Cpc.docx

UNIVERSITY INSTITUTE OF LEGAL STUDIES

Place of Suit Section 15 – 21of The Code of Civil Procedure

Submitted to:Dr. Karan Jawanda Assistant Professor, Uils, Panjab University

Submitted by:Dishant Mittal 130/15 (13754) Section C B.com L.L.B

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Acknowledgement Success is a blend of multiple efforts. The final import of this project is also a result of the sheer hard work and constant support of many people. I would like to take this opportunity to thank all of them. To begin with, I would like to express my humble gratitude to my teacher, DR. KARAN JAWANDA, for her able guidance and mentoring. The meticulous manner in which she teaches has paid significantly in the completion of this project. Secondly, I would like to thank my department, University Institute of Legal Studies, Panjab University, Chandigarh, for providing such an expansive library which provided me all the relevant material required for this project. Last but not the least, I would like to express my profound gratitude to my parents and my friends who have constantly supported and motivated me throughout this project.

Dishant Mittal

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Table of Contents Acknowledgement .......................................................................................................................... 2 Table of Contents ............................................................................................................................ 3 INTRODUCTION .......................................................................................................................... 4 Execution: Meaning ........................................................................................................................ 5 Which Court has power to execute a decree? ............................................................................. 6 Mode of executing decree ............................................................................................................... 7 Sale of property as a mode of execution of decree ......................................................................... 8 General Rules .............................................................................................................................. 8 Power of Court : Rules 64 - 65 ................................................................................................... 8 Proclamation of Sale Rule 66 - 67 .............................................................................................. 9 Time of Sale: Rule 68 ............................................................................................................... 12 Adjournment or Stoppage of sale : Rule 69 .............................................................................. 12 Default by purchaser: Rule 71 .................................................................................................. 13 Restrictions to bid : Rules 72 – 73 ............................................................................................ 14 Bibliography ................................................................................................................................. 16

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INTRODUCTION Implementation of litigation is also known as execution. A decree will come into existence where the civil litigation has been instituted with the presentment of the plaint. The decree means operation or conclusiveness of judgment. Implementation of a decree will be done only when parties have filed an application in that regard. A decree or order will be executed by the court as facilitative and not an obligation. If a party is not approaching the court, then the court has no obligation to implement it suo motu. A decree will be executed by the court which has passed the judgment. In exceptional circumstances, the judgment will be implemented by another court which is having competency in that regard. Execution is the last stage of any civil litigation. There are three stages in litigation: 1) Institution of litigation. 2) Adjudication of litigation. 3) Implementation of litigation. Execution is the medium by which a decree-holder compels the judgment-debtor to carry out the mandate of the decree or order as the case may be. It enables the decree-holder to recover the fruits of the judgment. The execution is complete when the judgment-creditor or decree-holder gets money or other thing awarded to him by judgment, decree or order.

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Execution: Meaning The term “execution” has not been defined in the code. The expression “execution” means enforcement or implementation or giving an effect to the order or judgment passed by the court of justice. Simply “execution” means the process for enforcing or giving effect to the judgment of the court. Execution is the enforcement of decrees and orders by the process of the court, so as to enable the decree-holder to realize the fruits of the decree. The execution is complete when the judgment-creditor or decree-holder gets money or other thing awarded to him by the judgment, decree or order. Illustration: A files a suit against B for Rs 10,000 and obtains a decree against him. Here A is the decreeholder. B is the judgment-debtor, and the amount of Rs 10,000 is the judgment- debt or the decretal amount. Since the decree is passed against B, he is bound to pay Rs 10,000 to A. Suppose in spite of the decree, B refuses to pay the decretal amount to A, and A can recover the said amount from B by executing the decree through judicial process. The principle governing the execution of decree and orders are dealt with in Sections 36 to 74 ( substantive law) and Order 21 of the code( procedural law). Supreme Court in Ghanshyam Das v. Anant Kumar Sinha1 dealing with provision of the code relating to execution of decree and orders, stated, “ so far as the question of executability of a decree is concerned, the Civil Procedure Code contains elaborate and exhaustive provisions for dealing with it in all aspects. The numerous rules of Order 21 of the code take care of different situations providing effective remedies not only to judgment-debtors and decree-holders but also to claimant objectors, as the case may be. In an exceptional case, where provisions are rendered incapable of giving relief to an aggrieved party inadequate measures and appropriate time, the answer is a regular suit in the civil court. Order XXI of the CPC which is the longest Order provides detailed provisions for making an application for execution and how they are to be entertained, dealt with and decided.

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(1991) 4 SCC 379

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Execution is the enforcement of a decree by a judicial process which enables the decree-holder to realise the fruits of the decree passed by the competent Court in his favour. All proceedings in execution commence with the filing of an application for execution. Such application should be made to the Court who passed the decree or where the decree has been transferred to another Court, to that Court. Once an application for Execution of decree is received by the Court, it will examine whether the application complies with the requirements of Rules 11 to 14. If they complied with, the Court must admit and register the application.

It is only the execution, which reveals and signifies the importance of the decrees to be passed and the pedestal of the Court and sanctity of the document. As such, the decrees are required to be executed with force, so that the Decree Holder having a document containing declaration of his rights may not feel cheated or helpless having earned no fruits of the list got settled by him from the Court even after spending decades altogether. This Order 21 of The Code, 1908 can be divided into six parts. The main classification is as under:1) Applications for execution and the process to be applied. 2) Stay of executions. 3) Mode of executions. 4) Sale of immovable property and movable property. 5) Adjudication of the claims and objections. 6) Resistance and delivery of possession.

Which Court has power to execute a decree? Section 38 of the code specifics that a decree may be executed either by the Court who passed it or by the Court to which it is sent for execution. Section 37 defines the expression ‘Court which passed a decree’ while sections 39 to 45 provide for the transfer for execution of a decree by the Court which passed the decree to another Court, lay down conditions for such transfer and also deal with powers of executing Court.

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Mode of executing decree The Code of Civil Procedure,1908 lays down various modes of execution. After the decreeholder files an application for execution of a decree, the executing court can enforce execution. The substantive provision under Section 51 of The Code,1908 merely enumerates different modes of execution in general terms. The Code of civil procedure allows more than one mode of execution of decrees. It is for the decree-holder to decide in which mode he will execute his decree. This power, however, is subject to such conditions and limitations as may be prescribed by the code2. The code lays down following modes for the execution of different types of decrees: i.

By delivery of any property specifically decreed. Property may be movable or immovable [Section 51(a)].

ii.

By attachment and sale of the property or by sale without attachment of the property [Section 51(b)].

iii.

By arrest and detention in prison [Section 51(c)].

iv.

By appointing a receiver [Section 51(d)].

v.

Section 51(e) is the residuary clause and comes into play only when the decree cannot be executed in any of the modes prescribed under clause (a) to (d).

Though it is for the decree-holder to choose a particular mode of executing his decree and it is permissible in law to opt for even a simultaneous execution, "the court may in its discretion, refuse execution at the same time against the person and property of the judgment-debtor3."

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Mahadea Prasad Singh v. Ram Lochan (1980) 4 SCC 354 Anandi Lal v. Ram Sarup, AIR 1936 All 495

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Sale of property as a mode of execution of decree A decree may be executed by attachment and sale or sale without attachment of any property. Section 65 to 73 and rules 64 to 94 of Order 21 deals with the subject relating to sale of movable and immovable property. Before ordering sale the court has to decide whether it is necessary to bring entire attached property to sale or such portion thereof as may seem necessary to satisfy the decree. If the property is large and decree to be satisfied is small the court must bring to sale only such portion of the property the proceeds of which would be sufficient to satisfy the claim of the decree holder. Order 21 of the Code of Civil Procedure deals with the solemn act of execution of the decrees passed by the Courts from grassroots to the top. Ultimately, after the judgment attains finality or where there is no stay in the execution by any Appellate or Revisional Court, it is the Court of original jurisdiction which performs this sacred act of implementation of the execution. The provisions of the Civil Procedure Code, 1903, on the subject of sales are contained in Order XXI, Rules 64 to 102. Rule 64 to 73 deal with “sale generally”; Rules 74 to 81, with “sale of moveable property”; and Rules 82 to 104 with “sale of immovable”.

General Rules Power of Court : Rules 64 - 65 Order 21 Rule 64: Power to order property attached to be sold and proceeds to 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 the proceeds of sale, or a sufficient portion thereof, shall be paid to the party entitled under the decree to receive the same. The rule enjoys that in all execution proceedings the court has to enquire whether sale of part of the property would be sufficient to satisfy the decree. 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 decreed 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

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sufficient to satisfy the decree, no further sale should be held and the court should stop at that stage. The sale held in contravention of this mandatory requirements is illegal and without jurisdiction4. Order 21 Rule 65: Sales by whom conducted and how made - Save as otherwise prescribed, every sale in execution of a decree shall be conducted by an officer of the Court or by such other person as the Court may appoint in this behalf, and shall be made by public auction in manner prescribed. According to rule 65, every sale in execution of a decree shall be conducted by an officer of the court by public auction, sale by asking offer through advertisement in Newspaper or otherwise is barred and such a sale is nullity. There is a substantial distinction between the sale by calling for offers through advertisement and the sale by public auction. An auction is held by public competition wherein every bidder has the right to raise his own bid. The atmosphere therein created by open bidding can tempt the bidder to raise his bid and thus enhanced price can be fetched by the said mode. In a sale by tender, however no such opportunity is available to the tender. Once he gives his offer that is final and cannot be raised, whereas in public auction each bidder knows the bid of the other person, in the mode of sale by calling for offers of tenders, none of the persons or tenders know the price offered by the other5.

Proclamation of Sale Rule 66 - 67 Order 21 Rule 66: Proclamation of sales by public auction - (1) Where any property is ordered to be sold by public auction in execution of a decree, the court shall cause a proclamation of the intended sale to be made in the language of such court. (2) Such proclamation shall be drawn 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 estate, where the property to be sold is an interest in an estate or in part of an estate paying revenue to the government; 4 5

Ambati Narasayya v. M. Subba Rao, 1989 (2) SCC 693 https://lawtimesjournal.in

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(C) any encumbrance 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 judgment 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. (3) Every application for an Order for sale under this rule shall be accompanied by a statement signed and verified in the manner herein before prescribed for the signing and verification of pleadings and containing, so far as they are known to or can be ascertained by the person making the verification, the matters required by sub-rule (2) to be specified in the proclamation. (4) For the purpose of ascertaining the matters to be specified in the proclamation, the court may summon any person whom it thinks necessary to summon and may examine him in respect to any such matters and require him to produce any document in his possession or power relating thereto. Service of notice on a judgment-debtor is a fundamental step in execution and, unless it is waived, it must be complied with. Absence of such notice causes irremediable injury to the judgment-debtor and sale without such notice will be a nullity6. Order 21 Rule 67: Mode of making proclamation - (1) Every proclamation shall be made and published, as nearly as may be, in the manner prescribed by rule 54, sub-rule (2). (2) Where the court so directs, such proclamation shall also be published in the Official Gazette or in a local newspaper, on in both, and the costs of such publication shall be deemed to be costs of the sale. (3) Where property is divided into lots for the purpose of being sold separately, it shall not be necessary to make a separate proclamation for each lot, unless proper notice of the sale cannot, in the opinion of the court, otherwise be given. 6

Desh Bandhu Gupta v. N.L. Anand, (1994) 1 SCC 131.

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The object of issuing a proclamation is twofold, firstly it protects the interest of the intending purchasers by giving them all material information regarding the property to be sold, and secondly, it protects the interest of the judgment-debtor by facilitating the fetching of proper market price for his property and by preventing it from being knocked down at public auction for a price much below the market price. It is the duty of the court to ensure that the requirements of Rule 66 are complied with7. It is also desirable that every proclamation of sale shall be made by beat of drum or other customary mode. It is no doubt easy to draw the line between irregularity and illegality in an execution sale, but where a substantial provision like Order XXI, Rule 66, is violated the sale should be regarded as having been illegally conducted and would be void. A sale conducted without publication of proclamation is not merely an irregularity but a nullity8. It is incumbent on the court to be scrupulous to the extreme. No action of the court or its officer should be such as to give rise to the criticism that it was done in a casual manner. Contents of proclamation:a) Time and place of sale b) Property to be sold c) Revenue, if any, assessed upon the property; d) Encumbrance, if any, to which property is liable; e) Amount to be recovered; f) Details relating to property, such as title deed, length etc.

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Shalimar Cinema v. Bhasin Film corp. (1987) 4 SCC 717 A. Venkatchalam v. E.M. Zackria, 1987 SCC 124

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Time of Sale: Rule 68 Order 21 Rule 68: Time of sale - Save in the case of property of the kind described in the proviso to rule 43, no sale hereunder shall, without the consent in writing of the judgment-debtor, take place until after the expiration of at least fifteen days in the case of immovable property, and of at least seven days in the case of movable property, calculated from the date on which the copy of the proclamation has been affixed on the court-house of the Judge ordering the sale. This provision provides that no sale shall, without the consent in writing of the judgment debtor, take place until after the expiration of at least thirty days in the case of immovable property, and of at least fifteen days in the case of movable property from the date of proclamation in the courthouse. The only exception is in the case, where the property ordered to be sold is perishable or the expense of keeping it in custody is likely to exceed its value. This provided in Order 21 Rule 43 of The code, 1908.

Adjournment or Stoppage of sale : Rule 69 Order 21 Rule 69: Adjournment or Stoppage of sale - (1) The court may, in its discretion, adjourn any sale hereunder to a specified day and hour, and the officer conducting any such sale may in his discretion adjourn the sale, recording his reasons for such adjournment: Provided that, where the sale is made in, or within the precincts of, the court house, no such adjournment shall be made without the leave of the court. (2) Where a sale is adjourned under sub-rule (1) for a longer period than thirty days, a fresh proclamation under rule 67 shall be made, unless the judgment debtor consents to waive it. (3) Every sale shall be stopped if, before the lot is knocked down, the debt and costs (including the costs of the sale) are tendered to the officer conducting the sale, or proof is given to his satisfaction that the amount of such debt and costs has been paid into the court which ordered the sale.

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The Court is given discretionary power to postpone the sale to a specified day and hour, however, if such sale is adjourned for more than thirty days, a fresh proclamation should be issued, unless the judgment debtor waives it. Waiver of sale proclamation implies waiver of an objection as to any of the defects apparent on the proclamation. Whoever prays for adjournment of sale, fresh sale proclamation is needed unless the judgment-debtor waives fresh sale proclamation. This section also provides that every sale shall be stopped if, before the property is knocked down, the debt and costs are tendered to the offer conducting the sale, or paid into the court9.

Default by purchaser: Rule 71 Order 21 Rule 71: Defaulting purchaser answerable for the loss on re-sale- Any deficiency of price which may happen on a re sale by reason of the purchaser’s default, and all expenses attending such re-sale, shall be certified to the court by the officer or other person holding the sale, and shall, at the instance of either the decree holder or the judgment debtor, be recoverable from the defaulting purchaser under the provisions relating to the execution of a decree for the payment of money. Where a resale has been occasioned by reason of the purchaser’s default, (i.e. due to the failure to deposit the sale price) any deficiency of price and all expenses attending such resale shall be certified to the court and shall be recoverable at the instance of either the decree-holder or the judgment debtor from the defaulting purchaser. When purchaser is not negligent then this rule won’t apply. In Gopal Krishan Das v. Sailendra Nath10, the court held that this provision is salutary and has been enacted with a view to minimize the hardship of the judgment-debtor or decree-holder resulting from the auctionpurchaser’s default. It also seeks to provide an expeditious remedy to the aggrieved party (judgment-debtor or decree-holder), who has suffered due to the default of the auction-purchaser. Therefore, if resale is not ordered because of the default of the auction purchaser, then Rule 71 will not apply.

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Radhey Shyam v. Shyam Behari, (1970) 2 SCC 405. (1975) 1 SCC 815

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Principles of natural justice are applied to this rule. Before auction-purchaser is held liable under this rule, he must be given notice and opportunity of hearing to show cause why an order adverse to him should not be passed.

Restrictions to bid : Rules 72 – 73 Order 21 Rule 72 : Decree holder not to bid for or buy property without permission - (1) No holder of a decree in execution of which property is sold shall, without the express permission of the court, bid for or purchase the property. (2) Where decree holder purchases, amount of decree may be taken as payment—Where a decree holder purchases with such permission, the purchase money and the amount due on the decree may, subject to the provisions of section 73, be set-off against one another, and the court executing the decree shall enter up satisfaction of the decree in whole or in part accordingly. (3) Where a decree holder purchases, by himself or through another person, without such permission, the court may, if it thinks fit, on the application of the judgment debtor or any other person whose interests are affected by the sale, by Order set aside the sale; and the costs of such application and order, and any deficiency of price which may happen on the re-sale and all expenses attending it, shall be paid by the decree holder. When decree holder does so with the permission of the court, he is entitled to a set off, but if he does so without such permission, the court has discretion to set aside the sale upon the application by the judgment-debtor, or any other person whose interests are affected by the sale. This provision is intended to safeguard the interests of the judgment-debtor. The court will have to be satisfied that without granting permission to the decree-holder, an advantageous sale cannot otherwise be had11. Such permission, therefore, should be cautiously granted after considering all the attending circumstances.

Even though there is no express requirement for issue of notice to the judgment-debtor in Rule 72 before granting permission to the decree-holder, since it vitally affects the rights of the judgmentdebtor, the rules of natural justice require that a notice should be given to him. The decision to grant permission is administrative and not judicial. It is therefore, not necessary for the court to pass a

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Sivathi Ammal v. Arulayee Ammal, AIR 1974 Mad 34.

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speaking order or to record reasons in support of grant of leave to the decree holder to bid. But the order must reflect application of mind by executing court. In Jaswantlal Natvarlal v. Sushilaben Manilal12, the court held that for getting a sale set aside it is not sufficient to show that there was an illegality or irregularity in the conduct of the sale, the applicant has to show substantial injury has been caused to him as a result of non issuance of the notice. In Janak Raj v. Gurdial Singh13, the Hon'able Supreme Court held that where the auction-purchaser is a stranger or an outsider, sale by public auction would normally protect him even if the decree is finally set aside. As this is based on the doctrine of justice and equality.

Order 21 Rule 72A provides that mortagee is also forbidden to bid at sale without the leave of the Court. If leave to bid is granted to such mortgagee, then the court shall fix a reserve price as regards the mortgagee so that mortgagee may not take undue advantage by purchasing the mortgaged property at a lower price and then pursuing other remedies to recover the balance of the amount of the decree.

Order 21 Rule 73: Restriction on bidding or purchase by officers- No officer or other person having any duty to perform in connection with any sale shall, either directly or indirectly, bid for, acquire or attempt to acquire any interest in the property sold.

In such case the sale will be hit by Section 64 of Cpc,1908.

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1991 (2) SCC 691 AIR 1967 SCC 608

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Bibliography

BOOKS 1. Justice C.K.Takwani (Thakker), Civil Procedure (CPC) with Limitation Act (8th ed. E.Book 2017). 2. Sir Dinshaw Fardunji Mulla, Mulla’s the Code of Civil Procedure (19th ed. Lexis Nexis 2017). 3. D. N. Mathur, Code of Civil Procedure (3rd ed. Cent. Law Publications 2015). 4. Avtar Singh, Code of Civil Procedure (4th ed. Cent. Law Publications 2015).

Websites 1. http://www.legalserviceindia.com 2. http://www.scconline.com/ 3. https://indiankanoon.org 4. https://legal-dictionary.thefreedictionary.com 5. https://definitions.uslegal.com/ 6. http://www.legalcrystal.com

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