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M/s. Sri Venkateswara Chemical Industries & Another v/s Kambampati Ramakrishna Rao & Others

    Civil Revision Petition No. 1573 of 2013 & 4115 of 2013

    Decided On, 19 September 2013

    At, High Court of Andhra Pradesh

    By, THE HONOURABLE MS. JUSTICE G. ROHINI

    For the Appellants: C.V. Mohan Reddy, Senior Counsel representing Parsa Ananth Nageswar Rao, Advocate. For the Respondents: Govardhan Venu



Judgment Text

Common Order:

The petitioners in these two Revision Petitions are the defendants 1 and 3 in O.S. No.152/1988 on the file of the Court of the Principal Junior Civil Judge, Machilipatnam. The said suit was filed by the respondent No.1 herein for recovery of money and the same was decreed for a sum of Rs.34,000/-. In pursuance thereof the respondent No.1/decree holder filed E.P. No.66/2003 for realization of the decretal amount by sale of the E.P. schedule properties. Accordingly public auction was held on 19.06.2006 through Court in which the respondent No.8 herein was declared as the successful bidder.

While so, the revision petitioners / judgment debtors 1 and 3 filed E.A. No.713/2006 under Order XXI Rule 90 of C.P.C with a prayer to set aside the sale alleging that the bid amount was very low and that the property worth Rs.10 lakhs was sold for realization of a meager amount of Rs.34,000/-. It was also pleaded that they had paid the entire decretal amount to the decree holder and that the decree holder himself filed a memo to record full satisfaction of the decree. However, by order dated 05.07.2010 E.A. No.713/2006 was dismissed by the executing Court.

In view of the pendency of E.A. No.713/2006 the sale held on 19.06.2006 could not be confirmed and ultimately after the dismissal of E.A. No.713/2006, the executing Court passed an order on 20.07.2010 confirming the sale and accordingly sale certificate was issued in favour of the respondent No.8.

In the meanwhile, the decree-holder filed memo dated 31.5.2010 stating that the decretal amount was paid to him directly by the judgment debtors and therefore he has no objection for termination of the execution proceedings and thus praying for recording full satisfaction of the decree. The said prayer of the decree-holder was rejected by the executing Court by order dated 21.06.2010 holding that as the sale was held long back on 19.06.2006 and the amounts were also deposited by the auction purchaser it is not open to the decree holder to receive the amounts from the judgment debtor out of Court.

Aggrieved by the order dated 05.07.2010 passed by the executing Court dismissing E.A. No.713/2006 the revision petitioners / judgment debtors 1 and 3 filed A.S. No.15/2012 in the Court of the VI Additional District Judge, Machilipatnam, on 10.11.2010, along with an application for stay. As no such interim stay was granted, the respondent No.8/auction purchaser filed a petition seeking delivery of the property purchased by him and the executing Court appointed an Advocate Commissioner to deliver the possession.

At that stage the judgment debtors 1 and 3 filed C.R.P. No.1573/2013 under Article 227 of the Constitution of India contending that the executing Court committed a grave error in not terminating the execution proceedings in spite of the fact that the decree holder reported full satisfaction of the decree.

They have also filed C.R.P (SR) No.14665 of 2013 against the order dated 21.06.2010 passed by the executing Court rejecting the memo filed by the decree holder reporting full satisfaction of the decree.

As both the revision petitions arose out the same execution proceedings and the issues involved are interlinked, they are heard and decided together by this common order.

I have heard the learned counsel for both the parties and perused the material available on record.

Sri C.V. Mohan Reddy, the leaned Senior Counsel appearing for the revision petitioners contended that the sale held on 19.6.2006 is collusive and vitiated by fraud and therefore the same is liable to be set aside. It is also contended that the Court below has no jurisdiction to proceed with the execution proceedings once the decree holder reported full satisfaction of the decree.

On the other hand, Sri Govardhan Venu, the learned counsel appearing for the respondent No.8, while supporting the orders passed by the Court below submitted that the interference by this Court is not warranted on any ground whatsoever.

At the outset, it is to be noticed that as against the order passed by the Court below, dated 05.07.2010 dismissing E.A. No.713/2006 filed by the judgment debtors 1 & 3 for setting aside the sale, a regular appeal lies under Section 96 of C.P.C and such an appeal has already been filed by the revision petitioners. Admittedly, the said appeal (A.S. No.15/2012) is pending on the file of the Court of the VI Additional District Judge, Krishna. Therefore, it is neither necessary nor proper for this Court to go into the question as to the validity of the sale held on 19.06.2006.

Thus, the only question that requires consideration by this Court is whether the order dated 21.06.2010 passed by the Court below rejecting the memo filed by the decree holder to record full satisfaction of the decree warrants interference by this Court.

As could be seen, the sale through Court was held on 19.06.2006 and the auction purchaser/respondent No.8 herein deposited the sale consideration immediately after the sale. Long thereafter on 31.05.2010 the decree holder filed a memo stating that the decretal amount was paid by the judgment debtors directly to him and therefore he is no longer interested to pursue the execution petition. Thus, he prayed to record full satisfaction and terminate the execution proceedings.

It is no doubt true that by the date of the said Memo about four years have elapsed from the date of the auction through Court. However, the fact remains that by that date the sale was not confirmed.

As per Order 21 Rule 92 of C.P.C. the sale of immovable property in execution of a decree becomes absolute only when an order is passed by the Court confirming the same. Rule 94 of Order 21 further provides that where sale of immovable property becomes absolute, the Court shall grant a Certificate and only thereafter an order can be made for delivery of the property to the purchaser. As the sale was admittedly not confirmed by the date of the Memo dated 31.5.2010, there can be no dispute that the auction purchaser/respondent No.8 did not acquire any right in respect of the property sold in the public auction.

However, the court below refused to accept the full satisfaction reported by the decree-holder on the ground that it is not open to the decree-holder to receive the decretal amount from the judgment-debtors out of Court at that stage.

The said order in my considered opinion runs contrary to Rule 2 of Order 21 of CPC which reads as under:

2. Payment out of Court to decree holder

(1) Where any money payable under a decree of any kind is paid out of the court, or the decree of any kind is otherwise adjusted in whole or in part to the satisfaction of the decree holder, the decree holder shall certify such payment or adjustment to the court whose duty it is to execute the decree, and the Court shall record the same accordingly.

(2) The judgment debtor or any person who has become surety for the judgment-debtor also may inform the court of such payment or adjustment, and apply to the court to issue a notice to the decree holder to show cause, on a day to be fixed by the court, why such payment or adjustment should not be recorded as certified; and if, after service of such notice, the decree holder fails to show cause why the payment or adjustment should not be recorded as certified, the court shall record the same accordingly.

(2-A) No payment or adjustment shall be recorded at the instance of the judgment debtor unless-

(a) the payment is made in the manner, provided in rule 1; or

(b) the payment or adjustment is proved by documentary evidence; or

(c) the payment or adjustment, is admitted by, or on behalf of, the decree holder in his reply to the notice given under sub-rule (2) of rule I, or before the Court.

(3) A payment or adjustment, which has not been certified or recorded as aforesaid, shall not be recognized by any court executing the decree.

On a plain reading of the above provision, it is clear that payment of the decretal amount out of Court is permissible even during execution proceedings.

However, the learned counsel for the respondent No.8 sought to justify the order under revision relying upon Rule 1(1) (b) of Order 21 of C.P.C. which provides that all money payable under a decree shall be paid out of Court to the decree-holder by postal money order or through a bank or by any other mode wherein payment is evidenced in writing. It is further contended that sub-rule (1) (b) of Rule 1 shall be read with sub-rule (3) which provides the particulars to be furnished to evidence the payment made out of Court.

For proper appreciation of the above said contention, Rule 1 of Order 21 may be extracted hereunder:

1. Modes of paying money under decree

(1) All money, payable under a decree shall be paid as follows, namely:-

(a) by deposit into the Court whose duty it is to execute the decree, or sent to that Court by postal money order or through a bank; or

(b) out of court, to the decree holder by postal money order or through a bank, or by any other mode wherein payment is evidenced in writing; or

(c) otherwise, as the Court, which made the decree, directs.

(2) Where any payment is made under clause (a) or clause (c) of sub-rule (1), the judgment debtor shall give notice thereof to the decree holder either through the court or directly to him by registered post, acknowledgment due.

(3) Where money is paid by postal money order or through a bank under clause (a) or clause (b) of sub-rule (1), the money order or payment through bank, as the case may be, shall accurately state the following particulars, namely:-

(a) the number of the original suit;

(b) the names of the parties or where there are more than two plaintiffs or more than two defendants, as the case may be, the names of the first two plaintiffs and the first two defendants;

(c) how the money remitted is to be adjusted, that is to say, whether it is towards the principal, interest or costs;

(d) the number of the execution case of the Court, where such case is pending; and

(e) the name and address of the payer.

(4) On any amount paid under clause (a) or clause (c) of sub-rule (1), interest, if any, shall cease to run from the date of service of the notice referred to in sub-rule (2).

(5) On any amount paid under clause (b) of sub-rule (1), interest, if any, shall cease to run from the date of such payment:

PROVIDED that, where the decree holder refuses to accept the postal money order or payment through a bank, interest shall cease to run from the date on which the money was tendered to him, or where he avoids acceptance of the postal money order or payment through bank, interest shall cease to run from the date on which the money would have been tendered to him in the ordinary course of business of the postal authorities or the bank, as the case may be. (emphasis supplied).

A combined reading of sub rules (1)(b) and (3) of Rule 1 of Order 21 of C.P.C. shows that whenever money payable under a decree is paid to the decree-holder out of Court, the same shall be in the procedure prescribed under sub-rule (1)(b) read with sub-rule (3) of Order 21 Rule 1 of C.P.C. If the Court is satisfied that the payment is so made to the decree-holder out of Court and the decree-holder certifies such payment to the Court, then the Court is bound to record the same as provided under Order 21 Rule 2 of C.P.C. I am fortified in my view by the decision of this Court in M. SRIRAMA MURTHY v. MANAGER, ANDHRA BANK, ONGOLE, PRAKASAM DISTRICT (2012 (2) ALD 418)wherein it was held that in case the decretal amount is realized at any stage before the sale is confirmed, the proceedings must stop and the E.P. must be closed.

As noticed above, the Court below passed the order dated 21.06.2010 only on the ground that it is not open to the decree-holder to receive the amounts from the judgment-debtors out of Court at that stage. Apparently, the view taken by the court below is contrary to the provisions of Order 21 Rules 1 & 2 of C.P.C. which expressly provides for payment of the decretal amount to the decree-holder out of Court even during the execution proceedi

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ngs. Since the Court below did not go into the question whether the payment stated to have been made to the decree-holder out of court was in terms of the procedure prescribed under Order 21 Rule 1 (1) (b) & (3), but the order dated 21.06.2010 came to be passed merely on an erroneous assumption that the decree-holder cannot accept the decretal amount out of Court at that stage, the said order suffered from an error apparent on the face of the record and therefore it is liable to be set aside on that ground alone. Accordingly, the order dated 21.06.2010 is set aside and the C.R.P (SR) No.14665/2013 is disposed of with a direction to the Court below to pass a fresh order on the decree-holder’s memo dated 31.5.2010 after making the necessary enquiry in the light of the observations made above. So far as C.R.P. No.1573/2013 is concerned, the same is liable to be dismissed in view of the pendency of A.S. No.15/2012 on the file of the Court of the VI Additional District Judge, Krishna. Accordingly, C.R.P. No.1573/2013 is dismissed with a liberty to the petitioners to pursue the above said appeal. In the result, C.R.P. No.1573/2013 is dismissed and C.R.P (SR) No.14665/2013 is disposed of with the above directions. No costs. Consequently the miscellaneous petitions, if any, pending in these Revision Petitions shall stand closed.
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