THE HONBLE SRI JUSTICE S.V. BHATT
C.R.P. No.1291 OF 2015
17-07-2015
E.Aruna w/o.Kondala Rao,Occupation:House wife, R/o. Chamadala Village,
Jaladanki Mandal, SPSR Nellore District..Petitioner
Vemala Sreenu s/o.Venkaiah, aged 41 years, r/o.Chamadala Village and Post,
Jaladanki Mandal, S.P.S.R.Nellore District, and two others. .Respondents
Counsel for Petitioner: Sri N.Vijay
Counsel for Respondent No.1: Sri A.V.V.S.N.Murthy
<GIST:
>HEAD NOTE:
? Cases referred 1987 (1) ALT 583
2002 (1) An.W.R.374 (A.P.)
2 2007 (1) ALD 106
3 2003 (1) An.WR 401 (A.P.)
4 AIR 2008 SC 2069
5 AIR 1983 A.P. 335
HONBLE SRI JUSTICE S.V.BHATT
CIVIL REVISION PETITION No.1291 OF 2015
ORDER:
Auction purchaser in the pending proceedings in E.P.No.99 of
2009 in O.S.No.389 of 2006 in the Court of Principal Junior Civil Judge,
Kavali, is the revision petitioner. The C.R.P. is directed against the order
in E.A. No.252 of 2014 dated 19.12.2014.
The 1st respondent in the C.R.P. filed E.A.No.252 of 2014 in E.A.
No.96 of 2013 under Order XXI Rule 59 of Civil Procedure Code (for
short CPC) for stay or to stop the delivery proceedings pending in E.A.
No.96 of 2013 in E.P.No.99 of 2009. The executing Court through
docket order dated 19.12.2014 ordered thus:
To avoid the un-necessary complications in the interest of justice,
the delivery proceedings in E.A.96/2013 in E.P.99/2009 in
O.S.389/2006 is hereby stayed, call on 31.12.2014, meanwhile issue
notice to Respondents 1 to 3.
The revision petitioner being aggrieved by the grant of stay of
delivery of E.P. schedule property pending in E.A.No.96 of 2013 filed the
present C.R.P.
The circumstances necessary for disposing of instant revision are
as follows:
The 2nd respondent in the revision filed O.S.No.389 of 2006 in the
Court of Principal Junior Civil Judge, Kavali to recover a sum of
Rs.43,000/- and odd from 3rd respondent herein. On 05.09.2006, the
trial Court ordered attachment before judgment of the following
property:
Sri P.S.R.Nellore District Registration- Kavali Sub Registration-
Jaladanki Mandal- Chamadala Village an extent of Ac.1.30 cents in
S.No.522/8 and an extent of Ac.0.20 cents in S.No.522/9 in total
Ac.1.50 cents of land out of Ac.1.53 cents within the following
boundaries.
EAST : Road
SOUTH : Land of Devalla Chenchaiah and
others
WEST : Vagu
NORTH : Land of Pallapu Ankaiah as per the
instant E.P.schedule, as
per the
petitioner Pallapu
Anjaiah
O.S.No.389 of 2006 was decreed on 02.07.2009. The 2nd
respondent is executing the Decree in E.P.No.99 of 2009 by putting to
sale the attached property. On 06.11.2012, the property was sold and
the revision petitioner purchased the E.P. Schedule in the auction
conducted by the Court. On 31.01.2013, sale certificate was issued in
favour of revision petitioner. On account of resistance, in one form or
the other, for actual delivery of E.P. schedule property the E.P. is
pending. The revision petitioner filed E.A.No.96 of 2013 for appropriate
orders from the executing Court. While the matters stood thus, the 1st
respondent filed E.A.Nos.251and 252 of 2014 under Order XXI Rules 58
and 59 CPC respectively. The case of 1st respondent is that on
07.06.2006, agreement of sale was entered into between the 1st and
3rd respondents in the revision petition and a regular sale deed was
executed on 01.04.2011 between them. The 1st respondent is unaware
or ignorant of either the attachment order dated 05.09.2006 in O.S.
No.389 of 2006 or knows anything about the pending execution
proceedings. The 1st respondent with the above contentions filed
claim and stay petitions in E.A. Nos. 251 and 252 of 2014 as stated
above.
Sri N.Vijay, learned counsel for the revision petitioner contends
that the executing Court committed serious illegality by ordering stay
of delivery under Order XXI Rule 59 CPC in E.A.No.252 of 2014.
According to the learned counsel, the executing Court can certainly
entertain an application filed under Rule 59 of Order XXI CPC provided
the petition filed under Order XXI Rule 58 CPC in E.A.No.251 of 2014 is
maintainable. The learned counsel relies upon the proviso to Order XXI
Rule 58 CPC and submits that once the E.P. schedule property is not
only sold, but sale certificate is issued in favour of revision petitioner
herein, prohibition in law for entertaining the claim petition at the
instance of any one much less the 1st respondent who claims to be a
purchaser of suit schedule property when the attachment is in force is
attracted.
The learned counsel places strong reliance upon the decisions
reported in P.M.Doraswamy Reddy v. T.M.Gowri Sanker , M.Jayamma
v. J.Nadamuni Reddy (died) per LRs , Gangineni Damodar Naidu v.
Kurapati Kondaiah Naidu , Singirikonda Surekha v. G.V.Sharma and
Kancherla Lakshminarayana v. Mattaparthi Shyamala .
The learned counsel while challenging the docket order dated
19.12.2014 contends that having regard to the facts and
circumstances of the present case, the prayer in E.A.No.252 of 2014 is
not maintainable and consequently no order under Rule 59 can be
granted. In other words, the objection raised by the petitioner goes to
the maintainability of applications in E.A.Nos.251 and 252 of 2014 and
the jurisdiction of the Court to grant stay of delivery of sold property.
On the other hand, Sri A.V.V.S.N. Murthy submits that the 1st
respondent on 07.06.2006 entered into agreement of sale with
judgment debtor and a registered sale deed was executed by
judgment debtor on 01.04.2011. The 1st respondent is not aware of the
attachment order dated 05.09.2006, or sale of the property in E.P.No.99
of 2009. Alternatively he submits that as a regular sale deed is
obtained by the 1st respondent, the 1st respondent is a person having
interest in the E.P. schedule property and the claim petition under Rule
58 of Order XXI CPC is maintainable. The learned counsel when
confronted with stark fact of auction held on 06.11.2012 and issue of
sale certificate dated 31.01.2013 replies by placing reliance upon the
decision in M/s Magunta Mining Co. v. M.Kondaramireddy that a
claim petition even after sale is completed can be maintained in law
and the instant applications are accordingly maintainable. The
learned counsel alternatively submits that the executing Court can
certainly consider the maintainability of E.A. Nos. 251 and 252 of 2014
and no ground is made out by the revision petitioner for interference at
this stage in E.P.No.99 of 2009.
Perused the material available on record and noted the rival
submissions of learned counsel appearing for the parties.
Now the point for consideration is whether the executing Court is
competent to pass the order dated 19.12.2014 in E.A.No.252 of 2014?
At the outset, it is noted that C.R.P. is directed against the order
dated 19.12.2014 in E.A.No.252 of 2014. Consideration of legality or
otherwise of the prayer in E.A.No.252 of 2014 and/or the order dated
19.12.2014 is depending upon consideration of the primary objections
raised by the revision petitioner under Order XXI Rule 58 CPC against
the very maintainability of E.A. No.251 of 2014.
Order XXI Rule 58 Sub Rule (1) reads thus:
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:
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 (emphasis added)
(b) where the Court considers that the claim or objection was
designedly or unnecessarily delayed.
The above Rule provides for adjudication of claims or objections
on attached property in E.P. The Rule enables maintaining a claim or
objection to the attachment of a property in execution of a decree by
contending that the property so attached is not liable for attachment
or further proceedings against the property covered by attachment
cannot be proceeded with in pending E.P. The claim is decided
under Sub Rules 2 to 5 or Order XXI Rule 58. Proviso (a) to Order XXI
Rule 58 Sub-Rule 1 CPC reads thus:
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. (emphasis added).
In other words, by operation of proviso (a), the executing Court
cannot entertain a claim petition if the execution proceedings have
culminated in sale of attached property and a sale certificate is issued
by the executing Court. The learned counsel appearing for the 1st
respondent places reliance upon M/s Magunta Mining Cos case
(6 supra) stating that a claim petition is maintainable even after the
property is sold and issuance of sale certificate by the executing Court.
The learned counsel relies upon the following paragraph in
M/s.Magunta Mining Cos case (6 supra).
Whenever a claim is preferred under O.21, R.58 against attachment
of immovable properties, the fact that the properties are sold or the
sale confirmed will not deprive the Court of its jurisdiction to adjudicate
on the claim. The inquiry into the claim can be proceeded with by the
trial Court of the appellate Court (under the Amended Code) and in
the event of the claim being allowed, the sale and the confirmation of
sale shall to that extent be treated as a nullity and of no effect.
M/s. Magunta Mining Co.s case (6 supra) was decided by a
Division Bench of this Court. The ratio of M/s.Mangunta Minding Cos
case has been the subject matter of the decisions in P.M.Doraswamy
Reddy (1 supra) and Singirikonda Surekha (4 supra). I consider it
appropriate to refer to the observations in these two decisions to
ascertain the ratio laid in M/s.Magunta Mining Co s case (6 supra).
The distinguishing feature in M/s.Magunta Mining Cos case
(6 supra) and P.M.Doraswamy Reddy (1 supra) and Singirikonda
Surekha (4 supra) cases is that in M/s.Magunta Mining Cos case, the
claim petition was filed before auction was held and during the
pendency of the appeal filed against rejection of claim petition, the
property was sold. The distinguishing fact situation of M/s. Magunta
Mining Cos case (6 supra) is considered in P.M.Doraswamy Reddys
case (1 supra) and Singirikonda Surekhas case (4 supra). Relevant
Paras read as follows:
P.M.Doraswamy Reddys case (1 supra):
The Division Bench is concerned with a situation whether appeal is
maintainable and in the context of considering this aspect two
aspects namely the sale after interim order was passed and the stay
of confirmation of sale were adverted to. Whatever be the effect of
sale subsequent to grant of interim stay the stay of confirmation of
sale is not a bar to the maintainability of appeal in view of second limb
of clause (B) of Order 21 Rule 59 CPC. It is obvious that the
conclusion is based upon this crucial aspect as evident from the
categorical observation, But it is clear that so long as the sale is not
confirmed the status quo ante can be restored in case the claim is
allowed. After adverting to the legal position hereinbefore with
reference to the facts in the case the Court adverted to the legal effect
of allowing the claim petition and in the context of considering this
aspect made general observations in para 15. For the purpose of
considering the contention of maintainability of the petition founded
upon the operation of proviso to Order 21 Rule 58 the impact of Order
21 Rule 59 has already been considered with reference to facts in the
case and as such the general observations in Para 15 are not
intended to cover the situation when the sale is held before filing the
claim petition. It is obvious that these observations echoed the
prevalent enunciation of legal position that the sale of the attached
property is null in the event of allowing the claim petition and these
observations are sought to be unduly stretched to the maintainability
of claim petition, notwithstanding the anterior sale. It may be
reiterated that the non-maintainability of the claim petition under
proviso to Rule 58 can be impugned by recourse to remedy by way of
suit under clause 5 of Rule 58 and this route of questing the
maintainability of the claim petition is not concerned with the issue of
adjudication of claim petition in event of sale before filing the petition.
Therefore, the conclusion of the lower court that the application under
Order 21 Rule 58 CPC is maintainable even when the sale is held
before filing the claim petition is in teeth of proviso to Order 21 Rule
58 CPC and the decision referred to is not applicable to the situation
in the instant case.
Singirikonda Surekhas case (4 supra)
M/s.Magunta Mining Co.(1 supra), relied on by the learned counsel
for the revision petitioner, has no application to the facts of this case.
In that case claim petition, in respect of the properties attached in
March,1980, was filed on 25.04.1980. After enquiry that petition was
dismissed on merits. Appeal against that order of dismissal was filed
in this Court on 18.05.1980 and interim stay was granted on
22.08.1980. But, even before the order of stay was communicated to
it, the Executing Court held the auction. Therefore, a contention was
raised during the course of hearing of the appeal that the appeal is
liable to be dismissed inasmuch as the sale was already held.
Therefore, one of the points for consideration framed was whether the
appeal can be proceeded with even though the property was sold
during the pendency of the appeal. Holding that the appeal can be
heard on merits, the Bench held in para 15 of its judgment as under:
Whenever a claim is preferred under Order 21 Rule 58
C.P.C,. against attachment of immovable properties, the fact that the
properties are sold or the sale confirmed will not deprive the Court of
its jurisdiction to adjudicate on the claim. The inquiry into the claim
can be proceeded with by the trial Court or the appellate Court (under
the amendment Code) and in the event of the claim being allowed, the
sale and the confirmation of sale shall to that extent be treated as a
nullity and of no effect, as the judgment-debtor had no title which
could pay to the Court auction-purchaser.
Therefore, the ratio in that decision is that if sale was held
during the pendency of the appeal against the order of dismissal of a
petition filed under Rule 58 of Order 21 C.P.C., the appeal does not
become infructuous. The Bench was not deciding the question as to
whether a claim petition can be filed after the sale was held. So, the
said decision has no application to the facts of this case.
In Kancherla Lakshminarayanas case (5 supra), the Apex Court
considered the meaning of the word sold in proviso (a) to Sub Rule I
of Rule 58 of Order XXI and held as follows:
Mere holding of auction sale does not bar the raising of objection to
attachment of property. The word sold in Clause (a) of the proviso to
Rule 58 has to be read meaning thereby a complete sale including the
confirmation of the auction. In considering the time factor of
challenging the sale, the locus standi factor on account of any prior
interest of the objector in the suit property has also to be considered.
The attachment cannot be free from the prior obligations. The
necessary sequatur is that even after the facturm of sale the objection
would still lie before the sale is made absolute.
This Court in the instant C.R.P. is concerned with proviso (a) to
Sub Rule 1 of Rule 58 of Order XXI CPC and maintainability of claim
petition after the property is sold and a sale certificate is issued. To
complete the narration the consideration on this aspect, the following
paragraph in Gangineni Damodar Naidus case (3 supra) is excerpted.
Rule 58 of Order XXI directs that all claims, or objections to,
attachment of any property, in execution of a decree, must be
preferred before the Executing Court itself. This provision is mainly
intended to deal with the claims, or objections of third parties. The
reason is that, a judgment-debtor cannot object for proceeding against
an item of property, if he has right and title in it, and he should not
bother himself much, if he does not hold title, upon it. Apart from
enabling third parties, to put forward their claims in the execution
proceedings, Rule 58 prohibits filing of separate suits. However, the
rule draws a dead line, in the matter of presentation of the claims. No
claim can be entertained, after the attached property is brought to
sale.
The facts and circumstances are not in dispute and the
outcome of C.R.P. depends on maintainability of claim petition after
the property is sold and a sale certificate is issued by the executing
Court. The 1st respondent places strong reliance upon M/s.Magunta
Mining Cos case (6 supra), as already noticed M/s.Magunta Mining
Cos case is distinguished by P.M.Doraswamy Reddy (1 supra) and
Singirikonda Surekha (4 supra) cases and the contention basing upon
M/s.Magunta Mining Cos case (6 supra) has to be negatived and
accordingly rejected. Now, I proceed to examine effect of proviso (a)
to Order XXI Rule 58 (1)CPC.
From the scheme of Order XX1 Rule 58 CPC, it is clear that the
Rule firstly provides for adjudication of claims at the instance of a third
party and the remedies against adjudication to an aggrieved party.
The proviso (a) to Sub- Rule 1 of Order XXI Rule 58 prohibits the
executing Court from entertaining claim or objection against the
property attached has already been sold. The purpose of imposing
prohibition to entertain claim petitions in matters which have been
processed up to the stage of issuance of sale certificate are easily
discernable. In construing the scope of prohibition to entertain the
claim petition under Order XXI Rule 58, sub-rule (1) can be examined
by reference to other relevant provision viz., Rules 92 and 94 of Order
XXI CPC and read thus:
Rule 92 of Order XXI:
Sale when to become absolute or be set aside.- (1) Where no
application is made under Rule 89, Rule 90 or Rule 91, or where such
application is made and disallowed, the Court shall make an Order
confirming the sale, and thereupon the sale shall become absolute:
Provided that, where any property is sold in execution of a decree
pending the final disposal of any claim to, or any objection to the
attachment of, such property, the Court shall not confirm such sale until
the final disposal of such claim or objection.
(2) Where such application is made and allowed, and where, in the case
of an application under rule 89, the deposit required by that rule is made
within 1 [sixty days] from the date of sale, or in cases where the amount
deposited under Rule 89 is found to be deficient owing to any clerical or
arithmetical mistake on the part of the depositor and such deficiency has
been made good within such time as may be fixed by the Court, the
Court shall make an order setting aside the sale:
Provided that no order shall be made unless notice of the application
has been given to all persons affected thereby:
Provided further that the deposit under this sub-rule may be made within
sixty days in all such cases where the period of thirty days, within which
the deposit had to be made, has not expired before the commencement
of the Code of Civil Procedure (Amendment) Act, 2002.
(3) No suit to set aside an order made under this rule shall be brought by
any person against whom such order is made.
(4) Where a third party challenges the judgment- debtors title by filing a
suit against the auction- purchaser, the decree- holder and the
judgment- debtor shall be necessary parties to the suit.
(5) If the suit referred to in sub-rule (4) is decreed, the Court shall direct
the
decree- holder to refund the money to the auction- purchaser, and where
such an Order is passed the execution proceeding in which the sale had been
held shall, unless the Court otherwise directs, be revived at the stage at
which the sale was ordered.
Rule 94 of Order XXI:
Certificate of purchaser:-Where a sale of immovable property has
become absolute, the Court shall grant a certificate specifying the
property sold and the name of the person who at the time of sale is
declared to be the purchaser. Such certificate shall bear date the day
on which the sale became absolute.
Proviso to Rule 92 sub-rule (1) of Order XXI CPC refers to a
situation where the sale is held and a claim is made by a third party,
the executing Court is directed not to confirm the sale till the disposal
of such claim by the executing Court.
Sub-rules (4) and (5) deal with a situation where a third party is
compelled to challenge by way of a suit, the judgment-debtors title
to the property sold in execution proceedings and who are the
necessary parties and what is the jurisdiction of Court to grant
comprehensive reliefs in the suit filed by a third party.
Rule 94 enables issuance of sale certificate to the auction
purchaser after completing various stages under different rules of
execution. Therefore the procedure stipulated in the rules has forward
march with the completion of a particular stage and not intended to
reopen the Court concluded actions viz., sale certificate is issued. The
important words to attract prohibition, in the proviso to Rule 58(1) CPC
are that the property attached has already been sold. The words are
simple and convey full meaning in the application of proviso to
completed sale transactions. From literal construction of these words it
can be held that once the sale certificate is issued to the property sold
in auction held by the Court, the proviso to Rule 58(1) is attracted and
no claim petition is maintainable against such property. From a
conspectus of the above provisions, it can be held that Order XXI CPC
is a stand alone provision comprehensively dealing with execution of
decrees and orders. The various stages of the execution provides for
objection by respondent/third party to execution and the executing
Court decides these objections. With a decision at appropriate stage
by the executing Court the next step is followed. Therefore, at the
instance of a third party the completed stages are not revisited.
Therefore, with the issuance of sale certificate the property is said to be
sold by the executing Court and no claim petition under Order XXI Rule
58 CPC is maintainable.
The executing Court with the issuance of sale certificate
completes the process of auction initiated under Order XXI and
thereafter, a further stage in execution proceedings arises. It cannot
be the intention of Parliament to go forwards and come backwards in
deciding the execution proceedings with the filing of claim petition.
Therefore, prohibition in complete terms is attracted to entertain a
claim petition by the proviso when the property is sold by the
executing Court. Therefore, in my considered opinion the prayer in
E.A.No.251 of 2014 is not maintainable.
Having regard to the findings recorded on the maintainability of
E.A.No.251 of 2014, I have to consider the legality of docket order
dated 19.12.2014. The executing Court prima facie has committed an
illegality in entertaining E.A.No.251 of 2014 and that E.A.No.96 of 2013 is
pending for delivery of possession. The order impugned is erroneous
and unsustainable. Once the claim petition is not maintainable in law,
the question of granting stay of delivery of possession does not arise.
Hence, the order impugned is set aside and C.R.P. allowed. The
revision petitioner is given liberty to bring to the notice of executing
Court the observations on the maintainability of E.A.No.251 of 2014 and
obtain appropriate orders.
It is made clear that the E.As filed by the 1st respondent are
considered from the limited perspective of maintainability and not on
merits. The dismissal or rejection of E.A. Nos.251 of 2014 or 252 of 2014
shall not be treated as foreclosing the remedies, if any, available to the
1st respondent.
With the above observation, the C.R.P. is allowed. No order as
to costs.
Miscellaneous petitions pending, if any, shall stand closed.
_____________
S.V.BHATT,J
Date:17.07.2015
C.R.P. No.1291 OF 2015
17-07-2015
E.Aruna w/o.Kondala Rao,Occupation:House wife, R/o. Chamadala Village,
Jaladanki Mandal, SPSR Nellore District..Petitioner
Vemala Sreenu s/o.Venkaiah, aged 41 years, r/o.Chamadala Village and Post,
Jaladanki Mandal, S.P.S.R.Nellore District, and two others. .Respondents
Counsel for Petitioner: Sri N.Vijay
Counsel for Respondent No.1: Sri A.V.V.S.N.Murthy
<GIST:
>HEAD NOTE:
? Cases referred 1987 (1) ALT 583
2002 (1) An.W.R.374 (A.P.)
2 2007 (1) ALD 106
3 2003 (1) An.WR 401 (A.P.)
4 AIR 2008 SC 2069
5 AIR 1983 A.P. 335
HONBLE SRI JUSTICE S.V.BHATT
CIVIL REVISION PETITION No.1291 OF 2015
ORDER:
Auction purchaser in the pending proceedings in E.P.No.99 of
2009 in O.S.No.389 of 2006 in the Court of Principal Junior Civil Judge,
Kavali, is the revision petitioner. The C.R.P. is directed against the order
in E.A. No.252 of 2014 dated 19.12.2014.
The 1st respondent in the C.R.P. filed E.A.No.252 of 2014 in E.A.
No.96 of 2013 under Order XXI Rule 59 of Civil Procedure Code (for
short CPC) for stay or to stop the delivery proceedings pending in E.A.
No.96 of 2013 in E.P.No.99 of 2009. The executing Court through
docket order dated 19.12.2014 ordered thus:
To avoid the un-necessary complications in the interest of justice,
the delivery proceedings in E.A.96/2013 in E.P.99/2009 in
O.S.389/2006 is hereby stayed, call on 31.12.2014, meanwhile issue
notice to Respondents 1 to 3.
The revision petitioner being aggrieved by the grant of stay of
delivery of E.P. schedule property pending in E.A.No.96 of 2013 filed the
present C.R.P.
The circumstances necessary for disposing of instant revision are
as follows:
The 2nd respondent in the revision filed O.S.No.389 of 2006 in the
Court of Principal Junior Civil Judge, Kavali to recover a sum of
Rs.43,000/- and odd from 3rd respondent herein. On 05.09.2006, the
trial Court ordered attachment before judgment of the following
property:
Sri P.S.R.Nellore District Registration- Kavali Sub Registration-
Jaladanki Mandal- Chamadala Village an extent of Ac.1.30 cents in
S.No.522/8 and an extent of Ac.0.20 cents in S.No.522/9 in total
Ac.1.50 cents of land out of Ac.1.53 cents within the following
boundaries.
EAST : Road
SOUTH : Land of Devalla Chenchaiah and
others
WEST : Vagu
NORTH : Land of Pallapu Ankaiah as per the
instant E.P.schedule, as
per the
petitioner Pallapu
Anjaiah
O.S.No.389 of 2006 was decreed on 02.07.2009. The 2nd
respondent is executing the Decree in E.P.No.99 of 2009 by putting to
sale the attached property. On 06.11.2012, the property was sold and
the revision petitioner purchased the E.P. Schedule in the auction
conducted by the Court. On 31.01.2013, sale certificate was issued in
favour of revision petitioner. On account of resistance, in one form or
the other, for actual delivery of E.P. schedule property the E.P. is
pending. The revision petitioner filed E.A.No.96 of 2013 for appropriate
orders from the executing Court. While the matters stood thus, the 1st
respondent filed E.A.Nos.251and 252 of 2014 under Order XXI Rules 58
and 59 CPC respectively. The case of 1st respondent is that on
07.06.2006, agreement of sale was entered into between the 1st and
3rd respondents in the revision petition and a regular sale deed was
executed on 01.04.2011 between them. The 1st respondent is unaware
or ignorant of either the attachment order dated 05.09.2006 in O.S.
No.389 of 2006 or knows anything about the pending execution
proceedings. The 1st respondent with the above contentions filed
claim and stay petitions in E.A. Nos. 251 and 252 of 2014 as stated
above.
Sri N.Vijay, learned counsel for the revision petitioner contends
that the executing Court committed serious illegality by ordering stay
of delivery under Order XXI Rule 59 CPC in E.A.No.252 of 2014.
According to the learned counsel, the executing Court can certainly
entertain an application filed under Rule 59 of Order XXI CPC provided
the petition filed under Order XXI Rule 58 CPC in E.A.No.251 of 2014 is
maintainable. The learned counsel relies upon the proviso to Order XXI
Rule 58 CPC and submits that once the E.P. schedule property is not
only sold, but sale certificate is issued in favour of revision petitioner
herein, prohibition in law for entertaining the claim petition at the
instance of any one much less the 1st respondent who claims to be a
purchaser of suit schedule property when the attachment is in force is
attracted.
The learned counsel places strong reliance upon the decisions
reported in P.M.Doraswamy Reddy v. T.M.Gowri Sanker , M.Jayamma
v. J.Nadamuni Reddy (died) per LRs , Gangineni Damodar Naidu v.
Kurapati Kondaiah Naidu , Singirikonda Surekha v. G.V.Sharma and
Kancherla Lakshminarayana v. Mattaparthi Shyamala .
The learned counsel while challenging the docket order dated
19.12.2014 contends that having regard to the facts and
circumstances of the present case, the prayer in E.A.No.252 of 2014 is
not maintainable and consequently no order under Rule 59 can be
granted. In other words, the objection raised by the petitioner goes to
the maintainability of applications in E.A.Nos.251 and 252 of 2014 and
the jurisdiction of the Court to grant stay of delivery of sold property.
On the other hand, Sri A.V.V.S.N. Murthy submits that the 1st
respondent on 07.06.2006 entered into agreement of sale with
judgment debtor and a registered sale deed was executed by
judgment debtor on 01.04.2011. The 1st respondent is not aware of the
attachment order dated 05.09.2006, or sale of the property in E.P.No.99
of 2009. Alternatively he submits that as a regular sale deed is
obtained by the 1st respondent, the 1st respondent is a person having
interest in the E.P. schedule property and the claim petition under Rule
58 of Order XXI CPC is maintainable. The learned counsel when
confronted with stark fact of auction held on 06.11.2012 and issue of
sale certificate dated 31.01.2013 replies by placing reliance upon the
decision in M/s Magunta Mining Co. v. M.Kondaramireddy that a
claim petition even after sale is completed can be maintained in law
and the instant applications are accordingly maintainable. The
learned counsel alternatively submits that the executing Court can
certainly consider the maintainability of E.A. Nos. 251 and 252 of 2014
and no ground is made out by the revision petitioner for interference at
this stage in E.P.No.99 of 2009.
Perused the material available on record and noted the rival
submissions of learned counsel appearing for the parties.
Now the point for consideration is whether the executing Court is
competent to pass the order dated 19.12.2014 in E.A.No.252 of 2014?
At the outset, it is noted that C.R.P. is directed against the order
dated 19.12.2014 in E.A.No.252 of 2014. Consideration of legality or
otherwise of the prayer in E.A.No.252 of 2014 and/or the order dated
19.12.2014 is depending upon consideration of the primary objections
raised by the revision petitioner under Order XXI Rule 58 CPC against
the very maintainability of E.A. No.251 of 2014.
Order XXI Rule 58 Sub Rule (1) reads thus:
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:
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 (emphasis added)
(b) where the Court considers that the claim or objection was
designedly or unnecessarily delayed.
The above Rule provides for adjudication of claims or objections
on attached property in E.P. The Rule enables maintaining a claim or
objection to the attachment of a property in execution of a decree by
contending that the property so attached is not liable for attachment
or further proceedings against the property covered by attachment
cannot be proceeded with in pending E.P. The claim is decided
under Sub Rules 2 to 5 or Order XXI Rule 58. Proviso (a) to Order XXI
Rule 58 Sub-Rule 1 CPC reads thus:
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. (emphasis added).
In other words, by operation of proviso (a), the executing Court
cannot entertain a claim petition if the execution proceedings have
culminated in sale of attached property and a sale certificate is issued
by the executing Court. The learned counsel appearing for the 1st
respondent places reliance upon M/s Magunta Mining Cos case
(6 supra) stating that a claim petition is maintainable even after the
property is sold and issuance of sale certificate by the executing Court.
The learned counsel relies upon the following paragraph in
M/s.Magunta Mining Cos case (6 supra).
Whenever a claim is preferred under O.21, R.58 against attachment
of immovable properties, the fact that the properties are sold or the
sale confirmed will not deprive the Court of its jurisdiction to adjudicate
on the claim. The inquiry into the claim can be proceeded with by the
trial Court of the appellate Court (under the Amended Code) and in
the event of the claim being allowed, the sale and the confirmation of
sale shall to that extent be treated as a nullity and of no effect.
M/s. Magunta Mining Co.s case (6 supra) was decided by a
Division Bench of this Court. The ratio of M/s.Mangunta Minding Cos
case has been the subject matter of the decisions in P.M.Doraswamy
Reddy (1 supra) and Singirikonda Surekha (4 supra). I consider it
appropriate to refer to the observations in these two decisions to
ascertain the ratio laid in M/s.Magunta Mining Co s case (6 supra).
The distinguishing feature in M/s.Magunta Mining Cos case
(6 supra) and P.M.Doraswamy Reddy (1 supra) and Singirikonda
Surekha (4 supra) cases is that in M/s.Magunta Mining Cos case, the
claim petition was filed before auction was held and during the
pendency of the appeal filed against rejection of claim petition, the
property was sold. The distinguishing fact situation of M/s. Magunta
Mining Cos case (6 supra) is considered in P.M.Doraswamy Reddys
case (1 supra) and Singirikonda Surekhas case (4 supra). Relevant
Paras read as follows:
P.M.Doraswamy Reddys case (1 supra):
The Division Bench is concerned with a situation whether appeal is
maintainable and in the context of considering this aspect two
aspects namely the sale after interim order was passed and the stay
of confirmation of sale were adverted to. Whatever be the effect of
sale subsequent to grant of interim stay the stay of confirmation of
sale is not a bar to the maintainability of appeal in view of second limb
of clause (B) of Order 21 Rule 59 CPC. It is obvious that the
conclusion is based upon this crucial aspect as evident from the
categorical observation, But it is clear that so long as the sale is not
confirmed the status quo ante can be restored in case the claim is
allowed. After adverting to the legal position hereinbefore with
reference to the facts in the case the Court adverted to the legal effect
of allowing the claim petition and in the context of considering this
aspect made general observations in para 15. For the purpose of
considering the contention of maintainability of the petition founded
upon the operation of proviso to Order 21 Rule 58 the impact of Order
21 Rule 59 has already been considered with reference to facts in the
case and as such the general observations in Para 15 are not
intended to cover the situation when the sale is held before filing the
claim petition. It is obvious that these observations echoed the
prevalent enunciation of legal position that the sale of the attached
property is null in the event of allowing the claim petition and these
observations are sought to be unduly stretched to the maintainability
of claim petition, notwithstanding the anterior sale. It may be
reiterated that the non-maintainability of the claim petition under
proviso to Rule 58 can be impugned by recourse to remedy by way of
suit under clause 5 of Rule 58 and this route of questing the
maintainability of the claim petition is not concerned with the issue of
adjudication of claim petition in event of sale before filing the petition.
Therefore, the conclusion of the lower court that the application under
Order 21 Rule 58 CPC is maintainable even when the sale is held
before filing the claim petition is in teeth of proviso to Order 21 Rule
58 CPC and the decision referred to is not applicable to the situation
in the instant case.
Singirikonda Surekhas case (4 supra)
M/s.Magunta Mining Co.(1 supra), relied on by the learned counsel
for the revision petitioner, has no application to the facts of this case.
In that case claim petition, in respect of the properties attached in
March,1980, was filed on 25.04.1980. After enquiry that petition was
dismissed on merits. Appeal against that order of dismissal was filed
in this Court on 18.05.1980 and interim stay was granted on
22.08.1980. But, even before the order of stay was communicated to
it, the Executing Court held the auction. Therefore, a contention was
raised during the course of hearing of the appeal that the appeal is
liable to be dismissed inasmuch as the sale was already held.
Therefore, one of the points for consideration framed was whether the
appeal can be proceeded with even though the property was sold
during the pendency of the appeal. Holding that the appeal can be
heard on merits, the Bench held in para 15 of its judgment as under:
Whenever a claim is preferred under Order 21 Rule 58
C.P.C,. against attachment of immovable properties, the fact that the
properties are sold or the sale confirmed will not deprive the Court of
its jurisdiction to adjudicate on the claim. The inquiry into the claim
can be proceeded with by the trial Court or the appellate Court (under
the amendment Code) and in the event of the claim being allowed, the
sale and the confirmation of sale shall to that extent be treated as a
nullity and of no effect, as the judgment-debtor had no title which
could pay to the Court auction-purchaser.
Therefore, the ratio in that decision is that if sale was held
during the pendency of the appeal against the order of dismissal of a
petition filed under Rule 58 of Order 21 C.P.C., the appeal does not
become infructuous. The Bench was not deciding the question as to
whether a claim petition can be filed after the sale was held. So, the
said decision has no application to the facts of this case.
In Kancherla Lakshminarayanas case (5 supra), the Apex Court
considered the meaning of the word sold in proviso (a) to Sub Rule I
of Rule 58 of Order XXI and held as follows:
Mere holding of auction sale does not bar the raising of objection to
attachment of property. The word sold in Clause (a) of the proviso to
Rule 58 has to be read meaning thereby a complete sale including the
confirmation of the auction. In considering the time factor of
challenging the sale, the locus standi factor on account of any prior
interest of the objector in the suit property has also to be considered.
The attachment cannot be free from the prior obligations. The
necessary sequatur is that even after the facturm of sale the objection
would still lie before the sale is made absolute.
This Court in the instant C.R.P. is concerned with proviso (a) to
Sub Rule 1 of Rule 58 of Order XXI CPC and maintainability of claim
petition after the property is sold and a sale certificate is issued. To
complete the narration the consideration on this aspect, the following
paragraph in Gangineni Damodar Naidus case (3 supra) is excerpted.
Rule 58 of Order XXI directs that all claims, or objections to,
attachment of any property, in execution of a decree, must be
preferred before the Executing Court itself. This provision is mainly
intended to deal with the claims, or objections of third parties. The
reason is that, a judgment-debtor cannot object for proceeding against
an item of property, if he has right and title in it, and he should not
bother himself much, if he does not hold title, upon it. Apart from
enabling third parties, to put forward their claims in the execution
proceedings, Rule 58 prohibits filing of separate suits. However, the
rule draws a dead line, in the matter of presentation of the claims. No
claim can be entertained, after the attached property is brought to
sale.
The facts and circumstances are not in dispute and the
outcome of C.R.P. depends on maintainability of claim petition after
the property is sold and a sale certificate is issued by the executing
Court. The 1st respondent places strong reliance upon M/s.Magunta
Mining Cos case (6 supra), as already noticed M/s.Magunta Mining
Cos case is distinguished by P.M.Doraswamy Reddy (1 supra) and
Singirikonda Surekha (4 supra) cases and the contention basing upon
M/s.Magunta Mining Cos case (6 supra) has to be negatived and
accordingly rejected. Now, I proceed to examine effect of proviso (a)
to Order XXI Rule 58 (1)CPC.
From the scheme of Order XX1 Rule 58 CPC, it is clear that the
Rule firstly provides for adjudication of claims at the instance of a third
party and the remedies against adjudication to an aggrieved party.
The proviso (a) to Sub- Rule 1 of Order XXI Rule 58 prohibits the
executing Court from entertaining claim or objection against the
property attached has already been sold. The purpose of imposing
prohibition to entertain claim petitions in matters which have been
processed up to the stage of issuance of sale certificate are easily
discernable. In construing the scope of prohibition to entertain the
claim petition under Order XXI Rule 58, sub-rule (1) can be examined
by reference to other relevant provision viz., Rules 92 and 94 of Order
XXI CPC and read thus:
Rule 92 of Order XXI:
Sale when to become absolute or be set aside.- (1) Where no
application is made under Rule 89, Rule 90 or Rule 91, or where such
application is made and disallowed, the Court shall make an Order
confirming the sale, and thereupon the sale shall become absolute:
Provided that, where any property is sold in execution of a decree
pending the final disposal of any claim to, or any objection to the
attachment of, such property, the Court shall not confirm such sale until
the final disposal of such claim or objection.
(2) Where such application is made and allowed, and where, in the case
of an application under rule 89, the deposit required by that rule is made
within 1 [sixty days] from the date of sale, or in cases where the amount
deposited under Rule 89 is found to be deficient owing to any clerical or
arithmetical mistake on the part of the depositor and such deficiency has
been made good within such time as may be fixed by the Court, the
Court shall make an order setting aside the sale:
Provided that no order shall be made unless notice of the application
has been given to all persons affected thereby:
Provided further that the deposit under this sub-rule may be made within
sixty days in all such cases where the period of thirty days, within which
the deposit had to be made, has not expired before the commencement
of the Code of Civil Procedure (Amendment) Act, 2002.
(3) No suit to set aside an order made under this rule shall be brought by
any person against whom such order is made.
(4) Where a third party challenges the judgment- debtors title by filing a
suit against the auction- purchaser, the decree- holder and the
judgment- debtor shall be necessary parties to the suit.
(5) If the suit referred to in sub-rule (4) is decreed, the Court shall direct
the
decree- holder to refund the money to the auction- purchaser, and where
such an Order is passed the execution proceeding in which the sale had been
held shall, unless the Court otherwise directs, be revived at the stage at
which the sale was ordered.
Rule 94 of Order XXI:
Certificate of purchaser:-Where a sale of immovable property has
become absolute, the Court shall grant a certificate specifying the
property sold and the name of the person who at the time of sale is
declared to be the purchaser. Such certificate shall bear date the day
on which the sale became absolute.
Proviso to Rule 92 sub-rule (1) of Order XXI CPC refers to a
situation where the sale is held and a claim is made by a third party,
the executing Court is directed not to confirm the sale till the disposal
of such claim by the executing Court.
Sub-rules (4) and (5) deal with a situation where a third party is
compelled to challenge by way of a suit, the judgment-debtors title
to the property sold in execution proceedings and who are the
necessary parties and what is the jurisdiction of Court to grant
comprehensive reliefs in the suit filed by a third party.
Rule 94 enables issuance of sale certificate to the auction
purchaser after completing various stages under different rules of
execution. Therefore the procedure stipulated in the rules has forward
march with the completion of a particular stage and not intended to
reopen the Court concluded actions viz., sale certificate is issued. The
important words to attract prohibition, in the proviso to Rule 58(1) CPC
are that the property attached has already been sold. The words are
simple and convey full meaning in the application of proviso to
completed sale transactions. From literal construction of these words it
can be held that once the sale certificate is issued to the property sold
in auction held by the Court, the proviso to Rule 58(1) is attracted and
no claim petition is maintainable against such property. From a
conspectus of the above provisions, it can be held that Order XXI CPC
is a stand alone provision comprehensively dealing with execution of
decrees and orders. The various stages of the execution provides for
objection by respondent/third party to execution and the executing
Court decides these objections. With a decision at appropriate stage
by the executing Court the next step is followed. Therefore, at the
instance of a third party the completed stages are not revisited.
Therefore, with the issuance of sale certificate the property is said to be
sold by the executing Court and no claim petition under Order XXI Rule
58 CPC is maintainable.
The executing Court with the issuance of sale certificate
completes the process of auction initiated under Order XXI and
thereafter, a further stage in execution proceedings arises. It cannot
be the intention of Parliament to go forwards and come backwards in
deciding the execution proceedings with the filing of claim petition.
Therefore, prohibition in complete terms is attracted to entertain a
claim petition by the proviso when the property is sold by the
executing Court. Therefore, in my considered opinion the prayer in
E.A.No.251 of 2014 is not maintainable.
Having regard to the findings recorded on the maintainability of
E.A.No.251 of 2014, I have to consider the legality of docket order
dated 19.12.2014. The executing Court prima facie has committed an
illegality in entertaining E.A.No.251 of 2014 and that E.A.No.96 of 2013 is
pending for delivery of possession. The order impugned is erroneous
and unsustainable. Once the claim petition is not maintainable in law,
the question of granting stay of delivery of possession does not arise.
Hence, the order impugned is set aside and C.R.P. allowed. The
revision petitioner is given liberty to bring to the notice of executing
Court the observations on the maintainability of E.A.No.251 of 2014 and
obtain appropriate orders.
It is made clear that the E.As filed by the 1st respondent are
considered from the limited perspective of maintainability and not on
merits. The dismissal or rejection of E.A. Nos.251 of 2014 or 252 of 2014
shall not be treated as foreclosing the remedies, if any, available to the
1st respondent.
With the above observation, the C.R.P. is allowed. No order as
to costs.
Miscellaneous petitions pending, if any, shall stand closed.
_____________
S.V.BHATT,J
Date:17.07.2015
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