LORD KRISHNA BANK LTD Vs. THOMAS JOSEPH

JUDGEMENT

(1.) THE appellant -decree -holder obtained a decree for sale on the basis of a mortgage executed by the first defend - ant judgment -debtor in his favour.In execution of that decree the mortgaged property was sold for Rs.1,500.However,before the sale was confirmed the sixth defendant,a purchaser of the property after the mortgage,applied to set aside the sale under Order XXI,rules 89 and 90 of the.Code of Civil Procedure,1908.The sale was set aside and the execution court entered part satisfaction of the decree to the extent of Rs.1,500.The execution petition,pursuant to which the sale was held,was posted for further steps.However,the decree -holder did not pursue that application and due to many reasons the next application was filed in 1970 as E.P.169 of 1970.Thereupon the sixth defendant prayed for stopping the sale as per his E.A.595 of 1972 on the ground that the first defendant's right over the property was already sold for Rs.1,500 and that therefore the first defendant has mo more rights in the property.The execution court as well as the lower appellate court upheld the contention raised by the sixth defendant and the decree -holder has come up in appeal.

(2.) THE execution court as well as the lower appellate court held that.after the sale the first defendant had no more rights in the property;the lower appellate court also held that when the sixth defendant paid the sale amount and commission he was in effect extinguishing the charge given to the bank over the property;the lower appellate court further held,that the bank in getting the sale amount and commission from the sixth defendant was really acknowledging that the 1st defendant had no further right in the property.In the opinion of the lower appellate court even though the bank was legally not entitled to transfer the sale right because the sale was not confirmed,the transaction must be treated as one whereby the 6th defendant has extinguished the prior charge by paying off the value of that charge to the decree -holder bank.For these reasons the lower courts held that the decree -holder cannot be permitted ˜to proceed on the identical property which they had already proclaimed for sale and purchased and allowed the sale to be set aside after receiving the sale amount and commission &rsquo ;.

(3.) THE lower appellate court has further gone to adjudicate upon the mortgage rights of the decree -holder bank.In view of the execution court having entered only part satisfaction of the decree to the extent of Rs.1,500 I do not understand how that court can in subsequent proceedings say that the charge itself has been extinguished wholly,for there was no other certification as,required by Order XXI,rule 2 of satisfaction of the decree -amount Order XXI,rule 2(3)prohibits the execution court from recognizing any payment or adjustment,which has not been certified or recorded as provided for in sub -rules(1)and(2)of rule 2.The lower courts did not refer to any other certification or recording.I am,therefore,of the view that there is absolutely no basis for the execution court to hold that the decree passed on the mortgage has been completely discharged.