THE HON’BLE SRI JUSTICE G.CHANDRAIAH C.R.P.NO.5384 OF 2009 O R D E R Heard the counsel for the petitioners and no representation for the respondents. 2. Aggrieved by the order and decree dated 29.09.2009 passed by the court of Senior Civil Judge, Nizamabad in E.A.No.132/2009 in E.P.No.69/2004 in O.S.No.27/2003, the present revision is filed. 3. The 1st respondent herein is Central Bank of India, Jawahar Road Branch, represented by its Branch Manager. The Bank sanctioned cash credit facility of Rs.3,00,000/- to one Nyalapally Narsaiah, who is the proprietor of M/s Vinayaka and Company, Jawahar Road, Nizamabad and while availing the said facility, Narsaiah, executed necessary documents agreeing to pay the amount with interest at the rate of 18.87 per cent per annum. As a collateral security, Nayalapally Narayana, 2nd respondent herein, who is the guarantor, created charge over the house bearing no.3-3-208/1, by way of equitable mortgage on 28.4.1998, by deposit of original title deeds No.1803/1980. As the borrower failed to repay the amount, the Bank filed the suit in O.S.No.80/2001 on the file of Senior Civil Judge, Nizamabad for recovery of the amount and the said suit was decreed. 4. The 2nd respondent herein – Nayalapally Narayana, obtained loan of Rs.3,50,000/- from the petitioner – Association and executed a simple registered mortgage deed in respect of his residential house hearing no. 3-3-208/1 situate at Kotagalli, Nizamabad, by way of security. As he failed to pay the said amount, the petitioner – association, filed suit in O.S.No.27/2003 on the file of the Senior Civil Judge, Nizamabad and a preliminary decree was passed on 7.7.2003 granting three months time for redemption. As the 2nd respondent, failed to pay the amount, final decree was passed on 28.4.2004 directing to sell the mortgaged property. The petitioner – association filed E.P.No.69/2004 in O.S.No.27/2003, for the sale of mortgaged property. The court below put the said property for sale by tom-tom and also by way of paper publication. As there was no objection from anybody, including the 1st respondent – Bank herein, the petitioner – association, was permitted to participate in the auction and the property was auctioned for an amount of Rs.12,00,000/- and the petitioner – association, which is the decree holder was also given relief of set off. 5. At this stage, the 1st respondent – Bank, which is the prior mortgagee of the house bearing no.3-3-208/1, filed the present E.A.No.132/2009 in E.P.No.69/2004 in O.S.No.27/2003, under Order 34 Rule 13 read with Section 151 of C.P.C. to direct the decree holder/auction purchaser, which is the petitioner – association herein, to deposit the balance sale consideration of Rs.8,47,350 and pay an amount of Rs.10,66,702/- to the Bank, from out of the total sale proceeds, as it is the prior mortgagee. 6. By the impugned order, the court below allowed the E.A. filed by the Bank and directed the petitioners herein, who are the decree holders, to deposit the balance sale consideration into the court. Aggrieved by the same, the present revision is filed. 7. The learned counsel appearing for the petitioners contended that the 1st respondent – Bank, did not obtain any decree for sale of the mortgaged property and it earlier filed application in E.A.No.90/2009, under Order 34, Rules 12 and 13 of C.P.C. and the same was dismissed and thus the present application under Order 34, Rule 13 of C.P.C. is not maintainable. He vehemently contended that the relief under Rule 13 of Order 34, would be applicable only when the order is passed for sale under Rule 12 of Order 34 with regard to distribution of auction sale proceeds. He contended that before conducting auction, the 1st respondent – Bank did not give its free consent for the sale of the mortgaged property free from mortgage as required under Rule 12 of Order 34 and hence the present petition under Rule 13, is not maintainable. He submitted that before conducting auction, the court ordered proclamation of sale by way of tom-tom, and paper publication was also ordered and the sale notice was published in news papers and in spite of the same, the 1st respondent - Bank did not raise any objection, nor requested for conducting the sale by giving its consent for conducting sale free of mortgage and hence, it lost its right. Further, the petitioners were granted permission to participate in the auction and the set off of the decretal amount was also granted and hence the said permission cannot be revoked. With these contentions, the learned counsel for the petitioners sought to set aside the impugned order. 8. Though notice is served and the matter underwent several adjournments, there is no representation for the 1st respondent – Bank. Hence, the matter is taken up for disposal on merits. 9. In the present case, as per the contentions of the counsel for the petitioners, which are not disputed, the Bank earlier filed E.A.No.90/2009 under Rules 12 and 13 of C.P.C. and the same was dismissed and before conducting auction, sale proclamation was given by way of tom-tom and the paper publication was given and there was neither any objection from the respondent – Bank, nor any consent was given for sale of the property free from mortgage. Further, the petitioners were given permission to participate in the auction and set off was also granted. 10. At this juncture it is necessary to look into Rule 12 of Order 34 of C.P.C., which reads as under: “Where any property the sale of which is directed under this order is subject to a prior mortgage, the court may, with the consent of the prior mortgagee, direct that the property be sold free from the same, giving to such prior mortgagee in the same interest in the proceeds of the sale as he had in the property sold.” 11. From a reading of the above provision it is clear that where any property, the sale of which is ordered under this Order, is subject to prior mortgage, the court may with the consent of the prior mortgagee, direct the sale of property free from prior mortgage. Considering the above rule, a Division Bench of the Allahabad High Court in RAMJI LAL RAIS, GHUZIABAD v. THE INOME TAX OFFICER, C- WARD, MEERUT[1] held that “This rule deals with “the proceeds of the sale” of property which was subject to a prior mortgage and which was sold with the prior mortgagee’s consent and the words “such proceedings” in r.13, which immediately follows, must necessarily refer to them. In other words r.13 has application only when a property subject to a prior mortgage is sold with the prior mortgagee’s consent as permitted by r.12 and has no general application.” In the present case, before conducting sale proclamation was given by way of tom-tom and paper publication was given. But the Bank failed to object or give its consent for sale of property free from mortgage, giving it the same interest in the proceeds of the sale. Further, Rule 13 of Order 34, simply states how the sales proceeds have to be applied in appropriating for the discharge of debts. Therefore, unless there is sale under Rule 12, the sale proceeds cannot be appropriated as stated under Rule 13 of C.P.C and, therefore the filing of the petition under Rule 13 of Order 34, is not maintainable and the court below failed to notice these factors and erroneously allowed the application, which is liable to be set aside. 12. For the foregoing reasons, the impugned order is set aside and the revision is allowed. No costs. AVS ------------------------------------- 15—11—2010 [1] (1963)1 I.T.R. 517 (Allahabad Series)