Laxmi Plastics v. Bank of Baroda — 1996 DIGILAW 151 (RAJ)

Honble JAIN, J. – The petitioners have filed this revision petition under S. 115 C.P.C. against the order dated 2.11.1995 passed by the learned Additional District Judge No.2, Jodhpur in Civil Misc. Case No. 83 of 1995 on the application moved by the petitioners under O.41, r.6(ii) C.P.C. (2). The relevant facts necessary for the disposal of this petition briefly stated are that non-petitioner No.1 Bank of Baroda filed a suit for the recovery of Rs. 1,36,248.95P. against non- petitioner No.2 M/s. Shobha Industrial Corporation and others in the learned lower Court. It is alleged that some credit facilities were sanctioned by non-petitioner No.1 in favour of non- petitioner No.2 by way of term loan etc. It is alleged that equitable mortgage in respect of the property belonging to Shri Hulas Chand, partner of M/s. Shobha Industrial Corporations was made for securing the loan. It is further alleged that plots No. P-5 and P-6 belonging to M/s Shobha Industrial Corporations were also got mortgaged with the non-petitioner Bank. The plants, machinery, raw-materials, processed as well as finished products were also hypothecated with the non-petitioner Bank. (3). The petitioner Firm M/s Laxmi Plastics is a partnership firm, in which, Hanumandas Rathi, and Smt. Kamla Devi Rathi are the partners. The firm is situated at Plot No.5, Industrial Estate, Jodhpur. Petitioner No.4 Shri Sita Ram Birla is the proprietor of M/s Birla Polymers, who was also a partner in M/s Laxmi Plastics before 9.9.1984. He retired and a reitrement deed was executed and Plot No. P-5 was agreed to be given to Shri Sitaram Birla. Originally, Plots No.5 and 6 were purchased by M/s. Laxmi Plastics, through its partner Shri Sitaram Birla, Hanumandas Rathi and Smt. Kamla Devi Rathi from M/s Shobha Industrial Corporation by way of registered sale deed dated 21.5.1979. Thus, at the relevant time, the petitioners were the owners of Plots No. P.5 and P.6. A preliminary decree in original suit No. 13/83 filed by plaintiff-non-petitioner No.1 against M/s Shobha Industrial Corporation and its partners was passed on 10.9. 1983 and against that preliminary decree, defendant-non-petitioner No.2 filed an appeal in this Court, which is still pending. It may be stated here that M/s Laxmi Plastics was not impleaded as party in the aforesaid suit but it was impleaded in the appeal as respondent. (4). 1983 and against that preliminary decree, defendant-non-petitioner No.2 filed an appeal in this Court, which is still pending. It may be stated here that M/s Laxmi Plastics was not impleaded as party in the aforesaid suit but it was impleaded in the appeal as respondent. (4). Plots No.P-5 and P-6 were transferred by M/s Shobha Industrial Corporation after the institution of the suit by the non- petitioner Bank against M/s Shobha Industrial Corporation and even in the Civil First Appeal No.5/94, M/s Shobha Industrial Corporation & Ors. vs. Bank of Baroda, an order was passed by this Court on 27.9.1988 that if the judgment debtor pays an instalment of Rs. 500/- per month to the Bank, the final decree may not be passed. However, the judgment debtor did not comply with the above direction and hence a final decree was passed on 30.4.1991. (5). An execution application No. 31/93 was filed by the decree- holder in which the petitioners have been impleaded as judgment- debtors. In the above execution proceedings, Plots No. P-5 and P- 6 were also attached. It may be stated that the petitioner filed an application under O.22, r. 10 C.P.C. and the trial Court allowed them to be impleaded as judgment-debotrs. (6). Aggrieved by the attachment of plots No.P.5 and P-6, the petitioners moved an application purporting to be under O.41 r.6 (ii) C.P.C. read with s.151 C.P.C. and it was registered at No.83/95 in the trial Court. The learned trial court by the impugned order allowed the application of the petitioners on the condition that the petitioners deposit a sum of Rs. 3,28,215.95 P. with the decree-holder Bank subject to the objections which may be raised by the petitioners. The above deposit will carry interest at the rate of 6% p.a. and the amount will be disbursed to the party held entitled to the same by the Court. (7). In this revision petition, the petitioners have assailed the impugned order on the ground that the onerous conditions imposed by the executing court virtually deprived the petitioners of any legitimate relief. The property whose valuation has been shown to be of Rs. 6,00,000/- in the sale proclamation is under attachment and the property itself constitutes the sole security for the judgment debtor. It was, therefore, not proper for the trial court to have imposed the above conditions. The property whose valuation has been shown to be of Rs. 6,00,000/- in the sale proclamation is under attachment and the property itself constitutes the sole security for the judgment debtor. It was, therefore, not proper for the trial court to have imposed the above conditions. By operation of the above order, the non-petitioner Bank has been benefited in two ways. The decretal amount is secured by the subsisting attachment of two plots and secondly, the amount has been ordered to be deposited by the Court in the Bank. The valuation of the property attached it more than sufficient to meet out the total decretal amount as claimed by the non-petitioner Bank. In such circumstances, the impugned order passed by the learned Addl. District Judge was very harsh and not proper. (8). It was also argued that the learned Addl. District Judge could have asked for furnishing the security though that was also not necessary in the case. Alternatively, it was alleged that if the learned Additional District Judge would have asked to furnish the Bank guarantee, the petitioners would have received the interest at a rate more than 6% p.a. In case, the petitioners succeed, they will be put to loss on account of less rate of interest. (9). On the other hand, Mr. P.K.Bhansali, the learned counsel appearing for the non-petitioner Bank challenged the maintainability of the revision petition on the ground that the prayer made by the petitioners for staying the sale of attached property was granted by the learned Addl. District Judge and when the relief prayed for is granted, the party was left with no grievance and as such, the revision petition must not be considered. It has also argued by the learned counsel that there is no scope for interfering with the order passed by the learned Addl. District Judge. In this connection, he invited my attention to the provisions of o.41,r.6(2) CPC. The executing court while passing an order under o.41,r.6(2) CPC is authorised to impose such terms on the judgment debtor while staying the sale of attached property. Hence, the some sort of security in addition to the attachment of immovable property is required to be furnished by the judgment debtor seeking stay of sale of property in execution of a decree during the pendency of an appeal against the decree. (10). I have considered the rival submissions made at the bar. Hence, the some sort of security in addition to the attachment of immovable property is required to be furnished by the judgment debtor seeking stay of sale of property in execution of a decree during the pendency of an appeal against the decree. (10). I have considered the rival submissions made at the bar. I do not find any force in the contention of the learned counsel for the non-petitioner, that since the petitioner succeeded in obtaining stay of sale of the attached property in execution of the above decree, they have got no grievance and hence,they were not entitled to agitate the matter in revision. (11). It may be stated that the petitioners have made serious grievance regarding the term imposed by the learned Addl. District Judge while granting stay of the sale of the attached property. The petitioners have alleged that in the facts and circumstances of this case, the term imposed by the learned Addl. District Judge is very harsh and unwarranted. It cannot be gainsaid that the matter squarely falls within the ambit of the provisions or o.41, r.6(2) C.P.C. For the application of the above provisions, the essential conditions are that appeal against the decree should be pending and the order under r.6(2) of o.41 must be passed by the Court. (12). The main thrust of the learned counsel for the petitioner is that the term imposed by the learned Addl.District Judge is too harsh and not warranted in the facts and circumstances of this case. Sub-r.(2) of r.6 of o.41 C.P.C. is relevant for consideration to this argument, which reads as under: "O.41,r.6(2) : Where an order has been made for the sale of immovable property in execution of a decree, and an appeal is pending from such decree, the sale shall, on the application of the judgment-debtor to the Court which made the order, be stayed on such terms as to giving security or otherwise as the Court thinks fit until the appeal is disposed of." The expression on such terms as to giving security or otherwise in sub - r.(2) of this rule means that the terms may either as to giving security or any other term, such as the deposit of the decree amount in the court ordering the stay. The court has, therefore, jurisdiction to make it a condition that the stay would be given only on the judgment-debtor depositing the decree amount or substantial part thereof in Court. There is divergence of opinion whether the court, looking to the value of the property attached, can dispense with the imposition of any term on the judgment-debtor ? (13). In Ganesh V. Premchand (1), it was held that in case the executing court is satisfied that the value of the property under attachment exceeds the decretal amount, it is not necessary to call upon the judgment , debtor to furnish the security. However, a different view has been taken in 1969 All WR (HC)-823 (2). In that case, the Allahabad High Court has taken the view that unless the some type of security in addition to the attachment of immovable property is furnished by the judgment-debtor, stay of sale of property in execution of decree during pendency of appeal against decree cannot be granted. (14). From the above, it is clear that while deciding the term to be imposed on the judgment debtor seeking stay under sub-r.(2) of r.6 of Order 41 C.P.C. , the value of property under attachment has got relevancy and the court passing the order under sub-r.(2) of r.6 of Order 41 C.P.C. must take into consideration the value of the property. The reason is obvious. The property under attachment will subsist till the dispute is decided and the decretal amount is naturally secured by the attached property. It is in view of this consideration that the Bombay High Court in Ganesh V. Premchands case (supra) took the view that where the value of the property under attachment exceeds the decretal amount, it is not necessary to call upon the judgment debtor to furnish the security. (15). It is not disputed before me that the value of the property under attachment in the instant case is of Rs. 6,00,000/-. Hence the value of the proper- ty exceeds the decretal amount. The learned Additional District Judge, therefore, committed an error in ignoring the value of the property under attachment while fixing the term for staying the sale of the property. 6,00,000/-. Hence the value of the proper- ty exceeds the decretal amount. The learned Additional District Judge, therefore, committed an error in ignoring the value of the property under attachment while fixing the term for staying the sale of the property. It was not proper on his part to have ordered the judgment debtor to deposit the full decretal amount before he could avail the relief contained in sub-r (2) of 6 of o.41 C.P.C. It almost amounted to complete satisfaction of the decree. (16). Taking into consideration the facts and circumstances of this case, I am of opinion that the petitioners may be asked to furnish a Bank guarantee in the sum of Rs. 1,00,000/- to the satisfaction of the learned trial court for staying the sale of the property in question. (17). I , therefore, partly allow the revision petition and modify the order of the learned trial court. The petitioners shall furnish a Bank guarantee in the sum of Rs.1,00,000/- to the satisfaction of the learned trial court for the continuance of the order staying the sale of the property under attachment passed by the learned Additional District Judge No. 2, Jodhpur. (18). In the facts and circumstances of the case, the parties are left to bear their own costs.