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1993 Supreme(Ker) 160

Judges : JOHN MATHEW,NARAYANA KURUP
Achamma George - Appellant
Versus
Trio Packaging Company - Respondent
Case No : C.M.A.NOS. 8 & 41 of 1989
Decided On : 04/05/1993
Advocates Appeared :
S. Narayanan Poti, P.K. Raman, B.S. Krishnan, M.I. Joseph (Sr. Advocate), Legy Abraham K. Anantha Narayanan & M. Hemalatlia For Appellants K.P. Vijayan, V.B.Jinnah, P.K. Alexander Vaidian, K.N. Narayana Pillai & Govt. Pleader (A.V.M. Salahuddin) For Respondents

The main legal point established in the judgment is the requirement for notice to all judgment-debtors regarding the sale of the property, as well as the consequences of material irregularity in sale proceedings resulting in substantial injury to the judgment-debtors.

Headnote:

Execution Proceedings - Sale of Property - Notice Requirement - Order XXI Rule 66 C.P.C. - Sale Set Aside - Material Irregularity - Substantial Injury

Fact of the Case:

The appeals arose from the execution proceedings in O.S. No. 154/1976 of the Additional Sub Court, N. Parur, involving a decree for money obtained by the State Bank of India against Trio Packaging Company for realisation of an amount of Rs. 2,41,083.77 and interest thereon. The judgment-debtors filed applications to set aside the sale of the decree schedule property, which were dismissed by the execution court. The appeals were filed against these orders.

Finding of the Court:

The court found that there was a material irregularity in publishing and conducting the sale, resulting in substantial injury to the judgment-debtors. The sale was set aside on the condition that the auction price, interest, additional amount, and entire cost of execution be deposited by the judgment-debtors within six months, failing which the sale would stand confirmed.

Issues: The main issue was whether the sale of the property was liable to be set aside, considering the notice requirement under Order XXI Rule 66 C.P.C. and the substantial injury suffered by the judgment-debtors due to material irregularity in the sale proceedings.

Ratio Decidendi: The court held that the failure to issue notice to certain judgment-debtors and the lack of opportunity for them to object to the proposed sale constituted a material irregularity. It also emphasized the requirement for notice to all judgment-debtors regarding the sale of the property, especially when all partners were made personally liable in the decree.

Final Decision: The sale was set aside on the condition that the specified amounts be deposited by the judgment-debtors within six months, failing which the sale would stand confirmed.

Judgment :-

John Mathew, J.

These appeals arise from the execution proceedings in O.S. No. 154/1976 of the Additional Sub Court, N. Parur. The decree was one for money obtained by the State Bank of India, Cochin Branch, which is hereinafter referred to as the decree-holder against Trio Packaging Company, M.G. Road, Ernakulam, which is hereinafter referred to as the 1st judgment-debtor, for realisation of an amount of Rs. 2,41,083.77 and interest thereon.

2. The decree schedule property was sold in execution. The judgment debtor filed E.A. No. 606/88 to set aside the sale. Judgment-debtors 1 and 2 filed E.A. No. 60S/ 88 to set aside the sale. These applications were dismissed by the execution court by separate orders dated 22nd December, 1988. The 9th judgment-debtor has filed C.M.A. No. 8/89 and the judgment-debtors 1 & 2 have filed C.M.A. No. 41/89 against the respective orders dismissing their application to set aside the sale. In both these appeals the auction purchaser is impleaded as a respondent. He is hereinafter referred to as the auction purchaser.

3. The only point to be considered is whether the sale is liable to be set aside.

4. There are 10 judgment-debtors in the decree. Out of this the 1st judgment-debtor is the partnership and the other judgment-debtors are the partners of that firm. The decree is as follows:

"Decree - It is ordered and decreed that the plaintiff is allowed to recover a sum of Rs. 2,41,083.77 with 14% interest on the principal amount of Rs. 2,39,704.67 from 11ll-76 till realisation and cost of the suit from defendants and plaint schedule property. The plaintiff will sell the property first and realise the amount. If only there is any balance, defendants will be personally liable. Time for payment is one month".

Schedule A to the decree consists of raw materials, semi-finished goods and finished goods. Schedule B consists of items of machinery belonging to the first judgment-debtor - partnership. Schedule C is 8 acres 29.5 cents in different sub divisions of Sy. Nos 126 and 127 of Kothakulangara Village in Alwaye Taluk, and the factory building therein measuring about 10,000 sq. ft. with masonry and having asbestos roof and concrete slab and the appertinent structures in this plot. Schedule D consists of two motor vehicles.

5. The first contention raised by learned counsel for the 91h judgment-debtor is that no notice under Order XXI Rule 22 of the Code of Civil Procedure was issued on E.P. No. 94/87and therefore, further proceedings in that E.P. was without jurisdiction. Learned counsel submitted that in column 6 of that E.P. the decree-holder mentioned that the previous E.P. No. 54/79 was dismissed on 5ll-1984. E.P. No. 94/87 was filed only on 9-4-1987, viz. after two years of the dismissal of the earlier E.P. Therefore, according to the learned counsel Rule 22 notice ought to have been issued. Such a contention was not taken in the execution court. In the appeal we permitted the appellant to raise such a ground since it relates to the jurisdiction of the execution court. The records originally received from the lower court did not contain the records relating to E.P. No. 54/79 and the E.P. filed in 1984. So we called for those records also from the lower court. On verification we find that E.P. No. 54/79 was filed on 17-3-1979 and was pending on 16ll-1984, on which dale the decree-holder filed a fresh E.P. No. 351/1984. That E.P. was dismissed only on 26-6-1986. Therefore, the entry made in column 6 of E.P.No. 94/87 that the E.P. was dismissed on 5ll-1984 is a mistake. Therefore, it was not necessary to issue Rule 22 notice on E.P. No. 94/87, which-was filed within two years of the dismissal of the earlier E.P. Therefore, there is no merit in the contention that Rule 22 notice ought to have been issued to the judgment-debtors.

6. The second ground is that on E.P. No. 94/87 no notice was issued to the judgment-debtor. A perusal of E.P. 94/87 discloses the following orders. E.P. filed on 9-4-1987. On 2



























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