AHMED MOHAMMED EL IMARI AND OTHERS, Appellants v. ESTATE OF MOHAMMED ABDULLAH ,BASYOUNI IN BANKRUPTCY AND SHUKRI NAJJAR AND BROTHERS, Respondents
Bankruptcy-Realization of assets-Purchase by judgement creditor at execution
auction without court permission
Contract-Acceptance-Auctioneer's acceptance subject to conditions is not an
acceptance
ludgement-Execution-Iudgement creditor's purchase at execution sale permis-
sion is subject to acceptance by the court
Reception-Bankruptcy-English Bankruptcy Act 1914 s. 40 not part of law of
the Sudan '
When a judgement creditor purchases, at the execution sale, but has not
obtained permission from the court to do so, and the judgement debtor
shortly thereafter applies for bankruptcy, the asset sold is part of the bank-
rupt's estate.
Bankruptcy Ordinance 1916, ss. 28 and 29.
English Bankruptcy Act 1883, s. 45.
English Bankruptcy Act 1914, s. 40.
Appeal
May 17, 1928. Bell C.J.: The facts of the case are as follows:
The respondents, Shukri Najjar and Brothers, obtained a decree
against Mahmud Abdullah Basyouni dated March 5, 1927. They ap-
plied for execution and on March 23, 1927 the decree was passed
to the Blue Nile Province Court for execution. The Blue Nile Pro-
vince Court, having obtained the Governor's 'sanction to certain land at
Kamlin being sold in the execution, ordered the sale of this land, and
fixed June 21, 1927 as the date 'of the sale.
* Court: Bell C.J., Hamilton-Grierson and David-Davis JJ.
The land was put by to sale by auction on June 21, 1927. There
were two or three bidders and the Mamur of Kamlin, who conducted
the auction, reported that "The highest bidder was Hassan Eff. Kishk,
the agent of the judgement creditors, who wishes the house to be reg-
istered in the name of Shukri Najjar and Brothers."
On May 30, 1927 the respondents had applied to the court for
leave to big. It does not appear that the court ever gave the express
permission which is required by rule 8 of the Civil Court (Execution)
Rules 1906.1 On the contrary, a note was made on the application
that it was to wait the result of the interpleader action. The wife of
the judgement debtor had made a claim tothe property, and this is the
interpleader action referred to. The execution debtor objected to the
auction on the ground that the highest bid, £E.51, fell far short of the .
value of the property.
On June 27, 1927 the execution debtor petitioned for bankruptcy.
No further entry was made in the record of the execution except
"2.7.1927, The execution has been stayed, as the judgement debtor
has petitioned for bankruptcy:" On July 2, 1927 in the bankruptcy
proceedings the court ordered that "the sale of the petitioner's house
in execution, which has not yet been confirmed by the court, should
be cancelled." On January 9, 1928 the question was again argued in
the bankruptcy proceedings. The court then decided that a sale took
place when the auctioneer knocked down the property to the highest
bidder. The court thereupon confirmed the safe.
The appellants are creditors in the bankruptcy, and their con-
tention is that the property should form part of the bankrupt's estate.
Sections 28 and 29 of the Bankruptcy Ordinance 1916 lay down the
law to be applied. The respondents relied on section 45 of the English
Bankruptcy Act 1883, which corresponds to section 40 of the English
Act of 19i4. This section has not been adopted in the Bankruptcy
1 Rule 8 of the Civil Court (Execution) Rules 1906 provides:
. "8. The decree holder may not bid for or purchase the property with-
out the express permission of the Court. If property is put up for sale
in pursuance oran execution, and there is no bid or the Judge refuses to
accept the bid,· the decree holder shall be informed and asked to make an
offer. If the Judge considers such offer reasonable, he shall order the prop-
erty to be put up for sale again. If no. higher bid is received, the prop-
erty, subject to final approval by the Judge,' will be knocked down to the
decree holder at his offer. The decree holder will be entitled to bid, if
bids above his original offer are received."
Ordinance 1916, and arguments based on it are therefore not to' the
point. The question is, whether assets have been realised in the course
of the execution or not.
The Civil Court (Execution) Rules 1906 contemplate that any
bid shall be subject to the acceptance of the court, The' bid at an auc-
tion is an offer, but the knocking down by the auctioneer is not an
acceptance, if it is subject to conditions. Thus the knocking down by
the auctioneer does not amount in these circumstances to a sale, 'nor
does it even amount to a contract. enforceable by the. bidder. . There-
fore, as there had been no acceptance at the time specified in section .
28, it is impossible to say that assets had been realised. Hence, in
my opinion, the order confirming the sale was wrong and must be
reversed. The position therefore is that the property is part of the
bankrupt's estate, available for distribution amongst the creditors.
The respondents must pay the court fees of this appeal but his
costs in the execution must be a charge on the property.
Appeal allowed