Or.21, rule 58 [1][b] -vs- Or.21 rule 58 [2] - for first count - no equiry is neccessary for dismissing the claim petition in limini but for second count - Trail is complusory when findings was given - execution court committed wrong - remanded for trial by setting aside the order as the execution court found that the sale agreement is a false one.

 Or.21, rule 58 [1][b] -vs- Or.21 rule 58 [2] - for first count - no equiry is neccessary for dismissing the claim petition in limini but for second count - Trail is complusory when findings were given - execution court committed wrong - remanded for trial  by setting aside the order as the execution court found that the sale agreement is a false one.

it does not appear that the executing Court had dismissed the objection under Clause (b) of proviso to sub-rule (1) of Rule 58 of Order 21 of the Code, that is to say only on the ground that the claim was designedly or unnecessarily delayed. Because a finding has been recorded that the agreement of sale in question is not genuine, the order passed must be held to have been passed under sub-rule (2) of Order 21 Rule 58 of the Code of Civil Procedure without holding an enquiry and without giving opportunity to the parties to the objection, but it has straightaway passed the order on merits which, on the face of it, is contrary to the mandatory provisions stated above. Under these circumstances, the impugned order suffers from material irregularity in exercise of its jurisdiction.” 

AP HIGH COURT 

Patcha Subrahmanyam,
Versus

Chenna Krishna Rao,

HON’ABLE SRI JUSTICE R. RAGHUNANDAN RAO

A.S.No.77 of 2017

JUDGMENT:

This appeal is directed against the decree and order dated

07.06.2016, passed in E.A.No.235 of 2016 in E.P.No.249 of 2014 in

O.S.No.319 of 2011, by the Additional Senior Civil Judge, Eluru.

2. The facts, which are given raise to this appeal, are that one

Thota Uma Maheswara Rao was the owner of 93 sq. Yards of land in

Rs.No.1936/2002 of Satrampadu village, Vatluru Sub-Division, West

Godavari District (hereinafter referred to as ‘the schedule property’). Sri

Chenna Krishna Rao, the 1st respondent in the appeal filed O.S.No.319 of

2011 before the Additional Senior Civil Judge, Eluru against Sri Thota Uma

Maheswara Rao, who has since passed away and is now represented by

respondents 3 to 5 in the present appeal, for recovery of money. The 1st

respondent/herein had also filed I.A.No.154 of 2011 for obtaining

attachment before judgment in respect of the schedule property and the

same was allowed on 13.09.2011. Subsequently, the suit was decreed on

10.02.2012. Thereafter, E.P.No.249 of 2014 was filed by the 1st

respondent herein for recovery of Rs.7,11,734/- along with costs of

Rs.17,547/- and for sale of the schedule property for recovery of decretal

amount and costs.

3. After the filing of the said E.P., the appellant herein filed

E.A.No.235 of 2016 claiming that he was the owner of the suit schedule

property. The claim of the appellant was that he had advanced a loan of

Rs.2,00,000/- to Sri Thota Uma Maheswara Rao, (the deceased 1st

respondent herein) and Sri Thota Uma Maheswara Rao had created a

mortgage over the schedule property by depositing title deeds on 

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2

11.10.2004. As Sri Thota Uma Maheswara Rao did not repay the loan

taken by him, the appellant claims to have issued a legal notice dated

30.09.2011, despite which no payments were made. Thereupon, the

appellant filed O.S.No.498 of 2011 on 24.10.2011 in the Court of Principal

Senior Civil Judge, Eluru and the same was decreed by way of a

preliminary decree dated 13.06.2012 decreeing the suit for Rs.5,36,000/-

with costs and subsequent interest at 6% per annum with principal

amount of Rs.2,00,000/- from the date of suit till the date of realisation

and time for redemption of four months was granted.

4. It is the case of the appellant herein that in view of the said

preliminary decree Sri Thota Uma Maheswara Rao (the deceased 1st

respondent herein) had executed a registered sale deed dated 26.08.2014

and the appellant had become the owner of the schedule property.

5. The 1st respondent herein resisted the said claim on the

ground that the order of attachment before judgment in favour of the 1st

respondent was issued on 13.09.2011 whereas the sale deed is said to

have been executed only on 28.06.2014 and in view of the same, the sale

deed itself is highly suspect and in any event not binding on the 1st

respondent as such. In view of the said submission, the 1st respondent

sought dismissal of E.A.No.235 of 2016.

6. It appears that the learned executing Judge heard the

arguments on both sides and dismissed the said E.A.No.235 of 2016 on

07.06.2016 only on the basis of the arguments advanced by both sides

and without any enquiry.

7. Aggrieved by the said order dated 07.06.2016, the present

appeal has been filed by the appellant. 

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8. The primary contention of the appellant is that in every

claim petition made in execution proceedings under Order XXI Rule 58

read with Section 47 of C.P.C.,an enquiry is required. Learned counsel for

the appellant submits that this would mean that the issues raised in the

claim application would require a formal trial including letting in evidence

by way of oral depositions and marking of documents as exhibits.

9. The claim of the appellant is that since this procedure has

not been followed, there is a clear violation of the provisions of Order XXI

Rule 58 C.P.C., and as such, the order dated 07.06.2016 requires to be

set aside and the matter may be remanded to the executing Court for a

proper enquiry in the matter before any decision is taken on the

application.

10. The learned counsel for the respondent submitted that since

the issues before the executing Court were straight forward in nature and

did not require any elaborate evidence, the procedure adopted by the

learned executing Judge is proper and does not require any interference.

11. In reply, the learned counsel for the appellant submits that

the question whether the mortgage of the property by the deceased 1st

respondent is in the year 2004 itself and the subsequent events leading to

the execution of the sale deed would have to be taken into account and

the objection of the 1st respondent herein on the genuineness and validity

of the sale deed dated 26.8.2014, would require to be examined in depth

and such facts can be determined by the executing Court only after a

proper enquiry is conducted, in which the witnesses would be crossexamined and the documents would be examined in a proper manner.

12. The provisions of Order XXI Rule 58 C.P.C would be

applicable to the present case. The said Rule has been considered by this 

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4

Hon’ble Court in the case of Muvvala Ramachandra Rao and anr. V.

Kuricheti Ravi and anr.,

1

. Paras 9 to 12 of the said judgment are

relevant and are extracted hereunder:

“9. The executing Court is competent to dismiss the

objection in limine where it considers that the objection or claim is

designedly or unnecessarily delayed, exercising its powers under

Clause (b) of proviso to sub-rule (1) of Rule 58 of Order 21 of the

Code of Civil Procedure and on that count, refuse to investigate

the claim; but if the Court does not exercise the said power, at its

inception, in terms of the above provisions, then, under sub-rule

(2) of Order 21 Rule 58 of the Code, the executing Court is bound

to decide all questions including the questions relating to right,

title or interest in the property attached arising between the

parties to the proceeding and relevant to the adjudication of the

claim or objection after giving opportunity of enquiry to the rival

parties to the objection.

10. In the case of K. Venkarayappa v. Ellen

Industries2

, a learned single Judge of this Court has held that

the Legislature intended that it is a mandatory duty cast on the

Court to hold an enquiry. The enquiry thereby posits that an

opportunity to be given to the parties to adduce all necessary

evidence in support of the claim or to resist such a claim by the

opposite party and thereafter to give finality to the objection by

that court, subject to a right of appeal provided under sub-rule (4)

thereof treating the order thereunder as a decree. The order thus

becomes conclusive. Thereby the Legislature has manifested that

holding an enquiry in adjudicating the right, title and interest of

the objector in dealing with the claim or objection is mandatory

and the order passed thereon shall be conclusive.

11. As noted above, it does not appear that the executing

Court had given opportunity to both the sides to lead evidence in

support of their rival claims. On perusal of Para 5 of the order

passed by the executing Court, it appears that the objection has

been dismissed on the ground that the appellants had not taken

any steps for raising the attachment before the disputed property

1

 1999 (3) ALD 101

2

 AIR 1985 AP 261 

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5

was put to sale though they had notice about the order of

attachment before Judgment before they had instituted the suit in

OS 100 of 1995 against both the respondents on the file of the

Additional Subordinate Judge, Tenali, for the relief of specific

performance, that the agreement of sale in question was not

genuine and no reliance can be placed on it, and that the petition

has been filed only with a view to drag the execution proceedings.

The appellate Court has found in Paras 10 and 11 of its judgment

that the agreement of sale in question is not genuine. Had it been

genuine, the appellants would have definitely obtained stay order

from the concerned Court in the civil suit OS 100 of 1995.”

12. From what is stated above, it does not appear that the

executing Court had dismissed the objection under Clause (b) of

proviso to sub-rule (1) of Rule 58 of Order 21 of the Code, that is

to say only on the ground that the claim was designedly or

unnecessarily delayed. Because a finding has been recorded that

the agreement of sale in question is not genuine, the order

passed must be held to have been passed under sub-rule (2) of

Order 21 Rule 58 of the Code of Civil Procedure without holding

an enquiry and without giving opportunity to the parties to the

objection, but it has straightaway passed the order on merits

which, on the face of it, is contrary to the mandatory provisions

stated above. Under these circumstances, the impugned order

suffers from material irregularity in exercise of its jurisdiction.”

13. In the present case also there is no finding by the learned

executing Judge that this is a matter which requires to be dismissed in

limini on the ground that the objection or claim is designedly or

unnecessarily delayed. As the executing Court went on the basis of the

claims made before it, the procedure adopted by the Court would not be

in consonance with the provisions of Order XXI Rule 58 (2) C.P.C., as

enunciated by this Hon’ble Court in the above referred judgment.

14. In view of the above, the appeal is allowed and the order

dated 07.06.2016 passed in E.A.No.235 of 2016 in E.P.No.249 of 2014 in

O.S.No.319 of 2011 is set aside and the matter is remanded to the 

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6

Executing Court with a direction to hold an enquiry and after affording

reasonable opportunity to both the parties to the claim petition, dispose of

the same according to law, expeditiously preferably within three months

from the date of receipt of this order. However, there shall be no order as

to costs.

15. As a sequel, pending miscellaneous petitions, if any, shall

stand closed.

_________________________

R. RAGHUNANDAN RAO, J.

5

th February, 2020

Js. 

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A.S.No.77 of 2017

7

HONOURABLE SRI JUSTICE R. RAGHUNANDAN RAO

A.S.No.77 of 2017

5

th February, 2020

Js.