Sikkim High Court
M/S Lexicon Commercial Enterprises Ltd vs Umakanta Sharma And Ors on 27 March, 2025
Author: Bhaskar Raj Pradhan
Bench: Bhaskar Raj Pradhan
THE HIGH COURT OF SIKKIM: GANGTOK
(Civil Appellate Jurisdiction)
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SINGLE BENCH: THE HON'BLE MR. JUSTICE BHASKAR RAJ PRADHAN, JUDGE
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FAO No. 02 of 2023
1. M/s Lexicon Commercial Enterprises Ltd.
Registered Office: 84/1A, Topsia Road (S)
Kolkata-46
Local Address: Babumoshai Hotel & Restaurant,
14th Mile, New Sada Block, Ravangla,
Namchi District, Sikkim-737126.
Through: Mr. Harish Himatsingka,
Director,
Lexicon Commercial Enterprises Ltd.
..... Appellant
Versus
1. Umakanta Sharma,
S/o U.K. Sharma,
R/o Bageykhola, LPG-Refill Centre IOC,
P.O. Majitar, Rangpo, East Sikkim
A/p Amdogolai, Bye Pass, P.O. Tadong,
East Sikkim-737102.
2. Udhay Kumar Pradhan,
S/o Late Prem Bahadur Pradhan,
R/o Pradhan Gaon, Middle Aritar, P.O. Aritar,
Rhenock, East Sikkim-737133.
3. The Manager,
Citizen Urban Co-operative Bank Ltd.,
Kashi Raj Pradhan Marg,
Nam Nang, Gangtok, East Sikkim-737101.
4. District Collector-cum-CALA,
Namchi District,
South Sikkim-737126.
5. Additional District Collector,
Namchi District,
South Sikkim-737126.
2
FAO No. 02 of 2023
M/s Lexicon Commercial Enterprises Ltd. vs. Umakanta Sharma & Ors.
6. Branch Manager,
IndusInd Bank,
Gangtok-737102.
..... Respondents
An appeal under Rule 1A of Order XLIII read with Sub-Rule
4 of Rule 58 of Order XXI and Section 97 of the Code of Civil
Procedure, 1908.
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Appearance:
Mr. S. S. Hamal and Mr. Karma Thinlay, Senior
Advocates with Mr. Varun Pradhan, Mr. Yashir N.
Tamang, Mr. Pradeep Sharma and Ms. Ramdevi
Chettri, Advocates for the Appellant.
Mr. Rajendra Upreti, Advocate for the Respondent
No.1.
Mr. Jorgay Namka, Senior Advocate with Ms. Deempal
Tamang, Advocate for Respondent No.2.
None for Respondent Nos. 3 & 6.
Mr. Thinlay Dorjee Bhutia, Government Advocate for
Respondent Nos. 4 and 5.
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Date of Hearing : 27.03.2025
Date of Order : 27.03.2025
ORDER (ORAL)
Bhaskar Raj Pradhan, J.
1. A short but interesting question arises in the present
first appeal. What is the procedure to be followed when a
claim is made before the executing court under Order 21
Rule 58 of the Code of Civil Procedure, 1908 (CPC) and can
the claim be rejected summarily ?.
M/s Lexicon Commercial Enterprises Ltd. vs. Umakanta Sharma & Ors.
2. Umakanta Sharma (respondent no.1 herein) on
05.03.2021 filed a petition under Order XXI Rule 11 of the
CPC for execution of a decree passed in Money Suit No.208
of 2019 in his favour. On 03.03.2023 the respondent no.1
sought attachment of the compensation amount sanctioned
by the NHIDCL in the name of Uday Kumar Pradhan
(respondent no.2 herein). On 02.06.2023 the learned
Principal District Judge directed the District Collector
(respondent no.4 herein) to deduct a sum of Rs.30,39,395/-
from the total compensation amount sanctioned by NHIDCL
in the name of respondent no.2 and to give it to respondent
no.1 and submit compliance report. Subsequently, the
amount in the order dated 02.06.2023 was corrected to
Rs.30,93,395/-. During the pendency of the execution
proceedings the M/s Lexicon Commercial Enterprises Ltd.
(the appellant herein) moved an application under Order 21
Rule 58 of CPC on 01.08.2023. On the said date i.e.
01.08.2023 the learned Principal District Judge ordered that
the disbursement as directed vide order dated 02.06.2023
and 27.06.2023 be kept on hold. The application filed by the
appellant was then placed for hearing on 29.08.2023. On
29.08.2023 on the plea of the appellant that the parties were
exploring possibility of settlement the matter was posted for
M/s Lexicon Commercial Enterprises Ltd. vs. Umakanta Sharma & Ors.
hearing on 05.09.2023 on which date the application was
heard by the learned Principal District Judge. Impugned
herein are two orders dated 03.10.2023 and 31.10.2023
passed by the learned Principal District Judge thereafter.
3. By the impugned order dated 03.10.2023 the
learned Principal District Judge rejected the application filed
by the appellant.
4. The appellant had moved this application claiming
that it had purchased the suit property including a 41/2
storied hotel building for a sum of Rs.49,25,000/- from the
Central Bank of India under the SARFAESI Act, 2002 and
thereafter, it was also delivered its khas and vacant
possession in the year 2012.
5. It was the appellant's case that it holds the title and
possession of the suit property, which was subsequently
acquired by NHIDCL. The appellant objected to the
attachment of the compensation amount claimed by
respondent no.1 as a decree holder in a suit and challenged
the attachment.
6. After the passing of the impugned order dated
03.10.2023 the learned Principal District Judge vide
impugned order dated 31.10.2023 directed the District
Collector-cum-CALA, Namchi District to abide with the order
M/s Lexicon Commercial Enterprises Ltd. vs. Umakanta Sharma & Ors.
dated 03.10.2023 to enable the decree in favour of
respondent no.1 is satisfied in accordance with law.
7. At this juncture the learned Government Advocate
draws the attention of this Court to the reply to the
application i.e I.A. No. 01 of 2023 filed by the respondent
nos. 4 and 5 in which it has been stated that as directed by
the Order dated 03.10.2023 and 31.10.2023 passed by the
learned Principal District Judge they have already disbursed
an amount of Rs.30,93,395/- in favour of respondent no.1
in his Axis Bank Account. The learned Senior Counsel for
the appellant submits that they would take necessary steps
regarding this issue.
8. The impugned order dated 03.10.2023 records that
the learned Principal District Judge had heard the said
application. However, the impugned order does not reflect
that the matter was "determined" in accordance with the
requirements of Order 21 Rule 58 of the CPC which is
reproduced herein below:-
"58. Adjudication of claims to, or objections to
attachment of, property.- (1) Where any claim is
preferred to, or any objection is made to the
attachment of, any property attached in execution of
a decree on the ground that such property is not
liable to such attachment, the Court shall proceed to
adjudicate upon the claim or objection in accordance
with the provisions herein contained:
M/s Lexicon Commercial Enterprises Ltd. vs. Umakanta Sharma & Ors.
Provided that no such claim or objection shall be
entertained-
(a) where, before the claim is preferred or
objection is made, the property attached has
already been sold; or
(b) where the Court considers that the claim or
objection was designedly or unnecessarily
delayed.
(2) All questions (including questions relating to right,
title or interest in the property attached) arising
between the parties to a proceeding or their
representatives under this rule and relevant to the
adjudication of the claim or objection, shall be
determined by the Court dealing with the claim or
objection and not by a separate suit.
(3) Upon the determination of the questions referred
to in sub-rule (2), the Court shall, in accordance with
such determination,-
(a) allow the claim or objection and release the
property from attachment either wholly or to
such extent as it thinks fit; or
(b) disallow the claim or objection; or
(c) continue the attachment subject to any
mortgage, charge or other interest in favour of
any person; or
(d) pass such order as in the circumstances of
the case it deems fit.
(4) Where any claim or objection has been
adjudicated upon under this rule, the order made
thereon shall have the same force and be subject to
the same conditions as to appeal or otherwise as if it
were a decree.
(5) Where a claim or an objection is preferred and the
Court, under the proviso to sub-rule (1), refuses to
entertain it, the party against whom such order is
made may institute a suit to establish the right which
he claims to the property in dispute; but, subject to
the result of such suit, if any, an order so refusing to
entertain the claims or objection shall be conclusive."
9. The provision makes it amply clear that the learned
Principal District Judge, as the executing court, was
required to "adjudicate" upon the claims or objections
M/s Lexicon Commercial Enterprises Ltd. vs. Umakanta Sharma & Ors.
including all questions relating to right, title or interest in
the property attached arising between the parties to a
proceeding and relevant to the adjudication of the claim or
objection and "determine" the same. It also makes it clear
that there was no need for a separate suit to "adjudicate"
and "determine" the questions involved.
10. The proviso to sub-rule (1) of Rule 58 makes it
further clear that the application of the appellant could have
been not "entertained" only on the grounds provided in
proviso (a) and (b) thereof. Under proviso (a) no such claim
or objection shall be entertained where, before the claim is
preferred or objection is made, the property attached has
already been sold. Under proviso (b) no such claim or
objection shall be entertained where the court considers that
the claim or objection was designedly or unnecessary
delayed.
11. The orders passed by the learned Principal District
Judge in the application filed by the appellant does not
reflect that the learned Principal District Judge had not
entertained the claim or objection either under proviso (a) or
under proviso (b).
12. Therefore, if the learned Principal District Judge
decided to "adjudicate" upon the claim or objection to the
M/s Lexicon Commercial Enterprises Ltd. vs. Umakanta Sharma & Ors.
attachment of suit property filed by the appellant it was
incumbent upon the court to be mindful of sub-rule (2) to (5)
thereof. More importantly the learned Principal District
Judge in the impugned order dated 03.10.2023 recorded
that the sale certificate dated 05.04.2012 would show that
the Central Bank of India had sold the mortgaged property
of the judgment debtor no.1 falling in plot no.782/924 of
Rabongla Block to the appellant for a sum of Rs.49,25,000/-
and the loan reportedly taken by the judgment debtor no.1
from Central Bank of India was to the tune of
Rs.50,00,000/-.
13. A composite reading of the provision leads this
court to conclude that the executing court examining an
application under Order 21 Rule 58 CPC is required to
"adjudicate" and "determine" the right, title and interest in
the property attached in the very same proceeding and not
by a separate suit. Right, title and interest in a property is
usually determined in a suit after a trial wherein pleadings
are exchanged, issues framed, witnesses examined and
documents exhibited. Therefore, when the legislature
thought it fit to provide the power to "adjudicate" upon the
claim or objection to the attachment of property claiming
right, title and interest therein under the provision of Order
M/s Lexicon Commercial Enterprises Ltd. vs. Umakanta Sharma & Ors.
21 Rule 58 itself and not by a separate suit it is quite clear
that the "determination" must be as conclusive as a decree
of the court. This would be clear from the sub-rule (4) which
provides that where any claim or an objection has been
adjudicated upon under this rule, the order made thereon
shall have the same force and subject to the same
conditions as to appeal or otherwise as if it were a "decree".
14. It is noticed that Order 21 Rule 58 gives a statutory
and a substantial right to the appellant to get his claim or
objection to attachment of property to be adjudicated by the
executing court. However, the records do not reveals that
any opportunity was given to the contesting parties to
adduce evidence. It is imperative that the executing court
comes to an effective conclusion on the claim of the
appellant by recording evidence and not on the basis of
pleadings and statements made in the objection petition and
the reply thereto. It is the duty of the executing court to
decide the objection on its merits. All questions raised by the
appellant have to be comprehensively considered on their
merits. The objections cannot be summarily dismissed. If
triable issues arise from the objection, the objections have to
be adjudicated by the executing court. A perusal of Order 21
Rule 58 reflects that an investigation is necessary of the
M/s Lexicon Commercial Enterprises Ltd. vs. Umakanta Sharma & Ors.
claims to and objections to attachment of, attached
properties. It is under this rule that the appellant who
claims that his property was wrongfully attached in
execution of a decree passed against another, is entitled to
object to the said attachment. All questions raised by the
objector have to be comprehensively considered on their
merits.
15. The right, title and interest in a property are
valuable rights and it should be effectively determined. A
proper procedure is required to be followed to do so. The
impugned order dated 03.10.2023 does not reflect any
"adjudication" or "determination" of the claim made by the
appellant save the learned Principal District Judge's
thoughts on the fact that even after 11 years the suit
property had not been registered in the name of the
appellant. In such view of the matter, the impugned order
dated 03.10.2023 cannot be sustained. It is accordingly set
aside. The application is restored to the Court of the learned
Principal District Judge, East Sikkim at Gangtok requesting
the learned Principal District Judge to re-determine this
application as per law by following a proper procedure for
determination of the questions raised.
M/s Lexicon Commercial Enterprises Ltd. vs. Umakanta Sharma & Ors.
16. The learned Senior Counsel representing the
appellant and the respondent no.2 made various
submissions on merits of the dispute. This Court refrains
from making any comment on the rival submissions on the
merits of the case so that no prejudice is caused to any of
the parties before the learned Principal District Judge. All
questions of fact and law which are open to the parties for
the effective determination of the application are left open for
determination by the learned Principal District Judge.
17. The FAO No 02 of 2023 is allowed to the above
extent and disposed along with the interim application.
( Bhaskar Raj Pradhan )
Judge
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