Kerala High Court
Boban vs Sajith Kumar And Anr. on 1 October, 2003
Equivalent citations: AIR2004KER181, AIR 2004 KERALA 181, (2004) 1 KHCACJ 249 (KER), ILR(KER) 2004 (1) KER 113, (2004) 1 KER LJ 153
Author: K. S. Radhakrishnan
Bench: K.S. Radhakrishnan, Pius C. Kuriakose
JUDGMENT K. S. Radhakrishnan, J.
1. This appeal arises out of the order passed in E.A. No. 1145 of 1999 in E.P. No. 473 of 1998 in O.S. No. 761 of 1996 on the file of the Sub-Court, Thrissur,
2. Appellant herein was the petitioner in E.A. No. 1145 of 1999 which was filed under Order XXI, Rule 90 of the Code of Civil Procedure. He is the decree holder in E.P. No. 179 of 1998 in O.S. No. 1892 of 1996 on the file of the Munsiff s Court, Thrissur. In execution of the decree he filed E.P. No. 179 of 1998 before the Munsiffs Court. Vadakkancherry. Decree schedule property was scheduled to be auctioned on 10-8-1999. Appellant however noticed that in order to defeat his interest, first respondent, who is the decree holder in O.S. No. 761 of 1986 had filed E.P. No. 473 of 1998 bringing the schedule property to auction. Property was sold in auction in that case on 21-6-1999. Sale was got confirmed on 23-2-2000. Appellant therefore wanted to set aside the sale in E.P. No. 473 of 1998 and put the property in auction again so that he would be able to realise the amount. He also raised a contention that the bid amount be deposited and he may be allowed to realise the amount by rateable distribution. The Court below found no basis in the petition and dismissed the same. Property was sold in auction for an amount of Rs. 1,00,124/- in E.P. No. 473 of 1998 and there is no justifiable reason to set aside the same. Further the Court below held that the appellant has not complied with the conditions prescribed in Section 73 of the Code for rateable distribution and dismissed the application. Aggrieved by the same this appeal has been preferred.
3. Counsel appearing for the appellant Sri Dilip J. Akkara contended that the sale was vitiated by fraud and material irregularity and therefore liable to be set aside. Counsel submitted that appellant came to know about the sale of the property only when E.A. No. 179 of 1998 was filed by the first respondent in O.S. No. 1892 of 1996. In any view of the matter, sale proceeds are liable to be rateably distributed as required under Section 73 of the Code.
4. Counsel appearing for the respondent, Sri G. Unnikrishnan, on the other hand contended that sale is not vitiated by fraud or material irregularity. He also pointed out that respondent had filed application under Order XXI, Rule 72 seeking permission to bid in auction and it is only after obtaining the permission he bid the property in auction. Counsel also submitted that the appellant has not complied with any of the conditions stipulated in Section 73 of the Code.
5. Contention of the appellant is that the sale conducted is liable to be set aside on the ground of fraud and material irregularity. Burden of proving fraud and material irregularity rests on the applicant. Mere assertion of circumstances is not sufficient to prove fraud. In the absence of any materials, we are inclined to reject the contention that the sale is vitiated by fraud or material irregularity. Facts would indicate that the property sold in auction was attached on 2-11-1996 as per order in I.A. No. 5018 of 1996 in O.S. No. 761 of 1996. Appellant filed E.R No. 179 of 1998 before the Munsiffs Court, Vadakkancherry on 6-10-1999 after E.P. No. 473 of 1998 was filed by the first respondent herein. Property was then sold in auction on 21-6-1999 and the sale was confirmed on 23-2-2000. Application to set aside the sale under Order XXI, Rule 90 was filed on 1-9-1999 though the property was sold on 21-6-1999. Under Article 127 of the Limitation Act, application to set aside sale in execution of a decree has to be filed within sixty days from the date of sale. Sale was conducted on 21-6-1999, evidently the application was filed beyond 60 days and therefore not liable to be entertained. We may also examine as to whether petitioner is entitled to get rateable distribution under Section 73 of the Code. The said provision is extracted below for easy reference.
73. (1) Where assets are held by a Court and more persons than one have, before the receipt of such assets, made application to the Court for the execution of decrees for the payment of money passed against the same judgment-debtor and have not obtained satisfaction thereof, the assets, after deducting the costs of realization, shall be rateably distributed among all such persons.
In order to apply Section 73, three conditions have to be satisfied. Counsel appearing for the petitioner placed reliance on various decisions. Reference was made to the decision of the Full Bench of Hyderabad High Court in Commercial and Industrial Bank Ltd. v. Mir Sarfaraz Ali Khan, AIR 1956 Hyderabad 65. Reference was also made to the decisions in Megaraj Iswardas v. Corporation of Madras, AIR 1936 Madras 797, Ramchandra Yeshwant Shringarpure v. Digambar Tejiram Pardeshi, AIR 1960 Bombay 230. Counsel appearing for the respondent, on the other hand, placed reliance on the decisions in Punnamchand Chatraban v. Vijjapu Satyanandan, AIR 1933 Madras 804, Subramania Iyer v. Sankaran Unni, AIR 1953 Trav-Co. 213, K. Subbayyamma v. P. Bangarraju, AIR 1961 Andh Pra 422, V. T. Veerappa Chettiar v. P.S. Palaniappa Chettiar, AIR 1973 Madras 313 and AIR 1984 Andh Pra 277.
6. We need not elaborately deal with those decisions cited by the counsel on either side, since we are satisfied that the sale is not vitiated by fraud or material irregularity. With regard to the claim for rateable distribution, we are of the view that the appellant has not satisfied the conditions to be complied with for claiming rateable distribution. The object of Section 73 is to prevent unnecessary multiplicity of execution proceedings, to obviate, in a case where there are many decree holders, each competent to execute his decree by attachment and sale of a particular property, the necessity of each and every one separately attaching and separately selling that property. In order to enable the decree holder to participate in the assets of a judgment debtor the following conditions have to be satisfied by the decree-holder; (i) decree holder claiming to share in the rateable distribution should have applied for execution of his decree to the appropriate Court, (ii) such application should have been made prior to the receipt of the assets by the Court, (iii) the assets of which a rateable distribution is claimed must be assets held by the Court, (iv) the attaching creditor as well as the decree holder claiming to participate in the assets should be holders of decrees for the payment of money, and (v) such decrees should have been obtained against the same judgment debtor. It is well settled that no rateable distribution should be claimed unless all the above mentioned conditions are fulfilled. Appellant herein has not satisfied any of the conditions enumerated above. Facts would show that appellant has not filed any application for rateable distribution prior to the receipts of assets by the Court. In V.T. Veerappa Chettiar's case, AIR 1973 Madras 313 (supra) the Court has held that an application for execution of a decree should be taken in the Court which received and held the assets. It was also held that Section 73 cannot be construed so as to enable all the decree holders, irrespective of their applications in different Courts, to claim the benefit since the Court which has received and held the assets may not know the number of applications in various Courts. In K. Subbayyamma's case, AIR 1961 AP 422 (supra), the Court has taken the view that one of the conditions which has to be satisfied before a decree holder can claim rateable distribution under the Section is that he should have applied for execution of his decree to the Court before the receipt of the assets. In the instant case, since the appellant has not satisfied any of the above mentioned conditions, we are of the view that Court below is perfectly justified in dismissing the application. The appeal is accordingly dismissed.