IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.SASIDHARAN NAMBIAR THURSDAY, THE 5TH MARCH 2009 / 14TH PHALGUNA 1930 CMA.No. 64 of 2001() -------------------- AS.358/2000 of DISTRICT COURT, THRISSUR OS.159/1996 of PRL.SUB COURT,THRISSUR .................... APPELLANT/RESPONDENT/DEFENDANT: -------------- GEORGE, S/O. KUNNATHUPARAMBIL THOMAS, OLLUR DESOM AND VILLAGE, THRISSUR, TALUK, REPRESENTED BY POWER-OF-ATTORNEY HOLDER, JAMES, S/O. LONAPPAN RESIDING AT NILAYATHINGAL HOUSE, BATHEL LANE, MISSION QUARTERS, THRISSUR-1. BY ADV. MR. S.V.BALAKRISHNA IYER, SENIOR ADVOCATE MR. P.B.KRISHNAN RESPONDENT/APPELLANT/PLAINTIFF: --------------- RAMACHANDRAN, S/O. CHALIPPAT RAMANUNNI, POOTHOLE DESOM, ARANATTUKARA VILLAGE, THRISSUR TALUK. BY ADV. MR. G.SREEKUMAR (CHELUR) MR. S.VENKETASUBRAMANIA IYER, SENIOR ADVOCATE THIS CIVIL MISC. APPEAL HAVING BEEN FINALLY HEARD ON 05/03/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: CMA.64/2001 ORDER ON C.M.P.1054 OF 2001 IN C.M.A. 64 OF 2001 DISMISSED. SD/- M. SASIDHARAN NAMBIAR, JUDGE 5.3.2009 OKB - TRUE COPY - P.A. TO JUDGE M. SASIDHARAN NAMBIAR, J. ------------------------------------------------- C.M.A.No.64 OF 2001 -------------------------------------------------- Dated this the 5th day of March, 2009 J U D G M E N T In view of the provisions of Rules 97, 98, 100 and 101 of Order XXI of Code of Civil Procedure, is a third party entitled to file an independent suit challenging execution of the decree? Is such a suit maintainable, when he had filed a petition under Rule 97 of Order XXI of Code of Civil Procedure and got it dismissed as not pressed? These are the substantial questions to be decided in the appeal. 2. Respondent instituted O.S.159 of 1996 before Sub Court, Thrissur seeking a decree for declaration that the decree in O.S.179 of 1982 or the execution proceedings or the auction sale conducted thereon are not valid and binding on the plaint schedule property or the respondent and a consequential relief of permanent prohibitory injunction restraining appellant from taking delivery of the property pursuant to the sale certificate issued in execution of the decree. Learned Munsiff, upholding the defence taken by the appellant that the suit is not CMA.64/2001 2 maintainable, dismissed the suit. Respondent challenged the judgment before District Court, Thrissur in A.S.358 of 2000. Learned District Judge found that a third party to a decree has two remedies available, one filing a petition under Rule 97 or Order XXI of Code of Civil Procedure and the other, an independent suit and therefore finding of the learned Sub Judge that the suit is not maintainable, is not correct. The judgment of the trial court was set aside and suit was remanded. That judgment is challenged in this appeal. Though at the time when the appeal was admitted, no substantial question of law was formulated, subsequent to the decision of the Apex Court holding that an appeal against an order of remand is to be treated as a second appeal, I.A.3150 of 2005 was filed for framing substantial question of law. The following substantial questions of law are therefore raised. (1) Is it not for a third party to a decree resisting execution, to approach the executing Court under Rule 97 of Order XXI of Code of Civil Procedure and is he entitled to file a separate suit ? (2) In the light of Rule 97 to 103 of Order XXI of CMA.64/2001 3 Code of Civil Procedure, is the First Appellate Court correct in remanding the suit holding that the suit is maintainable ? 3. Facts are not disputed. The plaint schedule property originally belonged to one Rajan. Rajan executed mortgage deed 4242 of 1976 in favour of the appellant in 1976. While the mortgage was subsisting, one Karunakaran Nair instituted O.S.795 of 1977 before Sub Court, Thrissur for realisation of money due from Rajan. That suit was decreed on 29.10.1977 for Rs.3,558/- and its interest. E.P.596 of 1978 was filed for execution of the decree. In that execution petition, the plaint schedule property was put up for sale and was sold on 6.11.1978. Haji A.B. Kutti Sahib purchased the property in court auction sale for Rs.4,625/- on 6.11.1978. That sale was confirmed on 24.10.1988. For realisation of the amount due under the mortgage 4242 of 1976, appellant instituted O.S.179 of 1982 before Sub Court, Thrissur on 7.4.1982. Karunakaran Nair, the decree holder in O.S.795 of 1977, was the third defendant in that suit. Under Ext.A10 decree, the suit was decreed on 22.8.1986. E.P.22 of 1988 was filed on 25.1.1988 in CMA.64/2001 4 execution of that decree. In that execution petition the plaint schedule property was sold and purchased by the appellant/decree holder/auction purchaser. That sale was confirmed on 1.8.1989. When delivery was ordered, one Santhosh and Davis claiming to be alienees from judgment debtor Rajan filed E.A.321 of 1991 on 12.3.1991. That was later dismissed as not pressed on 13.6.1996. After the confirmation of the court auction sale, the legal heirs of the auction purchaser Kutti Sahib obtained delivery of the property under Ext.A6 delivery warrant and Ext.A7 delivery receipt on 6.11.1995. Respondent purchased the property from the legal heirs of Kutti Sahib under Ext.A1 and A2 sale deeds dated 14.11.1995 and 12.6.1995. Subsequently Ext.A3 correction deed was got executed on 2.12.1995 in view of the mistake in the name of the father of the executants. After Exts.A1 to A3, respondent instituted the suit O.S.159 of 1996 before Sub Court, Trichur on 2.2.1996. The respondent thereafter filed E.A.631 of 1996 on 25.6.1996 under Rule 97, 98 and 100 of Order XXI of Code of Civil Procedure, praying for a declaration of his rights obtained under Exts.A6, A7 and Exts.A1 to A3 sale deeds. Later Ext.B2, CMA.64/2001 5 the E.A.631 of 1996 was not pressed by endorsement in the execution petition and was dismissed on 28.6.1996. Ext.B3, E.A.632 of 1996, was filed for stay of execution proceedings till the disposal of E.A.631 of 1996. After the dismissal of the applications, delivery was ordered. The respondent, later filed Ext.A12 petition under section 83 of the Transfer of Property Act tendering the mortgage money, on 26.5.1997. It was later got dismissed by making an endorsement that the petition is not pressed as the appellant is not willing to accept the mortgage money. In view of the orders passed in the suit and later in the appeal, appellant could not take delivery of the property. 4. The case of the respondent is that even though a mortgage decree was obtained by the appellant, in view of the Court auction sale on 6.11.1978, which was confirmed on 24.10.1988, when E.P.22 of 1988 was filed by the appellant, the judgment debtor Rajan had no subsisting right in the property and the property was sold in E.P.22 of 1988 without giving notice to the auction purchaser Kutty Sahib, who obtained the right of equity of redemption in the Court auction sale in E.P.596 of 1978 and therefore the auction sale in favour of the appellant CMA.64/2001 6 as also the execution proceedings are not binding on the respondent being the successor in interest of Kutty Sahib and therefore he cannot be dispossessed in execution of the decree in O.S.179 of 1982. It is on that basis the suit was instituted. 5. Learned counsel appearing for the appellant pointed out that when the mortgage in favour of the appellant was in 1976, and mortgage amount was Rs.20,000/- Karunakaran Nair, who was the third defendant in O.S.179 of 1982, instituted O.S.795 of 1977 for realisation of Rs.3,558/- due from Rajan on 27.7.1977 and a decree was obtained on 29.10.1977 and the property was sold and purchased in Court auction sale on 6.11.1978 and the fact that the property was sold in execution of a decree for Rs.3,558/- and interest when the property was mortgaged in 1976 for Rs.20,000/- establish that it was a collusive suit and decree to defraud the rights of the mortgagee. Learned counsel also pointed out that in view of the provisions of Rule 101 of Order XXI of Code of Civil Procedure, right of a third party to approach executing Court before his dispossession was declared by the Apex Court, respondent filed E.A.631 of 1996 for a declaration that the decree in O.S.179 of 1982 is not binding CMA.64/2001 7 on the decree schedule property and he cannot be dispossessed in execution of the said decree and though it was not pressed and dismissed on 28.6.1996, thereafter learned District Judge should not have found that respondent has two alternative remedies and therefore the suit is maintainable. Learned counsel pointed out that First Appellate Court has omitted to take note of the fact that Ext.B2 petition was filed under Rule 97 of Order XXI of Code of Civil Procedure and was dismissed and wrongly held in paragraph 10 of the judgment that “if the objector choses to file a petition under Rule 98 of Order XXI, thereafter he cannot file a fresh suit” and so the suit is maintainable it was without taking note of the dismissal of the petition filed under Rule 97 of Order XXI of Code of Civil Procedure. Learned counsel also argued that in view of the declaration of the Apex Court, the earlier view taken by this Court and the other High Courts that a third party has got two remedies which includes an independent suit is not the correct law and when a third party is entitled to file a petition under Rule 97 of Order XXI of Code of Civil Procedure before dispossession, where the entire rights is to be settled and Rule CMA.64/2001 8 101 to 103 of Order XXI of Code of Civil Procedure is a complete code in itself and it is to avoid multiplicity of proceedings and an order passed under Rule 98 is made appealable and even a second appeal will lie and so an independent suit is not maintainable and the finding of the learned District Judge is not sustainable. Reliance was placed on the decisions of the Apex Court in Bhanwar Lal Vs. Satyanarain and another(AIR 1995 (1) SCC 6), Babulal Vs. Raj Kumar and others(AIR 1996 SC 2050), Brahmdeo Chaudhary Vs. Rishikesh Prasad Jaiswal and another (1997 (3) SCC 694 and AIR 1997 SC 856), Shreenath and another Vs. Rajesh and others (AIR 1988 SC 1827), Ghasi Ram and others Vs. Chaitram Saini and others ((1998) 6 SCC 200), Tanzeem- E-Sufia Vs. Bibi Haliman and others (2002 (7) SCC 50), Prasantha Banerji Vs. Pushpa Ashoke Chandani and others ((2002) 9 SCC 554) and Ashan Devi and another Vs. Phulwasi Devi and others (AIR 2004 SC 511). Relying on the Single Bench decision of this Court in Arjunan Achary Vs. Thankamma (1988 (2) KLT 857) and Division Bench decision in Muhammed Master Vs. Abu Haji (1981 KLT 578) it was CMA.64/2001 9 argued that when Ext.B2 petition was dismissed though as not pressed, it is an order passed under Rule 98 of Order XXI of Code of Civil Procedure, which is appealable and therefore remedy of the respondent is only to challenge that order by filing an appeal and is not entitled to seek the relief in an independent suit. The learned counsel argued that the effect of dismissal of Ext.B2 petition is the same as dismissal of the application on merits and at best it could be an order on consent which would be binding on the respondent like any order on merit and therefore an independent suit is not maintainable. 6. Learned counsel appearing for respondent argued that appellant did not produce the original mortgage deed and Ext.A10 decree shows that suit was based on a hypothecation bond and therefore appellant cannot claim any special right based on the mortgage and O.S.795 of 1977 was instituted earlier to O.S.179 of 1982 and the property of the judgment debtor was sold in court auction in O.S.795 of 1977 and therefore appellant could claim right only subject to the right of the auction purchaser in E.P.596 of 1978 filed in execution of the decree in O.S.795 of 1977 and the right of the auction purchaser CMA.64/2001 10 or the assignees from the auction purchaser is not affected by the decree and court auction sale in O.S.179 of 1982 and therefore in execution of the decree, appellant is not entitled to dispossess the respondent. Learned counsel also argued that though Supreme Court has laid down the law that in anticipation of dispossession a third party to the decree is entitled to file an application under Rule 97 of Order XXI of Code of Civil Procedure and in such an application the entire rights is to be decided as in a suit and no separate suit would thereafter be maintainable, the question whether an independent suit will lie or not was not specifically considered or held not maintainable and therefore an independent suit is maintainable. Learned counsel also argued that if it is to be found that a third party is not entitled to file a separate independent suit without filing a petition under Rule 99 of Order XXI of Code of Civil Procedure after dispossession, it will lead to disastrous consequence and when he is entitled to file a suit for recovery of possession based on his title within a period of twelve years from the date of dispossession, and the period of limitation provided for a petition under Rule 99 of Order XXI is only 30 days and therefore it CMA.64/2001 11 cannot be said that an independent suit will not lie. Relying on the decision of this Court in Prabhakaran Vs. Kuttian Prakashan (1985 KLT 225), Varadaraja Iyer Vs. Kunhippa & Co. (1987 (1) KLT 570), Devassia Joseph Vs. Vysya Bank Ltd. (1990(2) KLT 339) and that of the Karnataka High Court in V.K. Rama Setty Vs. A. Gopinath (AIR 1998 Karnataka 186) and High Court of Andhra Pradesh in Pavan Kumar and another Vs. Gopalakrishna and another (AIR 1998 Andhra Pradesh 247), learned counsel argued that a separate suit will lie and Rule 97 or 99 of Order XXI is only enabling provisions and are not mandatory and therefore an independent suit will lie. Learned counsel, relying on the decision in Soman Nair Vs. State of Kerala (2008(2) KLT 103), Kandapazha Nadar and others Vs. Chitraganiammal and others ((2007) 7 SCC 65), Vasu Vs. Varghese (2007 (4) KLT 1013) and M/s. Gold Farm Foods Pvt. Ltd. Vs. The Regional Executive, Kerala Fishermen's Welfare Fund Board and another (ILR 1997 (2)Kerala 211) argued that there was no adjudication of the petition filed under Rule 97 of Order XXI of Code of Civil Procedure as it was dismissed as not pressed and dismissal of CMA.64/2001 12 the petition would not even amount to abandoning the claim and even if it amounts to abandoning the claim, it will not affect a suit which was pending when the petition under Rule 97 of Order XXI of Code of Civil Procedure was filed and later not pressed and therefore the suit is maintainable. The learned counsel argued that the remedy of a third party to file a suit is not taken away by the provisions of Rules 101 to 103 of Order XXI of Code of Civil Procedure and it is an independent right and as rightly found by the learned District Judge it is the option of the third party to choose the Forum and when he had chosen the Civil Court earlier to the filing of a petition under Rule 97 of Order XXI of the Code, the suit is maintainable and therefore the appeal is only to be dismissed. 7. Though the mortgage deed was not produced and for its non production learned counsel appearing for respondent argued that there is no evidence to prove that there was a mortgage executed by the original owner Rajan in favour of the appellant, Ext.A12 petition filed by the respondent himself before Sub Court, Thrissur under section 83 of the Transfer of Property Act itself is sufficient to reject the said submission. In CMA.64/2001 13 paragraph 4 of Ext.A12, respondent unambiguously stated that the plaint schedule property had been mortgaged for a sum of Rs.20,000/- by one Rajan, who was the judgment debtor in O.S.795 of 1977 in favour of the appellant and through one James respondent had approached the appellant to pay the entire mortgage money. In paragraph 6 also it is reiterated that the registered mortgage deed 4242 of 1976 in favour of the appellant was executed by Rajan on 11.12.1976. Ext.B2 petition filed before the executing Court under Rule 97 of Order XXI of Code of Civil Procedure by the appellant also contain specific admission about the mortgage. Therefore it is futile for the respondent to contend that there was no mortgage. Ext.A10, the decree passed by the learned Sub Judge in O.S.179 of 1982 also establish that it was a decree for sale of the charged property, the plaint schedule property. Therefore it is clear that O.S.795 of 1977 was instituted by Karunakaran Nair against the mortgagor Rajan on 27.7.1977 for realisation of the money advanced, when a registered mortgage 4242 of 1976 executed by Rajan in favour of the appellant was subsisting. O.S.795 of 1977 instituted by Karunakaran Nair on 27.7.1977 for realisation of CMA.64/2001 14 Rs.3,558/- with interest due from Rajan, was decreed on 29.10.1977 and E.P.596 of 1978 was filed in execution of the decree by Karunakaran Nair and the property was sold in court auction on 6.11.1978 and the sale in favour of Haji Kutti Sahib was confirmed on 24.10.1998 and under Exts.A6 and A7 delivery was taken by the legal heirs of the auction purchaser on 6.11.1995. O.S.179 of 1982 was instituted by the appellant on 7.4.1982 wherein the third defendant was the decree holder in O.S.795 of 1977. The respondent purchased the property from the legal heirs of the auction purchaser only on 14.11.1995 under Ext.A1 and Ext.A2 sale deeds. E.P.22 of 1988 was filed for execution of Ext.A10 decree on 25.1.1988. The charged property was sold in court auction sale on 27.5.1989. That sale was confirmed on 1.8.1989. E.A.1129 of 1989 was filed for delivery of the property. O.S. 159 of 1996 was filed thereafter on 2.2.1996. E.A.631 of 1996 (Ext.B2) was filed under Rule 97 of Order XXI of Code of Civil Procedure on 25.6.1996. As seen from the endorsement in Ext.B2 it was dismissed as not pressed on 28.6.1996. True, before filing E.A.631 of 1996, O.S.159 of 1996 (the present suit) was filed. There is no dispute on these CMA.64/2001 15 factual matrix. 8. The question is whether an independent suit will lie at the instance of a third party challenging the validity of the execution sale or resisting delivery in execution of the decree and whether it will make any difference if the suit was pending when a petition was filed under Rule 97 of Order XXI of Code of Civil Procedure or when it was dismissed. 9. Though learned counsel appearing for the respondent relied on various decisions of this Court and that of the High Courts of Karnataka and Andhra Pradesh to support the view of the learned District Judge that a third party has two remedies and one among them is an independent suit, those decisions are based on legal position prior to the declaration of the law by the Apex Court in Bhanwar Lal's case (supra). While appreciating the said decisions, it is to be borne in mind that those decisions were rendered at a time when the prevailing view was that a third party to a decree cannot file a petition under Rule 97 of Order XXI of Code of Civil Procedure in anticipation of his dispossession and his remedy is only to apply under Rule 99 of Order XXI of Code of Civil Procedure subsequent to the CMA.64/2001 16 dispossession. In the light of that position, it was found that an independent suit will lie before actual dispossession. The effect of provisions of Rule 101 to 103 of Order XXI of Code of Civil Procedure, in view of the declaration of law by the Supreme Court that those provisions are a separate code by themselves which provides for a complete adjudication of all the rights of the decree holder/judgment debtor and third parties, which is amenable for an appeal and second appeal was not considered while holding that an independent suit will lie. But subsequent to the declaration of law by the Apex Court the said decisions cannot have any application. 10. Supreme Court in Bhanwar Lal's case (supra) considering the right of a stranger to approach the executing court before dispossession under Rule 97 of Order XXI held: “ 5). The procedure has been provided in Rules 98 to 103. We are not, at present, concerned with the question relating to the procedure to be followed and question to be determined under Order 21, Rules 98 to 102. A reading of Order 21, Rule 97 CPC CMA.64/2001 17 clearly envisages that “any person” even including the judgment-debtor irrespective whether he claims derivative title from the judgment-debtor or set up his own right, title or interest dehors the judgment-debtor and he resists execution of a decree, then the court in addition to the power under Rule 35(3) has been empowered to conduct an enquiry whether the obstruction by that person in obtaining possession of immovable property was legal or not. The decree-holder gets a right under Rule 97 to make an application against third parties to have his obstruction removed and an enquiry thereon could be done. Each occasion of obstruction or resistance furnishes a cause of action to the decree- holder to make an application for removal of the obstruction or resistance by such person.” CMA.64/2001 18 The position is reiterated in Nooruddin Vs. Dr. K.L. Anand ((1995)1 SCC 242) “8). Thus, the scheme of the Code clearly adumbrates that when an application has been made under Order 21, Rule 97, the court is enjoined to adjudicate upon the right, title and interest claimed in the property arising between the parties to a proceeding or between the decree-holder and the person claiming independent right, title or interst in the immovable property and an order in that behalf be made. The determination shall be conclusive between the parties as if it was a decree subject to right of appeal and not a matter to be agitated by a separate suit. In other words, no other proceedings were allowed to be taken. It has to be remembered that preceding Civil Procedure Code Amendment Act, 1976, right of suit under CMA.64/2001 19 Order 21, Rule 103 of 1908 Code was available which has been now taken away. By necessary implication, the legislature relegated the parties to an adjudication of right, title or interest in the immovable property under execution and finality has been accorded to it. Thus, the scheme of the Code appears to be to put an end to the protraction of the execution and to shorten the litigation between the parties or persons claiming right, title and interest in the immovable property in execution.” It is again reiterated in Brahmdeo Chaudhary Vs. Rishikesh Prasad Jaiswal and another ((1997) 3 SCC 694). “5). The procedure has been provided in Rules 98 to 103. We are not at present, concerned with the question relating to the procedure to be followed and question to be determined under Order 21, Rules 98 to 102. A reading of Order 21, Rule 97 CPC CMA.64/2001 20 clearly envisages that 'any person' even including the judgment-debtor irrespective whether he claims derivative title from the judgment-debtor or sets up his own right, title or interest dehors the judgment-debtor and he resists execution of a decree, then the court in addition to the power under Rule 35(3) has been empowered to conduct an enquiry whether the obstruction by that person in obtaining possession of immovable property was legal or not. The decree-holder gets a right under Rule 97 to make an application against third parties to have his obstruction removed and an enquiry thereon could be done. Each occasion of obstruction or resistance furnishes a cause of action to the