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Thursday, January 1, 2015

2014- OCT.PART- S.C.- CIVIL APPEAL NO.9658 OF 2014 (Arising out of Special Leave Petition (Civil) No.1627 of 2014) Guttikonda Venkataramaiah ... Appellant Versus Godavarthy Venkateswarlu & Anr. ... Respondents


                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO.9658 OF 2014
       (Arising out of Special Leave Petition (Civil) No.1627 of 2014)

Guttikonda Venkataramaiah               ... Appellant


Godavarthy Venkateswarlu & Anr.         ... Respondents

                               J U D G M E N T


1.    Heard the learned counsel.

2.    Leave granted.

3.    In this appeal, the appellant – an auction purchaser,  has  challenged
the validity of the judgment dated 13th December, 2013, delivered  in  Civil
Revision Petition No.6528 of 2012 by the High Court of Judicature of  Andhra
Pradesh at Hyderabad.

4.    The appellant is an auction purchaser, whereas respondent  no.1  is  a
principal debtor and respondent no.2 is a creditor in this case.

5.    The facts giving rise to the present litigation, in  a  nutshell,  are
as under:

      Respondent no.2 had filed OS No.45 of 2006 in the Court  of  Principal
Senior  Civil  Judge,  Tenali  against  respondent  no.1  for  recovery   of
Rs.1,78,000/-.   An ex-parte decree was passed on 29th  December,  2006  and
the decretal amount was Rs.3,55,732/-.   It appears from the record that  no
successful effort was made by respondent no.1  to  challenge  the  said  ex-
parte decree.

6.     Thereafter,  the  execution  proceedings  had   been   initiated   by
respondent  no.2  for  sale  of  immovable  property  –  agricultural   land
belonging to the principal debtor – respondent no.1 herein and the sale  was
conducted on 30th May, 2011. The property had been sold  for  Rs.13,05,000/-
in an auction and the said amount had been paid by  the  appellant,  who  is
the auction purchaser.

7.    Subsequently,  respondent  no.1  had  filed  Civil  Revision  Petition
No.2610 of 2011 in the High Court of Andhra  Pradesh  pointing  out  certain
irregularities in the  execution  proceedings.    The  said  civil  revision
petition had been disposed of on 22nd July, 2011 as it was open  to  him  to
file an application under Rule 90 of Order XXI of the CPC.  In pursuance  of
the aforestated order passed by the High Court,  E.A.  No.426  of  2011  had
been filed by respondent no.1.  However, the same  had  been  dismissed  for
default on 22nd February, 2012.  An  effort  to  get  the  said  application
restored to file had also been failed.

8.    Finally, the Executing Court had also permitted the auction  purchaser
to take possession of the property in question  vide  its  order  dated  7th
November, 2012.

9.    In the aforestated circumstances,  respondent  no.1  had  filed  Civil
Revision Petition No.6528 of 2012 challenging the order dated 7th  November,
2012 passed by the executing Court before the High Court of Andhra Pradesh.

10.   After hearing the concerned counsel, the High Court  by  the  impugned
judgment dated 13th December, 2013, allowed the petition and set  aside  the
sale and directed the Executing Court to take appropriate  action  for  sale
of the property in question in accordance with the provisions  of  Rules  64
and 66 of Order XXI of the CPC.   It was also directed that respondent  no.1
i.e. the petitioner before the High Court should deposit  the  amount  which
had been paid to the decree holder i.e. the present  respondent  no.2.   The
amount deposited by the auction purchaser was directed  to  be  refunded  to
him by the executing Court and it was also directed that respondent  no.1  –
the judgment debtor should  be  put  into  possession  of  the  property  in

11.   We would also like to record some of the proceedings of this Court  in
this judgment.  At the time when the appeal  was  notified  for  hearing  on
14th July, 2014, this Court had directed  respondent  no.1  –  the  judgment
debtor,  to  pay  Rs.15,50,000/-  to  the  present  appellant  because   the
appellant had paid Rs.13,05,000/- when the property  in  question  had  been
purchased by him on 30th May, 2011.   The amount so paid  by  the  appellant
had been tied up since long and  so  as  to  return  his  amount  with  some
additional amount by way of compensation, we had  directed  respondent  no.1
to pay Rs.15,50,000/-, but respondent no.1 failed to do so upto 4th  August,
2014, the date on which the hearing was adjourned.

12.    Once  again,  on  4th  August,  2014,  we  granted  further  time  to
respondent no.1 to make payment of the aforesaid  amount  to  the  appellant
before 15th September, 2014.   However, in spite  of  this  additional  time
granted to respondent no.1, he did not pay the amount to the  appellant  and
on 15th September, 2014, respondent no.1, who was personally present in  the
Court had expressed his inability to  pay  the  aforestated  amount  to  the
auction purchaser.  We are narrating the said fact so as to  show  that  the
principal debtor was not only careless at an earlier  point  of  time  while
defending his case, but even after losing his case  and  after  getting  his
property sold in an auction, he was  not  even  prepared  to  pay  back  the
amount to the auction purchaser.  It was also clarified at  that  time  that
upon payment of the said amount to the auction  purchaser,  respondent  no.1
was entitled to withdraw the amount which had been deposited by the  auction
purchaser with the Court while purchasing the property  in  question.    The
aforestated directions were given by this Court from time to time so  as  to
know the bona fides of respondent no.1 – the principal debtor.

13.    The  aforestated  proceedings  show  behaviour  and  nature  of   the
principal debtor.

14.   It had been mainly submitted on behalf of the appellant – the  auction
purchaser that he had made complete payment for purchasing the  property  in
question at an auction and even the sale had been confirmed  in  his  favour
by an order  dated  23rd  February,  2012.   In  spite  of  the  said  fact,
appellant was not having peaceful possession of the suit property which  had
been purchased by him.  It had been submitted on  behalf  of  the  appellant
that the submission made on behalf of respondent no.1  to  the  effect  that
the property was worth Rs.30 lakhs was not correct.   Had it been so,  there
would have been several other bidders who would have offered higher bids  at
the time of the auction.  According to the appellant, the price  offered  by
the appellant was quite reasonable and fair market value of the property  in

15.   In the  aforestated  circumstances,  it  had  been  submitted  by  the
learned counsel for the appellant that the judgment delivered  by  the  High
Court, whereby the property is to be put  to  sale  once  again,  would  act
harshly upon the appellant, especially when the appellant  had  offered  the
highest bid and had purchased the property, sale  of  which  had  also  been
confirmed on 23rd February, 2012.  According to him, the entire  proceedings
should come to an  end.   It  had  also  been  specifically  submitted  that
respondent  no.1  had  shown  his  negligent  approach  towards  the  entire
proceedings and even before this Court, though he had shown his  willingness
to make the payment to the appellant at one point of time.  Finally, he  had
shown his inability to make the payment and his intention was  only  to  see
that the proceedings were prolonged  unnecessarily.  In  the  circumstances,
the learned counsel had prayed that the impugned judgment should be  quashed
and set aside so that the entire exercise with regard to  sale  of  property
in question may not have to be repeated.

16.   On the other hand, it had been submitted  on  behalf  of  the  learned
counsel appearing on behalf of respondent no.1 – the judgment  debtor,  that
the execution proceedings had  not  been  conducted  properly.   Though  the
decretal amount was Rs.3,55,732/-, the entire property was put  to  sale  by
the executing Court.   According  to  the  learned  counsel  for  respondent
no.1, by sale of a portion of  the  property,  the  dues  of  the  principal
debtor could have been satisfied and therefore, there was violation  of  the
provisions of Rules 64 and 66 of Order XXI of the CPC.  He  had,  therefore,
submitted that the impugned judgment delivered by the High  Court  was  just
and proper.

17.   Upon hearing the learned counsel for the parties, we are of  the  view
that the judgment delivered by the High Court is not  just  and  proper  for
the reason that respondent no.1- debtor had never shown his fairness in  the
entire proceedings.  Though an ex-parte decree was passed  against  him,  he
never made sincere efforts to get the decree set aside.  Even  at  the  time
when the sale proclamation had been issued, he did not raise  any  objection
to the effect that even by sale of lesser area  of  his  land,  the  decree-
holder would get his dues.  Only after the auction sale had been  concluded,
he had initiated different  proceedings  before  different  Courts,  perhaps
only with an  intention  to  see  that  the  property  in  question  is  not
transferred to the auction purchaser.

18.   In our opinion, respondent no.1 ought to have raised his objection  at
the stage when the property in question was to be sold by  an  auction.   He
did not do so.  Subsequently, after the property was sold  at  the  auction,
he approached the High Court, though a proper remedy for him was to file  an
application under Rule 90 of Order XXI of the CPC.    When  the  High  Court
had directed him to  file  appropriate  proceedings  before  an  appropriate
forum, he did so, but there also he was so  careless  that  the  proceedings
had been concluded against him on account of defaults committed by him.

19.   The aforestated circumstances very well show  that  the  intention  of
the principal debtor is to avoid making payment to the  decree  holder.   If
the judgment delivered by the High Court is upheld, the  entire  proceedings
with regard to execution will commence de novo and one does not know  as  to
when the proceedings would be concluded and the decree holder would get  the
decretal amount.  By this time, the decretal amount, which was Rs.3,55,732/-
 somewhere in 2006, must have increased substantially and it  would  not  be
just and proper to keep the decree holder waiting still more.

20.   For the aforestated reasons, in the interest of justice, we feel  that
the impugned judgment delivered by the High Court  deserves  to  be  quashed
and set aside.  If the  auction  purchaser  is  not  in  possession  of  the
property in question or if there is obstruction  by  respondent  no.1,  such
obstruction shall be removed and the appellant shall be  put  in  possession
of the property in question.

21.   For the aforestated reasons, the appeal  is  allowed.    The  impugned
judgment is quashed and set aside, however, with no order as to costs.

                                     (ANIL R. DAVE)

                                       (UDAY UMESH LALIT)
OCTOBER 13, 2014.

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