Judges : P.K.BALASUBRAMANYAN
Indian Bank - Appellant
Versus
Elizabeth Jacob - Respondent
Case No : C.R.P. No. 2292 of 1991
Decided On : 06/22/1995
Advocates Appeared :
E. Subramani For Petitioner P. Balagangadhara Menon (Sr. Advocate) & B. Raghunandanan For Respondents
Mortgage - Attachment of Property - Order 34 Rule 6 of the Code of Civil Procedure - Order 21 Rule 89 of the Code of Civil Procedure - Securing balance amount due under the decree - Effect of setting aside sale under Order 21 Rule 89 - Property reverts to judgment debtor - Property available for execution of personal decree - Court's jurisdiction to order attachment
Fact of the Case:
The decree holder, a bank, sought to attach the property of Judgment Debtor No.1, which had earlier been mortgaged and sold in enforcement of a mortgage decree. The executing court initially dismissed the application, but the higher court set aside the order and remanded the application for attachment for a fresh decision. The executing court held that the decree holder had no right to attach the properties again for recovery of the balance amounts due under the decree.
Finding of the Court:
The court found that on setting aside of the sale, the property reverts to the judgment debtor and remains available for being proceeded against in execution of the personal decree against the mortgagor. The executing court was in error in refusing to allow the attachment of the property.
Issues: The main issue was whether the decree holder had the right to attach the property for recovery of the balance amounts due under the decree, after the sale had been set aside under Order 21 Rule 89 of the Code of Civil Procedure.
Ratio Decidendi: The court held that on setting aside of the sale, the property reverts to the judgment debtor and remains available for being proceeded against in execution of the personal decree against the mortgagor. The executing court had the jurisdiction to order attachment of the property for realization of the balance amount due to the decree holder from the judgment debtor.
Final Decision: The court allowed the Civil Revision Petition, set aside the order of the executing court, and allowed the attachment of the property for realization of the balance amount due to the decree holder from the first judgment debtor.
The decree holder is the petitioner. It is a bank. The decree was one for recovery of money in enforcement' of a mortgage. In execution the hypotheca was brought to sale. It was sold on 15-6-1987 for a sum of Rs. 20001. The sale amount was not sufficient to discharge the decree debt. The judgment debtor No. I and a stranger who claimed that the property had subsequently been agreed to be sold to her filed an
application under Order 21 Rule 89 of the Code of Civil Procedure. The sale amount and 5% thereof was deposited. The executing court set aside the sale on 21-11-1987. For the balance due under the decree holder filed E.P.251 of 1991. The decree holder sought to attach the property of Judgment Debtor No.1 which had earlier been mortgaged and sold in enforcement of the mortgage decree. This was on the basis that. the property belonged to the judgment debtor on the sale being set aside and since the property had not been sold to the person who had joined the judgment debtor in applying under 0.21 Rule 89 of the Code of Civil Procedure, the decree holder could proceed against the property. That application was originally dismissed by the executing court. In C.R.P. 504 of 1991 filed by the decree holder, this court set aside the order of the executing court and remanded the application for attachment, to that court, for a fresh decision. The executing court held that since the property had been once sold in enforcement of the decree on the mortgage, the decree holder had no right to attach the properties over again for recovery of the balance amounts due under the decree. It is significant that the judgment debtor alone objected to the attachment and not the person who had joined the judgment debtor in the application under Order 21 Rule 89 of the Code of Civil Procedure on the basis that there was an agreement for sale in her favour. Obviously, there had been no conveyance by judgment debtor No.1 to the person who had joined her in making the application under Order 21 Rule 89 of the Code of Civil Procedure. An agreement for sale even if true, does not convey any title. The order of the executing court is challenged in this revision by the decree holder.
2. Order 34 Rule 6 of the Code of Civil Procedure provides that where the net proceeds of a sale held in terms of Order 34 R.5 of the Code is found insufficient to pay the amount due to the mortgagee -plaintiff, the court on an application by the plaintiff may, if the balance is legally recoverable from the defendant otherwise than out of the property sold, pass a decree for such balance. The argument on behalf of the judgment debtor is that in terms of R.6 of Order 34 the amount can be recovered personally only otherwise than out of the property sold. It is contended that once the sale has taken place under Order 34 Rule 5 of the Code, the decree for further amounts personally against the judgment debtor can be recovered only otherwise than from out of the property secured. It is further contended that the fact that such a sale was set aside under Order 21 Rule 89 of the code of civil procedure would not make any difference to the situation and the decree holder could proceed against the judgment debtor for the recovery of the balance without being able to proceed against the property mortgaged and sold. A decision of the Travancore-Cochin High Court is Gopalan v. Naniamma (AIR 1957 TC 107) is relied on in support.
In that decision relying" on a decision of the Patna High Court reported in A.I.R.1940 Pat. 191 it has been held:
"When a mortgaged property is sold in execution of the mortgage decree and the sale is subsequently set aside under Order 21 Rule 89, the mortgage lien on the property would be extinguished and the property cannot be sold again under the same decree. When a deposit under Order 21, R.89 is made and an application under mat rule is allowed what takes place in effect is a transfer of the rights of the auction purchaser to the applicant".
The submiss
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