IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.SASIDHARAN NAMBIAR MONDAY, THE 14TH JULY 2008 / 23RD ASHADHA 1930 CRP.No. 133 of 2006() --------------------- AGAINST THE ORDER DATED 6/2/2006 IN EA 1376/02,EP 353/88 IN OS.68/1986 of PRINCIPAL SUB COURT,ERNAKULAM .................... REVISION PETITIONER: PETITIONER: ------------------------------------------------------- MRS. SAJU GEORGE, WIFE OF T.V.GEORGE, AGED 56, HOUSE NO.36/715, SPICES STREET, LIZY ROAD, ERNAKULAM. BY ADV. SRI.K.C.CHARLES RESPONDENTS: RESPONDENTS: -------------------------------------------------- 1. THOMAS, SON OF POULOSE, AGED ABOUT 55, KIDANGATTU HOUSE, AMMANKOIL ROAD, ERNAKULAM (NOW AT KUNDANGATTU HOUSE, PARAMBITHARA ROAD, KOCHI-16). 2. CHANDRASEKHARAN NAIR, AGED 64, SON OF KARTHIAYANIAMMA, KOLLAMPARAMBU VEEDU, PLACHERY, ELAMAKKARA, ERNAKULAM. 3. P.CHANDRU, SON OF K.PANCHAVARNAM, AGED 43, HOUSE NO. 8/747, KARIMOKAL ROAD, VADAYAMPATHU MOOLAKKARA, PUTHENCRUZ P.O., PIN-682 308. BY ADV. SRI.P.P.JACOB,CAVEATOR - R1 SRI.GEORGE VARGHESE NARAYANPARAMBIL - R3 THIS CIVIL REVISION PETITION HAVING BEEN FINALLY HEARD ON 27/06/2008 ALONG WITH CRP NO. 137 OF 2006, CRP NO. 138 OF 2006 AND CRP NO. 139 OF 2006, THE COURT ON 14/07/2008 PASSED THE FOLLOWING: Kss ORDER IN I.A.NO.628/2006 IN C.R.P.NO.133/2006 DISMISSED 14/07/2008 SD/- M.SASIDHARAN NAMBIAR,JUDGE /TRUE COPY/ P.S.TO JUDGE Kss M.Sasidharan Nambiar,J. ======================= C.R.P Nos.133,137,138&139 of 2006 ======================= Dated this the 14th day of July, 2008 O R D E R Whether a transferee of a judgment debtor subsequent to the decree is a representative of the judgment debtor and whether he is entitled to challenge the court auction sale in execution of the decree, under section 47 of Code of the Code of Civil Procedure. When the mortgagee decree holder bid the property in court auction sale, if the court failed to fix reserve price as provided under sub rule (2) of Rule 72A of Order XX1 of Code of Civil Procedure, whether the sale is void. If the judgment debtor files an application under Rule 90 of Order XX1 of Code of Civil Procedure to set aside the sale, whether judgment debtor himself or his representative is entitled to file a petition to set aside the sale under section 47 of Code of Civil Procedure. These are the interesting C.R.P.Nos.133 of 2006 & connected cases 2 questions to be decided in these revision petitions. 2. First respondent mortgagee instituted O.S.68/1986 a suit on mortgage before Sub Court, Ernakulam against second respondent mortgagor for realisation of Rs.76000/- with interest by sale of the mortgaged property having an extent of 73 cents. A decree was granted in his favour. E.P.No.353/1988 was filed for execution of the decree by sale of the mortgaged property. The property was sold in court auction on 27.11.1999 for Rs.1,91,443/- in favour of the decree holder, who obtained permission of the court to bid and purchase by the order in E.A. 909/1999. Though permission was granted as provided under sub rule (2) of Rule 72A of Code of Civil Procedure, there was no prayer in the petition, to fix reserve price and executing court did not fix any reserve price. The sale was confirmed on 14.11.2000. First respondent decree holder auction purchaser took delivery of the property. Much prior to the C.R.P.Nos.133 of 2006 & connected cases 3 court auction sale, second respondent sold 15 cents of the mortgaged property in favour of the petitioner in C.R.P.133/2006 (the claim petitioner in E.A.1376/2002) under sale deed dated 14.3.1996 and 12.760 cents in favour of the petitioner in C.R.P.137/2006 (the claim petitioner in E.A.1281/2002) under sale deed dated 14.3.1996 and another 15 cents in favour of the petitioner in C.R.P.No.138/2006 (claim petitioner in E.A.1403/2002). Another portion was sold by second respondent in favour of Bharathiya Vidya Bhavan as per sale deed dated 29.6.1998 and 31.7.1998. The respective claim petitioners after delivery of the property by the court filed respective claim petitions before the executing court under section 47 of Code of Civil Procedure to set aside the sale contending that court auction sale as confirmed by the court is void on the ground that it was the decree holder who bid and purchased the mortgaged property when executing court did not fix reserve price as provided under sub rule (2) C.R.P.Nos.133 of 2006 & connected cases 4 of Rule 72A of Order XX1 of Code of Civil Procedure. Third respondent an assignee from first respondent subsequent to the court auction sale was later impleaded in the petitions. The case of the petitioners is common. Case was that as court sale was without fixing reserve price, sale is void and first respondent decree holder did not derive any right by the sale though sale confirmed by the executing court. It was also alleged that the property is worth more than Rs.35 lakhs and was purchased by the decree holder for a paltry sum of Rs.1,91,443/- and therefore the sale is to be declared null and void. 3.First respondent resisted the petition contending that petitions are not maintainable as the court auction sale was confirmed and property was taken delivery. It was contended that petitioners, who are strangers to the decree, have no locus standi to file the petitions. It was also contended that second respondent judgment debtor had filed a petition under Rule 90 of Order XX1 of C.R.P.Nos.133 of 2006 & connected cases 5 Code of Civil Procedure to set aside the sale which was later dismissed and hence petitioners being his transferees are not entitled to file the petitions to set aside the sale under section 47. It was also contended that first respondent purchased the property in court auction after getting leave from the court to bid and purchase and if at all there is any irregularity in conducting the sale, remedy is only to file a petition to set aside the sale as provided under the provisions of Order XX1 and no petition under section 47 will lie. 4. Second respondent contended that there were two attachments over the mortgaged property and second respondent got the attachment released and paid the entire decree debt to first respondent decree holder who assured that execution proceedings would be dropped and therefore second respondent did not follow up the case but the decree holder played fraud on him. It is admitted by him that he had assigned portions of the C.R.P.Nos.133 of 2006 & connected cases 6 mortgaged property in favour of the respective petitioners subsequent to the decree. 5. Third respondent contended that the property was taken delivery on 19.12.2001 by the first respondent decree holder auction purchaser and thereafter 22.670 cents out of that property was purchased by him for a consideration of Rs.4.5 lakhs and he has been in possession of the property and he mortgaged that property by depositing the title deed to H.S.B.C Bank and as petitioners are not parties to the suit or the execution proceedings or representatives in interest of the party to the decree or execution petition, they have no right to file the petitions. 6. Learned Sub Judge tried all the petitions together and on the evidence of Pws.1 and 2, DW1, Exts.A1 to A19 and Exts.B1 to B10, dismissed all the petitions as per the impugned common order dated 6.2.2006 which is challenged in these revision petitions. 7. Learned counsel appearing for petitioners C.R.P.Nos.133 of 2006 & connected cases 7 and learned counsel appearing for first respondent decree holder and third respondent were heard. 8. The argument of the learned counsel appearing for petitioners is that provisions of Rule 72A of Order XX1 are mandatory and violation of the mandatory provisions will make the sale void and though first respondent was granted leave to bid, court did not fix reserve price as provided under sub rule (2) of Rule 72A and for that sole reason the sale is void. Learned counsel relied on the decision of this court in Mrs.Achamma Cyriac v. K.F.C. & Others (1996(1) K.L.J.755), Gopaldas Mohata v. Fulchand (1997(1) KLT SN (Case No.40), Anto Nitto v. The South Indian Bank Ltd (ILR 1998 (1) Kerala 495), Nedungadi Bank Ltd. v. Ezhimala Agrl.Products (2003(3) KLT 1011), Manilal Mohanlal Shah v. Sardar Sayed Ahmed Sayed Mahmad (A.I.R.1954 S.C.349), Padmaja v. Sajeev (2006(1) KLT 265), D.S.Chohan v. State Bank of Patiala (1997) 10 SCC 65) and argued that though the Division Bench in C.R.P.Nos.133 of 2006 & connected cases 8 Antony v. Catholic Syrian Bank (1994(2) KLT 341) held that provisions of Rule 72A can be waived the subsequent decision in Anto Nitto's case (supra) did not agree with the view and held that right cannot be waived and that was again followed by subsequent Division Bench in Nedungadi Bank Ltd v. Ezhimala Agrl.Product (2003(3) KLT 1011) and therefore it is to be found that the court auction sale conducted in violation of the mandatory provisions of sub rule (2) of Rule 72A of Order XX1 is null and void. Learned counsel relying on the dictum in Ramanna v. Nallaparaju (A.I.R. 1956 SC 87) argued that when the court sale is void there is no necessity to file a petition under Rule 90 of Order XX1 and fact that the court auction sale is null and void can be raised in a petition filed under section 47 of the Code. Learned counsel also argued that though petitioners are transferees of the judgment debtor subsequent to the date of the decree, nevertheless they are representatives of the second respondent and in between the judgment C.R.P.Nos.133 of 2006 & connected cases 9 debtor and petitioners the transfer is valid and therefore being representatives of judgment debtor petitioners are entitled to file petitions under section 47 of the Code of Civil Procedure and learned Sub Judge was not justified in dismissing the petitions as not maintainable. 9. Learned counsel appearing for first respondent argued that second respondent judgment debtor himself filed a petition to set aside the sale under Rule 90 of Order XX1 and it was dismissed and transferees from the judgment debtor are not entitled to file a petition under section 47 later. It was also argued that they have no locus standi to file petition as they are claiming right subsequent to the date of the decree. Learned counsel also argued that even if there is violation of the provisions of sub rule (2) of Rule 72A of Order XX1, remedy is only as provided under sub rule (3) of Rule 72A and without filing a petition to set aside the sale as provided under sub rule (3) of Rule 72A of Order XX1 within the C.R.P.Nos.133 of 2006 & connected cases 10 period of limitation sale cannot be set aside by filing petition under section 47 of Code of Civil Procedure. The learned counsel further argued that the very fact that sub rule (3) of Section 72A provides for setting aside the sale for violation of the provisions of sub rule (2) establish that a sale conducted without fixing the reserve price is neither null nor void but is valid unless set aside as provided under sub Rule (3) of Rule 72A. The argument is that the non fixation of the reserve price may entitle judgment debtor to file an application under sub rule (3) of Rule 72A to set aside the sale or a petition under Rule 90 of Order XX1 to set aside the sale on material irregularity in conducting the sale and no petition under section 47 of Code of Civil Procedure will lie on the basis that such a sale is void. Relying on the Full Bench decision of this Court in Govinda Menon v. Varkey (1970 K.L.T. 440) it was argued that violation of Rule 72 of Order XX1 an identical provision was held to be only an C.R.P.Nos.133 of 2006 & connected cases 11 irregularity and in such a case sale is to be set aside under sub rule (3) of Rule 72 and the same principle apply to any violation of the provisions of Rule 72A also and therefore courts below rightly dismissed the petitions. 10. Learned counsel appearing for third respondent relying on the Full Bench decision of this Court in Chacko Pyli v. Iype Varghese (1955 K.L.T.739)argued that when petitioners are claiming right under a transfer from the judgment debtor subsequent to the date of the decree, as provided under section 52 of Transfer of Property Act petitioners are not entitled to claim any right and they cannot be the legal representatives of the judgment debtor and therefore they have no locus standi to file an application under section 47 of Code of Civil Procedure and as rightly found by courts below petitions are not maintainable. Learned counsel supporting the argument of the learned counsel appearing for first respondent argued that when the judgment debtor availed of the C.R.P.Nos.133 of 2006 & connected cases 12 remedy provided under Rule 90 of Order XX1 though unsuccessfully, transferees from the judgment debtor are not entitled to challenge the sale on the ground of violation of the provisions of Rule 72A in conducting the sale and at best it could only be a ground to set aside the sale either under sub rule (3) of Rule 72A of Order XX1 or Rule 90 of Order XX1 and petitioners are not entitled to seek the remedy provided under section 47 of Code of Civil Procedure. It was argued that when judgment debtor could not have filed petitions to set aside the sale after a period of sixty days from the date of sale the period of limitation cannot be avoided by the circuitous method of filing petitions under section 47 of the Code and hence revision petitions are only to be dismissed. 11. Petitioners are the transferees of portions of the decree schedule property subsequent to the date of the decree. Decree is a mortgage decree. First respondent is the decree holder and second respondent the judgment debtor mortgagor. C.R.P.Nos.133 of 2006 & connected cases 13 Though learned counsel appearing for first respondent relying on the decree argued that it is not a mortgaged decree, I cannot agree. Suit was for the mortgage money instituted by the mortgagee by sale of the mortgaged property. The decree provide for sale of the mortgaged property for realisation of the mortgage money. Though the wording in the decree is defective, still it is a mortgage decree. First respondent mortgagee obtained the decree against second respondent on 11.12.1987. But petitioners purchased the rights of the judgment debtor over portions of the property only on 14.3.1996. Section 47 of Code of Civil Procedure (hereinafter referred to as the Code) provides that all questions arising between the parties to the suit, in which the decree was passed, or their representatives and relating to the execution, discharge or satisfaction of the decree, shall be determined by the court executing the decree and not by a separate suit. Sub section (3) provides that where a question arises as to C.R.P.Nos.133 of 2006 & connected cases 14 whether any person is or is not the represenative of a party, such question shall, for the purposes of this section be determined by the Court. The argument of learned counsel appearing for respondents is that being a transferee subsequent to the date of the decree, petitioners cannot be a representatives of the judgment debtor and as they are not parties to the suit in which the decree was passed, they have no locus standi to file the petitions. Though reliance was placed on the Full Bench decision of this Court in Chacko Pyli (Supra)what was considered therein is only the question whether a transferee of a judgment debtor is a legal representative of the judgment debtor as defined under sub section (11) of Section 2 of the Code. Under sub section (11) of Section 2 “legal representative” is defined as means a person who in law represents the estate of a deceased person, and includes any person who intermeddles with the estate of the deceased and where a party sues or is sued in a representative C.R.P.Nos.133 of 2006 & connected cases 15 character, the person on whom the estate devolves on the death of the party so suing or sued. Section 47 enables not only the judgment debtor or a legal representatives of a judgment debtor but any of his representatives, to approach the court to determine any question relating to the execution, discharge or satisfaction of the decree. Though courts below finding that transfer in favour of petitioners were subsequent to the date of the decree held that transfer is hit by the provisions of Section 52 of Transfer of Property Act, as rightly pointed out by the learned counsel appearing for petitioners, even a transfer pendente lite is good as between the parties thereto. The only limitation is that transfer of his rights will be subject to the decree and execution thereof in the litigation pending which the transfer is made. Between the transferor and the transferee, the transfer is valid and binding. The only drawback is that the transferee is bound by the decree and plaintiff or the decree holder C.R.P.Nos.133 of 2006 & connected cases 16 can ignore the transfer even if he has notice of the transfer and proceed with the suit with the original party on record and the transferee would be bound by the ultimate result of the litigation. The legal position is thus well settled. It cannot be disputed that petitioners who are the transferees from the judgment debtor subsequent to the date of the decree, are nevertheless representatives of the judgment debtor in respect of portions of the property transferred in their favour. To that extent, they could definitely claim the rights of the judgment debtor. They are representatives of the judgment debtor as provided under section 47 eventhough the transfer was subsequent to the date of the decree and they were not parties to the suit or the decree. The resultant position is that eventhough petitioners are transferees of portions of the decree schedule property, subsequent to the date of the decree, as the transfer is valid and binding in between the judgment debtor transferor and his transferees, C.R.P.Nos.133 of 2006 & connected cases 17 petitioners are representatives of the judgment debtor to the extent of the property transferred in their favour and the petitions filed by them under section 47 of the Code is maintainable. 12. Pursuant to the mortgage decree and in execution of the decree, the mortgaged property were proclaimed and sold in court auction sale on 27.11.1999. It was purchased by first respondent decree holder after obtaining permission from the court as provided under Rule 72A of Order XX1 of the Code for a sum of Rs.1,91,443/-. As stated earlier, the decree is for realisation of Rs.76,000/- with interest at 12% per annum from 31.3.1982 by sale of the mortgaged property. Permission of the court was sought and granted as per order in E.A.909/1999. Ext.A4 is the certified photocopy of the said petition with the orders of the court which establishes that the petition was filed seeking permission to bid and purchase the property on 27.9.1999. In fact permission was also granted on the same day. C.R.P.Nos.133 of 2006 & connected cases 18 Neither petition nor the affidavit filed in support of the petition seeking permission to bid and purchase refers about the reserve price. The order only shows that first respondent was permitted to bid and purchase. No reserve price as provided under sub rule (2) of Rule 72A of Order XX1 of the Code was fixed. It is for the failure to seek fixation of the reserve price and also failure of the court to fix reserve price while granting permission as provided under sub rule (2), the sale is challenged as null and void. Before considering the question whether the said non- compliance would make the sale null and void another contention raised by respondents, that petitions under section 47 by the transferees of the judgment debtor are not maintainable as previous petition filed by the judgment debtor himself to set aside the sale under Rule 90 of Order XX1 of the Code was dismissed is to be decided. It is not disputed that the judgment debtor had in fact filed a petition under Rule 90 C.R.P.Nos.133 of 2006 & connected cases 19 of Order XX1 of the Code to set aside the sale contending that there was material irregularity in conducting the sale. That petition was later dismissed for non-prosecution. 13. When a judgment debtor makes an application under Rule 90 of Order XX1 to set aside the sale, by that action he accepts the factum of the sale and challenges the sale on the ground that the sale is vitiated by material irregularity or fraud in publishing or conducting the sale. The Full Bench of Madras High Court in A.P.V.Rajendran v. S.A.Sundararajan (AIR 1980 Madras 123) analysed the distinction between a petition under section 47 and a petition under Rule 90 of Order XX1 as follows:- “Though Section 47 is very wide in its terms and in one sense all questions relating to the execution, discharge or satisfaction of the decree that arise C.R.P.Nos.133 of 2006 & connected cases 20 between the decree holder and the judgment-debtor are within the purview of that section, nevertheless that section ought to be so interpreted as not to render redundant the other provisions contained in the Code, particularly Rules 89, 90 and 91 of Order 21, and as between the judgment-debtor and the decree holder only such applications to set aside an auction purchase made by the decree holder as do not come within the purview of Rules 89,90 and 91 of Order 21 are within the scope of Section 47 of the Code. Notwithstanding C.R.P.Nos.133 of 2006 & connected cases 21 the wording of Section 47 which is enough to cover all applications to set aside sales on the ground either of illegality or of irregularity, its scope has naturally to be restricted so as to give due effect to Order 21, Rule 90 C.P.C. Thus, if the sale is sought to be set aside on the ground of material irregularity in publishing and conducting the sale within the meaning of Order 21, Rule 90, then Section 47 cannot come into play at all, and the sale could be set aside only by invoking Order 21, Rule 90. But if C.R.P.Nos.133 of 2006 & connected cases 22 the sale is claimed to be void for certain illegality or voidable on ground of material irregularities not referred to in O.21, Rule 90 then Section 47 has to be invoked and in such cases Order 21, Rule 90 C.P.C cannot come into play at all.” A learned single Judge (as His Lordship then was) in Rajarethna Naikkan v. Parameswara Kurup (1997 (1)KLT 777)considered this aspect and held:- “The Supreme Court while affirming that decision referred to the decision in Dhirendranath v. Sudhir Chandra (AIR 1964 SC 1300) and pointed out that any objection to the drawing up C.R.P.Nos.133 of 2006 & connected cases 23 of a sale proclamation would be within the purview of O.XX1 R.90 of the Code and not outside it, and that in that particular case, the grounds that were taken fell within the purview of O.XX1 R.90 of the Code and hence not within the purview of S.47 of the Code of Civil Procedure. This decision thus indicates that though the object of both the proceedings may be to avoid the sale held in execution of a decree, a proceeding initiated under O.XX1 R.90 of the Code of Civil Procedure cannot be said to be a proceeding for the same relief as the one that may C.R.P.Nos.133 of 2006 & connected cases 24 be sought for in the application under S.47 of the Code. In Saheed v. Aluminium Fabricating C. (1985 KLT 991) a Division Bench of this Court has also indicated this distinction. The Division Bench has held. “It is the material irregularity or fraud which affects the method and manner of publishing the proclamation and the actual conduct of the sale that clothes the court with a jurisdiction