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Showing contexts for: rateable distribution in Leburu Sudhakara Reddy vs Gandavaram Rama Subbamma And Ors. on 16 September, 1997Matching Fragments
4. On the other hand, the learned Counsel for the respondents supported the impugned order under appeal. He contended that as pointed out by the Court below the irregularities that are noticed in the paper publication are not material irregularities. Presuming for the sake of the argument that such irregularities are there, the petitioner has not proved that he sustained a substantial injury. The burden is on him to prove the same. He further contended that he did not lead any evidence to show what exactly would be the value of the property now sold and how he sustained any injury. Nextly, he contended that he has no locus standi to maintain the present petition because E.P.No. 1 of 1989 in which he is a decree-holder, he has filed E.P. only for the purpose of attachment of monthly rents from M.N. Narayana, Managing Partner, Modern Hotel, Gudur, as a garnishee and he did not file any execution petition for attachment and sale of the present property. Therefore, the present E.P. is not maintainable in view of Section 73 of C.P.C. He elaborated his contention by stating that unless he files an application for attachment of (sic. and) sale of this property in question, he would not be entitled for any rateable distribution in terms of the said section. Therefore, he has no locus standi to maintain this petition. Secondly, he contended that, at any rate he has not shown before the Court, by leading cogent evidence that the market value is more than for what it was sold to the Respondent No. 1 (auction purchaser) and unless that is demonstrated he cannot be said to have suffered any injury, as held by the Hon'ble Supreme Court in . Hence, he submitted that there are no merits in the petition and the petition is accordingly liable to be dismissed.
6. Before I proceed to consider the matter on merits, I now first consider the arguments of the 1st respondent's Counsel regarding the locus standi of the petitioner. It is the argument of the learned Counsel for the respondent that since the petitioner had not sought for execution of the decree by sale of the property in question, he could not maintain the present petition. He further submitted that unless the petitioner files an application for attachment and sale of this particular property, he would not be entitled for any rateable distribution in terms of Section 73 of C.P.C. Therefore, the petitioner has no locus standi to challenge the auction sale held on 20-4-1993. In order to appreciate this contention, I immediately refer to Section 73 of C.P.C. which reads as under:
"Section 73. Proceeds of execution sale to be rateably distributed among decree- holders: (1) Where assets are held by 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: Provided as follows:-
(a) where any property is sold subject to a mortgage or charge, the mortgagee or incumbrancer shall not be entitled to share in any surplus arising from such sale;
(2) where all or any of the assets liable to be rateably distributed under this section are paid to a person not entitled to receive the same, any person so entitled may sue such person to compel him to refund the assets.
(3) Nothing in this section affects any right of the Government."
From Section 73 (1) C.P.C., it is clear that where the assets are held by the Court and where more than one person have made an application to the Court for the execution of a decree for payment of money passed against the same judgment-debtor and where such persons have not obtained satisfaction of their decrees, the assets shall be rateably distributed among all such persons. In the instant case, the petitioner himself is a decree-holder having obtained the decree in O.S.No. 138 of 1985 against the very judgment-debtors and he has filed E.P.No. 1 of 1989 and the same is pending. It is necessary to note here itself that the petitioner's brother also had obtained a decree for money in O.S.No. 91 of 1985 and his execution petition is pending in E.P.No. 17 of 1989. The impugned proceedings arise in E.P.No. 5 of 1989 in execution of a decree in O.S.No. 27 of 1987 in which R-1 is the auction purchaser. It is the case of the petitioner that the petitioner also should have been given an opportunity to participate in the auction in E.P.No. 5 of 1989. At any rate, the auction is bad for number of irregularities which he has pointed out. The Court below in the impugned order proceeded on the assumption that the petitioner has filed the present petition in E.A.No. 83 of 1993 to set aside the auction sale in E.P.No, 5 of 1989 on behalf of his brother as a General Power of Attorney holder. In fact, as noticed in para 22 of the judgment itself, the petitioner filed this application in his individual capacity as a decree-holder but not as a G.P.A. holder of his brother Sri L. Kiran Reddy, even though his brother also is a decree-holder whose execution proceedings also are pending in E.P.No. 17 of 1989. From this fact, it is clear that the petitioner being himself a decree holder, his decree is not yet satisfied, and accordingly he is entitled for rateable distribution. Thus, he has locus standi. However, the learned Counsel for the respondent submitted that under Section 73 (c) of C.P.C. and Order 21 Rule 90 of C.P.C. the petitioner should have applied for the attachment and sale of the property of the judgment-debtor and he has filed E.P. to attach certain moneys in the hands of the garnishee and vide order of the Court of the Additional Subordinate Judge, Gudur dt. 7-2-1996 garnishee is directed to deposit the monthly rents payable to the principal-debtor to E.P. He further submitted that since he has not prayed for the sale and execution of the property in question, he cannot maintain the present petition. But, I am of the opinion that when Section 73 itself enables the petitioner for rateable distribution of the assets in the hands of the Court, neither Section 73 (c) nor Order 21, Rule 90 of C.P.C. would have the effect of restricting such relief only because he has not sought for sale of judgment-debtor's property. Attachment and sale of judgment-debtor's property is one such mode to satisfy the decree and garnishee proceedings is the other mode. The intendment of Clause 4 of Section 73 (1) (c) is also to the same effect and the decree-holders need not have applied for sale of such property. Even if they applied to the Court for any other mode for satisfying their decree, they would be entitled to rateable distribution. The phrase "ordering such sale" found in Clause 4 of Section 73 (1) (c) is an adjective to the Court to which the holders of decree have applied and the same shall not be read as "holders of decrees applying to the Court for sale" as interpreted by the learned Counsel for Respondent No. 1. If "ordering sale" were to be used in relation to the holders of decree applying to the Court, the phrase would have been "for ordering such sale for execution of such decrees". The absence of the word 'for' would lead to only conclusion that 'ordering such sale' found in that clause is adjective to the Court to which the holders of decree have applied. In other words, it simply means that holders of decrees for payment of money against the judgment- debtor, who have applied to the Court prior to the sale of property, the Court ordering such sale for execution of such decrees, may apply the proceeds rateably amongst the holders of such decrees, who have not obtained satisfaction thereof. Therefore, the contention of the learned Counsel for Respondent No. 1 urged in this behalf is hereby rejected.