High Court of Judicature at Bombay
R.D. DHANUKA, J.
Meera Unnikrishnan & Another
Versus
Aashutosh Dyeing Mills Pvt. Ltd. & Others
First Appeal No. 186 of 2012 Alongwith Civil Application No. 407 of 2012 Alongwith Civil Application No. 3818 of 2013
Decided on: 09-09-2014
Fraud - Property Sale - Code of Civil Procedure, 1908 - Order 21 rule 58 - Summary of Acts and Sections: Code of Civil Procedure, 1908 - Summary: The court analyzed the sale of a property by a bank to a third party and the subsequent attachment of the property by another party. The court found that the property had been sold prior to the attachment and dismissed the appeal. The court held that the executing court could not decide the validity of the sale already concluded by another court. The appellant's claim for attachment was not maintainable as the property had already been sold. The court allowed the bank's application for impleadment as a party respondent in the appeal.
Fact of the Case:
The Jankalyan Sahakari Bank Limited sanctioned a loan to a judgment debtor and subsequently sold the property to a third party. The appellant filed a suit for recovery of money against the judgment debtor. The executing court levied a warrant of attachment on the property, which had already been sold to the third party by the bank.
Finding of the Court:
The court found that the property had been sold prior to the attachment and dismissed the appeal. The court held that the executing court could not decide the validity of the sale already concluded by another court. The appellant's claim for attachment was not maintainable as the property had already been sold.
Issues: The main issue was whether the executing court could levy a warrant of attachment on a property that had already been sold prior to the attachment.
Ratio Decidendi: The court held that the executing court could not decide the validity of the sale already concluded by another court. The appellant's claim for attachment was not maintainable as the property had already been sold.
Final Decision: The court dismissed the appeal and allowed the bank's application for impleadment as a party respondent in the appeal.
1. This appeal filed under section 96 of the Code of Civil Procedure, 1908 is directed against the order dated 7th October, 2011 passed by the 3rd Joint Civil Judge, Senior division, Kalyan allowing the application filed by the respondent nos. 1 and 2 herein partly, filed under order 21 rule 58 of Code of Civil Procedure, 1908. Some of the relevant facts for the purpose of deciding this appeal are as under:-
2. On or about 29th July 1997 Jankalyan Sahakari Bank Limited sanctioned loan in the sum of Rs.73.86 lacs to M/s. Suntex Hosiery Private Limited and Mr. Narottam Purohit against collateral security i.e. a factory premises known as plot No.F-12, situated at MIDC Industrial Estate, Badlapur, District Thane consisting of plot, plant and machinery etc. (hereinafter referred to as the suit property) M/s. Suntex Hosiery Private Limited and Mr. Narottam Purohit are hereinafter referred to as the judgment debtors. On 8th January 1999 the said bank issued a recall notice to the judgment debtor calling upon to pay Rs.89.16 lacs.
3. Sometime in the month of July 1999 the appellant filed a suit bearing Special Suit no.141 of 1999 before IIIrd Joint Civil Judge, Senior Division Kalyan against Mr. Naottam Purohit, the judgment debtor for recovery of certain amount.
4. On 18th January 2001 the said bank addressed a letter to the executive engineer, MIDC, Badlapur recording of lien in respect of the suit plot in view of the mortgage created in respect of the suit property by the judgment debtor in favour of the said bank. The said plot of land was alloted to the judgment debtor by MIDC on lease.
5. Sometimes in the year 2001 the bank filed a dispute against the judgment debtors under section 91 of the Maharashtra Co-operative Societies Act, 1960 before the Co-operative Court at Mumbai for recovery of loan of Rs.1,29,05,666/-with interest. The bank also filed an application for injunction against the judgment debtors not to dispose of the suit property and praying for attachment before judgment. On 20th February 2001 the Co-operative Court granted injunction and order of attachment before judgment in favour of the said bank and against the judgment debtors in respect of the suit plot and plant and machineries, moveables etc.
6. On 9th March, 2001 the judgment debtors filed an affidavit in those proceedings admitting the claim of the said bank and submitted that they had no objection for appointment of court receiver. On 27th April 2001 the Co-operative Court passed an award against the judgment debtors directing the judgment debtors to pay a sum of Rs.1,29,05,666.67 to the said bank and granted liberty to the bank to sell the hypothecated and mortgage properties in case of default committed by the judgment debtors.
7. On 11th September 2001 the Co-operative Court forwarded the award dated 27th April 2001 to the special recovery and sale officer (co-operative department) for the purpose of execution of the said award against the judgment debtors. On 14th September 2001 the special recovery and sale officer (co-operative department) issued a demand notice upon the judgment debtors calling upon them to pay a sum of Rs.1,29,05,666.67 with interest as awarded within 15 days of the said notice. The judgment debtor failed to comply with the said award and the demand notice.
8. On 8th November 2001 the special recovery and sale officer issued a warrant of attachment against Plot No.F-12, MIDC, Badlapur, Plant and Machinery, moveables and stock raw materials etc. On 6th February 2003 the said bank issued a public notice in the issue of 'Thane Parishad' for public auction of the Plot No. F-12, MIDC, Badlapur Industrial Area District Thane. No offer however was received in response to the said public notice. It was the case of the bank that since no offer was received pursuant to the said public notice, the role of the special recovery and sale officer discontinued and the further proceedings for recovery and/or execution by sale of securities con
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