PUNJAB AND HARYANA HIGH COURT AT CHANDIGARH
Deepak Gupta, J.
M/S Sherpur Rice Mills – Appellant
Versus
Pungrain And Others – Respondent
EFA-7-2023 (O&M)
Decided on : 07-01-2025
JUDGMENT :
Deepak Gupta, J.
Present appeal has been preferred by the appellant, who is one of the Judgment debtor, against the order dated 05.09.2023, passed by the Executing Court of Ld. Additional District Judge, Sangrur in Execution Petition No.205 of 2018 [CNR N: PBSG01-003091-2018] titled as PUNGRAIN Vs. M/s Noor Agro Industries and another', whereby objections filed by the appellant-JD under Order XXI Rule 90 CPC have been dismissed; and the Execution Petition has been disposed of by confirming the sale in favour of the auction purchaser-respondent No.3.
2.1 Facts of the case, in brief, are that JD N: 2 (appellant herein) is a partnership firm operating under the name of M/s Sherpur Rice Mills situated at Village Sherpur, Tehsil Dhuri, District Sangrur. On 19.10.2015, said appellant had entered into a lease agreement with JD N: 1 M/s Noor Agro Industries (respondent No.2 herein), whereby the said rice mill was leased to M/s Noor Agro Industries, a proprietorship firm through its proprietor-Jiwan Kumar. On 23.10.2015, decree holder - Punjab State Grains Procurement Corporation Ltd. (PUNGRAIN') [respondent No.1 herein] and respondent No.2-M/s Noor Agro Industries-JD No.1 executed a Custom Milling Agreement for the crop year 2015-16. Respondent No.2 was required to deliver the milled rice in time and to clear all the outstanding dues, if any, towards any agency or Government and also be liable for any default. The appellant-JD No.2 furnished surety bond and affidavit to that effect. The agreement between DH & JD N: 1 i.e., respondent No.1 and 2 carried an arbitration clause. There was default on the part of JD N: 1 - respondent No.2 on account of shortage of paddy, due to which complaints were lodged against respondent No.2 for misappropriation of the paddy by respondent No.1 - DH.
2.2 On account of the said default, Rice Mill, Sherpur of the appellant - JD N: 2 was sealed by respondent No.1 - DH and was held to be not entitled for new allotment of paddy due to non-clearance of the dues of DH-respondent No.1. According to the appellant, aggrieved by the said order of the respondent No.1, appellant filed Civil Suit No.595 of 2016 before Ld. Civil Judge (Jr. Div.) Sangrur seeking declaration & permanent injunction that it was entitled to allotment of paddy for the crop year 2016-17 along with the prayer for opening the seal and handing over the vacant possession of the premises.
2.3 As disputes arose between DH & JD N: 1, so on account of the arbitration clause in the custom milling agreement, DH invoked the said arbitration clause and the matter was referred for arbitration. Arbitration award dated 09.01.2018 was made against the JD N: 1 & JD N: 2, as per which, an amount of Rs. 55,78,102/- was awarded in favour of respondent No.1 - DH along with future interest @ 12% per annum till its realization. The objections
filed by the appellant - JD N: 2 under Section 34 of the Arbitration and Conciliation Act, 1996 against the said award filed before District and Sessions Judge, Chandigarh are stated to be still pending. In the meantime, respondent No.1/DH preferred execution bearing Execution Petition No.205 of 2018 before Additional District Judge, Sangrur under Order XXI Rule 11 CPC for implementation of the award dated 09.01.2018.
2.4 Upon notice to the JDs, JD No.1-M/s Noor Agro Industries put in appearance through its counsel on 25.07.2018. However, notice to JD No.2-appellant herein was received back unserved, as the premises were stated to be lying closed. Counsel for the decree-holder informed the Court that no other address of JD No.2 was available and so, affixation was ordered. Based upon the service of JD No.2-appellant by way of publication in newspaper Azad Soch', JD No.2-appellant was proceeded ex parte vide order dated 07.12.2019. On 20.09.2021, warrant of attachment of the property of JD No.2-appellant was received back duly executed. An application under Order XXI Rule 66 CPC was moved by decree-holder on 11.01.2022 qua
Unless there is material irregularity, which has resulted in causing substantial injury to judgment-debtor in conducting sale, question of interference by setting aside sale which was conducted by co....
A sale under Order XXI Rule 90 can only be set aside if the applicant proves both material irregularity and substantial injury resulting from it.
The court upheld the validity of the execution sale, ruling that the appellant failed to prove material irregularities or substantial injury, affirming the finality of the trial court's decree.
The execution sale was declared null and void due to the execution court's lack of jurisdiction from the absence of a required certificate from the Registrar, which is mandatory for the award to be e....
The executing court must ensure only necessary property is sold to satisfy a decree, and dismissal of a claim under Order XXI Rule 58 does not bar a subsequent application under Order XXI Rule 90 for....
The main legal point established is that an auction sale can be set aside if there are substantial irregularities and fraud, and the application to set aside the sale was filed within the limitation ....
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....
whether Section 35 of the Act is mandatory or directory the sale held in violation of the said provision is only illegal but not a nullity and therefore, it can be set aside only in the manner and th....
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