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Issues: (i) Whether an auction-sale of property in the custody of a court-appointed Receiver, held without notice to the Receiver and without leave of the appointing court, was illegal or merely irregular; (ii) Whether the civil suit challenging the sale and seeking consequential possession was barred by the Berar Land Revenue Code, 1928.
Issue (i): Whether an auction-sale of property in the custody of a court-appointed Receiver, held without notice to the Receiver and without leave of the appointing court, was illegal or merely irregular.
Analysis: Property in the hands of a Receiver is in custodia legis, and proceedings affecting it ordinarily should not be taken without leave of the court that appointed the Receiver. The statutory scheme of the Berar Land Revenue Code, 1928 provided for recovery of land revenue by attachment and sale and made the sale free from encumbrances, but it did not contain any specific provision dealing with property already under a court Receiver. The Court accepted, for the purpose of the case, that such a sale may be treated as voidable rather than void ab initio, but held that the absence of leave and notice to the Receiver made the sale illegal in the sense relevant to the suit.
Conclusion: The auction-sale was illegal and could not be sustained against the Receiver's interest.
Issue (ii): Whether the civil suit challenging the sale and seeking consequential possession was barred by the Berar Land Revenue Code, 1928.
Analysis: Sections 155 and 156 of the Berar Land Revenue Code, 1928 dealt with setting aside a sale on deposit of arrears or for material irregularity or mistake in publishing or conducting it, while section 157 barred claims based on irregularity or mistake within that scheme. The present suit, however, was not confined to those grounds; it was a suit for declaration that the sale did not affect property in custodia legis and for consequential possession. Section 192(1) did not bar the suit because the matter was not one which the revenue authorities were empowered to determine under the specific provisions of the Code, and the other cited sections had no bearing on the controversy.
Conclusion: The suit was not barred by the Berar Land Revenue Code, 1928.
Final Conclusion: The legal effect of the decision is that a revenue sale of property under court receivership, conducted without notice to the Receiver and without leave of the appointing court, cannot defeat the Receiver's protected possession, and a civil suit for declaration and possession is maintainable notwithstanding the revenue-code objections.
Ratio Decidendi: Where property is in custodia legis under a court-appointed Receiver, a statutory revenue sale held without notice to the Receiver and without leave of the appointing court does not fall within the barred categories of a revenue-code challenge and remains open to civil adjudication for declaration and consequential relief.