Sai
Enterprises Vs. Bhimreddy Laxmaiah & Anr [2007] Insc 292 (16 March 2007)
Dr. ARIJIT PASAYAT & LOKESHWAR SINGH PANTA
Dr. ARIJIT PASAYAT, J.
Challenge in this appeal is to the judgment passed by a learned Single Judge
of the Andhra Pradesh High Court dismissing the Civil Revision petition filed
under Article 227 of the Constitution of India, 1950 (in short 'the
Constitution') read with Section 115 of the Code of Civil Procedure, 1908 (in
short the 'Code').
Background facts in a nutshell are as follows:
The appellant filed a suit O.S. No.57/96 against respondent no.2 for
recovery of Rs.4,49,500/-. The respondent no.1 also filed a suit O.S. No. 65/96
against respondent no.2 for foreclosure of the mortgage in his favour for a sum
of Rs.1,00,000/-. Both the suits were pending on the file of the Senior Civil
Judge, Suryapet. During the pendency of the suit appellant filed IA no. 413/96
for attachment before judgment and same was ordered in terms of order dated
7.10.96. OS No.65/96 filed by respondent no.1 was decreed against respondent
no.2. Respondent no.1 filed an execution petition (EP No.1/99) and sought for
sale of mortgaged property as respondent no.2 did not satisfy the decree.
Respondent no.1 indicated the value of the property to be rupees three lakhs.
The bailiff after obtaining information from the Registrar and Municipal Office
mentioned value of the property at Rs.2,55,490/-. The appellant's suit OS 57/96
was decreed against respondent no.2. The said respondent No. 2 - judgment
debtor was set ex parte as he did not attend the EP proceedings i.e. EP
no.1/99.
Proclamation was published in newspaper "Eenadu". The matter was
adjourned from time to time. Appellant filed execution petition EP no.19/01
seeking direction for sale of schedule property for realization of the amount
of Rs.5,69,816/- due under the judgment and decree dated 16.2.2000 made in OS
No.57/96.
Respondent no.2 filed an application EA No.90/01 in EP No.1/99 under Order
XXI Rules 69 read with Sections 47 and 151 of the Code seeking a direction to
stop the auction to be held on 12.11.2001 and sought for adjournment of the
matter for settlement of terms and conditions of sale. Fresh publication and
proclamation of sale was made in newspaper namely, Neti Manadesam. Learned
Civil Judge dismissed the application EA No.90/91 in EP No.1/99 filed by
respondent no.2. The said order was challenged before the High Court in CRP
no.6036/01. Again proclamation of sale was published in 'Neti Mandadesham' and
the decree holder purchased the property for Rs.3,12,000/- in OS No.57/96.
Thereafter the appellant filed an application EA No.42/02 under Order XXI Rule
90 of the Code to aside the sale and to re-auction the schedule property, as
the respondent no.1 has not taken proper steps for wide publicity of the
auction. It was stated that the value of the property was not less than rupees
six lakhs. Objection was filed by the respondents. The judgment- debtor
categorically stated in the counter that the value of the property is more than
rupees 8 lakhs. The sale was confirmed on 24.1.2002. The High Court dismissed
CRP filed by the judgment debtor-respondent no.1. The appellant filed an
application EA No.107/03 in EA No.42/02 in EP No.1/99 to receive the valuation
report issued. Learned Civil Judge dismissed the application. The High Court
was moved. As noted above the High Court, dismissed the Civil Revision petition
being of the view that allegations made in the petition are general in nature,
and the affidavit with the petition does not disclose whether objection relates
to non publication in the newspaper or places.
In support of the appeal learned counsel for the appellant submitted that
the newspaper in which the publication was made is not a wide circulating
newspaper.
Further the valuation at which the decree holder purchased is very low.
Additionally, it is submitted that in terms of Order XXI Rule 64 of the Code
the Court was required to find out whether a part of the property would have
sufficed to meet the decretal amount, which was not done in the present case.
Learned counsel for the respondent supported the order.
It is to be noted that the High Court has categorically found that initially
the auction was notified in newspaper 'Eanadu' with wide circulation, and that
was done on two occasions. The grievance about the publication in a newspaper
with inadequate circulation would have been a factor provided the earlier
notice was published in some newspaper not having wide circulation, but
admittedly the publication was made in newspaper 'Eanadu' having a wide
circulation. Additionally, it was submitted that the stand regarding
non-compliance with the requirements of Order XXI Rule 54 sub-rule (2) of the
Code is of no consequence because the objection has to be specific and not to
be general in nature. In the absence of specific allegations it would not be
possible for either parties or the executing court to deal with the same. This
conclusion of the High Court is in order.
However, the grievance of the appellant so far non- compliance with the
requirements of Order XXI Rule 64 of the Code is on sound footing.
Order XXI Rule 64 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 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 portion 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) by LRs. And
Ors. v. Siddappa and Anr. (2005 (10) SCC 235). The position was also
highlighted in Balakrishnan v. Malaiyandi Konar (2006 (3) SCC 49).
In the aforesaid background normally we would have remit ted the matter for
consideration of the aspects covered by Order XXI Rule 64 of the Code. But
considering the peculiar facts of the case and the long passage of time, we
direct that the respondent no.1 shall pay a sum of rupees one lakh to the
appellant within a period of three months. In case of non-payment of the
aforesaid amount, the appellant shall be free to pay a sum of Rs.3,12,000/-
with 9% interest from the date of auction, to the respondent no.1 and get the
property conveyed in his favour under the directions of the Court.
Appeal is accordingly disposed of with no order as to costs.
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