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Kerala High Court · body

2017 DIGILAW 627 (KER)

KURIAKOSE v. KRISHNANKUTTY NAIR

2017-03-31

P.SOMARAJAN

body2017
ORDER : A court auction was conducted with respect to the property attached before judgment in execution of a money decree without giving notice to its real owners. On came to know about the court sale conducted, the real owners came up with an application in E.A.No.567 of 2007 in E.P.No.382 of 2003 in O.S.No.93 of 1997 of the Sub Court, Ernakulam under Order XXI Rule 90 of the Code of Civil Procedure to set aside the sale held on 22.7.2004 and confirmed on 25.9.2004. 2. A money suit was filed by the decree holders/petitioners which ended in a decree for recovery of money based on a contract for sale. The contract for sale could not be performed and as such the plaintiffs came up with the suit in O.S.No.93 of 1997 for recovery of the advance amount and it was decreed. In the trial stage, the property which is the subject matter of the contract for sale was attached before judgment. Prior to that the property was transferred by defendants 1 and 2 to strangers who were subsequently impleaded in the suit as additional defendants 3 to 6. The decree was put in execution and the property attached before judgment was auctioned and the decree holders bid the property on 25.7.2004 and the sale was confirmed on 25.9.2004. They have mutated the property in their name and began to pay tax. It is thereafter respondents 1 to 4/additional defendants 3 to 6, after three years, came up with an application in E.A.No.567 of 2007 under Order XXI Rule 90 CPC alleging fraud in publishing and conducting the sale. The said application was dismissed by the execution court. It was taken up in appeal in C.M.A.No.50 of 2011 before the additional District Court, Ernakulam. The first appellate court set aside the order of the trial court, allowed the appeal and set aside the sale conducted by its judgment dated 25.7.2013, which is under challenge in the present revision. 3. The main challenge is that the application under Order XXI Rule 90 CPC is barred by limitation as it was filed after three years from the date of confirmation of the sale and that Section 17 of the Limitation Act has no application in the case on hand. 4. 3. The main challenge is that the application under Order XXI Rule 90 CPC is barred by limitation as it was filed after three years from the date of confirmation of the sale and that Section 17 of the Limitation Act has no application in the case on hand. 4. Section 17 of the Limitation Act is squarely applicable and it is well evident from the execution petition and the proceedings initiated by the execution court in publishing and conducting the sale. Though the owners of the property, who were arrayed as additional defendants 3 to 6 in the suit, were impleaded in the execution petition as additional judgment debtors no notice was given to them regarding the initiation of execution proceedings. In the execution application there is no prayer to issue notice to additional defendants 3 to 6. The notice was given only to defendants 1 and 2 who were not having a transferable or alienable right over the property attached before judgment either as on the date of attachment or on any subsequent dates. It is an admitted case of both the parties that the first and second defendants who are the real judgment debtors had sold the property even prior to the attachment before judgment to the persons who were subsequently impleaded in the said suit as additional defendants 3 to 6. 5. It is unknown to law to execute a decree without giving notice to the person against whom the decree is sought to be executed. From the facts involved in the case it is well evident that the judgment debtors/defendants 1 and 2 were made as parties to the execution petition in their status as judgment debtors. Though execution proceedings were initiated against the judgment debtors/defendants 1 and 2, what is sought in the execution petition is to proceed against the property belonging to the additional defendants 3 to 6. They are really not in the status of judgment debtors. They were unnecessarily impleaded in the suit for recovery of money stating that they are the subsequent purchasers of the property owned by defendants 1 and 2. It is really impermissible to implead the subsequent purchasers of the property in a suit for recovery of money filed on the basis of an alleged transaction between the plaintiffs and the original defendants. The fraud played by the plaintiffs/decree holders is writ large on its face. It is really impermissible to implead the subsequent purchasers of the property in a suit for recovery of money filed on the basis of an alleged transaction between the plaintiffs and the original defendants. The fraud played by the plaintiffs/decree holders is writ large on its face. Firstly, additional defendants 3 to 6 were made as parties in the execution petition, but the prayer in the petition is limited to issue notice to judgment debtors 1 and 2 who are defendants 1 and 2 in the suit. There is no prayer to issue notice to additional defendants 3 to 6 who are the owners of the property sought to be proceeded against for recovery of decree amount and no notice was issued to them either (1) regarding initiation of execution proceedings though they were made as parties to the execution petition, or (2) regarding the proceedings initiated against the property owned by them. No notice under Rule 66 was also given to additional defendants 3 to 6. The property was sold in court auction without giving notice to its owners/additional defendants 3 to 6. In fact, additional defendants 3 to 6 were put in darkness by playing fraud by the decree holders in not issuing notice to them regarding (1) initiation of execution proceedings; (2) the proceedings for sale initiated against their property; (3) proclamation drawn in respect of their property; and (4) sale conducted in court auction. They came to know about the execution proceedings and the court sale only when their property was mutated by the decree holders who bid the property in court auction. The fraud played by the decree holders is well evident from the prayer in the execution petition and the manner in which the execution petition was prepared. In the execution petition, additional defendants 3 to 6 were made as parties but the prayer in the petition is to issue notice only to judgment debtors 1 and 2 who are defendants 1 and 2. Steps were taken to issue notice only to judgment debtors 1 and 2/defendants 1 and 2. No steps were taken at any point of time against additional defendants 3 to 6. Steps were taken to issue notice only to judgment debtors 1 and 2/defendants 1 and 2. No steps were taken at any point of time against additional defendants 3 to 6. This would show that the attempt of the decree holders is to conceal the initiation of execution proceedings in a money decree against the property of additional defendants 3 to 6 without giving notice to them but arraying them as parties to the execution petition. It is a clear case of fraud played by the decree holders before the execution court which cannot be tolerated even for a moment. This kind of practice would definitely cause destruction and damage to the whole system and it has to be deprecated in strong words. 6. The pre-planned commission of fraud even at the trial stage is well evident from the fact that though the suit was filed for recovery of the advance amount from defendants 1 and 2, the additional defendants 3 to 6 were unnecessarily dragged into the suit though there is no privity of contract between the plaintiffs and additional defendants 3 to 6. Additional defendants 3 to 6 were impleaded in the suit with a view to make the decree binding on them though they are not parties to the contract for sale. Further, the property under attachment before judgment cannot be treated as subject matter of the suit wherein the property was attached. In order to bring an immovable property as subject matter of the suit the mandate under Order VII Rule 3 CPC has to be complied with by giving the description of the property in the plaint sufficient to identify it with its boundaries and survey number. Admittedly the property under attachment before judgment has not been included as plaint schedule by giving its description. It has to be read along with the subsequent developments in the execution proceedings in arraying them as additional respondents/judgment debtors and proceeding against their property by selling the property in court auction without giving notice to them even with respect to the execution petition. It is settled law that in all proceedings initiated, notice should be given to the respondents/opposite parties. No proceedings can be initiated and no final orders can be passed without issuing notice and without affording an opportunity of being heard to the respondents/opposite parties. It is settled law that in all proceedings initiated, notice should be given to the respondents/opposite parties. No proceedings can be initiated and no final orders can be passed without issuing notice and without affording an opportunity of being heard to the respondents/opposite parties. The principle audi altram patram was overlooked by the decree holders by playing fraud on the execution court in publishing and conducting court sale. 7. Further the question of impleadment of a pendente lite transferee would arise only in a suit wherein immovable property made as subject matter. There cannot be impleadment of additional defendants in a suit wherein Section 52 of the Transfer of Property Act has no application. Only in a suit wherein right to an immovable property is directly and specifically in question, Section 52 of the Transfer of Property Act would come into play. If there is no application of Section 52 of the Transfer of Property Act in a suit, there cannot be any scope for impleadment of pendente lite transferee of any immovable property including the property which was attached under Order XXXVIII CPC. A suit wherein right to any immovable property is directly and specifically in question stood on a different footing. Unless there is application of Section 52 of the Transfer of Property Act, there cannot be any scope for impleadment of a pendente lite transferee as a party to the suit. 8. Further there is no provision anywhere in the Code of Civil Procedure for impleading the owner of the property under attachment before judgment as a party to the suit. A clear distinction is drawn with respect to a party to the suit, namely the defendant, and a stranger/claim petitioner under Order XXXVIII CPC regarding objection to the attached property by a party to the suit (defendant) and a claim of a third person/claim petitioner. Rule 5 to Order XXXVIII enables the court to call upon the defendants to furnish security or to show cause. Rule 6(2) enables the court to adjudicate any objection raised by the defendants in answer to such show cause notice either by lifting the attachment or by making such other order as it thinks fit. Order XXXVIII Rule 8 enables a stranger/a claim petitioner to raise any claim over the property attached before judgment. Rule 6(2) enables the court to adjudicate any objection raised by the defendants in answer to such show cause notice either by lifting the attachment or by making such other order as it thinks fit. Order XXXVIII Rule 8 enables a stranger/a claim petitioner to raise any claim over the property attached before judgment. A joint reading of Rule 6(2) and Rule 8 of Order XXXVIII would show that there is a clear distinction drawn in dealing with the objection raised by the defendants to an order of attachment before judgment and a claim petition by a third person. The claim petitioners/third persons are governed by Rule 8 of Order XXXVIII CPC, but the defendants are governed by Rule 6(2) of Order XXXVIII in adjudicating the question whether the property is available for attachment or not. By the impleadment of the owners of the attached property in the suit as additional defendants 3 to 6, the plaintiffs/decree holders virtually took away their right to have a claim petition under Rule 8 of Order XXXVIII CPC. In fact, they were brought under the category of parties to the suit, though they are strangers/3rd persons, at the instance of plaintiff. Once they were impleaded in the suit as additional defendants, they are governed by the restrictions under Rules 5 and 6 of Order XXXVIII CPC with the liability to show cause why security shall not be furnished. The remedy available to a third person against the order of attachment before judgment was thereby defeated by impleading them in the suit. The remedy available under Order XXXVIII Rule 8 CPC is so exhaustive and procedure under Rule 58 of Order XXI is extended in adjudicating a claim petition. It is a deemed decree and capable of rectification by an appellate court. But in so far as adjudication under Rule 6(2) of Order XXXVIII is concerned, the procedure under Order XXI Rule 58 is not extended. In fact, making the owners of the property under attachment before judgment as additional defendants on the application of plaintiffs would really amount to denying them the benefit under Rule 8 of Order XXXVIII CPC and Rule 58 of Order XXI CPC. The scope of attachment under Order XXXVIII Rule 5 CPC is to secure the decree that may be passed against the original defendant in which only the property owned by the defendant alone can be attached. The scope of attachment under Order XXXVIII Rule 5 CPC is to secure the decree that may be passed against the original defendant in which only the property owned by the defendant alone can be attached. There is no scope for attaching the properties belonged to the strangers and in the event of attachment of property belonged to strangers, the remedy by way of Rule 8 of Order XXXVIII is provided. At the same time, it is well within the authority of the defendants to raise objection regarding ownership of the property or any alienable interest over it but such objection can only be adjudicated under Rule 6(2) and not under Rule 8 of Order XXXVIII CPC. So it is not at all permissible to implead strangers who are the owners of the property attached before judgment as additional defendants to the suit. By allowing impleadment of additional defendants 3 to 6 the trial court has committed a grave error in the exercise of its jurisdiction by denying the valuable right of defence available to the owners of the property under attachment before judgment under Rule 8 of Order XXXVIII CPC. As such, it is fit and proper to exercise the jurisdiction under Article 227 of Constitution of India to rectify the aforesaid jurisdictional error committed by the trial court. Only persons who are bound by the contract and who are liable to pay the contractual amount either by way of advance amount or earnest money could be made as parties to the suit. It amounts another fraud played by the plaintiffs against additional defendants 3 to 6 by depriving their right under Rule 8 of Order XXXVIII and Rule 58 of Order XXI CPC. By exercising the power under Article 227 of the Constitution of India, the decree passed as against additional defendants 3 to 6 is hereby set aside and additional defendants 3 to 6 are deleted from the party array of the suit as well as the decree. The lower court shall immediately recall the decree and judgment passed in the suit and delete the name of additional defendants 3 to 6 from the party array of the decree and judgment as well as from the party array of the suit, limiting the suit, decree and judgment only against the original defendants 1 and 2. The lower court shall immediately recall the decree and judgment passed in the suit and delete the name of additional defendants 3 to 6 from the party array of the decree and judgment as well as from the party array of the suit, limiting the suit, decree and judgment only against the original defendants 1 and 2. It is made clear that a fresh trial or fresh adjudication in the matter is not at all necessary. The decree and judgment shall be recalled by the lower court only for the purpose of deleting additional defendants 3 to 6 from the party array of the suit as well as the decree and judgment and it shall be done by the lower court within a period of three weeks from the date of receipt of a copy of this order. It is made clear that after deleting the name of additional defendants 3 to 6 from the party array of the judgment and decree they will have the right to agitate their claim over the property under Rule 8 of Order XXXVIII CPC in accordance with the legal position settled by a Division Bench of this court in Gopalakrishna Pillai v. Syam Kumar (2017 (1) KLT 859 = 2017 (1) KHC 816). 9. Section 17 of the Limitation Act would come into play when fraud played by the decree holders came to the notice of the aggrieved persons in the publication and conduct of the court sale and hence the application is not barred by limitation as contended by the decree holders. Further, the decree holders cannot be heard on the question of limitation which is the direct consequence of the fraud played by them before the execution court. In fact, the entire execution proceedings are vitiated. Hence there is no reason warranting interference with the order passed by the first appellate court. 10. An attempt was made by the learned counsel appearing for the decree holders with the aid of Section 52 of the Transfer of Property Act that the transfer made by defendants 1 and 2 prior to the attachment before judgment would not affect the rights of the decree holders/plaintiffs. Section 52 of the Transfer of Property Act would apply only in a suit wherein any right to immovable property is directly and specifically in question. The present suit is for recovery of money paid as advance amount. Section 52 of the Transfer of Property Act would apply only in a suit wherein any right to immovable property is directly and specifically in question. The present suit is for recovery of money paid as advance amount. The immovable property which was transferred by defendants 1 and 2 in favour of additional defendants 3 to 6 is not the subject matter of the said suit. So Section 52 of the Transfer of Property Act has no application in the present suit. 11. Section 64 CPC deals with private alienation of property after attachment. It has no application in the present suit as the transfer effected over the immovable property is prior to the attachment before judgment. As discussed in the earlier paragraphs, the plaintiffs who had played fraud on the execution court as well as on defendants 3 to 6 in the suit, came before this court after suffering an appellate order against them with a view to sanctify the fraud played by them. Hence it is fit and proper to order costs of respondents 3 to 6 throughout from the revision petitioners. 12. In the result, the revision is dismissed with costs of respondents 3 to 6 throughout from the revision petitioners and it will have a charge over the decree amount sought to be executed. The trial court shall, on receipt of a copy of this order, delete the name of additional defendants 3 to 6 from the party array of the suit as well as from the decree and judgment confining the same only against the plaintiffs and defendants 1 and 2 and it shall be carried out within three weeks from the date of receipt of a copy of this order. For that purpose, the trial court shall recall the certified copies of the judgment and decree issued to the respective parties. The Registry is hereby directed to communicate a copy of this order to the trial court which passed the decree.