Lisamma Thomas v. P. Cherian andK.I. Thomas

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE & THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN THURSDAY, THE 12TH DAY OF OCTOBER 2017/20TH ASWINA, 1939 Mat.Appeal.No. 636 of 2010 ( ) ------------------------------- AGAINST THE ORDER IN EA 252/2009 IN EP 77/08 IN OP 643/2007 of FAMILY COURT, KOTTAYAM AT ETTUMANOOR DATED 30/06/2010 APPELLANT/RESPONDENT NO.2: ------------------------- LISAMMA THOMAS, D/O.THOMAS, THAYYIKAROTTU, POOVANTHURUTH KARA, POOVANTHURUTH VILLAGE, KOTTAYAM. BY ADVS.SRI.RAJEEV V.KURUP SRI.ALEX.M.SCARIA RESPONDENTS/CLAIM PETITIONER & RESPONDENT NO.1: ---------------------------------------------- 1. P.I.CHERIAN, S/O.ITTY IPE, KOSAMATTOM PUTHENPURA HOUSE, NATTASSERY, VIJAYAPURAM, KOTTAYAM-686 006. 2. K.I.THOMAS, THAYYIKAROTTU, POOVANTHURUTH KARA POOVANTHURUTH VILLAGE, KOTTAYAM- 686 012. DELETED (THE NAME OF THE 2ND RESPONDENT IS DELETED FROM THE PARTY ARRAY AT THE RISK OF THE APPELLANT VIDE ORDER DATED 22/03/2013 IN I.A.862/2013) R1 BY ADV. SMT.GEETHA P.MENON R1 BY ADV. SRI.P.B.KRISHNAN THIS MATRIMONIAL APPEAL HAVING BEEN FINALLY HEARD ON 21/06/2017, THE COURT ON 12-10-2017, DELIVERED THE FOLLOWING: MAT.APPEAL NO.636/2010 ---------------------- APPENDIX -------- APPELLANT'S ANNEXURES --------------------- 1: ATTESTED XEROX COPY OF THE SALE CERTIFICATE DATED 25/02/2009 IN EP 77/08 IN O.P.NO.643/2007. - 2: XEROX COPY OF THE DELIVERY CHIT DATED 28/05/2009. - 3: XEROX COPY DELIVERY ORDER DATED 14/05/2009. - 4: THE ENCUMBRANCE CERTIFICATE DATED 16/10/2009. RESPONDENT'S ANNEXURES ---------------------- NIL TRUE COPY P.S TO JUDGE ## **A.M.SHAFFIQUE, J & ANU SIVARAMAN, J** *** * * * * * * * * * * * * *** Mat.Appeal No.636 of 2010 ---------------------------------------Dated this the 12[th] day of October 2017 ## **J U D G M E N T** ## **Shaffique, J** This appeal is filed against the order dated 30/06/2010 in E.A.No.252/2009 in E.P.77/2008 in O.P.No.643/2007 of the Family Court, Kottayam at Ettumanoor. The 2[nd] respondent is the appellant here. The application is filed to set aside the sale of a property under Order 21 Rule 90 of the Code of Civil Procedure. 2. The short facts arising in this appeal are as under: O.P.No.643/2007 was filed by the appellant seeking to recover money from her husband Sri.K.I.Thomas. Property belonging to her husband was also attached. An ex parte decree came to be passed by the Family Court on 19/08/2007 and the property attached was sold in execution by the Family Court. The Decree Holder purchased the property, which was given delivery on 15/10/2009. 3. E.A.No.252/2009 was filed by the 1[st] respondent inter alia stating that the appellant's husband had borrowed an amount 2 Mat.Appeal No.636/2010 of Rs.40,000/- from him on 21/05/1996. Since the money was not repaid, he filed O.S.No.16/1997 before the Munsiff Court, Kottayam which came to be decreed. The defendant's property was attached and steps were taken to sell the property. Knowing about the execution proceedings in O.S.No.16/1997, the appellant and her children had approached the Execution Court and they were impleaded as additional judgment debtors. Though they raised a claim at the instance of the husband, the same was dismissed by the Execution Court. The 1[st] respondent contended that it is without disclosing the order of attachment, that O.P.No.643/2007 was filed and further proceedings were taken in the matter. Alleging that there was collusion between the husband and wife, and it was to avoid realization of the amount decreed in O.S.No.16/1997, the petition was filed. It is alleged that the petitioner had come to know about the sale of the property by the Family Court Ettumanoor only on 03/11/2009. It is also contended that the property decreed was worth more than Rs.10 lakhs and there is no proclamation of sale and therefore the sale is to be declared as void. 3 Mat.Appeal No.636/2010 4. According to the appellant, she had made arrangements with a counsel to defend the proceedings. However, no objection was filed despite the assurance that objection would be filed. It is submitted that the extent of property was 2.02 Ares which was sold in E.P.No. 77/2008 in Court auction on 15/10/2008 at the instance of the appellant for recovering Rs.4,49,824/- from her husband. The sale was confirmed on 16/12/2008 and delivery was taken on 28/05/2009. Therefore, according to the appellant, she is in possession of the property. 5. 1[st] respondent was examined as PW1. E.A.No.252/2009 was allowed setting aide the sale in E.P.No.77/2008. 6. The main contention urged by the appellant is that when the date of sale of the property was on 15/10/2008, and the sale was confirmed on 16/12/2008, the application to set aside sale is filed only on 16/11/2009. Even though no objection was filed, the application should not have been considered since the application itself was barred by limitation. Section 5 of the Limitation Act is not applicable to execution proceedings. The 4 Mat.Appeal No.636/2010 appellant challenges the findings of the Family Court wherein it is held that sale conducted in E.P.No.77/2008 was vitiated by fraud, collusion and suppression of material facts since the encumbrance certificate relating to the property did not show any attachment made in O.S.16/1997. Learned counsel for the appellant therefore, sought for setting aside the impugned order. 7. On the other hand, the learned counsel for the respondent supported the view taken by the Family Court to contend that all the proceedings in E.P.No.77/08 was the result of fraud and collusion between the husband and wife in order to avoid payment of the decree obtained against her husband, and hence there is justification on the part of the Family Court to arrive at a finding that the sale is liable to be set aside. 8. Learned counsel for the appellant also placed reliance upon the following judgments: i) **Mohanlal v. Hari Prasad Yadav** _[(1994) 4 SCC 177]_ . It is held that an application to set aside sale under Order 21 Rule 89 of the Code is governed by Article 127 of the Limitation Act and hence Section 5 of the Limitation Act has no application on its 5 Mat.Appeal No.636/2010 own wordings and that the execution court has no jurisdiction to entertain an application purportedly filed under Order 21 Rule 89 of the Code after the period of limitation prescribed by Article 127 of the Limitation Act. ii) **Francis v. Navodaya Kuries & Loans (P) Ltd & Ors.** _[2010 (3) KLT 609]._ In this case, the question considered was whether attachment over immovable property ceases to have effect when the property is sold in auction in execution of another decree. It was held that when a property is sold in execution of a decree, it cannot be sold again at the instance of another decree holder who may have attached it before the attachment effected by the decree holder under whose decree it is actually sold and that when a judicial sale takes place, all previous attachments effected upon the property sold fall to the ground. 9. On the other hand, learned counsel for the 1[st] respondent placed reliance on the following judgments: i) **Thomas v. Devassy** [1998 (2) KLT 1078]. In this judgment, it was held that where fraud has been committed by the decree holder and the judgment debtor did not have any knowledge about the proceedings, Sec.17 of the Limitation Act 6 Mat.Appeal No.636/2010 can be invoked and the petitioners are entitled to file an application to set aside sale under Order 21 Rule 90. That was a case in which an application was filed under Order 21 Rule 90 to set aside the sale. The allegation was that sale was held fraudulently and without due publicity. It was contended that the sale was held on 27/06/1991 and the property was purchased by the decree holder. The sale was confirmed and purchase certificate was issued on 27/08/1991. Petitioners alleged that they had come to know about the sale only on 27/09/1992, as the property was secretly manipulated and delivery of the property was obtained by the 1[st] respondent on 12/08/1992. One contention urged was that the petition was barred by limitation. This Court held that fraud has been committed and since the judgment debtor did not have any knowledge about the proceedings, Section 17 of the Limitation Act can be invoked and the petitioner can file the application within the time from the date of knowledge. ii) **Nakul Chandra v. Ajit Kumar** _[AIR 1982 Calcutta 564]._ This is a Division Bench judgment of the Calcutta High Court in which an application under Order 21 Rule 90 of the Code 7 Mat.Appeal No.636/2010 has been filed on 22/09/1976 for setting aside a sale held on 01/07/1968. It is held that in the case of an application to set aside the sale on the ground of fraud under Order 21 Rule 90 of the Code, limitation runs not from the date when the applicant has some hearsay knowledge of the factum of sale, but when he has a clear and definite knowledge of the facts constituting the fraud. 10. Learned counsel for the 1[st] respondent argued that fraud and collusion has been clearly pleaded in the petition and therefore, the application was rightly considered on merits. The Execution Court found that fraud has been committed by the 2[nd] respondent in collusion with the appellant, observing that, when execution proceedings were pending before the Munsiff court in respect of the very same property which was well within the knowledge of the 2[nd] respondent, the sale conducted in E.P.No.77/2008 was vitiated by fraud and collusion and suppression of material facts. 11. There is no dispute about the fact that an application under Order 21 Rule 90 has to be filed within the time specified under Article 127 of the Limitation Act. There is also no doubt Mat.Appeal No.636/2010 8 about the proposition that Section 5 of the Limitation Act has no application on such proceedings. As per Article 127 of the Limitation Act, an application to set aside a sale in execution of a decree including any such application filed by a judgment debtor has to be filed within 60 days from the date of sale. Sec.17(1) of the Limitation Act reads as under: ## _“_ _**17. Effect of fraud or mistake.-**_ _(1) Where, in the case of any suit or application for which a period of limitation is prescribed by this Act,-_ _(a) the suit or application is based upon the fraud of the defendant or respondent or his agent; or_ _(b) the knowledge of the right or title on which a suit or application is founded is concealed by the fraud of any such person as aforesaid; or_ _(c) the suit or application is for relief from the consequences of a mistake; or_ _(d) where any document necessary to establish the right of the plaintiff or applicant has been fraudulently concealed from him, the period of limitation shall not begin to run until plaintiff or applicant has discovered the fraud or the mistake or could, with reasonable diligence, have_ Mat.Appeal No.636/2010 9 _discovered it; or in the case of a concealed document, until the plaintiff or the applicant first had the means of producing the concealed document or compelling its production:_ _Provided that nothing in this section shall enable any suit to be instituted or application to be made to recover or enforce any charge against, or set aside any transaction affecting, any property which -_ _(i) in the case of fraud, has been purchased for valuable consideration by a person who was not a party to the fraud and did not at the time of the purchase know, or have reason to believe, that any fraud had been committed, or_ _(ii) in the case of mistake, has been purchased for valuable consideration subsequently to the transaction in which the mistake was made, by a person who did not know, or have reason to believe, that the mistake had been made, or_ _(iii) in the case of a concealed document, has been purchased for valuable consideration by a person who was not a party to the concealment and, did not at the time of purchase know, or have reason to believe, that the document had been concealed.”_ 12. If Sec.17(1) applies to the application for setting aside 10 Mat.Appeal No.636/2010 sale, limitation shall not begin to run until the applicant has discovered the fraud. Though it is stated that the property was sold and the appellant had taken delivery of the property, in the petition it is stated that cause of action for the application has arisen on 03/11/2009 when the applicant understood about the attachment, sale, delivery and the decree in O.P.No.643/2007. The application is seen filed on 16/11/2009. 13. Learned counsel for the appellant submitted that the appellant did not have an opportunity to contest the matter as no objection was filed. Perusal of the records would show that only the 1[st] respondent was examined as PW1 and there is no crossexamination. Learned counsel submits that an opportunity should be granted to contest the matter in the event it is found that Section 17 of the Limitation Act will not render any assistance to the 1[st] respondent. 14. Fraud is an exception to all proceedings and Section 17(1) of the Limitation Act clearly indicates that when fraud is being played, the limitation starts from the date when the applicant had discovered the fraud or could, with reasonable diligence, have discovered it. Mat.Appeal No.636/2010 11 15. Two questions may, therefore, arise for consideration. One is whether Section 17(1) of the Limitation Act saves the period of limitation for filing an application under Order 21 Rule 90 taking into consideration the facts of the present case and secondly whether the application is required to be decided on merits. 16. Though there is a finding by the Execution Court that fraud had been played, taking into consideration the fact that she could not contest the matter on merits, we are of the view that an opportunity has to be given to the appellant to contest the matter, so that both the questions can be considered on merits. And for that reason, the order passed by the Family Court has to be set aside and accordingly, this appeal is allowed as under: i) Order dated 30/06/2009 in E.A.No.252/2009 in E.P.No.77/08 in O.P.No.643/2007 of the Family Court, Kottayam at Ettumanoor is set aside. ii) The appellant and 1[st] respondent shall appear before the Family Court on 30/10/2017. iii) The appellant shall, on that date, file her objection to the petition under Order 21 Rule 90 of the C.P.C. 12 Mat.Appeal No.636/2010 iv) Parties shall be given an opportunity to adduce evidence. v) The presence of the 2[nd] respondent herein shall be dispensed with. vi) All endeavour shall be made by the Family Court to dispose of the matter, as expeditiously as possible. (sd/-) **(A.M.SHAFFIQUE, JUDGE)** (sd/-) **(ANU SIVARAMAN, JUDGE)** jsr