Decree; Unnikrishnan Vs. Kunhibeevi [Kerala High Court, 21-01-2011]

Civil Procedure Code, 1908 – Order 21, Rules 97 to 103 – A suit, even by a third party, impeaching a court sale is not maintainable and he has to take recourse to either Rule 97 of Order XXI, if it was before dispossession, or Rule 99 of Order XXI, if he had already been dispossessed and delivery effected after the court sale – Adjudication of all disputes over the right, title and interest of any person over the property covered by the decree – Once the execution has commenced the execution court alone can consider such disputes and it cannot be agitated by a separate suit – Even if a suit is entertained challenging a decree for possession of property before commencement of the execution proceedings of such decree, if the execution of that decree has culminated in a court sale of the property or the Plaintiff in that suit has already been dispossessed, the claim raised over the property has to be adjudicated only by the execution court and not by any other court.

Decree

2011 (1) KLT 508 : 2011 (1) KLJ 475 : ILR 2011 (1) Ker. 785 : 2011 (1) KHC 352

IN THE HIGH COURT OF KERALA AT ERNAKULAM

THOTTATHIL B.RADHAKRISHNAN AND S.S. SATHEESACHANDRAN JJ.

Dated this the 21st day of January, 2011

AS.No. 383 of 1997(E)

UNNIKRISHNAN Vs KUNHIBEEVI

For Petitioner :SRI.M.P.SREEKRISHNAN; For Respondent :SRI.N.SUBRAMANIAM

J U D G M E N T

S.S. SATHEESACHANDRAN, J.

The appellants are defendants 5, 7, 8 and some among the legal representatives of the 6th defendant, in O.S.No.229/93 on the file of the Principal Sub Court, Kochi. Respondents 1 to 8 are the legal representatives of the plaintiff viz., P.K.Aboo. 9th respondent is the 1st defendant in the above suit and respondents 10 to 12 are defendants 2 to 4 in the suit. Respondents 10 and 12 passed away during the pendency of the appeal and their legal representatives have been impleaded as respondents 19 to 23 and 24 to 27 respectively. Respondents 13 to 18 are the other legal representatives of the 6th respondent in the suit.

2. The appeal is directed against the decree granted by the court below setting aside the court sale in O.S.No.67/81 of the Principal Sub Court, Kochi, and directing re-delivery of some of the properties covered by that sale, four items described as B schedule in the present suit.

3. Short facts involved in the case necessary for disposal of the appeal can be summed up thus: The 1st defendant, a statutory bank, instituted O.S.No.67/81 against defendants 2 to 4 for recovery of the loan advanced to the 2nd defendant on the basis of mortgage of the properties of defendants 3 and 4, by sale of the properties. 12 items were included in the above suit as the mortgaged properties. Items 1 to 4 in O.S.No.67/81 are the B schedule properties in the present suit, O.S.No.229/93. Plaint A schedule properties in the suit are items 5 to 12 in O.S.No.67/81. Before institution of the above suit by the bank but long after the mortgage over item Nos.1 to 12 in its favour, another creditor of the 2nd defendant, M/s.Mettur Beard Sell Limited had instituted a suit, O.S.No.102/76 against the 2nd defendant. In the decree passed in that suit, B schedule properties in the present suit (items 1 to 4 in O.S.No.67/81) were brought to sale, and the present plaintiff, Sri.P.K.Aboo as the highest bidder in the auction purchased them. Those properties were later delivered over to him through court. Meanwhile, the suit, O.S.No.67/81 filed by the 1st defendant bank on 15.4.1981 was decreed. When the decree holder/1st defendant bank in the present suit moved for execution of the decree by sale of the mortgaged properties, the plaintiff had resisted the sale over B schedule, (items 1 to 4 in O.S.No.67/81). His challenges being negatived, the sale proceeded in which ‘B’ schedule properties were purchased by defendants 5 to 8. Though the plaintiff had challenged the delivery of B schedule properties to defendants 5 to 8, on various grounds, such attempts were unsuccessful. The plaintiff thereafter filed the present suit O.S.No.229/93 for a declaration that the court sale of the properties in O.S.No67/81 is illegal and vitiated by fraud and irregularity in the publishing and conducting of the sale, and, thus, liable to be set aside, and for a permanent prohibitory injunction to restrain the defendants from alienating or creating any charge over B schedule properties. A decree for re-delivery of B schedule was also sought for.

4. Among the defendants, the 1st defendant bank, 4th defendant, 5th defendant, and defendants 6 to 8 together, and 7th defendant separately, filed written statements, among whom, the 4th defendant supported the case of the plaintiff that the court sale is vitiated by fraud, and others resisted the claims canvassed raising manifold contentions in which the maintainability of the suit was also challenged in view of the orders passed by the execution court in O.S.No.67/81. The present suit is barred by res judicata was one among the contentions raised by the 1st defendant. Sale over B schedule items on the basis of the decree in O.S.No.102/76 by which the plaintiff claimed right over those properties as the auction purchaser, who had obtained delivery of such properties in such sale, was also impeached by the 1st defendant contending that B schedule properties were subject to the mortgage created in favour of the bank much earlier, and the suit [O.S.No.67/81] by the bank having been filed earlier to the sale held under the decree passed in O.S.No.102/76, such sale is hit by lis pendens. Defendants 5, 7, 6 and 8 in their written statements contended that the sale conducted in O.S.No.67/81 was proper, legal and valid and on no ground it was liable to be declared as null and void. They also contended that such sale could not be impeached in a separate suit at the instance of the plaintiff.

5. On the pleadings of the parties as above, the court below raised mainly the following issues: Whether the court sale impeached is vitiated by material irregularity and fraud in publishing and conducting of such sale and as to whether the plaintiff is entitled to the declaration and injunction sought for. On the issues so settled, both sides let in evidence, plaintiff examining Pws.1 to 6 and exhibiting Exts.A1 to A33, and the defendants one witness, DW.1 and towards documentary evidence Exts.B1 to B8. After having considered the pleadings with reference to the evidence let in by the parties and hearing the counsel on both sides, the court below arriving at the conclusion that the court sale impeached is vitiated by material irregularity and fraud, in publishing and conducting it, decreed the suit. The plaintiff was granted the declaration sought for setting aside the sale, and also re-delivery of the property by restitution under Section 144 of the Code of Civil Procedure, from defendants 5 to 8. The defendants 5, 7 and 8 with some of the legal representatives of the 6th defendant, all of them together, have preferred the present appeal challenging the legality and correctness of the judgment rendered by the court below setting aside the court sale in execution of the decree passed in O.S.No.67/81.

6. We heard the learned Senior Counsel Sri.M.C.Sen for the appellants, Advocate Sri.N.Subramanian for respondents 1 to 8 and Advocate Sri.Joseph Thayankeril for the 9th respondent. Both sides have argued extensively on various aspects touching upon the conducting and publishing of the sale in execution of the decree in O.S.No.67/81, which has been impeached in the suit as vitiated by fraud, material irregularity and illegality and thus null and void. After hearing the counsel at length and taking note of the controversies involved in the suit on which the parties have joined issues, we found that the first and foremost question to be considered relate to the entertainability of the suit challenging a court sale by a civil court de hors the provisions covered by Order XXI of the above Code. Counsel on both sides, on our bidding, have presented various facets involved in examining the maintainability of the suit challenging a court sale placing reliance on judicial authorities in support of the rival case presented.

7. A recapitulation of the admitted facts, as borne out by the pleadings and materials placed, has to be stated as to why the primary question to be considered in the appeal rests on the maintainability of the suit. A mortgage in favour of the first defendant bank in respect of the plaint properties A and B schedules subsisted when O.S.No.102/76 was instituted against the present 2nd defendant by M/s.Mettur Beard Sell Limited. Even before a decree was passed in the above suit, the above bank had filed a suit O.S.No.67/81 on 15.4.1981 for recovery of the money under the loan advanced to the 2nd defendant by sale of the mortgaged properties furnished as collateral security by defendants 3 and 4. A decree was passed in O.S.No.102/76 earlier in point of time, and B schedule properties in the present suit [4 items] brought to sale on 6.1.1982 in execution of that decree were purchased in the auction by the present plaintiff P.K.Aboo. That sale was confirmed on 10.3.1982. Those properties were delivered over to the plaintiff on 16.3.1985 and 2.4.1985. Suit filed by the bank O.S.No.67/81 was decreed on 8.1.1983 and in execution of that decree, at various stages, the plaintiff P.K.Aboo had resisted the steps for sale proceeded against the B schedule property for realisation of the decree debt. Plaintiff had filed an application E.A.No.141/86 in the execution proceedings of O.S.No.67/81 (E.P.79/84) seeking deletion of B schedule items which was sold and delivered over to him in execution of the decree in O.S.No.102/76. The execution court had dismissed that application but with a reservation that the obstructer/plaintiff will be entitled to the benefit under Section 61 of the Transfer of Property Act. Admittedly both the bank and also the plaintiff challenged the orders of the execution court in E.A.No.141/86 before this court by filing C.R.P.No.1480/87 and 295/88 respectively. Both revisions were dismissed by order dated 11.8.1989. After proclamation for sale of all the items were settled, the plaintiff moved another application as E.A.No.537/87 challenging the steps for sale of B schedule items and that was dismissed by the execution court. That was challenged in revision before this court by the present plaintiff. This court, confirming the order of the execution court directed it to proceed against B schedule property if only sale of A schedule properties was found insufficient to satisfy the decree debt due to the bank. Since the sale conducted over A schedule property was found to be insufficient, B schedule properties were also put to sale and those items were purchased by defendants 5 to 8 in such sale. Plaintiff, admittedly, filed an application under Order XXI Rule 89 of the Code of Civil Procedure after such sale. But since the application was not filed tendering the amount covered by the sale with the commission thereof, it was dismissed. Pursuant thereto, the sale being confirmed and sale certificate issued, the auction purchasers [defendants 5 to 8] applied for delivery of the properties. The delivery over B schedule was obstructed to by the plaintiff by filing several petitions, one after the other. Though no documentary materials tendered, at the hearing of appeal, the events that followed after issue of warrant for delivery were also referred to. The Amin deputed by the court had filed a report that delivery of B schedule was effected in execution of the warrant. Contending that there was no divesting of possession and physical possession was retained by him, the plaintiff moved an application before the execution court for annulling the report of the Amin. That application was dismissed, and against which a revision was filed before this court. The revision was disposed of upholding the finding of the execution court that the properties had been delivered over to the auction purchaser, but, reserving the right, if any, of the plaintiff to work out his remedies by way of appropriate proceedings.

8. The short question posed for consideration in the given facts of the case, is whether the plaintiff has to approach the execution court which passed the decree in O.S.No.67/81 in favour of the first defendant bank to impeach the court sale in execution of that decree and re- delivery of the property ordered thereon in favour of the auction purchasers, who had purchased B schedule in the auction, or, is the plaintiff empowered to file a separate suit to impeach such court sale and delivery on any ground whatsoever for a declaration that the court sale is void and for re-delivery of the property.

9. The learned counsel for the plaintiff Sri.Subramaniam relied on a number of authorities to contend that the suit is perfectly maintainable as he being a third party to the proceeding in O.S.No.67/81 he cannot be compelled to approach the execution court in which the decree passed in the above suit had been executed, moving an application under Order XXI Rule 99 of the Code. The decree passed in the above suit was not binding on the plaintiff as he was not a party to that suit and so, his right to impeach the court sale and the delivery in execution of the decree passed in that suit by way of a separate suit is a civil right, which is, in no way, interdicted by the procedure covered by Order XXI Rule 99 of the Code, is the submission of the learned counsel. Reliance is placed on by the counsel on