Case BriefsSupreme Court

Supreme Court: Dismissing a half a century old litigation (started in 1971), having five rounds of litigation at the stage of execution of a simple money decree, the Division Bench of Hemant Gupta and V. Ramasubramanian*,  JJ., put an end to what appeared as a never ending litigation by holding that res judicata is applicable on execution proceedings and the judgment debtor cannot be allowed to raise objections in instalments.

Background

The appellants-judgment debtor had challenged the impugned order whereby the High Court had confirmed the order of the Executing Court dismissing their application under Section 47 of the Code of Civil Procedure, 1908.

One Rama Rani Devi had filed a simple suit for recovery of money in Money from the appellant-judgment debtor (deceased) for recovery of a sum of Rs.3000. The suit was decreed ex parte and an execution petition was filed praying for the attachment and sale of 17 decimal of land (approximately about 7450 Sq.ft.) of the appellant-judgment debtor. Pursuant to which a sale proclamation was issued by the executing court after which the appellant-judgment debtor filed an application assailing the sale proclamation on the ground of material irregularity and fraud, but the same was dismissed and the auction was held.

Compromise between Judgment debtor and Auction Purchaser

 Initially, the judgment debtor had filed an under Order XXI, Rule 90 read with Section 152 of CPC praying for setting aside the auction sale on the ground of irregularities in the sale proclamation, however, he subsequently entered into a compromise with the auction purchasers. The memo of compromise reads as follows:

“ The petitioner and the auction purchaser Opp. party do settle the suit mutually in the following manner.

1) If the petitioner debtor pays the entire money due to the auction purchaser opposite part in cash within 15th December or if he deposits it in their credit in the court and the auction shall be revoked and the original execution case shall be disposed on full satisfaction.

2) Otherwise that is if the petitioner debtor does not pay the entire money due to the auction purchaser opposite party in cash within 15th December on deposits that amount in court within that date then the said auction shall remain effective and this present suit shall be dismissed with costs.”

Findings of the High Court

Noticeably, the amount of money deposited by the auction purchasers into court was Rs.5500/, but the decree debt was around Rs.3360/. Though the compromise memo did not refer to the decree debt, but repeatedly mentioned the words, “entire money due to the auction purchasers”, the judgment debtor admittedly deposited only a sum of Rs.3700 on the basis of the calculation provided by the court officer in terms of Order XXI, Rule 89 of CPC. Consequently, after several rounds of litigation, it was held by the High Court that the judgment debtor had failed to honour the commitment made in the compromise memo to deposit the entire amount due to the auction purchasers and that therefore the auction sale should be confirmed in favour of the auction purchasers.

Contention of the Judgment debtor

The only mantra, by the recitation of which the appellants hoped to succeed was Order XXI, Rule 64 of the Code, which enables an executing court to order “that any property attached by it and liable to sale or such portion thereof as may seem necessary to satisfy the decree, shall be sold and that the proceeds of such sale or a sufficient portion thereof 10 shall be paid to the party entitled under the decree to receive the same”.

It was the contention of the appellants that Order XXI, Rule 64 casts not a discretion, but an obligation, to sell only such portion of the property as may be sufficient to satisfy the decree.

Opinion and Analysis

Noticeably, the executing court had ordered the issue of notice of attachment under Order XXI, Rule 54 of the Code and it was only thereafter that the court directed the issue of sale proclamation under Order XXI, Rule 66; which was in conformity with proviso to sub rule (2) of Rule 66 gives a discretion to the court to dispense with a second notice to the judgment debtor of the date to be fixed for settling the terms of the proclamation of sale under Order XXI, Rule 66(2).

The sequence of events showed that the judgment debtor had sufficient opportunity to object to the inclusion of the entire property when an order was passed under Order XXI, Rule 54. Subsequently he had an opportunity to object to the inclusion of the whole of the property, by taking advantage of the amended clause (a) of sub rule (2) of Rule 66 of Order XXI, which speaks about sale of a part of the property that would be sufficient to satisfy the decree. But the judgment debtor despite filing a petition under Section 47, did not point out how the property being a vacant land of an extent of 17 decimals could have been divided.

Noticing that the objection relating to Order XXI, Rule 64 had been raised by the appellants-judgment debtor for the first time in the 5th round of litigation in execution, and that the 2nd round was kickstarted with a suit for a declaration that the auction sale was void despite the express bar of a separate suit, under Section 47(1) of CPC. The Bench remarked,

“…the appellants have  now exhausted almost all provisions available to a judgment debtor to stall execution and the case on hand is fit to be included in the syllabus of a law school as a study material for students to get equipped with the various provisions of the Code relating to execution.”

Findings and Conclusion

In the backdrop of above, the Bench held that the appellants could not be allowed to raise the issue relating to the breach of Order XXI, Rule 64 for the following reasons:

  1. A judgmentdebtor cannot be allowed to raise objections as to the method of execution in instalments. After having failed to raise the issue in four earlier rounds of litigation, the appellants could not be permitted to raise it;
  2. The original judgmentdebtor himself filed a petition under Section 47, and what was on hand was a second petition under Section 47 and, hence, it was barred by res judicata. The Bench explained that post insertion of Explanation VII under Section 11 of CPC by Act 104 of 1976 the provisions of res judicata will apply to a proceeding for the execution of a decree;
  3. The observations of the High Court that, “none of the parties shall have any claim whatsoever as against the applicant in respect of the purchased property which shall be deemed to be his absolute property on and from the expiry of 15th December, 1980”, had attained finality;
  4. Section 65 of the Code says that, “where immovable property is sold in execution of a decree and such sale has become absolute, the property shall be deemed to have vested in the purchaser from the time when the property is sold and not from the time when the sale becomes absolute”.
  5. The sale of a property becomes absolute under Order XXI, Rule 92(1) after an application made under Rule 89, Rule 90 or Rule 91 is disallowed and the court passes an order confirming the same, hence, the Court has to grant a certificate under Rule 94 indicating the date and the day on which the sale became absolute.

“…a conjoint reading of Section 65, Order XXI, Rule 92 and Order XXI, Rule 94 would show that it passes through three important stages (other than certain intervening stages). They are, conduct of sale; (ii) sale becoming absolute; and (iii) issue of sale certificate. After all these three stages are crossed, the 4th stage of delivery of possession comes under Rule 95 of Order XXI.”

Since, the appellants had raised the objection relating to Order XXI, Rule 64 at the 4th stage and it was not the case that the appellants were not aware of the fact that the property in entirety was included in the proclamation of sale, the claim on the basis of Order XXI, Rule 64 was rightly rejected by the High Court. In view of the above, the appeal was dismissed.

[Dipali Biswas v. Nirmalendu Mukherjee, 2021 SCC OnLine SC 869, decided on 05-10-2021]


Kamini Sharma, Editorial Assistant has put this report together 


Appearance by:

For the Appellants: Advocate RAUF RAHIM

For the Respondents: Advocate SATISH KUMAR


*Judgment by: Justice V. Ramasubramanian

Know Thy Judge | Justice V. Ramasubramanian