K Subashini, Krishna Dist vs Margadarsi Chit Fund Limited, ...
2021 Latest Caselaw 2138 AP

     THE HON'BLE SMT. JUSTICE LALITHA KANNEGANTI

           CIVIL REVISION PETITION No.4159 of 2016


ORDER:-

      The present civil revision petition under Section 115 of the

Code of Civil Procedure, 1908 (for short 'C.P.C.') is filed assailing

the order dated 12.08.2016 passed in E.A. No. 178 of 2012 in

E.P.No.8 of 2008 in O.S. No.55 of 2000 on the file of II

Additional District Judge, Vijayawada whereby the petition filed

by judgment debtor No.2 under Section 47 read with Section

151 of C.P.C. was dismissed.


2.    The facts in brief are that:

      The first respondent herein who is the Decree holder has

filed O.S. No. 55 of 2000 against the respondents 2 to 4 and

revision petitioner herein for recovery of an amount of

Rs.19,91,358/- being the principle and interest due by them

under chit agreement dated 31.03.1997 executed by the 2nd

Respondent with the surety of respondents 3, 4 and the

petitioner. The defendants also created equitable mortgage over

the plaint schedule property. Preliminary decree was passed on

22.06.2004 for a sum of Rs. 27,60,637/- with subsequent

interest at 12% per annum on Rs.16,00,000/- from 26.02.2004

till the date of realisation. As per the preliminary decree, if the

defendants fail to pay the amount within six months the plaintiff

is permitted to apply for final decree for sale of mortgaged

property. Since the defendants could not pay the amount, final

decree dated 25.07.2005 was passed in I.A. No. 1229 of 2005

under Order 34 Rule 5. Pursuant to the final decree E.P.2 of

2008 was filed by the decree holder on 07.12.2007.

3. The revision petitioner who is judgment debtor No.2 (wife

of the 1stJ.Dr) entered into agreement of sale with Vemuri

Hasitha on 09.08.2007 for a consideration of Rs.52,50,000/-.

On being intimated about the decree, the petitioner and the

vendee approached the decree holder and according to the

affidavit filed in E.A No.178 of 2012, orally it was settled for

Rs.29,95,000/-. Accordingly on 31.03.2008, an amount of

Rs.20,000,000/- was paid in two spells towards part payment

and the decree holder/plaintiff acknowledged and issued

receipts. The decree holder also informed the petitioner by way

of letter dated 21.09.2008 confirming the balance of debt of

Rs.9,95,000/-. Thereafter vendee paid an amount of

Rs.3,00,000/- on 28.03.2009 and the same was acknowledged

by the decree holder by way of a receipt.

4. As per the averments in the affidavit, the vendee requested

decree holder to handover the title deeds of the schedule

property by tendering balance amount of Rs.6,95,000/. The

averments in the affidavit further reveal that the vendor

demanded higher amount of Rs.57,50,000/- instead of agreed

amount of Rs.52,50,000/- towards sale consideration.

Accordingly on 17.06.2009 registered sale cum GPA was

executed in favour of vendee for Rs.57,50,000/- and delivered

possession of the schedule property to the vendee on

18.06.2009. It was further stated that the vendee approached

the decree holder in the second week of July, 2010 along with

Rs.6,95,000/- and to their surprise the decree holder demanded

Rs.8,00,000/- instead of Rs.6,95,000/-. The vendee deposited

the balance amount of Rs.6,95,000/- to the credit of E.P. on

14.07.2011 and filed E.A. No.178 of 2005 under Section 47 CPC

to dismiss the E.P.

5. The decree holder filed counter and contended that some

other decrees were passed against judgment debtor

No.2/petitioner basing on the suits filed by Margadarsi Chit

Fund, Hyderabad in O.S. No. 1139 of 1999 on the file of V Addl.

Senior Civil Judge, City Civil Court, Hyderabad; O.S. No. 229 of

2000 on the file of I Addl. Senior Civil Judge, Vijayawada and

the petition schedule property was attached before judgment in

I.A.No.418 of 2000. The letter dated 21.9.2008 is not binding on

the 1st respondent/decree holder. It is stated that neither the

petitioner/2nd judgment debtor nor vendee honoured the

promise and failed to fulfil the conditions of settlement. The

cheque issued by vendee of petitioner is dishonoured on

01.10.2008 and the said fact was also informed by the 1st

respondent/decree holder to the petitioner/2nd judgment debtor.

On 28.03.2009 the vendee of the petitioner/2nd judgment debtor

paid Rs.3,00,000/- towards part payment of decretal amount

which was received by the 1st respondent/decree holder and

receipt was issued. It is stated that the petition under Section

47 CPC is not maintainable and hence, prayed the court to

dismiss the petition.

6. During the course of enquiry, the husband of vendee was

examined as PW1 and Exhibits A1 to A26 were marked. On

behalf of the 1st respondent/decree holder, Senior Manager was

examined as RW1 and no exhibits were marked. The executing

court by order dated 12.08.2016 dismissed the petition.

Aggrieved by the same, the above revision is filed. In the

revision, 9th respondent (auction purchaser) was impleaded as

per order dated 02.09.2016 passed by this Court.

7. Heard, Sri E.V.V.S. Ravi Kumar, learned counsel for the

petitioner, Sri Durga Prasad, learned counsel for the 1st

respondent/decree holder and Sri W.B. Srinivas, learned

counsel for the 9th respondent/auction purchaser.

8. The learned counsel for the petitioner/judgment debtor

argued that u/s 47 CPC, the executing court shall decide the

execution, discharge or satisfaction of the decree. According to

the learned counsel for the petitioner the GPA holder of revision

petitioner along with the revision petitioner approached the

decree holder pursuant to the passing of final decree and the

suit debt was settled, orally, for Rs.29,95,000/-. He further

argued that an amount of Rs.20,00,000/- was paid in two spells

on 31.03.2008 and accordingly 1st respondent/decree holder

acknowledged the part payment and issued the receipts. The 1st

respondent/decree holder also confirmed the balance debt as

Rs.9,95,000 by way of letter dated 21.09.2008. An amount of

Rs.3,00,000/- was paid on 28.03.2009 towards part payment

and the same was acknowledged. He further argued that in

July, 2010 when the 2nd respondent approached the 1st

respondent/decree holder along with Rs.6,95,000/-, the 1st

respondent/decree holder demanded Rs.8,00,000/- instead of

Rs.6,95,000/-. It is submitted that the 1st respondent/ decree

holder filed a memo before the Court on 16.04.2010 about

receipt of the part payment. It was further argued that balance

amount of Rs.6,95,000/- was deposited on 14.07.2011 and

hence the decree was fully satisfied.

9. The learned counsel for the petitioner further submits that

it was recorded by the Court below that the decree holder has

filed a memo on 16.04.2020 that he received Rs.23,00,000/-

towards part payment of debt and no part satisfaction was

recorded by the Court and only after the property was brought

to sale the executing Court noticed part satisfaction memo and

recorded on 16.08.2012. He submits that the petitioner cannot

be made to suffer for the mistake of the Court and the revision

deserves to be allowed.

10. Learned counsel for the petitioner/2nd judgment debtor

placed reliance on Seth Banarsi Dass (Dead) by Lrs. v. District

Magistrate and Collector, Meerut and Others1 wherein the

Hon'ble Supreme Court observed as under:

"The second objection of the appellant, however, deserves to be accepted. It is contended by him that two sets of objections were raised by him to the proposed auction sale when the shares were attached. These objections to the sale were pending when the auction sale took place. These objections go to the root of the liability of the appellant to pay the amounts under the recovery certificate as well as to the sale ability of the shares proposed to be sold. These objections ought to have been adjudicated upon before the auction sale. An auction which is held without deciding objections to it is bad in law. Recovery proceedings are equivalent to execution proceedings under the Civil Procedure Code. The objections to the attachment and sale of the said shares were raised by the debtor. Under Section 47 of the Civil Procedure Code, all questions arising between the parties relating to execution, discharge or satisfaction of the claim were required to be determined by the officer in charge of execution before proceeding with execution by way of sale. The objections, for example, related to the amount which is claimed in the recovery certificate. According to the appellant the amount mentioned in the recovery certificate was not correct because subsequent citation was for a different amount. The appellant had also claimed repayment of various amounts. ..... We need not examine the merits of the objections raised by the appellant. But it is important to notice that these objections were not decided prior to the holding of the auction sale. The first respondent has given no

1996 (2) SCC 689

explanation for not deciding these objections earlier. In our view the High Court was not right in observing that the objections could be decided at a later date even after the sale of the shares to which the objections pertained. Proceeding with the auction sale without adjudicating upon the objections is a material irregularity which vitiates the sale. The appellant has thereby lost his valuable right to have his objections adjudicated upon in accordance with law. The objections were raised much prior to the auction sale and they ought to have been decided before the auction sale took place. Failure to do so vitiated the sale."

11. He also placed reliance on Union of Indian and another

v. Satyanarayana Construction Company, Secunderabad2,

this Court observed as under:

"9. The decree-holder submitted a representation dated 12-5-2004 to the Chief Administrative Officer (Construction), South Central Railway, Secunderabad, with a prayer to arrange for payment of the amounts awarded by the arbitrator. Indisputably a supplementary award came to be passed on 3-3-2004. The date on which the supplementary award came to be served on the judgment-debtors is not indicated. Even assuming the date of supplementary award as the date of service, the judgment-debtors have time till 3-6- 2004 and with a delay condonation petition till 3-7- 2004. Even before the expiry of the limitation provided under Section 34(3) of the Act, the decree-holder submitted representation dated 12-5-2004 foregoing

2008 (4) ALD 169 (DB)

certain claims and made the judgment-debtors to pay the amount.

10. The only issue that survives for consideration is whether the decree-holder accepted Rs.6,69,053.92 ps. towards full satisfaction or part satisfaction. The executing court misdirected itself as if the issue is with regard to recording or certifying of the payment made outside the court. The dispute is not with regard to recording the payments made outside the court. The decree-holder himself admits of receiving Rs 6,69,053.92 ps. Indeed in Col. No. 4(b) of the execution petition the decree-holder acknowledges the receipt of Rs.6,69,053.92 ps. When once the part payment is shown by the decree-holder himself, the requirement of certificate as contemplated under Sub-rule (2) of Rule 2, Order XXI CPC pales into insignificance."

12. On the other hand, the learned counsel appearing for the

1st respondent/decree holder argued that the letter dated

21.09.2008 is not binding on the 1st respondent/decree holder.

The petitioner/2nd judgment debtor and her vendee failed to pay

the amount and hence they cannot take advantage of the letter.

He further argued that when the cheque for Rs.6,95,000/- was

dishonoured, the said fact was informed to them. Without

paying the decretal amount, the petitioner/2nd judgment debtor

represented by her vendee as GPA holder filed this petition and

the petition does not have any merit. He further argued that the

petition filed under Sec.47 CPC itself is not maintainable.

13. The learned counsel for the auction purchaser argued that

the executing court conducted auction on 09.08.2012 and he

became the highest bidder for Rs.82,00,000/-. He deposited

Rs.20,50,000/- on 09.08.2012 and deposited the remaining

amount of Rs.61,50,000/- towards 3/4th of the auction

purchased money on 21.08.2012. He also deposited

Rs.4,10,000/- towards sale certificate. Since the sale was not

confirmed, he approached the High Court by filing civil revision

petition No.943 of 2015 for expedite disposal of his applications

and the said civil revision petition was disposed of. It was

further argued that without arraying him as party respondent,

the above revision was filed and interim order of confirmation of

sale was obtained. There are no merits in the application and

prayed the court to dismiss the application. He relied on

decision reported in Sultana Begum vs. Prem Chand Jain3.

14. In the light of the arguments advanced on behalf of either

side, the issue that falls for consideration in the present revision

is whether the executing Court acted within the parameters of

Sec 47 CPC, if not whether the order passed by the Court below

is liable to be set aside?

15. Section 47 of C.P.C. gives jurisdiction and power to the

executing Court to decide all questions relating to execution,

discharge and satisfaction of the decree. To show that the decree

is not executable, the learned counsel for the petitioner argued

about the oral agreement between the judgment debtor and

1997 (1) SCC 373

decree holder and further issuance of Ex.A4/letter dated

21.09.2008, by decree holder wherein it was mentioned that the

balance amount is Rs.9,95,000/- out of which an amount of

Rs.3,00,000/- was paid and cheque was issued for

Rs.6,95,000/- and the same was dishonoured. However,

Rs.6,95,000/- was also deposited to the credit of E.P. by way of

separate E.A. According to the learned counsel for the petitioner,

the decree was discharged. Once the decree is discharged, the

question of continuing the execution proceedings does not arise.

16. It is pertinent to mention here that the decree holder itself

filed memo into the Court about receiving an amount of

Rs.20,00,000/- on 31.03.2008 and out of the balance amount of

Rs.9,95,000/- Rs.3,00,000/- was paid on 28.03.2009 and the

balance of Rs.6,50,000/- was deposited in E.P. account on

14.07.2011. In fact Rs.6,50,000/- was deposited prior to

09.08.2012 on which date sale was conducted. The executing

Court failed to consider this crucial aspect which it ought to

have considered. It is settled law that when once the part

payment is shown by the decree holder himself, the requirement

of certificate as contemplated under Sub-rule (2) of Rule 2,

Order XXI CPC pales into insignificance and in the case on hand

the decree holder himself filed the memo with regard to part

payment and also issued Ex.A4/letter dated 21.09.2008.

17. It is urged by the learned counsel for the petitioner that

when part payment memo was filed by the decree holder, the

executing Court without deciding the issues/objections has

proceeded with the sale which is contrary to the law laid down

by the Hon'ble Apex Court in the judgments referred supra

wherein the Hon'ble Apex Court held that proceeding with the

sale without adjudicating upon the objections is a material

irregularity which vitiates the sale and hence the auction

conducted by the executing court without first deciding the

issue under Section 47 C.P.C., is not valid and the auction is

liable to be set aside.

18. The learned counsel for the auction purchaser relied on

Sultana Begum v. Prem Chand Jain4 wherein the Hon'ble Apex

Court held that the general power of deciding questions relating

to execution, discharge or satisfaction of decree under Section

47 can thus be exercised subject to the restriction placed by

Order XXI Rule 2 including Sub-rule (3) which contain special

provisions regulating payment of money due under a decree

outside the court or in any other manner adjusting the decree.

The general provision under Section 47 has, therefore, to yield

to that extent to the special provisions contained in Order XXI

Rule 2 which have been enacted to prevent a judgment-debtor

from setting up false, or cooked-up pleas so as to prolong or

delay the execution proceedings.

1997 1 SCC 373

19. According to him unless the part payment or full

satisfaction is recorded by the executing Court as mandated

under Order XXI Rule 2(2) C.P.C. the bar under Order XXI Rule

3 would apply and the execution Court was right in conducting

the auction and it was knocked down in favour of auction

purchaser. This argument has no legs to stand as in this case

the decree holder himself has filed the part payment memo as

such requirement of certificate as contemplated under Sub-rule

(2) of Rule 2 Order XXI C.P.C. pales into insignificance. The

executive Court is bound to decide first, whether the decree

passed is executable or not in the light of Ex.A4/letter and the

memo filed by the decree holder itself, into the Court along with

other payment.

20. In the order impugned the learned Judge has specifically

observed that pending application, without postponing the sale

for disposal of this petition the executing Court proceeded with

sale and sale was held on 09.08.2012. 'Actus Curiae Neminem

Gravabit' an act of Court shall prejudice no man. In the case on

hand, the act of the Court without deciding the application

under Section 47 of C.P.C. in the light of the memo filed by the

decree holder, going ahead with the sale has caused serious

prejudice to the petitioner. Apart from that it appears that by

the date of sale the petitioner had paid the entire amount.

21. The Courts while dealing with the cases has to keep in

mind that the object of prescribing procedure is to advance the

cause of justice and to provide substantial justice to the party.

The plaintiff has come to the Court by filing a suit for recovery of

money and he obtained a decree. He wants to put the mortgaged

property to sale for realization of the decretal amount. When the

decree holder comes before the Court and files a memo about

part satisfaction and when the judgment debtor paid the entire

amount as per the oral agreement even before the sale is

conducted, the Court below without deciding these issues, has

proceeded further and put the property to sale. The judgment

debtor having parted with money also has to part with the

property.

22. This Court is of the considered view that the executing

Court failed to exercise the jurisdiction vested in it by not

deciding the application filed under Section 47 of C.P.C., and

proceeding further by conducting auction which is

impermissible.

23. In view of the above, this civil revision petition is allowed

by setting aside the order dated 12.08.2016 passed in E.A. No.

178 of 2012 in E.P.No.8 of 2008 in O.S. No.55 of 2000 by II

Additional District Judge, Vijayawada and the matter is remitted

back to the executing Court for fresh adjudication. The

observations of this Court, if any, made are for the limited

purpose of deciding the revision and the Court below shall

decide the application independently uninfluenced by the

observations made by this Court, as expeditiously as possible.

The auction purchaser is at liberty to contest the case

before the executing Court, if he is advised to do so. If the

auction purchaser does not want to contest the case and wants

return of money, then if the law permits, he shall file an

appropriate application before the executing Court and the said

application shall be disposed of in accordance with law, within

two months from the date of filing of the said application.

Consequently, miscellaneous petitions pending, if any,

shall stands closed.

_________________________________ JUSTICE LALITHA KANNEGANTI Date: 25.06.2021 IKN

THE HON'BLE SMT JUSTICE LALITHA KANNEGANTI

CIVIL REVISION PETITION No.4159 of 2016

Date:25.06.2021

IKN