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 of asset receipt.

JUDGMENT :

P. KRISHNA KUMAR, J.

1. The appellant filed an application under Rule 90 of Order XXI of the Code of Civil Procedure, 1908 (“the Code”, for short) seeking to set aside a sale conducted by the Subordinate Judge’s Court, Thodupuzha, in an execution petition filed by the first respondent herein against respondent Nos. 2 to 4. By the order impugned in this appeal, the court dismissed the application.

2. In execution of a decree obtained by the first respondent against respondents 2 to 4, immovable property having an extent of 32.27 cents was sold in court auction on 06.11.2019, for a sale price of Rs.25,01,000/-. The first respondent himself purchased the property in the auction, with the permission of the court. The decree obtained by the first respondent directs that there would be a charge on the scheduled property for realising the decree amount of Rs.20,29,054/- with interest. According to the first respondent, the amount due to him at the time of sale was Rs.31,11,429/-, and thus there would be no surplus amount after adjusting the decree debt.

3. The appellant had also obtained a decree for money against respondent Nos. 2 to 4. He filed an execution petition against them and obtained an order of attachment of the very same property, on 06.10.2016. In the petition for setting aside the sale, the appellant contended that, as the property sold in auction was under attachment, the sale proceedings conducted without disclosing it are vitiated by fraud, collusion, and grave irregularities. He further contended that the sale was effected by suppressing the fact that the property would have fetched a very high price.

4. By the impugned order, the Execution Court dismissed the application for setting aside the sale and confirmed the sale on the finding that the appellant failed to show any material irregularity or fraud in publishing or conducting the sale. The court also found that the valuation of the property was fair and proper, as it has no road frontage.

5. We have heard Sri. M. Narendra Kumar, the learned counsel appearing for the appellant, and Sri. Manu Vyasan Peter, the learned counsel appearing for the first respondent.

6. As observed above, the sale was conducted in execution of a decree for recovery of money passed in favour of the first respondent, creating a charge on the scheduled property. The appellant has also obtained a decree against respondent Nos. 2 to 4 for recovery of money, but it is not a decree charged on the property. According to the appellant, the judgment debtors have no other property. The suit, decree, and the execution petition filed by the appellant are earlier in time than the corresponding proceedings of the first respondent, it is contented. However, the first respondent contended that the appellant obtained a compromise decree in collusion with the predecessor of respondent Nos. 2 to 4, based on a fabricated agreement for sale dated 18.12.2012, for defeating the rights of the first respondent under an agreement for sale executed prior to it, i.e., on 24.11.2012. According to him, the sale is valid and the sale price was fair and reasonable.

7. During the course of hearing, Sri. M. Narendra Kumar, the learned counsel appearing for the appellant, assailed the impugned order by raising the following contentions: As per Section 63 (1) of the Code, the court which shall receive or realise the property in execution of a decree shall be the court which first attaches the property, and the saving clause in sub-section (2) of of the Code does not extend to permitting a decree holder who has purchased the pro