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Andhra High Court · body

2013 DIGILAW 869 (AP)

Malampati Koteswara Rao v. Bank of Baroda

2013-10-08

A.RAJASHEKER REDDY

body2013
Judgment : This C.R.P is filed against the Auction Sale conducted on 05.11.2012 in E.P.No.134 of 2005 in O.S.No.74 of 2002 on the file of the Principal Senior Civil Judge, Narasaraopet. Facts of the case, which are necessary for disposal of the C.R.P., are as under: The first respondent Bank filed O.S.No.74 of 2002 against the revision petitioner and respondents 2 and 3 herein on the file of the Principal Senior Civil Judge, Narsaraopet, for recovery of a sum of Rs.8,15,499/- due in respect of cash credit facility availed by 2nd respondent firm, for which 3rd respondent is the proprietor. The revision petitioner stood as a guarantor for the said transaction. An ex parte preliminary decree was passed therein on 22.11.2002 for a sum of Rs.8,35,554/- together with costs, with subsequent interest at 17.75% per annum. Subsequently, first respondent filed I.A.No.1661 of 2004 for passing final decree and on 22.07.2005 a final decree was passed. Pursuant to passing of the final decree, 1st respondent filed E.P.No.134 of 2005 under Order XXI Rules 64 and 66 of C.P.C for sale of mortgaged property belonging to the revision petitioner who was stated to be a guarantor in respect of loan obtained by second respondent. It is the case of the revision petitioner that he has not received any summons from the lower Court either in the suit or in the final decree proceedings. It is stated by the revision petitioner that he was bed ridden and only on seeing paper publication on 27.10.2012 regarding sale of property, he filed petition on 05.11.2012 to set aside ex parte decree; that since the claim under the execution proceedings filed by the first respondent is Rs.13,40,136/-, which is more than Rs.10.00 Lakhs, the execution proceedings are maintainable only before the Debts Recovery Tribunal in terms of Section 31 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 ( for short ‘the Act’) and not by the civil Court after the establishment of the Special Statute Tribunals; that Order XXI Rule 10 of C.P.C is not applicable to the present case. Learned counsel for the revision petitioner contends that admittedly the E.P amount is more than Rs.10.00 Lakhs and as such the Court below has no jurisdiction to entertain the E.P and pass orders for sale of the property and sale notice issued is also without jurisdiction. Learned counsel for the revision petitioner contends that admittedly the E.P amount is more than Rs.10.00 Lakhs and as such the Court below has no jurisdiction to entertain the E.P and pass orders for sale of the property and sale notice issued is also without jurisdiction. In support of his contention, he placed reliance on a judgment of the Supreme Court in the case of Punjab National Bank, Dasuya v. Chajju Ram.( (2000)6 SCC 655 ) On the other hand, learned counsel for the 1st respondent Bank contends that in the present case the decree has almost been executed and the sale also took place. As such section 31-A of the Act has no application. Section 31-A applies where decree has not been executed but in the present case almost the decree has been executed. It is only at the final stage. He also contends that Section 31-A of the Act applies where the decree has been passed before the commencement of the Act but in the present case decree was passed after commencement of the Act, as such Section 31-A of the Act has no application. He also contends that judgment of the Supreme Court has no application because of the above distinction. In the present case, it is to be seen that the principal amount borrowed on 31.01.1998 is Rs.5.00 Lakhs. Suit was filed on 17.04.2002 for recovery of Rs.8,15,499/- inclusive of interest upto 17.04.2002. A preliminary decree was passed on 22.11.2002 for a sum of Rs.8,35,554/- with future interest at the rate of 17.75% p.a. from the date of filing of suit. Thereafter final decree was passed on 22.07.2005 for a sum of Rs.13,20,307/-, which includes interest at 17.75% p.a., on Rs.8,35,554/- from 17.04.2002 to 22.07.2005. Subsequently, E.P.No.134 of 2005 was filed by the first respondent bank claiming amount of Rs.13,40,136/-. Admittedly the value of the E.P is more than Rs.10.00 Lakhs and the sale warrant was also issued on 01.11.2012 for Rs.24,13,467/-. In the case stated supra, it was held at paragraph No.9 as under: “The High Court has further erred in holding that because the original decree which was passed was for principal sum of Rs.6,19,250/- the Tribunal would get no jurisdiction. The decree was for a sum of Rs.6,19,250/- plus interest at the rate of 16 ½ per cent per annum from the date of filing of the suit till the recovery of money. The decree was for a sum of Rs.6,19,250/- plus interest at the rate of 16 ½ per cent per annum from the date of filing of the suit till the recovery of money. As and when the amount due to the Bank under the decree became more than Rs.10 Lakhs and an application for execution was filed, it could only be entertained by the tribunal and not by the civil court. It is clear that in view of the provisions of Section 34 of the Act, the provisions of Order 21 Rule 10 C.P.C would have no application.” In the case before the Supreme Court, the principal amount claimed in the suit was Rs.6,19,250/- and the trial Court decreed the suit for the aforesaid amount with interest at the rate of 16 ½ per cent per annum from the date of filing of suit till the recovery of the money. Subsequently, an execution petition was filed for Rs.12,91,398/-. In those circumstances, the judgment debtor moved an application before the civil Court stating that the same is to be transferred to the Debts Recovery Tribunal. That application was allowed by the trial Court and ordered the transfer of the execution proceedings to the Debts Recovery Tribunal. The matter was taken to the High Court and the High Court reversed the same holding that it is only the civil Court which had passed decree could execute the same. When the matter was taken before the Supreme Court, it was held that as and when the amount due to the bank under decree became more than Rs.10 Lakhs, and an application for execution can only be entertained by a Tribunal but not the civil Court. It was further held that Order 21 Rule 10 CPC has no application. In the present case though it is contended that filing of suit and decree were subsequent to the commencement of the Act and that the decree has almost been executed, but the Supreme Court clearly held that as and when the amount due to the Bank became more than Rs.10.00 Lakhs, it can be only entertained by the Tribunal but not by the civil Court. When Section 31-A of the amendment Act says that any decree or order was passed by any Court before the commencement of the Act and has not yet been executed, then the decree holder may approach the Tribunal for recovery of amount, it cannot be said that the same is not applicable to the suit filed and decree obtained after commencement of the Act. In view of the law laid down by the Supreme Court in the above decision, the civil Court has no jurisdiction to entertain the E.P as the E.P amount is more than Rs.10.00 Lakhs. In view of the same, the impugned order is liable to be set aside. Accordingly, the Civil Revision Petition is allowed and the Auction Sale conducted on 05.11.2012 in E.P.No.134 of 2005 in O.S.No.74 of 2002 on the file of the Principal Senior Civil Judge, Narasaraopet, is set aside. There shall be no order as to costs. Miscellaneous petitions pending, if any, in this C.R.P shall stand closed.