Madras High Court
Athianna Gounder And Anr. vs Kumaraswamy (Now Deceased) And R. ... on 20 January, 1997
Equivalent citations: (1997)1MLJ657
ORDER S.S. Subramani, J.
1. This revision petition is by the judgment-debtors in O.S. No. 211 of 1973, on the file of Sub Court, Sankari.
2. First respondent herein, as plaintiff filed the above suit for recovery of the amount due on a promissory note. The suit was decreed, and to recover the amount, Execution Petition No. 28 of 1985 was filed. Even though the execution petition was for recovery' of the principal amount of Rs. 15,000 and interest thereon, pending execution petition itself, petitioners paid Rs. 28,500, towards the decree debt. At that time, execution petition was pending before Sub Court, Salem. When a new Sub Court was constituted at Sankari, the execution petition was transferred to that Court and sale was held on 22.11.1985. On the date of sale, the balance amount payable to the decree-holder as per the execution petition was only Rs. 1,887. It is the case of the petitioners that they are entitled to the benefit of Act 40 of 1979 and, therefore, the petitioners are liable to pay only the actual principal amount of Rs. 15,000 and Rs. 7.500 as interest. Since they have already paid more than that amount, they were under the bona fide belief that they need not pay any amount, and it was their further case that the decree-holder cannot pursue the execution. The entire debt, according to them, was wiped out. It is said that the property was purchased by decree holder's brother's son, who is also a member of the joint family. Therefore, the purchase is by the decree-holder himself, though in the name of another member, the same is without sanction of Court and hence invalid. It is further said that the decree-holder filed R.C.A. No. 421 of 1985 for sale of all the properties for the same upset price without, notice to the counsel or to the petitioners. It was at that time, the said proceedings were transferred to the Sub-Court at Sankari and re-numbered as E.A. No. 7 of 1985. Without notice to the petitioners or their counsel, R.E.A. No. 421 of 1985 was allowed, and the property was directed to be sold. There was no fresh Proclamation. Order 21, Rule 66, C.P.C. has been violated. More than 10 and odd acres of property, the value of which will be more than Rs. 2 lakhs, was sold for a paltry amount. Even if any amount is payable to the decree holder, the entire property need not be sold. Even if a small portion of the property was sold, the decree debt could-have been discharged. The Executing Court also did not apply its mind while selling 10 and odd acres. The petitioners came to know about the same only long thereafter. The entire proceedings in execution, i.e., the conduct of sale was fraudulent and void in law. The same is also without jurisdiction. They seek a declaration that the sale is invalid.
3. Both the decree holder as well as' the auction-purchaser have filed separate objections, but on the same lines. It is their case that all the proceedings have been taken in accordance with law, and they have not played any fraud either on Court or on the petitioners. It is their further cease that the petitioners have given notice of the R.E.A. No. 421 of 1985 for fresh sale of the petitioners' properties. It is their further case that when the petitioners have received notice of such an application it is their duty to watch the further proceedings. When the proceedings were transferred to Sub Court, Sankari and re-numbered as R.E.A. No. 7 of 1985, the petitioners did not care to file any objection. Therefore, the sale was ordered to take place. The contention that they did not have any opportunity to contest the case is also denied. It is their further case that no fresh notice under Order 21, R.66, C.P.C. need be issued when the execution petition is transferred to another court. Regarding the contention that only a small portion of the property could have been sold to satisfy the decree, the objection is that there is only one item of property and the same could be sold only as one lot. Even if the decree amount is small, the entire property is liable to be sold. It is their case that when the property was brought to sale it cannot be split up after settlement of proclamation, even if the judgment-debtors had paid a major portion of the amount. It is their case that the judgment-debtors ought to have taken steps to have the property split up when the property was brought to sale. They prayed for dismissal of the application.
4. Originally, the application was dismissed by the Executing Court as not maintainable on the ground that the sale certificate has already been issued, and nothing survives in execution. The Executing Court was of the view that the validity of the sale cannot be a matter in issue after the sale was confirmed and the sale certificate has been issued to the decree-holder on the auction-purchase. That order was challenged before this Court in C.R.P. No. 81 of 1990. V. Ratnam, J., as he then was, set aside the order on 8.3.1990. This Court held that since the application was under Section 47 of the Code of Civil Procedure the Executing Court should have decided the matter on merits. It was further found that if the sale is set aside, the issuance of a sale certificate is of no consequences and the technical reasoning given by the Executing Court cannot be sustained. The Executing Court was directed to restore the application filed by the petitioners and decide the matter afresh.
5. Pursuant to the said order, the execution petition was restored. But in the meanwhile, the auction purchaser filed an application praying that he may be issued a sale certificate. That was allowed. After getting the sale certificate, the auction purchaser filed an application that he may be allowed to take possession of the property. Even though the same was seriously objected by the petitioners, their objection was overruled and delivery was ordered. Against the said order, the petitioners filed C.R.P. No. 1194 of 1991, on the file of this Court. Srinivasah, J. as he then was, as per order dated 28.6.1991, dismissed the civil revision petition holding that there is no jurisdictional error in passing the order. Even before the civil revision petition was filed, it was represented by learned Counsel for the respondents that the property has been taken delivery through Court on 19.4.1991, and the Revision Petition was filed only a week later. The said submission was also recorded by the learned Judge while dismissing the revision petition. This Court was careful enough in safeguarding the interest of the judgment-debtor by directing the Executing Court to dispose of their application to set aside the sale, on or before 30.8.1991 and report to this Court about the compliance of that direction. The learned judge further declared thus:
...If the petitioners succeed in.the application under Section 47 of the Code of Civil Procedure they will be certainly entitled to get back possession by way of restitution....
With the above observation, the said revision was dismissed.
6. After the disposal of the said revision petition, the Executing Court took evidence, both oral and documentary. Thereafter, by the impugned order, it dismissed the application once again. It is that order that is challenged in this revision.
7. While dismissing the application R.E.A. No. 179 of 1986, Executing Court held that the application which was Tiled before the Subordinate Judge's Court Sankari, itself was not maintainable. It was of the view that the sale was conducted by the Subordinate Judge's Court, Salem. It was further held that the question whether the auction purchaser was entitled to get possession of the property or not, of 'whether the sale is invalid, really does not arise in execution, once the sale certificate is issued. It was further held that R.E.A. No. 179 of 1986 was filed suppressing the fact of confirmation of sale. According to the Executing Court, only that Court which conducts the sale can consider the validity, and, therefore, the application is not maintainable. The same was dismissed with costs. Learned Counsel for the petitioners submitted that the order of the Court below is perverse, and an interference under Section 115, C.P.C. is necessary. Learned Counsel submitted that the lower court has not taken note of the admitted acts or the records that were available before that Court. The observation by the lower Court that the sale was conducted by the Subordinate Judge's Court, Salem, is patently wrong. The sale was conducted only by the Court which passed the impugned order. The further finding of the Court below that once the sale is confirmed, the provisions of Section 47, or Order 21, Rule 90, C.P.C. need not be considered, as against the provisions of law, and also against the order in C.R.P. No. 81 of 1990 which directed that court to decide the matter on merits. It is further contended by learned Counsel that when more than 95% of the decree debt has been discharged, 10 and odd acres of property need not be sold for recovery of a paltry amount of only. Rs. 1,500. Even as per the valuation given by the decree holder, the property is worth more than Rs. 50,000 only that much extent of properly that is required for satisfying the decree should have been sold. The executing court did not apply its mind in that regard. It was further contended, that originally the execution petition was pending before Subordinate Judge's Court, Salem, and after the same was transferred to another court due to change of territorial jurisdiction and the sale was conducted alter 30 days, the entire proceedings is a nullity. From the transferred court, no notice has been served on the petitioners and if such a notice had been sent to them, they could have at least made an attempt to settle the transaction. That opportunity was also not given to them.
8. All these contentions were opposed by learned Counsel for the respondents. According to them, the proceeding was taken in accordance with law. The question whether the entire property should have been sold, or only a portion of it should have been sold, is a matter which the petitioners ought to have urged at the time of sale, and having failed to raise such a question at the appropriate time, that cannot be a ground for setting aside the sale. Learned Counsel further submitted that no fresh proclamation is required, since it was only a continuation of the earlier proceedings.
9. Having considered the rival submissions I am of the view that the contention of the petitioners has to succeed. I state the reasons hereunder.
10. The following properties have been brought to sale:
The total area comes to more than ten acres. From the proclamation schedule, which is marked as Ex. C-3, I do not find that the property has been encumbered in any way. Even at the time of original proclamation, i.e., at a time when more than Rs. 28,000 was due, the decree holder declared the value of all the properties at Rs. 50,000. The Amin who was deputed to assess the value of the property also fixed the value of the property at Rs. 50,000. In one of the counters to the execution petition, the judgment-debtors contended that the value of the property will be more than Rupees Two lakhs. That is in R.E.P. No. 180 of 1992. It was long thereafter, the execution petition was transferred to the Subordinate Judge's Court, Sankari. But the value of the judgment-debtors was not incorporated. The proclamation was allowed to be settled without taking into consideration the objection of the judgment-debtors.
11. Even though the amount mentioned in the original execution petition when the same was filed before the Subordinate Judge's Court, Salem was more than Rs. 28,000, a major portion of the amount was already paid, and, from the records of the case, it is seen that the petitioners have paid a total amount of Rs. 28,500. It is the case of the petitioners that since they are entitled to the benefits of Act 17 of 1979, they are bound to. pay only half the interest, thus totalling Rs. 22,500, excluding the costs. Since that amount had really been fully paid, they were under the belief that nothing more need be paid, and the decree-holder has also agreed not to proceed with the execution petition. Even if that part of the contention has not been proved, according to the decree-holder's own showing, the balance amount payable when the decree was transferred to Sub Court. Sankari was only Rs. 1,487. On the basis of the very same proclamation, and on the basis of the very same valuation, the decree-holder wanted sale of the property. He filed R.E.A. No. 421 of 1965 for the said purpose before Sub Court, Salem. The same was transferred to Sub Court, Sankari. Since no objection was filed by the petitioners, the same was allowed. From the evidence in this case, it is seen that the sale was ordered on 11.9.1985 and therefore the sale was conducted on 21.11.1985. There was no fresh settlement of proclamation pursuant to the order in R.E.A. No. 421 of 1985 (re-numbered as R.E.A. No. 7 of 1985). After the transfer to the Subordinate Judge's Court, Sankari, no notice had been served on the petitioners either regarding the date or time of sale. The entire 10 and odd acres of land was sold in one lot since the petitioners were not present at the time of sale. The Court also did not apply its mind whether the entire property has to be sold or a portion of it will be sufficient to satisfy the decree debt. Under the Code of Civil Procedure, Order 21, Rule 64, onwards deals with the procedure for sale of immovable property. Order 21, Rule 66, Sub-rule (2), C.P.C. says thus:
Such proclamation shall be drawn up after notice to the decree-holder and judgment-debtor and shall state the time and. place of sale, and specify as accurately as possible - (a) the property to be sold (or, where a part of the property, would be sufficient to satisfy the decree, such part)(b) to (d) ***** (e) every thing which the court considers material for a purchaser to know in order to judge of the nature and value of property.
Rule 69 of Order 21, C.P.C. deals with adjournment and stoppage of sale. Along with the same, the Court also will have to take into consideration the provisions of Order 21, Rule 90, C.P.C. Even if the grounds mentioned in Order 21, Rule 90, C.P.C. are not proved, if it is made out that there had been a contravention of law in the conduct of the sale, de hors Order 21, Rule 90, C.P.C, the sale has to be set aside under Section 47, C.P.C.
12. While narrating the facts I have already said that the execution petition was transferred from one Court : to another, not in the same place, but in a different taluk. The transfer was made due to bifurcation of Districts, for administrative reasons, and not on application of parties. When a new Sub Court was formed, certain suits were transferred to that Court. Naturally, that Court was bound to issue notice to the judgment-debtors that their case has also been transferred, and execution petition will be proceeded by that Court. Unfortunately that procedure was not adopted in this case. After sale was ordered in R.E.A. No. 421 of 1985 (renumbered as R.E.A. No. 7 of 1985), a duty was cast on that Court to issue notice under Order 21, Rule 66, C.P.C. That procedure was also not adopted. A sale without notice under Order 21, Rule 66, C.P.C. is always declared as a nullity and as a matter without jurisdiction. In a very recent decision of the Supreme Court reported in Desk Bandhu Gupta v. t N.I. Anand Rajinder Singh their Lordships held thus:
Service of notice on judgment-debtor under Order 21, Rule 66(2), unless waived by appearance or retained ex parte, is fundamental step in the procedure of the Court in execution. Judgment-debtor should have an opportunity to give his estimate of the property. Sub-rule (1) of Rule 66 enjoins the Court that the details enumerated in Sub-rule (2) shall be specified as fairly and accurately as possible. The duty to comply with it arises only after service of the notice on the judgment-debtor or unless he voluntarily appears and is given opportunity in the settlement of the value of the property. The absence of notice causes irremedial injury to the judgment-debtor. Equally publication of the proclamation of sale under Rule 67 and specifying the date and place of sale of the property under Rule 66(2) are intended that the prospective bidders would know the value so as to make up their mind to offer the price and to attend at sale of the property and to secure competitive bidders and fair price to the property sold. Absence of notice to the judgment debtor disables him to offer his estimate of the value who better knows its value and to publicise on his part, canvassing and bringing the intending bidders at the time of sale. Absence of notice prevents him to do the above and also disables him to know fraud committed in the publication and conduct of sale or other material irregularities in the conduct of sale. It would be broached from yet another angle. The compulsory sale of immovable property under Order 21 divests right, title and interest of the judgment-debtor and confers those rights in favour of the purchaser. It thereby deals with the rights and disabilities either of the judgment-debtor or the decree-holder. A sale made, therefore, without notice to the judgment-debtor is a nullity since it divests the judgment-debtor of his right, title and interest in his property without an opportunity. The jurisdiction to sell the property would arise in a court only where the owner is given notice of the execution' for attachment and sale of his property. It is very salutory that a person's property cannot be sold without his being told that it is being so sold and given an opportunity to offer his estimate as he is the person who intimately knows the value of his property and prevailing in the locality through exaggeration may at time be possible. Therefore, notice under Order 21, Rule 66(2), unless proviso is applied if not already issued under Order 21, Rule 22, and service is1 mandatory. The omission thereof renders the further action and the sale in pursuance thereof void unless the judgment-debtor appears without notice and thereby waives the service of notice.
[Italics supplied] That itself will be sufficient for setting aside the sale.
13. For other reasons also, the sale cannot stand in this case. I have already said that even according to the decree-holder, the value of the property was Rs. 50,000 at the time when the entire decree amount was payable to him. No sale was conducted, and more than 1 1/2 years thereafter, the entire property has been sold when the decree is executed only for Rs. 1,487. The same proclamation was made use of for the purpose of sale. In view of the amendment to Order 21, Rule 66(a), C.P.C. (extracted supra), as Act 104 of 1976, a duty is cast on the Court to verify whether the entire property has to be sold, or a sale of only a portion of it will be sufficient to meet the decree amount. In this case, admittedly, that procedure was not adopted. The decree holder himself has admitted in his counter that since the entire property is one lot and it was shown in the proclamation for sale, the same was sold as such, even though a major portion of the decree amount had already been paid. He accuses the judgment-debtors for not demarcating the entire property into plots.
14. I cannot agree with the contention of the decree-holder in that regard. Even if the judgment-debtor did not object to the procedure, the court cannot remain silent when the law casts a duty on it. In taking this view, I am supported by the decision reported in Takkaseela Pedda Subba Reddi v. Pujati Padmavathamma and Ors. Where it was held thus:
Even though the decree-holder had obtained the second decree before the sale, he did not approach the Court for amending the decretal amount mentioned in the sale proclamation to include both the decrees. So, under the provisions of Order 21, Rule 64 of the Code when the amount as specified in the sale proclamation was fully satisfied by the sale of the first set of properties the Court should have stopped the sale of further items of the properties. It is manifest that where the amount specified in the proclamation of sale for the recovery of which the sale was ordered is realised by sale of contain items, the sale of further items should be stopped. Under Order 21, Rule 64 the executing court derives jurisdiction to sell properties attached only to the point at which the decree is fully satisfied. The words "necessary to satisfy the decree" clearly indicate that no sale can be allowed beyond the decretal amount mentioned in the sale proclamtion.
The fact that the judgment-debtor did not raise an objection on this ground before the executing court is not sufficient to put him out of Court because this was a matter which went to the very root of the jurisdiction of the Executing Court to sell the properties and the non-compliance with the provisions of Order 21, Rule 64 of the Code was sufficient to vitiate the same so far as further items of properties were concerned.
[Italics supplied] The above decision was followed the Supreme Court in Amhatti Nurasayya v. Subba Rao and Anr. wherein (in para 7) their Lordships said thus:
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 satisfy property to sale or such portion thereof as may seen necessary to atta 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 to which would be sufficient to satisfy the claim of the decree holder. Ii is immaterial whether the properly 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, both and obligation imposed on the court. Care must be taken to put one 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.
15. The decision reported in Karimbal Ice & Cold Storage Co. and Anr. v. S.S.B.T. and Anr. (supra was followed by the Kerala High Court in the decisions reported in 1995 I K.L.T 495 and also in Parvathv Antharjanan v. Indian Bank (1990) 1 K.L.T. 319.
16. In view of the above settled principles of law, the contention of the decree-holder that since the judgment debtors failed to have the property divided in lots, the entire property is liable to be sold cannot stand. In this case, that question cannot arise in view I of my finding on the earlier point that the judgment-debtors were not given any notice by anyone regarding the date and time of sale. Even the Court before which they should appear was not known to them. The conduct of the judgment-debtors also makes me to believe that if only an opportunity had been given to them, they would have settled the entire matter. More than 95% of the decree debt has been paid by them within a short period of one year after the execution petition was filed. When the balance due was a paltry sum of Rs. 1,487 they would not have hesitated to wipe off the decree debt, to save the entire ten acres of land. It is an unencumbered agricultural property belonging to the family. The decree-holder should have taken steps to issue notice to the judgment-debtors when the property was sold by the transferee Court. When the Court has failed to discharge this duty, the party should not suffer on account of the same.
17. The sale was conducted violating the provisions of law and, therefore, it was one without jurisdiction. Because, the judgment-debtors were not given opportunity to pay the amount, to avoid the sale, it cannot but be held that they were put to irreparable loss and the sale is tainted with material irregularity and illegality.
18. The Court below has not taken into consideration any of the above facts, and dismissed the application on irrelevant considerations. I set aside the order of the Court below and allow the revision.
19. I have already said that Srinivasan, J. as he then was in C.R.P. No. 1194 of 1991, has held that if the application under another Section 47, C.P.C. is allowed, the petitioner will be entitled to gel restitution. That order binds the parties to the proceedings. In view of the said order, I hold that the petitioners will be entitled to get possession of the property even without a further application. The respondents have in the earlier proceedings, admitted that they have dispossessed the judgment-debtors on 19.4.1991. This Court has taken note of the said statement, and that was the reason for dismissal of the civil revision petition. Now they cannot turn round and say that they did not obtain possession. They are bound to is and over possession of the property forthwith. Since they have taken possession of the properly under sale which is held to be illegal and without jurisdiction, they arc also liable for profits, which is to be ascertained by the Executing Court.
20. In the result, the Civil Revision Petition is allowed with costs before this Court well as in the Court below. In this Court I quantify that costs at Rs. 1,000. The respondents herein are direct to hand over possession of the property to the petitioners within two weeks from to-day, and in case they failed to do so, the Court below on production of a copy of this order, by the petitioners, or on receipt of the copy of this order from this Court shall see that the petitioners herein are in possession of the property in question without any further delay. The order will have to be complied with by the Court below within 15 days from the date of receipt of the copy of this order, and a compliance report should be forwarded to this Court without fail. The question of quantifying the profits can wait till the petitioners are put in possession of the property as directed above. The auction purchaser is permitted to withdraw the amount deposited in court.