in the case of auction purchaser in execution, even after the expiration of the period of limitation prescribed under Article 134 for filing application for delivery of possession, the title to the property which passed on to him on the confirmation of the sale remains with him and will not revert back to the judgment debtor but the auction purchaser will be precluded from obtaining possession of the property by the operation of limitation. There is a similar situation in the case of the doctrine of part performance enshrined in Section 53A of the Transfer Of Property Act, where the transferor on whom the title to the property technically remains, would be debarred from enforcing any right in respect of the property of which the transferee had taken possession of in part performance of the contract for transfer. But there is a conscious and valid/just reason behind the provision in Section 53A i.e. to compel the transferor to honour the contract and to protect the interest of transferee who has performed his part of the contract or is willing to perform his part of the contract. But it is doubtful whether the legislature was conscious of the meager 1 year period of limitation in Article 134 of the Limitation Act and the consequence of precluding the Auction Purchaser from the remedy of a regular suit while amending Section 47 CPC by incorporating explanations bringing in the auction purchaser as a ‘party to the suit’ for the purpose of the Section. Apparently there is no reason for wholly precluding the auction purchaser owner from enforcing his right of ownership on the basis of inaction for a meager period of 1 year as prescribed in Article 134 and the law as it stands appears to be extremely harsh on the auction purchaser and disproportionate to the lapse/inaction. This perhaps had prompted Honorable Justice M. M. Punchhi; to opine as quoted above in ‘Pattam Khader Khan’.

The reason for delay in filing petition for delivery may be myriad and in many cases justifiable also.  But as the provision in Section 5 of limitation Act 1963 is not applicable to any application under Order 21 the delay cannot be condoned under any circumstances. So in fact Section 47 CPC  R/W Article 134 of the Limitation Act as interpreted in ‘Harnandrai’ will work out grave injustice and deprive the auction purchaser of his proprietary right.

It would be appropriate to note that even when Section 47 CPC was amended to bring in within its ambit an auction purchaser, Section 15(4) Limitation Act 1963 which reads as follows “In computing the period of limitation for a suit for possession by a purchaser in a sale in execution of a decree, the time during which a proceeding to set aside the sale has been prosecuted shall be excluded” was not touched. So also Clause (c) of Article 65 of the limitation Act 1963 which speaks of a suit by auction purchaser for possession remained as such in the statute book.  In Ganpath Singh(dead) by L.Rs v Kailash Shankar and another 1987(3) SCC 146: AIR 1987 SC 1443. A bench comprising E.S Venkataramiah and M.M Dutt,jj of the Hon’ble Supreme Court observed that “It may be that before the amendment of S.47 of the Code, an auction purchaser could file a suit for recovery of possession of the property within 12 years from the date of sale, but in view of the amendment of S.47 of the Code such a suit cannot be filed. But that is no ground for holding that Art.136. Limitation Act, would apply to an application for delivery of possession. Under the old Limitation Act of 1908, an application for delivery of possession could be made within three years from the date on which sale became absolute as prescribed by Art.180 of that Act, but under Art.134, Limitation Act, 1963 such an application can be made within one year from the date on which sale became absolute. Thus the period of limitation for delivery of possession of property purchased at the court sale has been reduced to a considerable extent, but that also cannot be taken into consideration for the purpose of interpretation of the provisions of the Limitation Act. It is for the Legislature to prescribe the period and the Court is only to see whether any particular application has been filed within that period.” In the light of the above view of the Hon’ble Supreme Court based on the amendment to Section 47 CPC, it appears that Section 15(4) and clause (c) of Article 65 of the Limitation Act 1963 have become redundant.

It is worth noting that these are times when the ambit of Human Right Jurisprudence is widening and Right of property is not considered as confined to be a statutory right but is also read into the realm of Human Rights and the courts and jurists around the world are approaching/viewing statutes of limitation overriding property rights with disdain.  The Supreme Court of India starting from P. T. Munichikkanna Reddy and Others v. Revamma and Others 2007 KHC 3543 : JT 2007 (6) SC 86 : 2007 (6) SCC 59 : AIR 2007 SC 1753 : 2007 (3) CHN 116 (SC) 07 (6) Mah LJ 336 : 20*S. B. Sinha; Markandey Katju, JJ. and later on in Hemaji Wagaji Jat v. Bhikhabhai Khengarbhai Harijan 2008 (4) KLT 357 : AIR 2009 SC 103 : 2008 (12) SCALE 697 : 2009 (16) SCC 517*Dalveer Bhandari; H. S. Bedi, JJ. and in State of Haryana v. Mukesh Kumar and Others*Dalveer Bhandari; Deepak Verma, JJ.  2011 KHC 4876 : 2011 (4) KHC SN 7 : 2011 (11) SCALE 266 : 2011 (4) KLT SN 70 : 2011 (10) SCC 404 : AIR 2012 SC 559, has strongly deprecated the law of adverse possession and has recommended the government to abolish or make necessary changes in the law of adverse possession. In ‘Mukesh Kumar’ the Honourable Supreme Court of India citing English Authorities/cases reiterated that the law which provides to oust an owner on the basis of inaction of 12 years is “illogical and disproportionate”. The effect of such law would “seem draconian to the owner” and “a windfall for the squatter” and there is an urgent need of fresh look regarding the law on adverse possession.”

If that be so, the injustice looms larger in the case of precluding the auction purchaser from enforcing his proprietary rights at the expiry of a paltry one year period in Article 134. It is unlikely that the matter would come before a larger bench of the Hon’ble Supreme Court and the injustice would be undone by overruling the view in ‘Harnandrai’ as the court cannot legislate under the guise of interpretation. Hence it is for the legislature to take steps to undo the injustice worked out by the law as it stands now.  It appears that the legislature is oblivious of the injustice imprint in Article 134 of the Limitation Act R/W Section 47 CPC. Hence there is an urgent need to bring the injustice writ large on Article 134 of the Limitation Act R/W Section 47 CPC, to the notice of the people who are instrumental in the process of law making in this country, to persuade them to take steps to give back to the auction purchaser his right to sue for possession based on paramount title, by necessary amendment in the Civil Procedure Code, in the interest of justice. This Article is a humble effort in that direction. 

Nizam A started his career as an Advocate. He has worked as Manger (Legal) with Union Bank of India and Bank of India. He later joined the Kerala Judicial Service and served as Munsiff Magistrate for a year and a half before resigning from the post recently. Nizam has keen interest in Civil Law.