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V.K. Kannadasan v/s Radhakrishnan & Others

    RSA. No. 628 of 2017

    Decided On, 14 June 2018

    At, High Court of Kerala

    By, THE HONOURABLE MR. JUSTICE A. HARIPRASAD

    For the Appellant: M. Narendra Kumar, Saju Raghavan, M.J. Sajitha, Advocates. For the Respondents: R1, Rajesh Sivaramankutty, Advocate.



Judgment Text

1. Heard the learned counsel for the appellant and contesting respondents.

2. This appeal arises out of a suit for partition filed by the 1st respondent against the appellant, his mother and brother. Property originally belonged to one Karuppaswami. Defendants 1 to 3 are his wife and children. One Kochumol filed O.S.No.485 of 2003 before the Court of Munsiff, Ottappalam against the appellant (1st defendant) and obtained a decree for money. The suit was decreed ex-parte against the appellant. The ex-parte decree was executed through E.P No.90 of 2006 by sale of 1/3 share of the 1st defendant (appellant) in the plaint schedule property. The property was put in auction and it was purchased by the 1st respondent herein. The sale was confirmed in his name. The property was symbolically delivered to him. Thereafter, the 1st respondent/plaintiff demanded partition, which was refused by the defendants.

3. The suit was decreed by the trial court finding that the 1st respondent is entitled to 1/3 share of the property by virtue of the court sale in O.S.No.485 of 2003. It goes without saying that 1/3 share belonged to the appellant was obtained by the 1st respondent in the court sale. Other defendants in the suit did not seriously contest the case. Contention raised by the 1st defendant/appellant, that the sale was incompetent and his rights were not extinguished by the court sale, were repelled by the trial court.

4. The judgment and decree of the trial court was unsuccessfully challenged before the lower appellate court. After re-appreciating the evidence, the lower appellate court also agreed with the trial court and the appeal was dismissed.

5. The substantial questions of law raised in this second appeal are as follows:

a. Whether the proceedings leading to the sale of property in execution of the decree in O.S No.485 of 2003 is void for noncompliance of mandatory provisions in order 21 Rule 66 of the Code of Civil Procedure (in short, 'the Code') ?

b. Whether such a question can be raised in a subsequent suit, that too without pursuing the remedy originally taken under Section 47 of the Code ?

6. Learned counsel submitted that the appellant is seriously prejudiced by the incorrect procedure adopted by the execution court in E.P No. 113 of 2007 in O.S.No. 485 of 2003. In-order to understand the real point of dispute, the records in E.P.No.113 of 2007 were also called for and perused.

7. Insofar as the contentions in this suit are concerned, there is not much dispute. The property originally belonged to the father of the appellant and on his death, the appellant, his brother and mother got 1/3 right each. Fact that appellant was the defendant in O.S.No.485 of 2003, a suit for realisation of money, is also not

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disputed. Further fact that he suffered an exparte decree, is also not under challenge. Only contention raised by the appellant is that the property was sold for satisfying the decree in O.S.No.485 of 2003, without complying with the mandatory provisions in order 21 Rule 66 of the Code. On a perusal of the execution petition in E.P.No.113 of 2007, it is seen that on 29.06.2006, notice was issued to the respondent in the execution petition (that is the present appellant) under order 21 Rule 66 of the Code and the matter was posted to 28.07.2006. On 28.07.2006, notice was again sent by registered post. Case was adjourned to 28.08.2006. On that day, the Court noticed that the registered letter was returned 'unclaimed'. Then, the Court ordered the decree holder to produce draft sale papers and encumbrance certificate and it was adjourned to 23.09.2006. On 23.09.2006, draft sale papers and encumbrance certificate were produced and the matter was adjourned to 26.09.2006. On 26.09.2006, the matter was posted for settlement of proclamation to 28.09.2006. On that day, the Court considered that the property sought to be sold is having an extent of 45 cents and that the decree holder had proposed Rs.30,000/- as upset price for 1/3 share of the appellant. The decree debt was found to be Rs.1,04,966/-. The Court, after considering all the matters, fixed Rs.76,000/- as upset price and the proclamation was settled accordingly. The matter was slated for sale, on 01.11.2006. On that day, when the case was taken up at 2.30 pm, the sale was conducted for a sum of Rs.92,000/- and the 1st respondent in this matter was declared to be the successful bidder. Later, the sale was confirmed in his name.

8. The contention raised by the learned counsel for the appellant that notice under Order 21 Rule 66 of the Code was not properly attempted to be served deserves consideration. Relying on Desh Bandhu Guptha v. N.L.Anand & Rajinder Singh [1994 (1) SCC 131], it has been contended by the learned counsel for the appellant that any sale, without complying with the mandatory requirements in order 21 Rules 66 and 67 of the Code, is null and void. Paragraphs 9 and 10 in the decision is quoted hereunder for clarity of expression:

9. However, there is considerable force in the contention of the appellant that the procedure prescribed under Order 21 Rule 66 was flagrantly violated by the Executing Court. We have already noted the order of the court to conduct the sale. For judging its legality and validity, it would be desirable to have a bird's eye view of the procedure for sale of immovable property in execution. On an application for execution filed under Order 21 Rule 5 the court shall ascertain the compliance of the prerequisites contemplated under Rule 17 and on finding the application in order, its should be admitted and so to make an order, thereon to issue notice under Rule 22, subject to the conditions specified therein. If a notice was served on the judgment-debtor as enjoined under Order 5 but he did not appear or had not shown cause to the satisfaction of the court, under Rule 23 the court 'shall order the decree to be executed'. If an objection is raised to the execution of the decree, by operation of sub-rule (2) thereof, 'the court shall consider such objections and make such order as it thinks fit'. Thereafter in the case of a decree for execution against immovable property an attachment under Rule 54 should be made by an order prohibiting the judgment-debtor from transferring or creating encumbrances on the property. Under Rule 64 the court may order sale of the said property. Under Rule 66(2) proclamation of sale by public auction shall be drawn up in the language of the court and it should be done after notice to the decree-holder and the judgment-debtor and should state the 'time and pace of sale' and 'specify as fairly and accurately as possible' the details specified in clauses (a) to (d) of sub-rule (2) thereof. The Civil Rules of Practice in Part L in the Chapter 12 framed by the High Court of Delhi 'Sale of Property and Delivery to the Purchaser' Rule 2 provides that whenever a court makes an order for the sale of any attached property under Order 21, Rule 64, it shall fix a convenient date not being distant more than 15 days, for ascertaining the particulars specified in Order 21 Rule 66(2) and settling the proclamation of sale. Notice of the date so fixed shall be given to the parties or their pleaders. In Rule 4 captioned 'Settlement of Proclamation of Sale, Estimate of Value' it is stated that on the day so fixed, the court shall,after perusing the documents, if any, and the report referred to in the preceding paragraph, after examining the decree-holder and judgment-debtor, if present, and after making such further enquiry as it may consider necessary, settle the proclamation of sale specifying as clearly and accurately as possible the matters required by Order 21 Rule 66(2) of the Code. The specifications have been enumerated in the rule itself. The proclamation for sale is an important part of the proceedings and the details should be ascertained and noted with care. This will remove the basis for many a belated objections to the sale at a later date. It is not necessary to give at proclamation of sale the estimate of the value of the property. The proclamation when settled shall be signed by the Judge and got published in the manner prescribed by Rule 67. The court should authorise its officers to conduct the sale. Under rule 68 the sale should be conducted at 'the place and time' specified or the time may be modified with the consent in writing of the judgment-debtor. The proclamation should include the estimate, if any, given by either judgment-debtor or decree-holder or both the parties. Service of notice on judgment-debtor under Order 21 Rule 66(2), unless waived by appearance or remained ex parte, is a fundamental step in the procedure of the court in execution. Judgmentdebtor should have an opportunity to give his estimate of the property. The estimate of the value of the property is a material fact to enable the purchaser to know its value. It must be verified as accurately and fairly as possible so that the intending bidders are not misled or to prevent them from offering inadequate price or to enable them to make a decision in offering adequate price. In Gajadhar Prasad v. Babu Bhakta Ratan this Court, after noticing the conflict of judicial opinion among the high Courts, held that a review of the authorities as well as the amendments to Rule 66(2) (e) make it abundantly clear that the court, when stating the estimated value of the property to be sold, must not accept merely the ipse dixit of one side. It is certainly not necessary for it to state its own estimate. If this was required, it may, to be fair, necessitate insertion of something like a summary of a judicially considered order, giving its grounds, in the sale proclamation, which may confuse bidders. It may also be quite misleading if the court's estimate is erroneous. Moreover, Rule 66(2)(e) requires the court to state only nature of the property so that the purchaser should be left to judge the value for himself. But, the essential facts which have a bearing on the very material question of value of the property and which could assist the purchaser in forming his own opinion must be stated, i.e the value of the property, that is, after all, the whole object of Order 21, Rule 66(2) (e), CPC. The court has only to decide what are all these material particulars in each case. We think that this is an obligation imposed by Rule 66(2)(e). In discharging it, the court should normally state the valuation given by both the decree-holder as well as the judgment-debtor where they both have valued the property, and it does not appear fantastic. It may usefully state other material facts, such as the area of land, nature of rights in it, municipal assessment, actual rents realised, which could reasonably and usefully be stated succinctly in a sale proclamation has to be determined on the facts of each particular case. Inflexible rules are not desirable on such a question. It could also be angulated from another perspective. Sub-rule (1) of Rule 66 enjoins the court that the details enumerated in sub-rule (2) shall be specified as fairly and accurately as possible. The duty to comply with it arises only after service of the notice on the judgment-debtor unless he voluntarily appears and is given opportunity in the settlement of the value of the property. The absence of notice causes irremedial injury to the judgment-debtor. Equally publication of the proclamation of sale under Rule 67 and specifying the date and place of sale of the property under Rule 66(2) are intended that the prospective bidders would know the value so as to make up their mind to offer the price and to attend at sale of the property and to secure competitive bidders and fair price to the property sold. Absence of notice to the judgment-debtor disables him to offer his estimate of the value who better knows its value and to publicise on his part, canvassing and bringing the intending bidders at the time of sale. Absence of notice prevents him to do the above and also disables him to know fraud committed in the publication and conduct of sale or other material irregularities in the conduct of sale. It would be broached from yet another angle. The compulsory sale of immovable property under Order 21 divests right, title and interest of the judgmentdebtor and confers those rights, in favour of the purchaser. It thereby deals with the rights and disabilities either of the judgment-debtor or the decree-holder. A sale made, therefore, without notice to the judgment-debtor is a nullity since it divests the judgment-debtor of his right, title and interest in his property without an opportunity. The jurisdiction to sell the property would arise in a court only where the owner is given notice of the execution for attachment and sale of his property. It is very salutary that a person's property cannot be sold without his being told that it is being so sold and given an opportunity to offer his estimate as he is the person who intimately knew the value of his property and prevailing in the locality, exaggeration may at time be possible. In Rajagopla Ayyar v. Ramachnadra Ayyar the Full Bench held that a sale without notice under Order 21 Rule 22 is a nullity and is void and that it has not got to be set aside. If an application to set aside such a void sale is made it would fall under Section 47.

10. Above discussion indicates a discernible rule that service of notice on the judgment-debtor is a fundamental part of the procedure touching upon the jurisdiction of the Execution Court to take further steps to sell his immovable property. Therefore, notice under Order 21 Rule 66(2), unless proviso is applied (if not already issued under Order 21 Rule 22), and service is mandatory. It is made manifest by Order 21 Rule 54 (1-A) brought on statute by 1976 Amendment Act with peremptory language that before settling the terms of the proclamation the judgment-debtor shall be served with a notice before settling the terms of the proclamation of sale. The omission thereof renders the further action and the sale in pursuance thereof void unless the judgment-debtor appears without notice and thereby waives the service of notice.

This decision has been followed in Mahakal Automobiles v. Kishan Swaroop Sharma [2008 (13) SCC 113].

9. From the above pronouncements, it will be clear that service of notice on Judgment Debtor under Order 21 Rule 66(2) of the Code, unless waived by appearance or remained exparte, is a fundamental step in the procedure of the court in execution. The judgment debtor should have an opportunity to give his estimate of the value of the property. Estimate of value of the property is a material fact to enable the purchaser to know its value. Therefore, non compliance of the above provisions will result in material prejudice to the judgment debtor and therefore, it will cause the sale to be treated as null and void.

10. In this case, one difficulty faced by the appellant is that by virtue of Section 27 of the General Clauses Act, 1897, the expressions 'serve' or 'give' or 'send' shall be deemed to be effected by properly addressing, prepaying and posting by a registered post, a letter containing the document, and unless the contrary is proved, to have been effected at the time at which a letter would be delivered in the ordinary course of post. The proceedings in the execution petition would show that the decree holder had sent notice through court by registered post to the address of the appellant borne out from the records. It is also submitted by the learned counsel for the respondent that the same address is shown in the present proceedings too, whereby the appellant is precluded from contending that the notice under Order 21 Rule 66 of the Code was not sent in the correct address. It is also endorsed by the executing Court that the notice was returned 'unclaimed', implying that an intimation should have been given to the respondent regarding availability of a letter addressed to his name. Then the contention raised by the appellant that he was away at that time and therefore could not receive notice, was not established before the court below. It cannot be re-agitated in a second appeal as it is purely a question of fact.

11. Having regard to the facts and circumstances, I am of the view that even though fulfillment of the requirements in Order 21 Rule 66 of the Code is mandatory, the appellant is unable to satisfy the conscience of the court that he was not given an opportunity to contest.

12. Another issue arising for consideration is whether he can challenge correctness of the sale as a defendant in a subsequently instituted suit. In other words, whether the appellant was bound to pursue his remedy by invoking Section 47 of the Code or by filing and contesting an application under Order 21 Rule 90 of the Code.

13. It is seen that Ext.A8 application was filed by the appellant before the execution court under Section 47 of the Code. That application was dismissed by the court below for want of prosecution. The dismissal for default was not challenged anywhere and it has become final. Now the question is whether the same set of contentions, which could have been raised in an application under Section 47 of the Code can be raised as a defence in a subsequent suit for partition. The answer can be only in the negative. Learned counsel for the appellant fairly submitted that the decisions of the apex Court on the point are against this contention of the appellant. It is seen from Mohanlal v. Benoy Kishan [AIR 1953 SC 65] that such contention cannot be allowed as it will be barred by constructive res judicata. Observations in paragraphs 19 and 20 are quoted hereunder for profit:

19. The foregoing narrative of the various stages through which the execution proceedings passed from time to time will show that neither at the time when the execution application was made and a notice served upon the judgment-debtor, nor in the applications for setting aside the two sales made by him did the judgment-debtor raise any objection to execution being proceeded with on the ground that the execution court had no jurisdiction to execute the decree. The failure to raise such an objection which went to the root of the matter precludes him from raising the plea of jurisdiction on the principle of constructive res judicata after the property has been sold to the auction-purchaser who has entered into possession. There are two occasions on which the judgment-debtor raised the question of jurisdiction for the first time. He did not, however, press it with the result that the objection must be taken to have been impliedly overruled. One such occasion was when the property was sold for the second time and was purchased by the decreeholder for Rs.20,000. In para 19 of his application dated 7-7-1933 (Exhibit E) to set aside the sale he challenged the jurisdiction of the Court, but the order of the Court dated 29-1-1934, does not show that the plea was persisted in. The second occasion was when the property was sold for the third time and in his application (Exhibit E.4) dated 27-6-1938, for setting aside the sale he raised the question in para 20. The objection application is dismissed but there is no trace of the judgment-debtor having pressed this objection. When he preferred an appeal to the High Court, he did not make the plea of jurisdiction a ground of attack against the execution of the decree and the appeal was dismissed on other points. Finally he filed a review application and in paras 11, 12 and 13 he raised the objection to execution in more elaborate words, but the application was rejected by the High Court on the ground that such an objection did not fall within the purview of O. 21, R.90, Civil P. C. This order therefore became final. The judgment-debtor admitted that the two applications ( Exhibits E and E.4) were prepared according to his instructions. It is not possible therefore for the judgment-debtor to escape the effect of the above orders which became binding upon him.

20. That the principle of constructive res judicata is applicable to execution proceedings is no longer open to doubt.... See - 'Annada Kumar v. Sheik Madan', 38 Cal W N 141 and 'Mahadeo Prasad v. Bhagwat Narain Singh', AIR 1938 Pat 427. In the first case an application was made by a certain person for execution of a decree and no objection was raised that the decree was not maintainable at the instance of the applicant and the application was held to be maintainable. It was held that no further objection on the score of the maintainability of a fresh application for execution on the part of the same applicant could be raised. In the second case a money decree had been obtained on the foot of a loan which was the subject-matter of a mortgage and the property was sold in execution. The judgment-debtor raised the question of the validity of the execution proceedings and objected that the execution court had no jurisdiction to sell the property in execution of a money decree as no sanction of the Commissioner had been obtained under S. 12-A, Chota Nagpur Encumbered Estates Act. The objection was not decided but the objection petition was dismissed with the result that the property came into the possession of the auctionpurchaser. In an action for a declaration that the sale to the purchaser was void for want of sanction of the Commissioner it was held that as the point was raised, although not decided in the objection petition under S. 47, it was res judicata by reason of Expl. 4 to S.11.

Aforementioned decision was followed by the Supreme Court in Lagan Jute Machineries Co. Ltd. v. Candlewoood Holdings Ltd. [2007 (8) SCC 487]. It is therefore clear that the challenge now raised in the present suit against the execution sale is barred by constructive res judicata.

14. Another point urged by the learned counsel for the appellant is that the sale conducted without complying with Order 21 Rule 66 of the Code being a nullity can be challenged even in a collateral proceedings. This submission cannot be accepted in the light of the settled law that executability or otherwise of a decree should be challenged in a proceedings under Section 47 of the Code and not by a separate suit. It is all the more clear from the wording in Section 47 of the Code after its amendment in 1976. This Court had occasion to consider the issue in India Cements Capital Limited v. William & Others [ILR 2015 (4) KLJ 8]. Relying on the decisions of the apex Court on the point, it has been held as follows:

16. Under Section 47 of the Code the jurisdiction exercisable by a court executing a decree is very wide. The Section says that all questions arising between the parties to the suit in which the decree was passed, or their representatives and relating to the execution, discharge or satisfaction of the decree shall be determined by the court executing the decree and not by a separate suit. The contention of the revision petitioner that the first respondent is not a party to the proceedings is of no consequence here since the first respondent admittedly acquired an interest over the subject matter of the dispute pending the proceedings. True, Explanation II to S.47 of the Code says that for the purpose of the Section, a purchaser of property at a sale in execution of a decree shall be deemed to be a party to the suit in which the decree is passed. The normal rule is that a dispute between a party to the suit or his representative on the one hand and a stranger, who is not a purchaser at the execution sale, on the other hand, is outside the scope of the Section. By adding Explanation II to the Section, a purchaser of property at a sale in execution of a decree, though a stranger to the suit, is deemed to be a party to the suit in which the decree has been passed. Nevertheless, there is no bar under law for a stranger to the proceedings, who has an independent legal right to appear and contest the execution proceedings and whose property interests will be adversely affected by sale of the property in execution proceedings, to point out that the decree sought to be executed is a nullity. The first respondent filed the petition before executing court claiming reliefs not only under Sections 47 and 151, but also under Order XXI Rule 97 of the Code. It is his definite case that he is a bona fide purchaser of the property for value, purchased in the year 2008. It may be true that if a valid equitable mortgage was in existence, the first respondent could have purchased only the equity of redemption. His right to approach the executing court under Order XXI Rule 97 of the Code anticipating dispossession cannot be rejected. The Supreme Court in Brahmdeo Chaudhary v. Rishikesh Prasad Jaiswal (AIR 1997 SC 856) has held that the words 'any person' in Order XXI Rule 97(1) of the Code are comprehensive enough to include apart from judgment debtor or anyone claiming through him, even persons claiming independently and who would therefore be total strangers to the decree. What the first respondent challenges is the executability of the award itself. So, the first respondent's locus standi to file an application is well founded. In an application under S.47 of the Code, the question that a decree is not executable being a nullity can be raised and the executing court is obliged to decide the question. Even if the judgment debtor did not raise the question, the remedy available under S.47 of the Code cannot be denied to an affected party, if such a question is properly raised. It is well settled that a decree which is a nullity in the eye of law is no decree. Even by the consent of parties such a decree cannot be executed by the court. Supreme Court in Kiran Singh v. Chaman Paswan (AIR 1954 SC 340) held that though a court executing a decree cannot go into the question of correctness or legality of a decree, it can entertain the objection that it is a nullity on the ground that the court which passed it had no jurisdiction to pass it. Apex Court in Sunder Dass v. Ram Parkash (AIR 1977 SC 1201) has clearly held that this examination is not going behind the decree, since the decree being null and void, there is no decree at all. The same principle was restated by the Apex Court in Rafique Bibi v. Sayed Waliuddin (AIR 2003 SC 3789). Court below correctly placed reliance on Hira Lal Patni v. Sri Kali Nath (AIR 1962 SC 199) to hold that validity of a decree can be challenged in execution proceedings only on the ground that the court which passed the decree was lacking in inherent jurisdiction in the sense that it could not have been in seizin of the case because the subject matter was wholly foreign to its jurisdiction. Therefore, there cannot be any doubt that the question of nullity of a decree should be examined by the executing court, if any one who is likely to be prejudicially affected by the execution of decree raises that question in a manner known to law. I hold therefore that the court below was well within its limits in entertaining the application at the instance of the first respondent. Hence the contention of the revision petitioner that the court below should not have entertained an application at the instance of the first respondent is not legally sustainable. It is the bounden duty of an executing court to pronounce on the executability of the decree, if a contention is properly raised that the decree is inexecutable because it is a nullity.

15. Learned counsel for the plaintiff/1st respondent contended that other defendants in the suit have not put up any contest. The contentions raised by the appellant in the present suit are barred res judicata and further, he did not pursue his remedy under Section 47 of the Code, which he resorted at one point of time and dropped half way, it will have the effect of abandoning his claim.

Having regard to the facts and circumstances, I find that the substantial questions of law raised can only be decided against the appellant and hence, I do so.

In the result, the appeal is dismissed.

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