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AMICUS AI
Citation Codes
Neutral Citations
2006 INSC 94
Equivalent Citations
citation codes
Case Number
Disposition
Advocates
Judges
Acts
  • The Debt Relief Act
  • Article 180 of the Limitation Act, 1908
  • the Code of Civil Procedure, 1908 (in short “the Code”)
  • Article 134 of the Limitation Act, 1963 (in short “the Limitation Act”)
  • the Tamil Nadu Debt Relief Act, 1980 (in short “the Debt Relief Act”)
  • Section 47 CPC (Code of Civil Procedure)
  • Article 134 of the Limitation Act, as appearing in the Schedule to the Limitation Act relatable to Sections 2(j) and 3
  • Order 21 Rule 95 of the Code
  • Section 47 of the Code of Civil Procedure, 1908
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Order 21 Rule 64 of the Code
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Cites
Cited by
Citation Codes
Neutral Citations
2006 INSC 94
Equivalent Citations
citation codes
Case Number
Disposition
Advocates
Judges
Acts
  • The Debt Relief Act
  • Article 180 of the Limitation Act, 1908
  • the Code of Civil Procedure, 1908 (in short “the Code”)
  • Article 134 of the Limitation Act, 1963 (in short “the Limitation Act”)
  • the Tamil Nadu Debt Relief Act, 1980 (in short “the Debt Relief Act”)
  • Section 47 CPC (Code of Civil Procedure)
  • Article 134 of the Limitation Act, as appearing in the Schedule to the Limitation Act relatable to Sections 2(j) and 3
  • Order 21 Rule 95 of the Code
  • Section 47 of the Code of Civil Procedure, 1908
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Order 21 Rule 64 of the Code
Smart Summary

Factual and Procedural Background

The appellant (decree-holder) obtained a money decree in O.S. No. 385 of 1977 on the file of the District Munsif, Kulithalai, on the strength of a promissory note executed by the respondent (judgment-debtor). In execution, the appellant purchased the respondent’s 5-acre property in a court-auction on 8 July 1981 for Rs 7,510; the sale was confirmed on 22 August 1983.

The respondent’s application (E.A. No. 17 of 1983) to set aside the sale under the Tamil Nadu Debt Relief Act, 1980 was dismissed, and the Madras High Court rejected his Civil Revision Petition No. 3963 of 1983 on 10 September 1987.

Subsequently, on 13 August 1993 the appellant filed E.P. No. 80 of 1993 under Order 21 Rule 95 CPC seeking delivery of possession. The respondent objected, contending that the petition was barred by the one-year limitation prescribed by Article 134 of the Limitation Act, 1963. Although the executing court ordered delivery, the High Court, in C.R.P. No. 2328 of 1994, set aside the auction-sale and remitted the matter for fresh consideration under Section 47 CPC and Order 21 Rule 64 CPC. The present appeal challenges that High Court order.

Legal Issues Presented

  1. Whether the High Court was right in declaring the auction-sale and its confirmation illegal for non-compliance with Order 21 Rule 64 CPC.
  2. Whether the appellant’s application for delivery of possession (filed on 13 August 1993) was barred by Article 134 of the Limitation Act, 1963.
  3. Whether, despite the earlier confirmation of sale on 22 August 1983 and dismissal of the respondent’s previous challenge, the legality of the sale could be reopened.

Arguments of the Parties

Appellant’s Arguments

  • The sale was confirmed on 22 August 1983 and had attained finality; hence the High Court could not re-examine its legality.
  • The respondent’s objection before the High Court was confined to limitation under Article 134; therefore the High Court erred in invoking Order 21 Rule 64.
  • Even if limitation applied, any delay was attributable to the respondent’s own proceedings, including the civil revision petition dismissed on 10 September 1987.

Respondent’s Arguments

  • The application for delivery was clearly barred by Article 134, as it was filed more than one year after the sale became absolute.
  • The High Court properly exercised its power to ensure substantial justice, noting that property worth far more than the decretal amount (5 acres sold for about Rs 4,000) had been sold and that the respondent had deposited Rs 35,000—more than enough to satisfy the decree.
  • Order 21 Rule 64 requires the court to sell only so much of the attached property as is necessary to satisfy the decree; this mandate had been ignored.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Takkaseela Pedda Subba Reddi v. Pujari Padmavathamma (1977) 3 SCC 337; AIR 1977 SC 1789 Meaning of the words “necessary to satisfy the decree” in Order 21 Rule 64 CPC. Emphasised that no sale can proceed beyond the amount required to satisfy the decree.
Ambati Narasayya v. M. Subba Rao, 1989 Supp (2) SCC 693 Sale without first determining what portion of property is sufficient is illegal and without jurisdiction. Cited to underline the mandatory duty of the executing court under Order 21 Rule 64.
S. Mariyappa v. Siddappa (2005) 10 SCC 235 Reaffirmed the obligation to sell only that portion of property necessary to satisfy the decree. Relied upon for the same principle as above.
S.S. Dayananda v. K.S. Nagesh Rao (1997) 4 SCC 451 Compliance with Order 21 Rule 64 is mandatory, not discretionary. Referenced to stress procedural rigour in execution sales.
Desh Bandhu Gupta v. N.L. Anand (1994) 1 SCC 131 Mandatory nature of Order 21 Rule 64 requirements. Cited in support of the High Court’s approach.
Ganpat Singh v. Kailash Shankar (1987) 3 SCC 146 Limitation under Article 134 starts from the date of confirmation of sale. Applied to hold the delivery application time-barred.
Pattam Khader Khan v. Pattam Sardar Khan (1996) 5 SCC 48 Sale becomes absolute on confirmation under Order 21 Rule 92; limitation runs from that date, not from issuance of sale certificate. Used to reinforce the conclusion on limitation.

Court's Reasoning and Analysis

The Supreme Court noted that, although the High Court had examined the sale’s validity under Order 21 Rule 64 despite earlier confirmation, the appellant could not succeed in any event because his application for delivery was barred by Article 134 of the Limitation Act:

  • Mandatory nature of Order 21 Rule 64: The Court reaffirmed that an executing court must decide whether sale of the entire property, or only part thereof, is necessary. Sales violating this requirement are illegal. However, in the present case that issue was considered to have already attained finality after sale confirmation.
  • Limitation under Article 134: The one-year period begins when the sale becomes absolute (22 August 1983). The appellant’s delivery petition, filed on 13 August 1993, was therefore grossly out of time. Precedents such as Ganpat Singh and Pattam Khader Khan were cited to support this interpretation.
  • Effect of respondent’s prior litigation: The Court rejected the appellant’s contention that the respondent’s earlier civil revision petition justified delay, observing that the petition had been dismissed in 1987, well before the 1993 delivery application.
  • Substantive justice: Maintaining the High Court’s remand would best serve justice by allowing the executing court to consider the respondent’s deposit of Rs 35,000 and to decide, under Section 47 CPC, whether any further sale or delivery is warranted.

Holding and Implications

APPEAL DISMISSED.

The Supreme Court upheld the High Court’s order remitting the matter to the executing court. The executing court must now address the maintainability of the appellant’s time-barred application for delivery, rather than the validity of the auction-sale itself. The decision provides no new legal precedent but reiterates the strict limitation period under Article 134 and the mandatory duty imposed by Order 21 Rule 64 CPC.

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    Balakrishnan v. Malaiyandi Konar .

    Arijit Pasayat, J..— Challenge in this appeal is to the judgment rendered by a learned Single Judge of the Madras High Court holding that the auction-sale held in an execution proceeding and confirmation thereof was illegal. The matter was remitted to the executing court with a direction to consider the objection in terms of Section 47 of the Code of Civil Procedure, 1908 (in short “the Code”) and to consider whether there was any need for sale of the property in view of the deposit made by the judgment-debtor respondent herein. The appellant who is the decree-holder purchased the property in the court auction-sale. The proceedings relate to OS No. 385 of 1977 on the file of the District Munsif, Kulithalai.

    2. The background facts need to be noted in brief:

    The suit was filed by the appellant on the basis of a promissory note executed by the respondent in favour of the appellant. The suit was decreed. In the proceeding for execution of the decree in his favour (EP No. 725 of 1981 on the file of the District Munsif, Kulithalai later renumbered as EP No. 45 of 1983 on the file of the District Munsif, Manapparai) the appellant purchased the judgment-debtor's property on 8-7-1981 in court auction after obtaining permission of the court for a sum of Rs 7510. The sale was confirmed on 22-8-1983.

    3. The respondent filed EA No. 17 of 1983 to set aside the sale on the ground that he is entitled to the benefits under the Tamil Nadu Debt Relief Act, 1980 (in short “the Debt Relief Act”). On 30-4-1983 application filed by the respondent was dismissed on the ground that the respondent has not made out a case for getting benefit under the Debt Relief Act. It was also held that apart from the property covered by the auction-sale, he had got income from other properties. The respondent filed Civil Revision Petition No. 3963 of 1983 before the Madras High Court against the order of dismissal of EA No. 17 of 1983. By order dated 10-9-1987 the High Court dismissed the civil revision petition upholding the findings of the executing court.

    4. EP No. 80 of 1993 was filed by the appellant on 13-8-1993 under Order 21 Rule 95 of the Code for delivery of possession. The respondent filed counter-affidavit inter alia taking the stand that the execution petition was liable to be dismissed, as it was filed beyond the limitation period of one year prescribed under Article 134 of the Limitation Act, 1963 (in short “the Limitation Act”). The trial court overruled the objections and ordered delivery. The respondent thereafter filed Civil Revision Petition No. 2328 of 1994 before the High Court which was allowed on 13-7-1998 by the impugned judgment.

    5. During the hearing of the case, the High Court in order to shorten litigation gave option to the judgment-debtor to deposit decretal amount with interest. In fact the respondent deposited Rs 35,000. Though at the time of hearing, learned counsel appearing for the present appellant accepted that the offer of judgment-debtor (the respondent herein) was a reasonable one, he informed the Court that his client was not agreeable to receive any amount and wanted the property. The High Court on examining the scope and ambit of Order 21 Rule 64 of the Code held that the executing court while directing the sale had not kept in view the correct parameters of the requirements enjoined by the said provision, in particular to decide first whether it is necessary to bring the entire attached property to sale. Accordingly, the following directions were given:

    “In view of the abovesaid principle, I am of the view that the executing court without application of mind has directed the sale of the property of nearly 5 acres for a paltry sum of Rs 4000 and odd. Now the petitioner has shown his bona fide by depositing the amount of Rs 35,000 and I am of the view that the parties can be given an opportunity to establish the same. It is open to the petitioner to convince the lower court as to which portion of the property is sufficient to satisfy the decree amount and the lower court is directed to consider the matter afresh, in the light of the decisions of the Supreme Court as well as the judgment of this Court referred to above, dispose of the claim of the parties in accordance with law. Since the executing court has not acted in accordance with the abovesaid principles of the Supreme Court, I am of the view that the sale itself is liable to be set aside even though no application has been filed by the petitioner. However, the objection filed by the petitioner is directed to be treated as a petition under Section 47 CPC. Hence, the matter is remitted back to the executing court with direction to dispose of the objection petition afresh. The executing court can also consider the need for the sale of property in view of the deposit made by the petitioner.”

    6. Learned counsel for the appellant in support of the appeal submitted that the High Court has lost sight of the fact that the sale was confirmed on 22-8-1983. The earlier petition filed in the execution proceedings was rejected and the High Court also did not interfere. That matter had attained finality. The subsequent execution proceeding for delivery was filed. The objection filed by the respondent related to the applicability of Article 134 of the Limitation Act and the High Court could not have examined the matter in the background of Order 21 Rule 64 of the Code. It is further submitted that even conceding for the sake of argument that Article 134 of the Limitation Act had application, the delay in filing the application is clearly attributable to the respondent himself. He had filed the objection and after its dismissal by the trial court had moved the High Court.

    7. In response, learned counsel for the respondent submitted that Article 134 of the Limitation Act clearly applies to the facts of the case. Though the High Court did not advert to that provision yet for doing substantial justice the Court had indicated the parameters of Order 21 Rule 64 of the Code. Property measuring about 5 acres was sold for a paltry sum of rupees four thousand. The judgment-debtor had deposited Rs 35,000 which was sufficient to satisfy the decretal amount and the interest that would have been earned had the payment been made at the initial stage.

    8. Order 21 Rule 64 reads as follows:

    “64. Power to order property attached to be sold and proceeds to be paid to person entitled.—Any court executing a decree may order that any property attached by it and liable to sale, or such portion thereof as may seem necessary to satisfy the decree, shall be sold, and that the proceeds of such sale, or a sufficient portion thereof, shall be paid to the party entitled under the decree to receive the same.”

    9. The provision contains some significant words. They are “necessary to satisfy the decree”. Use of the said expression clearly indicates the legislative intent that no sale can be allowed beyond the decretal amount mentioned in the sale proclamation. (See Takkaseela Pedda Subba Reddi v. Pujari Padmavathamma (1977) 3 SCC 337, AIR 1977 SC 1789.) In all execution proceedings, the court has to first decide whether it is necessary to bring the entire property to sale or such portion thereof as may seem necessary to satisfy the decree. If the property is large and the decree to be satisfied is small the court must bring only such portion of the property the proceeds of which would be sufficient to satisfy the claim of the decree-holder. It is immaterial whether the property is one or several. Even if the property is one, if a separate portion could be sold without violating any provision of law only such portion of the property should be sold. This is not just a discretion but an obligation imposed on the court. The sale held without examining this aspect and not in conformity with this mandatory requirement would be illegal and without jurisdiction. (See Ambati Narasayya v. M. Subba Rao 1989 Supp (2) SCC 693.) The duty cast upon the court to sell only such property or portion thereof as is necessary to satisfy the decree is a mandate of the legislature which cannot be ignored. Similar view has been expressed in S. Mariyappa v. Siddappa (2005) 10 SCC 235.

    10. In S.S Dayananda v. K.S Nagesh Rao (1997) 4 SCC 451 it was held that the procedural compliance with Order 21 Rule 64 of the Code is a mandatory requirement. This was also the view expressed in Desh Bandhu Gupta v. N.L Anand (1994) 1 SCC 131.

    11. Therefore, on the background facts noted by the High Court the auction-sale did not meet the requirements of law. But at the same time it appears that the question regarding the legality of the sale had attained finality because of the confirmation of sale on 22-8-1983. Though it is contended by learned counsel for the respondent that the order dated 10-9-1987 passed by the High Court rejecting CRP No. 3963 of 1983 filed by the judgment-debtor seeking relief, was relatable to the Debt Relief Act, that did not have the effect of reviving the question relating to violation of Order 21 Rule 64 of the Code.

    12. The residual question is the effect of Article 134 of the Limitation Act, as appearing in the Schedule to the Limitation Act relatable to Sections 2(j) and 3 providing for periods of limitation. Article 134 reads as follows:

    “Description of suit Period of limitation Time from which period begins to run 134. For delivery of possession by a purchaser of immovable property at a sale in execution of a decree. One year When the sale becomes absolute.”

    13. The limitation for the purpose of Article 134 starts from the date of confirmation of sale. (See Ganpat Singh v. Kailash Shankar (1987) 3 SCC 146.) In Pattam Khader Khan v. Pattam Sardar Khan (1996) 5 SCC 48 this Court held that it is not from the date when sale certificate is issued that the limitation starts running. The sale becomes absolute on confirmation under Order 21 Rule 92 of the Code effectively passing title. It cannot be said to attain finality only when sale certificate is issued under Order 21 Rule 94. There can be variety of factors conceivable for which delay can be caused in issuing a sale certificate. The period of one-year limitation now prescribed under Article 134 of the Limitation Act in substitution of a three-year period prescribed under Article 180 of the Limitation Act, 1908 is reflective of the legislative policy of finalising proceedings in execution as quickly as possible by providing a quick forum to the auction-purchaser to ask for the delivery of possession of the property purchased within that period from the date of the sale becoming absolute rather than from the date of issuance of the sale certificate. On his failure to avail such a quick remedy the law relegates him to the remedy of a regular suit for possession based on title, subject again to limitation.

    14. Though it was submitted by learned counsel for the appellant that the respondent was responsible for the delay caused as he had filed the civil revision before the High Court, the plea is clearly untenable. The civil revision petition was dismissed on 10-9-1987.

    15. Above being the position, we are not inclined to interfere in the matter. Though the question of applicability of Order 21 Rule 64 of the Code should not have been considered by the High Court in view of the dismissal of earlier civil revision petition, even otherwise no relief could have been granted to the appellant in view of Article 134 of the Limitation Act. Substantive justice can be done to the parties if the order passed by the High Court remitting the matter is maintained. But the question that has to be considered will not be the validity of the sale, but the maintainability of the application for delivery of the property.

    16. The appeal is accordingly dismissed. No costs.

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    Comments

    Balakrishnan v. Malaiyandi Konar .
    (Feb 17, 2006)