Madras High Court
Arunachalathammal vs Balasubramanian (Died) on 24 October, 2018
Author: G.R.Swaminathan
Bench: G.R.Swaminathan
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 24.10.2018
CORAM
THE HONOURABLE MR.JUSTICE G.R.SWAMINATHAN
CMSA (MD) No.17 of 2015
and
MP(MD)No.2 of 2015
1.Arunachalathammal
@Chellammal
2.Somasubramanian ... Appellants
Vs.
Balasubramanian (died)
1.Minor.Maruthu Manikandan
(rep.by his next friend &
Guardian Murugesan)
2.A.K.C.Kanthasamy Mudaliar
3.Lakshmi Durai Arasu ... Respondents
(R3 is impleaded as per order dated
10.10.2018 in CMP(MD)No.3235 of 2017)
Prayer : Civil Miscellaneous Second Appeal is filed Order 43 Rule 1 r/w.
Section 100 of Civil Procedure Code, to set aside the Judgment and decree
dated 05.10.2013 passed in CMA No.9 of 2013 on the file of the 4th Additional
District Court, Tirunelveli confirming the fair and decreetal order dted
04.02.2013 passed in E.A No.187 of 2012 in E.P No.97 of 2006 in O.S No.347 of
1999 on the file of the Principal Sub Court, Tenkasi.
!For Appellants : Mr.V.Meenakshi Sundaram
for Mr.D.Nallathambi
^For Respondents : Mr.A.Haja Mohideen for R1
Mr.Anand C.Rajesh for R3
R2 ? No appearance
:JUDGMENT
O.S No.347 of 1999 on the file of the Additional Sub Court, Tenkasi was filed by late Karuthaiya Solalaghar against the second respondent namely, Kandhasamy Mudaliyar for recovering a sum of Rs.57,610/- with interest. The suit was decreed exparte on 02.09.2003. To enforce the decree, E.P. No.97 of 2006 was filed. In the meanwhile, the decree holder passed away and his legal heirs came on record. In the execution petition, the petition mentioned property was attached on 25.06.2006. It was subsequently brought to sale. Upset price was originally fixed at Rs.5,75,000/- and later reduced to Rs.5,25,000/-. In the auction sale, the highest bid was Rs.5,26,000/-. The appellants herein who are none other than the wife and son of the judgment debtor filed E.A No.187 of 2012 for raising the attachment made on 25.06.2006.
2.The appellants contended that the property in question had been settled in their favour by the judgment debtor on 25.08.2005 itself by a registered document. The attachment itself was made only on 25.06.2006. Since the property had changed hands even prior to the filing of the execution petition, the appellants wanted the attachment to be raised. But, the executing court by order dated 04.02.2013 dismissed the said E.A No.187 of 2012. Aggrieved by the same, the claimants filed CMA No.9 of 2013 before the 4th Additional District Judge, Tirunelveli. The learned first appellate court by order dated 05.10.2013 dismissed the CMA and affirmed the order passed by the executing court. Challenging the same, this Civil Miscellaneous Second Appeal has been filed. The Civil Miscellaneous Second Appeal is admitted since the following substantial questions of law have arisen for determination :
1.When the upset price fixed by the Execution Court for the property attached in the court auction itself Rs.5,25,000/- and the decree put in execution is for recovery of a poultry amount less than one lakh, whether the approach of the executing court auctioning the valuable property belongs to this claimant and the order of dismissing the claim petition by the courts below is correct and the same is against the spirit of Order 21 Rule 64 of Civil Procedure Code 1908?
2.When the property in dispute was settled by the 2nd respondent infavour of these appellants/claimants through a registered settlement deed dated 25.08.2005, whether the attachment of the very same property in the execution proceedings much later on 25.06.2006 is valid and in consonance to Order 21 Rule 41 of Civil Procedure Code?
3.Whether the courts below are correct in dismissing the claim petition filed by these appellants simply on the ground that the approach of the executing court, auctioning the entire property as the same is indivisible is correct when the executing court had not applied its mind as per Order 21 Rule 64 before attaching and auctioning the property in dispute and hence the order of the courts below warrants interference?
3.Heard the learned counsel on either side.
4.It is not in dispute that the suit was filed for recovering a sum of Rs.57,610/-. The principal amount is Rs.42,000/-. Even the E.P was filed only for a sum of Rs.74,725/-. The decreetal liability was below a sum of Rs.1.00 Lakh even at the time of bringing the attached property to sale. The property that was attached and later brought for sale comprises a residential house and an appurtenant vacant land. The original valuation and upset price was at Rs.5,75,000/-. E.A No.371 of 2010 was filed and the upset price was reduced to Rs.5,25,000/-. The property was ultimately sold for Rs.5,26,000/- . Even according to the executing court, the property comprising a house and an appurtenant vacant site could fetch a sum of Rs.5,25,000/-. Since the E.P claim itself was less than a sum of Rs.1.00 lakh, a portion of the property alone ought to have been brought to sale. But, the courts below proceeded on the erroneous footing that a single item of property cannot be so divided. The courts below had proceeded on the understanding that only when there is more than one item of property that are brought to sale, the question of divisibility will arise.
5.As rightly contended by the learned counsel appearing for the appellants, this is clearly an erroneous understanding of the legal position. Order 21 Rule 64 of CPC reads 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.?
The expression ?such portion thereof? occurring in the aforesaid rule is significant. Therefore, to apply the principle of divisibility, it is not necessary that there should be more than one item of property that is being brought to sale. The statutory scheme set out under Order 21 Rule 64 of CPC contemplates that only a portion of the property should be brought to sale if it is sufficient to satisfy the decree. Order 21 Rule 64 of CPC will have to be read along with Order 21 Rule 17 (4) of CPC. The proviso to Order 21 Rule 17(4) of CPC reads that in the case of a decree for the payment of money, the value of the property attached shall, as nearly as may be, correspond with the amount due under the decree. In this case, the amount due under the decree was only a sum of Rs.57,610/-. When the E.P was filed, it was only a sum of Rs.74,725/-. Even when the property was brought for auction sale, still the decretal liability was less than a sum of Rs.1.00 lakh. Thus, it is beyond dispute that a property which was worth more than five and half times the decreetal liability was brought to sale.
6.The learned counsel appearing for the appellants placed reliance on the decision of the Hon''ble Supreme Court reported in 2006 (3) CTC 180 (Balakrishnan vs. Malaiyandi Konar). Interpreting Order 21 Rule 64 of CPC, the Hon'ble Supreme Court held as follows :
?10.The provision contains some significant words. They are ?necessary to satisfy the decree?. Use of the said expression clearly indicates the legislative intent that no sale can be allowed beyond the decretal amount mentioned in the sale proclamation. (See Takkaseela Pedda Subba Reddi v. Pujari Padmavathamma, AIR 1977 SC 1789. In all execution proceedings, Court has to first decide whether it is necessary to bring the entire 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 is not just a discretion but an obligation imposed on the court. The sale held without examining this aspect and not in conformity with this mandatory requirement would be illegal and without jurisdiction. (See Ambati Narasayya v. M. Subba Rao and Anr., 1989 Suppl. (2) SCC 693. The duty cast upon the court to sale only such property or portion thereof as is necessary to satisfy the decree is a mandate of the legislature which cannot be ignored. Similar view has been expressed in S. Mariyappa (Dead) v Siddappa and anr., 2004(3) CTC 671 : 2005
910) SCC 235.
11. In S.S. Dayananda v. K.S. Nagesh Rao and others., 1997 (4) SCC 451, it was held that the procedural compliance with Order 21, Rule 64 of the Code is a mandatory requirement. This was also the view expressed in Desh Bandhu Gupta v. N.L. Anand and Rajinder Singh, 1994(1) SCC 131.?
7.The learned counsel appearing for the auction purchaser pleaded that his claimant had raised the amount in question through private sources and that he has so far been servicing the interest liability and that his burden has by now mounted to more than Rs.25.00 lakhs. He called upon this Court to follow the decision of the Hon'ble Supreme Court reported in (2015) 2 SCC 46 (Guttikonda Venkataramaiah vs. Godavarthy Venkateswarlu and another). The Hon'ble Supreme Court in the said case had clearly castigated the conduct of the judgment debtor and after reversing the decision of the High Court directed that the auction purchaser be put in possession of the property in question. The learned counsel highlighted that in the present case also the appellants are none other than the wife and son of the judgment debtor. The fact that the judgment debtor transferred the property in their names after suffering the decree would go to show that he never had any bonafide intention to satisfy the decretal liability.
8.The objections raised by the learned counsel appearing for the auction purchaser cannot be casually brushed aside. Therefore, this Court called upon the learned counsel appearing for the appellants to come out with a fair offer to give a quietus to the issue on hand. Thereupon, the learned counsel appearing for the appellants filed an affidavit before this Court. The appellants' counsel produced a Demand Draft for a sum of Rs.1,25,000/- favouring the decree holder. The said sum represents the decretal liability as on date. The auction purchaser had deposited a sum of Rs.5,26,000/-. Of course, since the said amount was deposited only in court. It would not have fetched any interest. The appellants filed an affidavit undertaking to deposit a sum of Rs.5,00,000/- towards interest as well as compensation in favour of the auction purchaser.
9.This Court expressed the view that the said amount cannot really be sufficient. Thereupon, the learned counsel for the appellants made a statement that the offer of Rs.5.00 lakhs can be further improved and that he would be prepare to pay a sum of Rs.7.00 lakhs in all towards all the claims of the auction purchaser. Though, the claim petition filed by the appellants was dismissed and the same was also affirmed by the first appellate court, the matter has not attained finality. Therefore, whatever rights that may have been acquired by the auction purchaser can only be said to be rather nebulous. The Hon'ble Supreme Court in the decision reported in AIR 2000 SC 1148 (Kharaiti Lal v. Raminder Kaur) held that if an appeal was pending against an order refusing to set aside the sale, the confirmation of sale as also the issuance of Sale Certificate would be in a nebulous state. It was further held that the sale does not become absolute or irrevocable merely on passing an order confirming the sale under Order 21, Rule 92, but it would attain finality on the disposal of the appeal, if any, filed against an order refusing to set aside the sale.
10.In the present case, the appellants applied for raising the attachment. The executing court dismissed the said E.A. The auction was conducted only thereafter. The present CMSA arises out of the said proceedings filed by the appellants for raising the attachment. Therefore, the fact that the auction was concluded and sale certificate was issued in favour of the third respondent in the meanwhile cannot be decisive of the matter. In the very nature of things, it is subject to outcome of this appeal.
11.As already pointed out, complying with the mandate set out under Order 21 Rule 64 of CPC is mandatory. It is an obligation cast on the executing court. In this case, the executing court failed to decide as to whether it is necessary to bring the entire property to sale or only a portion thereof as necessary to satisfy the decree in question. The Hon'ble Supreme Court in the decision reported in 2006 (3) CTC 180 (Balakrishnan vs. Malaiyandi Konar) held that even if property is one, if a separate portion could be sold without violating any provision of law, only such property should be sold. In this case, the executing court failed to even explore the said option. In as much as the mandate set out under Order 21 Rule 64 r/w the proviso to Order 21 Rule 17(4) of CPC has not been borne in mind, the substantial questions of law that arise for determination in this case are answered in favour of the appellants.
12.The orders impugned in this Civil Miscellaneous Second Appeal are set aside. This Civil Miscellaneous Second Appeal stands allowed subject to the following directions :
(i) The appellants shall forthwith hand over the Demand Draft drawn in Canara Bank, Krishnapuram Branch for a sum of Rs.1,25,000/- in favour of the decree holder to the counsel for the decree holder herein. The auction purchaser is permitted to withdraw whatever amount deposited by him under any head in E.P No.97 of 2006 on the file of the Principal Sub court, Tenkasi.
(ii)The appellants shall deposit a sum of Rs.7.00 lakhs within a period of four weeks from the date of receipt of a copy of this order to the credit of E.P. No.97 of 2006 and the auction purchaser is permitted to withdraw the same amount of Rs.7.00 lakhs towards interest and compensation and all his other claims. If this condition is not complied with, this order would stand recalled and this CMSA would be dismissed automatically.
13.This Civil Miscellaneous Second Appeal is allowed on these terms. No costs. Consequently, connected miscellaneous petition is closed.
Note :The counsel for the decree holder acknowledges receipt of the DD for Rs.1,25,000/-
To 1.4th Additional District Judge, Tirunelveli.
2.The Principal Sub Judge, Tenkasi.
Copy to :
The Record Keeper, V.R.Section, Madurai Bench of the Madras High Court, Madurai.
.