V.S. Vasudevan v. The Federal Bank Ltd.

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.M.JOSEPH & THE HONOURABLE MR. JUSTICE M.L.JOSEPH FRANCIS TUESDAY, THE 4TH OCTOBER 2011 / 12TH ASWINA 1933 FAO.No. 188 of 2011 ------------------------------------AGAINST THE ORDER DATED 15.6.2011 IN EA.1468/10 IN EP.434/03 IN OS.1051/2001 of II ADDL.SUB COURT,THRISSUR .................... APPELLANT (PETITIONER/2ND JUDGMENT DEBTOR) ---------------------------------------------------------------------------- V.S.VASUDEVAN, S/O.SANKUNNY, VALAPARAMBIL HOUSE, THRITHALLUR.P.O., PIN-680 619. BY ADV. SRI.G.HARIKRISHNAN. RESPONDENT(S): (RESPONDENT/DECREE HOLDER) -------------------------------------------------------------------------- THE FEDERAL BANK LTD., VATANAPILLY BRANCH, VATANAPPILLY, PIN-680 614. THIS FIRST APPEAL FROM ORDERS HAVING COME UP FOR ADMISSION ON 04/10/2011 ALONG WITH FAO.NO.189/2011 & EX.F.A.NO.15/2011,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **K.M. JOSEPH &** **M. L. JOSEPH FRANCIS, JJ.** **----------------------------------------FAO.NOS.188 & 189 OF 2011 & EX.F.A.NO.15 OF 2011** **-----------------------------------------Dated this the 4[th] October, 2011** ## **JUDGMENT** ## **K.M. Joseph, J.** Since there is some connection between these cases, we dispose of the same by a common Judgment. 2. OS No.1051 of 2001 before the IInd Additional Sub Court, Thrissur was a Suit on mortgage filed by the respondent/Bank in all these cases. The said Suit was decreed in a sum of Rs.5,91,015/= with costs and interest at six per cent per annum from the date of Suit till realisation. Two items of properties were mortgaged. According to the Bank, one item is 10.3/4th cents. The said property belonged to Shri V.S. Vasudevan, who is the appellant in FAO. No.188 of 2011. In execution proceedings by the Bank, the said property came to be sold for Rs.2.5 Lakhs. Shri V.S. Vasudevan filed _**FAO.NOS.188/11, 189/11 & Ex.FA.No.15/2011 2**_ E.A.No.1468/2010 purportedly under Section 47 of the Code of Civil Procedure to set aside the sale. The E.A. was filed for setting aside the sale after receiving the amount. Fortyeight cents of property which purportedly belonged to Shri M. K. Ramakrishnan who is the appellant in F.A.O. No.189 of 2011 was also the subject matter of the mortgage, which in turn was the subject matter of the Suit in question. The said property was brought to sale for a sum of Rs.4,00,000/= in execution proceedings. In both these cases, the decree holder/Bank itself has purchased the properties. Shri M. K. Ramakrishnan filed E.A. No.320/2010 purporting to be under Order XXI Rule 90 of the CPC for setting aside the sale of the property. 3. The appellant in Ex.F.A.No.15 of 2011 is one Smt. Janaki. She is admittedly the wife of the appellant in FAO.No.189 of 2011. She filed a petition purporting to be under Order XXI Rule 98 CPC. It is her case that though in the Suit the court proceeded on the basis that 48 cents had been mortgaged by her husband Shri M. _**FAO.NOS.188/11, 189/11 & Ex.FA.No.15/2011 3**_ K. Ramakrishnan, actually there was only about 39 cents. According to her, she was the owner of 8.3/4[th] cents as per Document No.1478/03 of SRO, Vadanappilly. Her case was that on the basis of the sale of 48 cents in court auction, her property is sought to be taken possession of by the decree holder/auction purchaser Bank and she accordingly sought relief in respect of her property. All the three Applications filed have been rejected. Hence the Appeals. 4. We heard the learned counsel for the appellants in all these cases and also the respondent/Bank. Though we had not admitted FAO.No.189/2011, we heard the learned counsel for the respondent Bank also in the said case. We have not issued notice to the second respondent. Having regard to the nature of the order that we propose to pass, it is not necessary for us to hear the second respondent. 5. First we take up Ex.F.A.No.15 of 2011. The following is the reasoning: _**FAO.NOS.188/11, 189/11 & Ex.FA.No.15/2011 4**_ _“The claim of the petitioner is that the petition schedule property having an extent of 8 ¾ cents belongs to her alone and now it is learnt that the said property also auctioned for realisation of the decree amount in O.S.1051/2001. According to respondent, 48 cents of property comprised in Sy.No.95/5 belonged to the 3[rd] respondent Ramakrishnan as per document No.1609/93 and the said Ramakrishnan deposited that title deed on 6.1.99. The respondent produced certified copy of document No.1609/93 (Ext.B1). The four boundaries of 48 cents involved in it are specifically stated in it. Then the suit was filed in 2001._ _The claim of applicant is that she got assignment of 8 ¾ cents of property comprised in Sy.No.95/5. She produced certified copy of document No.1478/03 of SRO, Vatanapilly. Ext.A1 it was executed by one Ismail and Jameela had executed it on 11.08.3 and the Encumbrance Certificate produced (Ext.A2) shows that at the time of that assignment deed, there was no encumbrance over this property. But she had not produced any preview documents to show that it is_ _**FAO.NOS.188/11, 189/11 & Ex.FA.No.15/2011 5**_ _part of the 48 cents of property covered by Ext.B1 assignment deed is obtained by R3 Ramakrishnan. The property described in schedule of Ext.B1 (Document No.1609/93) and Ext.A1 (Document No.1478/03) are part of 76 cents comprised in Sy.No.95/5 and as such the applicant has failed to show that the property she claims is part of 48 cents claimed by the respondent or that her predecessor in interest get assignment of the property even prior to the date of institution of O.S.1051/01. The recitals in document No.1478/03 refers about document No.742/01 but that document or copy of it is not produced. Further the property was mortgaged way back 6.1.99 and as that charge created on 6.1.99. On any account the applicant has not succeeded to show that her property is part of 48 cents sold in auction and that there is no charge over the property claimed by her even when it is part of the property mortgaged on 6.1.99. As such, this application is seen without merits. In the result, this E.A. is dismissed.”_ 6. Learned counsel for the appellant would focus his _**FAO.NOS.188/11, 189/11 & Ex.FA.No.15/2011 6**_ attention on Ext.A2 Encumbrance Certificate. He would take us through the entries in the Encumbrance Certificate and contend that it would bear out his contention that 8 ¾ cents belonging to the appellant was indeed part of 48 cents which originally belonged to her husband. He would submit that the encumbrance certificate would show that by a series of transactions emanating, however more importantly, from an inter vivos transfer made on 6.12.1997, the appellant's husband had transferred the property of 8 ¾ cents to Sulekha and thereafter by various subsequent transfers, the property came to be acquired by the appellant by Document dated 11.8.2003 (No.1478/03) (Ext.A1). He would point out that the entries relate to the 8 ¾ cents. 7. He would in fact contend that the sale itself will have to go. He would also submit that the letter evidencing the mortgage by way of deposit of title deeds itself would show that Shri M. K. Ramakrishnan had mortgaged only 39 cents. This also would go to strengthen the appellant's case that Shri M.K. Ramakrishnan did _**FAO.NOS.188/11, 189/11 & Ex.FA.No.15/2011**_ _**7**_ not have 48 cents and the appellant was indeed the independent owner of 8 ¾ cents as claimed by her, he contends. 8. Per contra, learned counsel for the decree holder/Bank would contend that indeed 48 cents had been mortgaged and the document relating to 48 cents had been deposited with the Bank as aforesaid. Of course, he would submit that the sale cannot be set aside. It is also submitted that in the description of the boundaries of the appellant in FAO.No.189/2011, the property of the appellant (Smt. Janaki) is shown as one of the boundaries. 9. FAO No.188/2011 arises out of the order passed on the petition filed by Shri V.S. Vasudevan. Shri V.S. Vasudevan was one of the judgment debtors. The sale admittedly took place in the year 2005. The application was filed in the year 2010. Counsel for the respondent Bank would immediately point out that the Application was hopelessly barred by limitation, even if it is taken as an Application under Section 47. Of course, the learned counsel for the appellant would point out that the sale was confirmed only _**FAO.NOS.188/11, 189/11 & Ex.FA.No.15/2011**_ _**8**_ on 25.9.2008. 10. As far as FAO. No.189/2011 is concerned, as already noted, Shri M.K. Ramakrishnan has filed the Application purporting to be under Order XXI Rule 90 in the year 2010 to set aside the sale which took place in the year 2005. It is further submitted that the entire property need not have been sold. He would submit that there are other contentions also. Per contra, counsel for the auction purchaser/Bank would contend that the Application is hopelessly barred. He submits that the Application is under Order XXI Rule 90 CPC. He further points out that as held by this Court in Dhanalakshmi Bank Ltd. v. Divakaran (2000 (2) KLT 231), it is not open to the mortgagor to set up the plea that a lesser extent ought to have been sold in execution proceedings and the appropriate time to raise such a plea is at the trial stage and he would point out that, therefore, there is no merit at all in the Appeal. 11. Learned counsel for the appellant would in fact point out _**FAO.NOS.188/11, 189/11 & Ex.FA.No.15/2011**_ _**9**_ that the appellant is prepared to pay off the amount. He would point out that in FAO. No.188/2011, the appellant is prepared to pay off the amount in a few days' time. As far as FAO. No.189/2011 is concerned, he would submit that the party does not have the resources and does not have the capacity to raise resources to pay off the amount immediately. In fact, it is contended on behalf of the appellants in Ex.F.A.No.15/2011 and FAO. No.189/2011 that if only 8.3/4th cents belonging to the appellant in Ex.F.A.No.15/2011 is allowed to be sold, the appellants will be able to re-pay of the amounts. 12. As far as Ex.F.A.No.15/2011 is concerned, we are of the view that the impugned order cannot be sustained. In a proceeding under Order XXI Rule 98 CPC, even if it is before dispossession of the person who files the objection, all questions raised must be considered. Case of the appellant is that the appellant is the owner of 8 ¾ cents on the strength of document No.1478/03. Ultimately, she purports to trace her title through her own husband, who by _**FAO.NOS.188/11, 189/11 & Ex.FA.No.15/2011**_ _**10**_ way of sale executed in the year 1997 had transferred 8 ¾ cents in favour of one Smt. Sulekha. These transactions appear to be borne out by the entries in Exhibit A2 encumbrance certificate. She has produced also Exhibit A1 which is the certified copy of her title deed. Exhibit B1 purports to be the document of title of Shri M.K.Ramakrishnan produced by the bank obviously on an attempt to show that there were 48 cents which has been mortgaged. The appellant has also produced before this Court certified copies of document dated 08/12/1997 which purports to be the document under which the husband of the appellant has transferred 8.3/4th cents in favour of Smt.Sulekha. Further the appellant also produced documents dated 06/07/1999 and 19/04/2001 which are in fact referred to in the encumbrance certificate also. We would think that the order, therefore cannot be sustained and the matter has to be remitted back for taking fresh decision in accordance with law. We, however, hasten to repel the contention of the learned counsel for the appellant that if 8 ¾ cents is found to be _**FAO.NOS.188/11, 189/11 & Ex.FA.No.15/2011**_ _**11**_ part of 48 cents, it should inevitably result in the sale of the entire property being set aside. The result of 8 ¾ cents being found to be part of 48 cents as contended by the appellant, would only result in the auction purchaser not being able to take delivery of the said item of property. 13. Learned counsel for the appellants in FAO Nos.188 & 189/2011 would submit that they are prepared to pay off the entire amount and if after remand, the contention of the appellant is accepted, the appellants in FAO No.189/2011 and Ex.F.A No.15/2011 will get much needed time to pay off the amount. He would pray that if 6 months time is granted and if also in the meantime the proceedings are directed to be completed in Ex.F.A No.15/2011, in all probability, the appellant would be able to pay off the amount. As far as FAO No.188/2011 is concerned, he reiterates that the appellant is prepared to pay off the amount in a few days. 14. As far as FAO Nos.189/2011 and 188/2011 are _**FAO.NOS.188/11, 189/11 & Ex.FA.No.15/2011 12**_ concerned, as such there is no merit in the said appeals, having regard to the date on which the sales took place and the dates on which the applications were filed by the appellant admittedly. Besides, as far as the contention relating to the extent of properties concerned, it cannot be made the subject matter of any complaint in execution proceedings by the mortgagor/defendant in a suit on the strength of a mortgage as held in Dhanalakshmi Bank Ltd. v. Divakaran (2000 (2) KLT 231). 15. However, we would think that at the same time, since the decree holder/Bank itself is the auction purchaser, if the appellant pays off the entire amount due which, according to the counsel for the decree holder/Bank, if it is allowed to be done within a period of 6 months from today, will be not less than Rs.11,00,000/=, sales can be set aside. We pass the following order: Ex.F.A.No.15/2011 is allowed, the impugned order is set aside and the matter is remitted back to the II[nd] Additional Sub Court, Thrissur. The Execution Court will proceed to hear the _**FAO.NOS.188/11, 189/11 & Ex.FA.No.15/2011**_ _**13**_ matter afresh and pass orders before 31/01/2012. It is open to the parties to adduce fresh evidence. It is also open to the appellant to seek measurement of the property in question. 16. As far as FAO Nos.189/2011 and 188/2011 are concerned, we direct that if the appellants pay a sum of Rs.11,00,000/= to the decree holder/auction purchaser/Bank on or before 05/04/2012, the sale of the properties involved in FAO Nos.188/2011 and 189/2011 will stand set aside. If the amount is not paid as aforesaid, the sales in both the cases will stand. The appellant in Ex.F.A No.15/2011 is permitted to take back the certified copies of the documents produced by her in the appeal. Sd/= **K.M. JOSEPH,** **JUDGE Sd/= M.L. JOSEPH FRANCIS, kbk. JUDGE** **//True Copy//** **PS to Judge** _**FAO.NOS.188/11, 189/11 & Ex.FA.No.15/2011**_ _**14**_