2015 (1) TMI 1507 - HC - Indian Laws

Appellants' title through court auction upheld despite original decree being set aside later

Bombay HC set aside lower court judgments that failed to recognize appellants' title acquired through court auction. The court held that stranger-auction ... Validity of title acquired through court auction - Claim of title by prescription based on continuous possession - Suit filled for declaration as regards ownership of the Appellants, eviction of Respondents and demolition of the structure - Appellants claimed ownership based on a court auction purchase. HELD THAT:- The law is that even if the decree under which the property was sold in auction is ultimately set aside or modified, the sale will remain unaffected. There is however a distinction in the case of a decree holder-purchaser and a stranger-auction purchaser. A stranger-auction purchaser is placed on a different pedestal. He is a bonafide purchaser since he looks only to the decree and the order in auction, and he must be protected. This is also the legislative policy. The Courts must strive to give effect to the legislative policy and uphold the right of a stranger purchaser at the auction held by the Court. Both the Courts below have noted the fact that the Appellants have asserted their right on the basis of the court auction but have failed to give a legal effect to the title asserted by the Appellants. Since the Appellants have purchased the property through a Court auction and that it is the policy of legislature, as emphasized by the Apex Court in the case of Janatha Textiles & Ors. V/s. Tax Recovery Officer & Anr [2008 (5) TMI 12 - SUPREME COURT] to protect and to give effect to the Court auction, the Courts below ought to have considered the issue seriously. It will be against the legislative policy and the mandate of the Apex Court to deprive the Appellants the benefit of their right accrued through a Court auction. The High Court found that the lower courts erred in not upholding the appellants' title acquired through the court auction and set aside their judgments. Prescription based on registration and Article 528 - The Courts below have found that except for stray sentence that Appellants were in possession for 30 years the claim is not elaborated. It is difficult to find fault with the reasoning of the learned Trial Judge. Merely by way of scattered sentences in plaint a case of prescription cannot be pleaded. It is not for the Court to Suo moto take cognizance of possible arguments, but the facts must be pieced together in a proposition to be asserted. Article 526 of the Code - Neither in the plaint nor in the Courts below an argument based on Article 526 of the Portuguese Civil Code is advanced. This cannot be considered as a pure question of law and it is not permissible to raise for the first time in the second appeal. In view of this position, finding of the Courts below that the Appellants have failed to established the right by prescription cannot be disturbed. Though the additional substantial question of law has been allowed to be incorporated in the appeal memo in view of interest of justice and completeness of proceedings, it has to be seen whether this argument was made in specific terms before the Courts below. The High Court concluded that the appellants acquired a valid title to the property through the court auction and were entitled to relief based on this ground. The judgments and decrees of the lower courts were quashed and set aside, and the suit was decreed in favor of the appellants in terms of the prayer clauses a, b, c, and d of the plaint. No costs were awarded. Issues Involved:1. Validity of title acquired through court auction.2. Claim of title by prescription based on continuous possession.Summary:1. Validity of Title Acquired Through Court Auction:The appellants challenged the judgment and order of the 1st Additional District Judge, South Goa, Margao, which dismissed their appeals and confirmed the Civil Judge's order dismissing their suit. The appellants' suit, filed in 1965, sought a declaration of ownership, eviction of respondents, and demolition of structures. The appellants claimed ownership based on a court auction purchase in 1945. The trial court and appellate court examined the transactions prior to the auction and concluded that the original owner, Xavier, had no valid title to convey, thus invalidating the appellants' title. However, the High Court emphasized that a bona fide purchaser at a court auction derives title from the court and is protected under the law. The court held that the appellants, being strangers to the execution proceedings and bona fide purchasers, acquired a protected title to the property. The High Court found that the lower courts erred in not upholding the appellants' title acquired through the court auction and set aside their judgments.2. Claim of Title by Prescription Based on Continuous Possession:The appellants also claimed title by prescription, asserting continuous possession for over 30 years. The trial court rejected this claim, stating that it was not specifically pleaded with particulars in the plaint. The High Court agreed with this finding, noting that a claim of prescription requires detailed factual pleadings, which were lacking in the appellants' case. The court also noted that the argument based on Article 526 of the Portuguese Civil Code, introduced as an additional question of law, was not raised in the lower courts and could not be considered for the first time in the second appeal. Consequently, the High Court upheld the lower courts' finding that the appellants failed to establish title by prescription.Conclusion:The High Court concluded that the appellants acquired a valid title to the property through the court auction and were entitled to relief based on this ground. The judgments and decrees of the lower courts were quashed and set aside, and the suit was decreed in favor of the appellants in terms of the prayer clauses a, b, c, and d of the plaint. No costs were awarded.