Sannidhi Krishna Murthy and anr. Vs. Ponipireddy Venkata Rao and ors. - Court Judgment

Excerpt:
- - 5. these two civil revision petitions, for the above reasons, must fail and are accordingly dismissed.orderv.v.s. rao, j.1. as a similar point is involved in these cases, they are being disposed of by this common order. the petitioner in c.r.p. no. 2529 of 2009 is the father of petitioner in c.r.p. no. 2530 of 2009. father filed o.s. no. 382 of 1997 and obtained decree for payment of money against sri gulipalli ganapathi rao. he filed execution petition (ep) against legal representatives (lrs) of judgment debtor therein (respondents 2 to 5 herein). similarly, son filed o.s. no. 384 of 1997 against sri gulipalli ganapathi rao and obtained decree for payment of money. he filed e.p. no. 204 of 2007. in the meanwhile, first respondent herein filed suit being o.s. no. 103 of 1998 and obtained decree against the same judgment debtor. in e.p. no. 406 of 2005, he got the properties attached, which were sold in court auction. therefore, father filed e.a. no. 307 of 2008 and son filed e.a. no. 306 of 2008 in e.p. no. 406 of 2005 in o.s. no. 103 of 1998 under sections 73 and 151 of the code of civil procedure, 1908 (cpc), for rateable distribution of saie proceeds of e.p. no. 406 of 2005. the court of i additional junior civil judge, bheemavaram, by two separate orders passed on 31.03.2009, rejected the execution applications filed by the father and son, aggrieved by which, these two civil revision petitions are filed.2. learned counsel for petitioners in both the cases places reliance on narayan ganesh v. fatma daud : air 1952 bombay 70, manora bai v. sultan bakat : air 1968 a.p. 113 and k. srinivasa v. noor muhammad air 1970 mad 504 and submits that, even if an application for rateable distribution of sale proceeds in another execution petition is filed after confirmation of sale, the petitioners are entitled for such rateable distribution. per contra, learned counsel for first respondent places reliance on division bench judgment of this court in lanka suryaprakash rao v. gadigatla venkaramanna chowdary air 1994 a.p. 5 and submits that any decree holder seeking rateable distribution has to file such application prior to sale of assets of judgment debtor and after confirmation of sale, such application cannot be entertained.3. section 73 (cpc) reads as under.section 73. proceeds of execution-sale to be rateably distributed among decree-holders - (1) where assets are held by court and more persons than one have, before the receipt of such assets, made application to the court for the execution of decree for the payment of money passed against the same judgment-debtor and have not obtained satisfaction thereof, the assets, after deducting the costs of realization, shall be rateably distributed among all such persons:provided as follows:(a) where any property is sold subject to a mortgage or change, the mortgagee or incumbrancer shall not be entitled to share in any surplus arising from such sale;(b) where any property liable to be sold in execution of a decree is subject to a mortgage or charge, the court may, with the consent of the mortgagee or incumbrancer, order that the property be sold free from the mortgage or charge, giving to the mortgagee or incumbrancer the same interest in the proceeds of the sale as he had in the property sold;(c) where any immovable property is fold in execution of a decree ordering its sale for the discharge of an incumbrance thereon, the proceeds of the sale shall be applied-first, in defraying the expenses of the sale;secondly, in discharging the amount due under the decree;thirdly, in discharging the interest and principal moneys due on subsequent incumbrances (if any); andfourthly, rateably among the holders of decrees for the payment of money against the judgment-debtor, who have, prior to the sale of the property, applied to the court, which passed the decree ordering such sale for execution of such decrees, and have not obtained satisfaction thereof.(2) where all or any of the assets liable to be rateably distributed under this section are paid to a person not entitled to receive the same, any person so entitled may sue such person to compel him to refund the assets.(3) nothing in this section affects any right to the government.3. for the purpose of this case, sub-section (1) of section 73 with its provisos (a), (b) and (c) is relevant. a reading of relevant part of proviso would show that court is required to rateably distribute assets of (sic. to) different decree holders, when an application is made to do so, only in two circumstances. such an application by persons should be made to the court, which holds the assets before such assets are received by the court and secondly holders of decrees for payment of money against judgment debtor make such application prior to sale of the property. this only means that if property is already sold even before different decree holders of decrees make an application for rateable distribution, court is not required to resort to rateable distribution.4. in lanka suryaprakash rao (supra), a division bench of this court considered this aspect of the matter and held that when decree holder complies with conditions of money decree, there is no necessity to grant relief of rateable distribution of assets to another decree holder. in this case, it is no doubt true that petitioners in both civil revision petitions obtained decree prior to decree obtained by first respondent. but first respondent brought the property of respondents 2 to 5 to sale. sale was conducted on 05.02.2008 and it was confirmed on 04.04.2008. it is only after the auction purchaser deposited the amount, which was received by the court, petitioners filed their applications on 25.06.2008. therefore, as per proviso (c) of sub-section (1) of section 73 of the cpc, proceeds of sale need not be rateably distributed among holders of decrees i.e. petitioners herein, because, they applied to the court after sale of property. the interpretation of learned counsel for petitioners relying on decisions cited by him that court is required to rateably distribute assets of decree holders even if they make applications after sale, cannot be accepted in view of clear language of the said proviso.5. these two civil revision petitions, for the above reasons, must fail and are accordingly dismissed. there shall be no order as to costs.

Judgment:
ORDER

V.V.S. Rao, J.

1. As a similar point is involved in these cases, they are being disposed of by this common order. The petitioner in C.R.P. No. 2529 of 2009 is the father of petitioner in C.R.P. No. 2530 of 2009. Father filed O.S. No. 382 of 1997 and obtained decree for payment of money against Sri Gulipalli Ganapathi Rao. He filed Execution Petition (EP) against Legal Representatives (LRs) of judgment debtor therein (respondents 2 to 5 herein). Similarly, son filed O.S. No. 384 of 1997 against Sri Gulipalli Ganapathi Rao and obtained decree for payment of money. He filed E.P. No. 204 of 2007. In the meanwhile, first respondent herein filed suit being O.S. No. 103 of 1998 and obtained decree against the same judgment debtor. In E.P. No. 406 of 2005, he got the properties attached, which were sold in Court auction. Therefore, father filed E.A. No. 307 of 2008 and son filed E.A. No. 306 of 2008 in E.P. No. 406 of 2005 in O.S. No. 103 of 1998 under Sections 73 and 151 of the Code of Civil Procedure, 1908 (CPC), for rateable distribution of saie proceeds of E.P. No. 406 of 2005. The Court of I Additional Junior Civil Judge, Bheemavaram, by two separate orders passed on 31.03.2009, rejected the Execution Applications filed by the father and son, aggrieved by which, these two Civil Revision Petitions are filed.

2. Learned Counsel for petitioners in both the cases places reliance on Narayan Ganesh v. Fatma Daud : AIR 1952 Bombay 70, Manora Bai v. Sultan Bakat : AIR 1968 A.P. 113 and K. Srinivasa v. Noor Muhammad AIR 1970 Mad 504 and submits that, even if an application for rateable distribution of sale proceeds in another Execution Petition is filed after confirmation of sale, the petitioners are entitled for such rateable distribution. Per contra, learned Counsel for first respondent places reliance on Division Bench judgment of this Court in Lanka Suryaprakash Rao v. Gadigatla Venkaramanna Chowdary AIR 1994 A.P. 5 and submits that any decree holder seeking rateable distribution has to file such application prior to sale of assets of judgment debtor and after confirmation of sale, such application cannot be entertained.

3. Section 73 (CPC) reads as under.

Section 73. Proceeds of execution-sale to be rateably distributed among decree-holders - (1) Where assets are held by Court and more persons than one have, before the receipt of such assets, made application to the Court for the execution of decree for the payment of money passed against the same judgment-debtor and have not obtained satisfaction thereof, the assets, after deducting the costs of realization, shall be rateably distributed among all such persons:

Provided as follows:

(a) Where any property is sold subject to a mortgage or change, the mortgagee or incumbrancer shall not be entitled to share in any surplus arising from such sale;

(b) Where any property liable to be sold in execution of a decree is subject to a mortgage or charge, the Court may, with the consent of the mortgagee or incumbrancer, order that the property be sold free from the mortgage or charge, giving to the mortgagee or incumbrancer the same interest in the proceeds of the sale as he had in the property sold;

(c) Where any immovable property is fold in execution of a decree ordering its sale for the discharge of an incumbrance thereon, the proceeds of the sale shall be applied-

First, in defraying the expenses of the sale;

Secondly, in discharging the amount due under the decree;

Thirdly, in discharging the interest and principal moneys due on subsequent incumbrances (if any); and

Fourthly, rateably among the holders of decrees for the payment of money against the judgment-debtor, who have, prior to the sale of the property, applied to the Court, which passed the decree ordering such sale for execution of such decrees, and have not obtained satisfaction thereof.

(2) Where all or any of the assets liable to be rateably distributed under this section are paid to a person not entitled to receive the same, any person so entitled may sue such person to compel him to refund the assets.

(3) Nothing in this section affects any right to the Government.

3. For the purpose of this case, Sub-section (1) of Section 73 with its provisos (a), (b) and (c) is relevant. A reading of relevant part of proviso would show that Court is required to rateably distribute assets of (sic. to) different decree holders, when an application is made to do so, only in two circumstances. Such an application by persons should be made to the Court, which holds the assets before such assets are received by the Court and secondly holders of decrees for payment of money against judgment debtor make such application prior to sale of the property. This only means that if property is already sold even before different decree holders of decrees make an application for rateable distribution, Court is not required to resort to rateable distribution.

4. In Lanka Suryaprakash Rao (supra), a Division Bench of this Court considered this aspect of the matter and held that when decree holder complies with conditions of money decree, there is no necessity to grant relief of rateable distribution of assets to another decree holder. In this case, it is no doubt true that petitioners in both Civil Revision Petitions obtained decree prior to decree obtained by first respondent. But first respondent brought the property of respondents 2 to 5 to sale. Sale was conducted on 05.02.2008 and it was confirmed on 04.04.2008. It is only after the auction purchaser deposited the amount, which was received by the Court, petitioners filed their applications on 25.06.2008. Therefore, as per proviso (c) of Sub-section (1) of Section 73 of the CPC, proceeds of sale need not be rateably distributed among holders of decrees i.e. petitioners herein, because, they applied to the Court after sale of property. The interpretation of learned Counsel for petitioners relying on decisions cited by him that Court is required to rateably distribute assets of decree holders even if they make applications after sale, cannot be accepted in view of clear language of the said proviso.

5. These two Civil Revision Petitions, for the above reasons, must fail and are accordingly dismissed. There shall be no order as to costs.