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Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
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  • Order 21 Rule 90 of the Code of Civil Procedure
  • Order 21 Rule 89 of Civil Procedure Code
  • Order 21 of Rule 90 of the Code of Civil Procedure
  • Order 21 Rule 66 of the Code of Civil Procedure
  • Section 47 of the Code of Civil Procedure
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Judges
Acts
  • Order 21 Rule 90 of the Code of Civil Procedure
  • Order 21 Rule 89 of Civil Procedure Code
  • Order 21 of Rule 90 of the Code of Civil Procedure
  • Order 21 Rule 66 of the Code of Civil Procedure
  • Section 47 of the Code of Civil Procedure
Smart Summary

Factual and Procedural Background

An arbitrator passed an award concerning the sale of goods to a partnership firm comprised of six partners. The award was made a rule of the court by the Sub-Judge, 1st Class, Delhi, resulting in a decree. That decree was transferred to the court of the Sub-Judge, 1st Class, Gurgaon, for execution. Two partners, Sukhdeb Singh and Jai Dayal, were formally parties to the arbitration proceedings; other partners, including the present appellant Rajender Prashad, were not individually served.

During execution, the judgment-debtors objected that (i) the decree was ex-parte and therefore a nullity against non-served partners, and (ii) the execution sale was conducted without proper publication of a sale proclamation under Order 21 Rule 66 CPC. Both the executing court and, on appeal, the Punjab & Haryana High Court rejected these objections. The present appeal was filed by special leave challenging those concurrent findings.

Legal Issues Presented

  1. Whether an ex-parte decree based on an arbitration award can be executed against partners who were not individually served in the arbitration proceedings or the suit making the award a rule of court.
  2. Whether alleged non-compliance with Order 21 Rule 66 CPC (service and publication of the sale proclamation) rendered the auction sale liable to be set aside for material irregularity or fraud.

Arguments of the Parties

Appellants' Arguments

  • The decree is ex-parte and therefore in-executable against partners who were not parties to or served in the proceedings, relying on Section 47 CPC and Order 21 Rule 50(1)(b) CPC.
  • The attachment and sale of agricultural land violated Order 21 Rule 66 because no proper proclamation was made or served in the village.
  • Consequently, the auction sale should be set aside and the decree treated as a nullity with respect to their personal property.

Respondents' Arguments

  • Notice of settlement of the sale proclamation was duly served; the proclamation was settled and published, and the appellant never contested it at any stage.
  • The appellant also failed to invoke Order 21 Rule 90 (to set aside the sale for irregularity) or Order 21 Rule 89 (to redeem the property by deposit), demonstrating acquiescence.
  • Courts below have already determined that the objectors were partners; similar objections had earlier been dismissed, making the decree binding.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Ravindra Finance v. Yahai Tobacco Co., AIR 1979 Mad 25; (1978) 2 MLJ 183 Authority relied on by objectors (specific principle not detailed in the opinion) The executing court and the Supreme Court observed that the decision did not assist the objectors.

Court's Reasoning and Analysis

The Court affirmed the concurrent findings of the executing court and the High Court that:

  • The objectors failed to adduce any evidence that they were not partners; previous dismissal of identical objections in Delhi bound them.
  • The notice of settlement of the sale proclamation under Order 21 Rule 66 CPC was proven to have been served, the proclamation was settled and published, and no objection was raised at the relevant time.
  • No material irregularity or fraud in publishing or conducting the sale was shown. The appellant’s omission to move applications under Order 21 Rules 89 or 90 further weakened his case.

Finding no legal defect in the execution process, the Court nevertheless, “considering fairness and equity,” suggested—and counsel for the auction-purchaser accepted—payment of an additional sum of ₹2,25,000 (inclusive of the sale price already deposited) to the judgment-debtors within four weeks. The amount is to be deposited in the executing court and may be withdrawn unconditionally by the appellants.

Holding and Implications

Appeal DISPOSED OF upon acceptance of the respondent’s undertaking to pay an additional ₹2,25,000 within four weeks; no order as to costs.

Direct Effect: The execution sale stands confirmed; judgment-debtors receive additional monetary compensation. Broader Implications: The decision reaffirms that objections under Section 47 and Order 21 CPC must be supported by evidence and pursued through the specific procedural avenues provided (Rules 66, 89, 90) or they will not succeed. No new legal precedent was created beyond the factual application of settled principles.

    Rajender Prashad And Others v. M/S Devi Dayal Ravinder Kumar And Others

    Order

    1. Leave granted. Arguments heard.

    2. The instant appeal on special leave has been filed against the judgment and order of the Punjab and Haryana High Court whereby the High Court upheld the findings of the courts below dismissing the objections raised on behalf of the judgment debtors Rajender Prashad and others against the validity of the ex-parte decree.

    3. Undoubtedly, there was an award made by an arbitrator in respect of certain matters referred to the arbitrator relating to the sale of goods to the defendant partners, wherein one of the partners was present and that award was filed in the Court of the Subordinate Judge, Ist Class, for making the award a rule of the Court. In that proceeding Sukhdeb Singh and Jai Dayal were made parties out of the six partners of the partnership firm, respondent 3. The award was made a rule of the court. The decree was transferred to the Court of Sub-Judge, Ist Class, Gurgaon for execution. Appellants filed objections to the effect that the transferee court cannot execute the decree inasmuch as the decree was an ex-parte one and secondly, the appellant Rajender Prashad was not a party to the decree and no summons of the said proceedings was served on him and, as such, he was completely shut out from raising his objections against the decree. It was contended in this connection by drawing our attention to the provisions of Section 47 of the Code of Civil Procedure as well as to Order 21 Rule 50(1)(b) that this decree could not be executed against the personal property of Rajender Prashad and others. Undoubtedly, in clause (b) of Order 21 of Rule 50 there is a provision that decree can only be executed if he is adjudged as one of the partners. In all these proceedings, particularly, in the order passed by Shri R.C Bansal, Sub-Judge, First Class, Gurgaon, he has elaborately considered the matter and has come to a finding to the following effect:

    “The above provisions would not hold the objectors, because they have not produced any evidence, to support that they were not partners. Rather, as has been seen above that even the learned Sub-Judge, Ist Class Delhi, had dismissed similar objection of the objectors and they are bound by that order. The learned counsel for the objectors have also argued that the attachment was statedly effected on June 9, 1979 but the concerned Kanungo signed that documents on June 9, 1973. It seems that O.W 1 Om Prakash, attorney of the objectors, has made a very vague statement. During cross-examination, he could not tell whether the objectors, Ishwar Dass and Rajender were partners or not. He admitted that Guru Parasad used to sit on the shop, but he could not tell whether they were sharing profits or losses of the partnership firm. The objectors are partners and the decree could be legally executed against them. The objectors have also contended that the decree was nullity and unexecutable, but no convincing evidence has been produced. Rather, we have already discussed above that even a civil suit filed for setting aside the decree was without any result. Therefore, the award upon the basis of which the decree was passed, cannot be stated to be without jurisdiction. The authority referred to (Ravindra Finance v. Yahai Tobacco Co. AIR 1979 Mad 25, (1978) 2 MLJ 183) would not help the objectors in any way. Not only this Om Parkash also filed independent objections, but with no result. It seems that the objectors are unnecessarily creating hindrances in the execution of the decree validly passed by the Court. There is no force in the objections of the objectors that their agricultural land was not liable to be attached and sold in execution. There is no evidence that the arbitration award was without any jurisdiction. Both the issues are decided against the objectors.”

    4. The other objection was that no proclamation regarding auction was made in the village and no legal notice under Order 21 Rule 66 of the Code of Civil Procedure was served. That objection was also elaborately considered and learned Subordinate Judge had come to a finding that the sale is not liable to be set aside. All these steps provided under the Act has been complied with in putting the property to sale. It is also an established fact that these Rajender Prashad and others had filed some suits challenging the validity of the decree which challenges became unsuccessful up to the appellate court and the decree was held to be good and unassailable. All the suits were dismissed and the decree was affirmed. This position has been frankly admitted by the learned counsel appearing on behalf of the appellants before us that after the order of the courts regarding the validity of the decree, he could not challenge the decree.

    5. Mr Ashoke Sen, learned counsel drew our attention to the findings arrived at by the High Court, particularly, with regard to the specific point that the notice of settlement of the sale proclamation under Order 21 Rule 66 of Code of Civil Procedure was duly served and it was settled and then it was published and at no stage the judgment-debtor Rajender Prashad has come forward to contest the settlement of the sale proclamation. Even on the date when the auction was going to be held he did not appear and file any objections and, moreover, under Order 21 of Rule 90 of the Code of Civil Procedure, he should have disputed the sale price and prayed for appropriate order for setting aside the same. He did not take any steps even knowing fully well that the property in question has been put to auction sale and has been ultimately sold and even no application has been made under Order 21 Rule 89 of Civil Procedure Code to set aside the impugned sale by depositing sale price for payment to the auction-purchaser etc.

    6. Considering all these aspects of the matter and also the legal position we are unable to hold that there has been any material irregularity or fraud in publishing and conducting the sale. However, considering fairness and equity, we of our own, suggested to the learned counsel Mr Ashoke Sen to pay something more to the appellants and Mr Sen in his fairness immediately agreed to the proposal on instructions from his client that the auction-purchaser, the respondents, are willing to pay a sum of Rs 2 lakh 25 thousand to the other side within a period of four weeks as suggested by this Court including the sale amount already deposited. In view of this statement made by Mr Ashoke Sen, learned counsel for the respondents, we accept the same and we grant four weeks time for payment of the amount as aforesaid in full and final settlement of the matter. The said amount shall be deposited in the executing court and the appellants judgment-debtors will be free to withdraw the same unconditionally. The appeal is thus disposed of. There will be no order as to cost.

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    Rajender Prashad And Others v. M/S Devi Dayal Ravinder Kumar And Others
    (Oct 10, 1991)