IN THE HIGH COURT OF KERALA AT ERNAKULAM
P.B. SURESH KUMAR, JOHNSON JOHN, JJ.
M/s. Vijaya Marketing Associates, Represented By Its Managing Director P.K. Jose and Anr. – Appellants
Versus
M/s. Southern Blomoulders, Represented By Its Managing Partner N. Suresh Babu, S/o. Unnikrishanan and Ors. – Respondents
F.A.O. No. 65 of 2023 & I.A. No. 2 of 2023
Decided On : 11-12-2023
Consolidation of Decree Amounts - Execution Sale - Section 73 of CPC, Order XXI Rule 72 - The court allowed consolidation of decree amounts in 7 Execution Petitions and sale of the property for realization of the decree debts. The decree holders accepted the sale price towards full satisfaction of the decree debts in all the cases. The appeal against the dismissal of the application to set aside the sale was found devoid of merit and dismissed.
Fact of the Case:
The appellants appealed against the dismissal of their application to set aside the sale conducted for the realization of decree debts. They contended that the consolidation of decree amounts in 7 Execution Petitions and the sale of the property were in violation of Section 73 of CPC.
Finding of the Court:
The court found that the decree holders accepted the sale price towards full satisfaction of the decree debts in all the cases, and no substantial injury was caused to the judgment debtors. The appeal was deemed devoid of merit and dismissed.
Issues: Consolidation of decree amounts, violation of Section 73 of CPC, material irregularity or fraud in conducting the sale, substantial injury to the judgment debtors.
Ratio Decidendi: The court held that the consolidation of decree amounts and the sale of the property for realization of the decree debts were in accordance with the provisions of Section 73 of CPC and Order XXI Rule 72. It was established that no substantial injury was caused to the judgment debtors, and the appeal was dismissed.
Final Decision: The appeal was found devoid of merit and dismissed.
JUDGMENT :
(Johnson John, J.) :
The appellants are the judgment debtors in E.P. No. 191 of 2016 on the file of the Sub court, Thrissur and respondents 1 and 2 are the decree holders. The appeal is against the dismissal of E.A. No. 11 of 2023 filed under Order XXI Rule 90 of CPC to set aside the sale conducted on 11.01.2023 on the ground that the sale is vitiated by material irregularity in publishing and conducting the sale.
2. The appellants contended that during the pendency of the Execution Petition, the decree holders filed E.A. No. 8 of 2022 with a prayer to consolidate the decree amount in 7 Execution Petitions for realization of the decree debts due in E.P. Nos. 191 of 2016 in O.S. No. 1085/2004, 211 of 2016 in O.S. No. 1071 of 2004, 212 of 2016 in O.S. No. 1180 of 2004, 104 of 2016 in O.S. No. 1178 of 2004, 207 of 2016 in O.S. No. 1077/2004, 78 of 2016 in O.S. No. 1078/2004 and 208 of 2016 in O.S. 1137 of 2004. It is stated that the decree schedule properties having an extent of 12.75 Ares in re-survey No. 510/17/3 and 0.94 Ares in re-survey No.510/17/3 of Aymanam village along with residential house owned by the second appellant was sold in execution and the person representing all the decree holders bid the auction for a total price of Rs.1,56,96,350/-. It is stated that the court below allowed E.A. No. 8 of 2023 to consolidate the 7 Execution Petitions ignoring the objection of the appellants and the said order is in violation of Section 73 of CPC. It is stated that the decree holders in all the 7 Execution Petitions are separate legal entities and that the Execution Court has no power to consolidate the decree debts in different Execution Petitions and therefore, the auction sale of the scheduled property as a whole in all the Execution Petitions is material irregularity and fraud.
3. I.A. No. 2 of 2023 is an impleading petition, wherein petitioners 3 to 8 are the decree holders in the connected 6 Execution Petitions referred above and considering the nature of dispute involved, we find that the decree holders in the connected Execution Petitions are necessary parties for the proper disposal of the appeal and hence, the impleading petition is allowed .
4. Heard both sides and perused the records.
5. The learned counsel for the appellants argued that the court below allowed E.A. No. 8 of 2022 and consolidated the decree amount in 7 Execution Petitions and the whole decree schedule property is sold in execution in the absence of any prayer for rateable distribution and in violation of Section 73 of CPC. But, the learned counsel for the respondents argued that E.A. No. 8 of 2022 in E.P. No. 191 of 2016 for selling the decree schedule property for the purpose of realization of decree debt in all the 7 Execution Petitions was allowed by the court below on 10.08.2022 after considering the formal objection filed by the judgment debtors and since the said order was not challenged in appeal, the same has become final. It is pointed out that the decree amount, including interest and cost, in all the 7 Execution Petitions was Rs.2,15,24,381/-and the sale proclamation was drawn by fixing the upset price at Rs.1,56,96,350/- and the appellants have not filed any objection as against the sale proclamation. It is pointed out that the first respondent participated in the auction with the leave of the court as the representative of all the 7 decree holders and purchased the property for Rs.1,56,95,390/-. It is also pointed out that the decree debt in all 7 Execution Petitions were set off against the said purchase and that the decree holders also accepted the said sale towards full satisfaction of the decree debt in all the 7 Execution Petitions and therefore, there is no material irregularity or fraud in conducting the sale.
6. Section 73 of CPC is extracted below for convenient reference:
(1) Where assets are held by a Court and more persons than one have, be
A charged property can be executed for recovery under a decree without instituting a separate suit, and rateable distribution is only available to pending applications from decree-holders at the time....
Point of Law : Auction Sale - Once rateable distribution among two or more decree holders is ordered, it is always desirable to consolidate all the related Execution Petitions and are proceeded joint....
The court emphasized the application of Order XXI Rule 90 of the CPC in cases of substantial irregularities causing injury to the judgment-debtor and cited legal precedents to support its decision.
A sale in execution of a decree cannot be set aside unless the judgment debtor proves material irregularity, fraud, or substantial injury.
The executing court has the jurisdiction and power to decide all questions relating to execution, discharge, and satisfaction of the decree under Section 47 CPC. However, the court must consider all ....
The court affirmed that disputes regarding execution of decrees must be resolved by the executing court, and allegations of fraud must be substantiated with evidence.
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