V.B. Sherla, Anithaa Anand and Akhil Anand v. Punjab National Bank and others

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN** ## **&** ## **THE HONOURABLE MR.JUSTICE K. BABU** **THURSDAY, THE 21[ST] DAY OF OCTOBER 2021 / 29TH ASWINA, 1943** ## **FAO NO. 304 OF 2007** **AGAINST THE ORDER DATED 30.06.2007 IN E.A 121/2007 DATED 03.04.2007 & E.A 140/2007 DATED 30.06.2007 IN E.P 13/2003 IN OS 16/2000 OF ADDITIONAL SUB COURT, ALAPPUZHA,** ## **APPELLANTS/PETITIONERS/JUDGMENT DEBTORS 3, 7 AND 8:** 1 V.B.SHERLA, WIFE OF LATE PRASANNAN, SIVASAKTHY GEETHA WINES, KALARCODE, ALAPPUZHA. 2 ANITHA ANAND, D/O. LATE PRASANNAN, DO. DO. 3 AKHIL ANAND, SON OF LATE PRASANNAN, AGED 17 YEARS, REPRESENTED BY MOTHER, FIRST APPELLANT. BY ADVS. SRI.P.R.RAJA R.AZAD BABU ## **RESPONDENTS/COUNTER PETITIONERS/DECREE HOLDERS AND JDS 1, 4 TO** ## **6/AUCTION PURCHASER:** 1 PUNJAB NATIONAL BANK, ALAPPUZHA , REPRESENTED BY ITS MANAGER. 2 *SIVASAKTHY GEETHA WINES, KALARCODE,ALAPPUZHA, REPRESENTED BY ITS PARTNER. (REMOVED) 3 P.U.JOSPEH,PARTNER ,SIVASKTHY GEETHA WINES, KALARCODE, ALAPPUZHA. F.A.O.No.304/2007 2 4 *MURALI P.I. DO..DO.. (REMOVED) *RESPONDENTS 2 AND 4 ARE REMOVED FROM THE ARRAY OF PARTIES AT THE RISK OF APPELLANTS VIDE ORDER DATED 26.10.2007 IN I.A.4023/2007* 5 MARIYAMMA JOSEPH, WIFE OF P.U.JOSEPH, DO..DO. 6 SANTHOSH KUMAR,(DIED) VADAKYIRAPARAMBU,VADACKAL P.O.,, ALAPPUZHA. **ADDITIONAL RESPONDENTS 7 TO 10 ARE IMPLEADED BEING THE LEGAL REPRESENTATIVES OF THE DECEASED 6TH RESPONDENT VIDE ORDER DATED 26-02-2016 IN I.A 1348/2014** 7 ADDL.R7-UMA AMMA, AVITTATHIL HOUSE, KRISHNAPILLAI NAGAR.P.O, SANADANAPURAM, ALAPPUZHA-3 (DIED)LRS RECORDED) 8 ADDL.R8-SUPRIYA, W/O. LATE SANTHOSH KUMAR, DO. DO. 9 ADDL.R9-EASWAR SANTHOSH (MINOR), S/O LATE SANTHOSH KUMAR 10 ADDL.R10-AKSHARA SANTHOSH (MINOR), D/O LATE SANTHOSH KUMAR (ADDITIONAL RESPONDENTS 9 & 10 ARE MINORS, WHO ARE REPRESENTED BY THEIR MOTHER & GUARDIAN 8TH RESPONDENT SUPRIYA) *** IT IS RECORDED THAT LEGAL HEIRS OF DECEASED ADDL.R7 WHO ARE ADDL.R8 TO R10 ARE ALREADY ON THE PARTY ARRAY VIDE ORDER DATED 27-11-2015 IN I.A 1347/2015*** BY ADVS. P.A.AJITH KUMAR -R1 K.N.VENUGOPALA PANICKER- R5 & R6 B.PRAMOD -Addl R8 to R10. THIS FIRST APPEAL FROM ORDERS HAVING BEEN FINALLY HEARD ON 25.08.2021, THE COURT ON 21.10.2021 DELIVERED THE FOLLOWING: F.A.O.No.304/2007 3 ## _**JUDGMENT**_ ## _K.Babu, J._ This appeal is directed against the order dated 3.4.2007 in E.A.No.121 of 2007 and order dated 30.6.2007 in E.A.No.140 of 2007 in E.P.No.13 of 2003 in O.S.No.16 of 2000 on the file of the Additional Subordinate Judge's Court, Alappuzha. 2. The appellants are judgment debtors 3, 7, and 8 in the E.P. Respondent No.1 is the decree-holder. Judgment debtors 1 and 4 to 6 are respondents 2 to 5. Respondents 2 and 4 were removed from the party array, as per order dated 26.10.2007 in I.A.No.4023 of 2007. During the course of these proceedings, respondent No.6 died. His legal representatives were impleaded as additional respondents 7 to 10. Additional respondent No.7 also died during the course of proceedings whose legal representatives are additional respondents 8 to 10. 3. The husband of appellant No.1, who is the father of appellants 2 and 3, Sri.Prasannan, along with respondents 3 and 4, had availed a loan from the first respondent Bank. Two items of properties were offered as security for the loan transaction. One item of property was jointly held by the deceased Prasannan F.A.O.No.304/2007 4 and appellant No.1, and the other property was jointly held by respondents 3 and 5. 4. The first respondent Bank obtained decree dated 11.12.2001, for realisation of Rs.4,30,902/- with interest at the rate of 21.93% per annum and costs, against the appellants and respondents 3 to 5 in O.S.No.16 of 2000. 5. The Bank filed E.P.No.13 of 2003 before the court below for realisation of the decretal amount by the sale of the abovesaid properties. The court below proclaimed the properties for sale, and the sale was scheduled to be conducted on 3.4.2007. 6. Respondents 3 and 5 (JDs 4 and 6) filed E.A.No.121 of 2007 stating that they were prepared to pay the portion of the decree amount after adjusting the sale proceeds of the property held by the appellants (Item No.1 property) and prayed that the property that belonged to them (Item No.2) be excluded from sale. The appellants were not made parties in E.A.No.121 of 2007. They had no notice of the institution of E.A.No.121 of 2007. The court below allowed E.A.No.121 of 2007 as per order dated 3.4.2007 and directed sale of item No.1 property in auction. Item No.1 property was auctioned on 3.4.2007 itself. F.A.O.No.304/2007 5 7. After getting knowledge regarding the sale of item No.1 property, the appellants filed E.A.No.140 of 2007 under Order XXI Rule 90 C.P.C. The court below, as per order dated 30.6.2007 dismissed E.A.No.140 of 2007, holding that the sale conducted on 3.4.2007 was legal and proper. 8. Heard the learned counsel for the appellants and also the learned counsel for respondent Nos.1 and 8 to 10. 9. The learned counsel for the appellants contended that respondents 3 and 5 had obtained the order dated 3.4.2007 in E.A.No.121 of 2007 by playing fraud on the court, as the appellants were not made parties in the said application wherein the relief sought for was prejudicial to them. It is further contended that the impugned orders are not supported by reasons. 10. It is common ground that the appellants were not made parties in E.A.No.121 of 2007, an application filed by respondents 3 and 5 praying for excluding item No.2 property from auction and putting item No.1 property that belonged to the appellants alone in the auction. The order dated 3.4.2007 in E.A.No.121 of 2007 makes it clear that the appellants were not made parties therein, and they were not heard before allowing F.A.O.No.304/2007 6 the same. 11. It is submitted that the appellants had raised contentions, even before the proclamation of the sale, that a portion of the property belonged to them, namely, 10 cents out of the 30 cents would be more than sufficient for realisation of the decretal amount and further that the upset price shown was very low. 12. It is contended by the appellants that in E.A.No.140 of 2007, an application filed under Order XXI Rule 90 C.P.C, it was specifically pleaded that it was improper on the part of respondents 3 and 5 (judgment debtors 4 and 6) to seek prayer to exclude their property from sale in such a way as to cause prejudice to the appellants and that too without impleading them as parties in the application. It was further pleaded that the institution of E.A.No.121 of 2007 was a collusive act between the decree-holder and respondents 3 and 5. 13. The major challenges in the appeal are the following: - (a) The impugned orders are not supported by reasons. - (b) Non-impleadment of the appellants in E.A.No.121 of 2007 has resulted in a gross miscarriage of justice. 14. The orders under challenge are extracted below : F.A.O.No.304/2007 7 (i) The order dated 3.4.2007 in E.A.No.121 of 2007 : _"Decree holder has no objection. So I allowed this petition. Item No.1 property will be sold hereby."_ (ii) The order dated 30.6.2007 in E.A.No.140 of 2007 : _“This is a petition filed by the judgment debtors for setting aside the sale conducted on 3.4.2007. The judgment debtors did not substantiate that the sale conducted by the court is not a sustainable one. I am satisfied that the said sale conducted on 3.4.2007 is legal and proper. Hence, the petition is devoid of any merit. The sale is only to be confirmed. So, the E.A. is dismissed confirming the said sale. No costs.”_ 15. Providing reasons in orders is an essential attribute of judicial proceedings. The reason is the very life of the law. Every litigant who approaches the court with a prayer is entitled to know the reasons for acceptance or rejection of such prayer. Reasons are also essential for either of the parties to the lis to make the remedy of appeal meaningful. It is the reasoning which ultimately culminates into a final decision which may be subject to examination of the higher courts. 16. While highlighting the principle that, to give reasons is the rule of natural justice, the Apex Court in **the Secretary & Curator, Victoria Memorial v. Howrah Ganatantrik Nagrik Samity and others [AIR 2010 SC 1285]** held that, not only F.A.O.No.304/2007 8 administrative but also judicial order must be supported by reasons, recorded in it. Thus, while deciding an issue, the Court is bound to give reasons for its conclusion. It is the duty and obligation on the part of the Court to record reasons while disposing of the case. The hallmark of an order and exercise of judicial power by a judicial forum is to disclose its reasons by itself and giving of reasons has always been insisted upon as one of the fundamentals of sound administration justice-delivery system, to make known that there had been proper and due application of mind to the issue before the Court and also as an essential requisite of principles of natural justice. The giving of reasons for a decision is an essential attribute of judicial and judicious disposal of a matter before Courts, and which is the only indication to know about the manner and quality of exercise undertaken, as also the fact that the Court concerned had really applied its mind. The Apex Court further held that absence of reasons renders the order indefensible/unsustainable particularly when the order is subject to further challenge before a higher forum. It was further held that the recording of reasons is principle of natural justice and every judicial order must be supported by reasons recorded in writing. It ensures F.A.O.No.304/2007 9 transparency and fairness in decision making. The person who is adversely affected may know, as why his application has been rejected. 17. In **Jawahar Lal Singh v. Naresh Singh [(1987) 2 SCC 222]** the Apex Court held that recording of proper reasons would be essential, so that the appellate court would have advantage of considering the considered opinion of the High Court on the reasons which had weighed with the trial court. 18. In **State of Orissa v. Dhaniram Luhar [(2004) 5 SCC 568]** the Apex Court held that reasons in support of the decision is cardinal principle and right to reason is an indispensable part of a sound judicial system. 19. In **State of Rajasthan v. Rajendra Prasad Jain [(2008) 15 SCC 711]** the Apex Court held that reason is the heartbeat of every conclusion, and without the same it becomes lifeless. ## 20. In **Assistant Commissioner, Commissioner Tax Department v. Shukla and Brothers (2010 KHC 4260)** , the Apex Court held that, the principle of natural justice has twin ingredients; firstly, the person who is likely to be adversely affected by the action of the authorities should be given notice to F.A.O.No.304/2007 10 show cause thereof and granted an opportunity of hearing and secondly, the orders so passed by the authorities should give reason for arriving at any conclusion showing proper application of mind. 21. The court below lost sight of the above-mentioned salutary requirements while passing the impugned orders. It ignored the fact that a losing litigant has a cause to plead and a right to challenge the order if it was adverse to him. 22. The non-impleadment of the appellants in E.A.No.121 of 2007 has resulted in the violation of the principle of natural justice. The upshot of the above discussion is that the orders under challenge cannot be sustained. In the result, (i) The appeal is allowed. (ii) The order dated 3.4.2007 in E.A.No.121 of 2007 and order dated 30.6.2007 in E.A.No.140 of 2007 are set aside. (iii) The Execution Applications are ordered to be restored to file. (iv) The court below shall consider the E.As afresh and dispose of them after affording sufficient opportunity to the parties concerned in accordance with law. F.A.O.No.304/2007 11 (v) The court below shall dispose of the matter within a period of three months from the date of receipt of a certified copy of this judgment. Sd/- **ANIL K.NARENDRAN JUDGE** Sd/- **K.BABU JUDGE** csl/KAS