IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD WEDNESDAY, THE TWENTY SEVENTH DAY OF OCTOBER, TWO THOUSAND AND TEN PRESENT THE HON'BLE SRI GHULAM MOHAMMED AND THE HON'BLE SRI JUSTICE B.CHANDRA KUMAR CIVIL REVISION PETITION NO. 2887 OF 2009 AND CIVIL MISCELLANEOUS APPEAL NO. 658 OF 2010 CRP No. 2887 of 2009 Between: Yanati Srinivasulu Reddy ..... Petitioner AND Avanthi Foods Limited, Kovvuru, WestGodavari, Rep. By Deputy Manager .....Respondent CMA No. 658 OF 2010 Avanthi Feeds Limited, Kovvuru, Rep. By Manager, Sri Y.Ramachandram Appellant AND Advita Marine Products Private Ltd., Rep.by its Director, Medarametla Sankar Reddy, Respondent The Court made the following: COMMON ORDER: (per the Hon’ble Sri Justice Ghulam Mohammed) Since both these cases are interconnected, they were heard together and are being disposed of by this common order. The Civil Revision Petition is directed against the order and decree dated 1.4.2009 dismissing the petition filed by the petitioner herein under Order 21 Rule 26 CPC seeking to stay all further proceedings in E.P. No. 26 of 2007 filed for execution of decree dated 18.11.2003 in O.S. No. 11 of 1999 filed by the respondent in the Revision Petition. The petitioner herein is the seventh defendant in the suit, who stood as guarantor/mortgagor for the amount borrowed by the first defendant viz., Vegsha Venugopal Raju, for recovery of which the respondent herein filed the above suit. The court below dismissed the application observing that the under Order 21 Rule 26 CPC enables stay only for a reasonable time so as to apply to the court which passed the decree to an appellate court for an order of stay and not generally. The court below while observing that having moved the application forty days back, the petitioner could not seek stay of the execution proceedings, dismissed the same being devoid of merits. Aggrieved by the same, the present Civil Revision Petition is filed inter alia contending that having come to know about passing of the decree dated 18.11.2003, he filed a petition to set aside the exparte decree along with a petition to condone the delay in filing such an application and, therefore, pending the said application, dismissal of EA 162 of 2009 seeking to stay the execution of decree, is unsustainable. Learned counsel for the petitioner contends that the decree which is sought to be executed in the above E.P. is a collusive decree. It is further his contention that no notices were served on the petitioner and the respondent herein got managed to return the notice with the sole intention to get an exparte decree and accordingly an exparte decree dated 18.11.2003 came to passed. It is further contended that the dismissal of the stay application EA No. 162 of 2009, pending adjudication of the application filed by the petitioner herein to condone the delay in filing petition to set aside the expart decree, is unsustainable and, therefore, if the order impugned is not set aside, the petitioner would be put to injury. Per contra, the learned counsel for the respondent herein contends that the petitioner herein has avoided to receive the notice and failed to participate in the proceedings and the action of the petitioner herein in filing a petition to set aside the exparte decree along with a petition to condone abnormal delay of six years, cannot be countenanced. He further contends that pending that application, since the petitioner herein has filed EA No. 162 of 2009, seeking stay of the execution of the decree against the plaintiff in OS No. 11 of 1999, which is the appellant in CMA No. 658 of 2010, the court below has rightly dismissed the application and, therefore, no interference is called by this court. Before adverting to the contentions raised by the counsel on either side, be it noted that the decree dated 18.11.2003 was passed by the learned II Addl. District Judge, Eluru, in OS No. 11 of 1999 and for the purpose of execution, it was sent to the District Judge, Ongole Prakasam District, where E.A. No. 162 of 2009 was filed by the petitioner herein to stay the execution thereof. Rightly or wrongly, there is an exparte mortgage decree passed against the petitioner and others, to the tune of Rs.19,63,380.80 Ps. with interest at 12% p.a. from the date of decree, which, at random, comes to Rs.40.00 lakhs. EA No. 162 of 2009 is filed seeking to stay execution of the decree dated 18.11.2003. Order 21 Rule 26 deals with stay of execution. For the adjudication of the lis involved in this case, it is apt to reproduce the same, which reads: 26. When Court may stay execution:- (1) The Court to which a decree has been sent for execution shall, upon sufficient cause being shown, stay the execution of such decree for a reasonable time, to enable the judgment debtor to apply to the court by which the decree was passed, or to any Court having appellate jurisdiction in respect of the decree or the execution thereof, for an order to stay execution, or for any other order relating to the decree or execution which might have been made by such Court of first instance or Appellate Court if execution had been issued thereby, or if application for execution had been made thereto. (2)……… (3...…….” Thus a bare reading of the above provision makes it clear that the court below has rightly dismissed the application inasmuch as even after forty days of filing the application to set aside the exparte decree along with an application to condone the delay of nearly six years, no order was passed staying the proceedings. That apart, the affidavit sworn to by the petitioner herein filed in support of E.A. No.162 of 2009 shows that the petitioner had deposited his original deeds with the respondent – 1st defendant, though denied execution of Memorandum of mortgage. Therefore, in the facts and circumstances of the case, since there is a decree, be it exparte, in favour of the respondent herein – appellant in the CMA No. 658 of 2010, the interest of the mortgagor, who obtained the decree, needs to be protected. Hence, under the above circumstances, we deem it appropriate to direct the petitioner herein to deposit a sum of Rs.10.00 lakhs (Rupees ten lakhs only) to the credit of the E.P. No. 26 of 2007 in O.S. No. 11 of 1999 within a period of two months from the date of receipt of a copy of this order. It is made clear that such deposit does not entitle the respondent herein viz., Avanthi Foods Limited, Kovvuru – appellant in CMA No. 658 of 2010, to withdraw the same pending adjudication of the applications filed by the petitioner herein to condone the delay and to set aside the exparte decree. With this direction, the Civil Revision Petition is disposed of. No order as to costs. The Civil Miscellaneous Appeal is directed against the order and decree dated 21.7.2009 allowing I.A. No. 928 of 2009 in O.S. No.55 of 2009, filed by the respondent herein under Order 39 Rule 1 and 2 CPC seeking to restrain the appellant herein from executing the decree dated 18.11.2003 passed in OS No. 11 of 1999 by the District Court, Eluru, in respect of the plaint schedule property. The respondent in the appeal filed the suit OS No. 55 of 2009 seeking to cancel the judgment and decree in OS No. 11 of 1999 dated 18.11.2003 on the file of the II Addl. Dist. Judge, West Godavari, Eluru, and for consequential relief of injunction. Along with the suit, the respondent herein also filed the above I.A. under order 39 Rule 1 and 2 CPC for the grant of interim injunction restraining the appellant herein from executing the decree in OS No. 11 of 1999 dated 18.11.2003. The court below allowed the application, as stated above. Aggrieved thereby, the present Civil Miscellaneous Appeal is filed, inter alia contending that the court below having dismissed EA No.109 of 2009 i.e. stay petition and the claim petition in EA No. 611 of 2009, ought not to have granted temporary injunction in favour of the plaintiff, more particularly when the 2nd defendant in OS No. 55 of 2009 who is 7th defendant in OS No. 11 of 1999, has suffered a decree. It is contended on behalf of the appellant herein that the appellant company had obtained a decree in OS No. 11 of 1999 and if injunction is granted against the defendants, the appellant cannot proceed with execution of the decree passed in OS No. 11 of 1999, more particularly against the second defendant in OS No. 55 of 2009, who is judgment debtor in EP No. 26 of 2007 in OS No. 11 of 1999. It is further contended that injunction petition is not maintainable in the absence of the 7th defendant in OS No. 11 of 1999 being made a party respondent. It is also its case that when the 7th defendant has admitted to have mortgaged the property for the loan obtained by the first defendant therein, the court below ought not to have granted injunction. Per contra it is the contention of the learned counsel for the respondent herein that the company is a bona fide purchaser for valuable consideration and under the exparte decree, the rights of the company cannot be taken away. It is further contended that though the appellant had the knowledge of the proceedings in the suit, the plaint in OS No. 55 of 2009 is not in accordance with the Code of Civil Procedure. It is further contended that the respondent is in possession of the property and three is no document filed by the appellant herein (plaintiff in OS No. 11 of 1999) to show the transaction between it and the defendant No.7 in OS No. 11 of 1999 and by suppressing the facts, the appellant herein i.e. the plaintiff in OS No.11 of 1999, had obtained exparte decree and, therefore, the respondent being bonafide purchaser of the property for value, cannot be injuncted, being the real owner. The court below, on extensive consideration of the rival contentions of both the parties, has observed that no material facts as to the date when or for what sum the title deeds are deposited, there is no evidence to show the debt and, therefore, the suit was fraudulently filed. It is further observed by the court below that there is nothing on record to show that any memorandum of equitable mortgage had been executed by the 7th defendant in OS No. 11 of 1999. The court below observing that the decree in O.S. No. 11 of 1999 is a collusive decree, had held that the contentions do not come in the way of the respondent herein and disentitle it for the relief of temporary injunction and allowed the petition, as stated above. There are triable issues in the suit. Without adverting to the merits or otherwise of the contentions sought to be raised before this court, prima facie, there is a decree in favour of the appellant herein. Since the appellant is a bona fide purchaser for value and enjoying the property for the last eleven years and doing business, it cannot be injuncted in toto, as sought for by the respondents. Thus the balance of convenience is in favour of the appellant hence and the interest of the appellant has to be safeguarded. The court below is justified in observing that if the suit schedule property in OS No. 11 of 1999 is put to sale, in execution of the decree, nothing remains for adjudication. We do not find any infirmity or illegality in the order passed by the court below. Consequently, with the direction issued in the C.R.P. No. 2887 of 2009, both the Civil Revision Petition and the Civil Miscellaneous Appeal are disposed of. No order as to costs. The trial court is directed to dispose of the suit within a period of six months from the date of receipt of a copy of this order on its own merits, uninfluenced by any of the observations made in the impugned order or made hereinbefore. ______________________ Justice Ghulam Mohammed _____________________ Justice B.Chandra Kumar October 27, 2010 MAS.