Code of Civil Procedure, 1908 – s.144 – Application for restitution – Decree passed by the Trial Court was varied by the appeal court by reducing the decretal amount of Rs.27694/to Rs.17120/- –However, in the meantime, the plaintiff-decree holder executed the decree and the properties of the defendantjudgment debtor (appellant) were put to auction and were purchased by the decree holders – Confirmed by Executing Court – After variation of decree, the appellant-judgment debtor filed application under Section 144 CPC for restitution – Rejected – First property in auction was sold by the plaintiff in favour of respondent no.3 herein vide registered sale deed – Appellant-judgment debtor, if entitled to restitution: Held: Section 144 CPC statutorily recognises a pre-existing rule of justice, equity and fair play – That is why it is often held that even away from Section 144, the court has inherent jurisdiction to order restitution so as to do complete justice between the parties – Further, where the decree holder is himself the auction purchaser, the sale cannot stand, if the decree is subsequently set aside – Respondent no.3 purchased the property from decree holder with full knowledge of pending restitution proceedings as the same was contained in the recital in para 4 of the sale deed – Thus, the purchaser or the assignee from the decree holder is not entitled to object restitution on the ground that he is a bona fide purchaser– In the present case, the decree was subsequently modified/varied and the decretal amount was reduced from Rs.27,694/- to Rs.17,120/-, the sale of all the three attached properties was not at all required and further in the facts and circumstances of the case variation of the decree read together with the sale of the properties at a low price caused huge loss to the judgment debtor where restitution by setting aside the execution sale is the only remedy available – Present is a fit and suitable case for exercising power under Section 144 CPC directing restitution in favour of the judgment debtor by placing the parties in the position which they would have occupied before such execution and for this purpose the Court may make any order, as provided under Section 144 CPC – Order passed by the High Court set aside, appellants’ application under Section 144 CPC is allowed and the sale of the attached properties belonging to the judgment debtor is set aside – Parties restored back to the position where the execution was positioned before the attachment of the immovable properties of the judgment debtor. [Paras 12, 14, 18, 26-28] Code of Civil Procedure, 1908 – Execution of the decree by attachment of whole property when part of the property could have satisfied the decree – Impermissibility:
Held: A decree for realisation of a sum in favour of the plaintiff should not amount to exploitation of the judgment debtor by selling his entire property – The execution of a decree by sale of the entire immovable property of the judgment debtor is not to penalise him but the same is provided to grant relief to the decree holder and to confer him the fruits of litigation – However, the right of a decree holder should never be construed to have bestowed upon him a bonanza only because he had obtained a decree for realisation of a certain amount – Court’s power to auction any property or part thereof is not just a discretion but an obligation imposed on the Court and the sale held without examining this aspect and not in conformity with this mandatory requirement would be illegal and without jurisdiction – In the case at hand, the Executing Court did not discharge its duty to ascertain whether the sale of a part of the attached property would be sufficient to satisfy the decree – When the valuation of three attached properties was mentioned in the attachment Panchanama, it was the duty of the Court to have satisfied itself on this aspect and having failed to do so the Court caused great injustice to the judgment debtor by auctioning his entire attached properties causing huge loss to him and undue benefit to the auction purchaser – The fact that the properties were sold for Rs. 34,000/- would further demonstrate that the decree holder who himself was the auction purchaser calculatedly offered a bid at Rs. 34,000/- despite being aware that the value of the attached properties was Rs. 1,05,700/-. [Paras 25, 27] Code of Civil Procedure, 1908 – Order XXI, Rule 54(1) r/w Order XXI CPC, Rule 66 – Plea of the respondent nos.1 and
2 that the valuation of the attached properties as shown in the attachment panchanama cannot be the basis to hold that the property of the judgment debtor valued much more than the decretal sum has been sold in execution as, Rule 54 of Order XXI CPC does not contemplate valuation at the time of attachment:
Held: Sub-rule (2) of Rule 66 of Order XXI CPC mandates that the sale proclamation should mention the estimated value of the property and such estimated value can also be given under Rule
54 Order XXI CPC – The fact that the Court is also entitled to enter in the proclamation of sale its own estimate of the value of the property demonstrates that whenever the attached immovable property is to be sold in public auction the value thereof is required to be estimated – In between Rule 54 to Rule 66 of Order XXI CPC, there is no other provision requiring assessment of value of the property to be sold in auction – The provisions contained in Rule 54(1) Order XXI read with Rule 66 of Order XXI CPC are to be borne in mind wherein it is provided that either whole of the attached property or such portion thereof as may seem necessary to satisfy the decree shall be sold in auction – If there is no valuation of the property in the attachment Panchanama and there being no separate provision for valuation of the property put to auction, it is to be understood that the valuation of the property mentioned in attachment Panchanama prepared under Rule 54 can always provide the estimated value of the property otherwise the provisions enabling the court to auction only a part of the property which would be sufficient to satisfy the decree would be unworkable or redundant – In the present case, the assessed value of all the attached properties was Rs.1,05,700/- whereas the original decretal sum was Rs.27,694/- which is about 26.2% of the total value of the property – Therefore, when only one of the attached properties was sufficient to satisfy the decree there was no requirement for effecting the sale of the entire attached properties. [Paras 21, 22]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Divya Pandey. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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