BHIKCHAND S/O DHONDIRAM MUTHA (DECEASED) THROUGH LRS.versusSHAMABAI DHANRAJ GUGALE (DECEASED) THROUGH LRS.

                  [2024] 6 S.C.R. 624 : 2024 INSC 411

         Bhikchand S/o Dhondiram Mutha (Deceased)
                        Through Lrs.
                             v.
      Shamabai Dhanraj Gugale (Deceased) Through Lrs.
                       (Civil Appeal No. 5026 of 2023)
                                 14 May 2024
           [Hrishikesh Roy and Prashant Kumar Mishra,* JJ.]

                           Issue for Consideration
       Whether the present is a fit and suitable case for exercising
       power under Section 144, Code of Civil Procedure, 1908 directing
       restitution in favour of the appellant-judgment debtor by placing
       the parties in the position which they would have occupied before
       the execution.

                                  Headnotes†
       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 defendant-
       judgment 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–
* Author
[2024] 6 S.C.R.                                                             625

     Bhikchand S/o Dhondiram Mutha (Deceased) Through Lrs. v.
         Shamabai Dhanraj Gugale (Deceased) Through Lrs.

     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
626                                                              [2024] 6 S.C.R.

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       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]
[2024] 6 S.C.R.                                                              627

     Bhikchand S/o Dhondiram Mutha (Deceased) Through Lrs. v.
         Shamabai Dhanraj Gugale (Deceased) Through Lrs.

                              Case Law Cited
           Binayak Swain v. Ramesh Chandra Panigrahi & Anr.
           [1966] 3 SCR 24 : AIR 1966 SC 948; South Eastern
           Coalfields Ltd. v. State of M.P. & Ors. [2003] Supp. 4
           SCR 651 : (2003) 8 SCC 648; Chinnamal & Ors. v.
           Arumugham & Anr. [1990] 1 SCR 78 : AIR 1990 SC
           1828; Padanathil Rugmini Ama v. P.K. Abdulla [1996]
           1 SCR 651 : (1996) 7 SCC 668; Lal Bhagwant Singh
           v. Sri Kishen Das [1953] 1 SCR 559; Balakrishnan v.
           Malaiyandi Konar [2006] 2 SCR 363 : (2006) 3 SCC
           49; Ambati Narasayya v. M. Subba Rao [1989] Supp.
           1 SCR 451 : 1989 supp (2) SCC 693 – relied on.
           Gurjoginder Singh v. Jaswant Kaur & Anr. [1994] 1 SCR
           794 : (1994) 2 SCC 368; Kuppa Sankara Sastri & Ors.
           v. Kakumanu Varaprasad & Anr., AIR 1948 MAD.12 –
           referred to.
           Jai Berham v. Kedar Nath Marwari, AIR 1922 PC 269;
           Zain-UlAbdin Khan v. Muhammad Asghar Ali Khan
           (1888) ILR 10 ALL 166 (PC) – referred to.

                                 List of Acts
     Code of Civil Procedure, 1908.

                              List of Keywords
     Section 144 of Code of Civil Procedure, 1908; Restitution; Judgment
     debtor; Properties of judgment debtor; Decree holders; Decree
     varied/Variation of decree; Auction; Public auction; Auction sale;
     Decree holder is auction purchaser, Decree subsequently set aside;
     Decree holder purchased property in execution of his own decree;
     Person not party to the decree; Third-party auction purchaser;
     Knowledge of pending proceeding; Executing Court; Registered
     sale deed; Decree subsequently modified/varied; Attachment of
     immovable properties of the judgment debtor; Purchaser or the
     assignee from the decree holder; Bona fide purchaser; Sale of all
     the attached properties; Restitution in favour of judgment debtor;
     Execution sale; Restitution by setting aside execution sale; Execution
     of a decree by sale of entire immovable property; Sale of a part
     of the attached property sufficient to satisfy the decree; Valuation
     of the property put to auction; Valuation at the time of attachment;
     Valuation of the attached properties; Attachment Panchanama.
628                                                         [2024] 6 S.C.R.

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                             Case Arising From
       CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5026 of 2023
       From the Judgment and Order dated 05.06.2017 of the High Court
       of Bombay in SA No. 338 of 1994
                          Appearances for Parties
       D.N. Goburdhan, Sr. Adv., Ms. Kamakshi S. Mehlwal, Sanveer
       Mehlwal, Ms. Deepa Joseph, Ms. Gauri Goburdhan, Advs. for the
       Appellants.
       K. Parameshwar, Yuvraj Vijayrao Kakade, Kailas B. Autade, Sachin
       Patil, Shashibhushan P. Adgaonkar, Advs. for the Respondents.
                 Judgment / Order of the Supreme Court
                                 Judgment
       Prashant Kumar Mishra, J.
1.     The legal issue in this appeal, concerns restitution of a judgment
       debtor on a decree being varied, reversed, set aside or modified
       as it is statutorily recognised in Section 144 of the Code of Civil
       Procedure, 1908.1 The decree passed by the Trial Court in the present
       case was varied by the appeal court. However, in the meantime, the
       decree was executed by sale of the judgment debtor’s property on
       23.09.1985 in favour of the decree holders, including respondent
       Nos. 1 and 2.
2.     After the decree was varied by the Appellate Court, the appellant/
       judgment debtor applied for restitution by invoking Section 144 CPC.
       The Trial Court, Appellate Court and the second Appellate Court as
       well, under impugned judgment have rejected the appellant/Judgment
       debtor’s application for restitution inter alia on the ground that the
       original decree was modified to the extent of interest payable and
       the judgment debtor not having deposited any amount in the court
       after the original decree and the property was put in auction, is not
       entitled to restitution.
3.     Before proceeding to deal with the legal issue, few relevant facts
       need to be referred which are stated intra:


1    ‘CPC’
[2024] 6 S.C.R.                                                         629

     Bhikchand S/o Dhondiram Mutha (Deceased) Through Lrs. v.
         Shamabai Dhanraj Gugale (Deceased) Through Lrs.

     3.1 Dhanraj, the husband of the original plaintiff - Shamabai Dhanraj
         Gugale advanced loan of Rs. 8,000/- to the original defendant
         – appellant/judgment debtor in the year 1969. Upon his failure
         to repay the debt, the original plaintiff instituted a Special Civil
         Suit No. 255 of 1972 for recovery of Rs. 10,880/- (Rs.8,000/-
         as principal amount + Rs. 2880/- as accrued interest) along
         with interest @ 12% per annum pendente lite and post decree
         and for other ancillary reliefs and costs. On 15.02.1982, the
         4th Joint Civil Judge, Senior Division, Pune partly decreed the
         suit by awarding the principal amount; pre-suit accrued interest;
         pendente lite and further interest at the rate of 12% per annum
         till realization of the principal amount and costs. The original
         plaintiff-decree holder preferred appeal against rejection of part
         of the claim. In this appeal (C.A. No. 1293 of 1986), the judgment
         debtor preferred cross objections. During the pendency of the
         above first appeal, the plaintiff-decree holder also preferred
         execution application which came to be transferred to the
         court of Civil Judge, Senior Division, Ahmednagar because the
         property belonging to the judgment debtor against which the
         decretal amount was to be recovered fell within the jurisdiction
         of Ahmednagar court. A special Darkhast No. 100 of 1982 came
         to be filed in the Ahmednagar court on 20.09.1982. In these
         execution proceedings, the decree holder sought attachment
         and sale of the following properties of the judgment debtor for
         satisfaction of the decree:
                (1)   The land situate at Mauje Davtakli, Taluka
                      Shevgaon, District Ahmednagar at Gut No. 72,
                      admeasuring approximately 9 Hectares 55 Are.
                      (approximately 24 acres);
                (2)   land situate at Mauje Davtakli, Taluka Shevgaon,
                      District-Ahmednagar at Gut No. 280, admeasuring
                      approximately 0 Hectare 48 Are.
                (3)   Three House Property bearing nos. 13, 23 and
                      8 situate at Mauje Devtakli, Taluka Shevgaon,
                      District Ahmednagar.
     3.2 The civil appeal preferred by the original plaintiff came to be
         dismissed by the district court on 02.08.1988 and at the same
         time the defendant’s cross objections were allowed to the extent
630                                                          [2024] 6 S.C.R.

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            of interest and cost. The appellate court reduced the interest
            from 12% per annum to 6% per annum for both pre-suit and
            pendente lite/ future interest and further directed the parties to
            bear their own costs. As a result, the appellate decree, while
            retaining the principal decretal amount of Rs. 8,000/-, reduced
            the pre-suit interest from Rs. 2880/- to Rs. 1440/- and the
            pendente lite interest from Rs. 15360/- to Rs. 7680/- and denied
            costs of Rs. 1454/- altogether. The total decretal amount of
            Rs.27694/- thus stood reduced to Rs. 17120/-.
       3.3 Before the decision rendered by the appellate court reducing the
           decretal amount, as above, the plaintiff/decree holder executed
           the decree and the properties of the defendant/judgment debtor
           as mentioned (supra) were put to auction and were purchased
           by the original plaintiffs/decree holders themselves for a sum
           of Rs. 34000/- in the auction dated 09.08.1985 which was
           confirmed by the Executing Court i.e. 2nd Joint Civil Judge, Senior
           Division, Ahmednagar in Special Darkhast No. 100 of 1982 on
           23.09.1985. The first property in auction admeasuring 24 acres
           was subsequently sold by the plaintiff in favour of respondent
           no. 3 herein vide registered sale deed dated 17.07.2009 for a
           sum of Rs.3.9 Lakhs.
       3.4 On 29.01.1990, the present appellant/ judgment debtor moved an
           application for restitution under Section 144 CPC on the ground
           that the original decree having been varied, substantially, the
           execution sale deserves to be set aside and reversed by way
           of restitution. The appellant/judgment debtor also deposited
           the entire decretal amount (as finally decreed by the appeal
           court) in the Trial Court. As noted above, the courts below have
           concurrently rejected the appellant/judgment debtor’s application
           for restitution basing the reasoning that he had not deposited
           any amount in court, when the suit was originally decreed and
           the decree was put in execution, and not even a part of the
           amount which was finally decreed by the appeal court was
           deposited, hence, the principle of restitution is not invokable.
4.     Mr. D.N. Goburdhan, learned senior counsel appearing for the
       appellant/judgment debtor has strenuously urged that the auction
       purchaser, being the decree holder, in the present case, is not
       entitled to any equity, which a bona fide auction purchaser with no
[2024] 6 S.C.R.                                                            631

      Bhikchand S/o Dhondiram Mutha (Deceased) Through Lrs. v.
          Shamabai Dhanraj Gugale (Deceased) Through Lrs.

      knowledge of the litigation, or the pending appeal would have in
      such matter. Reliance is placed on Binayak Swain vs. Ramesh
      Chandra Panigrahi & Anr2. & Chinnamal & Ors. Vs. Arumugham
      & Anr3. It is further argued that even an assignee of a decree holder/
      auction purchaser (respondent no. 3 herein) cannot be equated with
      a bona fide purchaser for value without notice. Reference is made
      to the decision of this Court in Padanathil Rugmini Ama Vs. P.K.
      Abdulla4. It is then argued that where a decree holder himself is
      an auction purchaser, the sale cannot stand not only in the case of
      reversal of a decree but also on any variation or modification of it. It
      is submitted that the judgment debtor’s right under Section 144 CPC
      is ignited immediately after reversal or modification of the decree.
      Referring to South Eastern Coalfields Ltd. Vs. State of M.P. &
      Ors.5, it is argued that the principles enshrined in Section 144 CPC
      have to be given the widest possible meaning, therefore, even in
      case of variation or modification of decree, restitution must follow.
      Reference is also made to Chinnamal (supra).
5.    Learned senior counsel for the appellant would highlight that the
      decree holder in the present case enjoyed harvesting 24 acres of
      land for over 25 years and then sold the said land for a sum of Rs.
      39 lakhs on 17.07.2009 to respondent no. 3 who was gambling on
      the litigation. He had full knowledge of the litigation which is reflected
      from the recital in the sale deed (in para 4 of the sale deed) wherein
      he agreed that if the decree holder loses the litigation, Rs. 39 lakhs
      would be paid back to him (to the purchaser) without interest. This
      crucial point was not noticed by the courts below as probably, the said
      information was not made available to the court. Such subsequent
      purchaser can never be treated as bona fide purchaser as held in
      the matter of Chinnamal (supra), Gurjoginder Singh vs. Jaswant
      Kaur & Anr.6 & Padanathil (supra).
6.    Per contra, Mr. Vinay Navare learned senior counsel appearing for
      respondent nos. 1 and 2 would submit that even assuming that the
      modified decree was for Rs. 17120/-, auction sale by the Executing


2    [1966] 3 SCR 24 : AIR 1966 SC 948
3    [1990] 1 SCR 78 : AIR 1990 SC 1828
4    [1996] 1 SCR 651 : (1996) 7 SCC 668
5    [2003] Supp. 4 SCR 651 : (2003) 8 SCC 648
6    [1994] 1 SCR 794 : (1994) 2 SCC 368
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       Court was inevitable and the appellant cannot claim for setting aside
       the sale and his only right is to recover the amount of difference i.e.
       Rs. 10574/- under Section 144 CPC. It is argued that the appellant/
       defendant remained absent during the proceedings, and he entered
       into two agreements to defraud the respondent/plaintiff which has
       been noted by the Executing Court while rejecting his objections
       to the attachment and sale of the said property. Insofar as the
       valuation of the property mentioned in the attachment Panchanama
       under Rule 54 of Order XXI it is argued that the rule itself does not
       contemplate valuation at the time of attachment. It is then argued
       that the contention regarding hurried auction cannot be raised in
       the proceedings under Section 144 CPC for which there are various
       provisions in Order XXI CPC which can be invoked in the course of
       the execution proceedings. The appellant having not invoked any such
       provisions, the same cannot be raised in proceeding under Section
       144 CPC. It is also submitted that Order XXI is a self-contained
       code and Principal of Estoppel would apply because the appellant,
       having accepted the conclusion of auction proceedings and choosing
       not to challenge the same, is now estopped from questioning the
       validity of the auction.
7.     Learned counsel would further submit that the judgments referred by
       the appellant in the matter of South Eastern Coal Field (supra) has
       no application in the facts of the present case. It is further put forth that
       difference in the value of the property in the year 1985 and 2009 also
       cannot be allowed to be raised, as it is alien to jurisprudence under
       Section 144 CPC. According to the learned counsel, the provisions
       contained in Section 144 CPC need to be read in correct perspective
       and restitution can be ordered in appropriate case, when decree is
       set aside, but restitution is not the only way of compensating the party
       under Section 144 CPC. Laying emphasis on the words “restitution
       or otherwise” in Section 144 CPC, it is vehemently argued that
       the wordings clearly show such legislative intention that restitution
       is not the only way of compensating the party and the judgment
       debtor can be granted relief by way of compensation or interest, in
       appropriate case.
8.     Mr. K. Parameshwar learned counsel appearing for respondent no.
       3 would submit that the said respondent had purchased the subject
       property vide sale deed dated 17.07.2009 as a bona fide purchaser
       for value. He would refer to the conduct of the appellant throughout
[2024] 6 S.C.R.                                                          633

      Bhikchand S/o Dhondiram Mutha (Deceased) Through Lrs. v.
          Shamabai Dhanraj Gugale (Deceased) Through Lrs.

      the litigation including the execution proceedings wherein he did not
      prefer any appeal against the trial court’s decree nor against the
      confirmation of sale by the Executing Court. It is argued that the
      cases relied upon by the appellant/judgment debtor are in respect
      of reversal of decree whereas the present is one of variation of the
      decree and not of reversal.
9.    Mr. Parameshwar would submit that the appellant/judgment debtor is
      not entitled for restitution, and he had no means to pay the reduced
      decretal amount, therefore, the sale was inevitable. Reference is
      made to Kuppa Sankara Sastri & Ors. Vs. Kakumanu Varaprasad
      & Anr.7 so also Lal Bhagwant Singh vs. Sri Kishen Das8 & South
      Eastern Coalfields Ltd. (supra).
10. It is next argued by Mr. Parameshwar that the appellant/judgment
    debtor is not entitled to restitution against respondent no. 3 who
    purchased the property from the decree holder. Reference is made
    to Chinnamal (supra) & Padanathil (supra). Alternatively, it is argued
    by Mr. Parameshwar that extent of variation in the decree/order is
    an important factor to be considered by the Court in view of the
    language employed in Section 144 CPC providing restitution will be
    made “so far as may be” in the context of “insofar as a decree is
    varied or reversed”. It is argued that the restitution to the judgment
    debtor shall be in proportion to the variation/modification made in
    the decree so that equitable justice is done to subsequent purchaser
    as well. The conduct of the party and lapse of time from the date of
    variation of decree and when the restitution is going to be ordered
    as well as the third-party interest are other factors which need to be
    considered while ordering restitution.
      ANALYSIS
11. The statutory mandate for restitution is contained in Section 144
    CPC which is reproduced hereunder:
             “144. Application for restitution.—(1) Where and in so far
             as a decree [or an order] is [varied or reversed in any
             appeal, revision or other proceeding or is set aside or
             modified in any suit instituted for the purpose, the Court


7    AIR 1948 MAD.12
8    [1953] SCR 559
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            which passed the decree or order] shall, on the application
            of any party entitled in any benefit by way of restitution
            or otherwise, cause such restitution to be made as will,
            so far as may be, place the parties in the position which
            they would have occupied but for such decree [or order]
            or [such part thereof as has been varied, reversed, set
            aside or modified]; and, for this purpose, the Court may
            make any orders, including orders for the refund of costs
            and for the payment of interest, damages, compensation
            and mesne profits, which are properly [consequential on
            such variation, reversal, setting aside or modification of
            the decree or order].
            [Explanation.—For the purposes of sub-section (1) the
            expression “Court which passed the decree or order” shall
            be deemed to include,— (a) where the decree or order
            has been varied or reversed in exercise of appellate or
            revisional jurisdiction, the Court of first instance; (b) where
            the decree or order has been set aside by a separate suit,
            the court of first instance which passed such decree or
            order; (c) where the Court of first instance has ceased to
            exist or has ceased to have jurisdiction to execute it, the
            Court which, if the suit wherein the decree or order was
            passed were instituted at the time of making the application
            for restitution under this section, would have jurisdiction
            to try such suit.]
            (2) No suit shall be instituted for the purpose of obtaining
            any restitution or other relief which could be obtained by
            application under sub-section (1).”
       The principle behind the order of restitution made after the original
       decree is reversed or varied or modified has been explained by this
       Court in the matter of South Eastern Coal Fields (supra) in the
       following words in paras 26, 27 & 28:
            “26. In our opinion, the principle of restitution takes care of
            this submission. The word “restitution” in its etymological
            sense means restoring to a party on the modification,
            variation or reversal of a decree or order, what has been
            lost to him in execution of decree or order of the court
            or in direct consequence of a decree or order (see Zafar
[2024] 6 S.C.R.                                                             635

     Bhikchand S/o Dhondiram Mutha (Deceased) Through Lrs. v.
         Shamabai Dhanraj Gugale (Deceased) Through Lrs.

           Khan v. Board of Revenue, U.P. [1984 Supp SCC 505 :
           AIR 1985 SC 39] ) In law, the term “restitution” is used
           in three senses: (i) return or restoration of some specific
           thing to its rightful owner or status; (ii) compensation for
           benefits derived from a wrong done to another; and (iii)
           compensation or reparation for the loss caused to another.
           (See Black’s Law Dictionary, 7th Edn., p. 1315). The Law
           of Contracts by John D. Calamari & Joseph M. Perillo
           has been quoted by Black to say that “restitution” is an
           ambiguous term, sometimes referring to the disgorging of
           something which has been taken and at times referring to
           compensation for injury done:
                “Often, the result under either meaning of the term
                would be the same. … Unjust impoverishment
                as well as unjust enrichment is a ground for
                restitution. If the defendant is guilty of a non-
                tortious misrepresentation, the measure of
                recovery is not rigid but, as in other cases
                of restitution, such factors as relative fault,
                the agreed-upon risks, and the fairness of
                alternative risk allocations not agreed upon and
                not attributable to the fault of either party need
                to be weighed.”
           The principle of restitution has been statutorily recognized
           in Section 144 of the Code of Civil Procedure, 1908.
           Section 144 CPC speaks not only of a decree being varied,
           reversed, set aside or modified but also includes an order
           on a par with a decree. The scope of the provision is
           wide enough so as to include therein almost all the kinds
           of variation, reversal, setting aside or modification of a
           decree or order. The interim order passed by the court
           merges into a final decision. The validity of an interim order,
           passed in favour of a party, stands reversed in the event
           of a final decision going against the party successful at
           the interim stage. Unless otherwise ordered by the court,
           the successful party at the end would be justified with all
           expediency in demanding compensation and being placed
           in the same situation in which it would have been if the
           interim order would not have been passed against it. The
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       successful party can demand (a) the delivery of benefit
       earned by the opposite party under the interim order of
       the court, or (b) to make restitution for what it has lost;
       and it is the duty of the court to do so unless it feels that
       in the facts and on the circumstances of the case, the
       restitution far from meeting the ends of justice, would rather
       defeat the same. Undoing the effect of an interim order by
       resorting to principles of restitution is an obligation of the
       party, who has gained by the interim order of the court,
       so as to wipe out the effect of the interim order passed
       which, in view of the reasoning adopted by the court at
       the stage of final decision, the court earlier would not or
       ought not to have passed. There is nothing wrong in an
       effort being made to restore the parties to the same position
       in which they would have been if the interim order would
       not have existed.
       27. Section 144 CPC is not the fountain source of restitution,
       it is rather a statutory recognition of 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. In Jai Berham v. Kedar Nath Marwari
       [(1922) 49 IA 351: AIR 1922 PC 269] Their Lordships of
       the Privy Council said: (AIR p. 271)
            “It is the duty of the court under Section 144 of
            the Civil Procedure Code to ‘place the parties
            in the position which they would have occupied,
            but for such decree or such part thereof as has
            been varied or reversed’. Nor indeed does this
            duty or jurisdiction arise merely under the said
            section. It is inherent in the general jurisdiction
            of the court to act rightly and fairly according to
            the circumstances towards all parties involved.”
       Cairns, L.C. said in Rodger v. Comptoir D’Escompte de
       Paris [(1871) 3 PC 465: 7 Moo PCC NS 314: 17 ER 120]:
       (ER p. 125)
            “[O]ne of the first and highest duties of all
            courts is to take care that the act of the court
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                does no injury to any of the suitors, and when
                the expression, ‘the act of the court’ is used, it
                does not mean merely the act of the primary
                court, or of any intermediate court of appeal,
                but the act of the court as a whole, from the
                lowest court which entertains jurisdiction over
                the matter up to the highest court which finally
                disposes of the case.”
           This is also on the principle that a wrong order should not
           be perpetuated by keeping it alive and respecting it (A.
           Arunagiri Nadar v. S.P. Rathinasami [(1971) 1 MLJ 220]).
           In the exercise of such inherent power the courts have
           applied the principles of restitution to myriad situations not
           strictly falling within the terms of Section 144.
          28. That no one shall suffer by an act of the court is not
          a rule confined to an erroneous act of the court; the “act
          of the court” embraces within its sweep all such acts
          as to which the court may form an opinion in any legal
          proceedings that the court would not have so acted had
          it been correctly apprised of the facts and the law. The
          factor attracting applicability of restitution is not the act of
          the court being wrongful or a mistake or error committed
          by the court; the test is whether on account of an act of
          the party persuading the court to pass an order held at the
          end as not sustainable, has resulted in one party gaining
          an advantage which it would not have otherwise earned,
          or the other party has suffered an impoverishment which
          it would not have suffered but for the order of the court
          and the act of such party. The quantum of restitution,
          depending on the facts and circumstances of a given
          case, may take into consideration not only what the party
          excluded would have made but also what the party under
          obligation has or might reasonably have made. There is
          nothing wrong in the parties demanding being placed in
          the same position in which they would have been had
          the court not intervened by its interim order when at the
          end of the proceedings the court pronounces its judicial
          verdict which does not match with and countenance its
          own interim verdict. Whenever called upon to adjudicate,
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            the court would act in conjunction with what is real and
            substantial justice. The injury, if any, caused by the act
            of the court shall be undone and the gain which the party
            would have earned unless it was interdicted by the order
            of the court would be restored to or conferred on the party
            by suitably commanding the party liable to do so. Any
            opinion to the contrary would lead to unjust if not disastrous
            consequences. Litigation may turn into a fruitful industry.
            Though litigation is not gambling yet there is an element of
            chance in every litigation. Unscrupulous litigants may feel
            encouraged to approach the courts, persuading the court
            to pass interlocutory orders favourable to them by making
            out a prima facie case when the issues are yet to be heard
            and determined on merits and if the concept of restitution
            is excluded from application to interim orders, then the
            litigant would stand to gain by swallowing the benefits
            yielding out of the interim order even though the battle
            has been lost at the end. This cannot be countenanced.
            We are, therefore, of the opinion that the successful party
            finally held entitled to a relief assessable in terms of money
            at the end of the litigation, is entitled to be compensated
            by award of interest at a suitable reasonable rate for the
            period for which the interim order of the court withholding
            the release of money had remained in operation.”
12. The principle explained by this Court in South Eastern Coal Fields
    (supra) as extracted above is to the effect that 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 as held by Privy Council in
    Jai Berham vs. Kedar Nath Marwari9. It is also explained that the
    factor attracting applicability of restitution is not the act of the court
    being wrongful or a mistake or error committed by the court; the test
    is whether on account of an act of the party persuading the court
    to pass an order held at the end as not sustainable, has resulted in
    one party gaining an advantage which it would not have otherwise
    earned.


9   AIR 1922 PC 269
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13. In the matter of Binayak Swain (supra), this Court held that the
    obligation for restitution arises automatically on the reversal or
    modification of the decree and necessarily carries with it the right to
    restitution of all that has been done under the erroneous decree; and
    the Court in making restitution is bound to restore the parties, so far
    as they can be restored to the same position they were in at the time
    when the Court by its erroneous action had displaced them from.
14. Drawing the distinction between a decree holder who himself is the
    auction purchaser and a third-party auction purchaser, this Court in
    Binayak Swain (supra) approved an earlier judgment of Privy Council
    in the matter of Zain-Ul-Abdin Khan vs. Muhammad Asghar Ali
    Khan10 to reiterate that “great distinction between the decree-holders
    who came in and purchased under their own decree, which was
    afterwards reversed on appeal, and the bona fide purchasers who
    came in and bought at the sale in execution of the decree to which they
    were no parties, and at a time when that decree was a valid decree,
    and when the order for the sale was a valid order”. It is categorically
    held that where the decree holder is himself the auction purchaser,
    the sale cannot stand, if the decree is subsequently set aside.
15. In the matter of Chinnamal (supra), this Court again dealt with the
    distinction between the decree holder who purchased the property in
    execution of his own decree, which is afterwards modified or reversed,
    and a person who is not a party to the decree. This Court held thus
    in paras 10 and 11:
              “10. There is thus a distinction maintained between the
              decree holder who purchases the property in execution of
              his own decree, which is afterwards modified or reversed,
              and an auction purchaser who is not party to the decree.
              Where the purchaser is the decree holder, he is bound
              to restore the property to the judgment debtor by way of
              restitution but not a stranger auction purchaser. The latter
              remains unaffected and does not lose title to the property
              by subsequent reversal or modification of the decree. The
              courts have held that he could retain the property since he
              is a bona fide purchaser. This principle is also based on the
              premise that he is not bound to enquire into correctness


10   (1888) ILR 10 ALL 166 (PC)
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         of the judgment or decree sought to be executed. He is
         thus distinguished from an eo nomine party to the litigation.
         11. There cannot be any dispute on this proposition, and
         it is indeed based on a fair and proper classification. The
         innocent purchaser whether in voluntary transfer or judicial
         sale by or in execution of a decree or order would not be
         penalised. The property bona fide purchased ignorant of
         the litigation should be protected. The judicial sales in
         particular would not be robbed of all their sanctity. It is a
         sound rule based on legal and equitable considerations.
         But it is difficult to appreciate why such protection should
         be extended to a purchaser who knows about the pending
         litigation relating to the decree. If a person ventures to
         purchase the property being fully aware of the controversy
         between the decree holder and judgment debtor, it is difficult
         to regard him as a bona fide purchaser. The true question
         in each case, therefore, is whether the stranger auction
         purchaser had knowledge of the pending litigation about
         the decree under execution. If the evidence indicates that
         he had no such knowledge he would be entitled to retain
         the property purchased being a bona fide purchaser and
         his title to the property remains unaffected by subsequent
         reversal of the decree. The court by all means should
         protect his purchase. But if it is shown by evidence that
         he was aware of the pending appeal against the decree
         when he purchased the property, it would be inappropriate
         to term him as a bona fide purchaser. In such a case
         the court also cannot assume that he was a bona fide
         or innocent purchaser for giving him protection against
         restitution. No assumption could be made contrary to
         the facts and circumstances of the case and any such
         assumption would be wrong and uncalled for.”
16. Whether a third-party auction purchaser who had the knowledge of
    the pending proceedings can resist restitution has been answered
    against such auction purchaser in paras 14, 16 & 17 of Chinnamal
    (supra)
         “14. This proposition, we are, however, unable to accept.
         In our opinion, the person who purchases the property in
         court auction with the knowledge of the pending appeal
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           against the decree cannot resist restitution. His knowledge
           about the pending litigation would make all the difference
           in the case. He may be a stranger to the suit, but he must
           be held to have taken calculated risk in purchasing the
           property. Indeed, he is evidently a speculative purchaser,
           and, in that respect, he is in no better position than the
           decree holder purchaser. The need to protect him against
           restitution, therefore, seems to be unjustified. Similarly,
           the auction purchaser who was a name lender to the
           decree holder or who has colluded with the decree holder
           to purchase the property could not also be protected to
           retain the property if the decree is subsequently reversed.
           16. This is also the principle underlying Section 144 of
           the Code of Civil Procedure. It is the duty of all the courts
           as observed by the Privy Council “as aggregate of those
           tribunals” to take care that no act of the court in the
           course of the whole of the proceedings does an injury to
           the suitors in the court. The above passage was quoted
           in the majority judgment of this Court in A.R. Antulay v.
           R.S. Nayak [(1988) 2 SCC 602, 672: 1988 SCC (Cri) 372].
           Mukharji, J., as he then was, after referring to the said
           observation of Lord Cairns, said: (SCC p. 672, para 83)
                “No man should suffer because of the mistake
                of the court. No man should suffer a wrong by
                technical procedure of irregularities. Rules or
                procedures are the handmaids of justice and not
                the mistress of the justice. Ex debito justitiae,
                we must do justice to him. If a man has been
                wronged so long as it lies within the human
                machinery of administration of justice that wrong
                must be remedied.”
           17. It is well to remember that the Code of Civil Procedure
           is a body of procedural law designed to facilitate justice
           and it should not be treated as an enactment providing
           for punishments and penalties. The laws of procedure
           should be so construed as to render justice wherever
           reasonably possible. It is in our opinion, not unreasonable
           to demand restitution from a person who has purchased
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          the property in court auction being aware of the pending
          appeal against the decree.”
17. In the matter of Padanathil Rugmini Amma (supra), this Court while
    dealing with somewhat similar fact situation (as in the case in hand)
    wherein a decree holder himself became the auction purchaser and
    later on leased out the property to a third party who in turn sold to
    another one and then this man again sold out to a fourth person,
    held thus in paras 10, 11, 14, 15,16 and 17:
          “10. It is, however, contended by the respondent that he
          is a lessee from the decree-holder auction-purchaser. The
          appellant cannot seek restitution of properties leased to
          him by the decree-holder auction-purchaser. The lease in
          his favour is protected, he being a third party to the court
          proceedings and the auction sale. This contention has been
          upheld by the Kerala High Court and is challenged before
          us. Now, under Section 144 of the Civil Procedure Code
          where and insofar as a decree or an order is varied or
          reversed or is set aside, the court which passed the decree
          or order, shall, on the application of any party entitled to
          any benefit by way of restitution or otherwise, cause such
          restitution to be made as will, so far as may be, place the
          parties in the position which they would have occupied but
          for such decree or order. For this purpose, the court may
          make such orders including orders for the refund of costs
          and for the payment of interest, damages, compensation
          and mesne profits, which are properly consequential on
          such variation, reversal, setting aside or modification of
          the decree or order.
          11. In the present case, as the ex parte decree was
          set aside, the judgment-debtor was entitled to seek
          restitution of the property which had been sold in court
          auction in execution of the ex parte decree. There is no
          doubt that when the decree-holder himself is the auction-
          purchaser in a court auction sale held in execution of a
          decree which is subsequently set aside, restitution of the
          property can be ordered in favour of the judgment-debtor.
          The decree-holder auction-purchaser is bound to return
          the property. It is equally well settled that if at a court
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           auction sale in execution of a decree, the properties are
           purchased by a bona fide purchaser who is a stranger to
           the court proceedings, the sale in his favour is protected
           and he cannot be asked to restitute the property to the
           judgment-debtor if the decree is set aside. The ratio
           behind this distinction between a sale to a decree-holder
           and a sale to a stranger is that the court, as a matter of
           policy, will protect honest outsider purchasers at sales
           held in the execution of its decrees, although the sales
           may be subsequently set aside, when such purchasers
           are not parties to the suit. But for such protection, the
           properties which are sold in court auctions would not
           fetch a proper price and the decree-holder himself would
           suffer. The same consideration does not apply when the
           decree-holder is himself the purchaser and the decree in
           his favour is set aside. He is a party to the litigation and
           is very much aware of the vicissitudes of litigation and
           needs no protection.
           14. In the case of Satis Chandra Ghose v. Rameswari Dasi
           [AIR 1915 Cal 363: 20 CWN 665], the Calcutta High Court
           relied upon these observations of the Privy Council and
           held that the decree-holders and those who claim under
           decree-holders will form one class as against strangers
           to the decree who purchase in a court auction sale. The
           title of a purchaser from one who has bought at the sale
           in execution of his own decree is liable to be defeated
           when the decree is subsequently set aside. The Calcutta
           High Court said:
                “The Court as a matter of policy has a tender
                regard for honest purchasers at sales held in
                execution of its decrees though the sales may be
                subsequently set aside, where those purchasers
                are not parties to the suit and the decree has
                not been passed without jurisdiction. But the
                same measure of protection is not extended
                to purchasers who are themselves the decree-
                holders; nor can the purchasers from such
                decree-holders claim that the Court owes them
                any duty….”
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       The policy which prompts the extension of protection to
       the strangers who purchase at court auctions is based
       on a need to ensure that proper price is fetched at a
       court auction. This policy has no application to sales
       outside the court. The purchasers from a decree-holder
       auction-purchaser have bought from one whose title is
       liable to be defeated. The title acquired by the purchaser
       from the decree-holder is similarly defeasible. The Court
       further observed: “… the defeasibility of a decree-holder’s
       title where the decree is ex parte is of such common
       occurrence that the plea of a purchaser for value without
       notice hardly applies”.
       15. The same view has been reaffirmed by the Calcutta
       High Court in the case of Abdul Rahman v. Sarat Ali [AIR
       1916 Cal 710: 20 CWN 667] where it has been held that the
       assignee of a decree-holder auction-purchaser stands in
       no better position than his assignor. The special protection
       afforded to a stranger who purchases at an execution
       sale is not extended to an assignee of the decree-holder
       auction-purchaser.
       16. The distinction between a stranger who purchases at
       an auction sale and an assignee from a decree-holder
       purchaser at an auction sale is quite clear. Persons who
       purchase at a court auction who are strangers to the decree
       are afforded protection by the court because they are not
       in any way connected with the decree. Unless they are
       assured of title; the court auction would not fetch a good
       price and would be detrimental to the decree-holder. The
       policy, therefore, is to protect such purchasers. This policy
       cannot extend to those outsiders who do not purchase
       at a court auction. When outsiders purchase from a
       decree-holder who is an auction-purchaser clearly their
       title is dependent upon the title of decree-holder auction-
       purchaser. It is a defeasible title liable to be defeated if the
       decree is set aside. A person who takes an assignment
       of the property from such a purchaser is expected to be
       aware of the defeasibility of the title of his assignor. He
       has not purchased the property through the court at all.
       There is, therefore, no question of the court extending any
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           protection to him. The doctrine of a bona fide purchaser for
           value also cannot extend to such an outsider who derives
           his title through a decree-holder auction-purchaser. He
           is aware or is expected to be aware of the nature of the
           title derived by his seller who is a decree-holder auction-
           purchaser.
           17. The High Courts of Patna, Madras and Kerala, however,
           appear to have taken a different view. They have equated
           an assignee from a decree-holder auction-purchaser
           with a stranger auction-purchaser on the basis that an
           assignee from a decree-holder auction-purchaser has to be
           considered as a bona fide purchaser for value who should
           not be allowed to suffer on account of the mistakes or
           irregularities committed in a court of law. It is difficult to see
           how an assignee from a decree-holder auction-purchaser
           can be equated with a bona fide purchaser for value without
           notice. He is aware of the nature of the title of his seller or
           assignor. He is also aware that the title of his assignor or
           seller is subject to the doctrine of restitution if the decree is
           ultimately set aside particularly in a case where the decree
           is an ex parte decree and there is a greater possibility of
           such a decree being set aside. The reasons which prompt
           the courts to protect strangers who purchase at court auction
           sales also do not apply to assignees or purchasers from a
           decree-holder auction purchaser. They purchase outside
           the court system and cannot expect any protection from
           the court. Their title is liable to be defeated if the title of
           their seller or assignor is defeated. The view, therefore,
           expressed by the Patna High Court in the case of Gopi Lal
           v. Jamuna Prasad [AIR 1954 Pat 36:1 BLJ 406] , the Madras
           High Court in S. Chokalingam Asari v. N.S. Krishna Iyer
           [AIR 1964 Mad 404 : ILR (1964) 1 Mad 923] and the cases
           cited therein as also by the Kerala High Court in the case
           of Parameswaran Pillai Kumara Pillai v. Chinna Lakshmi
           [1970 Ker LJ 450] is not the correct view. The High Court,
           therefore, was not right in protecting the lease created in
           favour of the respondent by Mohammed Haji who was a
           decree-holder auction-purchaser at the sale in execution
           of the ex parte decree which was subsequently set aside.”
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18. The judgment in Padanathil Rugmini Amma (supra), completely
    answers the argument raised by Mr. K. Parameshwar, learned
    counsel for respondent no. 3 who has purchased the property from
    decree holder on 17.07.2009 with full knowledge of pending restitution
    proceedings as the same is 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.
19. We shall now deal with the arguments raised by Mr. Navare, learned
    senior counsel 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. According to him, Rule 54 of Order
    XXI CPC does not contemplate valuation at the time of attachment.
    This argument is raised in answer to court’s query that when only
    a sum of Rs. 27,694/- was to be realised why all the properties i.e.
    three houses approximately valued at Rs. 25,700/-, 9 H 55 Are land
    valued at Rs. 75,000/- and third property admeasuring 0 H 48 Are
    valued at Rs. 5,000/- were put to auction.
20. The above stated three properties were attached under Order XXI
    Rule 54 CPC and thereafter the Executing Court vide its order dated
    22.10.1982 (Annexure P/4) issued sale notice under Order XXI Rule
    66 CPC for sale of the attached property by public auction. The
    object of attachment of immovable property in course of execution
    of decree is for realisation of the decretal amount by way of the sale
    of the attached property under Order XXI Rule 66 CPC. The said
    rule (Order XXI Rule 66 CPC) provides for proclamation of sale by
    public auction. Sub-rule (2) of Rule 66 CPC needs reference which
    is reproduced hereinbelow:
          “(2) Such proclamation shall be draw up after notice to
          the decree-holder and the judgment-debtor and shall
          state the time and place of sale, and specify as fairly and
          accurately as possible-
          (a)   the property to be sold or, where a part of the property
                would be sufficient to satisfy the decree, such part;
          (b)   the revenue assessed upon the estate or part of the
                State, where the property to be sold is an interest in
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                 an estate or in part of an estate paying revenue to
                 the Government;
           (c)   any incumbrance to which the property is liable;
           (d)   the amount for the recovery of which the sale is
                 ordered; and
           (e)   every other thing which the Court considers material
                 for a purchaser to know in order to judge of the nature
                 and value of the property:
           Provided that where notice of the date for settling the
           terms of the proclamation has been given to the judgement-
           debtor by means of an order under rule 54, it shall not be
           necessary to give notice under this rule to the judgment-
           debtor unless the Court otherwise directs:
           Provided further that nothing in this rule shall be construed
           as requiring the Court to enter in the proclamation of
           sale its own estimate of the value of the property, but the
           proclamation shall include the estimate, if any, given, by
           either or both of the parties.”
21. The above quoted provisions contained in sub-rule (2) of Rule 66 of
    Order XXI CPC clearly 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 clearly 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.
22. It is also important to bear in mind the provisions contained in Rule
    54(1) Order XXI read with Rule 66 of Order XXI CPC 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
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       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 case in hand, the assessed value
       of all the attached properties is 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.
23. In the matter of Balakrishnan vs. Malaiyandi Konar11 this Court
    observed thus:
             “9. The provision contains some significant words. They
             are “necessary to satisfy the decree”. Use of the said
             expression clearly indicates the legislative intent that no
             sale can be allowed beyond the decretal amount mentioned
             in the sale proclamation. (See Takkaseela Pedda Subba
             Reddi v. Pujari Padmavathamma [(1977) 3 SCC 337: AIR
             1977 SC 1789].) In all execution proceedings, the court
             has to first decide whether it is necessary to bring the
             entire property to sale or such portion thereof as may seem
             necessary to satisfy the decree. If the property is large and
             the decree to be satisfied is small the court must bring only
             such portion of the property, the proceeds of which would
             be sufficient to satisfy the claim of the decree-holder. It is
             immaterial whether the property is one or several. Even
             if the property is one, if a separate portion could be sold
             without violating any provision of law only such portion of
             the property should be sold. This is not just a discretion,
             but an obligation imposed on the court. The sale held
             without examining this aspect and not in conformity with
             this mandatory requirement would be illegal and without
             jurisdiction. (See Ambati Narasayya v. M. Subba Rao [1989
             Supp (2) SCC 693].) The duty cast upon the court to sell
             only such property or portion thereof as is necessary to
             satisfy the decree is a mandate of the legislature which
             cannot be ignored. Similar view has been expressed in S.
             Mariyappa v. Siddappa [(2005) 10 SCC 235].


11   [2006] 2 SCR 363 : (2006) 3 SCC 49
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             10. In S.S. Dayananda v. K.S. Nagesh Rao [(1997) 4 SCC
             451] it was held that the procedural compliance with Order
             21 Rule 64 of the Code is a mandatory requirement. This
             was also the view expressed in Desh Bandhu Gupta v.
             N.L. Anand [(1994) 1 SCC 131].”
24. In Ambati Narasayya vs. M. Subba Rao12 this Court has held that
    in auction sale this is obligatory on Court that only such portion of
    property as would satisfy decree is sold and not the entire property.
    This court observed thus in paras 6, 7 & 8:
             “6. The principal question that has been highlighted before
             us relates to the legality of the sale of 10 acres of land
             without considering whether a portion of the land could
             have been sold to satisfy the decree. It is said that the
             total sum claimed in the execution was Rs 2395.50. The
             relevant provision which has a bearing on the question is
             Rule 64 Order XXI of the Code of Civil Procedure and it
             reads as follows: -
                    “Order XXI Rule 64: Power to order property
                    attached to be sold and proceeds to be paid to
                    persons entitled.—Any court executing a decree
                    may order that any property attached by it and
                    liable to sale, or such portion thereof as may
                    seem necessary to satisfy the decree, shall be
                    sold, and that the proceeds of such sale, or a
                    sufficient portion thereof, shall be paid to the
                    party entitled under the decree to receive the
                    same.”
             7. It is of importance to note from this provision that in all
             execution proceedings, the court has to first decide whether
             it is necessary to bring the entire attached property to
             sale or such portion thereof as may seem necessary to
             satisfy the decree. If the property is large and the decree
             to be satisfied is small, the court must bring only such
             portion of the property, the proceeds of which would be
             sufficient to satisfy the claim of the decree holder. It is


12   [1989] Supp. 1 SCR 451 : 1989 Supp (2) SCC 693
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          immaterial whether the property is one, or several. Even
          if the property is one, if a separate portion could be sold
          without violating any provision of law only such portion
          of the property should be sold. This, in our opinion, is
          not just a discretion, but an obligation imposed on the
          court. Care must be taken to put only such portion of the
          property to sale the consideration of which is sufficient to
          meet the claim in the execution petition. The sale held
          without examining this aspect and not in conformity with
          this requirement would be illegal and without jurisdiction.
          8. In Takkaseela Pedda Subba Reddi v. Pujari
          Padmavathamma [(1977) 3 SCC 337, 340] this Court
          after examining the scope of Rule 64 of Order XXI CPC
          has taken a similar view: (SCC p. 340, para 3)
                “Under this provision the executing court derives
                jurisdiction to sell properties attached only to
                the point at which the decree is fully satisfied.
                The words ‘necessary to satisfy the decree’
                clearly indicate that no sale can be allowed
                beyond the decretal amount mentioned in the
                sale proclamation. In other words, where the
                sale fetches a price equal to or higher than the
                amount mentioned in the sale proclamation
                and is sufficient to satisfy the decree, no further
                sale should be held, and the court should stop
                at that stage.”
25. It is, thus, settled principle of law that 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 is 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 has caused great
    injustice to the judgment debtor by auctioning his entire attached
    properties causing huge loss to the judgment debtor and undue
[2024] 6 S.C.R.                                                      651

     Bhikchand S/o Dhondiram Mutha (Deceased) Through Lrs. v.
         Shamabai Dhanraj Gugale (Deceased) Through Lrs.

     benefit to the auction purchaser. The fact that the properties were
     sold for a sum of Rs. 34,000/- would further demonstrate that the
     decree holder who himself is the auction purchaser has calculatedly
     offered a bid at Rs. 34,000/- despite being aware that the value of
     the attached properties is Rs. 1,05,700/-.
26. In view of the above discussion, we are satisfied that the present is
    a case where the decree is 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
    has caused huge loss to the judgment debtor where restitution by
    setting aside the execution sale is the only remedy available. It is
    not a case where the restitution can be ordered appropriately or
    suitably by directing the decree holder to make payment of some
    additional amount to the judgment debtor to compensate him for the
    loss caused due to sale of his properties. Doing so would perpetuate
    the injustice suffered by the judgment debtor.
27. It has been argued that the execution sale cannot be set aside
    at this stage when the judgment debtor has not paid any amount
    to satisfy the original decree or the modified decree nor he has
    challenged the legality of the auction sale on any permissible ground
    as contemplated in Order XXI CPC. However, we are not convinced
    with this submission made on behalf of the learned counsel for the
    respondents for the reason that we are not per se setting aside the
    execution sale as if the present is the proceedings challenging the
    execution of the decree by way of sale of the attached immovable
    properties of the judgment debtor. We are concerned herewith and
    we have confined ourselves to the core issue as to whether the
    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. It is in exercise of
    this power that we have considered the aspect of execution of the
    decree by attachment of whole property when part of the property
    could have satisfied the decree. This examination was necessary to
    ascertain the extent of injury the judgment debtor has suffered at the
    time of execution of the original decree for Rs. 27,694/- opposite to
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       the modified decree for Rs. 17,120/-. 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. 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.
28. For the foregoing, the appeal is allowed. The order dated 05.06.2017
    passed by the High Court is set aside and the appellants’ application
    under Section 144 CPC is allowed and the sale of the attached
    properties belonging to the judgment debtor is set aside and the
    parties are restored back to the position where the execution was
    positioned before the attachment of the immovable properties of the
    judgment debtor. The execution of the modified decree, if not already
    satisfied, shall proceed in accordance with law.

       Result of the case: Appeal allowed.



       †
           Headnotes prepared by: Divya Pandey