IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMAN & THE HONOURABLE MR. JUSTICE P.BHAVADASAN THURSDAY, THE 27TH AUGUST 2009 / 5TH BHADRA 1931 Ex.FA.No. 103 of 2009 ----------------------- AGAINST THE ORDER DATED 14/07/2009 IN EA.776/96 IN EP.480/03 IN OS.320/1998 of II ADDL.SUB COURT,THRISSUR .................... APPELLANT/CLAIM PETITIONER ---------------------------------------------- SREESAILAM CHITTIES & LOANS PVT.LTD., KOKKALA, THRISSUR, REP. BY ITS MANAGING DIRECTOR, P.S.RAJAN, S/O.PUTHENVEETTIL SUBRAMONIAN, VIVATTOM VILLAGE, RAMAVARMAPURAM DESOM, THRISSUR TALUK. BY ADV. SRI.P.SANTHOSH (PODUVAL) SMT.R.RAJITHA RESPONDENT(S): --------------- 1. V.A.POULOSE, S/O.VELLOPPILLIL ABRAHAM, PARAVATTANI DESOM, OLLUKKARA VILLAGE, KOZHAKKUMPATTU KARA, THRISSUR. 2. THE FEDERAL BANK LTD., NELLIKKUNNU BRANCH, THRISSUR. 3. JACOB MATHEW, S/O.MATHEW, KANDANKERY HOUSE, THRISSUR. 4. OFFICIAL RECEIVER, THRISSUR. 5. MARIA FINANCIERS, THRISSUR REP.BY ITS MANAGING PARTNER, JOSE K FRANCIS AVENUE REOAD, CHIYYARAM VILLAGE THRISSUR TALUK (ADDL.R5 IMPLEADED AS PER ORDER DATED 27.8.09 IN IA 2494/09) ADV. SRI.T.K.ABRAHAM FOR R1 SRI.MOHAN JACOB GEORGE FOR R3 SMT.P.V.PARVATHI FOR R3 SMT.REENA THOMAS FOR R3 SRI.L.RAM MOHAN FOR R3 SRI.JAMES AUGUSTINE FOR R3 SRI.P.K.SAJEEV FOR R5 SRI.K.N.PADMAKUMAR FOR R-4 THIS EXECUTION FIRST APPEAL HAVING COME UP FOR ADMISSION ON 27/08/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: P.R. RAMAN & P. BHAVADASAN, JJ. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Ex.F.A. No. 103 of 2009 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 27th day of August, 2009. JUDGMENT Raman, J, This is an appeal filed by one of the creditors of third respondent at the execution stage. Third respondent herein, against whom there is a mortgage decree obtained by the second respondent Federal Bank. On execution of the decree, property of the third respondent was sold and purchased by the first respondent. Sale certificate was also issued. The appellant herein filed a claim petition under Order 21 Rule 90 of the Code of Civil Procedure. He also filed an application under Order 21 Rule 58. It is found that there is no material irregularity or fraud and dismissed the application filed under Order 21 Rule 90. The application filed under Order 21 Rule 58 was also dismissed finding that he has no claim. Hence this appeal is filed. 2. It is contended that the appellant had filed an Ex.F.A.103/2009. 2 insolvency petition before the Sub Court, Trichur for declaring the third respondent herein as an insolvent, wherein the present debt of the Bank is also included, and according to him the Bank having thus opted to come within the insolvency proceedings for ratable distribution of the assets of the third respondent, the Bank ought to have disclosed the same at the time of sale of the property. First respondent is the auction purchaser. It is also contended that the property was sold at avery low price as a result many of the other creditors are defrauded. The additional fifth respondent, who is another creditor, has offered an amount of Rs.9,00,000/- by way of consideration for the property, which has now been sold in favour of the first respondent for Rs.4,80,000/- and the same is now lying in deposit in the Treasury. It is contended that in such circumstances, if the property is allowed to be purchased by the additional fifth respondent for a total consideration of Rs.9,00,000/-, the balance amount will be available for equitable distribution by the insolvency court among the other unsecured Ex.F.A.103/2009. 3 creditors. 3. We heard the parties at length. The first respondent herein also filed a counter affidavit and a statement of accounts, as per which he has incurred a total amount of Rs.8,04,436/- inclusive of the Advocate fee and miscellaneous expenditure of Rs.30,000/-. He has also claimed 12% interest for the deposited amount from the respective dates on which the amounts have been deposited. Though it has been contended by the appellant and the additional fifth respondent that the first respondent cannot claim, as of right, interest at 12% and also relied on the provisions contained in Order 21 Rule 93. It was rightly pointed out by the first respondent that though there is a discretion in the matter of grant of interest, there is no reason why the first respondent should be denied the interest. As a matter of fact, according to him he is entitled to get compensation, because ultimately he will have to re-convey the property after foregoing the benefits accrued to him. He relied on the decision reported in Hindi Pracharak Prakashan v. M/s. Ex.F.A.103/2009. 4 G.K. Borthers (1990 KHC 1046), wherein in a similar situation it was found that 12% interest would be a just compensation. In the facts and circumstances and after hearing the parties, we find that since there are more number of creditors waiting for ratable distribution of the assets belonging to the judgment debtor, the property should fetch the maximum price, in which case after satisfying the claim of decree holder Bank, whatever balance amount left will be available for ratable distribution. But, in the meantime, since the property has been sold and the amount has been deposited by the first respondent, we asked the learned counsel for the first respondent whether he is interested to retain the property by paying additional amount, which the additional fifth respondent has offered. But counsel submitted that the first respondent is not interested to incur any further amount in this regard and he is satisfied if the amount as per the statement is paid to him. Ex.F.A.103/2009. 5 In the above circumstances, and in the interests of justice, we set aside the sale on condition that an amount of Rs.9,00,000/- shall be deposited by the additional fifth respondent within three weeks from today. Within one week thereafter, the fifth respondent will make necessary arrangements for reconveyance of the property with due intimation to the first respondent or to the counsel, whereupon the first respondent will execute the document and register the same through the Sub Registrar's Office at the expense of the fifth respondent and once such reconveyance is made, the first respondent will be entitled to withdraw an amount of Rs.7,70,500/-. The balance amount will be transferred to the insolvency court for ratable distribution among the other unsecured creditors. The entire amount now in the Treasury deposit along with interest accrued due is permitted to be withdrawn by the decree holder Bank towards the satisfaction of the decree. In case there is any failure on the part of the first respondent to execute the sale deed as aforesaid, it will be open to Ex.F.A.103/2009. 6 the fifth respondent to get the sale deed executed through court. It is open to the first respondent to produce the photocopy of the document reconveying the property, to enable him to withdraw the amount. The appeal is thus allowed as above. In case the additional fifth respondent fails to make the deposit as aforesaid within a period of three weeks from today, the appellant will lose the benefit of this judgment. However, the decree holder Bank will be entitled to withdraw the amount deposited in the Treasury as ordered in full and final satisfaction of the decree Sd/-P.R. Raman, Judge Sd/-P. Bhavadasan, Judge True copy PS TO JUDGE sb.