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2011 DIGILAW 233 (KER)

M. D. Varghese v. G. Parameswaran Nair

2011-03-03

S.S.SATHEESACHANDRAN

body2011
Judgment : The appellant is the claim petitioner in a proceeding under Order XXI Rule 58 of the Code of Civil Procedure (for short ‘the Code’). His claim was allowed by the Execution Court, but that order was reversed by the lower appellate court. Feeling aggrieved, he has preferred this second appeal. 2. The first respondent (hereinafter referred to as the ‘decree holder’) sought for execution of the decree passed in his favour, as against the 2nd respondent in O.S.No.116/96 before the Sub Court, Neyyattinkara. The decree proceeded in execution was passed in a suit for money charged on the scheduled property of the 2nd respondent/judgment debtor. Admittedly that scheduled property had been attached before judgment and when the suit was decreed, a charge for realization of the same was made over that property. In execution of the decree, when the decree holder proceeded for sale of the property, the appellant (hereinafter referred to as ‘the claimant’) moved an application contending that even before the institution of the suit, the property belonging to the judgment debtor had been conveyed to him under a registered sale deed for valuable consideration received. His claim was objected to by the decree holder raising various objections that the sale deed had been fraudulently created in collusion with the judgment debtor to defeat the decree, and the property proceeded against had already been mortgaged in favour of the decree holder. In the adjudication over the claim, claimant examined PWs.1 to 3 and got marked Exts.A1 to A8. No counter evidence was let in by the decree holder, who alone contested the proceedings. The execution court, after examining the materials holding that the claimant had acquired title to the property proceeded for sale even before the institution of the suit and the order of attachment passed over such property, allowed his claim ordering the vacating of the attachment over the property. The order of the execution court was challenged by the decree holder in appeal, and the lower appellate court, after re-appraisal of the materials tendered in the proceedings, set aside the order of the execution court holding that an equitable mortgage by deposit of title deed subsisted over the scheduled property when attachment was ordered and, later, the decree was passed with a charge over the attached property. The attachment made over the mortgaged property was not of much significance as there was an equitable mortgage by deposit of title deed, and, therefore, the decree holder was entitled to enforce the charge by sale of the scheduled property in execution of the decree, was the view taken by the lower appellate court to conclude that even the application moved under Order XXI Rule 58 of the Code by the claimant was not entertainable since the property was encumbered by a ‘charge’ created by an equitable mortgage. Impeaching the correctness and legality of the decision so rendered by the lower appellate court unsettling the order of the execution court, the claimant has preferred this appeal. 3. Substantial question of law previously raised for hearing in the appeal, after hearing the counsel on both sides, and taking note of the questions arising for consideration, has been re-modified and formulated as hereunder: “Have not both the courts below egregiously erred in resolving the dispute which arose for adjudication without looking into and deciding the question, what is the true scope and nature of the decree passed in favour of the decree holder as to whether it was a decree for sale of the mortgaged property under Order XXXIV of the Code or a mere decree for money charged on the property which is proceeded for sale?” 4. The admitted facts involved in the case deserve to be taken note of in advance in considering the challenge against the decision rendered by the lower appellate court, negativing the claim of the appellant. A decree for money was passed in favour of the decree holder as against the judgment debtor/2nd respondent charging the decree debt on the suit property which was attached before judgment. Suit claim was based on a promissory note, which according to the decree holder, was secured by an equitable mortgage by deposit of the title deed of the judgment debtor. Before the attachment ordered over the suit property, under Ext.A1 sale deed executed by the judgment debtor title over the property was conveyed in his favour, receiving valuable consideration, was the basis of the claim raised by the claimant to resist the sale of the property in execution of the decree. His claim was based under Rule 58 of Order 21 of the Code. His claim was based under Rule 58 of Order 21 of the Code. The decree holder had resisted the claim on the basis of the equitable mortgage made over the property securing the amount covered by the promissory note, which was decreed in his favour in the suit. If there was an equitable mortgage, as contended by him, and the decree was providing for sale of the mortgaged property, the realization of the decree debt, then, no doubt, the application under Order XXI Rule 58 of the Code was not entertainable. So much so, the real issue involved in the case was whether the decree proceeded in execution, in which the claim was set up by the claimant, was one providing for realization of decree debt by sale of the mortgaged property, as contemplated under Order XXXIV of the Code. Whereas, the execution court has not at all gone into that question, the lower appellate court, it is seen, solely relying on the operative portion of the judgment rendered in the case had construed the decree as one passed in a suit for realization of money by sale of the mortgaged property. 5. The records of the case both on the trial side and the execution side, were called upon and perused by me, to examine the propriety and correctness of the conclusion drawn by the lower appellate court that the decree passed in the case was essentially one for sale of the mortgaged property. Suit had been filed by the decree holder for realization of the amount due on the promissory note allegedly secured by equitable mortgage by deposit of title deeds for recovery of money by sale of the mortgaged property. The attachment applied for over the suit property in such a suit was quite unnecessary. If there was a mortgage over the property by deposit of title deeds, no charge by way of attachment in such suit for sale was needed. However, the decree holder got the property attached before judgment to secure the suit claim. The defendant after filing a written statement practically conceding the suit claim, later, remained absent. If there was a mortgage over the property by deposit of title deeds, no charge by way of attachment in such suit for sale was needed. However, the decree holder got the property attached before judgment to secure the suit claim. The defendant after filing a written statement practically conceding the suit claim, later, remained absent. Suit was decreed with the operative portion of the judgment reading thus: “Plaintiff is entitled to recover and realize a sum of Rs.1,02,800/- from the defendant with interest on the principal amount of Rs.80,000/- from the date of filing of the suit, till realization at 6% per annum and costs from the defendant and from his assets, both movable and immovable and charged on the attached property. Six months’ time is allowed to the defendant to pay the decree debt failing which, the plaintiff can proceed against the mortgaged property.” 6. The simple question that emerges for consideration on the decree granted, as aforesaid, to the plaintiff/decree holder is whether it was a decree for money by sale of the mortgaged property. The decree for money was granted against the person and property of the defendant inclusive of the attached property. In default of the judgment debtor to pay the decree debt, the decree holder was allowed to proceed against the mortgaged property. That would not constitute the decree as one passed for sale of the mortgaged property. Where a decree is passed under Order XXXIV Rule 4 of the Code, in respect of a mortgage for its sale the personal liability of the mortgagor would arise only as under Rule 6 of Order XXXIV and that is when the secured debt covered by the mortgage is found to be insufficient to satisfy the decree debt by sale of the mortgaged property. In the nature of the decree passed in the suit, whatever be the lis or relief canvassed in the case, the decree granted against the defendant directing to proceed against him personally and also his assets in general and more particularly charging on the attached property was granted by the court and that decree cannot be considered as a decree passed for recovery of money by sale of the mortgaged property. So, the lower appellate court was not at all justified in forming a conclusion that the decree was one for sale of mortgaged property and thus, an application under Order XXI Rule 58 of the Code, at the instance of the claimant would not lie. 7. Admittedly, the decree holder/plaintiff had applied for an attachment of the property of the judgment debtor over which he claimed an equitable mortgage by deposit of title deeds and when the decree was granted to secure the decree debt, a charge was also provided under the decree passed in his favour. So, the only question to be looked into is whether the judgment debtor had title over the property as and when an attachment was ordered over the property over which later a charge was also made under the decree rendered in the suit. A sale deed had been executed (Ext.A1) in favour of the claimant by the judgment debtor and his wife is not under dispute, but only that the execution of such deed was fraudulent. That deed is also attached on the ground that the original title deed of the executants had not been handed over to the claimant. Both the grounds, as above, canvassed to impeach Ext.A1 sale deed obtained by the claimant which was executed much earlier to the attachment passed over the property of the judgment debtor, are found to be not of any significance. So far as the imputation of fraud in the execution of Ext.A1 sale deed, which was set forth to resist that claim no evidence nor even any circumstance was tendered by the decree holder/1st respondent in the proceedings under Order XXI Rule 58 of the Code. The judgment debtor had obtained the property covered by Ext.A1 sale deed, which was the subject matter of the attachment in the suit under the original of Ext.A2 partition deed. A partition deed does not involve transfer of property as between the parties therein, but only a division of their rights over an undivided property. Where several persons join together to divide an undivided property by way of partition, it is not at all possible for them, after effecting such division, to hand over the original partition deed when one or the other of them execute a conveyance or sale over the divided share obtained by him under such partition deed. Where several persons join together to divide an undivided property by way of partition, it is not at all possible for them, after effecting such division, to hand over the original partition deed when one or the other of them execute a conveyance or sale over the divided share obtained by him under such partition deed. So much so, the claimant obtained Ext.A1 sale deed without obtaining the original partition deed, and also its non-production, to substantiate his claim before the court that the attachment was passed over the property after the judgment debtor ceased to have subsisting title over the property, has innocuous value. Ext.A1 sale deed obtained by the claimant is dated 29.4.1995, i.e., much earlier to the institution of the suit, which was on 26th July, 1996. The attachment order passed in the suit, which was instituted later to Ext.A1, as if the property covered by the attachment belonged to the judgment debtor/defendant and also a charge made over that property under the decree passed, will not in any way affect the proprietary title which had been obtained by the claimant under such registered deed. The application moved by the claimant under Order XXI Rule 58 of the Code, in the nature of the decree passed in favour of the decree holder in the suit, which was only a decree for recovery of money as against the person and properties, with a charge on the attached property of the judgment debtor, but not a decree for sale of the mortgaged property, was perfectly maintainable, and on the materials placed in the case and the facts and circumstances involved, his claim, based on Ext.A1 sale deed, for lifting the attachment was fully justified. So much so, in reversal of the judgment rendered by the lower appellate court, the order passed by the execution court lifting the attachment over the property claimed in the claim petition is only to be restored, and it is ordered accordingly. The appeal is allowed, directing both sides to suffer their costs.