State Bank of India vs Bhakoo Industries

J.M. Tandon, J.—M/s Bhakoo Industries, Respondent, tiled a suit for the recovery of Rs. 30,000/- against Suds Company, Respondent, on 12.8.1983 in the Court of Subordinate Judge, Chandigarh and obtained an ex parte decree for Rs. 30,000/- with costs on 24.11.1983. The decree-holder got machinery of the judgment-debtor attached in the execution proceedings initiated for the recovery of the decretal amount. The machinery was evalued at Rs. 14,000/- by the decree-holder and at Rs. 32,000/- by the Court Bailiff. M/s Suds Company, judgment-debtor had raised a loan from State Bank of India |by pleading their machinery before 22.8.1983. The amount due to the bank from the judgment-debtor is Rs. 1,39,713/09 paise. The bank filed an application in the executing Court praying that the machinery be not auctioned, because the same was pledged with it for the repayment of the loan which far exceeds its value. The executing Court vide order dated 5.4.1984, declined the prayer made by the bank adding that out of the sale-proceeds, the claim of the bank against the judgment debtor shall be satisfied first. It is against this order that the present revision is directed.

The Learned Counsel for the Petitioner has argued that there can be no manner of doubt that the claim of the bank against the judgment debtor for Rs. 1,39,713/09 psise far exceeds the value of the machinery proposed to be auctioned. The argument proceeds that it is obvious that the entire sale-proceeds shall become payable to the bank in pursuance of the direction of the executing Court contained in the impugned order to meet their claim against the judgment-debtor. The bank apprehends that in the event of the sale of the machinery, the judgment-debtor will not be in a position to repay the entire amount due to the bank. It is for this reason that prayer was made to the executing Court not to auction the machinery.

The Learned Counsel for the decree-holder has contended that in spite of the fast that the machinery proposed to be auctioned was valued at Rs. 14,000/- by the decree-holder and Rs. 32,000/- by the Court bailiff, its true value will be known at the time of auction. The machinery should, therefore be auctioned and if the sale-proceeds exceeds the claim of the bank against the judgment-debtor, then the excess will only be paid to the decree-holder.

After hearing arguments of the Learned Counsel for the parties, it will be proper to infer that the claim of the bank against the judgment-debtor far exceeds the value of the machinery proposed to be attached, with the result that all the tale-proceeds will become payable to the bank. In this situation, there is no point in auctioning the attached machinery of the judgment-debtor against the wishes of the bank. It will, however, open for the decree holder to recover the decretal amount by attachment and auction of the other property of the judgment debtor, if available

The revision is allowed and the impugned order of the executing Court set aside. The machinery of the judgment-debtor proposed to be auctioned shall stand released.