P. Somasundaram vs A. Ponnusamy and others

These two appeals arise out of execution proceedings in two suits between the same parties the Judgment debtors in both the suits are the same

and the Court auction purchaser in both the cases is the same. In C.M.A. No. 806 of 1990, the property was brought to sale in E.P. No. 47 of

1987 in O.B. No. 1767 of 1985, The amount due under the decree is stated in the proclamation is Rs. 39,774.09. The property was brought to

sale on 2-11-1988. Two items were intended to be sold. The first lot comprising of a house and ground was valued by the decree-holder at Rs.

50,000/- and by the Court at Rs. 2,50,000/-. The second lot was valued at Rs. 1,00,000/- by the decree-holder and Rs. 10 lakhs by the Court.

The other appeal arises out of E.P. No. 49 of 1987 in O.S. No. 1769 of 1985. The amount due under the decree as stated in the proclamation

is Rs. 80,334.98. The same two items which are proceeded against in E.P. No. 47 of 1987 arc also proceeded against in these execution

proceedings. The values given by the decree-holder and the Court are the same.

On 2-11-1988, lot No. 1 was sold in E.P.47/87 and a sum of Rs. 2,95,000/- was realised. On the same day, lot No. 2 was also sold in E.P.

49/87 for a sum of Rs. 10,01,000/-.

The appellant filed E.A. Nos. 12 and 13 of 1989 for setting aside the sales. He had mentioned certain irregularities including the close

relationship of the auction purchaser and one of the judgment debtors. It was also alleged that a partner of the decree-holder firm was also related

to the auction purchaser. The Court below held that there was no ground made out by the appellant for setting aside the sales and dismissed the

applications.

In these appeals, it is contended that the Court ought to have set aside both the sales as the appellant has proved the value of the properties to

be much more than the value for which they have been sold in Court auction. It is also contended by learned counsel for the appellant that the

auction purchaser being related closely to one of the judgment debtors and the other judgment debtors having colluded against him, the sales ought

to have been set aside. Lastly, it is contended that, in any event, the sale of lot 2 should be set aside as the sale of lot by itself fetched an amount

much more than the amounts due under the two decrees.

I do not accept the first two contentions of learned counsel for the appellant. There is absolutely no evidence worthy of acceptance to prove the

value of the proper-tics as contended by the appellant. The only two documents which are relevant are Exs. A. 3 and B.1 both of which, being

after the filing of the petitions for setting aside the sale, cannot be relied on by the Court. Hence, in the absence of any evidence on the side of the

appellant, the first contention has to fail. With regard to the second contention also, the evidence on record is not sufficient. Even assuming that the

auction purchaser is a relative of one of the judgment debtors and the decree-holder, there is no evidence of any collusion between the other

judgment debtors. In the circumstances, that contention has to fail.

However, there is substance in th third contention. As seen already, both the lots were sold in execution on the very same day and lot No. I

itself fetched a sum of Rs. 2,95,000/-. That is much more than the amounts due under the decrees in O.S. Nos. 1767 of 1985 and 1765 of 1985.

As the decree-holder and the judgment debtors are the same, the executing Court ought to have stopped with the sale of lot No. 1 and should not

have proceeded to sell lot No. 2.

The Supreme Court had occasion to consider a similar situation in Takkaseela Pedda Subba Reddi Vs. Pujari Padmavathamma and Others, . In

that case, there was only one decree and not two decrees, as in this case. But, in my view, the position by the same person against the same

judgment debtors. In the case before the Supreme Court, the amount due under the decree as mentioned in the proclamation was Rupees

16,715.80, The sale of lands in one village alone fetched a sum of Rs. 16,880/-. Despite that, the Court Proceeded to sell the properties of the

judgment debtor in another village which fetched a sum of Rs. 12,500/-. When the Court auction sale was sought to be set aside, the.High Court

accepted the contention of the judgment debtor and set aside the sale. On appeal, the Supreme Court confirmed the same. The law on the subject

was stated thus by the Supreme Court (at p. 1791 of AIR) :

In these circumstances, therefore, under the provisions of O. 21, R. 64 of the Code when the amount as specified in the sale proclamation was

fully satisfied by the sale of the properties in village Devanoor, the Court should have stopped the sale of further items of the properties. It is

manifest that where the amount specified in the proclamation of sale for the recovery of which the sale was ordered the sale of further items should

be stopped. This, in our opinion, is the logical corollary which flows from O. 21, R. 64 of the Code which may be extracted thus :

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.

Under this provision the Executing Court derives jurisdiction to sell properties attached only to the point at which the decree is fully satisfied. The

words ""necessary to satisfy the decree"" clearly indicate that no sale can be allowed beyond the decretal amount mentioned in the sale

proclamation. In other words where the sale fetches a price equal to or higher than the amount mentioned in the sale proclamation and is sufficient

to satisfy the decree, no further sale should be held and the Court should stop at that stage. In the instant case, we have already indicated that the

sale of lands in village Devanoor alone fetched a sum of Rs. 16,880/- which was more than sufficient to satisfy the amount of Rs. 16,715.85

mentioned in the sale proclamation. It is true that the decree-holder had obtained another decree in O.S. No. 19 of 1985 but, there is nothing to

show that the decree-holder had approached the Court for including the second decretal amount in the proclamation of sale. In these

circumstances, therefore, we are clearly of the opinion that the Executing Court was not justified in the facts and circumstances of the present case,

in selling the properties situated in village Gudipadu. The fact that the judgment-debtor did not raise an objection on this ground before the

Executing Court is not sufficient to put him out of Court because this was a matter which went to the very root of the jurisdiction of the Executing

Court to sell the properties and the non-compliance with the provisions of 0.21, R. 64 of the Code was sufficient to vitiate the case so far as the

properties situated in village Gudipadu were concerned. For these reasons, the contentions raised by counsel for the appellant must be overruled.

The same proposition was reiterated by the Supreme Court in Ambati Narasayya Vs. M. Subba Rao and another, . In that case, 10 acres of

land was sold in auction for Rs. 17,000/- in execution of a decree for Rs. 2,000/-. The Court held that the sale was in contravention of the

provisions of 0.21, R. 64 of the CPC and liable to be set aside. The Supreme Court made a reference to its earlier decision in Takkaseela Pedda

Subba Reddi Vs. Pujari Padmavathamma and Others, and applied the principle set out therein.

If the judgments of the Supreme Court are applied to the facts of this case, the sale of lot 2 cannot stand. As pointed out already, the sale of lot

I having fetched an amount requisite for satisfying both the decrees of the same decree-holder, the Court ought to have stopped and should not

have proceeded further with the sale of the second lot.

It is contended by learned counsel for the auction purchaser and the decree-holder that there being two different decrees and two different

proclamations, the Court was certainly entitled to direct sale of both the items. Learned counsel submitted that, when the first item was sold in

execution of one decree, there was only one other item available for being proceeded against in execution of the other decree. According to the

learned counsel, in these circumstances, there was no error on the part of the executing Court in proceeding with the execution of second decree. I

do not agree with this contention. If the decree-holders had been different, the position might have been different. But, in this case, the same

decree-holder had obtained two decrees against same persons and proceeded against the same properties in both the executions. In those

circumstances, the Court ought to have taken into account the fact that one sale had fetched the amounts due under both the decrees with same

amount to spare and ought to have stopped the sale of the second item.

Learned counsel for the decree-holder and auction purchaser also contended that the objection should have taken by the judgment debtor at

the time of settlement of proclamation that it was not necessary to sell both the lots. Having failed to do so the judgment debtor is precluded by the

provisions of O. 21, R.90(3) of the Code of Civil Procedure, from putting forward the same at the present stage. There is no substance in this

contention. When the sale proclamation was settled, the value of lot I as stated by the decree-holder was only Rs. 50,000/-. There was great

disparity between the value stated by the decree-holder and the Amin''s valuation. Hence, it could not have been contended by the judgment-

debtors at that time that sale of lot one would satisfy both the decrees as the amount due under the two decrees exceeded Rs. 1 lakh and odd.

Hence, the contention is overruled.

In the result, C.M.A. No. 806 of 1990 is dismissed and the order of the subordinate Judge, Karur in B.A. No. 12 of 1989 is confirmed.

C.M.A. No. 806 of 1990 is allowed and the order in E.A. No. 13 of 1989 is set aside. The sale hold in E.P. No. 49 of 1987 is set aside. There

will be no order as to costs in either of the appeals.

The fourth respondent/decree-holder is permitted to withdraw the amounts due under the two decrees from out of the sale proceeds of lot one

in the executing Court, subject to any claim of rateable distribution u/S. 73 of the Code of Civil Procedure. The auction purchaser, the fifth

respondent in the appeals, is permitted to take back the amount deposited by him as sale consideration for lot 2. The executing court is directed to

return the amount to him on production of a steno copy of the order of this Court.

Order accordingly.