Karnataka High Court
Shree Arcee Steel Private Limited And ... vs Bharat Overseas Bank Limited And Anr. on 16 March, 2005
Equivalent citations: AIR2005KANT287, III(2006)BC589, [2005]127COMPCAS537(KAR), ILR2005KAR2859, 2005(2)KARLJ472, AIR 2005 KARNATAKA 287, 2006 (2) ABR (NOC) 262 (KAR), 2005 AIR KANT HCR 1175, 2005 AIHC 2438, (2005) 2 CIVILCOURTC 238, (2005) 2 KANT LJ 472, (2005) 3 ICC 785, (2005) 2 KCCR 1031, (2006) 3 BANKCAS 589, (2005) 127 COMCAS 537, (2005) 4 CIVLJ 395, (2005) 3 BANKCLR 272
Author: K. Bhakthavatsala
Bench: K. Bhakthavatsala
ORDER 21 RULE 90-ADVOCATE COMMISSIONER SELLING PROPERTY IN PUBLIC AUCTION-APPLICATION FILED UNDER ORDER 21 RULE 90 NOT TO ACCEPT OR CONFIRM THE SALE OR IN THE ALTERNATIVE TO SET ASIDE THE SALE OF THE PROPERTY EFFECTED BY THE COMMISSIONER ON THE GROUND THAT THE TURNING MACHINE WAS EMBEDDED TO EARTH IN THE FACTORY AND THEREFORE AS THE TIME OF EFFECTING ATTACHMENT, THE PROPERTY COULD NOT BE REMOVED FROM THE FACTORY-WHETHER THE PROPERTY AUCTIONED BY THE ADVOCATE COMMISSIONER IS IMMOVABLE PROPERTY- HELD: The meaning of the word "immovable" means permanent, fixed, not liable to be removed. In other words, for a chattel to become immovable property, it must be attached to the immovable property permanently as a building or as a tree attached to earth. Though a moveable property is attached to earth permanently for the beneficial use and enjoyment, is still a movable property. For an illustration, though a sugar cane machine/or an oil engine is attached to earth, it is moveable property. The term "immovable property" is defined in three enactments viz., the General Clauses Act, the Registration Act and the Transfer of Property Act. The first two are not of much assistance, for they merely show that "immovable property" includes things attached to earth, or permanently fastened to anything attached to earth. They give no guidance as to what is meant by 'attached' or 'permanently fastened'. The third enactment, by Section 3 of Transfer of Property Act, describes what is meant by 'attached to earth', means:- (a) rooted in the earth, as in the case of trees and shrubs; (b) imbedded in the earth, as in the case of walls or buildings; or (c) attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached. The degree, manner, extent and strength of attachment of the chattel to the earth or building are the main features to be recorded. The subject matter of the property in the instant case is Centerless Bar Turning Machine measuring 80' in length and 10' in width and 5' height embedded to the earth by mounting the same on cement base and fastened to it with bolts and nuts cannot be called as immovable property. Appeal dismissed. JUDGMENT K. Bhakthavatsala, J.
1. This is an appeal filed under Order 43, Rule 1(j) of the Code of Civil Procedure, challenging the order dated 13-10-1995 made in Execution Case No. 1066 of 1996 on the file of XV Additional City Civil Judge, Bangalore City, rejecting I.A. 7 filed under Order 21, Rule 90 of the Code of Civil Procedure by the judgment-debtors for setting aside the sale.
2. The respondent 1 is represented by Sri Y.V. Parthasarathy. The respondent 2-auction purchaser is represented by Sri Ananthram.
3. Heard arguments.
4. The brief facts of the case leading to the filing of the appeal may be stated as under.--
The respondent 1-decree-holder filed Execution Case No. 1066 of 1986 in pursuance of recovery of money in a sum of Rs. 29,44,415/- made in O.S. No. 623 of 1982, on the file of City Civil Judge, Bangalore City. In the Execution Case, an Advocate Commissioner was appointed to effect sale of schedule property viz., One Centerless Bar Turning Machine (manufactured by M/s. GKW Limited) kept in the premises Nos. 27(B) and 28(C), Peenya Industrial Estate, Second Phase, Tumkur Road, Bangalore. Accordingly, the property was sold by the Advocate Commissioner in public auction to the respondent 2 herein for a sum of Rs. 3,85,000/-. The appellants-judgment-debtors filed I.A. 7 under Order 21, Rule 90 not to accept or confirm the sale or in the alternative to set aside the sale of the property effected by the Commissioner on the ground that the Turning Machine was embedded to earth in the Factory and therefore at the time of effecting attachment, the property could not be removed from the Factory. It is contended that since the property was embedded to the earth, it was immovable property worth Rs. 10,00,000/-. But, the property has been sold for less on account of not following the procedure for sale of immovable property. Further, the Commissioner colluded with the Bank Officers and without obtaining permission for confirmation of sale, removed the machinery and delivered the same on 20-7-1995 to the auction purchaser. After hearing the arguments, the Court below has passed the impugned order rejecting the same. This is impugned in this appeal.
5. The learned Counsel for the appellants contended that since the property in question is immovable property, the Execution Court did not follow the procedure applicable in respect of sale of immovable property as a result of which the property has been sold for Rs. 3,85,000/-, though it was worth Rs. 10,00,000/-. He submitted his arguments relying on the meaning of Section 3(26) of the General Clauses Act, 1897 dealing with the definition of immovable property in Clause (26) of Section 3 of the General Clauses Act, 1897, and cited the following decisions.--
(i) J. Kuppanna Chetty, Ambati Ramayya Chetty and Company v. Collector of Anantapur and Ors., , on the point that the factory, building and machinery embedded therein are immovable properties and attachment procedure followed in respect of movable property is illegal and therefore the Attachment Officer committed tort.
(ii) K.N.K. Iyengar v. Vijaya Bank, Gandhi Bazaar Branch, Bangalore and Anr., 2000(4) Kar. L.J. Sh. N. 2, ILR 2000 Kar. 4552, on the point that machinery embedded to earth for the permanent beneficial enjoyment of the property to which it is attached, becomes a part of the immovable property.
(iii) Duncans Industries Limited v. State of Uttar Pradesh and Ors., on the point that machinery, which formed fertiliser plant were permanently embedded in earth with intention of running fertiliser factory, the machinery be treated as immovable property.
6. On the other hand, the learned Counsel for respondent 2 cited a decision in South Indian Bank Limited by its General Manager, M.G.P. Nambiar v. V. Krishna Chettiar and Brothers by its Partner V.K. Palaniappan and Ors., AIR 1976 Mad. 215, on the point that machinery fixed to the earth was not immovable property and the mortgagee was entitled to a charge decree on machinery.
7. In the light of the arguments addressed by the learned Counsels for the parties, the short question that arises for consideration is.--
Whether the property auctioned by the Advocate Commissioner is immovable property?
8. My answer to the above point is in the negative for the following reasons.--
The word "immovable" means permanent, fixed, not liable to be removed. In other words, for a chattel to become immovable property, it must be attached to the immovable property permanently as a building or as tree attached to earth. Though a moveable property is attached to earth permanently for the beneficial use and enjoyment, is still a movable property. For an illustration, though a sugarcane machine/or an oil engine is attached to earth, it is movable property. The term "immovable property" is defined in three Indian enactments viz., the General Clauses Act, the Registration Act and the Transfer of Property Act. The first two are not of much assistance, for they merely show that "immovable property" includes things attached to earth, or permanently fastened to anything attached to earth. They give no guidance as to what is meant by 'attached' or 'permanently fastened'. The third enactment, by Section 3 of the Transfer of Property Act, describes what is meant by 'attached to earth', means.--
(a) rooted in the earth, as in the case of trees and shrubs;
(b) imbedded in the earth, as in the case of walls or buildings; or
(c) attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached.
9. The degree, manner, extent and strength of attachment of the chattel to the earth or building are the main features to be recorded. In that context, the Madras High Court, in the decision in Perumal Naicker v. T. Ramaswami Kone and Anr., , has rightly held that the Peter Engine, which was the subject-matter of sale in that case, mounted on cement base and fastened to it by bolts and nuts was not 'immovable property'. In other words it is fixed to the earth in that manner for the beneficial enjoyment of it during its use. It means, the engine cannot be used, except by fixing it to the earth. Therefore, it cannot be said that the intention, as disclosed by the fixture, is to make part of the earth and so it is immovable property. The nature of the engine and the purpose of its fixtures, both show that it cannot be regarded as immovable property. The above said case is applicable on all the fours to the case on hand. The subject-matter of the property in the instant case is Centerless Bar Turning Machine measuring 80' in length and 10' in width and 5' height embedded to the earth by mounting the same on cement base and fastened to it with bolts and nuts cannot be called as immovable property. Therefore, there is nothing wrong in the procedure adopted by the Advocate Commissioner while auctioning the property in question. The appellants have utterly failed to establish collusion between the Advocate Commissioner and Bank or any other violation of law while auctioning the property. Therefore, the decisions cited by the learned Counsel for the appellants are not applicable and of no avail to the case of the appellants.
10. Therefore, I pass the following order.--
The appeal fails and the same is hereby dismissed.
In the circumstances of the case, I pass no order as to costs.