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S. Sivaprakasam v. B.V Muniraj And Others
Factual and Procedural Background
The Catholic Syrian Bank Ltd., as mortgagee, filed OS No. 340 of 1951 against the mortgagor, Manickam Mudaliar, to foreclose a mortgage on the suit property. A preliminary decree was passed on 20-12-1951 and a final decree on 28-08-1952. While execution proceedings were pending, Palaniammal, a simple money creditor, obtained a money decree in OS No. 321 of 1958 against the same mortgagor. In execution of that money decree, the property was sold on 04-09-1963 to Kandaswamy, whose purchase was confirmed and possession delivered.
Kandaswamy later transferred the property to B. V. Muniraj and B. V. Rangaraj (Respondents 1 and 2). Respondents 1 and 2 applied under Order 34 Rule 5 of the Code of Civil Procedure (CPC) to have a final decree passed in the mortgage suit, depositing the requisite amount. The executing court allowed the application. The mortgagor’s auction-purchaser under the mortgage decree (the present appellant) challenged that order, but the Madras High Court (Single Judge) upheld the executing court on 23-09-1975 in CRP No. 4307 of 1984. Pending the revision, Respondents 1 and 2 sold the property to S. Palaniswamy (Respondent 5). The present appeal by special leave questions whether the appellant’s rights as purchaser in the mortgage decree take precedence over those of the purchasers in the money decree.
Legal Issues Presented
- Whether purchasers of the mortgaged property in execution of a simple money decree, having stepped into the shoes of the judgment-debtor, can invoke Order 34 Rule 5 CPC to redeem the mortgage and obtain a final decree in their favour prior to confirmation of a mortgage-decree sale.
- Whether Order 21 Rule 92 CPC and the doctrine of lis pendens (Section 52 of the Transfer of Property Act) limit or defeat the rights conferred by Order 34 Rule 5 CPC in the circumstances of this case.
Arguments of the Parties
Appellant's Arguments
- Under Order 21 Rule 92 CPC, once objections to the mortgage-decree sale are rejected, confirmation of the sale is a ministerial act; therefore, the appellant’s rights as auction-purchaser cannot be displaced by subsequent proceedings.
- The doctrine of lis pendens under Section 52 of the Transfer of Property Act renders transfers pendente lite ineffective against the appellant.
- Procedures under Order 21 CPC govern the situation, and Order 34 Rule 5 CPC cannot be used by purchasers in a money decree to override a prior mortgage-sale purchase.
Respondents' Arguments
This information was not available in the provided opinion.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Court examined Order 34 Rule 5 CPC, emphasizing that before confirmation of a sale under a mortgage decree, a defendant may deposit all amounts due and obtain a final decree directing the mortgagee to release documents, transfer the property, and place the applicant in possession. Because the property had already been sold and confirmed in execution of the simple money decree, the auction-purchasers in that proceeding (Respondents 1 and 2) legally stood in the shoes of the original mortgagor. Consequently, they qualified as “defendants” entitled to move the application under Order 34 Rule 5 CPC and deposit the decretal amount.
The Court rejected the appellant’s reliance on Order 21 Rule 92 CPC, clarifying that Order 34 provides a specialised procedure for mortgage suits, distinct from the general execution framework of Order 21. Likewise, Section 52 of the Transfer of Property Act was held inapplicable because the statutory redemption right under Order 34 Rule 5 operates irrespective of lis pendens. Once Respondents 1 and 2 exercised that right and the executing court accepted their deposit, the appellant’s rights as purchaser in the mortgage decree were “eclipsed,” leaving no basis to interfere with the orders of the courts below.
Holding and Implications
APPEAL DISMISSED.
The Court affirmed that a purchaser of mortgaged property in a simple money-decree sale, upon acquiring the judgment-debtor’s interest, may redeem the mortgage under Order 34 Rule 5 CPC before confirmation of the mortgage-decree sale. The decision reinforces the independence of mortgage-procedure provisions from general execution rules and clarifies that the doctrine of lis pendens does not curtail the statutory right of redemption provided in Order 34. No new precedent was set beyond the immediate clarification of these procedural distinctions.
Order
1. This appeal by special leave arises from the judgment of the learned Single Judge of the Madras High Court, made on 23-9-1975 in CRP No. 4307 of 1984. The facts are a little complicated, but to clear the clogs, they are as under.
2. The Catholic Syrian Bank Ltd. was the mortgagee and Manickam Mudaliar was the mortgagor in respect of the plaint schedule property. To foreclose the mortgage OS No. 340 of 1951 was filed by the Bank. Preliminary decree was passed on 20-12-1951 and final decree came to be passed on 28-8-1952. When objections were raised against the passing of final decree pending those proceedings and later execution thereof, one Palaniammal, a simple money creditor filed OS No. 321 of 1958 against Manickam Mudaliar and obtained a money decree. In execution of the decree, the selfsame property was brought to sale in which one Kandaswamy had purchased the property in a court auction on 4-9-1963. Admittedly, the same case to be confirmed and possession was taken under the said decree. Kandaswamy transferred the property in favour of B.V Muniraj and B.V Rangaraj, Respondents 1 and 2. Subsequently, the proceedings went on between the parties with which we are not concerned. Respondents 1 and 2 filed the application under Order 34, Rule 5 CPC for passing a final decree in terms of sub-rule (1) of Rule 4 of Order 34. That order came to be passed. Orders passed on objections and the orders passed by the executing court under Order 34, Rule 5 were the subject-matter of the revision and were dealt with together. The learned Single Judge has upheld the action of the court below in passing the final decree in favour of the subsequent court-purchasers B.V Muniraj and B.V Rangaraj. Pending revision, they, in turn, sold the property to one S. Palaniswamy, who is the fifth respondent herein. Thus, the question arises whether the appellant-purchaser of the property in the mortgage decree has a precedence over the purchaser in money decree in getting the final decree passed in the mortgage suit.
3. Order 34, Rule 5 CPC provides as under:
“5. Final decree in suit for sale.—(1) Where, on or before the day fixed or at any time before the confirmation of a sale made in pursuance of a final decree passed under sub-rule (3) of this rule, the defendant makes payment into Court of all amounts due from him under sub-rule (1) of Rule 4, the Court shall, on application made by the defendant in this behalf, pass a final decree or, if such decree has been passed, an order—
(a) ordering the plaintiff to deliver up the documents referred to in the preliminary decree,
and, if necessary,—
(b) ordering him to transfer the mortgaged property as directed in the said decree,
and also, if necessary,—
(c) ordering him to put the defendant in possession of the property.
(2) Where the mortgaged property or part thereof has been sold in pursuance of a decree passed under sub-rule (3) of this rule, the Court shall not pass an order under sub-rule (1) of this rule, unless the defendant, in addition to the amount mentioned in sub-rule (1), deposits in Court for payment to the purchaser a sum equal to five per cent of the amount of the purchase-money paid into Court by the purchaser.
Where, such deposit has been made, the purchaser shall be entitled to an order for repayment of the amount of the purchase-money paid into Court by him, together with a sum equal to five per cent thereof.
(3) Where payment in accordance with sub-rule (1) has not been made, the Court shall, on application made by the plaintiff in this behalf, pass a final decree directing that the mortgaged property or a sufficient part thereof be sold, and that the proceeds of the sale be dealt with in the manner provided in sub-rule (1) of Rule 4.”
The later two clauses are not relevant for the purpose of this case.
4. A reading of the above would clearly indicate that where, on or before the day fixed or at any time before the confirmation of a sale made in pursuance of a final decree passed under sub-rule (3) of Rule 5 of Order 34, the defendant makes payment into the court of all amounts due from him under sub-rule (1) of Rule 4, the court shall, on application made by the defendant in this behalf, pass a final decree or, if such decree has been passed, an order ordering the plaintiff to deliver the documents referred to in the preliminary decree, and if necessary, ordering him to transfer the mortgaged property as directed in the said decree and also, if necessary, ordering him to put the defendant in possession of the property. The question, therefore, is whether Respondents 1 and 2, whose release deed by the auction-purchaser Kandaswamy was accepted by the executing court, are entitled to make the application under Order 34, Rule 5 CPC.
5. It is seen that since the simple money decree had been duly executed through the Court and the selfsame property had been brought to sale, was duly confirmed and possession taken in execution thereof, the auction-purchasers of the said property in the money decree stepped into the shoes of the judgment-debtor, Manickam Mudaliar. Consequently, they got transposed themselves to be defendants in the mortgage decree. Therefore, before the confirmation of the final decree, they are entitled to make an application under Order 34, Rule 5 depositing all the decretal amount and request the court to pass a final decree and directing the mortgagee, Catholic Syrian Bank Ltd., to deliver all the documents to them duly endorsing that the decree stands discharged. Thereby having had the right thus fructified, the subrogation eclipsed right of the purchaser in the mortgage decree. Thus, his right stands nullified by operation of Order 34, Rule 5 CPC. Thus, the appellant did not get any right, though he was a successful auction-purchaser.
6. Shri S. Balakrishnan, learned counsel for the appellant, seeks to contend that under Order 21, Rule 92 CPC as soon as objections have been raised and rejected, the court is required to confirm the sale and in this case the act of confirmation being the ministerial act, that does not defeat the right of the auction-purchaser nor confer any right on the subsequent purchaser under a simple money decree. The doctrine of lis pendens applies. We find no force in the contention. Section 52 of the Transfer of Property Act has no application to the facts. The procedure under Order 34 is entirely distinct and different from the procedure prescribed under Order 21. Order 21 deals with execution of decrees and orders and objections therein other than those relating to the property covered in mortgage decree. Order 34 is a special procedure prescribed relating to mortgages. Therefore, the procedure prescribed under Order 21, Rule 92 has no application as regards the passing of final decree under Order 34, Rule 5 CPC. Thus considered, we hold that the action taken by the executing court is not vitiated by any error of law, warranting interference.
7. The appeal is accordingly dismissed. No costs.
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