INDIAN BANK Vs. ELIZABETH JACOB

JUDGEMENT

(1.) The decree holder is the petitioner. It is a bank. The decree was one for recovery of money in enforcement of a mortgage. In execution the hypotheca was brought to sale. It was sold on 15-6-1987 for a sum of Rs. 20001. The sale amount was not sufficient to discharge the decree debt. The judgment debtor No. 1 and a stranger who claimed that the property had subsequently been agreed to be sold to her filed an application under O.21 R.89 of the Code of Civil Procedure. The sale amount and 5% thereof was deposited. The executing court set aside the sale on 21-11-1987. For the balance due under the decree holder filed E.P.251 of 1991. The decree holder sought to attach the property of Judgment Debtor No.1 which had earlier been mortgaged and sold in enforcement of the mortgage decree. This was on the basis that the property belonged to the judgment debtor on the sale being set aside and since the property had not been sold to the person who had joined the judgment debtor in applying under O.21 R.89 of the Code of Civil Procedure, the decree holder could proceed against the property. That application was originally dismissed by the executing court. In C.R.P. 504 of 1991 filed by the decree holder, this court set aside the order of the executing court and remanded the application for attachment; to that court, for afresh decision. The executing court held that since the property had been once sold in enforcement of the decree on the mortgage, the decree holder had no right to attach the properties over again for recovery of the balance amounts due under the decree. It is significant that the judgment debtor alone objected to the attachment and not the person who had joined the judgment debtor in the application under O.21 R.89 of the Code of Civil Procedure on the basis that there was an agreement for sale in her favour. Obviously, there had been no conveyance by judgment debtor No. 1 to the person who had joined her in making the application under O.21 R.89 of the Code of Civil Procedure. An agreement for sale even if true, does not convey any title. The order of the executing court is challenged in this revision by the decree holder.

(2.) O.34 R.6 of the Code of Civil Procedure provides that where the net proceeds of a sale held in terms of O.34 R.5 of the Code is found insufficient to pay the amount due to the mortgagee-plaintiff, the court on an application by the plaintiff may, if the balance is legally recoverable from the defendant otherwise than out of the property sold, pass a decree for such balance. The argument on behalf of the judgment debtor is that in terms of R.6 of O.34 the amount can be recovered personally only otherwise than out of the property sold. It is contended that once the sale has taken place under O.34 R.5 of the Code, the decree for further amounts personally against the judgment debtor can be recovered only otherwise than from out of the property secured. It is further contended that the fact that such a sale was set aside under O.21 R.89 of the Code of Civil Procedure would not make any difference to the situation and the decree holder could proceed against the judgment debtor for the recovery of the balance without being able to proceed against the property mortgaged and sold. A decision of the Travancore-Cochin High Court is Gopalan v. Naniamma (AIR 1957 TC 107) is relied on in support.

(3.) Though there appears to be some controversy as to whether O.21 R.89 of the Code of Civil Procedure would apply to a sale held in execution of a mortgage decree, the said question need not be considered in this case . Here, as a matter of fact, the sale was set aside on an application under O.21 R.89 of the Code of Civil Procedure. This is probably justified because of the absence of a rule corresponding to O.54 R.5 of the Code of Civil Procedure in the modified Rules of O.34 adopted in the State of Kerala. Whatever that be, the question that has to be considered is the effect of the setting aside of the sale under O.21 R.89 of the Code of Civil Procedure. On setting aside of the sale, the property reverts to the judgment debtor and continues to be the property of the judgment debtor. If in execution for the balance amount a personal decree is possible as against the judgment debtor. I see no reason why this property which had reverted to the judgment debtor cannot be attached in execution in enforcement of the personal decree. That on a sale being set aside the property would revert to the judgment debtor is clear from the principle recognised in the decision of the Madras High Court in Venkata Madhava Rao v. Narayanna Moorty