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Karnataka High Court · body

2015 DIGILAW 700 (KAR)

M. v. Perumal VS A. Vijay Kumar

2015-07-02

B.S.PATIL

body2015
JUDGMENT 1. This appeal is filed challenging the order dated 22.07.2014 passed by the Executing Court dismissing the application filed by the judgment-debtors under Order XXI Rule 90 read with Section 47 CPC seeking to set aside the sale certificate issued on 08.10.2013. 2. Facts necessary for the disposal of the case, stated in nutshell, are that O.S.No.705/1994 was filed by the decree-holder for recovery of money. The said suit was filed against one Perumal – father of the appellants herein/judgment-debtors. The suit was decreed on 12.10.2007 for a sum of Rs.1,00,000/- with interest and costs. Respondents 1 & 2 herein/decree-holders filed E.P.No.1230/2010 against the legal representatives of M.V. Perumal. 3. The Executing Court issued notices to the legal representatives of the judgment-debtor. Despite service of notice, the legal representatives of the judgment-debtor did not appear before the Executing Court. The decree-holder filed an application under Order XXI Rule 54 CPC seeking issue of attachment order of the immovable property. It has to be noticed here that in the order sheet maintained by the Executing Court, it is mentioned that the application is for attachment of movable property, whereas indeed the application was filed for attachment of immovable properties as is evident from Ex.C-2 – application. The Executing Court issued notice on 18.11.2011 to the judgment-debtors. The said notice was returned with postal shara refused. Later on, on 07.08.2012, attachment warrant under Order XXI Rule 54 CPC came to be issued. 4. As per the office note found in the order sheet, attachment warrant was executed and the report of the bailiff had been submitted mentioning the value of the attached property as Rs.1,25,00,000/-. The decree-holder filed IA2 under Order XXI Rules 64/66 CPC on 17.11.2012. On 16.02.2013, notices to judgment-debtors 4, 5 & 7 was issued. Notice was reissued on 22.03.2013. Later, on 02.07.2013, sale proclamation notice was issued for conducting spot and court sale. 5. The spot sale was conducted on 20.08.2013 followed by court sale on 28.08.2013. The property was auctioned for Rs.1,11,00,000/- and the court sale was effected at Rs.1,11,50,000/-. The auction purchaser deposited the entire bid amount on 10.09.2013. The decreetal amount was Rs.5,28,534/- which was disbursed out of the sale consideration to the decree-holder and the balance amount was ordered to be kept in deposit before the Registry of the City Civil Court, Bengaluru. The property was auctioned for Rs.1,11,00,000/- and the court sale was effected at Rs.1,11,50,000/-. The auction purchaser deposited the entire bid amount on 10.09.2013. The decreetal amount was Rs.5,28,534/- which was disbursed out of the sale consideration to the decree-holder and the balance amount was ordered to be kept in deposit before the Registry of the City Civil Court, Bengaluru. The sale certificate was ordered to be issued to the auction purchaser on 03.10.2013 and the same was issued on 08.10.2013. Thereafter, on 12.11.2013, the judgment-debtors filed the application under Order XXI Rule 90 read with Section 47 CPC seeking to set aside the sale. This application, after enquiry, has been dismissed by the court below. This is how the judgment-debtors are before this Court. 6. Mr. Sreevatsa, learned Senior Counsel appearing for the appellants-judgment debtors contends that no notice under Order XXI Rule 54 CPC was issued as per the proforma prescribed in Appendix-E of Form-24 of CPC, and therefore, the entire proceedings culminating in the sale of the property are vitiated. He urges that for the purpose of proclamation of sale by public auction in terms of Order XXI Rule 66, two things are required to be satisfied. First of all the property must have been earlier attached. Secondly, the court must satisfy itself whether a part of the property would be sufficient to satisfy the decreetal amount or whole of the property has to be sold. In the instant case, Counsel submits, there is no valid attachment of the property nor there is any satisfaction by the Executing Court with regard to the need to sell the whole of the property, and therefore, both the conditions are not satisfied. In this regard, he has placed reliance on the judgments in the case of AMBATI NARASAYYA VS M.SUBBA RAO & ANOTHER – AIR 1990 SC 119 , and GEETABAI & OTHERS VS STATE BANK OF INDIA & OTHERS – AIR 2001 KAR 294 . 7. It is his next contention that the proclamation has to be issued in terms prescribed in Form-29 of Appendix-E, wherein the valuation of the property as made by the decree-holder and the valuation of the property as made by the judgment-debtors have to be mentioned. But, in the instant case, there is no mention of either of the valuations. 7. It is his next contention that the proclamation has to be issued in terms prescribed in Form-29 of Appendix-E, wherein the valuation of the property as made by the decree-holder and the valuation of the property as made by the judgment-debtors have to be mentioned. But, in the instant case, there is no mention of either of the valuations. Inviting the attention of the Court to the judgment in the case of SHALIMAR CINEMA VS BHASIN FILM CORPORATION & ANOTHER – (1987)4 SCC 717 , learned Senior Counsel submits that the Court has a duty to see that requirement of Order XXI Rule 66 CPC were properly complied with and it was incumbent on the court to be scrupulous in the extreme to ensure the observance of the requirements. He points out that the Apex Court has ruled in the said judgment that it may not be necessary for the court to make a valuation and enter it in the sale proclamation in every case, but it is desirable at least in cases of sale of valuable property that the court make its valuation. 8. Sri Sreevatsa has also placed reliance on the judgment in the case of DESH BANDHU GUPTA Vs. N.L. ANAND & RAJINDER SINGH – (1994) 1 SCC 131 to contend that absence of notice to the judgment debtor causes irreparable injury and disables him to offer his estimate of the value better known to him and consequently in publicizing and canvassing the same to bring it to the notice of the intending bidders at the time of sale and therefore, sale made without notice to the judgment debtor is a nullity. Reliance is also placed by him on the judgment in the case of MERLA RAMANNA Vs. NALLAPARAJU & OTHERS AIR 1956 SC 87 to contend that Article 127 of the Limitation Act has no application to the facts of the case inasmuch as its application is confined only to petitions filed under Order XII Rules 89, 90 & 91 CPC, but not for application filed when the sale was inoperative and void. He urges that question whether an application by the judgment debtor for setting aside the sale on the ground that there was excessive execution and that the sale of his property was therefore void, was governed by Article 137 and not as per Article 127. He urges that question whether an application by the judgment debtor for setting aside the sale on the ground that there was excessive execution and that the sale of his property was therefore void, was governed by Article 137 and not as per Article 127. He, therefore, contends that in the instant case as the whole of the property has been sold without being satisfied as to whether part only of the property could have been sold to satisfy the decreetal amount, the sale was void and therefore, Article 137 of the Limitation Act as amended would apply. 9. He has also invited the attention of the Court to the decision in the case of MADAPPA Vs. LINGAPPA & ANOTHER – ILR 1986 KAR 2081, particularly paragraph 27, to urge that if the circumstances pleaded by the judgment debtor in support of his prayer for setting aside the sale were beyond the questions of material irregularity or fraud in publishing or conducting the sale and if the question raised goes beyond the sale, whereunder the sale itself could be rendered nullity, then the application could only be filed under Section 47 and not under Order XXI Rule 90 CPC and therefore, period of limitation could be governed by Article 137. 10. Learned Counsel appearing for respondents 1 to 3 strongly supports the order passed by the Executing Court and principally contends that the application filed under Order XXI Rule 90 CPC was barred by time, and therefore, was not maintainable in view of the period of limitation under Article 127 of the Limitation Act. Inviting the attention of the Court to the decision of the Apex Court in the case of MOHANLAL VS HARIPRASAD YADAV – (1994)4 SCC 177 , it is urged by him that there is no jurisdiction for the Executing Court to entertain the application under Order XXI Rules 89 & 90 after 60 days. 11. He takes me through the proceedings of the court below and points out that the application under Order XXI Rule 54 CPC was indeed filed for attachment of immovable properties and not for movables. He also points out inviting the attention of the Court to the evidence of the OW-1/judgment-debtor No.4 to contend that on his own admission the notice issued by RPAD to the Judgment-debtor was addressed to the place where he was residing. He also points out inviting the attention of the Court to the evidence of the OW-1/judgment-debtor No.4 to contend that on his own admission the notice issued by RPAD to the Judgment-debtor was addressed to the place where he was residing. The said cover which was confronted to him on being admitted regarding the address was opened before the Court. The court has found in the said cover, a copy of the notice issued to the judgment-debtor which has been marked as Ex.C-1 and the application filed under Order XXI Rule 54 CPC seeking attachment of immovable property has been marked as Ex.C-2. Attachment warrant issued has been marked as Ex.C-30. In this background, he submits that judgment-debtors have intentionally stayed away from the process of the court consistently, from the beginning and have not chosen to file the application within time. Hence, they cannot be now heard to say that auction sale conducted was illegal and was not in accordance with law. 12. He has also contended that as per Order XXI Rule 90(3) CPC, the judgment-debtors are precluded from taking such contentions, in as much as, no application to set aside the sale under the said rule shall be entertained upon any ground which the applicant could have taken on or before the date on which the proclamation of sale was drawn up. He also invites the attention of the Court to the explanation to sub-clause (3) of Rule 90 of Order XXI, which states that mere absence of, or defect in, attachment of the property sold shall not, by itself, be a ground for setting aside the sale under the said Rule. He also invites the attention of the Court to Section 65 of CPC to contend that where immovable property is sold in execution of a decree and such sale has become absolute, the property shall be deemed to have vested in the purchaser from the time when the property is sold and not from the time when the sale becomes absolute. It is, thus, contended that 60 days for the purpose of Article 127 has to be computed from the date of sale and not from the date when the sale becomes absolute on issuance of sale certificate. 13. It is, thus, contended that 60 days for the purpose of Article 127 has to be computed from the date of sale and not from the date when the sale becomes absolute on issuance of sale certificate. 13. By placing reliance on the very judgment of the Apex Court in the case of DESH BANDHU GUPTA VS N.L. ANAND & RAJINDER SINGH – (1994) 1 SCC 131 , relied on by the appellant, learned counsel for the respondent urges that in the said judgment the Apex Court after considering the effect of previous judgment in the case of GAJADHAR PRASAD & OTHERS VS BABU BHAKTA RATAN & OTHERS (1974) 1 SCR 372 has observed that in Gajdar Prasad’s case after reviewing the various authorities in the light of Rule 66 (2)(e) of Order XXI of CPC that the Court while stating the estimated value of the property to be sold, must not accept merely the ipse dixit of one side and that it was certainly not necessary for the Court to state its own estimate. If that was required, then there would be necessity of passing a summary of judicially considered order giving its grounds in the sale proclamation, which might confuse the bidders. It might also be quite misleading if the Courts were to estimate it erroneously. It has been further held in the above judgment that Rule 66(2)(e) requires the court to state only nature of the property so that the purchaser should be left to judge the value for himself. Counsel further urges, inviting the attention of the Court to paragraph 10 of the aforementioned judgment that service of notice on the judgment debtor is a fundamental part of the procedure touching upon the jurisdiction of the Executing Court to take further steps to sell his immovable property and therefore, notice under Order XXI Rule 66 (2) and its service would be mandatory unless the proviso to the said Rule is applied and unless the notice had not been already issued under Order XXI Rule 22 (emphasis supplied). It is his contention that in the instant case, proviso to Order XXI Rule 66(2) applies and more than that already notice had been issued under Order XXI Rule 22 and even the notice of attachment as per Order XXI Rule 54 had been also issued to the judgment debtors and despite service of the same, they remained absent and therefore, it was not open for them to take up all these contentions. 14. Having heard the learned counsel for both parties and on careful perusal of the entire records, the first question that requires to be answered is whether the judgment debtors were issued with notice of the execution petition and had been served with notice of the proceedings? If so, at what stage of the proceedings? 15. Cause notice was issued to the legal representatives of judgment debtors on 18.04.2011. The same was returned with postal shara ‘refused’. Notice on the application filed under Order XXI Rule 54 seeking attachment of immovable property was issued on 08.11.2011 and the same was also returned with postal shara ‘refused’. Attachment warrant under Order XXI Rule 54 was issued on 07.08.2012 and the same was executed. Bailiff filed his report on 17.10.2012. When the decree holder filed I.A.No.2 under Order XXI Rule 64/66 CPC, the Court issued sale proclamation notice for conduct of spot and court sale on 02.07.2013. These facts which are borne out from the proceedings maintained by the executing court clearly disclose that the judgment debtors have consistently and deliberately avoided notice issued by the court and have indeed, refused to receive the same. In such circumstances, it cannot be said that judgment debtors were not notified of the execution proceedings and notice under Order XXI Rule 54 CPC. 16. It is true the Executing Court cannot proceed with the sale of the property without notifying the judgment debtors and non-service of notice to the judgment debtors will render the proceedings illegal and the sale may be declared as a nullity. However, in the present case, such a contention is not open to the judgment debtors as they have refused to receive the notice consistently. 17. However, in the present case, such a contention is not open to the judgment debtors as they have refused to receive the notice consistently. 17. The next question to be examined is whether the auction sale conducted has been rendered void and the entire auction be declared as without authority as the court below has not recorded its satisfaction regarding sufficiency or otherwise of sale of part only of the property to realize the decreetal amount? It is true the executing court is required to satisfy whether sale of part of the property would satisfy the decreetal amount and make an endeavour to sell only a part of the property if it was sufficient to discharge the liability of the decree holder. 18. In the instant case, Sri Sreevatsa has contended that as the executing court has not recorded any satisfaction in this regard and has proceeded to sell the property worth Rs.1,20,00,000/- to discharge the dues of the decree holder to the tune of Rs.5,00,000/-, the sale itself was void and therefore, the judgment debtors were entitled to have it annulled by making an application under Section 47 CPC and not necessarily by making an application under Order XXI Rule 90 CPC. The other ancillary question that would crop up here itself is whether Article 127 of the Limitation Act would have no application in such a case and the application filed seeking to set aside the sale even beyond 60 days would be within limitation?. Though several judgments have been cited by the learned counsel for both parties in this connection, the judgment in Deshbandu Gupta’s case on which both parties have placed reliance would provide a subtle answer to the question. At paragraph 15 of the said judgment, the Apex Court has held as under: “To get over the difficulty, Sri Madhava Reddy has fallen back on Order 21 Rule 90(3) of the Code, which provides that “no application to set aside the sale under this rule shall be entertained upon any ground which the applicant could have taken on or before the date of which the proclamation of sale was drawn up.” Undoubtedly, this special rule was brought on statute by 1976 Amendment Act. It is like a “caveat emptor” that the judgment debtor be vigilant and watchful to vindicate pre-sale illegalities or material irregularities. He should not standby to procrastinate the execution proceedings. It is like a “caveat emptor” that the judgment debtor be vigilant and watchful to vindicate pre-sale illegalities or material irregularities. He should not standby to procrastinate the execution proceedings. If he so does, Rule 90(3) forewarns him that he pays penalty for obduracy and contumacy. Equally it is reminder that the court should be strict to comply with the procedural part under Rule 54(1A) before depriving the JD of the remedy under Order 21 Rule 90 CPC. If he had notice from court and acquiesced to take action before the date of sale, he would be precluded to assail its legality or correctness thereafter. It is seen that the appellant had not been served with or given notice at the time of drawing up the proclamation of sale and as a fact no proclamation of sale was drawn up by the executing court except accepting the ipse dixit of the decree holder. The procedure adopted by the executing court brittles with several irregularities touching the jurisdiction of the Court…..” 19. In the facts of the above case, as the judgment debtor was neither given notice nor was he present, nor aware of passing of the order issuing sale proclamation, the application filed by him immediately under Order XXI Rule 90 CPC was allowed. While doing so, it has been laid down in paragraph 10 that service of notice on judgment debtor is a fundamental part of the procedure touching upon the jurisdiction of the executing court to take further steps to sell his immovable property. Therefore, notice under Order XXI Rule 66(2) is mandatory, unless proviso is applied (if not already issued under Order XXI Rule 22). Order XXI Rule 66 (2) while mandating service of notice to the judgment debtor regarding issue of sale proclamation with details specified therein, enacts in the first proviso that where notice of the date for settling the terms of proclamation has been given to the judgment debtor by means of an order under Rule 54, it shall not be necessary to give notice under Rule 66(2) to the judgment debtor unless the Court otherwise directs. In the instant case, as is evident from Ex.C-30 notice was issued under Order XXI Rule 54 notifying the date fixed and even the said notice was refused by the judgment debtor. Therefore, question of invalidating the sale which has been conducted subsequently does not arise. In the instant case, as is evident from Ex.C-30 notice was issued under Order XXI Rule 54 notifying the date fixed and even the said notice was refused by the judgment debtor. Therefore, question of invalidating the sale which has been conducted subsequently does not arise. As held by the Apex Court in Deshbandu Gupta’s case referred to and extracted supra, the Judgment-debtor shall not stand by and procrastinate the execution proceeding. If he does so Rule 90(3) forewarns him that he pays penalty for obduracy and contumacy. 20. Similarly, the contention urged by the learned counsel appearing for the judgment debtors Sri Sreevatsa that the sale itself was inoperative and void because the Court failed to record its satisfaction regarding sufficiency of sale of part only of the property and therefore, the application filed by the judgment debtor for setting aside sale on the ground that there was excessive execution is also misconceived and untenable in the facts and circumstances of the case. The judgment in the case of MERLA RAMANNA VS NALLAPARAJU & OTHERS AIR 1956 SC 87 relied on in this regard has no application to the facts of the present case. In the said case, suit had been decreed in O.S.No.25/1927 directing only sale of mortgage rights under Ex.A and not of the properties and a final decree was passed. The decree holder filed execution petition praying for sale of hypothecated properties including properties mentioned in Ex.A therein. An extent of 81 acres 86.5 cents of land was brought for sale. The sale was confirmed. But, before possession was taken, a suit was instituted for a declaration that the decree in O.S.25/1927 had been obtained fraudulently and that decree holder was not entitled to execute the decree as against the properties of the plaintiff. The defendants resisted the suit. It was held that the decree directed the sale of only mortgage rights under Ex.A and the sale of the property was therefore not in accordance with the decree. But, the court found that the matter could only be agitated before the executing court and no separate suit was maintainable because of the bar under Section 47 CPC. However, the High Court held that as bar under Section 47 has not been pleaded in the written statement, plaintiffs were entitled for the decree. 21. But, the court found that the matter could only be agitated before the executing court and no separate suit was maintainable because of the bar under Section 47 CPC. However, the High Court held that as bar under Section 47 has not been pleaded in the written statement, plaintiffs were entitled for the decree. 21. The Apex Court went into the question whether the suit was barred by limitation if it had been treated as an application for setting aside the sale. In that context, it was held that Article 166 (present Article 127) applied only when the sale was valid one which was under law required to be set aside as for example under Order XXI Rule 89, 90 & 91 CPC., and that it had no application when the sale was inoperative and void. It is in that context only, question whether an application by the judgment debtor for setting aside a sale on the ground that there was excessive sale and therefore the sale of the property was consequently void was governed by Article 181 (present Article 137) and not Article 166 (present Article 127). 22. The question of holding the sale as a nullity, in the facts of the instant case does not arise. This is not a case where a decree was passed for sale of any interest only and not of any specific properties, but in the execution proceedings initiated the Executing Court acted without jurisdiction by bringing other properties for sale. It cannot be said that omission of the Executing Court to record its satisfaction regarding sufficiency of sale of part only of the property to meet the decreetal amount would render the sale a nullity and the action of the Court without jurisdiction. The illegality or irregularity that is allegedly committed by the Court below would squarely fall under Order XXI Rule 90 CPC. Therefore, as per sub-clause (3) of Rule 90 of Order XXI CPC., no application to set aside the sale under the said Rule shall be entertained upon any ground which the applicant could have taken on or before the proclamation of sale was drawn up. As this position is made clear in the judgment in Deshbandu Gupta’s case referred to supra in paragraph 15 as extracted above, I do not find substance in any of the contentions urged by the learned Senior Counsel Sri Sreevatsa. As this position is made clear in the judgment in Deshbandu Gupta’s case referred to supra in paragraph 15 as extracted above, I do not find substance in any of the contentions urged by the learned Senior Counsel Sri Sreevatsa. In fact, the property sold in auction is a single property. No objection was raised at any stage stating that part only of this property by dividing it could be sold. 23. In any event, even examining the matter keeping in mind the ends of justice, it is clear that the judgment debtors have not bothered to appear before the Court despite issue of repeated notices by the executing court. They have stayed away from the proceedings for the reasons best known to them. The Apex Court in the case of BARKAT ALI AND ANOTHER Vs. BADRINARAIN (DEAD) BY L.Rs. – (2008) 4 SCC 615 , has observed as under in paragraphs 9 to 12 of the said judgment: “9. Order 21 Rule 22 CPC culminates in end of one stage before attachment of the property can take place in furtherance of execution of decree. The proceedings under Order 21 Rule 23 can only be taken if the executing court either finds that after issuing notice under Order 21 Rule 21 (sic Rule 2) the judgment debtor has not raised any objection or if such objection has been raised, the same has been decided by the executing court. Sub-rule (1) as well as sub-rule (2) under Order 21 Rule 22, operate simultaneously in the same field. Sub-rule (1) operates when no objection is filed. Then the court proceeds and clears the way for going to the next stage of the proceedings, namely, attachment of the property and if the court finds objections on record then it decides the objections in the first instance and thereafter clears the way for taking up the matter for attachment of the property if the objections have bee overruled. 10. Whether the order is made under sub-rule (1) or sub-rule (2), it has the effect of determining the preliminary stage before the attachment process is set in motion. In this background, the order of the court to proceed with attachment on finding that no objection has been raised also operates as an order deciding the preliminary stage of the execution proceedings and operates as if the judgment-debtor has no objection to file. In this background, the order of the court to proceed with attachment on finding that no objection has been raised also operates as an order deciding the preliminary stage of the execution proceedings and operates as if the judgment-debtor has no objection to file. If thereafter, the judgment-debtor wants to raise an objection in the same proceedings in the absence of any modification of order passed under Order 21 Rule 22 sub-rule (1) or (2), he has to take recourse to get rid of the order by way of appeal. 11. There is no dispute and it has not been agitated that the order for proceeding by the judgment-debtor under Order XXI Rule 22 amounts to a decree under Section 47 CPC and it is appealable as a decree i.e. to say it is not an appeal against the interim order but an appeal against the decree which is provided against the final order. It means that at the different stages of the execution, orders passed by the executing court have attained finality unless they are set aside by way of appeal before the higher forum. Otherwise, they bind the parties at the subsequent stage of the execution proceedings so that the smooth progress of execution is not jeopardized and the stage which reached the finality by dint of various orders of Order 21, operates as res judicata for the subsequent stage of the proceedings. Since the order passed at different stages itself operates as a decree and is appealable as such, the same cannot be challenged in appeal against subsequent orders also, because appeal against an order passed under Order 21 Rule 22 does not amount to appeal against order at initial stage, but amounts to a decree finally determining the question. That is why no appeal against orders made under Order 21 has been provided under Order 43. 12. That is why no appeal against orders made under Order 21 has been provided under Order 43. 12. In this background, where a judgment-debtor has an opportunity to raise an objection which he would have raised but failed to take and allowed the preliminary stage to come to an end for taking up the matter to the next stage for attachment of property and sale of the property under Order 21 Rule 23 which fell within the above principle, the judgment-debtor thereafter cannot raise such objections subsequently and revert back to earlier stage of proceedings unless the order resulting in termination of preliminary stage which amounts to a decree is appealed against and order is set aside or modified.” 24. Therefore, the judgment debtors having not raised any objection at any stage of the proceedings are precluded from challenging the sale. As the judgment debtors have not appeared and made any suggestion with regard to sufficiency of sale of part only of the property nor have they suggested any of their terms before issuing the sale of proclamation, it is not open for them to contend that Court has not applied its mind. Reliance placed by the learned counsel for the respondent on the judgment in Barkat Ali’s case is quite appropriate to the facts of the present case. Even otherwise, the application to set aside the sale under Order 21 Rule 10 could have been filed within 60 days from the date of sale and not from the date of issue of sale certificate. Article 127 of the Limitation Act applied and the application filed was beyond the period of limitation and was therefore liable to be dismissed. 25. Hence, I am of the view that none of the contentions urged by the appellant are sustainable in law. The appeal is, therefore, dismissed.