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2021 DIGILAW 356 (AP)

K. Subashini v. Margadarsi Chit Fund Limited

2021-06-25

LALITHA KANNEGANTI

body2021
JUDGMENT Lalitha Kanneganti, J. - The present civil revision petition under Section 115 of the Code of Civil Procedure, 1908 (for short 'C.P.C.') is filed assailing the order dated 12.08.2016 passed in E.A. No. 178 of 2012 in E.P.No.8 of 2008 in O.S. No.55 of 2000 on the file of II Additional District Judge, Vijayawada whereby the petition filed by judgment debtor No.2 under Section 47 read with Section 151 of C.P.C. was dismissed. 2. The facts in brief are that: The first respondent herein who is the Decree holder has filed O.S. No. 55 of 2000 against the respondents 2 to 4 and revision petitioner herein for recovery of an amount of Rs.19,91,358/- being the principle and interest due by them under chit agreement dated 31.03.1997 executed by the 2nd Respondent with the surety of respondents 3, 4 and the petitioner. The defendants also created equitable mortgage over the plaint schedule property. Preliminary decree was passed on 22.06.2004 for a sum of Rs. 27,60,637/- with subsequent interest at 12% per annum on Rs.16,00,000/- from 26.02.2004 till the date of realisation. As per the preliminary decree, if the defendants fail to pay the amount within six months the plaintiff is permitted to apply for final decree for sale of mortgaged property. Since the defendants could not pay the amount, final decree dated 25.07.2005 was passed in I.A. No. 1229 of 2005 under Order 34 Rule 5. Pursuant to the final decree E.P.2 of 2008 was filed by the decree holder on 07.12.2007. 3. The revision petitioner who is judgment debtor No.2 (wife of the 1stJ.Dr) entered into agreement of sale with Vemuri Hasitha on 09.08.2007 for a consideration of Rs.52,50,000/-. On being intimated about the decree, the petitioner and the vendee approached the decree holder and according to the affidavit filed in E.A No.178 of 2012, orally it was settled for Rs.29,95,000/-. Accordingly on 31.03.2008, an amount of Rs.20,000,000/- was paid in two spells towards part payment and the decree holder/plaintiff acknowledged and issued receipts. The decree holder also informed the petitioner by way of letter dated 21.09.2008 confirming the balance of debt of Rs.9,95,000/-. Thereafter vendee paid an amount of Rs.3,00,000/- on 28.03.2009 and the same was acknowledged by the decree holder by way of a receipt. 4. The decree holder also informed the petitioner by way of letter dated 21.09.2008 confirming the balance of debt of Rs.9,95,000/-. Thereafter vendee paid an amount of Rs.3,00,000/- on 28.03.2009 and the same was acknowledged by the decree holder by way of a receipt. 4. As per the averments in the affidavit, the vendee requested decree holder to handover the title deeds of the schedule property by tendering balance amount of Rs.6,95,000/. The averments in the affidavit further reveal that the vendor demanded higher amount of Rs.57,50,000/- instead of agreed amount of Rs.52,50,000/- towards sale consideration. Accordingly on 17.06.2009 registered sale cum GPA was executed in favour of vendee for Rs.57,50,000/- and delivered possession of the schedule property to the vendee on 18.06.2009. It was further stated that the vendee approached the decree holder in the second week of July, 2010 along with Rs.6,95,000/- and to their surprise the decree holder demanded Rs.8,00,000/- instead of Rs.6,95,000/-. The vendee deposited the balance amount of Rs.6,95,000/- to the credit of E.P. on 14.07.2011 and filed E.A. No.178 of 2005 under Section 47 CPC to dismiss the E.P. 5. The decree holder filed counter and contended that some other decrees were passed against judgment debtor No.2/petitioner basing on the suits filed by Margadarsi Chit Fund, Hyderabad in O.S. No. 1139 of 1999 on the file of V Addl. Senior Civil Judge, City Civil Court, Hyderabad; O.S. No. 229 of 2000 on the file of I Addl. Senior Civil Judge, Vijayawada and the petition schedule property was attached before judgment in I.A.No.418 of 2000. The letter dated 21.9.2008 is not binding on the 1st respondent/decree holder. It is stated that neither the petitioner/2nd judgment debtor nor vendee honoured the promise and failed to fulfil the conditions of settlement. The cheque issued by vendee of petitioner is dishonoured on 01.10.2008 and the said fact was also informed by the 1st respondent/decree holder to the petitioner/2nd judgment debtor. On 28.03.2009 the vendee of the petitioner/2nd judgment debtor paid Rs.3,00,000/- towards part payment of decretal amount which was received by the 1st respondent/decree holder and receipt was issued. It is stated that the petition under Section 47 CPC is not maintainable and hence, prayed the court to dismiss the petition. 6. During the course of enquiry, the husband of vendee was examined as PW1 and Exhibits A1 to A26 were marked. It is stated that the petition under Section 47 CPC is not maintainable and hence, prayed the court to dismiss the petition. 6. During the course of enquiry, the husband of vendee was examined as PW1 and Exhibits A1 to A26 were marked. On behalf of the 1st respondent/decree holder, Senior Manager was examined as RW1 and no exhibits were marked. The executing court by order dated 12.08.2016 dismissed the petition. Aggrieved by the same, the above revision is filed. In the revision, 9th respondent (auction purchaser) was impleaded as per order dated 02.09.2016 passed by this Court. 7. Heard, Sri E.V.V.S. Ravi Kumar, learned counsel for the petitioner, Sri Durga Prasad, learned counsel for the 1st respondent/decree holder and Sri W.B. Srinivas, learned counsel for the 9th respondent/auction purchaser. 8. The learned counsel for the petitioner/judgment debtor argued that u/s 47 CPC, the executing court shall decide the execution, discharge or satisfaction of the decree. According to the learned counsel for the petitioner the GPA holder of revision petitioner along with the revision petitioner approached the decree holder pursuant to the passing of final decree and the suit debt was settled, orally, for Rs.29,95,000/-. He further argued that an amount of Rs.20,00,000/- was paid in two spells on 31.03.2008 and accordingly 1st respondent/decree holder acknowledged the part payment and issued the receipts. The 1st respondent/decree holder also confirmed the balance debt as Rs.9,95,000 by way of letter dated 21.09.2008. An amount of Rs.3,00,000/- was paid on 28.03.2009 towards part payment and the same was acknowledged. He further argued that in July, 2010 when the 2nd respondent approached the 1st respondent/decree holder along with Rs.6,95,000/-, the 1st respondent/decree holder demanded Rs.8,00,000/- instead of Rs.6,95,000/-. It is submitted that the 1st respondent/ decree holder filed a memo before the Court on 16.04.2010 about receipt of the part payment. It was further argued that balance amount of Rs.6,95,000/- was deposited on 14.07.2011 and hence the decree was fully satisfied. 9. The learned counsel for the petitioner further submits that it was recorded by the Court below that the decree holder has filed a memo on 16.04.2020 that he received Rs.23,00,000/- towards part payment of debt and no part satisfaction was recorded by the Court and only after the property was brought to sale the executing Court noticed part satisfaction memo and recorded on 16.08.2012. He submits that the petitioner cannot be made to suffer for the mistake of the Court and the revision deserves to be allowed. 10. Learned counsel for the petitioner/2nd judgment debtor placed reliance on Seth Banarsi Dass (Dead) by Lrs. v. District Magistrate and Collector, Meerut and Others, (1996) 2 SCC 689 wherein the Hon'ble Supreme Court observed as under: "The second objection of the appellant, however, deserves to be accepted. It is contended by him that two sets of objections were raised by him to the proposed auction sale when the shares were attached. These objections to the sale were pending when the auction sale took place. These objections go to the root of the liability of the appellant to pay the amounts under the recovery certificate as well as to the sale ability of the shares proposed to be sold. These objections ought to have been adjudicated upon before the auction sale. An auction which is held without deciding objections to it is bad in law. Recovery proceedings are equivalent to execution proceedings under the Civil Procedure Code. The objections to the attachment and sale of the said shares were raised by the debtor. Under Section 47 of the Civil Procedure Code, all questions arising between the parties relating to execution, discharge or satisfaction of the claim were required to be determined by the officer in charge of execution before proceeding with execution by way of sale. The objections, for example, related to the amount which is claimed in the recovery certificate. According to the appellant the amount mentioned in the recovery certificate was not correct because subsequent citation was for a different amount. The appellant had also claimed repayment of various amounts. .. We need not examine the merits of the objections raised by the appellant. But it is important to notice that these objections were not decided prior to the holding of the auction sale. The first respondent has given no explanation for not deciding these objections earlier. In our view the High Court was not right in observing that the objections could be decided at a later date even after the sale of the shares to which the objections pertained. Proceeding with the auction sale without adjudicating upon the objections is a material irregularity which vitiates the sale. In our view the High Court was not right in observing that the objections could be decided at a later date even after the sale of the shares to which the objections pertained. Proceeding with the auction sale without adjudicating upon the objections is a material irregularity which vitiates the sale. The appellant has thereby lost his valuable right to have his objections adjudicated upon in accordance with law. The objections were raised much prior to the auction sale and they ought to have been decided before the auction sale took place. Failure to do so vitiated the sale." 11. He also placed reliance on Union of Indian and another v. Satyanarayana Construction Company, Secunderabad, (2008) 4 ALD 169 (DB) this Court observed as under: "9. The decree-holder submitted a representation dated 12-5-2004 to the Chief Administrative Officer (Construction), South Central Railway, Secunderabad, with a prayer to arrange for payment of the amounts awarded by the arbitrator. Indisputably a supplementary award came to be passed on 3-3-2004. The date on which the supplementary award came to be served on the judgment-debtors is not indicated. Even assuming the date of supplementary award as the date of service, the judgment-debtors have time till 3-6- 2004 and with a delay condonation petition till 3-7- 2004. Even before the expiry of the limitation provided under Section 34(3) of the Act, the decree-holder submitted representation dated 12-5-2004 foregoing certain claims and made the judgment-debtors to pay the amount. 10. The only issue that survives for consideration is whether the decree-holder accepted Rs.6,69,053.92 ps. towards full satisfaction or part satisfaction. The executing court misdirected itself as if the issue is with regard to recording or certifying of the payment made outside the court. The dispute is not with regard to recording the payments made outside the court. The decree-holder himself admits of receiving Rs 6,69,053.92 ps. Indeed in Col. No. 4(b) of the execution petition the decree-holder acknowledges the receipt of Rs.6,69,053.92 ps. When once the part payment is shown by the decree-holder himself, the requirement of certificate as contemplated under Sub-rule (2) of Rule 2, Order XXI CPC pales into insignificance." 12. On the other hand, the learned counsel appearing for the 1st respondent/decree holder argued that the letter dated 21.09.2008 is not binding on the 1st respondent/decree holder. When once the part payment is shown by the decree-holder himself, the requirement of certificate as contemplated under Sub-rule (2) of Rule 2, Order XXI CPC pales into insignificance." 12. On the other hand, the learned counsel appearing for the 1st respondent/decree holder argued that the letter dated 21.09.2008 is not binding on the 1st respondent/decree holder. The petitioner/2nd judgment debtor and her vendee failed to pay the amount and hence they cannot take advantage of the letter. He further argued that when the cheque for Rs.6,95,000/- was dishonoured, the said fact was informed to them. Without paying the decretal amount, the petitioner/2nd judgment debtor represented by her vendee as GPA holder filed this petition and the petition does not have any merit. He further argued that the petition filed under Sec.47 CPC itself is not maintainable. 13. The learned counsel for the auction purchaser argued that the executing court conducted auction on 09.08.2012 and he became the highest bidder for Rs.82,00,000/-. He deposited Rs.20,50,000/- on 09.08.2012 and deposited the remaining amount of Rs.61,50,000/- towards 3/4th of the auction purchased money on 21.08.2012. He also deposited Rs.4,10,000/- towards sale certificate. Since the sale was not confirmed, he approached the High Court by filing civil revision petition No.943 of 2015 for expedite disposal of his applications and the said civil revision petition was disposed of. It was further argued that without arraying him as party respondent, the above revision was filed and interim order of confirmation of sale was obtained. There are no merits in the application and prayed the court to dismiss the application. He relied on decision reported in Sultana Begum vs. Prem Chand Jain, (1997) 1 SCC 373 . 14. In the light of the arguments advanced on behalf of either side, the issue that falls for consideration in the present revision is whether the executing Court acted within the parameters of Sec 47 CPC, if not whether the order passed by the Court below is liable to be set aside? 15. Section 47 of C.P.C. gives jurisdiction and power to the executing Court to decide all questions relating to execution, discharge and satisfaction of the decree. 15. Section 47 of C.P.C. gives jurisdiction and power to the executing Court to decide all questions relating to execution, discharge and satisfaction of the decree. To show that the decree is not executable, the learned counsel for the petitioner argued about the oral agreement between the judgment debtor and decree holder and further issuance of Ex.A4/letter dated 21.09.2008, by decree holder wherein it was mentioned that the balance amount is Rs.9,95,000/- out of which an amount of Rs.3,00,000/- was paid and cheque was issued for Rs.6,95,000/- and the same was dishonoured. However, Rs.6,95,000/- was also deposited to the credit of E.P. by way of separate E.A. According to the learned counsel for the petitioner, the decree was discharged. Once the decree is discharged, the question of continuing the execution proceedings does not arise. 16. It is pertinent to mention here that the decree holder itself filed memo into the Court about receiving an amount of Rs.20,00,000/- on 31.03.2008 and out of the balance amount of Rs.9,95,000/- Rs.3,00,000/- was paid on 28.03.2009 and the balance of Rs.6,50,000/- was deposited in E.P. account on 14.07.2011. In fact Rs.6,50,000/- was deposited prior to 09.08.2012 on which date sale was conducted. The executing Court failed to consider this crucial aspect which it ought to have considered. It is settled law that when once the part payment is shown by the decree holder himself, the requirement of certificate as contemplated under Sub-rule (2) of Rule 2, Order XXI CPC pales into insignificance and in the case on hand the decree holder himself filed the memo with regard to part payment and also issued Ex.A4/letter dated 21.09.2008. 17. It is urged by the learned counsel for the petitioner that when part payment memo was filed by the decree holder, the executing Court without deciding the issues/objections has proceeded with the sale which is contrary to the law laid down by the Hon'ble Apex Court in the judgments referred supra wherein the Hon'ble Apex Court held that proceeding with the sale without adjudicating upon the objections is a material irregularity which vitiates the sale and hence the auction conducted by the executing court without first deciding the issue under Section 47 C.P.C., is not valid and the auction is liable to be set aside. 18. 18. The learned counsel for the auction purchaser relied on Sultana Begum v. Prem Chand Jain, (1997) 1 SCC 373 wherein the Hon'ble Apex Court held that the general power of deciding questions relating to execution, discharge or satisfaction of decree under Section 47 can thus be exercised subject to the restriction placed by Order XXI Rule 2 including Sub-rule (3) which contain special provisions regulating payment of money due under a decree outside the court or in any other manner adjusting the decree. The general provision under Section 47 has, therefore, to yield to that extent to the special provisions contained in Order XXI Rule 2 which have been enacted to prevent a judgment-debtor from setting up false, or cooked-up pleas so as to prolong or delay the execution proceedings. 19. According to him unless the part payment or full satisfaction is recorded by the executing Court as mandated under Order XXI Rule 2(2) C.P.C. the bar under Order XXI Rule 3 would apply and the execution Court was right in conducting the auction and it was knocked down in favour of auction purchaser. This argument has no legs to stand as in this case the decree holder himself has filed the part payment memo as such requirement of certificate as contemplated under Sub-rule (2) of Rule 2 Order XXI C.P.C. pales into insignificance. The executive Court is bound to decide first, whether the decree passed is executable or not in the light of Ex.A4/letter and the memo filed by the decree holder itself, into the Court along with other payment. 20. In the order impugned the learned Judge has specifically observed that pending application, without postponing the sale for disposal of this petition the executing Court proceeded with sale and sale was held on 09.08.2012. 'Actus Curiae Neminem Gravabit' an act of Court shall prejudice no man. In the case on hand, the act of the Court without deciding the application under Section 47 of C.P.C. in the light of the memo filed by the decree holder, going ahead with the sale has caused serious prejudice to the petitioner. Apart from that it appears that by the date of sale the petitioner had paid the entire amount. 21. Apart from that it appears that by the date of sale the petitioner had paid the entire amount. 21. The Courts while dealing with the cases has to keep in mind that the object of prescribing procedure is to advance the cause of justice and to provide substantial justice to the party. The plaintiff has come to the Court by filing a suit for recovery of money and he obtained a decree. He wants to put the mortgaged property to sale for realization of the decretal amount. When the decree holder comes before the Court and files a memo about part satisfaction and when the judgment debtor paid the entire amount as per the oral agreement even before the sale is conducted, the Court below without deciding these issues, has proceeded further and put the property to sale. The judgment debtor having parted with money also has to part with the property. 22. This Court is of the considered view that the executing Court failed to exercise the jurisdiction vested in it by not deciding the application filed under Section 47 of C.P.C., and proceeding further by conducting auction which is impermissible. 23. In view of the above, this civil revision petition is allowed by setting aside the order dated 12.08.2016 passed in E.A. No. 178 of 2012 in E.P.No.8 of 2008 in O.S. No.55 of 2000 by II Additional District Judge, Vijayawada and the matter is remitted back to the executing Court for fresh adjudication. The observations of this Court, if any, made are for the limited purpose of deciding the revision and the Court below shall decide the application independently uninfluenced by the observations made by this Court, as expeditiously as possible. The auction purchaser is at liberty to contest the case before the executing Court, if he is advised to do so. If the auction purchaser does not want to contest the case and wants return of money, then if the law permits, he shall file an appropriate application before the executing Court and the said application shall be disposed of in accordance with law, within two months from the date of filing of the said application. Consequently, miscellaneous petitions pending, if any, shall stands closed.