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PETITIONER: TAKASEELA PEDDA SUBBA REDDY

       Vs.

RESPONDENT: PUJARI PADMAVATHAMMA & ORS.

DATE OF JUDGMENT28/04/1977

BENCH: FAZALALI, SYED MURTAZA BENCH: FAZALALI, SYED MURTAZA BHAGWATI, P.N.

CITATION:  1977 AIR 1789            1977 SCR  (3) 692  1977 SCC  (3) 377  CITATOR INFO :  F          1990 SC 119  (8)

ACT:             Code  of Civil Procedure, (Act V of  1908),  1908--Order         XXI,  Rule 64--Scope of--Meaning of the words "as  may  seem         necessary to satisfy the decree".

HEADNOTE:             Order  XXI  Rule 64 of the C.P.C. lays  down  that  "any         court   executing   a  decree may order  that  any  property         attached by it and liable to sale  or  such portion  thereof         as  may seem necessary to satisfy the decree, shall be  sold         and that the proceeds of such sale, or a sufficient  portion         thereof shall be paid to the party entitled under the decree         to receive the same."             The 5th respondent/decree-holder, S.P.R. Reddy  obtained         two  decrees against the Judgment-debtor Pujari  Subbarayudu         in two suits viz.; U.S. 15 of 1949 and O.S. 19 of 1953.   He         filed  execution proceedings No. 24 of 1953 in   the   trial         Court for selling the properties belonging to the  judgment-         debtor in  Devanoor and Gudipadu villages in order to satis-         fy  the  decree  in U.S. 15 of 1949.  He  also  applied  for         permission to bid at the auction sale.  In the auction  sale         held  on  March 2, 1955, the 5th  respondent  purchased  the         lands  situated  in   village  Devanoor for  a  sum  of  Rs.         16,880/-.   Despite the fact that the sale proceeds  of  the         lands  in village Devanoor alone was sufficient  to  satisfy         the decretal amount mentioned in the warrant of sale and the         proclamation of sale viz.; Rs. 16,715.50, The Court proceed-         ed  to  sell  the properties  of  the   judgment-debtor   in         village  Gudipadu which fetched Rs. 12,500/- and which  were         purchased  by the  appellant auction-purchaser.   The  judg-         ment-debtor  filed an application on March 31, 1955  to  set         aside the sale contending, inter alia, that once the sale of         the  properties in village Devanoor was sufficient to satis-         fy the amount mentioned in the sale proclamation, the  Court         should have stopped the sale as required  by  the  mandatory         provisions  of Order XXI Rule 64 of the C.P.C.   The   Trial         Court  rejected the said application; whereupon the  decree-         holder on April  20,  1955 obtained an order from the  court         for  rateable distribution of the sale proceeds.  In  appeal         the  High  Court accepted the plea  of  the  judgment-debtor

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       regarding  non-compliance with the provisions of O.XXI  Rule         64 C.P.C. and set aside the sale with respect to the proper-         ties situated in village Gudipadu.         Dismissing the appeal by certificate the Court,             HELD:  (1) The High Court rightly held that as the  sale         of  the  properties in village Devanoor  fetched  an  amount         mentioned  in the sale warrant. the Executing Court was  not         justified in proceeding with the sale of the  properties  in         village Gudipadu and should have stopped the sale. [694 F]             (2) The logical corollary which flows from O.XXI Rule 64         of the Code is that where the amount specified in the  proc-         lamation  of  sale for the recovery of which  the  sale  was         ordered  is realised by sale of certain items, the  sale  of         further items should be stopped.  [695 C-D]             (3) Under Order XXI Rule 64, the Executing Court derives         jurisdiction  to sell properties attached only to the  point         at which the decree is fully satisfied. The words "necessary         to  satisfy the decree" clearly indicate that no  s,de   can         be  mentioned in the sale proclamation and is sufficient  to         satisfy the  decree,  no allowed beyond the decretal  amount         mentioned in the  sale  proclamation.  In other words. where         the sale fetches a price equal to or higher than the  amount         further  sale  should be held and the court should  stop  at         that stage. [695 E-F]             (4) In the facts and circumstances of the present  case,         there  being  nothing  to show that  the  decree-holder  had         approached  the  court  for including  the  second  decretal         amount  obtained in O.S. 19 of 1953 in the  proclamation  of         sale, the         693         Executing Court was not justified in selling the  properties         situated    in   village  Gudipadu.   The  fact   that   the         Judgment-debtor  did not raise an objection on  this  ground         before the Executing Court rs not sufficient to put him  out         of   court because this was a matter which went to the  very         root of the jurisdiction of the Executing Court to sell  the         properties  and  the non-compliance with the  provisions  of         O.XXI,  Rule  64 of the Code was sufficient to  vitiate  the         same so far as properties situated in village Gudapadu  were         concerned. [695 G-H, 696 A]             (5) The Court remitted the matter to the Executing Court         for an  inquiry with the following directions:             (i) The appellant will have to return the properties  in         village  Gudipadu  to  the judgment-debtor and  he  will  be         entitled  to receive the value of improvements made  by  him         during the time he was in possession of these properties, as         determined  by  the  Executing  Court  in  addition  to  Rs.         12,500/-.             (ii)  He  will not he entitled to any  interest  on  the         value  of the improvements, if he is found to be in  posses-         sion of the property.             (iii)  If  the Executing Court finds that  the  auction-         purchaser   was  not  in possession of the  properties,  the         judgment-debtor  will  have  to refund  the  amount  of  Rs.         12,500/-  to the appellant with interest at the rate  of  12         per  cent  per annum from the date of sale upto the date  of         refund. [696 B-E]

JUDGMENT:         CIVIL APPELLATE JURISDICTION: C.A. No. 2381 of 1968.             (From  the Judgment and Order dated the 30th March  1965         of the Andhra Pradesh High Court in Appeal against Order No.         443 of 1963)

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                 P. Ram Reddy, K. Jayaram and K. Ram Kumar, for the         appellant.                   B.R. Agarwala, for respondents.                  The Judgment of the Court was delivered by             FAZAL  ALI, J. This appeal by certificate arises out  of         execution proceedings in respect of a decree obtained by the         respondents/decreeholders.    It  appears that the  5th  re-         spondent/decree-holder  Siddam Pedda Rami Reddi  hereinafter         referred to as "SP" Reddi---obtained a decree in O.S. No. 15         of  1949  from the Court of Sub-Judge  Kurnool  against  the         judgment-debtor  Pujari  Subbarayudu hereinafter referred to         as  "Pujari" or "judgment-debtor".  The 5th  respondent  had         also obtained another money decree against Pujari in another         suit    being   O.S.   No.   19   of   1953.      The    5th         respondent/decree-holder filed Execution Proceedings No.  24         of  1953 in the Trial Court for selling the  properties  be-         longing  to  the  judgment-debtor in order  to  satisfy  the         decree  in O.S. No. 15 of 1949 and he also applied for  per-         mission  to  bid at the auction sale.   The first  sale  was         held  on  October 12, 1954 at which the  lands  situated  in         villages  Devanoor and Gudipadu were put to sale.  But  this         sale was set aside as there was some delay in payment of the         sale price.  Consequently a second sale was held on March 2,         1955  at  which the 5th respondent SPR Reddi  purchased  the         lands  situated in village Davanoor and  the  appellant/auc-         tion-purchaser  T.P.S. Reddy purchased the lands in  village         Gudipadu.    It is also not disputed that in the warrant  of         sale as also the sale proclamation, the decretal amount  for         which  the properties were to be sold was mentioned  as  Rs.         16,715-8-0.   The sale of lands in village         694         Devanoor  alone fetched a sum of Rs. 16,880/- at  which  the         sale was knocked down.   Thus it would appear that the  sale         proceeds of the lands in village Devanoor were sufficient to         satisfy the decretal amount mentioned in the proclamation of         sale.    Despite this fact, the Court proceeded to sell  the         properties   of  the judgment-debtor  in   village  Gudipadu         which  fetched Rs. 12,500/- and which were purchased by  the         appellant/auction-purchaser.             On  April 20, 1955 the decree-holder obtained  an  order         from  the Court for rateable distribution of the  sale  pro-         ceeds.   In other words, this order was passed by the  Court         not before the sale so that the entire decretal amount could         have been mentioned in the sale proclamation but a few  days         after the sale had already taken place.   This is rather  an         important  aspect of the matter which appears to  have  been         completely  overlooked  by the Trial Court.   On  March  31,         1955 the judgment-debtor Pujari filed an application to  set         aside the sale on various grounds, namely, that the sale was         vitiated  by  material irregularities which  caused  serious         prejudice  to  the judgment-debtor and that  the  properties         sold by the Court were valuable properties and the same were         grossly  undervalued-in the sale proclamation.   Finally  it         was  contended by the judgment-debtor that once the sale  of         the properties in village Devanoor was sufficient to satisfy         the  amount  mentioned in the sale proclamation,  the  Court         should  have stopped the sale as required by  the  mandatory         provisions  of  0.21 r. 64 of the Code of  Civil  Procedure-         hereinafter  referred to as the Code--instead of  continuing         the   sale  of the  properties-in  village   Gudipadu.   The         Trial  Court, however, after heating the objections  of  the         decree-holder  rejected the  application of  the   judgment-         debtor.    Thereafter   the  judgment-debtor  preferred   an         appeal  before  the High Court which,  while  negativing-the         grounds taken by the judgment-debtor regarding the  material

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       irregularities in the conduct of sale or the under-valuation         of the properties, accepted the plea of the  judgment-debtor         regarding the non-compliance with the provisions of 0.21  r.         64  of  the Code. The High Court held, and  in  our  opinion         rightly,  that  as  the sale of the  properties  in  village         Devanoor  fetched an amount which was sufficient to  satisfy         the  amount  mentioned in the sale  warrant,  the  Executing         Court  was not justified in proceeding with the sale of  the         properties  in village Gudipadu and should have stopped  the         sale.   The High Court accordingly accepted the plea of  the         judgment-debtor  and set aside the sale with respect to  the         properties  situated  in  village Gudipadu,  but  granted  a         certificate to the appellant to file an appeal in this Court         and hence this appeal before us.             In this appeal the facts are more or less undisputed and         the  only serious point argued by the appellant is that  the         High  Court was in error in setting aside the  sale  because         even  if the entire decretal amount was not mentioned in the         sale  proclamation, that was at best an  irregularity  which         did not cause any prejudice to the judgment-debtor.  It  was         also  argued by learned counsel for the appellant  that  the         judgment  debtor  did  not raise any  objection  before  the         Executing Court against continuing the sale of other proper-         ties  situated in village Gudipadu.  It was  next  submitted         that  the  5th respondent/decreeholder had obtained  another         decree in O.S  19 of 1953 and the total         695         amount under the two decrees fully justified the selling  of         the  properties in village Gudipadu also, particularly  when         the  decree-holder  had taken an order  from  the  Executing         Court  for rateable distribution of the sale proceeds.    It         is true that the High Court has  not considered this  aspect         of the matter, but in our opinion the contentions raised  by         the  appellant  are wholly untenable.   It is  not  disputed         that  the  warrant of sale was prepared long after  the  5th         respondent/decreeholder  had obtained the second  decree  in         O.S.  19 of 1953 and yet no attempt was made by the  decree-         holder  to  approach  the Court for  amending  the  decretal         amount mentioned in the sale proclamation, so as to  include         the  decretal  amount not only of the decree in   the  first         suit  No.  O.S.  15 of 1949 but also of the  decree  in  the         second  suit in O.S. 19 of 1953.   In  these  circumstances,         therefore,  under the provisions of 0.21 r. 64 of  the  Code         when  the amount as specified in the sale  proclamation  was         fully  satisfied  by the sale of the properties  in  village         Devanoor, the Court should have stopped the sale of  further         items  of  the properties.   It is manifest that  where  the         amount specified in the proclamation of sale for the  recov-         ery  of  which the sale was ordered is realised by  sale  of         certain items, the sale of further items should be  stopped.         This,  in our opinion, is the logical corollary which  flows         from O.21 r. 64.of the Code which may be extracted thus:                       "Any  Court executing a decree may order  that                       any  property  attached by it  and  liable  to                       sale,  or  such portion thereof  as  may  seem                       necessary to satisfy the decree, shah be sold,                       and  that  the  proceeds of such  sale,  or  a                       sufficient portion thereof, shall be  paid  to                       the party entitled under the decree to receive                       the same."         Under  this provision the Executing Court derives  jurisdic-         tion to sell properties attached only to the point at  which         the  decree  is fully satisfied.   The words  "necessary  to         satisfy  the decree" clearly  indicate that no sale  can  be         allowed  beyond  the decretal amount mentioned in  the  sale

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       proclamation.   In  other words, where the  sale  fetches  a         price  equal to or higher than the amount mentioned  in  the         sale  proclamation and is sufficient to satisfy the  decree,         no further sale should be held and the Court should stop  at         that  stage. In the instant case, we have already  indicated         that  the sale of lands in village Devanoor alone fetched  a         sum of Rs. 16880 which was more than  sufficient  to  satis-         fy   the  amount  of Rs, 16,715-8-0 mentioned  in  the  sate         proclamation.    It is true that the decree-holder  had  ob-         tained  another decree in O.S. No. 19 of 1953, but there  is         nothing  to show that the decree-holder had  approached  the         Court for including the second decretal amount in the  proc-         lamation  of sale.   In these circumstances,  therefore,  we         are clearly of the opinion that the Executing Court was  not         justified,  in  the facts and circumstances of  the  present         case, in selling the properties situated in village  Gudipa-         du.   The  fact that the judgment-debtor did  not  raise  an         objection  on this ground before the Executing Court is  not         sufficient to put him out of Court because this was a matter         which  went  to  the very root of the  jurisdiction  of  the         Executing  Court  to  sell  the  properties  and  the   non-         compliance  with the provisions  of O. 21 r. 64 of the  Code         was sufficient to vitiate the same so far as the         696         properties  situated  in village  Gudipadu  were  concerned.         For these reasons the contentions raised by counsel for  the         appellant  must be overruled.             This,  however, does not put an  end to the  issue,  be-         cause  the  High Court, while setting aside  the  sale,  has         passed  no  order  for adjusting the  equities  between  the         parties.  According to the appellant he had taken possession         of the properties purchased  by him at the auction sale  and         had  made substantial improvements.   If the sale  of  these         properties  is to be set aside, the appellant will  have  to         return these properties to the judgment-debtor, but he  will         be  entitled to receive the value of improvement’s  made  by         him during the time he was in possession of those properties         in  addition to the return of the sum of Rs. 12,500/-.   The         Executing Court will have to hold an inquiry into the matter         and  determine  the value of the improvements  made  by  the         appellant which will have to be paid to him.   The appellant         will  not  be entitled to any interest on the value  of  the         improvements  if  he  is found to be in  possession  of  the         properties.  If, however, the Executing Court finds that the         auction-purchaser  was not in possession of  the  properties         and   the properties  continued to be in  possession of  the         judgment-debtor, then the question of the value of  improve-         ments  will naturally not arise.   In that event  the  judg-         ment-debtor  will have to refund the amount of Rs.  12,500/-         to the appellant with interest at the rate of 12% per  annum         from the date of sale upto the date of refund.             For  these reasons, therefore, the  appeal is  dismissed         with  the modification indicated above and the case is  sent         back  to  the Executing Court to hold an  inquiry  into  the         matter.    In the special and peculiar circumstances of  the         present case, we make no order as to costs.         S.R.                                      Appeal dismissed.         697