Case Note & Summary
The dispute arose from a revenue sale conducted under the Berar Land Revenue Code, 1928, of a plot in Yeotmal, Central Provinces and Berar, which was in the possession and management of a Receiver appointed by the Bombay High Court in a mortgage suit. The property, comprising a ginning factory and buildings, was sold at auction for recovery of land revenue arrears without the leave of the appointing court and without notice to the Receiver. The auction purchaser, Kanhaiyalal, purchased the property for Rs. 270, while its value was about Rs. 70,000. The Receiver attempted to pay the arrears but the payment was received after confirmation of sale. The Sub-Divisional Officer set aside the sale on review, but the Financial Commissioner vacated that order, leading the Receiver to file a civil suit for declaration that the sale was illegal and for recovery of possession. The trial court and first appellate court held the suit barred by Sections 157 and 192 of the Code. The Nagpur High Court in second appeal and letters patent appeal held the suit not barred and the sale illegal. The auction purchaser appealed to the Supreme Court. The Supreme Court examined whether the sale was void or voidable and whether the suit was barred. The Court noted that property in the custody of a Receiver is custodia legis and exempt from judicial process without leave of the appointing court. It held that proceedings taken without such leave are illegal, though not void ab initio; the sale is voidable and can be set aside by a proper proceeding. On the bar of suit, the Court interpreted Section 157(1) as confined to claims based on irregularities or mistakes in publishing or conducting the sale as referred to in Section 156. Since the suit was based on grounds of absence of leave and notice to Receiver, not mere irregularity, it was not barred. The Court also held that Section 192 did not apply because the suit was not one simpliciter to set aside the sale but for a declaration and consequential relief on grounds not covered by the Code's specific provisions. Accordingly, the appeal was dismissed, the High Court's decision was affirmed, and no order as to costs was made in favour of or against the State Government.
Headnote
A) Civil Procedure - Receiver and Custodia Legis - Sale Without Leave of Court Is Illegal and Voidable - Code of Civil Procedure, 1908, Order 40 Rule 1; Order 21 Rule 52 - The property was in possession of a Receiver appointed by Bombay High Court; revenue sale conducted without leave of court and without notice to Receiver. Held that such proceedings are illegal in the sense that party proceeding without leave may be liable for contempt and the sale does not affect interest in hands of Receiver; sale is voidable, not void ab initio. (Paras 8-9) B) Revenue Law - Bar of Suit to Set Aside Sale - Section 157(1) Limited to Irregularities in Publishing or Conducting Sale - Berar Land Revenue Code, 1928, Sections 155, 156, 157 - The suit sought declaration that sale was illegal due to lack of notice to Receiver and lack of leave of court, not merely irregularity in publication or conduct. Held that Section 157(1) bars only suits on grounds of irregularity or mistake in publishing or conducting sale as referred to in Section 156; suits on other grounds, including those in sub-section (2) of Section 157, are not barred. (Paras 7-8) C) Revenue Law - Exclusion of Jurisdiction of Civil Court - Section 192 Not Applicable to Suit for Declaration and Consequential Relief Based on Grounds Outside Code - Berar Land Revenue Code, 1928, Section 192 - Suit was not simpliciter to set aside sale but for declaration and consequential relief on grounds not covered by specific provisions of the Code for setting aside sale. Held that Section 192(1) does not bar such suit. (Paras 8-9)
Issue of Consideration
Whether sale of property in possession of Court-appointed Receiver without leave of court and notice to Receiver is void or voidable; whether suit to set aside such sale is barred by Sections 157 and 192 of Berar Land Revenue Code, 1928.
Final Decision
Appeal dismissed; High Court judgment affirmed; sale held illegal; suit not barred. The Supreme Court held that the sale was voidable and illegal due to absence of leave and notice, and that Sections 157 and 192 did not bar the suit. No order as to costs in favour of or against the Government.
Law Points
- Legal points not extracted
- Property in custodia legis exempt from judicial process without leave of appointing court
- Sale without leave of court and notice to Receiver is illegal and voidable
- Section 157(1) of Berar Land Revenue Code bars only suits for irregularities in sale conduct
- Section 192 not applicable to suit for declaration based on grounds outside Code
- Revenue sale without proper attachment not void but voidable
- Jurisdiction of revenue authority not dependent on notice of attachment
