Andhra HC (Pre-Telangana)
Malempati Harinarayana vs Vankayalapati Subba Rao And Others on 22 January, 2013
Author: M.S.Ramachandra Rao
Bench: M.S.Ramachandra Rao
THE HON'BLE SRI JUSTICE M.S.RAMACHANDRA RAO CRP No.872 of 2003 dated.22-01-2013 Malempati Harinarayana ...PETITIONER Vankayalapati Subba Rao and others ...RESPONDENT <GIST: >HEAD NOTE: Counsel for the petitioner: Sri Korrapati Subbarao Counsel for the respondents 1,6 & 7: Sri Nimmagadda Satyanarayana ^ Counsel for the respondent No.2 : Sri G.Pedda Babu ^ Counsel for the respondent No.5 : Sri G.Subba Rao ?Cases referred 1 AIR 1990 SC 119 2 AIR 2003 A.P.45 3 AIR 1977 SC 1789 4 (2005) 10 S.C.C. 235 ORDER:
This revision is filed under Section 115 CPC challenging the order dated 09-12-2002 in C.M.A.No.2 of 1999 of the Senior Civil Judge, Addanki modifying the order dated 29-12-1998 in E.A.No.576 of 1996 in E.P.No.31 of 1994 in O.S.No.103 of 1979 on the file of Principal Junior Civil Judge, Addanki.
2. Heard Sri Korrapati Subbarao, learned counsel for the petitioner, Sri Nimmagadda Satyanarayana, learned counsel for the 1st respondent and respondents 6 and 7, Sri G.Pedda Babu, learned counsel for the 2nd respondent and Sri G.Subba Rao, learned counsel for the 5th respondent. None appeared for the 4th respondent. By order dated 23-12-2011, C.R.P. was dismissed for default as against the 3rd respondent.
3. The suit O.S.No.103 of 1979 was filed on the file of Principal Junior Civil Judge, Addanki by the 2nd respondent on the basis of a promissory note against the 1st respondent. The said suit was decreed on 11-12-1984. E.P.No.31 of 1994 was filed by the decree holder/2nd respondent to bring the E.P. schedule properties (three items) to sale to recover an amount of Rs.18,449/- as per the above decree. During the pendency of suit itself, the E.P. schedule properties had been attached under Order 38 Rule 5 CPC in I.A.No.700/1979 on 13-07-1979. The three properties which were brought to sale in the E.P. are as under:
"Item No.1:
Rachapudi Village, Korisapadu Mandal, Prakasam District.
1. Patta No.48. Sy. No.6 out of Ac.3.30 cents : Ac.0.76 cts
2. Patta No.246. Sy. No.9/4 out of Ac.2.26 cents : Ac.0.56 cts
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Ac.1.32 cts
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Item No.2:
Ac.3.32 cents in S.No.24 in Rachapudi village. This property was not brought to the sale.
Item No.3:
4. Item No.3 consists of three properties an extent of Ac.1.42 cents in Sy. No.138/1, an extent of Ac.0.49 cents in S.No.140/6 and an extent of Ac.0.05 cents in S.No.140/8 and the total extent is Ac.1.96 cents situated in Pamidipadu village."
5. After the E.P. was filed, notices under Order 21 Rule 22 of CPC were served on the judgment debtor/1st respondent. He entered appearance through an advocate and filed objections on 02-02-1995. The objections were overruled by the executing court on 19-04-1995. On 06-09-1995, sale papers and encumbrance certificates in respect of the E.P. schedule properties were filed. On 30-10- 1995, sale notice was ordered along with proclamation schedule. On 17-04-1996, the judgment debtor/1st respondent was set ex parte as he had not filed any counter. On 13-04-1996, the executing court settled the terms of the sale of the E.P. schedule properties. On 01-07-1996, sale was held for item No.1 of the E.P. schedule and the petitioner became the highest bidder for an amount of Rs.17,700/- out of five bidders. On the same day, sale of item No.3 of the E.P. schedule was also held and the 5th respondent became the highest bidder for the said item for an amount of Rs.24,000/-. On 08-07-1996, the E.P. was posted for further steps.
6. On 29-08-1996, E.A.No.576 of 1996 was filed by the judgment debtor/1st respondent under Order 21 Rule 90 r/w Section 47 and 151 CPC to set aside the sale alleging that his father had died intestate; that on his death, the respondents 3 and 4 became co-owners with him (i.e., the 1st respondent) in view of the Hindu Succession Act, 1956; that the 1st respondent had been sued in his individual capacity and not as Manager of the family; that the 1st respondent cannot represent the interest of the 4th respondent as she was married long ago and she was no longer a member of the family of the 1st respondent; therefore the property shown in the E.P. schedule is not legally saleable and the very order of the sale of properties itself is illegal; that there was no attachment of properties brought to sale as contemplated under law and procedure laid down by law was not at all followed; there can be no sale of properties without proper attachment; that the decree holder did not take notices as contemplated under Order 21 Rule 66 CPC; the form of notices utilized both for Order 38 Rule 5 CPC and Order 21 Rule 66 CPC are not in accordance with the Rules; thus there has been disregard of some positive provisions of law relating to the execution; that there was no publication as contemplated under law; that the basis for conducting the sale appears to be the values given by the Amin in the year 1979 and there was no assessment and fixation of value by the court; at the time of sale, the value of the properties was easily around Rs.70,000/- per acre; that the court should have considered the fair value of the properties; a deliberate mis-statement of values of the properties was given by the decree holder to mislead possible bidders to prevent them from offering adequate prices; on account of that, the properties were sold for a meager amount and the petitioner thereby sustained loss; there was no proper publication or proclamation of sale either by beat of tom tom or in papers and nobody got any notice of auction sale; that the bidders who participated in the auction were the nominees of the decree holder; there was no competition regarding the bids as there was no publication and proclamation; that all the bidders were arranged by the decree holder and the bids were collusive; there was any amount of fraud played by the decree holder in bringing the properties to sale and in publishing and conducting the sale.
7. By order 29-12-1998, the Principal Junior Civil Judge, Addanki dismissed the said E.A.No.576 of 1996 filed by the 1st respondent inter alia holding that there was no challenge by the 1st respondent to the attachment of the E.P. schedule properties before judgment and therefore the contention of the 1st respondent that Order 21 Rule 54 (2) CPC should again be invoked is not valid; that there is no irregularity or material irregularity resulting in substantial injury to the 1st respondent; that the sale notice under Order 21 Rule 66 was served on the 1st respondent/J.Dr. but he did not file any counter and remained ex parte; that after settlement of the terms of sale on 30-04-1996, on 22-05-1996, proclamation was effected as contemplated under Order 21 Rule 66 (2) CPC ; that there was adequate publicity to one and all in the village through beat of tom tom; that the sale proclamation was affixed in the Gram Panchayat office at both Pamidipadu and Rachapudi and also in the notice board of the court and the Collector's office. He also held that there was a clear recital in the sale proclamation effected on 22-05-1996 and 23-05-1996 that the items 1 and 3 of E.P. properties are subject of a mortgage to the Union Bank of India and item No.2 is under mortgage to the Land Mortgage Bank and the contention of the 1st respondent that this was not mentioned in the sale proclamation is not correct. It also held that as per Ex.A-1, valuation certificate, issued by Sub-Registrar, Ammanabrolu, the land in Sy. No.6 (forming part of item 1 of the E.P. schedule) is valued at Rs.35,000/- per acre while the land in sy. No.138/1 and 138/2 (forming part of item 3 of the E.P. schedule) is valued @ Rs.25,000/- per acre and the contention of the 1st respondent that the market value of the land is Rs.70,000/- per acre is not correct; that the lands are dry lands suitable for rain fed crops and in any event properties sold in court auction sale normally fetch a rate lower than the market rate. It was also contended by the 1st respondent that the 2nd respondent/decree holder had realized Rs.17,700/- through auction sale of item 1 of the E.P. schedule property against the sale warrant amount of Rs.18,449.95 ps; that only a meager amount of about Rs.750/- is left to be recovered; that the 2nd respondent should not have therefore focused on item 3 which consisted of three plots; at best only one plot forming part of item 3 could have been sold and not the entire extent of item 3 for Rs.24,000/-. But this contention was rejected by the court holding that there was a mortgage of items 1 and 3 to Union Bank of India, Ravinuthala dt.07-11-1974 and 23-08-1974 for Rs.4,500/- and Rs.3,500/- respectively and item 2 was mortgaged to the Land Mortgage Bank, Ongole dt.08- 04-1971 for Rs.3,000/-; that the said mortgages are in subsistence; that the mortgage debts would have first charge and therefore only the entire third item was put to auction.
8. Challenging the same, the 1st respondent/judgment debtor filed C.M.A.No.2 of 1999 to the court of the Senior Civil Judge, Addanki. Before the said court the 1st respondent relied upon Order 21 Rule 64 CPC and the decision of the Supreme Court in Ambati Narasaiah Vs. M.Subba Rao1 and contended that item 1 alone would have been sufficient to satisfy the entire decretal amount; that there was no necessity to auction the entire item 3; and that without applying its mind, the executing court had sold item 1 and item 3 in their entirety. By order dated 09-12-2002, the Senior Civil Judge, Addanki held that when Rs.24,000/- was realized in the auction on sale of item 3 and only Rs.18,449.95 ps. is the E.P. amount, the trial court could not have sold item No.1 for Rs.17,700/- and therefore set aside the sale of item No.1 of the E.P. schedule property. It also held that even if there is a charge over item 3 of the E.P. schedule properties by way of mortgage to the Union Bank of India, the rights of the auction purchaser of item 3 i.e. R-5 herein would be subject to the mortgage liability.
9. Challenging the same, the petitioner who is the auction purchaser of item 1 of the E.P. schedule property, has filed the present revision.
10. The learned counsel for the petitioner contended that the Senior Civil Judge, Addanki erred in setting aside the sale in respect of item No.1 of the E.P. schedule which took place on 01-07-1996; that the 1st respondent judgment debtor had merely contended in the said appeal before the Senior Civil Judge that the trial court ought not to have sold the entire property of item 3 consisting of three plots and therefore the Senior Civil Judge could not have granted relief beyond what was claimed by the judgment debtor; that even if the judgment of the Supreme Court in Ambati Narasaiah (1 supra) applies, still sale of item 1 cannot be set aside and the same would apply only as regards sale of item No.3.
11. On the other hand, the learned counsel for the 5th respondent contended that the order of the Senior Civil Judge, Addanki in C.M.A.No.2 of 1999 is valid and correct and did not warrant any interference under Section 115 CPC. It is contended that for setting aside a sale in execution of a decree, the petitioner should have availed the remedies under Order 21 Rule 89 and 90 CPC and as the petitioner had not filed any such application to set aside the sale of item 3, he cannot file the revision after the time prescribed for filing application to set aside the sale, has elapsed. Reliance is placed on Vummethala Somamma v. Thammeeru Balanagamma2.
12. Admittedly O.S.No.103 of 1979 was decreed for Rs.18,449.95 ps/- by the Principal Junior Civil Judge, Addanki on 11-12-1984. The 2nd respondent/decree holder had got attached under Order 38 Rule 5 CPC, during the pendency of the suit, all the above three properties owned by the 1st respondent judgment debtor , in I.A.No.700 of 1979 on 13.7.1979 and the said attachment continued during the pendency of the suit. After the suit was decreed on 11.12.1984, the 2nd respondent filed E.P.No.31 of 1994 to sell the above three properties.
13. On 01-07-1996, sale was held for item 1 and item 3 of the E.P. schedule property and the petitioner became the highest bidder in respect of item 1 by quoting Rs.17,700/- and the 5th respondent became the highest bidder in respect of item 3 quoting Rs.24,000/-. The decree was only for Rs.18,449.95 ps/-.
14. The question which arises for consideration is whether the executing court was correct in selling both items 1 and 3 of the E.P. schedule or whether it should have sold only item 1 and part of item 3 or only item 3?
15. Order 21 Rule 64 CPC states as follows:
"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."
16. In TPS Reddy Vs. Padmavathamma3, one S.P.R.Reddi obtained money decrees against one Pujari in O.S.No.15 of 1949 on the file of the Court of Sub Judge, Kurnool and also in O.S.No.19 of 1953. E.P.No.24 of 1953 was filed by the appellant before the court for selling the properties of the judgment debtor to satisfy the decree in O.S.No.15 of 1949 and he also applied for permission to bid at the auction sale. The first sale was held on 12-10-1954 wherein lands in villages Devanoor and Gudipadu were put to sale but the sale was later set aside as there was delay in payment of sale price. Thereafter a second sale took place on 02-03-1955 wherein the decree holder purchased the lands situated in village Devanoor and one TPS Reddy (the appellant before the Supreme Court) purchased the lands in the village Gudipadu. The total decretal amount was Rs.16,715-8-0. The sale of the lands in the village Devanoor alone fetched a sum of Rs.16,880/- and it appeared that the said sale proceeds would be sufficient to satisfy the decretal amount mentioned in the proclamation of sale. But the court proceeded to sell the properties of the judgment debtor in Gudipadu village also which fetched Rs.12,500/-. The judgment debtor filed an application to set aside the sale contending that once the sale of the properties in village Devanoor was sufficient to satisfy the amount mentioned in the sale proclamation, the court should have stopped the sale as required by Order 21 Rule 64 CPC instead of continuing the sale of the properties in the village Gudipadu. The trial court rejected it but the High Court upheld it on the ground of non-compliance with Order 21 Rule 64 CPC. The Supreme Court upheld the decision of the High Court and held that the High Court was right in holding that the sale of the properties in the village Devanoor fetched an amount which was sufficient to satisfy the amount mentioned in the sale warrant and the executing Court was not justified in proceeding with the sale of the properties in the village Gudipadu and should have stopped the sale. It further held that the executing court derives jurisdiction under Order 21 Rule 64 to sell properties attached only to the point at which the decree is fully satisfied and that no sale can be allowed beyond the decretal amount mentioned in the sale proclamation. It further held that the judgment debtor not having raised the objection on the above ground before the executing court would not come in his way of raising the said ground later as it was a matter which went to the very root of the jurisdiction of the executing court to sell the properties.
17. In Ambati Narsaiah (1 supra), in an execution petition, the amount claimed by the decree holder was Rs.2,400/- but land measuring Ac.10.00 gts. was sold for Rs.17,000/- to realize the decretal amount. The Supreme Court held that the land was not indivisible nor was division impracticable or undesirable and therefore out of Ac.10.00 gts., the executing court could have conveniently demarcated a portion which would fetch the decretal amount and sold it ; that a duty is cast upon the court to sell only such property or a portion thereof as necessary to satisfy the decree; and the mandate of the legislature cannot be ignored. At para 7, the Supreme Court held as follows:
"It is of importance to note from this provision that in all execution proceedings, the Court has to first decide whether it is necessary to bring the entire attached 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 decree holder. 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, in our opinion, is not just a discretion, but an obligation imposed on the Court. Care must be taken to put only such portion of the property to sale the consideration of which is sufficient to meet the claim in the execution petition. The sale held without examining this aspect and not in conformity with this requirement would be illegal and without jurisdiction."
18. In S.Mariyappa Vs. Siddappa4, the Supreme Court followed the above decisions and held that the executing court should consider whether sale of only a part of the property would be sufficient to meet the decretal debt, that therefore the sale held by the executing court should be set aside and the decree holder should seek for execution of the decree in accordance with law.
19. In the present case the E.P. amount was only Rs.18,449/- but to realize the same, the executing court on 01-07-1996 sold item 1 to the petitioner for Rs.17,700/- and also sold item 3 consisting of 3 plots to the 5th respondent for Rs.24,000/-. While the executing court justified the sale of both items on the ground that they were subject to mortgage to the Union Bank of India, Ravinuthala, the lower appellate court had held that only sale of item 3 was sufficient to satisfy the decree and that it was not necessary to sell item 1. It is important to note that the judgment debtor's contention was that the sale of item 1 to the petitioner having realized Rs.17, 700/-, there was no necessity to sell all the three plots in item 3 (Ac.1.42cts., Ac.0.49 cts. and Ac.0.05 cts.) and that for the balance amount of Rs.750/-, the executing Court could have only sold one plot of item 3 of the E.P. schedule (i.e the plot of area Ac.0.05 cents or other plot of area Ac.0.49 cents. In ground (x) of the Grounds of Appeal raised by him before the lower appellate court, he contended that "the lower court ought to have held that the conduction of sale 3 items shown in item no.3 only for balance of Rs.247/- is illegal and not valid under law and liable to be set aside. The reasoning in this context given by the lower court is not good under law as observed in the ruling reported in AIR 1990 SC 119". ). Thus it is not the contention of the judgment debtor that the sale of item No.1 is to be set aside but he contended that whole of item 3 need not have been sold.
20. The issue to be decided is when more than one item is mentioned in the E.P. schedule for sale, how the executing court should go about the sale and select the priority among the items mentioned in the schedule for sale. There is no direct decision on the issue. Therefore a common sense approach is to be adopted by the executing court. No universal rule as to the sequence to be followed can be laid down. The decree holder, when he seeks sale of more than one item of properties of the judgment debtor, normally would indicate the item with highest market value first and the other items with lesser value later in seriatim. In such a case, it is the duty of the executing court to arrive at the value of each item chronologically and sell them in seriatim, if the sale of the earlier items is not sufficient to satisfy the decree.
21. In my opinion, in the present case the judgment debtor sought application of Or.21 R.64 CPC in regard to sale of item 3. Therefore , the executing court, having sold item 1 for Rs.17,700/- to the petitioner, keeping in view the mortgages in respect of items 1, 2 and 3, should have applied its mind and then decided whether item 2 should be sold or item 3 should be sold totally or in part . This exercise does not appear to have been done by the executing court at all. The lower appellate court has set aside the sale of item 1 on the ground that the sale of item 3 would satisfy the decretal amount. When the judgment debtor had questioned the sale of all three plots of item 3 only, and had not questioned the sale of item 1 at all as being violative of Or.21 R.64 CPC, the lower appellate court could not have set aside the sale of item 1 and confirmed the sale of item 3. Therefore the sale of the said item to the petitioner has to be confirmed but since the balance recoverable is only Rs.750/- out of the E.P. amount, the executing court should consider, in the light of Order 21 Rule 64 CPC, whether the sale of item 2 or sale of item 3 (in whole or in part) should be done to recover the said amount of Rs.750/-.
22. I am also of the opinion that the contention of the fifth respondent that the petitioner not having challenged the sale of item no.3 by filing an application under Order 21 Rule 89 or 90 of CPC cannot be permitted to file the revision is to be rejected. This is because the executing court had sold both item 1 and 3 initially and therefore there was no cause of action for the petitioner who was the auction purchaser of item 1 to file a petition under Order 21 Rule 89 or 90 of CPC. Therefore judgment in VUMMETHALA SOMAMMA's case ( 2 supra ) which laid down the proposition that the judgment debtor or third party auction purchaser cannot file a revision without availing of the remedies to set aside the sale under Order 21 Rule 89 or 90 CPC has no application to the facts of the case. In the said case, the judgment debtor challenged the sale of his property to the decree holder by filing a revision in the High Court on the ground that no notice of sale was served on the judgment debtor and in those circumstances the above proposition was laid down by this Court.
23. In this view of the matter, the C.R.P. is allowed and the judgment of the Senior Civil Judge, Addanki dtd. 09-12-2002 in C.M.A.No.2 of 1999 and the judgment of the Principal Junior Civil Judge, Addanki dt.29-12-1998 in E.A.No.576 of 1996 in E.P.No.31 of 1994 in O.S.No.103 of 1979 are set aside, the sale of item 1 of the said E.P. schedule to the petitioner herein is confirmed, the sale of item 3 to the 5th respondent is set aside and the Principal Junior Civil Judge, Addanki is directed to consider in the light of Order 21 Rule 64 CPC and the above quoted decisions whether item 2 or part or whole of item 3 of the E.P. schedule should be sold to recover the balance E.P. amount of Rs.750/- to satisfy the decree in the light of the fact that items 1 to 3 were all mortgaged to the Union Bank of India, Ravinuthala and Land Mortgage Bank, Ongole and then pass orders according to law. This exercise shall be completed in a period of 3 months from the date of receipt of copy of this order. No costs.
__________________________________ JUSTICE M.S.RAMACHANDRA RAO Date:22-01.2013