Bhikchand vs Shamabai Dhanraj Gugale ((D) 2024 INSC 411 – S 144 CPC – Restitution – Auction Sale

Code Of Civil Procedure, 1908; Section 144 -Section 144 CPC statutorily recognises a pre-existing rule of justice, equity and fair play – Even away from Section 144 the court has inherent jurisdiction to order restitution so as to do complete justice between the parties- 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- 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- Where the decree holder is himself the auction purchaser, the sale cannot stand, if the decree is subsequently set aside-(Para 11-14) [In this case, the decree passed by the Trial Court was varied by the appeal court – However, in the meantime, the decree was executed by sale of the judgment debtor’s property on in favour of the decree holders-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 rejected the 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- Allowing appeal, SC held: 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- Referred to Padanathil Rugmini Ama Vs. P.K. Abdulla (1996) 7 SCC 668.]

Code Of Civil Procedure, 1908; Order XXI Rule s 54, 66 – 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 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 -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 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-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. (Para 20-22) – The 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 31 examining this aspect and not in conformity with this mandatory requirement would be illegal and without jurisdiction- 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. (Para 25- 27)

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