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2013 DIGILAW 170 (AP)

Kovvuri Lakshmi Narayana Reddy v. Mamidi Ravi Ratna Swaroop

2013-03-08

M.S.RAMACHANDRA RAO

body2013
ORDER These revisions are filed by the decree holder in OS No. 166 of 2004 on the file of the I Additional Senior Civil Judge, Kakinada challenging the order dated 28.2.2007 of the II Additional Senior Civil Judge, Kakinada in EA No. 4 of 2007 and in Memo SR No. 4589 of 2005 in EP No. 195 of 2004 in the said suit. 2. The petitioner had filed OS No. 166 of 2004 against one Mamidi Ravi Ratna Swaroop for recovery of Rs. 3,45,696/- being the principal and interest due under a pro-note dated 1.11.2001 executed by the latter in his favour. The said suit was decreed ex parte on 27.4.2004 by the I Additional Senior Civil Judge, Kakinada. 3. The petitioner filed EP No. 195 of 2004 for recovery of Rs. 3,77,913/- and brought property allegedly belonging to the judgment debtor to sale. With the permission of the Court, the petitioner also bid in the auction conducted by the Court and became the highest bidder for Rs. 9,10,000/-. 4. Before the sale could be confirmed, two third parties filed a claim petition contending that each of them had 1/3rd share in the EP schedule property and therefore the sale to that extent has to be set aside. These claim petitions were allowed on 25.9.2006, the sale of 2/3rd of the EP schedule property was set aside and the sale of only 1/3rd of the undivided share in the EP schedule property was confirmed. 5. In view of this event, the petitioner filed EA No. 4 of 2007 under Rules 231 to 235 of the Civil Rules of Practice read with Order 24 and Section 151 CPC praying the trial Court to issue an account payee cheque in his favour for Rs. 5,72,948/- representing the value of 2/3rd of the EP schedule, in respect of which the sale was set aside. 6. When this was pending, the 2nd respondent filed a Memo (which was given SR No. 4589/05) before the trial Court contending that he had obtained a decree against the same judgment debtor in OS No. 140 of 2004 on the file of the trial Court for Rs. 5,07,600/- with subsequent interest and costs; that he filed EP No. 118/2005 in his suit and got attached the properties of the judgment debtor for recovery of Rs. 5,07,600/- with subsequent interest and costs; that he filed EP No. 118/2005 in his suit and got attached the properties of the judgment debtor for recovery of Rs. 5,49,825/- towards the decretal amount; that petitioner in this CRP is only claiming Rs. 3,77,773/-; there is a balance of Rs. 5,31,979/- left after satisfying the claim of the petitioner; and that the Court grant ratables for the said amount in his favour under Section 73 of the CPC. 7. By a common order dated 28.2.2007, the trial Court dismissed EA No. 4 of 2007 filed by the petitioner and upheld the objection raised in the memo filed by the respondent. Thus the petitioner could not get the amount of Rs. 5,77,948/- from the trial Court by way of cheque which he had deposited as consideration for purchase of 2/3rd share in the EP schedule property which was set aside at the instance of the third party claimants by the trial Court on 25.9.2006. 8. Challenging the same, these CRPs are filed by the petitioner. 9. Heard Sri K.V. Bhanu Prasad, learned Counsel for the petitioner and Sri V.L.N.G.K. Murthy, learned Counsel for the respondent. 10. The Counsel for the petitioner contended that the trial Court erred in dismissing EA No. 4 of 2007 filed by the petitioner and in upholding the objections filed by the respondent in the memo and preventing the petitioner from withdrawing the excess amount deposited by him towards 2/3rd share in the EP schedule for which the sale was not confirmed. The Counsel for the petitioner contended that the trial Court erred in dismissing EA No. 4 of 2007 filed by the petitioner and in upholding the objections filed by the respondent in the memo and preventing the petitioner from withdrawing the excess amount deposited by him towards 2/3rd share in the EP schedule for which the sale was not confirmed. He contended that the Court below did not understand the principle of ratable distribution; that the Court below should have taken note of the fact that the claim petitions of third parties in respect of 2/3rd share in the EP schedule property were allowed on 25.9.2006 and only thereafter the sale in petitioner's favour in respect of the balance 1/3rd was confirmed; in this situation the case law relied upon by the trial Court laying down the principle that "there is no warranty of title in respect of Court sales" has no application; that the said principle would apply only if the Court had confirmed the sale of the entire EP schedule in his favour in the Court auction, and subsequently, the sale stood set aside on the ground that the judgment debtor had no salable interest in the property; and therefore the order of the trial Court be set aside. 11. The Counsel for the respondent supported the order of the trial Court and contended that the said order does not suffer from any error warranting interference of this Court under Section 115 of CPC. He also relied upon C.V. Rajagopalachariar v. Rajagopalan and others, AIR 1954 Mad. 357 , Jagadish Vaishnav v. Farpos Leading Cateror and others, 2002 (5) ALD 72 , Nagalinga Chettiyar v. Guruswami Ayyar and others, AIR 1930 Mad. 856, Firm Narasingi v. Narasayya, AIR 1945 Mad. 363 and Yadavalli Surya Kanthamma v. Maddipatla Dorayya, AIR 1965 AP 239 (FB). 12. In C.V. Rajagopalachariar's case (supra), the Madras High Court held that the right of an auction purchaser to sue for recovery of purchase money does not enable him to file a suit for recovery of the purchase money where there is only a partial failure of consideration, as where the judgment debtor is found to be entitled only to a portion of the property sold. Similar view was taken in Nagalinga Chettiar's case (supra) and it was held that where the auction purchaser purchases in one lot certain properties, to some of which the judgment-debtor is subsequently found to have no title, he is not entitled to have a refund of proportionate amount of purchase-money paid by him into Court, for Rule 93, Order 21 would not apply to cases where a judgment-debtor has some interest in the property, however small the same may be. In Firm Nagasingi's case (supra) and in Yadavalli Suryakanthamma's case (supra), also similar view was taken. These decisions have no application because unlike in those cases, in the present case, before confirmation of sale by the Court in favour of the petitioner, claim petitions were filed and were allowed insofar as 2/3rd of the EP schedule property is concerned. This was not a case where after the confirmation of sale, the defect in the title of the judgment-debtor was discovered. 13. In Jagadish Vaishnav's case (supra), this Court held that Section 73 of CPC would be attracted in a situation where several decree holders attached amounts due to one judgment-debtor and would become entitled to ratable distribution and the mere fact that one of them obtained orders of attachment and filed execution petition would not deprive the others who did not file execution petition under Order 21 Rule 11 CPC to get ratable distribution. 14. The petitioner is claiming Rs. 3,77,913/- in the EP No. 195 of 2004 filed by him in OS No. 146 of 2004. He had deposited Rs. 9,10,000/- in the Court prior to the auction pending confirmation of his sale. After confirmation of the sale in respect of 1/3rd of the EP schedule and after adjusting Rs. 3,77,913/- as consideration for the said 1/3rd share of the EP schedule property, he would be entitled to the balance of Rs. 5,72,948/- after deducting the poundage and stamp for sale certificate. As stated above, since the defect in title of the judgment debtor was discovered prior to the confirmation of the sale in favour of the petitioner and the claim petitions filed by third parties in respect of 2/3rd of the EP schedule property were decided prior to confirmation of sale, the petitioner cannot be denied refund of the amount of Rs. 5,72,948/- on the plea that there is no warranty of title in a Court sale. 5,72,948/- on the plea that there is no warranty of title in a Court sale. The respondent cannot also claim ratables in respect of this amount of Rs. 5,72,948/- as the said amount has not become the property of the judgment-debtor and continued to be the property of the petitioner. 15. Therefore, the Court below erred in dismissing EA No. 4 of 2007 in EP No. 195 of 2004 in OS No. 166 of 2004 on the file of the II Additional Senior Civil Judge, Kakinada and in allowing the Memo SR No. 4589 of 2006 filed by the respondent. 16. The civil revision petitions are accordingly allowed. No costs.