Is exemption provided U/S 60(1)(c) of C.P.C applicable to a decree with a statutory charge over the property?

 Coming to the crucial issue in these cases, it is relevant

to note that the decree put in execution is for realisation of the

advance sale consideration paid by the decree holder, where a

statutory charge was created under Section 55 (6) (b) of the Transfer of Property Act. When there is a charge decree, a debtor cannot claim exemption under Section 60(1)(c) of the C.P.C. This legal position was considered by a Division Bench of this Court in the decision Ammini v. K.V.Vibeesh & Ors. (supra) and held in the affirmative. In fact, there is no reason to differentiate a charge decree and a decree, where statutory charge is created, while considering exemption provided under Section 60(1)(c) of C.P.C. Thus, without much ado, it can be held that a decree where there is a statutory charge over the property is akin to a charge decree. Therefore, it has to be held that the exemption provided under Section 60(1)(c) of the C.P.C is not applicable to a charge decree or to a decree where there is a statutory charge, over the property. In view of the matter, I have no hesitation to hold that Ext.P4 order passed by the execution court is legally unsustainable and the same is liable to be set aside. {Para 17}

 IN THE HIGH COURT OF KERALA AT ERNAKULAM

OP(C) NO. 2004 OF 2018

BINOY KURIAN Vs VARKEY JOSEPH

PRESENT

 MR. JUSTICE A. BADHARUDEEN

Dated this the 19th day of May, 2022

O.P(C).No.2004/2018 is one filed under Article 227 of the

Constitution of India by the judgment debtor in E.P.No.76/2016 in

O.S.No.6/2016 on the file of Munsiff Court, Vaikom, challenging

order dated 20.06.2018, which is produced as Ext.P11. As per

Ext.P11, the learned Munsiff accepted the sale proposed by the

decree holder after exempting 7 cent out of 14 cent. The decree

holder is the respondent in this Original Petition.

2. Whereas the decree holder has filed

O.P(C).No.1755/2019, arraying the judgment debtor as respondent,

challenging Ext.P4 order dated 3.1.2018, whereby the learned

Munsiff exempted 2.67 Ares of property from sale under Section

60(1)(c) of the Code of Civil Procedure, holding that the said

portion is the residential house of the judgment debtor and the land

appertenant thereto which was liable to be excluded from the sale

since he is an Agriculturist. The judgment debtor is the respondent

in this Original Petition.

3. I shall refer the parties in this Original Petition as the

`decree holder' and the `judgment debtor' for easy reference.

4. Heard the learned counsel for both sides in detail.

5. 3 relevant questions arise for consideration herein, as

under:

(i) Whether exemption provided under Section 60(1) (c) of

the Code of Civil Procedure is applicable to a property,

where there is a statutory charge?

(ii) Whether exemption under Section 60(1)(c) of

C.P.C is available to a property covered by a charge

decree?

(ii) Whether in view of Ext.P11 order in

O.P(C).No.2004/2018, the judgment debtor is estopped

from challenging Ext.P4 order in O.P(C).No.1755/2019

whereby the learned Munsiff granted exemption under

Section 60 (1) (c) of the Code of Civil Procedure?

6. I shall refer the impugned order in O.P(C).No.1755/2019

as `Ext.P4' and the impugned order in O.P(C).No.2004/2018 as

`Ext.P11' hereinafter for convenience.

7. While challenging Ext.P4, the learned counsel for the

decree holder would submit that Ext.P4 order is erroneous and the

judgment debtor is not entitled to get any exemption in this case

where the decree was for getting back advance purchase money,

where a statutory charge under Section 55(6)(b) of Transfer of

Property Act was created. In this connection, the learned counsel

had given heavy reliance on a Divison Bench ruling of this Court

reported in [2019(3) KHC 646 : 2019(3) KLT 147], Ammini v.

K.V.Vibeesh & Ors. In the said judgment, the Division Bench

observed that a judgment debtor, who suffers a money decree, if

creates a charge over his property, cannot claim benefit under

Section 60(1)(c) of the Code of Civil Procedure. Here, as rightly

argued by the learned counsel for the judgment debtor, no charge is

created in the property as per the decree. However, it is not in

dispute that the decree was the outcome of a claim for advance

purchase money paid for the property proposed to be sold on the

basis of a sale agreement entered into between the decree holder and

the judgment debtor. Therefore, a statutory charge under Section

55(6)(b) of the Transfer of Property Act is there.

8. Going by the ratio in Ammini's case (supra) it is settled

that when there is a charge decree over a property, during

execution, the benefit of exemption under Section 60(1)(c) of C.P.C

cannot be applied. Now the question is whether, a decree, where

there is a statutory charge is akin to a charge decree so as to exclude

the said property out of the purview of Section 60(1)(c) of C.P.C.

9. The learned counsel for the judgment debtor, though

attempted to carve out exemption in between a charge decree and a

property where statutory charge is created, he could not justify his

contention based on convincing materials by highlighting statutory

provisions. Thus, without much ado, it can be held that a charge

decree is akin to a decree where there is a statutory charge over the

property.

10. It is also argued by the learned counsel for the judgment

debtor that since the decree holder accepted Ext.P4 order, the same

has become final and is merged with Ext.P11 order. So, the decree

holder is estopped from disputing Ext.P4 order after conceding the

same. He has placed reliance on the following decisions reported in

[1953 KHC 308], Mohanlal Goenka v. Benoy Krishna Mukherjee

& Ors.; [2010 KHC 4697], Mumbai International Airport Pvt.

Ltd. v. M/s.Golden Chariot Airport & anr.; [2013 KHC 4116],

Rajasthan State Industrial Development Appellants and

Investment Corporation & anr. v. Diamond and Gem

Development Corporation Ltd. & anr. And [2013(1) KHC 470],

Lekshmy Sukesini Devi & anr. v. L.Sumathy & anr., in support of

this contention. How far this contention would help the judgment

debtor, is the relevant and pertinent question.

11. In Mohanlal Goenka v. Benoy Krishna Mukherjee &

Ors. (supra), the Apex Court held that principles of res judicata

would apply in execution proceedings as well and even an

erroneous decision on a question of law operates as res judicata

between the same parties to it. Here the contention of the learned

counsel for the judgment debtor is that since after passing Ext.P4,

no challenge raised by the decree holder against Ext.P4 and

therefore, in view of Ext.P11, the challenge against Ext.P4 is barred

by the res judicata. In fact, the submission cannot be appreciated.

Here there is specific challenge against Ext.P4 and therefore, either

res judicata or the principle of estoppel shall not be available in the

case on hand.

12. The decision in Mumbai International Airport Pvt. Ltd.

v. M/s.Golden Chariot Airport & anr. (supra), has given emphasis

to contend that a litigant cannot be permitted to assume inconsistent

positions to the detriment of his opponent. The decision in

Rajasthan State Industrial Development Appellants and

Investment Corporation & anr. v. Diamond and Gem

Development Corporation Ltd. & anr.(supra), has been pointed

out to contend that nobody could approbate and reprobate. Though

this legal position is correct, the facts of the case involved herein do

not show that the decree holder took inconsistent positions in this

case or taken approbate and reprobate contention. Therefore, the

ratio of the above rulings has also no application to the facts of this

case.

13. Coming to Ext.P4, the same is challenged by filing

O.P(C).No.1755/2019 since the same alleged to be patently illegal.

On perusal of Ext.P4 order, exemption in relation to 2.67 Ares of

property, out of 5.67 Ares of property was given by the execution

court resorting to Section 60(1)(c) of C.P.C. It is true that there is

observation in Ext.P4 that in order to satisfy the decree, whole

property need not be sold out. However, the order was passed by

the execution court giving emphasis to Section 60(1)(c) of C.P.C

ignoring the statutory charge and, therefore, the said order is

patently illegal. When there is patent illegal order and is put under

challenge, it cannot be said that the same is merged with a

subsequent order passed by the court, that too, when the subsequent

order is put under challenge by the judgment debtor also.

Therefore, I am not inclined to accept this contention.

14. The learned counsel for the judgment debtor highlighted

decisions reported in [1996 KHC 66], Parvathy Antherjanam v.

Indian Bank; [2008 (1) KHC 258], P.K.Kuruvilla v. Corporation

Bank; and [2022 (2) KHC 479], Fathima Beevi v. Joly John, to

contend that only property to an extent of 2 cent is sufficient to

satisfy the decree since the total sale consideration agreed at the

time of executing the sale agreement was Rs.50 lakh. Therefore,

Rs.8,60,000/- fixed by the execution court as upset price is too low

to 5.67 Ares of property and the same cannot be justified.

15. Repelling this contention, the learned counsel for the

decree holder submitted that the upset price was fixed after

assessing its present market value, and the agreement entered into

between the parties cannot have predominance over the market

price prevailing. He also submitted that considering the particular

nature of the property, the entire extent of 5.67 Ares is liable to be

sold to execute the decree, since execution of any portion is not

possible.

16. Having appraised these contentions, the legal position is

not in dispute that it is necessary to sell only the portion of the

property which is necessary for satisfaction of the decree and a duty

is cast upon the court under Order 21 Rule 64 of C.P.C to ensure the

said compliance. In this matter it is discernible that the crux of the

dispute is confined in the matter of grant of exemption in so far as

2.67 Ares of property and the residential house, out of 5.67 Ares,

under Section 60(1)(c) of the Code of Civil Procedure. Similarly, after

having exempted 2.67 Ares as per Ext.P4 order, then also, more extent

got included in the sale proclamation which led to Ext.P11 order.

17. Coming to the crucial issue in these cases, it is relevant

to note that the decree put in execution is for realisation of the

advance sale consideration paid by the decree holder, where a

statutory charge was created under Section 55 (6) (b) of the Transfer

of Property Act. When there is a charge decree, a debtor cannot

claim exemption under Section 60(1)(c) of the C.P.C. This legal

position was considered by a Division Bench of this Court in the

decision Ammini v. K.V.Vibeesh & Ors. (supra) and held in the

affirmative. In fact, there is no reason to differentiate a charge

decree and a decree, where statutory charge is created, while

considering exemption provided under Section 60(1)(c) of C.P.C.

Thus, without much ado, it can be held that a decree where there is

a statutory charge over the property is akin to a charge decree.

Therefore, it has to be held that the exemption provided under

Section 60(1)(c) of the C.P.C is not applicable to a charge decree

or to a decree where there is a statutory charge, over the

property. In view of the matter, I have no hesitation to hold that

Ext.P4 order passed by the execution court is legally unsustainable

and the same is liable to be set aside.

18. Coming to Ext.P11 order, the same also is confined to

sale of only a portion of the property in view of exemption granted

under Ext.P4, excluding the property and the residential house. On

perusing Ext.P11, there is finding by the executing court that the

extent of property covered by Ext.P11 is sufficient to satisfy the

decree.

19. This finding in Ext.P11 would go to show that the

execution court diligently entered into a finding under Order 21

Rule 64 of C.P.C. Therefore, Ext.P11 order need not be interfered.

20. Accordingly, Ext.P4 under challenge stands set aside;

Ext.P11 order stands confirmed and the execution court is directed

to proceed further against the property covered by Ext.P11 order, to

realise the decree debt in accordance with law. It is specifically

ordered that if sale of the portion of the property covered by

Ext.P11 order is not sufficient to realise the decree debt, the

execution court can include more property or the whole property for

sale, after appraising the fact that the decree debt could not be

realised by selling the property covered by Ext.P11.

21. Considering the fact that the Suit is of the year 2016, the

execution court is directed to expedite the execution, at any rate,

within six weeks from the date of receipt of a copy of this judgment.

Accordingly, O.P(C).No.2004/2018 stands dismissed;

O.P(C).No.1755/2019 stands allowed as indicated herein above.

Sd/- (A. BADHARUDEEN, JUDGE)

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