{"id":214204,"date":"2007-01-08T00:00:00","date_gmt":"2007-01-07T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/e-p-abdul-latheef-vs-k-vinodan-on-8-january-2007"},"modified":"2016-07-12T08:41:53","modified_gmt":"2016-07-12T03:11:53","slug":"e-p-abdul-latheef-vs-k-vinodan-on-8-january-2007","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/e-p-abdul-latheef-vs-k-vinodan-on-8-january-2007","title":{"rendered":"E.P.Abdul Latheef vs K.Vinodan on 8 January, 2007"},"content":{"rendered":"
Kerala High Court<\/div>\n
E.P.Abdul Latheef vs K.Vinodan on 8 January, 2007<\/div>\n
       \n\n  \n\n  \n\n \n \n  IN THE HIGH COURT OF KERALA AT ERNAKULAM\n\nWP(C) No. 31746 of 2004(D)\n\n\n1. E.P.ABDUL LATHEEF, S\/O.MUHAMMD,\n                      ...  Petitioner\n\n                        Vs\n\n\n\n1. K.VINODAN, S\/O.LATE APPU NAIR,\n                       ...       Respondent\n\n2. P.K.RAJAN, S\/O.KRISHNAN,\n\n                For Petitioner  :SRI.B.KRISHNAN\n\n                For Respondent  :SRI.K.V.SOHAN\n\nThe Hon'ble MR. Justice M.SASIDHARAN NAMBIAR\n\n Dated :08\/01\/2007\n\n O R D E R\n                   M.SASIDHARAN NAMBIAR,J.\n\n                ===========================\n\n               W.P.(C)  NO.31746    OF 2004\n\n                ===========================\n\n\n\n        Dated this the 8th day of January 2007\n\n\n\n                            JUDGMENT\n<\/pre>\n
     A   decree   holder   was   permitted   to   bid   the<\/p>\n
attached  property  in  court  auction  sale  and  to  set<\/p>\n
off the purchase money towards the amount due under<\/p>\n
the decree   as provided under Rule 72 of Order XXI<\/p>\n
of  Code  of  Civil  Procedure.  Is  the  executing  court<\/p>\n
competent   to   pass   order   for   rateable   distribution<\/p>\n
as   provided     under   section   73   of   the   Code     in   an<\/p>\n
application   filed   by   another   decree   holder   is   the<\/p>\n
question to be settled.\n<\/p>\n
     2.        Petitioner   is   the   decree   holder   in<\/p>\n
O.S.164\/01.     First   respondent   is   the   decree   holder<\/p>\n
in   O.S.258\/01.       Petitioner   obtained   an   order   of<\/p>\n
attachment   before   judgment   of   the   property   sold   in<\/p>\n
E.P.363\/01   as   per   order   dated   14.8.01.     Respondent<\/p>\n
in  his  suit  obtained  an  order  of  attachment  before<\/p>\n
judgment   on   13.8.01.     Respondent   filed   E.P.86\/04,<\/p>\n
for   realisation   of   the   decree   debt   in   O.S.258\/01.\n<\/p>\n
W.P.(C)31746\/04                   2<\/span><\/p>\n
Petitioner   sought   sale   of   the   attached   property   in<\/p>\n
that   E.P.363\/01.   The   property   of   judgment   debtor<\/p>\n
was   sold   in   that   E.P.         Petitioner   was   permitted<\/p>\n
to   bid   and   set   off   as   provided   under   Rule     72   of<\/p>\n
Order  XX1  by  the  executing  court.  The  property  was<\/p>\n
purchased   by   petitioner   as   auction   purchaser   for<\/p>\n
Rs.75,000\/-.    It  was  not  sufficient  to  satisfy  the<\/p>\n
decree   debt         in   O.S.164\/01.   Respondent   filed<\/p>\n
E.A.163\/04   in   E.P.363\/01   for   rateable   distribution<\/p>\n
of the assets realised by the sale of the attached<\/p>\n
property   in   E.P.363\/01.   E.A.163\/04   was   allowed<\/p>\n
overruling   the   objection   raised   by   the   petitioner.\n<\/p>\n
Executing   court   directed     petitioner   to   deposit<\/p>\n
Rs.30,000\/-   out   of   purchase   money   for   rateable<\/p>\n
distribution   to     first   respondent.     This   petition<\/p>\n
is   filed   under   Article   227   of     Constitution   of<\/p>\n
India challenging that order.\n<\/p>\n
      3. Learned counsel appearing for petitioner and<\/p>\n
first respondent were heard.\n<\/p>\n
      4.    The  arguments  of  learned counsel  appearing<\/p>\n
for petitioner relying on the decision of a learned<\/p>\n
W.P.(C)31746\/04                           3<\/span><\/p>\n
single  Judge  of  High  Court  of  Madras  in  Periaswami<\/p>\n
Gounder v. Nachimuthu Mudaliar (AIR 1979 Madras 87)<\/p>\n
was  that    executing  court  permitted  petitioner    to<\/p>\n
bid and set off and the amount realised by sale of<\/p>\n
the   attached   property     has   already   been   adjusted<\/p>\n
towards   the   decree   debt   and   so     a   portion   of   that<\/p>\n
amount   cannot   be   directed   to   be   deposited   for<\/p>\n
rateable   distribution   to                     first   respondent   and<\/p>\n
therefore Ext.P6 order   is to be quashed.   Learned<\/p>\n
counsel vehemently argued that first respondent had<\/p>\n
attached,   apart   from   the   property   sold   in<\/p>\n
E.P.363\/01,  another item of  property belonging to<\/p>\n
the   judgment   debtor   and   he   is   entitled   to   realise<\/p>\n
his     decree   debt       by   sale   of   that   property   and<\/p>\n
only   if   by   such   sale   the   decree   debt     is   not<\/p>\n
satisfied,     first   respondent   is   entitled   to   claim<\/p>\n
rateable   distribution     and   therefore   Ext.P6     order<\/p>\n
is not sustainable.   Finally it was argued that in<\/p>\n
any         case,         without         considering                  the         actual<\/p>\n
entitlement,                    executing           court         directed               the<\/p>\n
petitioner   to   deposit   Rs.30,000\/-   and   it   is<\/p>\n
W.P.(C)31746\/04                   4<\/span><\/p>\n
illegal.\n<\/p>\n
      5.        Learned   counsel   appearing   for   first<\/p>\n
respondent argued   that  set off allowed in favour<\/p>\n
of     petitioner   was   subject   to   Section   73   of     Code<\/p>\n
of   Civil   Procedure   providing   rateable   distribution<\/p>\n
and   this   aspect   was   not   taken   note   of                 in<\/p>\n
Periaswami   Gounder’s  case.    Relying   on   the   Full<\/p>\n
Bench   decision   of          High   Court   of   Bombay   in<\/p>\n
Ramachandra   Yeshwant   Shringarpure   v.   Digambar<\/p>\n
Tejiram   Pardeshi   (AIR   1960   Bombay   230)           it   was<\/p>\n
argued that the right of set off granted in favour<\/p>\n
of     petitioner   was   subject   to   the   right   of     first<\/p>\n
respondent   for   rateable   distribution   as   provided<\/p>\n
under   section   73   of   the   Code   and   first   respondent<\/p>\n
had filed an execution petition before the sale and<\/p>\n
also   filed   an   application   before   the   executing<\/p>\n
court   for   rateable   distribution   and   it   was   rightly<\/p>\n
allowed     and   there   is   no   reason   to   interfere   with<\/p>\n
that   order.     It   was   also   pointed   out   that     if   the<\/p>\n
amount   directed   to   be   deposited   by   the   order   was<\/p>\n
W.P.(C)31746\/04                           5<\/span><\/p>\n
without   considering     the   guidelines   provided   under<\/p>\n
section   73,     executing   court   may     be   directed   to<\/p>\n
fix   the   actual   amount,   which   petitioner   is   liable<\/p>\n
to   be   deposited   for   rateable   distribution,   as<\/p>\n
provided under section 73 of the Code.\n<\/p>\n
      6.   The   property   sold   in   E.P.363\/01   was<\/p>\n
admittedly              attached         by         first         respondent         in<\/p>\n
O.S.258\/01   before   the   petitioner   got     attached   the<\/p>\n
same in O.S.164\/01.   But the property was sold for<\/p>\n
realisation of the decree debt in O.S.164\/01 by the<\/p>\n
petitioner.     But   before   the   sale,   first   respondent<\/p>\n
had filed E.P.86\/04.  Therefore first respondent is<\/p>\n
entitled   to   apply   for   rateable   distribution   of   the<\/p>\n
assets   realised   on   court   sale     as   provided   under<\/p>\n
section   73.   The   fact   that   petitioner   was   permitted<\/p>\n
to bid and set off as provided under section 72, on<\/p>\n
27.5.04  was  not  disputed.    The  crucial  question  is<\/p>\n
whether   by   such   permission     petitioner   is   entitled<\/p>\n
to contend that as he was permitted to set off the<\/p>\n
purchase   money   towards   the   decree   debt     he   is   not<\/p>\n
liable   to   deposit   any   portion   of   that   purchase<\/p>\n
W.P.(C)31746\/04                                   6<\/span><\/p>\n
money  for rateable distribution.\n<\/p>\n
      7.     Sub   rule   (1)   of   Rule   72   of   Order   XXI<\/p>\n
provides that no holder of a decree in execution of<\/p>\n
which   property   is   sold   shall,   without   the   express<\/p>\n
permission   of   the   Court,   bid   for   or   purchase   the<\/p>\n
property.     Sub   rule   (2)   provides   for     set   off.\n<\/p>\n
It reads:-\n<\/p>\n
          “Where              a              decree-holder<\/p>\n
          purchases                          with              such<\/p>\n
          permission,   the   purchase-\n<\/p>\n
          money   and   the   amount   due   on<\/p>\n
          the   decree   may,   subject   to<\/p>\n
          the   provisions   of   Section<\/p>\n
          73,   be   set-off   against   one<\/p>\n
          another,            and                 the         Court<\/p>\n
          executing   the   decree   shall<\/p>\n
          enter up satisfaction of the<\/p>\n
          decree   in   whole   or   in   part<\/p>\n
          accordingly.”\n<\/p>\n
Sub   rule   (2)   makes   it   absolutely   clear   that   the<\/p>\n
permission granted to the decree holder to purchase<\/p>\n
W.P.(C)31746\/04                   7<\/span><\/p>\n
the attached property sold in execution and set off<\/p>\n
is   subject   to   the   provisions   of   Section   73.\n<\/p>\n
Therefore by the permission granted to bid and set<\/p>\n
off under sub rule (2) of Rule 72, a decree holder<\/p>\n
is not entitled to contend that he is not liable to<\/p>\n
deposit any part of the purchase money   because of<\/p>\n
the   permission   granted   under   Rule   72.     Permission<\/p>\n
granted under sub rule (2) of Rule 72 is subject to<\/p>\n
the   provision   for   rateable   distribution   under<\/p>\n
section 73.\n<\/p>\n
         8.     Learned   single   Judge   of     High   Court   of<\/p>\n
Madras in Periaswami Gounder’s case (supra) did not<\/p>\n
consider   the   effect   of   sub   rule   (2)   of   Rule   72   of<\/p>\n
the Code   and without taking note of the fact that<\/p>\n
permission     granted   was   subject   to   the     right   of<\/p>\n
rateable   distribution   available   to     other   decree<\/p>\n
holders   under   section   73,   held   that   by   the<\/p>\n
permission  granted  to  bid  and  set  off  the  purchase<\/p>\n
money     shall   be   deemed   to   have   been   received   and<\/p>\n
realised eo instanti of the sale made and therefore<\/p>\n
the   sale   proceeds     is   not   available   for   rateable<\/p>\n
W.P.(C)31746\/04                 8<\/span><\/p>\n
distribution.     The   learned   single   Judge   relied   on<\/p>\n
an earlier decision of Division Bench of the Madras<\/p>\n
High   Court   in     Punnamchand   Chatraban   v.   Vijjapu<\/p>\n
Satyanandam  (AIR  1933  Madras  804)  but  did  not  take<\/p>\n
notice that     another Division Bench of the Madras<\/p>\n
High   Court   had   considered   this   question   in  Megraj<\/p>\n
Iswardas   v.   Corporation   of   Madras   (AIR   1936   Madras<\/p>\n
797). The latter Division Bench took the view that,<\/p>\n
the   fact   that   decree   holder   purchased   the   property<\/p>\n
with the leave of the court  and was allowed to set<\/p>\n
off   the   purchase   price   against   the   decree   debt   ,<\/p>\n
does   not   oust   the   power   conferred   by   S.63   on   the<\/p>\n
Court of the higher grade, to call for the proceeds<\/p>\n
and rateably distribute the sale proceeds.   It was<\/p>\n
held   that   the   purchase   by   the   decree   holder   does<\/p>\n
not confer upon him an unqualified right, but it is<\/p>\n
subject to the terms of Section 63.\n<\/p>\n
  9.  The  Full Bench of the High Court of Bombay in<\/p>\n
Ramachandra   Yeshwant   Shringarpure’s   case   (supra),<\/p>\n
considered   the   question   whether   the   order   granting<\/p>\n
W.P.(C)31746\/04                             9<\/span><\/p>\n
permission   to                   set   off        under   Rule   72   is   a<\/p>\n
proceeding   within   the   meaning   of   Section   63(2)   of<\/p>\n
Code   of   Civil   Procedure.     Agreeing   with   the   view<\/p>\n
taken by the Madras   High Court in  Megraj Iswardas<\/p>\n
case(supra) and holding that the permission granted<\/p>\n
under   sub   rule   (2)   of   Rule   72   is   subject   to   the<\/p>\n
provisions   of   Section   73,   Full   Bench   held   that   by<\/p>\n
the permission granted to the  decree holder to bid<\/p>\n
and set off he  is not entitled to contend that any<\/p>\n
part   of   the   sale   proceeds   is   not   liable   to   be<\/p>\n
deposited   by   him   for   rateable   distribution.   The<\/p>\n
Full Bench also held:-\n<\/p>\n
          “In our judgment, sub-s.(2)of S.63<\/p>\n
          does   not   in   any   way   affect   the<\/p>\n
          liability   cast   upon   the   decree-<\/p><\/blockquote>\n
          holder   who   is   allowed   a   set   off<\/p>\n
          under   sub   rule   (2)   of   Rule   72,   to<\/p>\n
          refund   or   pay   back   the   amount,   if<\/p>\n
          it         is         required         for         rateable<\/p>\n
W.P.(C)31746\/04                                  10<\/span><\/p>\n
          distribution,   under   S.73   of   the<\/p>\n
          Code.   The   object   of   S.63   clearly<\/p>\n
          is         to         avoid          multiplicity                        of<\/p>\n
          proceedings                     and               to              ensure<\/p>\n
          equitable                  distribution                      of         the<\/p>\n
          assets   of   a   judgment-debtor   which<\/p>\n
          have   been   realised,   amongst   all<\/p>\n
          his   creditors.     It   does   not   lay<\/p>\n
          down any principle of exclusion.”\n<\/p><\/blockquote>\n
As pointed out by the learned counsel appearing for<\/p>\n
respondents,                 in   view   of   the   divergent   views<\/p>\n
expressed  by    High  Court  of  Calcutta,    explanation<\/p>\n
was added to Section 63. The explanation  reads:-\n<\/p>\n
           “Explanation- For the purposes<\/p>\n
           of sub-section (2), proceeding<\/p>\n
           taken   by   a   Court   does   not<\/p>\n
           include   an   order   allowing,   to<\/p>\n
           a   decree   holder,   who   has<\/p>\n
           purchased   property   at   a   sale<\/p>\n
           held in execution of a decree,<\/p>\n
           set   off   to   the   extent   of   the<\/p>\n
W.P.(C)31746\/04                          11<\/span><\/p>\n
           purchase   price   payable   by<\/p>\n
           him.”\n<\/p><\/blockquote>\n
Because   of   the   said   explanation,   it   is   clear   that<\/p>\n
an order granted under Rule 72 is taken out of the<\/p>\n
purview   of   Section   63   of   the   Code.                                  Even<\/p>\n
otherwise,           when   Rule   72   (2)                     of   Order   XXI<\/p>\n
specifically   provide   that   permission                               granted<\/p>\n
under   the   section     is     subject   to   the   provisions<\/p>\n
of   Section   73,   it   is   not   possible   to   take   a   view<\/p>\n
that   because   of   the   permission   so   granted   the<\/p>\n
auction   purchaser   decree   holder   is   not   liable   to<\/p>\n
deposit any part of the sale proceeds for rateable<\/p>\n
distribution   to   the   other   decree   holders,     if<\/p>\n
another   decree   holder   is   entitled   to   rateable<\/p>\n
distribution             as         provided         under         section         73.\n<\/p>\n
Therefore   I   find   no   reason   to   interfere   with   the<\/p>\n
finding   of   the   executing   court   that   petitioner   is<\/p>\n
liable   to   deposit     part   of   the   sale   proceeds   for<\/p>\n
rateable distribution to  first respondent.\n<\/p>\n
         10.   There   is   force   in   the   argument   of   the<\/p>\n
learned   counsel   appearing   for     petitioner   that<\/p>\n
W.P.(C)31746\/04                      12<\/span><\/p>\n
while   directing   to   deposit   Rs.30,000\/-     executing<\/p>\n
court   did   not   consider   the   guidelines     provided<\/p>\n
under   section   73   and   without   considering     that<\/p>\n
question           and         without          giving         any         reason<\/p>\n
Rs.30,000\/-   was   directed   to   be   deposited.   Finding<\/p>\n
of   the   executing   court   to   that   extent   is   set<\/p>\n
aside.   Executing   court   is   directed   to   fix   the<\/p>\n
amount   to   be   deposited   by   petitioner   for   rateable<\/p>\n
distribution     after   hearing   both   the   parties.     It<\/p>\n
was   also   argued   by     learned   counsel   appearing   for<\/p>\n
petitioner     that       first   respondent   had   attached<\/p>\n
one   more   item   of     properties     in   addition   to   the<\/p>\n
property   sold   in   execution   by   the   petitioner   and<\/p>\n
first respondent can  proceed against  that property<\/p>\n
and   so   he     is   not   entitled   to   seek   rateable<\/p>\n
distribution.       Learned counsel appearing for the<\/p>\n
first respondent submitted that the said   property<\/p>\n
is   not   sufficient   to   satisfy   the   decree   debts   and<\/p>\n
Section   73   does   not   provide   that   if   any   other<\/p>\n
property   is   available   for     the   decree   holder,   who<\/p>\n
attached   the   property   which   was   sold   in   execution<\/p>\n
W.P.(C)31746\/04                  13<\/span><\/p>\n
petition,   then   he     is   not   entitled   to   apply   for<\/p>\n
rateable   distribution.     Section   73   does   not   also<\/p>\n
provide   that   a   decree   holder   is   entitled   to   apply<\/p>\n
for   rateable   distribution   only     if   the   judgment<\/p>\n
debtor     is   not   left   with   any   other   property,<\/p>\n
except   the   property   sold.     So   long   as     first<\/p>\n
respondent   is   a   decree   holder,   whose   decree<\/p>\n
remains   unsatisfied and he had filed an execution<\/p>\n
petition     for     realisation     of   the   decree   debt<\/p>\n
before     sale   of   the   property,   and   applies   for<\/p>\n
rateable distribution, he is entitled to   rateable<\/p>\n
distribution.     Therefore   on   that   ground   also,   the<\/p>\n
order cannot be interfered.\n<\/p>\n
               Writ   Petition   is   disposed   of   directing<\/p>\n
Munsiff,   Thalassery       to   fix   the   amount   to   be<\/p>\n
deposited   by   the   decree   holder,   for   rateable<\/p>\n
distribution   after   hearing   both   the   parties.     It<\/p>\n
is   made   clear   that   both   the   decree   holders   are<\/p>\n
entitled   to   proceed   against   any   other   property   of<\/p>\n
the   judgment   debtor,   if   available   for   realisation<\/p>\n
of   the   balance   decree   debt.     Naturally     decree<\/p>\n
W.P.(C)31746\/04              14<\/span><\/p>\n
holders   are   entitled   to   rateable   distribution   in<\/p>\n
respect of that sale also, if other conditions are<\/p>\n
satisfied.\n<\/p>\n
                                    M.SASIDHARAN NAMBIAR<\/p>\n
                                               JUDGE<\/p>\n
tpl\/-\n<\/p>\n
M.SASIDHARAN NAMBIAR, J.\n<\/p>\n
    ———————\n<\/p>\n
     W.P.(C).NO. \/06<\/p>\n
    ———————\n<\/p>\n
        JUDGMENT<\/p>\n
    SEPTEMBER,2006<\/p>\n","protected":false},"excerpt":{"rendered":"
Kerala High Court E.P.Abdul Latheef vs K.Vinodan on 8 January, 2007 IN THE HIGH COURT OF KERALA AT ERNAKULAM WP(C) No. 31746 of 2004(D) 1. E.P.ABDUL LATHEEF, S\/O.MUHAMMD, … Petitioner Vs 1. K.VINODAN, S\/O.LATE APPU NAIR, … Respondent 2. P.K.RAJAN, S\/O.KRISHNAN, For Petitioner :SRI.B.KRISHNAN For Respondent :SRI.K.V.SOHAN The Hon’ble MR. Justice M.SASIDHARAN NAMBIAR Dated :08\/01\/2007 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,21],"tags":[],"class_list":["post-214204","post","type-post","status-publish","format-standard","hentry","category-high-court","category-kerala-high-court"],"yoast_head":"\nE.P.Abdul Latheef vs K.Vinodan on 8 January, 2007 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/e-p-abdul-latheef-vs-k-vinodan-on-8-january-2007\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"E.P.Abdul Latheef vs K.Vinodan on 8 January, 2007 - 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