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SUPREME COURT OF INDIA
Hrishikesh Roy, Prashant Kumar Mishra, JJ.
Bhikchand S/o Dhondiram Mutha (Deceased) Through Lrs. - Appellant
Versus
Shamabai Dhanraj Gugale (Deceased) Through Lrs. – Respondent
Civil Appeal No. 5026 of 2023
Decided On : 14-05-2024
(A) Civil Procedure Code, 1908 – Section 144 – Restitution of a judgment debtor – Section 144 CPC statutorily recognises a pre-existing rule of justice, equity and fair play – Even away from Section 144 court has inherent jurisdiction to order restitution so as to do complete justice between parties – Test is whether on account of an act of party persuading court to pass an order held at the end as not sustainable, has resulted in one party gaining an advantage which it would not have otherwise earned – Where decree holder is himself auction purchaser, sale cannot stand if decree is subsequently set aside – Purchaser or assignee from decree holder is not entitled to object restitution on the ground that he is a bonafide purchaser. (Paras 12, 14 and 18)
(B) Civil Procedure Code, 1908 – Section 144 – Restitution of a judgment debtor – Execution of a decree by sale of entire immovable property of judgment debtor is not to penalise him but same is provided to grant relief to decree holder and to confer him fruits of litigation – However, right of a decree holder should never be construed to have bestowed upon him a bonanza only because he had obtained a decree for realisation of a certain amount – Decree for realisation of a sum in favour of plaintiff should not amount to exploitation of judgment debtor by selling his entire property – Order passed by High Court set aside and appellants’ application under Section 144 CPC allowed and sale of attached properties belonging to judgment debtor set aside and parties restored back to position where execution was positioned before attachment of immovable properties of judgment debtor – Execution of modified decree shall proceed in accordance with law. (Paras 27 and 28)
(C) Civil Procedure Code, 1908 – Order XXI Rules 54 and 66 – Execution of decree – Attachment of immovable property – Whenever attached immovable property is to be sold in public auction value thereof is required to be estimated – In between Rule 54 to Rule 66 of Order XXI CPC, there is no other provision requiring assessment of value of property to be sold in auction – If there is no valuation of property in attachment Panchanama and there being no separate provision for valuation of property put to auction, it is to be understood that valuation of property mentioned in attachment Panchanama prepared under Rule 54 can always provide estimated value of property otherwise the provisions enabling court to auction only a part of property which would be sufficient to satisfy decree would be unworkable or redundant – Court’s power to auction any property or part thereof is not just a discretion but an obligation imposed on Court and sale held without examining this aspect and not in conformity with this mandatory requirement would be illegal and without jurisdiction. (Paras 21, 22 and 25)
Facts of the case:
Legal issue in this appeal, concerns restitution of a judgment debtor on a decree being varied, reversed, set aside or modified as it is statutorily recognised in Section 144 of Code of Civil Procedure, 1908. Decree passed by the Trial Court in the present case was varied by the appeal court. However, in the meantime, the decree was executed by sale of judgment debtor’s property on 23.09.1985 in favour of decree holders, including respondent Nos. 1 and 2.
Findings of Court:
Executing Court did not discharge its duty to ascertain whether the sale of a part of attached property would be sufficient to satisfy decree. When valuation of three attached properties is mentioned in attachment Panchanama, it was duty of Court to have satisfied itself on this aspect and having failed to do so Court has caused great injustice to the judgment debtor by auctioning his entire attached properties causing huge loss to judgment debtor and undue benefit to auction purchaser.
It is not a case where restitution can be ordered appropriately or suitably by directing decree holder to make payment of some additional amount to the judgment debtor to compensate him for loss caused due to sale of his properties. Doing so would perpetuate injustice suffered by judgment debtor.
Result : Appeal allowed.
1. The legal issue in this appeal, concerns restitution of a judgment debtor on a decree being varied, reversed, set aside or modified as it is statutorily recognised in Section 144 of the Code of Civil Procedure, 1908.1[‘CPC’] The decree passed by the Trial Court in the present case was varied by the appeal court. However, in the meantime, the decree was executed by sale of the judgment debtor’s property on 23.09.1985 in favour of the decree holders, including respondent Nos. 1 and 2.
2. After the decree was varied by the Appellate Court, the appellant/judgment debtor applied for restitution by invoking Section 144 CPC. The Trial Court, Appellate Court and the second Appellate Court as well, under impugned judgment have rejected the appellant/Judgment debtor’s application for restitution inter alia on the ground that the original decree was modified to the extent of interest payable and the judgment debtor not having deposited any amount in the court after the original decree and the property was put in auction, is not entitled to restitution.
3. Before proceeding to deal with the legal issue, few relevant facts need to be referred which are stated intra:
3.1. Dhanraj, the husband of the original plaintiff - Shamabai Dhanraj Gugale advanced loan of Rs. 8,000/- to the original defendant – appellant/judgment debtor in the year 1969. Upon his failure to repay the debt, the original plaintiff instituted a Special Civil Suit No. 255 of 1972 for recovery of Rs. 10,880/- (Rs.8,000/- as principal amount + Rs. 2880/- as accrued interest) along with interest @ 12% per annum pendente lite and post decree and for other ancillary reliefs and costs. On 15.02.1982, the 4th Joint Civil Judge, Senior Division, Pune partly decreed the suit by awarding the principal amount; pre-suit accrued interest; pendente lite and further interest at the rate of 12% per annum till realization of the principal amount and costs. The original plaintiff-decree holder preferred appeal against rejection of part of the claim. In this appeal (C.A. No. 1293 of 1986), the judgment debtor preferred cross objections. During the pendency of the above first appeal, the plaintiff-decree holder also preferred execution application which came to be transferred to the court of Civil Judge, Senior Division, Ahmednagar because the property belonging to the judgment debtor against which the decretal amount was to be recovered fell within the jurisdiction of Ahmednagar court. A special Darkhast No. 100 of 1982 came to be filed in the Ahmednagar court on 20.09.1982. In these execution proceedings, the decree holder sought attachment and sale of the following properties of the judgment debtor for satisfaction of the decree :
(2). land situate at Mauje Davtakli, Taluka Shevgaon, District-Ahmednagar at Gut No. 280, admeasuring approximately 0 Hectare 48 Are.
(3). Three House Property bearing nos. 13, 23 and 8 situate at Mauje Devtakli, Taluka Shevgaon, District Ahmednagar.
3.2. The civil appeal preferred by the original plaintiff came to be dismissed by the district court on 02.08.1988 and at the same time the defendant’s cross objections were allowed to the extent of interest and cost. The appellate court reduced the interest from 12% per annum to 6% per annum for both pre-suit and pendente lite/future interest and further directed the parties to bear their own costs. As a result, the appellate decree, while retaining the principal decretal amount of Rs. 8,000/-, reduced the pre-suit interest from Rs. 2880/- to Rs. 1440/- and the pendente lite interest from Rs. 15360/- to Rs. 7680/- and denied costs of Rs. 1454/- altogether. The total decretal amount of Rs.27694/- thus stood reduced to Rs. 17120/-.
3.3. Before the decision rendered by the appellate court reducing the decretal amount, as above, the plaintiff/decree holder execute
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