VARGHESE Vs. PARAMESWARAN NAIR

JUDGEMENT

(1.) The Appellant is the claim Petitioner in a proceeding under Order XXI Rule 58 of the Code of Civil Procedure (for short 'the Code'). His claim was allowed by the Execution Court, but that order was reversed by the lower appellate court. Feeling aggrieved, he has preferred this second appeal.

(2.) The first Respondent (hereinafter referred to as the 'decree holder') sought for execution of the decree passed in his favour, as against the 2nd Respondent in O.S. No. 116/96 before the Sub Court, Neyyattinkara. The decree proceeded in execution was passed in a suit for money charged on the scheduled property of the 2nd Respondent/judgment debtor. Admittedly that scheduled property had been attached before judgment and when the suit was decreed, a charge for realisation of the same was made over that property. In execution of the decree, when the decree holder proceeded for sale of the property, the Appellant (hereinafter referred to as 'the claimant') moved an application contending that even before the institution of the suit, the property belonging to the judgment debtor had been conveyed to him under a registered sale deed for valuable consideration received. His claim was objected to by the decree holder raising various objections that the sale deed had been fraudulently created in collusion with the judgment debtor to defeat the decree, and the property proceeded against had already been mortgaged in favour of the decree holder. In the adjudication over the claim, claimant examined P Ws.l to 3 and got marked Exts. Al to A8. No counter evidence was let in by the decree holder, who alone contested the proceedings. The execution court, after examining the materials holding that the claimant had acquired title to the property proceeded for sale even before the institution of the suit and the order of attachment passed over such property, allowed his claim ordering the vacating of the attachment over the property. The order of the execution court was challenged by the decree holder in appeal, and the lower appellate court, after re-appraisal of the materials tendered in the proceedings, set aside the order of the execution court holding that an equitable mortgage by deposit of title deed subsisted over the scheduled property when attachment was ordered and, later, the decree was passed with a charge over the attached property. The attachment made over the mortgaged property was not of much significance as there was an equitable mortgage by deposit of title deed, and, therefore, the decree holder was entitled to enforce the charge by sale of the scheduled property in execution of the decree, was the view taken by the lower appellate court to conclude that even the application moved under Order XXI Rule 58 of the Code by the claimant was not entertainable since the property was encumbered by a 'charge' created by an equitable mortgage. Impeaching the correctness and legality of the decision so rendered by the lower appellate court unsettling the order of the execution court, the claimant has preferred this appeal.

(3.) Substantial question of law previously raised for hearing in the appeal, after hearing the counsel on both sides, and taking note of the questions arising for consideration, has been re-modified and formulated as hereunder: