Andhra Pradesh High Court
Judges : K.RAMASWAMY
SATTI SEETHARATNAM - Appellant
Versus
NULI NUGARAM - Respondent
C.R.P.Nos.7362/63 of 1979
Decided On : 03-25-83
Advocates Appeared :
Mr. B. Manohar, Mr. M.S.R. Subrahmanyam
Held: By operation of Sec. 55(6)(b) a charge is created on the property when suit for specific· performance was filed and the charge merely embodies the decr6E1, Therefore, it can be said that the charge is created by operation of law. Once the charge is created by operation of law, them the purchaser acquires a lien on the property for the refund of the earnest money be parted with and received by the seller in pursuance of the Contract. Once the decree creating a charge in the specific performance suits were made, it dates back to the date of payment. Therefore, the statutory charge created in the specific performance decrees prevail over the maintenance decree.
C.R.Ps. Dismissed.
( 1 ) IN these two revision petitions, the common question that arises for decision is whether the charge created in the decree in O. S. No. 248/72, hereinafter called maintenance decree gets precedence over the decrees in o. S. Nos. 140 and 141/71, herein after called specific performance decrees . O. S. No. 246/72 was filed by the petitioners as indigent persons and that suit was decreed on 11-5-1972 creating a charge on the plaint sceedule properties herein. While so, the respondents herein filed two suite, O. S. Nos. 140 and 141 of 1971 respectively seeking specific performance of the contract of Sale and alternatively for refund of the earnest money paid and also for creating a charge on the properties, the subject matter of the contract. Preliminary decree for refund of earnest money only was granted on 20-4-1979 and final decrees were also passed on 6-9-77. The relief for specific performance was negatived. In the preliminary decrees as prayed for, a charge was also created on the properties, the subject matter of the contract. The same property is the subject matter of the charge in both sets of decrees.
( 2 ) WHEN the respondents laid the execution and seeking to bring the properties to sale, the petitioners herein filed their objections, contending inter alia, that their maintenance decree creating a charge on the very same properties is entitled to precedence over the spcific performance decrees to realise their decree debt and contended that the property shall be brought to sale only subject to the charge in their favour. The lower court did not accept the contention. It held that the charge created in favour of the respondents is a statutory charge and that it is entitled to priority over the charge-decree granted in favour of the petitioners. But however, to be fair to all concerned, it was ordered that it should be notified in the sale proclamation to that effect. As against this order, the above C. R. Ps. have been filed.
( 3 ) SRI, Manohar, learned counsel for the petitioners contended that the charge created in O. S. Nos. 140and 141/71 is not a suit for enforcement of a statutory charge but a mere suit for specific performance or in the alterahative for refund of the earnest money received under the contract of sale and a relief for creation of charge was sought for. Under these circumstances, the respondents are not entitled to a precedence over the maintenance decree creating a charge in O. S. No. 248/72. Therefore the lower court is not correct in holding that the charge in O. S. Nos. 140 and 141/71 is a statutory charge and entitled to priority.
( 4 ) SRI. M. S. R. Subrahmanyam, learned counsel for the respondents, on the other hand, contends that the suits for specific performance in o. S. Nos. 140 and 141/71 were filed on 9-11-1971 namely, earlier to the date of suit for maintenance and they specifically sought for a charge. Once the decree has been granted crasting a charge it dates backs to the date of payment of earnest money and therefore the charge created in the speeific performance suits, O. S. Nos. 140 and 141/71 are entitled to priority over the maintenance decree. The lower court thus has correctly ordered only to notify the existence of the decree for maintenance in the sale proclamation. He also further contends that while the suit is pending the first defendant, the husband of the first petitioner died on 13-11-1974. The petitioners, were brought on record as legal representatives of the vendee. They did not raise this plea. So it operates as constructive res-judicata.
( 5 ) UPON these respective contentions, the question that arises for consideration is whether the charge-decree created in the maintenance decree is entitled to priority over the decrees for specific performance, where at a charge also is created on the very same property.
( 6 ) BEFORE deciding this question, it would be necessary to clear the two grounds raised on either side, viz. , whether the failure
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