Annie John and others v. Dhanakenthra Kuries and Loans Private Limited

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE K.HARILAL** ## **&** **THE HONOURABLE MRS. JUSTICE ANNIE JOHN** **THURSDAY, THE 28TH DAY OF FEBRUARY 2019 / 9TH PHALGUNA, 1940** ## **FAO.No. 326 of 2014** **AGAINST THE ORDER DATED 31-03-2010 IN E.A.NO.1081/2008 IN E.P.NO.34/2007 IN OS 528/2005 of PRINCIPAL SUB COURT, IRINJALAKUDA** ## **APPELLANTS/ PETITIONERS/ JUDGMENT DEBTORS :** **1 ANNIE, W/O.CHITTILAPPILLY THOMANA POULOSE, PULLUR VILLAGE AND DESOM, MUKUNDAPURAMTALUK. 2 SOJAN, S/O.CHITTILAPPILLY THOMMANA POULOSE, PULLUR VILLAGE AND DESOM, MUKUNDAPURAM TALUK. 3 VINCENT, S/O.CHITTILAPPILLY THOMMANA POULOSE, PULLUR VILLAGE AND DESOM, MUKUNDAPURAM TALUK. 4 LEENA, D/O.CHITTILAPPILLY THOMMANA POULOSE, PULLUR VILLAGE AND DESOM, MUKUNDAPURAM TALUK. BY ADVS. SRI.RAJU JOSEPH (SR.) SRI.FIROZ K.ROBIN SRI.J.JULIAN XAVIER SRI.PIOUS MATHEW** ## **RESPONDENT/ RESPONDENT/ DECREE HOLDER :** **DHANAKENTHRA KURIES AND LOANS (P) LTD., EAST REGISTERED OFFICE AT CHALAKUDY VILLAGE AND DESOM, MUKUNDAPURAM TALUK, PIN - 680 722.** ## **BY ADV. M P RAMNATH** **THIS FIRST APPEAL FROM ORDERS HAVING BEEN FINALLY HEARD ON 04.12.2018, ALONG WITH OP(C).1694/2014, THE COURT ON 28.02.2019 DELIVERED THE FOLLOWING:** 2 ## **[FAO 326/2014 & OP(C).1694/2014 ]** **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT** **THE HONOURABLE MR.JUSTICE K.HARILAL** **&** **THE HONOURABLE MRS. JUSTICE ANNIE JOHN** **THURSDAY, THE 28TH DAY OF FEBRUARY 2019 / 9TH PHALGUNA, 1940** **OP(C).No. 1694 of 2014** **AGAINST THE ORDER DATED 31.05.2014 IN E.A.NO.562/2012 IN E.P.NO.34/2007 IN OS 528/2005 of PRINCIPAL SUB COURT, IRINJALAKUDA** ## **PETITIONERS :** **1 SOJAN, S/O. CHITTILAPPILLY THOMMANA POULOSE, URAKAM DESOM, PULLUR VILLAGE, MUKUNDAPURAM TALUK.** **2 VINCENT, AGED 44 YEARS, S/O. CHITTILAPPILLY THOMMANA POULOSE, URAKAM DESOM, PULLUR VILLAGE, MUKUNDAPURAM TALUK.** **BY ADVS. SRI.RAJU JOSEPH (SR.) SMT.ANIES MATHEW SMT.M.S.SOUJATH SRI.E.HARIDAS SRI.FIROZ K.ROBIN SRI.J.JULIAN XAVIER SRI.PIOUS MATHEW SRI.ROY JOSEPH** ## **RESPONDENTS :** **1 DHANAKENTHRA KURIES AND LOANS PRIVATE LIMITED EAST CHALAKUDY VILLAGE, MUKUNDAPURAM TALUK, REPRESENTED BY ITS MANAGING DIRECTOR, JOHN, S/O KARIYIL JOSEPH. PIN - 680 307.** **[FAO 326/2014 & OP(C).1694/2014 ]** 3 **2 ANIE, AGED 72 YEARS, W/O. CHITTILAPPILLY THOMMANA POULOSE, URAKAM DESOM, PULLUR VILLAGE, MUKUNDAPURAM TALUK.** **3 LEENA, AGED 37 YEARS, D/O.CHITTILAPPILLY THOMMANA POULOSE, URAKAM DESOM, PULLUR VILLAGE, MUKUNDAPURAM TALUK.** **BY ADVS. SRI.M.P.RAMNATH SMT.UMA R.KAMATH SRI.P.RAJESH (KOTTAKKAL)** **THIS OP (CIVIL) HAVING BEEN FINALLY HEARD ON 04.12.2018, ALONG WITH FAO.NO.326/2014, THE COURT ON 28.02.2019 PASSED THE FOLLOWING :** **[FAO 326/2014 & OP(C).1694/2014 ]** 4 ## **JUDGMENT** ## **Annie John, J.** The appellants in FAO No. 326 of 2014 are the judgment debtors in O.S. No. 528 of 2005 on the files of Principal Sub Court, Irinjalakuda. The suit was for realisation of Rs.16,22,207/- allegedly due in connection with some kuri transaction with interest. 2. According to the respondent/plaintiff, the property having an extent of 1.69 acres belongs to the defendants was mortgaged to secure the amount due under the kuri transactions. The appellants/judgment debtors filed a written statement denying the plaint averments and stating that the amount as claimed in the plaint was not due to the respondent. The respondent filed Execution Petition in O.S. No. 528 of 2005 and got entire extent of 1.69 acres of land, including the residential building in court auction on **[FAO 326/2014 & OP(C).1694/2014 ]** 5 25.06.2008 for Rs.15,00,100/-. The appellants filed E.A. No. 1081 of 2008 to set aside the sale. The respondent filed objection denying the averments. The learned Principal Subordinate Judge, as per order dated 31.03.2010, dismissed the EA. Aggrieved by the same, the appeal has been filed. 3. The case of the appellants is that with an intention to settle the dispute involved in the suit, they borrowed an amount of Rs.5,00,000/- from one Santhosh and entered into an agreement for sale in respect of 50 cents of property out of the aforesaid 1.69 acres of land. Since the said Santhosh failed to comply with the agreement, the appellants could not settle the dispute involved in O.S. No. 528 of 2005. Thereupon, the said Sanothosh filed O.S.No. 487 of 2007 for specific performance of the agreement. Subsequently, there was an understanding between the plaintiffs in the above-mentioned suits and the **[FAO 326/2014 & OP(C).1694/2014 ]** 6 appellants herein to settle the disputes involved in both the suits. Accordingly, the appellants withdrew their contentions in both the suits. Thus, the judgment and decree were passed in O.S. Nos. 528 of 2005 and 487 of 2007 and the appellants were given six months' time for repayment of the decree amount. Thereafter, the appellants paid an amount of Rs.2,50,000/- on 26.06.2006 to the respondents. The appellants could not comply with the directions of the judgment due to paucity of funds. Hence, the respondent herein filed the aforesaid EA before the Principal Sub Court, Irinjalakuda. 4. According to the appellant, on 18.03.2008, the appellants remitted an amount of Rs.30,000/- and another Rs.10,000/- on 26.05.2008. Apart from that, an amount of more than Rs.5,00,000/- is due to them, which they have deposited with the respondent by way of kuri deposits. The learned counsel for the appellants **[FAO 326/2014 & OP(C).1694/2014 ]** 7 contended that there is a building having an extent of 2000 sq. ft. in the property and the same is having high yielding improvements also. He has also contended that the proclamation was published without giving the details of the building and the improvements in the property. At the time of proclamation, the property was worth at least Rs.50,000/- per cent. There was no proper publication of sale proclamation. The publication was not effected in the office of the District Collector, Village Office and the Panchayat Office. The sale price of Rs.15,00,100/- does not constitute even a portion of the value of the property and therefore, the sale was vitiated by fraud and material irregularity. According to the appellants, since they were making earnest efforts to settle the dispute, they did not file an appeal against the order in E.A and that they could not settle the dispute since the respondent had been demanding exorbitant amount. **[FAO 326/2014 & OP(C).1694/2014 ]** 8 5. The petitioners in O.P.(C) No. 1694 of 2014 are the judgment debtors in E.P. No. 34 of 2007 in O.S. No. 528 of 2005 on the files of the Principal Subordinate Judges Court, Irinjalakuda. Challenging Ext.P7 order dated 31.05.2014, the Original Petition has been filed. As per Ext.P1 judgment and decree, the liability due to the first respondent as on the date of passing the decree is Rs.16,22,227/- together with interest @ 6% per annum for the principal amount of Rs.11,39,700/- from the date of suit along with cost Rs.25,245/-. 6. The first judgment debtor is the mother of judgment debtors 2 to 4. The proclaimed property was sold on 25.06.2008 for an amount of Rs.15,00,100/and it was posted for conformation of sale to 29.08.2008. The EA was filed to set aside the sale. According to the appellant, the proclaimed property has total extent of 1 acre 69 cents and having a concrete **[FAO 326/2014 & OP(C).1694/2014 ]** 9 building having an extent of 2000 square feet. Over and above, there is cultivation in the property. The decree holder has given only an estimated price of Rs.50,000/- for the said property. The decree could have been satisfied by sale of part of the property. Further, the proclamation was published without giving the details of the building and other cultivation in the property. According to the appellants, the property is worth Rs.50,000/- per cent. They have also alleged that there was no proper publication of the sale proclamation. If there was proper publication, there would have been a number of bidders for the property and the property would have been sold for a good value in the competitive bidding. 7. According to the respondent/decree holder there is no material irregularity and it is incorrect to say the the property is worth Rs.50,000/- per cent. It was after considering the objection of the judgment **[FAO 326/2014 & OP(C).1694/2014 ]** 10 debtors, the reserve price was fixed at Rs.15,00,0000/and accordingly the proclamation of the sale was done. The learned counsel for the respondent/decree holder contended that there is no merit in the contentions of the appellants and they urged for dismissing the case. 8. We have meticulously gone through the order of the court below and the materials on records. We find that though the petition was posted for hearing on 29.08.2008, the appellants sought time for settling the matter. Thereafter, on 07.09.2009, it was submitted that the matter was not settled and accordingly, the matter was posted for evidence. But, no evidence was adduced by the appellants to prove that there was fraud or material irregularity in publishing or conducting the sale. The appellants have entered appearance after due notice issued by the Execution Court and they have raised an objection regarding the sale of the property. After hearing both **[FAO 326/2014 & OP(C).1694/2014 ]** 11 sides, the court fixed the total value of the property as Rs.15,00,000/-. The court below has also held that there was no specific prayer to sell only a part of the property to satisfy the decree in the objection filed by the appellants on 25.09.2007. 9. The sole question to be considered is whether there was due participation of the appellants at the time of conducting the sale. It is an admitted fact that the extent of property is 1.69 acres and the same has been mentioned in the proclamation schedule. The objection filed by the appellant would prove that he had only dispute regarding the price fixed for the property. After hearing the appellants/judgment debtors that the Court has fixed the value of the property and only after that the proclamation of sale was done. The main grievance of the appellants is that there is material irregularity in publishing the sale proclamation and conducting the ## **[FAO 326/2014 & OP(C).1694/2014 ]** 12 sale. 10. This FAO was filed in order to set aside the order in EA.No.1081 of 2008 in EP.No.234 of 2007 in OS.No.528 of 2005. The above said EA was filed under Order XXI Rule 90 read with Section 151 of the CPC. Order XXI Rule 90 of the CPC. Reads thus : ## _**Application to set aside sale on ground of**_ _**irregularity or fraud** - (1) “Where any immovable property has been sold in execution of a decree, the decree holder, or the purchaser, or any other person entitled to share in a rateable distribution of assets, or whose interests are affected by the sale, may apply to the Court to set aside the sale on the ground of a material irregularity or fraud in publishing or conducting it”._ 11. Now the main argument of the learned counsel for the appellant was that the sale was conducted without proper publication and there is irregularity in publishing the conduct of the sale. **[FAO 326/2014 & OP(C).1694/2014 ]** 13 According to the appellant, there is a building having an extent of 2000 Sq.ft. situated in the property sold in auction and this fact has not been mentioned in the proclamation schedule. Moreover the upset price fixed by the lower court is incorrect. Thirdly, the lower court ought to have considered the Order XXI Rule 64 of the CPC. that a portion of the property was sold for satisfying the decree therein. 12. It has held in _**Kuruvilla v. Corporation Bank [2008 (1) KLT 604]**_ that “the executing court should apply its mind and decide whether it is necessary to bring the whole property to sale or whether it is sufficient to bring only a portion of the property to sale to satisfy the decree. The proclamation of sale is intended to assist the intending bidders in ascertaining the nature and real value of the property. The procedure prescribed in the Code of Civil Procedure in settling the sale proclamation and in ## **[FAO 326/2014 & OP(C).1694/2014 ]** 14 publishing the same would disclose the importance of the existence of a proper proclamation of sale in court auction sale. If the court fixes an upset price which does not reflect at least an approximately real value of the property, the intending bidder would be misled by the same. This would, sometimes, result in fetching a low price at the court auction sale. Fixing upset price in a mechanical manner, taking an average of what is stated by the decree holder and the judgment debtor, a practice prevalent in executing courts, would be against the mandate of R.66 of O.XXI CPC. It was also held that the both the decree holder and the judgment debtor would be put to prejudice if a stranger purchases immovable property in court auction for a low price. If the decree holder purchases the property for a low value, which does not even wipe off the decree debt, the judgment debtor would be put to great prejudice”. **[FAO 326/2014 & OP(C).1694/2014 ]** 15 13. It is true that Order XX1 Rule 64 of the CPC. mandates that “any court executing a decree may order that any property attached by it and liable to sale, or such portion thereof as may seems necessary to satisfy the decree shall be sought. It is true that in Rule 64, the words “any property attached” occur. Rule 66 (2)(a) of Order XXI would apply to a charge decree as well. The specific mention of attachment of property in Rule 64 would not take any application of Rule 66 to a decree for execution of which no attachment is necessary. Rule 64 makes provision for sale of attached property. While Rule 66 in this case is covered by Rule 64 and also the decree where attachment is not required. 14. Here, the appellant has filed EA as cited supra under Order XXI Rule 90 CPC. to set aside the sale. The executing court after analyzing the evidence on record dismissed the application. In fact 1.69 acres ## **[FAO 326/2014 & OP(C).1694/2014 ]** 16 of land was sold for court auction for Rs.15,00,100/-. It was the case of the respondent that the value of the property was fixed as Rs.15 lakhs as per the objection raised by the appellant in the above said execution application and further the decree in this case passed on the strength of a written statement filed withdrawing the contentions and the total amount will be about Rs.16 lakhs. It is very important to note that the amin who has gone to effect delivery of the petition schedule property could not able to deliver it since 50 cents of property which form part of 1.69 cents has been already handed over in possession of one Sudhish, who was filed suit for specific performance wherein the appellant has not contested it. So, the balance one acre and 19 cents was found to be delivered in the possession of the respondent decree holder herein. In fact, one acre and 69 cents of property has been sold for Rs.15,00,100/-. But the **[FAO 326/2014 & OP(C).1694/2014 ]** 17 respondent decree holder has obtained only one acre 19 cents available in the possession of the appellant herein for which also the respondent decree holder has sustained loss of the value of 50 cents. It is important to note that total upset price fixed for 1 acre 69 cents is only Rs.15 lakhs and the appellant has not adduced any evidence to the effect that the rest of the property i.e.one acre and 19 cents is not to be sold for the decree debt. 15. The Respondent has filed an objection to the proclamation stating that the 1 acre 69 cents of property is mentioned in the schedule as dry land and there is a concrete building having a plinth area of 2000 sq. ft. is situated therein. Over and above, it is an agricultural land and the upset price fixed for the total 1 acre 69 cents is only Rs.50,000/-. In fact one cent of property in that area would fetch Rs. 50,000/- and the total value of the building and the agriculture would **[FAO 326/2014 & OP(C).1694/2014 ]** 18 amount to Rs.5 lakhs. After hearing the objection, the lower court has fixed upset price as Rs.15 lakhs. 16. It is borne out from the proclamation schedule that including the value of the building therein the total value was fixed as Rs.15 lakhs. No further objection was raised by the appellant therein. It is very important to note that when the property was put in auction, 1 acre 69 cents was auctioned by the respondent/decree holder for Rs.15,00,100/-. But later on, when the EP was posted for effecting delivery of the property, it was turned out that out of 1 acre 69 cents, about 50 cents has already been sold out and the balance of 1 acre 19 cents was available to be delivered to the respondent/decree holder. The respondent/decree holder filed a petition before the court below stating that he satisfied with the 1 acre 19 cents and the Court has ordered delivery of 1 acre 19 cents to the respondent/decree holder. **[FAO 326/2014 & OP(C).1694/2014 ]** 19 17. In fact, decree holder has obtained only 1 acre 19 cents for the value of Rs.15,00,100/-. While disposing of the EA dated 18.10.2018 by the court below, this fact has not been considered that only 1 acre 19 cents was available to be delivered to the respondent/decree holder instead of 1 acre 69 cents. The respondent/decree holder has obtained a decree for Rs.16,22,207/- on 15[th] June, 2006. So far, there was no attempt on the part of the appellant to repay the amount. Instead of that, they filed applications one by one so as to prolong the matter. In fact, the property has been delivered on 25.07.2011. Now the property except 50 cents out of 1 acre 69 cents is now in the possession of the judgment debtor since 2011 onwards. Considering this fact, I find that the present petition filed under Order XXl Rule of the Code of Civil Procedure Code is not sustainable. The appellant has also had a grievances to the effect that the Order XXl **[FAO 326/2014 & OP(C).1694/2014 ]** 20 Rule 64 of the Code of Civil Procedure Code is not complied with. ## 18. Order XXI rule 64 contemplates that: “ `any court executing a decree may order that any property attached by it and liable to sale, or such portion thereof, has may seen necessary to satisfy the decree, shall be sold, and that the proceedings of such sale, or a sufficient portion thereof, shall be paid to the party entitled under the decree to receive the same.”` 19. So, as per Order XXl Rule 64, the Court has to decide which portion shall be sold for satisfying the decree and it is not for the decree holder to comply with Order XXl Rule 64 of the CPC. It is the duty of the Executing Court to consider whether the sale of the part of the property would be sufficient to meet the decree debt. The same was reiterated in the decision in cited in 2005 (10) SCC 235 (SC). If the Court has not decided this matter by invoking Order XXl Rule 64 of the CPC, that will not point out that the Court does not comply with it. In fact, even if 1 acre 69 cents was **[FAO 326/2014 & OP(C).1694/2014 ]** 21 sold out to the respondent/decree holder for Rs.15,00,100/- for a decree debt of more than Rs 16 lakhs, the decree holder has obtained only 1 acre 19 cents since 50 cents of property had already been given in possession of strangers on the strength of a suit for specific performance. So, we find that the ground as sought by the appellants that the Order XXl Rule 64 is not complied with cannot be accepted. More over, the appellant could not able to substantiate the fact that the sale was conducted improperly and there is material irregularity in publishing and conducting sale. We have meticulously gone through the pleadings and the records and found that the sale was conducted without due notice of the appellants/judgment debtors and after considering the objection filed by the judgment/debtor the proclamation schedule was drawn, including the value **[FAO 326/2014 & OP(C).1694/2014 ]** 22 of the building as Rs.5 lakhs. Now at this stage, the appellant is not expected to raise such a contention so as to disturb the sale which was validly conducted by the court below. We do not find any ground to interfere with the order of the court below and therefore, it is only to be confirmed. In the result, this appeal is disposed of. Sd/- **K.HARILAL, JUDGE** Sd/- **ANNIE JOHN, JUDGE** RKM **[FAO 326/2014 & OP(C).1694/2014 ]** 23 ## **APPENDIX OF O.P.(C) NO.1694/2014** ## **PETITIONERS' EXHIBITS :** - P1 : COPY OF THE JUDGMENT DATED 15.06.2006 IN O.S.NO.528/2005. - P2 : COPY OF THE AFFIDAVIT AND PETITION IN E.A.NO.1090/2010 IN O.S.NO.528/2005 FILED BY THE 1ST RESPONDENT HEREIN FOR DELIVERY OF THE PROPERTY. - P3 : COPY OF THE OBJECTION FILED BY THE PETITIONERS WITH OTHER JUDGMENT DEBTORS. - P4 : COPY OF TH INTERIM ORDER DATED 17.06.2011 IN O.P. (C).NO.1921 AND 1923 OF 2011. - P5 : COPY OF THE JUDGMENT DATED 08.07.2011 IN O.P.CIVIL NO.1923/2011. - P6 : COPY OF THE PETITION FILED UNDER SECTION 47 OF THE C.P.C. - P7 : COPY OF THE ORDER DATED 31.05.2014 IN E.A.NO.562/2012 IN E.P.NO.34/2007 IN O.S.NO.5287/2005.