Holding

In execution proceedings, the court is mandated to sell only that portion of the attached property necessary to satisfy the decree; any sale beyond the decretal amount is illegal and beyond jurisdiction.

Summary

The appellant filed a suit for recovery of Rs.4.49 lakh and the respondent No.1 filed a separate suit for foreclosure of a mortgage against the same judgment debtor, respondent No.2. Both suits were decreed against respondent No.2, and execution proceedings were instituted, leading to the sale of the mortgaged property to the decree holder for Rs.3.12 lakh. The appellant challenged the sale, alleging that the newspaper used for notice did not have wide circulation and that the court had not examined whether only a portion of the property, sufficient to satisfy the decretal amount, could have been sold as required by Order XXI Rule 64 of the CPC. The High Court dismissed the revision, holding the objections were vague, but the Supreme Court held that the statutory mandate to sell only that portion necessary to satisfy the decree is an obligation, not a mere discretion, and that a sale beyond the decretal amount is illegal. Consequently, the Supreme Court directed respondent No.1 to pay Rs.1 lakh to the appellant and, failing that, allowed the appellant to purchase the property for Rs.3.12 lakh with interest, while disposing of the appeal without costs.

Issues considered

Whether the court must limit the sale of attached property to the portion necessary to satisfy the decree under Order XXI Rule 64 of the CPC.
Whether failure to give notice in a widely circulated newspaper justifies setting aside the sale.
Whether an objection to the sale must be specific rather than general to be entertained.
Whether the sale of the entire property when the decree amount is less than the property's value is permissible.

Legislation cited

Code of Civil Procedure, 1908s. Order XXI Rule 54(2), s. Order XXI Rule 64, s. Order XXI Rule 69, s. Order XXI Rule 90, s. Section 151, s. Section 47

Subjects

Execution of decreeSale of attached propertyOrder XXI Rule 64 CPCNotice and publicityPartial sale of propertyDecretal amount

Judgment

,A

A SA! ENTERPRISES
v.
BHIMREDDY LAXMAIAH AND ANR.

MARCH 16, 2007

B [DR.ARIJITPASAYAT AND LOKESHWARSINGHPANTA,JJ.]

"'
Code of Civil Procedure, 1908:

0.21, rr. 54, 64 and 90-Execution proceedings-Sale of property-
c Duty of Court-Held: Court not to allow sale of property beyond decretal
amount-It is not just discretion but obligation cast on Court to direct sale
of only such portion of property as is necessG1y to satis.fi' the decree.

The appellant filed suit against respondent No.2 for recovery of Rs.4.49
lacs. Respondent No. I also filed suit against respondent No.2 for foreclosure
D of the mortgage in his favour for Rs. I lac. During the pendency of first suit,
trial Court ordered attachment before judgment. The suit filed by respondent
No.I was decreed against respondent No.2. Respondent No. I filed an execution
petition and sought for sale of mortgage property as respondent No.2 did not
satisfy the decree. The appellant's suit was also decreed against respondent
E No.2. Respondent No.2-judgment debtor was set ex parte as he did not attend
the execution proceedings. Proclamation was published in a newspaper.
Appellant filed execution petition seeking direction for sale of schedule
property for realization of Rs.5.69 lacs.

Respondent No.2 filed an application under Order 2I Rule 69 CPC r/w.
F ss. 47 and 151 seeking direction to stop the auction and also sought for
adjournment of the matter for settlement of terms and conditions of sale.
Proclamation of sale was published in another newspaper and the decree
holder-Respondent No.I purchased the property for Rs.3.12 lacs. Thereafter
the appellant filed an application under Order 2I Rule 90 to set aside the
sale and to re-auction the schedule property, as the respondent no.I has not
G
taken proper steps for wide publicity of the auction. It was stated that the value
of the property was not less than 6 lacs. The judgment-debtor Respondent
No.2 objected in the counter that the value of the property is more than rupees .....

8 lakhs. The sale was confirmed. The High Court, dismissed the Revision
petition taking of the view that allegations made in the petition were general
H 40
- )-

SAi ENTERPRISES v. BHIMREODY LAXMAIAH 41
in nature, and the affidavit with the petition does not disclose whether objection A
relates to non publicatipn in the newspaper or places.

In appeal to this Court, the appellant contended that the newspaper in
which the publication was made was not a wide circulating newspaper. Further
the value at which tile decree holder purchased was very low. Additionally, it
I .
was submitted that jn terms of Order 21Rule64 Code of Civil Procedure, B
1908. the Court was required to find out whether a part of the property would
_)
have sufficed to meet the decretal amount, which was not done in the present
case.

Disposing of the aipeal, the Court
., c
~
HELD: I. The H~h Co"rl has oatego,kally fo"nd that iniHally the
auction was notified in" ewspaper 'Eanadu' with wide circulation, and that
was done on two occasio s. The grievance about the publication in a newspaper

was published in some tpape'
with inadequate circull;lti_ n would have been a factor provided the earlier notice
not having wide dn:ulation, but admittedly D
the publication was mad in newspaper having a wide circulation. Additionally,
the stand regarding non ompliance with the requirements of Order 21 Rule
54 sub-rule (2) CPC is of no consequence because the objection has to be
specific and not to be general in nature. In the absence of specific allegations
'
it would not be possible for either parties or the executing court to deal with
the same. This conclusion of the High Court is in order. However, the E
grievance of the appellant so far non-compliance with the requirements of
Order 21Rule64 of the Code is on sound footing. 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.
F
[Paras 7, 8, 9J (44-D, F, G; 45-A]
r
Takkasee/a Pedda Subba Reddi v. Pujari Padmavathamma, AIR (1977)
SC 1789, r:elied on.

2. In all execution proceedings, Court has to first decide whether it is
G
necessary to bring the entire property to saleor 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
1_
\ 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
H
--{_ __

42 SUPREME COURT REPORTS [2007) 4 S.C.R.

A property is one, if a separate portion could be sold without violating .any
provision of law only such portion of the proper,ty 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. The duty cast upon the Court to sell
B only such portion thereof as is necessary to satisfy the decree is a mandate
of the legislature which cannot be ignored. [Para 91 (45-B, C, DJ

Ambati Narasayya v. M. Subba Rao and Anr., [I989) Suppl. 2 SCC 693,
relied on.

C 3. Considering the peculiar facts of the case and the long passage of
time, respondent no.I is directed to pay a sum of Rs. I lac to the appellant
within a period of three months. In case of non-payment of the aforesaid
amount, the appellant shall be free to pay a sum of Rs.3.I2 lacs with 9%
interest from the date of auction, to respondent no.I and get the property
conveyed in his favour under the directions of the Court. [Para IO) f45-E-F)
D
S. Mariyappa (Dead) by LRs_ and Ors. v. Siddappa and Anr., (2005) 10
SCC 235 and Balakrishnan v. Malaiyandi Konar, (2006) 3 SCC 49, relied
on.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 576 of2005.
E
From the Final Judgment and Order dated 30.02.2004 of the High Court
of Judicature, Andhra Pradesh at Hyderabad in C.R.P. No. 30 of 2004.

K. Maruthi Rao, 'K. Radha and Anjani Aiyagari for the Appellant.
F
D. Bharathi Reddy for the Respondents.

The Judgment of the Court was delivered by

DR ARIJIT PASA YAT, J. I. Challenge in this appeal is to the judgment
G passed by a learned Single Judge of the Andhra Pradesh High Court dismissing
the Civil Revision petition filed under Article 227 of the Constitution of India,
1950 (in short 'the Constitution') read with Section 115 of the Code of Civil
Procedure, 1908 (in short the 'Code').

· 2. Background facts in a nutshell are as follows:
H
SAIENTERPRISESv. BHJMREDDYLAXMAIAH [PASAYAT,J.] 43

3. The appellant filed a suit O.S. No.57/96 against respondent no.2 for A
- recovery of Rs.4,49,500/-. The respondent no. I also filed a suit O.S. No. 651
96 against respondent no.2 for foreclosure of the mortgage in his favour for
a sum of Rs.l ,00,000/-. Both the suits were pending on the file of the Senior
Civil Judge, Suryapet. During the pendency of the suit appellant filed IA no.
413/96 for attachment before judgment and same was ordered in tenns of order
dated 7 .10.96. OS No.65/96 filed by respondent no. I was decreed against B
respondent no.2. Respondent no. 1 filed an execution petition (EP No.1/99)
.
j

_, and sought for sale of mortgaged property as respondent no.2 did not satisfy
the decree. Respondent no.1 indicated the value of the property to be rupees
three lakhs. The bailiff after obtaining information from the Registrar and
Municipal Office mentioned value of the property at Rs.2,55,490/-. The c
appellant's suit OS 57/96 was decreed against respondent no.2. The said
respondent No. 2 - judgment debtor was set ex parte as he did not attend the
EP proceedings i.e. EP no. l/99. Proclamation was published in newspaper
"Eenadu". The matter was adjourned from time to time. Appellant filed execution
petition EP no.19/01 seeking direction for sale of schedule property for
realization of the amount of Rs.5,69,816/- due under the judgment and decree D
dated 16.2.2000 made in OS No.57/96.

4. Respondent no.2 filed an application EA No.90/01 in EP No.1/99
under Order XXI Rule 69 read with Sections 4 7 and 151 of the Code seeking
a direction to stop the auction to be held on 12.11.200 I and sought for
adjournment of the matter for settlement of terms and conditions of sale.
E
Fresh publication and proclamation of sale was made in newspaper namely,
Neti Manadesam. Learned Civil Judge dismissed the application EA No.90/91
in EP No. l/99 filed by respondent no.2. The said order was challenged before
the High Court in CRP no.6036/01. Again proclamation of sale was published
in 'Neti Mandadesham' and the decree holder purchased the property for F
Rs.3,12,000/- in OS No.57/96. Thereafter the appellant filed an application EA
No.42/02 under Order XXI Rule 90 of the Code to aside the sale and to re-
auction the schedule property, as the respondent no. l has not taken proper
steps for wide publicity of the auction. It was stated that the value of the
property was not less than rupees six lakhs. Objection was filed by the
respondents. The judgment-debtor categorically stated in the counter that the G
value of the property is more than rupees 8 lakhs. The sale was confirmed
on 24.1.2002. The High Court dismissed CRP filed by the judgment debtor-
).. respondent no.1. The appellant filed an application EA No.I 07 /03 in EA
No.42/02 in EP No.1199 to receive the valuation report issued. Learned Civil
H
44 SUPREME COURT REPORTS [2007) 4 S.C.R.

A Judge dismissed the application. The High Court was moved. As noted above
the High Court, dismissed the Civil Revision petition being of the view that
allegations made in the petition are general in nature, and the affidavit with
the petition does not disclose whether objection relates to non publication
in the newspaper or places.

B 5. In support of the appeal learned counsel for the appellant submitted
that the newspaper in which the publication was made is not a wide circulating
newspaper. Further the valuation at which the decree holder purchased is
very low. Additionally, it is submitted that in terms of Order XXI Rule 64 of
the Code the Court was required to find out whether a part of the property.
C would have sufficed to meet the decretal amount; which was not done in the
present case.

6. Learned counsel for the respondent supported the order.

7. It is to be noted that the High Court has categorically found that
D initially the auction was notified in newspaper 'Eanadu' with wide circulation,
and that was done on two occasions. The grievance about the publication
in a newspaper with inadequate circulation would have been a factor provided
the earlier notice was published in some newspaper not having wide circulation,
but admittedly the publication was made in newspaper 'Eanadu' having a wide
circulation. Additionally, it was submitted that the stand regarding non-
E compliance with the requirements of Order XXI Rule 54 sub-rule (2) of the
Code is of no consequence because the objection has to be specific and not
to be general in nature. In the absence of specific allegations it would not be
possible for either parties or the executing court to deal with the same. This
conclusion of the High Court is in order.

F 8. However, the grievance of the appellant so far non-compliance with
the requirements of Order XXI Rule 64 of the Code is on sound footing.

Order XXI Rule 64 reads as follows:

"64. Power to order property attached to be sold and proceeds to
G be paid to person 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."
H
SAIENTERPRISESv. BHIMREDDYLAXMAIAH [PASAYAT,J.] 45
9. The provision contains some significant words. They are "necessary A
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 Sub/Ja Reddi v. Pujari
Padmavathamma, AIR { 1977) SC 1789). In all execution proceedings, 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 B
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 C
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 and Anr., [1989] Suppl. 2 SCC 693). The
duty cast upon the Court to sale only such portion or portion thereof as is
necessary to satisfy the decree is a mandate of the legislature which cannot D
be ignored. Similar, view has been expressed in S. Mariyappa (Dead) by LRs.
And Ors. v. Siddappa and Anr., [2005] 10 SCC 235. The position was also
highlighted in Balakrishnan v. Malaiyandi Konar, [2006] 3 SCC 49).

10. In the aforesaid background normally we would have remitted the
matter for consideration of the aspects covered by Order XXI Rule 64 of the E
Code. But considering the peculiar facts of the case and the long passage of
time, we direct that the respondent no. l shall pay a sum of rupees one lakh
to the appellant within a period of three months. In case of non-payment of
the aforesaid amount, the appellant shall be free to pay a sum ofRs.3, 12,000/
- with 9% interest from the date of auction, to the respondent no. I and get F
the property conveyed in his favour under the directions of the Court.

11. Appeal is accordingly disposed of with no order as to costs.

D.G. Appeal disposed of.
G

j