Holding

A preliminary decree substituted by consent extinguishes the basis of any final decree passed earlier, rendering the final decree and the auction sale non‑est, and auction purchasers are parties only upon execution of a final decree.

Summary

The appellant mortgagor and his co‑heirs mortgaged two‑thirds of a property for a loan. A mortgage suit was filed and the trial court passed a preliminary decree on 25‑July‑1962 ordering payment in instalments and authorising a sale on default. Because of non‑payment, a final decree for sale was passed on 6‑March‑1963 and the property was eventually sold at auction on 15‑March‑1968. While the appeal against the preliminary decree was pending, the High Court substituted the original preliminary decree by consent on 13‑December‑1971. The appellant contended that the substitution nullified the final decree and the auction sale, invoking Section 47 CPC, whereas the respondents argued that the final decree and sale were valid and that the auction purchasers were parties to the suit. The Supreme Court held that the substituted preliminary decree replaced the original, so any final decree must be based on it; consequently the final decree and the auction sale became non‑est. Auction purchasers are deemed parties only upon execution of a final decree, not before. The Court allowed the appeal, set aside the sale, and, exercising its inherent powers under Article 142, directed the appellant to pay interest on the blocked purchase money to the auction purchasers.

Issues considered

The effect of a substituted preliminary decree on a subsequently passed final decree and an auction sale under Order 34 CPC.
Whether an auction purchaser becomes a party to the suit under Section 47 CPC before the final decree is passed.
Whether the auction sale can be set aside and what compensation, if any, is due to the auction purchasers.

Legislation cited

Bengal Money Lenders' Acts. 35
Code of Civil Procedure, 1908s. 2(2), s. 47, s. Order 21 Rule 90, s. Order 34 Rules 1-5
Constitution of Indias. Article 142

Subjects

mortgagepreliminary decreefinal decreeauction saleSection 47 CPCsubstituted decreeauction purchaser rightsinherent powersArticle 142non‑est salecivil procedure

Judgment

KUMAR SUDHEtmu NARAIN DEB A
v.
MRS. RENUKA BISW AS AND ORS.

NOVEMBER 13, 1991

[MADAN MOHAN PUNCHHI AND S.C. AGRAWAL, JJ.] B '

Civil Procedure Code, 1908-Sections 2(2) and 47, Order 34--J>re-
liminary decree by trial Court dated 25. 7.1962-Substituted preliminary
decree by High Court by consent of parties dated 13.12.1971-Final de-
cree dated 6. 3. 63 by trial Court on the basis of its preliminary decree
dated 25.7.1962-A.uction sale on 15.3.1968-Validity of after passing of C
High Court's substituted preliminary decree. ,

Civil Procedure Code, 1908-&ction 2(2), Explanation--"Decree"-
Construction of

Civil Procedure Code; 1908-0rder 34, Rules 1-4-Fixing date in D
postponing sale confirmation--Executing Court's power--Limitation.

Civil Procedure Code, 1908-0rder 34, Section 47-Auction sale
before the passing of High Court's substituted preliminary decree-Claim
of auction purchasers to be parties to suit-Effect.
E
Civil Procedure Code, 1908-Section 151, read with Article 142,
Constitution of India, 1950--Powers of Supreme Court under-Direction
to judgment-Debtor to pay interest on the auction s.ale amount.

The appellant and his co-heirs mortgaged their two-third in-
terest in ,the proper:ty as security for a loan of Rs. 27,000 obtained F
from one Smt. Biswas, the predecessor-in-interest of the plaintiffs-
respondents.

After the death of the mortgagee, some of tier heirs and legal
representatives filed a mortgage suit on 13.3.1961 for the recovery
of the mortgage money before the Subordinate J'udge and seeking G
enforcement and .sale of the mortgaged property. The left out heir
of the mortgagee, originally arrayed as a defenda111t was transposed.
as a co-plaintiff. ·

On 25.7.1962, the trial court passed a prelhninary decree foi:.
Rs.51,570 totalling the principal sum and interest, and costs. The H

233
234 SUPREME COURT REPORTS [1991) SVPP. 2 S.C.R.

A decretal amount was proportioned in as much as two-third was or-
dered as payable to the original plaintiffs and the remaining one-
third to the transposed co-plaintiff. T;1e decretal amount was to be
paid by the mortgagors in 15 equal annual instalments and in de-
faul~ of any one of the instalments, the mortgagee-plaintiffs were at
liberty to apply for making the decree final and in the event of such
B application being made the mortgitged property, or a part thereof,
shall be directed to be sold. Interest also· was allowed on the sum
due from the date of institution of the suit till the date of realisation
of the entire sum.

On 18.12.1962, the proforma-respondent no.8 filed an appeal
c against the preliminary decree in the High Court. Prayer for stay of
execution of the decree was rejected. ·

Though some deposits were made on the basis of the prelimi-
nary decree, there was a failure to deposit in terms thereof. There-
fore a final decree was passed by the trial court on 6.3.1963, when
D the appeal against the preliminary decree was pending in the High
Court.

The decree-holders representing two-third interest and the de-
cree-holder representing one-third interest filed two separate ex-
ecution petitions for realisation of their shares under the decree.
E Both the execution petitions contained identical prayers for sale of
the mortgaged property and the execution petitions were consoli-
dated and numbered.

On 10.8.1963, proclamation of sale was drawn. The value .of
the mortgaged property was suggested as Rs. 75,000 and Rs. 3 lacs,
F by the decree-holders and the appellant respectively.

On 4.3.1968, before the sale of the property, the appellant
made a regular objection u/s 47, C.P.C. The appellant had also
made some more deposits within the intervening period of 41h years.

G The property was sold on 15.3.1968 on the proclamation of
sale as was drawn on 10.8.1963 for Rs. 1,00,500 in favour of the
auction-purchasers [respondents nos. 6 & 7).

On 11.4.1968 the appeJlant filed an application under Order
21, Rule 90, C.P.C. Tor setting aside the sale and prayed for stay of
H its confirmation on the grounds that the judgment-debtors had no
KUMAR SUDHENDU v. MRS. RENUKA BISW AS 235

saleable interest in the mortgaged property; that legally two execu- A
tion petitions could not be consolidated; and that th.e provisions of
section 35 of the Bengal Money Lenders' Act had been overlooked.

The application under Order 21 Rule 90 was treated as part of
the original objection u/s. 47, C.P.C.
B
The executing Court on 11.4.1968 dismissed the objection u/s
47 C.P .C. against which the appellant preferred an appeal before
the High Court.

Later the petition under Order 21 Rule 90, CP.C. was for-
mally dismissed in default. On 14.9.1968 the auc~ion sale was con- C
firmed.

In tbe appeal against the preliminary decree, the parties ar-
rived at a settlement on 13.12.1971 before the High Court. In the
place of the preliminary decree dated 21.7.1962 a new preliminary
decree on settlement between the parties was passed by the High D
Court, whereunder the dccretal amount was principally agreed not
to exceed Rs.54,000. The sums deposited by the appellant were ad-
justed and the final amount struck as unpaid was put at Rs.44,000.

Having cleared off the mortgage debt, the appellant in his
appeal, preferred against the rejection of objection, raised the addi- E
tional legal ground that after the displacement of the original pre-
liminary decree by substitution, the final decree as well as the auc-
tion sale did not survive.

The High Court rejected all the legal points otherwise raised,
but certified as fit questions as raised to be answered by this Court F
without framing anyone of them as such.

Hence this appeal by certificate, involving the question of law
as to whether a court sale held in execution of a final decree, passed
in a suit for recovery of mortgage money can be upset under the
provisions of section 47 of C.P.C., on the displacement of the pre- G
liminary decree upon which such final decree was based.

The appellant contended that . the preliminary decree dated
25.7.1962 was a preliminary decree for sale passed in terms of Or-
der 34 Rule 4 and the final decree dated 6.3.1963 was a final
decree for sale under Order 34 Rule 5(3) of the C.P.C., that the H
236 SUPREME COURT REPORTS [1991) SUPP. 2 S.C.R.

A right to apply for the final decree arose from the terms of the
preliminary decree and on the failure of the defendant making pay·
ments in terms thereof. And since the preliminary decree of 25.7.1962
·was displaced and substituted by the preliminary decree passed b)
the High Court in appeal, which was instantly satisfied, the founda-
tion under the final decree stood removed; that the plaintiff had lost
B the right to ask for a final decree, there was no compulsion for the
purpose or the occasion to pass it; and that the auction had become
non-est having no legal foundation or sanction in law.

The respondents on the other hand contended that there could
not be a reverse process when the final decree bad factually been
C passed and an auction sale in terms thereof had taken place bring-
ing in the rights of the stranger auction-purchasers.

Allowing the appeal of the judgment-debtor-appellant, this Court,

HELD: 1. On the substitution of the preliminary decree, even
D though by consent, there is no denying the fact that the seal of adjudi-
cation gets affixed to it. The court passing it has formally expressed
the terms itself under its own'authority, even though at the suggestion
of the parties. It conclusively determines the right of the parties with
regard to the matters in controversy valid in the suit till the stage of
passing of the preliminary decree. In the field, the only preliminary
E decree is the one, which was passed by the High Court substituting the
original preliminary decree of the Trial Court, and the final decree, if
at all required, is to be passed in accordance therewith. (244 B, G]

2. The Explanation to Section 2(2) of the Code of Civil Proce-
dure defining the word "decree", goes to say that a decree is pre-
·F liminary when further proceedings had to be taken before a suit can
be completely disposed of.· It is final where such adjudication com-
pletely disposes of the suit. It may be partly preliminary and partly
final. [244 CJ ·

3. In the instant case the preliminary decree whether as originally
G made or as substituted in appeal, had not disposed of the suit com-
pletely. It was to be enforceable on the terms it was drawn. There
were obligations for the defendants to fulfil and on the violation to
observe the obligations, rights accrued to the plaintiffs. It cannot be
twistedly said that the obligations of the defendants may substitutedly ,
be that as defined by the appellate preliminary decree, but the right
H of the plaintiffs kept accrued on the failure of non-fulfilment o{ the
KUMAR SUDHENDU v. MRS. RENUKA BISW AS 237

obligations of the' defendants under the preliminary decree of the A
Court of first instance. Such an interpretation or construction would
render the substantive right of appeal redundant and choked de-
feating the ends of justice and would otherwise be ill-fitted in the
scheme of Order 34, C.P .C. [244 D-F)

4. For the purposes of Section 47, the auction-purchaser deemiogly
is a party to the suit in which the decree is passed if he has pur-
cliased the property at the sale and execution of that decree. [245 B)
5. Instantly, the auction-purchasers had purchased the prop-
erty if:, execution of the final decree and not in execution of the
preliminary decree and on that basis can at best be deemed to be
parties to the suit throughout only on the strength the final decree if
c
obtained on the terms of the existing preliminary decree. But the
property was not put to sale in execution of the preliminary decree.
The auction-purchasers cannot claim themselves to be parties to the
suit at the time of or at any time prior to the passing of the prelimi-
nary decree. The preliminary decree and final decree are passed
D
under Order 34 of the Code of Civil Procedure in one and the same
suit, in which two decrees may be required to be passed at separate
stages. And both being formal adjudications to the stage are formal
expressions of decision of the Court. At the stage of the preliminary
decree there arises no question of the property under mortgage
being put to sale in execution of the decree, and if that is so the
E
ultimate auction purchaser cannot be held deemingly to be party to
the suit upto the stage of the preliminary decree. [245 B-E]

6. The converse interpretation that the auction-purchaser at
a sale and execution of the final decree shall be deemed to be a
party to the suit at and prior to the stage when preliminary decree
is passed, unless sustaining, would be contrary to the spirit and F
scheme of Order 34 of the Code of Civil Procedure. And. since 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 are required to be deter-
mined by the Court executing the decree and not by a separate suit,
the objection of the appellant judgment-debtor with regard to the G
knocking out of the original preliminary decree was sustainable.
[245 E-G)

7. In terms of the preliminary appellate decree ·and fulfil-
ment of the obligations of the defendants on payment of the sum as
struck, there remained no occasion for enteri,aining, maintaining or - H
238 SUPREME COURT REPORTS [1991) SUPP. 2 S.C.R.

A sustaining the application of the plaintiff-mortgagees for sale of the
property mortgaged and on that basis the auction sale in favour of
th'e auction-purchasers and confirmation of that sale automatically
becomes non est. The High Court went wrong in rejecting the objec-
tion of the appellant-judgment-debtor. [245 G-H]

B 8. No compensatory sum is due to the auction-purchasers un-
der the strict terms of sub-rule (2) of Rule 5 of Order 34. In exer-
cise of the Court's inherent powers under the C.P.C. and powers
otherwise under Article 142 of the Constitution, to further the cause
of complete justice, confining it to the facts of the case, and to be
fair to the auction-purchasers, the appellant is directed to burden
C himself in paying to the auction-purchasers, interest on their blocked
sum of Rs.1,05,000 the purchase money, lying in Court since 1963,
which was quantified as equivalent to the sum deposited. [246 D, E-
F]

Hukumchand v. Bansilal & Ors., [1967) 3 SCR 695; Janak Raj v.
D Gurdial Singh and Anr., [1967) 2 SCR 77 and Sardar Govindrao Mahadik
& Anr. v. Devi Sahai & Ors., [1982) 2 SCR 186, referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1203 of
1977.

From the Judgment and Order dated 4.12.1973 of the Calcutta High
E Court in Appeal from Original Order No. 624 of 1968.

AK.Ganguli, U.R.Lalit, S.K.Nandy, Chandra Nath Mukherjee, Gaurav
Kumar Banerjee, Ajit Chakravorty, Narayan Sinha and B.C. Barua for.the
appellants.

F G. Ramawamy, Dr. Shankar Ghosh, R.F. Nariman, P.H.Parekh, Ms.
Sunita Sharma, B.M.Mitra and Dhillon for the Respondents.

The Judgment of the Court was delivered by
••
PUNCHHI, J. This appeal by certificate, poses an important ques- i
G tion of law, as to whether, a court sale held in execution of a final decree,
passed in a suit for recovery of mortgage money, can be upset under the
.Provisions of section 47 of the Code of Civil Procedure, on the displace- '
ment of the preliminary decree upon which such final decree was based.

The question of law emerges on the facts summarized as follows:
H
KUMAR SUDHENDU v. MRS. RENUKA BISW AS [PUNCHHI, J.] 239

Raja Abhoy Narain Deb was the owner of premises no.117-A, Rash A
Behari Avenue statedly a fashionable quarter of Calcutta, built on an area
approximating I Bigha 6 cottahs, with three· storied 'building on it consist-
ing of 32,spacious rooms and two out houses. On the demise of Raja
Abhoy N~ain Deb, the appellant herein, and the proforma respondents,
succeeded as heirs to the same on September 15, 1949. The appellant and
his co-heirs mortgaged their two-third interest in the said property as B
security for a loan of Rs.27 ,000 obtained from the mortgagor Smt. Prokashini
Biswas, the predecessor-in-interest of the plaintiffs-respondents. After her
death some of the heirs and legal representatives of Smt. Biswas, on
March 13,, 1961, filed a mortgage suit for the recovery of the mortgage
money etc. in the court of the 3rd Subordinate Judge at Alipore, being
title Suit No.17 of 196 I, seeking enforcement and sale of the mortgaged C
property. To this suit the left out heir of Smt. Biswas, originally arrayed
as a defend~t, was transposed as a co-plaintiff. On July 25, 1962, the trial
court passed a preliminary decree in the sum of Rs.27000 for the principal
sum and a sum of, Rs.24570 for interest on the said principal, totalling
Rs.5 I 570, together with costs. The sum of Rs.51570 was proportioned in
as much as two-third was ordered as payable to the original r ! tintiffs and D
the remaining one-third to the transposed co-plaintiff. The decree stipu-
lated that the mortgagors were allowed to pay the decreetal amount in 15
equal annual instalments, to be deposited by the 30th June of each year, in
the afore-mentioned proportions of two-third and one-third, to the credit
of the respective mortgagee-plaintiffs; the first instalment being payable.
by August 31, 1962. The mortgagee-plaintiffs were also allowed interest E
on the sums due from the date of institution. of the suit till the date of
realisation of the entire sum. It was further stipulated that in default of
any one of the instalments, the mortgagee-plaintiffs were at liberty to
apply for making the decree final, and in the event· of such application
being made the mortgaged property, or a sufficient part thereof, shall be
directed to be sold, and for such purpose all necessary steps were required F
to be taken by the plaintiffs-mortgagees. On December 18, 1962, the present
proforma respondent no.8, Kumar Sudhendu Narain Deb, filed F.A. No.
902 of 1964 against the aforesaid preliminary decree in the Calcutta High
C9urt praying as well for stay of execution of the decree, which prayer
was ultimately declined. Some deposits, however, were made to feed the
preliminary decree but since there was a failure to deposit in the terms G
th'ereof, a final decree was passed by the Court of the 3rd Subordinate
Judge, Alipore on March 6, 1963, even though F.A. No. 902 of 1964, the
apJ>eal against the preliminary decree, was pending in the High Court.

The group of the decree-holders representing two-third interest filed
an execution petition for realisation of their' own share under the decree H
240 SUPREME COURT REPORTS [1991) SUPP. 2 S.C.R.

A which was followed by another execution petition of the remaining de-
cree-holder representing one-third interest, seeking realisation of his one-
third share of the decreetal amount. Both the execution petitions,..cop-
tained identical prayers for sale of the mortgaged property. The execution

B
petitions were consolidated and numbered as Execution Petitions 11 and·
13 of 1963 respectively. On August 10, 1963, proclamation of sale was
drawn, apparently in the presence of parties. The decree-holders suggested
-
the value of the mortgaged property as Rs.75,000. The appellant herein
put its value at Rs.3 lacs. In these circumstances, the executing court
ordered that both the valuations be incorporated in the sale proclamation.
The sale, however, did not take place till March 15, 1968 and a period of
over 4 Yi years passed by in the mean time. By that time, the value of the
C property; according to the appellant, had risen to Rs.6 lacs for which on
March 4, 1968, before the sale, the appellant made a regular objection
under section 47 of the Code of Civil Procedure. Within the intervening
period of 4 Yi years, some more deposits apparently were made by the
appellant. The property was all the same sold on March 15, 1968, on the
proclamation of sale as was drawn on Augt1st I 0, 1963, for Rs.1,00,500 in
D favour of the auction purchasers respondents 6 & 7 herein. On April 11,
1968, the appellant yet filed an application under Order 21 Rule 90 C.P.C.
for setting aside the sale and prayed for stay of its conflrmation basically
on three grounds:

(i) the judgment-debtors had no saleable interest in the mortgaged
E property;
(ii) legally two execution petitions could not be consolidated; and
(iii) the provisions of section 35 of the Bengal Money Lenders' Act
had been overlooked. ·
This petition was treated as a part of the original objection under
F section 47 C:P.C. On April 11, 1968, the objection under section 47
C.P.C. was dismissed·by the executing court against which the appellant
preferred an appeal before the Calcutta High Court being F.M.A. No.624
of 1968. Later the petition under Order 21 Rule 90 C.P.C. was formally
dismissed in default in the above backgr':>und. On September 14, 1968, the
auction sale was confined.
G
In F.M.A. No.902 of 1964, the appeal against the preliminary de-,
ere~, the parties arrived at a settlement on December 13, 1971 before the
Calcutta High Court. In place of the preliminary decree dated July 25,
1962 'a new preliminary decree on settlement between the parties, was
passed by a division bench of the High Court, whereunder the decreetal
H amount was principally agreed not to exceed Rs.54000 being the double
KUMAR SUDHENDU v. MRS. RENUKA BISWAS [PUNCHHI, J.] . 241

of the toriginal debt of Rs.27000. The sums deposited by the appellant, A
under lnterim orders of the court from time to time to the credit of the
decree-holders, were adjusted and the final amount struck as unpaid was
put at Rs.44000 regarding which claim of the mortgagees was conceded
by the appellant-mortgager as well as to the manner of its payment, and
• which sum in fact was deposited by him in Court, for not only simultane-
ous passing of the decree but recording as well it satisfaction. Having B
cleared off in this manner the mortgage debt, the appellant in his appeal
F.M.A. 624 of 1968, preferred against the rejection of objection raised
the additional legal ground that after the displacement of the original
preliminary decree by substitution the final decree did not survive, and so
did succumb the auction sale, posing amongst others the question set out
in the opening paragraph of the judgment. The High Court rejected all the c
legal pleas otherwise raised but certified as ,fit questions as raised to be
answered by this Court, without framing any one of them as such.

It was pointed out by Mr. Ganguli, learned counsel for the appellant
that the preliminary decree dated July 25, 1962 was a preliminary decree
for sale passed in terms of Order .34 Rule 4 of the kind covered under D
Clause (c) (i) of sub-rule (1) of Rule 2 and the final decree dated March 6,
1963 was final decree for sale under Order 34 Rule 5 (3) of the Code of
Civil Procedure. This is evident from the. copies of both the decrees
which are part of the additional documents submitted to this Court. The
preliminary decrees for sale, details apart, besides striking the amount due
payable in instalments, mentions the time for payment, further provides E
that in default of payment as provided, the plaintiff may apply to the
Court for final decree for the sale of the mortgaged property; and on such
application being made. The mortgaged ·property or sufficient part thereof,
shall be directed to be sold; and for the purpose of such sale, the plaintiff
shall produce before the court or such officer, as it appoints, all docu-
ments in his possession or relating to the mortgaged property. It is evident F
from the terms of the final decree that it was passed on tbe basis of the
preliminary decree dated July 25, 1962 and the plaintiff making an appli-
cation on September 19, 1962 for a final decree, and it appearing that the
payment directed by the said decree and orders had not been made by the
defendant or any p~rson on his behalf or any other person entitle~ to
redeem the mortgage. the Court then ordered and decreed t~at the mon• G
gaged property in the preliminary decree afore~ptentioned, or a sufficient
part thereof, be sold and that for the purpose of such sale, the plain~iff
1
shall produce before the Court or such O{fLcer, as it appoints, all the
documents in his possession or power relating to the mortgaged property...
It is on the strength of terms of both the decrees that Mr. Ganguli, urged H'·
tltat the right to apply for the fiinal d,ecree
'
arose from the terms of the .
'
242 SUPREME COURT REPORTS (1991] SUPP. 2 S.C.R.

A preliminary decree and on the failure of the defendant making payments
in terms thereof. And since the preliminary decree of July 25, I 962 was
displaced and substituted by the preliminary decree passed by the High
Court in appeal, which was instantly satisfied, the foundation under the ,
final decree stood removed. It was further urged that the plaintiff had lost
the right to ask for a final decree, there was no compulsory need for the
"'
~--

~-
B purpose or the occasion to pass it. It is also urged that the auction has
become non-est having no legal foundation or sanc;tion in law. The well
settled principle of the appeal being a continuation of the suit was pressed
into service to contend that the final decree had no life of its own and
could only be passed on an application moved by the plaintiff on the
defendant's failure to comply with the terms of the substituted preliminary _
c decree. Mr. Nariman, learned counsel appearing for the respondents on
the other hand contended that there could not be a reverse process when
the final decree had factually been passed and an auction sale in terms
thereof had taken place bringing in the rights of the stranger auction-
purchasers.

D In order to appreciate the respective contentions of learned counsel
for the parties, the scheme of Order 34 would be essential to be grasped. It
would be seen that Rule I thereof enjoins that subject to the provisions of
the Code, all persons having an interest either in the mortgage-security or
in the right of redemption shall be joined as parties to any suit relating to
the mortgage. Confining to the relevant statutory provisions thereunder, as
E are applicable to the case, the preliminary decree was passed in the fore-
closure suit in accordance with sub-clause (c)(i) of Clause (I) of Rule 2.
Further in terms of sub-clause (c)(ii) of Clause (I). of Rule 2, the Court
held the plaintiffs entitled to apply for a final decree, debarring the de-
fendant from all right to redeem the property. The Court under sub-rule
(2) of Rule 2 can, on good cause shown and upon terms to be fixed by the
F Court from time to time, at any time before any decree is passed, extend
the time fixed for the payment of the amount found or declared due under
sub-rule (l) or of the amount adjudged due in respect of subsequent costs,
charges, expenses and interest. Rule 3 of Order 34 provides that when an
application is made by the defendant seeking a final decree, the Court has

G
two courses open depending on the defendant making payment in Court of
all amounts due from him under sub-rule (I) of Rule 2, and not making
...,' -
~

payment. Under sub-rule (1) of Rule 3, a final decree of one kind may be
passed in .terms thereof, if payment is made. But if no payment is made a
final decree of the other kind may be passed in terms of sub-rule (2) of
Rule 3. Sub-rule (3) of Rule J enjoins that on the passing of a final decree
under sub-rule (2) all liabilities to which the defendant is subject in re-
H spect of mortgage or on accou~t of suit shall be deemed to have been
KUMAR SUDHENDU v. MRS. RENUKA BISWAS [PUNCHHI, J.) 243

discharged. Under Rule 5, the defendant is given another opportunity to A
make payment of all amounts due from him under sub-rule (1) of Rule 4,
if such payment is made on or before the day fixed or at any -time before
the confirmation of sale in pursuance of the final decree. It is thus notice-
able that at every conceivable step opportunity is given to the defendant to
redeem the property at any time before the confirmation of sale made in
pursuance of the final decree, and if such deposit is made the Court has to B
accept the payment and make an order in favour of the defendant. The
Court, however, has no power t·.) go on fixing date after date, in postpon-
ing confirmation of sale to accommodate the defendant, as was held by
this Court in Hulcumchand v. Bansi/al & Ors, [1967] 3 SCR 695. No right
is given to the mortgagor defendant to ask for postponement of confirma-
tion of sale in order to enable him to deposit the amount. Reference may C
also be made to Janak Raj v. Gurdial Singh and Anr, [1967] 2 SCR 77,
wherein it has been laid down that when no application for setting aside a
sale has been made to the executing court or when one made under Rules
89 to 91 of Order 21 gets dismissed, the court has no choice thereafter but
to confirm the sale. This Court made significant observation by spelling
out the policy of protecting auction purchasers in the foliowing words: D

"The policy of the Legislature seems to be that unless a stranger
auction-purchaser is protected. against the vicissitudes of the
fortunes of the suit, sales in execution would not attract cus-
tomers and it would be to the detriment of the interest of the
_,,..-· borrower and the creditor alike if sales were allowed to be E
impugned merely because the decree was ultimately set aside
or modified. The Code Qj Civil Procedure of I 908 ma_kPs q1ir.
pie vrovision for the vrotection of the interest of the judgment-
debtor who feels that the decree ought not to have been passed
gggj.nst him.:·
[Underlining ours] F
However, this Court in Sardar Govindrao Mahadik & Anr. v. Devi
Sahai & Ors, [1982] 2 SCR 186, carved out an exception in the case of
the auction purchaser who was a decree-holder himself, denying to him
the protection given in Janak Raj's case (supra) to the stranger auction
purchaser. As is discernible Sardar Govindrao 'case (supra) and G
Hukumchand's case (Supra) are cases distinguishable as against Janak
Raj's case (supra). Whereas Sardar Govindrao 's case (supra) is a case of a
mortgagee-'decree-holder'-auction purchaser and Hukwnchand's case [supra]
relating to a mortgage suit, Janak Raj's case (supra) is a case of a simple
money decree in execution of which the auction purchaser got to buy the
judgment-debtors immovable property. Still the underlined words in the H
extract from Janak Raj's case (supra) conceivably leave to the judgment-
244 SUPREME COURT REPORTS (1991) SUPP. 2 S.C.R.

A debtor his rights under the Civil Procedure Code whereby he can have the
decree passed against him set aside and to seek appropriate reliefs on the
basis thereof.

Now coming to the ~bstituted preliminary decree, even though by
consent, there is no denying the fact that the seal of adjudication gets
B affixed to it. The Court passing it has formally expressed the terms itself
under its own authority, even though at the suggestion of the parties. It
conclusively determines the right of the parties with regar\t to the matters .
in controversy valid in the suit till the stage of passing of the preliminary
decree. The Explanation to Section 2(2) of the Code of Civil Procedure
defining-the word "decree", goes to say that a decree is preliminary when
c further proceedings had to be taken ~f9re a suit can be completely dis-
posed of. It is final where such adjudication completely disposes of the
suit. It may be partly.preliminary and partly final. The preliminary decree
in the instant case, whether as originally made or as substituted in appeal,

-
had not disposed of the suit completely. It was to be enforceable on the
terms it was drawn. There were obligations for the defendants to fulfil and
D on the violation to observe these obligations rights accrued to the plain-
tiffs. If we import this analysis into the understanding of the decree, the
defendants could obviously in appeal against the decree have their obliga-
tions altered and the scope and role of re-defining the obligations defi-
nitely vested in the appellate court. It cannot thus be twistedly said that
the obligations Of the defendants may substitutedly be that as defined by
E the appellate preliminary decree, but the right of the plaintiffs kept ac-·
crued on the failure of non-fulfilment of the obligations of the defendants
under the preliminary decree of the Court of first instance. Is it then
conceivable that the appellate preliminary decree was valid for the pur-
poses of defining the obligations of the defendants, but was not valid since
rights had accrued to the plaintiffs on the non-fulfilment of obligations
F under the preliminary decree of the Court of first instance? Such an inter-
pretatio~ or construction would render the substantive right of appeal
redundant and choked defeating the ends of justice and would otherwise
be ill-fitted in the scheme of Order 34 C.P.C. Therefore, it must be held
that in the field the only preliminary decree is the one. which was passed
by the Calcutta High Court substituting the original preliminary decree of
G the Trial Court, and the final decree, if at all required, is to be passed in
accordance therewith.

The fact that the decree was consensualin in nature, having been
passed between the parties to the suit, is of no consequence. It has the
same binding force just as one which could be passed on contest. An
H objection was raised that to this settlement, the auction purchasers were
KUMAR SUDHENDU v. MRS. RENUKA BISWAS [PUNCHH~J.) 245

not parties and hence not bound by it, though their interest had appeared A
on the scene due to the auction purchase. Our attention was invited· to
Section 47 of the C.P.C. and to Explanation II(a) providing thaffrir the
purposes of Section 47, a purchaser of a property in execution of the
decree shall be deemed to be a party to the suit in which the decree is
passed. It was suggested that the plaintiffs and the defendants ·could not .
settle the suit without the consent and p8Jticipation of the'.auetion purchas- B
ers to their detriment. There is an oby~ous fallacy in the argument. Signifi-
cantly, for the purposes of Sectiori·4'if';·the auction purchaser deemingly is
a party to the suit in which the decree is passed if he bas purchased the
property at the sale and execution of that decree. lnstantly;-tbe> auction
purchasers had purchased the property !n. execution of the final decree and
not in execution of the prelimipary decree and on t~t basis can at best be C
deemed to be parties to .the swt tbroughou,t only on'the strength of the
final decree if obtained on-the .terms of .the exis~ng- preliminary decree.
But here the property, as said before, was not put to sale in execution of
the prel~minary decree. The auction purchasers cannot claim themselves
to be parties to the suit at the time of or at any time prior to the passing of
the preliminary decree. It is to be remembered that both the preliminary D
decree and final decree are passed under Order 34 of the Code of Civil
Procedure in one and the same suit, in which two decrees may be required
to be passed at separate stages. And both being formal adjudications ap-
propriate to the stage are formal expressions of decision of the Court. At
the stage of the preliminary decree there arises no question of the property
under mortgage being put to sale in execution of the decree, and if that is E
so the ultimate auction purchaser cannot be held deemingly to be a party
to the suit upto the stage of the preliminary decree. In our opinion, the
converse interpretation that the auction purchaser at a sale and execution
of the final decree shall be deemed to be party to the suit at and prior to
the stage when preliminary decree is passed, unless sustaining, would be
contrary to the spirit and scheme of Order 34 of the Code of Civil Proce- F
dure. And since 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 are required to be deter-
mined by the Court executing the decree and not by a separate suit, the
objection of the appellant judgment-debtor with regard to the knocking
out of the original preliminary decree was to our mind sustainable. In G
terms of the preliminary appellate decree and fulfilment of the obligations
of the defendants of payment of the sum as struck, there remained no
occasion for enterqtining, maintaining or sustaining the application of the
plaintiff mortgagees for sale of the property mortgaged and on that b.asis
the auction sale in favour of the auction purchasers and confirmation of
that sale automatically becomes non-est. We are thus of the considered H
view that the High Court went wrong in rejecting the objection of the
appellant judgment-debtor.
246 SUPREME COURT REPORTS (1991] SUPP. 2 S.C.R.

A For the view _above taken it would not be necessary to go into the
other two questions raised by Mr. Ganguli, and for which there is warrant
in the order of the High Court granting certificate, with regard to violation
of section 35 of the Bengal Money Lenders Act, as well as to settle the
effect of the executing court not mentioning its own evaluation of the
property in the proclamation of sale and to have illegally incorporated
B both the e_valuations as suggested by the decree-holders and the judgment-
debtors, rendering the auction sale void.

But this is not the end of the matter. The auction purchasers are not
on firm footing on the strength of the observationl> afore-quoted in Janak
.Raj's case (supra), afore-distinguished. In that case the relief in the suit
C was unconnected with the property sold in execution of the decree. Here
the relief in the suit is inextricably connected with the property sold. The
two cannot be divorced diverting them to different courses: The substi-
tuted preliminary decree is the one passed under Rule 4 of Order 34 and
involves the property in dispute. It so happens that the stage of Rule 5
Order 34 stands withdrawn, repdered non-est and wiped out. No compen-
D satory sum is due to the auction purchasers under the strict terms of sub-
rule (2) of Rule 5 of Order 34, whereunder the defendant mortgagor, in
addition to the payment of all amount due from him under sub-rule (I) of
Rule 4, is required to deposit a sum equal to 5% of the amount of the
purchase, money paid into the Court by the auction purchaser, which
obviously is meant to compensate the auction purchaser. That stage in the
E eye of law has not arrived. Since in strict sense the provisions would not
be applicable to the facts of the instant case, we in exercise of the Court's
inherent powers under the Code and powers otherwise under Article 142
of the Constitution, to further the cause of complete justice, confining it to
the facts of this case, and to be fair to the auction purchasers; direct the
appellant to burden himself in paying to the auction purchasers, interest
F on their blocked sum of Rs.1,05,000, the purchase money, lying in Court
since 1963, which we quantify as equivalent to the sum deposited.· We
thus allow this appeal on the condition that the appellant shall deposit in
the executing Court a sum of Rs.1,05,000, within a period of two months
from this date and direct that this sum together with the sum of Rs.
l,05,000, lying in deposit as auction money be paid over by the executing
-
G Court to the auction purchasers, singularly or collectively; at the conven-
ience of the auction purchasers. In the facts and circumstan.ces of the case,
however, we leave the parties to bear their own costs in this Court.

V.P.R. Appeal allowed.