PRIVY COUNCIL

                Ragunath Das and others

                Vs.

                Sundar Das Khetri and another

(Lords Moulton, CJ, and Parker Of Waddington, Sir John Edge J and Mr. Ameer Ali
                                                 JJ)

                18.5.1914

                JUDGMENT

Lord Parker J.

1. The action in which this appeal arises is an action for the recovery of a leasehold
colliery. The plaintiffs (the present appellants) claimed title to the property under the
Official Assignee in the insolvency of the lessees. The order vesting the property in
the Official Assignee was made under the Insolvent Debtors (India) Act, 1848, on the
8th September, 1904. At the date of this order the colliery had been attached in
execution case No. 303 of 1904, in which the lessees were the judgment-debtors and
the defendants (the present respondents) were the judgment-creditors and an order had
been obtained for the sale of the interest therein of the judgment-debtors. Counsel for
the respondents admitted that attachment in execution of a money-decree followed by
such an order for sale does not confer on the judgment-creditor any charge on the land,
(See Sarkies v. Mussumat Bandno Bace1. An attachment prevents and avoids any
private alienation, but does not invalidate alienation by operation of law such as is
affected by a vesting order under the Act of 1848, and an order for sale, though it
binds the parties does not confer title.

2. It follows that under the order of the 8th September, 1904, the property vested in the
Official Assignee free from any charge in favour of the judgment-creditors. The
Official Assignee in due course, by order of the Court having jurisdiction in the
insolvency, sold the property, and the appellants derive title through the purchaser.
Their title is thus prima facie a good and valid title, but it is disputed by the
respondents under the following circumstances.

3. On the 12th September, 1904, the Judge in the execution proceedings stayed the
sale therein directed, until further order. This was the proper and indeed the only thing
he could do, for the judgment-debtors had no longer any interest which could be sold.
Further, if, as was no doubt the case, the judgment-debt was included in the schedule
filed by the insolvents under the Act, their Lordships are of opinion that he was bound
to stay the sale under Section 49 of the Act. At any rate the execution could not
proceed until the Official Assignee had been properly brought before the Court and an
order binding on him had been obtained. In their Lordships' opinion, this could only be
done by obtaining an order for the issue of, and by serving him with a notice under
Section 248 of the Civil Procedure Code of 1882, which was the Code then in force. It
was suggested in argument that he might have been made a party to the proceedings
either under Section 32 or under Section 372 of the Code, but even if these sections
are applicable after final decree as to which there is considerable doubt (See Goodall
v. Mussoorie Bank Ltd.2 no proceedings seem to have been taken there under. What
the judgment-creditors did was this: they applied to the Judge in the execution case for
an order, and on the 30th September, 1904, and again on the 3rd November, obtained
an order for the issue and service on the Official Assignee of a notice calling upon him
to show cause why he should not be substituted in the suit for the judgment-debtors.
This was not a proper notice under the 248th section. A notice under that section
should have called upon the Official Assignee to showcause why the decree should
not be executed against him. Had the Official Assignee been served with such a notice
it is at least probable that he would as in their Lordships' opinion be certainly could
have shown good cause why the decree should not be executed, the property having
under the Act and vesting order been transferred to him for the benefit of the creditors
of the insolvent generally. It is possible that the notice might be upheld as a proper
notice preliminary to adding the Official Assignee as a party under the 32nd section if
that section were applicable but in order to bind a party added, under the 32nd section
he has after being added, to be served with a summons to appear and answer and it is
not suggested that any such summons was served. Similarly it is not suggested that
any order to carry on proceedings was obtained under the 372nd section.

4. Having obtained leave in that behalf the respondents proceeded to serve the notice
in question and their Lordships will assume that the notice was duly served on the
Official Assigne. The Official Assignee took no notice of it, possibly because he had
no objection to being substituted as a party, and expected to be served with notice of
any further application against him. There is no evidence that he knew that an order
for sale had been already made. The time fixed by the notice for cause to be shown
having expired, the respondents, without further notice to the Official Assignee,
applied for and obtained an order not only substituting the Official Assignee as a party
in the place of the judgment-debtors but directing the sale to proceed. The sale
accordingly proceeded. There had to be a fresh sale proclamation by reason of the
291st section of the Code: Such proclamation is not in evidence, but their Lordships
must presume in default of evidence to the contrary that the property offered for sale
was the property ordered to be sold, that is to say, the right and interest of the
judgment-debtors in the colliery. At the sale the respondents (the judgment-creditors)
having obtained leave to bid, became the purchasers. The sale was confirmed by the
Court on the 8th April, 1905, and on the 25th April, 1905, the respondents obtained
the usual certificate which refers to the right, title and interest of the judgment-debtors
as the property sold. Their Lordships are of opinion that this sale was altogether
irregular and inoperative. In the first place the property having passed to the Official
Assignee, it was wrong to allow the sale to proceed at all. The judgment-creditors had
no charge on the land and the Court could not properly give them such a charge at the
expense of the other creditors of the insolvents. In the second place no proper steps
had been taken to bring the Official Assignee before the Court and obtain an order
binding or him, and accordingly he was not bound by anything which was done. In the
third place the judgment-debtors had at the time of the sale no right, title or interest
which could be sold to or vested in purchaser and consequently the respondents
acquired no title to the property.

5. Their Lordships' attention was called in this connection to the case of Malkarjun
Bin Shidramappa v. Narhari Bin Shivappa3, but in their opinion there is nothing in
that case which had any bearing upon the present appeal. As laid down in Gopal
Chunder Chatterjee v. Gunamoni Dasi4 a notice under Section 248 of the Code is
necessary in order that the Court should obtain jurisdiction to sell property by way of
execution as against the legal representative of a deceased judgment-debtor. In the
case in Indian Appeals such a notice had been served, and the Court had determined,
as it had power to do for the purpose of the execution proceedings, that the party
served with the notice was in fact the legal representative. It had therefore jurisdiction
to sell though the decision as to who was the legal representative was erroneous. There
being jurisdiction to sell, and the purchasers having no notice of any irregularity, the
sale held good unless or until it were set aside by appropriate proceedings for the
purpose. The present case is of a wholly different character. No proper notice was
served under the section and the respondents had full notice of and indeed were
responsible for the irregularities of the procedure adopted.
6. The respondents suggested that with regard to certain machinery which was
included in the sale of the colliery by the Official Assignee and which was also sought
to be recovered in this action, the statute of limitations was a good defence. This point
does not appear to have been taken at any time prior to the hearing before Their
Lordships' Board. It was not one of the issues settled by the Court on the action, nor
did the respondents mention it among their grounds of appeal from the decision of the
Subordinate Judge. Their Lordships consider that it involves an inquiry as to the
nature of the machinery to which it is said to be applicable and it is therefore too late
to raise it.

7. Their Lordships will humbly advise His Majesty that the appeal ought to be allowed
and the decree of the High Court of the 4th June, 1912, set aside with costs, here and
below and that the judgment of the Subordinate Judge of Burdwan of the 8th
September, 1909 ought to be restored.

Appeal allowed.

Cases Referred.

1. [1869] 1 N.W.P.H.C.R.172

2. [1900] 25 B.337 : L.R.27 I.A.216

3. [1887] 10 All. 97

4. [1892] 20 C. 370