Execution Of Decree By Sale Of Judgment Debtor's Immovable Property Is Not To Penalise Him; But Only To Provide Relief To Decree Holder: SC
The Supreme Court observed that the execution of a decree by sale of the entire immovable property of the judgment debtor is not to penalise him but the same is provided to grant relief to the decree holder and to confer him the fruits of litigation.
The court said that the right of a decree holder should never be construed to have bestowed upon him a bonanza only because he had obtained a decree for realisation of a certain amount.
The Court observed thus in an appeal concerning the restitution of a judgment debtor on a decree being varied, reversed, set aside or modified as it is statutorily recognised in Section 144 of the Civil Procedure Code (CPC).
The two-Judge Bench comprising Justice Hrishikesh Roy and Justice Prashant Kumar Mishra held, “The execution of a decree by sale of the entire immovable property of the judgment debtor is not to penalise him but the same is provided to grant relief to the decree holder and to confer him the fruits of litigation. However, the right of a decree holder should never be construed to have bestowed upon him a bonanza only because he had obtained a decree for realisation of a certain amount. A decree for realisation of a sum in favour of the plaintiff should not amount to exploitation of the judgment debtor by selling his entire property.”
The Bench said that in between Rule 54 to Rule 66 of Order XXI CPC, there is no other provision requiring assessment of value of the property to be sold in auction.
Senior Advocate D.N. Goburdhan represented the appellant while Senior Advocate Vinay Navare represented the respondent.
Factual Background -
The decree passed by the Trial Court was varied by the appeal court, however, in the meantime, the decree was executed by sale of the judgment debtor’s property in 1985 in favour of the decree holders, including the respondents. After the decree was varied by the Appellate Court, the appellant/judgment debtor applied for restitution by invoking Section 144 of CPC.
The Trial Court, Appellate Court, and the second Appellate Court as well, rejected the appellant/Judgment debtor’s application for restitution inter alia on the ground that the original decree was modified to the extent of interest payable and the judgment debtor not having deposited any amount in the court after the original decree and the property was put in auction, is not entitled to restitution.
The Supreme Court in view of the above facts noted, “It is, thus, settled principle of law that court’s power to auction any property or part thereof is not just a discretion but an obligation imposed on the Court and the sale held without examining this aspect and not in conformity with this mandatory requirement would be illegal and without jurisdiction. In the case at hand, the Executing Court did not discharge its duty to ascertain whether the sale of a part of the attached property would be sufficient to satisfy the decree. When the valuation of three attached properties is mentioned in the attachment Panchanama, it was the duty of the Court to have satisfied itself on this aspect and having failed to do so the Court has caused great injustice to the judgment debtor by auctioning his entire attached properties causing huge loss to the judgment debtor and undue benefit to the auction purchaser. The fact that the properties were sold for a sum of Rs. 34,000/- would further demonstrate that the decree holder who himself is the auction purchaser has calculatedly offered a bid at Rs. 34,000/- despite being aware that the value of the attached properties is Rs. 1,05,700/-.”
The Court said that it is not a case where the restitution can be ordered appropriately or suitably by directing the decree holder to make payment of some additional amount to the judgment debtor to compensate him for the loss caused due to sale of his properties and doing so would perpetuate the injustice suffered by the judgment debtor.
“It has been argued that the execution sale cannot be set aside at this stage when the judgment debtor has not paid any amount to satisfy the original decree or the modified decree nor he has challenged the legality of the auction sale on any permissible ground as contemplated in Order XXI CPC. However, we are not convinced with this submission made on behalf of the learned counsel for the respondents for the reason that we are not per se setting aside the execution sale as if the present is the proceedings challenging the execution of the decree by way of sale of the attached immovable properties of the judgment debtor”, it concluded.
Accordingly, the Apex Court allowed the appeal and set aside the order of the High Court.
Cause Title- Bhikchand S/o Dhondiram Mutha (Deceased) Through LRs. v. Shamabai Dhanraj Gugale (Deceased) Through LRs. (Neutral Citation: 2024 INSC 411)
Appearance:
Appellant: Senior Advocate D.N. Goburdhan, AOR Kamakshi S. Mehlwal, Advocates Sanveer Mehlwal, Deepa Joseph, and Gauri Goburdhan.
Respondent: Advocates K. Parameshwar, Yuvraj Vijayrao Kakade, Kailas B. Autade, AOR Sachin Patil, and Shashibhushan P. Adgaonkar.