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2018 Supreme(Mad) 2518
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
M.V. MURALIDARAN, J.
T. Mohan - Petitioner
Vs.
Shriram Chits Tamil Nadu Ltd. & Ors. - Respondents
C.R.P.(MD)(PD) No. 1485 of 2018 and CMP(MD) No. 6430 of 2018
Decided On : 02-08-2018
For the Petitioner: Mr. T. Pon Ramkumar.
For the Respondents: Mr. R.V. Rajkumar.
The main legal point established is that a guarantor, having paid the entire dues, can seek to set aside an auction sale under Section 151 of C.P.C., emphasizing the need to protect the guarantor's constitutional right to property and to ensure substantial justice.
Headnote:
Chit - Civil Revision Petition - Indian Chit Funds Act, 1982 - Section 64(1)(A) - Order 21 Rule 89 of C.P.C. - Section 151 of C.P.C.
Fact of the Case:
The revision petitioner, a guarantor, challenged the auction sale of his property conducted to recover dues of the borrower. The petitioner had paid the entire dues to the creditor before and after the auction sale, and a 'No Due Certificate' was issued. The auction purchaser sought to take possession, leading to a complaint and arrest of the petitioner.
Finding of the Court:
The court found that the petitioner, as a guarantor, had settled the entire due amount and sought to set aside the auction sale under Order 21 Rule 89 of C.P.C. and Section 151 of C.P.C. The court held that the petitioner's right to hold property should not be easily infringed and that substantial justice must be done. The court set aside the auction sale and directed the petitioner to deposit the auction amount with interest, protecting the interest of the auction purchaser.
Issues: The issues involved the maintainability of the application to set aside the auction sale, the rights of the guarantor, and the protection of the auction purchaser's interest.
Ratio Decidendi: The court held that the guarantor, having paid the entire dues, could seek to set aside the auction sale under Section 151 of C.P.C. even without invoking Order 21 Rule 89 of C.P.C. The court emphasized the need to protect the guarantor's constitutional right to property and to ensure substantial justice.
Final Decision: The court allowed the Civil Revision Petition, set aside the auction sale, and directed the petitioner to deposit the auction amount with interest. The court also directed the refund of the amount deposited by the auction purchaser, protecting the interests of all parties involved.
The judgment debtor is the civil revision petitioner before this Court, challenging the order in E.A.No.208 of 2010 in E.P.No.21 of 2003 dated 01.04.2014, on the file of the learned I Additional Subordinate Judge, Madurai.
2. The case of Revision Petitioner/Judgment Debtor is that one Rajendran who is the friend of revision petitioners’ son had taken Chit with 1st respondent chits for period of 40 months time for a sum of Rs. 5,00,000/, in which Rajendran had also become member and taken the chit in auction for a sum of Rs.3,50,000/- and agree to repay the remaining terms installment. Further that said Rajendran had executed pro-note dated 18.01.2000 for a sum of Rs.3,37,500/-, for which revision petitioner and his son Rajesh stood as guarantor and that for collateral security, the original documents in respect of property in R.S.No.69/2A, Nehru Street, Tahsildhar Nagar, Senthilnathan 4th Street, Managiri Village, Madurai belong to the revision petitioner and his wife were given to 1st respondent chit.
3. The further case of revision petitioner that the said Rajendran herein had properly paid 25 dues and thereafter he failed to pay the dues between 26 to 40. Hence, the 1st respondent chits had issued notice dated 16.05.2001 directing the said Rajendran to repay remaining amount of Rs.1,84,840/-along with interest at the rate of 24%. But he did not pay. Since he had not turned up, 1st respondent chits had preferred C.D.No.129 of 2001 on the file of the Deputy Registrar of Chits, Madurai South under Section 64(1)(A) of Indian Chit Funds Act, 1982. In the said chit case an exparte award dated 21.01.2002 was passed and the revision petitioner was also directed to pay a sum of Rs.1,95,631/- to the 1st respondent chits. The further case of revision petitioner he was not aware of said exparte award. On the other hand the 1st Respondent Chits filed an Execution Petition in E.P.No.21 of 2003 on the file of the learned I Additional Subordinate Judge, Madurai to execute the expartee award.
4. The further case of the revision petitioner that on receipt of notice in execution proceedings revision petitioners’ son started to repay the award amount in the name of revision petitioner on installment basis. Pending execution proceedings said property given for security purpose have been brought for auction and auction was conducted on 04.03.2010. On coming to know the said facts son of revision petitioner immediately approached the 1st respondent chits and repaid the entire amount and on 10.03.2010 revision petitioners’ son preferred application in the name of revision petitioner in E.A.No.208 of 2010 to set aside the said auction held on 04.03.2010. Pending application the 1st respondent chits had also issued “No Due Certificate” towards the C.D.No.129/2001 and the same was also brought to the knowledge of the Executing Court and thereafter, the matter was kept pending without any progress for more than 4 years. On the other hand the revision petitioner had sold the said property on 12.09.2011 to a third party. All of sudden a counter affidavit was filed by the 2nd respondent alone and E.A. preferred in the name of revision petitioner was dismissed by order dated 01.03.2014 and sale certificate was issued in the name of auction purchaser/2nd respondent on 21.07.2014, based on which in the month of June 2017 the said auction purchaser/2nd respondent made attempt to take possession of property, during which it was objected by the 3rd party purchaser. The 3rd party purchaser gave complaint against the revision petitioner and his family members and he was arrested and released on bail. The further case of the revision petitioner is that after he released on bail he came to know all the above facts and thereafter he obtained the certified copies and preferred the present Civil Revision Petition.
5. The learned counsel for the revision petitioner would contend that very petition filed in C.D.No.129 of 2011 itself not maintainable for reason that
