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2015 DIGILAW 1620 (HP)

Rama Kundra v. Esskay Woolen & Spinning Mills

2015-11-03

MANSOOR AHMAD MIR, TARLOK SINGH CHAUHAN

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Judgment : Mansoor Ahmad Mir, Chief Justice. This appeal is directed against the judgment and order, dated 22.09.2006, made by the learned Single Judge in OMPs No. 201 of 1994 & 189 of 1999 and Execution Petition No. 26 of 1989, whereby and whereunder the sale was set aside and the Execution Petition was dismissed (for short "the impugned judgment"). 2. The Decree Holder and the Judgment Debtors have not questioned the impugned judgment, has been questioned by the auction purchaser, namely Smt. Raj Kapoor, who died during the pendency of the appeal and her legal representative has been brought on record, on the ground that she was a bona fide purchaser and no illegality was committed while making the orders under Order XXI Rule 66 of the Code of Civil Procedure, 1908 (for short "CPC") and Order XXI Rule 66 CPC, the impugned judgment be set aside and she be handed over the possession of the property, the subject matter of the appeal. 3. The core question involved in this appeal is whether the Executing Court, while determining the Execution Petition, has followed the mandate of Order XXI read with the Rules? 4. In order to determine the issue and return the findings, it is necessary to give a brief resume of the case, the womb of which has given birth to the instant appeal. 5. Civil Suit No. 10 of 1980, titled as State Bank of India versus M/s. Esskay Woolen & Spinning Mills (P) Ltd. and another, was filed in the year 1980, which was decided in exparte vide judgment and decree, dated 30.04.1981. The Execution Petition was filed by the Decree Holder and notice was issued to the Judgment Debtors for satisfying the decree, failed to do so and execution was sought by attachment and sale of land measuring 442 Kanals 7 Marlas, situated at Mehal Beli, Mauja Satana, District Kangra, which was owned by original defendant No. 2/Judgment Debtor No. 2. Attachment order was made on 09.05.1991, constraining the Decree Holder to lay an application for sale of the attached property and for proclamation in terms of Order XXI Rule 66 CPC, which was diarized as OMP No. 428 of 1991. During the pendency of the said application, the Judgment Debtors filed an application for setting aside the exparte decree and execution of the decree was stayed. During the pendency of the said application, the Judgment Debtors filed an application for setting aside the exparte decree and execution of the decree was stayed. The said application was dismissed and the stay order was vacated. On 15.03.1994, orders qua warrant of sale were made by the Registrar. 6. While going through the file, one comes to an inescapable conclusion that no order was passed by the Executing Court in terms of Order XXI Rule 64 CPC, which reads as under: "ORDER XXI EXECUTION OF DECREES AND ORDERS ............ 64. Power to order property attached to be sold and proceeds to be paid to person entitled. Any Court executing a decree may order that any property attached by it and liable to sale, or such portion thereof as may seem necessary to satisfy the decree, shall be sold, and that the proceeds of such sale, or a sufficient portion thereof, shall be paid to the party entitled under the decree to receive the same." 7. The mandate of law, reproduced above, is to pass an order to record satisfaction as to whether the portion of the attached property or the entire attached property is to be put to sale in order to satisfy the decree. It is not just a formality, but is mandatory, because the said mandate of law gives power to the Court to deprive a person from his property, that is why the Court had to record its satisfaction. 8. Our this view is fortified by the Apex Court judgment in the case titled as Balakrishnan versus Malaiyandi Konar, reported in 2006 AIR SCW 951. It is apt to reproduce paras 10 and 11 of the judgment herein: "10. The provision contains some significant words. They are "necessary to satisfy the decree". Use of the said expression clearly indicates the legislative intent that no sale can be allowed beyond the decretal amount mentioned in the sale proclamation. (See Takkaseela Pedda Subba Reddi v. Pujari Padmavathamma ( AIR 1977 SC 1789 ). In all execution proceedings, Court has to first decide whether it is necessary to bring the entire property to sale or such portion thereof as may seem necessary to satisfy the decree. (See Takkaseela Pedda Subba Reddi v. Pujari Padmavathamma ( AIR 1977 SC 1789 ). In all execution proceedings, Court has to first decide whether it is necessary to bring the entire property to sale or such portion thereof as may seem necessary to satisfy the decree. If the property is large and the decree to be satisfied is small the Court must bring only such portion of the property the proceeds of which would be sufficient to satisfy the claim of the decreeholder. It is immaterial whether the property is one or several. Even if the property is one, if a separate portion could be sold without violating any provision of law, only such portion of the property should be sold. This is not just a discretion but an obligation imposed on the Court. The sale held without examining this aspect and not in conformity with this mandatory requirement would be illegal and without jurisdiction. (See: Ambati Narasayya v. M. Subba Rao and Anr., 1989 Suppl (2) SCC 693). The duty cast upon the Court to sale only such portion or portion thereof as is necessary to satisfy the decree is a mandate of the legislature which cannot be ignored. Similar view has been expressed in S. Mariyappa (Dead) by L. Rs. and Ors. v. Siddappa and Anr. ( 2005 (10) SCC 235 ). 11. In S. S. Dayananda v. K. S. Nagesh Rao and Ors. ( 1997 (4) SCC 451 ) it was held that the procedural compliance of Order XXI Rule, 64 of the Code is a mandatory requirement. This was also the view expressed in Desh Bandhu Gupta v. N. L. Anand and Rajinder Singh ( 1994 (1) SCC 131 )." 9. The question is whether such order was made? 10. The learned Single Judge has perused the record and has specifically recorded that no such order was made. We have also gone through the record. In fact, the order has been made under Order XXI Rule 66 CPC, but no order has been made under Order XXI Rule 64 CPC. Thus, any steps taken in breach of Order XXI Rule 64 CPC is nullity and without jurisdiction. 11. It is also worthwhile to mention herein that the Judgment Debtor No. 2 has satisfied the decretal amount while making the payment during the pendency of the Execution Petition. 12. Thus, any steps taken in breach of Order XXI Rule 64 CPC is nullity and without jurisdiction. 11. It is also worthwhile to mention herein that the Judgment Debtor No. 2 has satisfied the decretal amount while making the payment during the pendency of the Execution Petition. 12. Learned counsel for the appellant argued that the appellant has purchased the property through auction and has deposited the money, is bona fide purchaser. 13. Learned Single Judge has taken care of the said fact and has directed the Registry to refund the said amount to the appellant auction purchaser alongwith interest, in terms of para 29 of the impugned judgment. 14. Learned counsel for the appellant also argued that if any mistake has been committed by the Court, why his client be made to suffer. The argument is misplaced and devoid of any force for the following reasons: 15. The Court has to pass orders strictly as per the law applicable. Order XXI CPC read with the Rules provides a mechanism how to execute the decrees and what orders are to be made by the Court. It also provides mechanism how to hear the objections of the Judgment Debtors/Decree Holders and by any other person interested including the auction purchaser. 16. The fact that the auction purchaser has deposited the amount, will not clothe him with a right to purchase a property, when the foundation of the said exercise was illegal. It is also a fact that the Judgment Debtors had to part with a big chunk of land, thereby had to suffer from irreparable loss. 17. In the given circumstances, it was the duty of the Executing Court to see whether the entire property was to be put to sale or some portion of it. But, unfortunately, the Executing Court has not passed any order under Order XXI Rule 64 CPC. 18. It is the duty of the Court to see that the action of the Court should not cause prejudice to a party. If any action of the Court prejudices any party, the law of restitution applies in order to redress the same. 19. Having said so, the impugned judgment and order is well reasoned, needs no interference. 20. The amount be refunded in terms of para 29 of the impugned judgment to the auction purchaser/legal representatives of the auction purchaser. 21. If any action of the Court prejudices any party, the law of restitution applies in order to redress the same. 19. Having said so, the impugned judgment and order is well reasoned, needs no interference. 20. The amount be refunded in terms of para 29 of the impugned judgment to the auction purchaser/legal representatives of the auction purchaser. 21. Accordingly, the impugned judgment is upheld and the appeal is dismissed alongwith all pending applications.