PETITIONER:
TAKASEELA PEDDA SUBBA REDDY
Vs.
RESPONDENT:
PUJARI PADMAVATHAMMA & ORS.
DATE OF JUDGMENT28/04/1977
BENCH:
FAZALALI, SYED MURTAZA
BHAGWATI, P.N.
CITATION:
1977 AIR 1789 1977 SCR (3) 692
1977 SCC (3) 377
ACT
Code of Civil Procedure, (Act V of 1908), 1908--Order
XXI, Rule 64--Scope of--Meaning of the words "as may seem
necessary to satisfy the decree".
HEADNOTE
Order XXI Rule 64 of the C.P.C. lays down that "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."
The 5th respondent/decree-holder, S.P.R. Reddy obtained
two decrees against the Judgment-debtor Pujari Subbarayudu
in two suits viz.; U.S. 15 of 1949 and O.S. 19 of 1953. He
filed execution proceedings No. 24 of 1953 in the trial
Court for selling the properties belonging to the judgment-
debtor in Devanoor and Gudipadu villages in order to satis-
fy the decree in U.S. 15 of 1949. He also applied for
permission to bid at the auction sale. In the auction sale
held on March 2, 1955, the 5th respondent purchased the
lands situated in village Devanoor for a sum of Rs.
16,880/-. Despite the fact that the sale proceeds of the
lands in village Devanoor alone was sufficient to satisfy
the decretal amount mentioned in the warrant of sale and the
proclamation of sale viz.; Rs. 16,715.50, The Court proceed-
ed to sell the properties of the judgment-debtor in
village Gudipadu which fetched Rs. 12,500/- and which were
purchased by the appellant auction-purchaser. The judg-
ment-debtor filed an application on March 31, 1955 to set
aside the sale contending, inter alia, that once the sale of
the properties in village Devanoor was sufficient to satis-
fy the amount mentioned in the sale proclamation, the Court
should have stopped the sale as required by the mandatory
provisions of Order XXI Rule 64 of the C.P.C. The Trial
Court rejected the said application; whereupon the decree-
holder on April 20, 1955 obtained an order from the court
for rateable distribution of the sale proceeds. In appeal
the High Court accepted the plea of the judgment-debtor
regarding non-compliance with the provisions of O.XXI Rule
64 C.P.C. and set aside the sale with respect to the proper-
ties situated in village Gudipadu.
Dismissing the appeal by certificate the Court,
HELD: (1) The High Court rightly held that as the sale
of the properties in village Devanoor fetched an amount
mentioned in the sale warrant. the Executing Court was not
justified in proceeding with the sale of the properties in
village Gudipadu and should have stopped the sale. [694 F]
(2) The logical corollary which flows from O.XXI Rule 64
of the Code is that where the amount specified in the proc-
lamation of sale for the recovery of which the sale was
ordered is realised by sale of certain items, the sale of
further items should be stopped. [695 C-D]
(3) Under Order XXI Rule 64, 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 s,de can
be mentioned in the sale proclamation and is sufficient to
satisfy the decree, no 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
further sale should be held and the court should stop at
that stage. [695 E-F]
(4) In the facts and circumstances of the present case,
there being nothing to show that the decree-holder had
approached the court for including the second decretal
amount obtained in O.S. 19 of 1953 in the proclamation of
sale, the
693
Executing Court was not justified 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 rs 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
O.XXI, Rule 64 of the Code was sufficient to vitiate the
same so far as properties situated in village Gudapadu were
concerned. [695 G-H, 696 A]
(5) The Court remitted the matter to the Executing Court
for an inquiry with the following directions:
(i) The appellant will have to return the properties in
village Gudipadu to the judgment-debtor and he will be
entitled to receive the value of improvements made by him
during the time he was in possession of these properties, as
determined by the Executing Court in addition to Rs.
12,500/-.
(ii) He will not he entitled to any interest on the
value of the improvements, if he is found to be in posses-
sion of the property.
(iii) If the Executing Court finds that the auction-
purchaser was not in possession of the properties, the
judgment-debtor will have to refund the amount of Rs.
12,500/- to the appellant with interest at the rate of 12
per cent per annum from the date of sale upto the date of
refund. [696 B-E]
JUDGMENT
CIVIL APPELLATE JURISDICTION: C.A. No. 2381 of 1968.
(From the Judgment and Order dated the 30th March 1965
of the Andhra Pradesh High Court in Appeal against Order No.
443 of 1963)
P. Ram Reddy, K. Jayaram and K. Ram Kumar, for the
appellant.
B.R. Agarwala, for respondents.
The Judgment of the Court was delivered by
FAZAL ALI, J. This appeal by certificate arises out of
execution proceedings in respect of a decree obtained by the
respondents/decreeholders. It appears that the 5th re-
spondent/decree-holder Siddam Pedda Rami Reddi hereinafter
referred to as "SP" Reddi---obtained a decree in O.S. No. 15
of 1949 from the Court of Sub-Judge Kurnool against the
judgment-debtor Pujari Subbarayudu hereinafter referred to
as "Pujari" or "judgment-debtor". The 5th respondent had
also obtained another money decree against Pujari in another
suit being O.S. No. 19 of 1953. The 5th
respondent/decree-holder filed Execution Proceedings No. 24
of 1953 in the Trial Court for selling the properties be-
longing to the judgment-debtor in order to satisfy the
decree in O.S. No. 15 of 1949 and he also applied for per-
mission to bid at the auction sale. The first sale was
held on October 12, 1954 at which the lands situated in
villages Devanoor and Gudipadu were put to sale. But this
sale was set aside as there was some delay in payment of the
sale price. Consequently a second sale was held on March 2,
1955 at which the 5th respondent SPR Reddi purchased the
lands situated in village Davanoor and the appellant/auc-
tion-purchaser T.P.S. Reddy purchased the lands in village
Gudipadu. It is also not disputed that in the warrant of
sale as also the sale proclamation, the decretal amount for
which the properties were to be sold was mentioned as Rs.
16,715-8-0. The sale of lands in village
694
Devanoor alone fetched a sum of Rs. 16,880/- at which the
sale was knocked down. Thus it would appear that the sale
proceeds of the lands in village Devanoor were sufficient to
satisfy the decretal amount mentioned in the proclamation of
sale. Despite this fact, the Court proceeded to sell the
properties of the judgment-debtor in village Gudipadu
which fetched Rs. 12,500/- and which were purchased by the
appellant/auction-purchaser.
On April 20, 1955 the decree-holder obtained an order
from the Court for rateable distribution of the sale pro-
ceeds. In other words, this order was passed by the Court
not before the sale so that the entire decretal amount could
have been mentioned in the sale proclamation but a few days
after the sale had already taken place. This is rather an
important aspect of the matter which appears to have been
completely overlooked by the Trial Court. On March 31,
1955 the judgment-debtor Pujari filed an application to set
aside the sale on various grounds, namely, that the sale was
vitiated by material irregularities which caused serious
prejudice to the judgment-debtor and that the properties
sold by the Court were valuable properties and the same were
grossly undervalued-in the sale proclamation. Finally it
was contended by the judgment-debtor that once the sale of
the properties in village Devanoor was sufficient to satisfy
the amount mentioned in the sale proclamation, the Court
should have stopped the sale as required by the mandatory
provisions of 0.21 r. 64 of the Code of Civil Procedure-
hereinafter referred to as the Code--instead of continuing
the sale of the properties-in village Gudipadu. The
Trial Court, however, after heating the objections of the
decree-holder rejected the application of the judgment-
debtor. Thereafter the judgment-debtor preferred an
appeal before the High Court which, while negativing-the
grounds taken by the judgment-debtor regarding the material
irregularities in the conduct of sale or the under-valuation
of the properties, accepted the plea of the judgment-debtor
regarding the non-compliance with the provisions of 0.21 r.
64 of the Code. The High Court held, and in our opinion
rightly, that as the sale of the properties in village
Devanoor fetched an amount which was sufficient to satisfy
the amount mentioned in the sale warrant, the Executing
Court was not justified in proceeding with the sale of the
properties in village Gudipadu and should have stopped the
sale. The High Court accordingly accepted the plea of the
judgment-debtor and set aside the sale with respect to the
properties situated in village Gudipadu, but granted a
certificate to the appellant to file an appeal in this Court
and hence this appeal before us.
In this appeal the facts are more or less undisputed and
the only serious point argued by the appellant is that the
High Court was in error in setting aside the sale because
even if the entire decretal amount was not mentioned in the
sale proclamation, that was at best an irregularity which
did not cause any prejudice to the judgment-debtor. It was
also argued by learned counsel for the appellant that the
judgment debtor did not raise any objection before the
Executing Court against continuing the sale of other proper-
ties situated in village Gudipadu. It was next submitted
that the 5th respondent/decreeholder had obtained another
decree in O.S 19 of 1953 and the total
695
amount under the two decrees fully justified the selling of
the properties in village Gudipadu also, particularly when
the decree-holder had taken an order from the Executing
Court for rateable distribution of the sale proceeds. It
is true that the High Court has not considered this aspect
of the matter, but in our opinion the contentions raised by
the appellant are wholly untenable. It is not disputed
that the warrant of sale was prepared long after the 5th
respondent/decreeholder had obtained the second decree in
O.S. 19 of 1953 and yet no attempt was made by the decree-
holder to approach the Court for amending the decretal
amount mentioned in the sale proclamation, so as to include
the decretal amount not only of the decree in the first
suit No. O.S. 15 of 1949 but also of the decree in the
second suit in O.S. 19 of 1953. In these circumstances,
therefore, under the provisions of 0.21 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 recov-
ery of which the sale was ordered is realised by sale of
certain items, 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, shah 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 jurisdic-
tion 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. 16880 which was more than sufficient to satis-
fy the amount of Rs, 16,715-8-0 mentioned in the sate
proclamation. It is true that the decree-holder had ob-
tained another decree in O.S. No. 19 of 1953, but there is
nothing to show that the decree-holder had approached the
Court for including the second decretal amount in the proc-
lamation 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 Gudipa-
du. 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 O. 21 r. 64 of the Code
was sufficient to vitiate the same so far as the
696
properties situated in village Gudipadu were concerned.
For these reasons the contentions raised by counsel for the
appellant must be overruled.
This, however, does not put an end to the issue, be-
cause the High Court, while setting aside the sale, has
passed no order for adjusting the equities between the
parties. According to the appellant he had taken possession
of the properties purchased by him at the auction sale and
had made substantial improvements. If the sale of these
properties is to be set aside, the appellant will have to
return these properties to the judgment-debtor, but he will
be entitled to receive the value of improvement’s made by
him during the time he was in possession of those properties
in addition to the return of the sum of Rs. 12,500/-. The
Executing Court will have to hold an inquiry into the matter
and determine the value of the improvements made by the
appellant which will have to be paid to him. The appellant
will not be entitled to any interest on the value of the
improvements if he is found to be in possession of the
properties. If, however, the Executing Court finds that the
auction-purchaser was not in possession of the properties
and the properties continued to be in possession of the
judgment-debtor, then the question of the value of improve-
ments will naturally not arise. In that event the judg-
ment-debtor will have to refund the amount of Rs. 12,500/-
to the appellant with interest at the rate of 12% per annum
from the date of sale upto the date of refund.
For these reasons, therefore, the appeal is dismissed
with the modification indicated above and the case is sent
back to the Executing Court to hold an inquiry into the
matter. In the special and peculiar circumstances of the
present case, we make no order as to costs.
S.R. Appeal dismissed.
697