The main legal point established in the judgment is the preferential right of secured creditors and the limitations on raising objections against the sale of property subject to mortgage.

Vinod K. Sharma, J. - This order shall dispose of CR No. 1565 of 2004 titled M/s R.J. Agro Industries v. M/s Parkash Rice & General Mills & Ors., and CR No. 5112 of 2006 titled Yogesh Kumar v. M/s R.J. Agro Industries and Ors., as common questions of law and facts are involved in both these revision petitions.

2. For facility facts are being taken from CR No. 1565 of 2004.

Present revision petition has been filed against the order dated 27.2.2004 passed by learned Civil Judge (Senior Division), Kurukshetra disposing of the application filed on behalf of the applicants Raj Kishan, M/s Bhagat Ram Jai Bhagwan, Gupta Trading Company, OBC Thanesar, UHBVN, Pipli, Sales Tax Department, Bajaj Rice Mill, M/s Shish Pal Yash Pal for payment and application of applicant Aman for Imperial India/Auction Purchaser for confirmation of sale.

3. M/s R.J. Agro Industries, Patiala, the petitioner herein filed a civil suit for the recovery against M/s Parkash Rice & General Mills, Pundri, Tehsil Thanesar. Said suit was decreed for the recovery Rs. 13,56,018.75 along with costs and interest from the date of filing of the suit till realisation vide judgment and decree dated 31.3.2003.

4. The petitioner moved an application for the recovery of Rs. 26,18,998/- i.e. the decretal amount along with costs and interest along with future interest in terms of the judgment and decree and in execution learned Executing Court was pleased to attach property measuring 24 kanals along with superstructure of the judgment debtor. The attached property was mortgaged with the Oriental Bank of Commerce, Thanesar.

5. The bank had filed a suit for recovery against the judgment debtor and its partners. However, in the said suit the matter was settled in the Lok Adalat on 27.7.2003 and under the said settlement as per the orders passed by the Debt Recovery Tribunal, Chandigarh, Judgment Debtor had agreed to pay a sum of Rs. 90.59 lacs along with interest to the hank. Respondent Nos. 1 to 3 had also mortgaged the residential house in favour of the bank.

6. Vide, order dated 18.10.2003 learned Civil Judge (Senior Division), Kurukshetra on an application moved under Order 21 Rule 66 of the Code of Civil Procedure (for short the Code) for the sale of the attached property was pleased to order the sale of the property subject to mortgage as per the following schedule :

Notice Munadi Auction Report

at spot

31.10.03 15.11.03 6.12.03 20.12.03

7. In pursuance to the order dated 18.10.2003 the property was auctioned on 6.12.2003 for a sum of Rs. 1,39,00,000/- which was purchased by M/s Imperial India, Kurukshetra, respondent No. 14 who sought the confirmation of sale. After the sale, respondents No. 4 to 13 moved an application under Section 73 of the Code praying for rateable distribution of the sale proceeds. Said application came up for hearing before the Executing Court on 27.2.2004 and the same was disposed of by observing that the Oriental Bank of Commerce had the preferential right/first right to recover the outstanding amount from the mortgage/hypothecated property of the firm. It was also observed that vide order dated 28.8.2003 a decision had already been taken that the amount so realised from the sale of mortgaged property shall be first payable to the bank being a secured creditor and the said decision was affirmed by the learned Additional District Judge, Kurukshetra vide order dated 6.4.2003 as well as by Shri L.N. Mittal, learned District Judge, Kurukshetra vide order dated 26.8.2003. Said order was also affirmed in CR No. 3186 of 2003 decided on 15.7.2003 by this court. The order passed by this court reads as under :-

"The present petition is against the order passed by the Additional District Judge, Kurukshetra whereby the appeal filed by the decree-holder against the order of recall of the attachment order passed by the Executing Court was accepted and attachment order was restored.

At the outset, it may be stated that on the application of the jud