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CLAIM PETITIONS IN EXECUTION PROCEEDINGS
by Smt.Nakka Lavanya, Junior Civil Judge, Kamalapuram Introduction The chapter “Execution” in the entire code made every endeavor to protect not only the interests of the parties to suit and execution but also 3 rd parties, whose interest are involved without their knowledge. However knowingly or unknowingly there may be several mistakes in attachment. In some cases some third persons may be having interest in the attached property. In certain other cases, the property attached may not belong to judgment debtor, but to some other persons. If such property is sold, those third parties may suffer a lot. To avoid such unnecessary hardship to third parties, lawmakers made a provision of solving such claims, objections from Order XXI Rule 58 onward. Now we have to see what Order XXI Rule 58 and Rule 59 says. Order 21 Rule 58: ( 1 ) Where any claim is preferred to, or any objection is made to the attachment of, any property attached in execution of a decree on the ground that property is not liable to such attachment, the Court shall proceed to adjudicate upon the claim or objection in accordance with the provisions herein contained: Provided that no such claim or objection shall be entertained- (a) Where, before the claim is preferred or objection is made, the property attached has already been sold; or (b) Where the Court considers that the claim or objection was designedly or unnecessarily delayed. ( 2 ) All questions (including questions relating to right, title or interest in the property attached) arising between the parties to a proceeding, or their representatives under this Rule and relevant to the adjudication of the claim or objection, shall be determined by the Court dealing with the claim or objection and not by a separate suit
( 3 ) Upon the determination of the questions referred to in sub-Rule (2), the Court shall, in accordance with such determination- (a) Allow the claim or objection and release the property from attachment either wholly or to such extent as it thinks fit, or (b) Continue the attachment subject to any mortgage, charge or other interest in favour of any person; or (c) Pass such Order as in the circumstances of the case it deems fit. ( 4 ) Where any claim or objection has been adjudicated upon under this Rule, the Order made thereon shall have the same force and be subject to the same conditions as to appeal or otherwise as if it was a decree. ( 5 ) Where a claim or an objection is preferred and the Court, under the proviso to sub-Rule (1) refuses to entertain it, the party against whom such Order is made may institute a suit to establish the right which he claim to the property in dispute; but, subject to the result of such suit, if any, an Order so refusing to entertain the claim or objection shall be conclusive. SCHEME Where any property is attached in execution of a decree, it is always open to the parties, their representatives or third parties to raise objection against such attachment. If the objection is raised by a party or his representative, the question falls under Section 47 of the Code and should be decided by the executing court and not by a separate suit. If, on the other hand, such objection is raised by a third party, two courses are open to him. Firstly, he may straightway file a suit claiming appropriate relief. Secondly, he may file an application under Order 21 Rule 58 of the Code to the executing court. Where the executing court entertains a claim or objection, it will hold a full-fledged enquiry into the right, title and interest of the claimant or objector and record a finding either upholding the claim or objection or rejecting it. The remedy available to the aggrieved party is to prefer an appeal against the Order and not to file a suit. Scope of this section
movable property of different categories under Rules 42 to 53 or the one immovable property under Rule 54 of Order XXI CPC Rule 58 does not make any difference between movable and immovable properties. Through the length and breadth of the Rule, the word ‘attachment’ occurs at many places, hardly leaving any doubt that the sine qua non to invoke that provision is existence of attachment. Even where an amount, which is not with the judgment debtor is attached in the execution, it is possible for one to invoke that provision”. **Objection to Execution,
- Under Order 21 Rule 58 CPC or under Order 21 Rule 97 to 101 CPC**
- Enquiry/adjudication that of a suit is necessary:- That Order 21 Rule 58 CPC or under Order 21 Rule 97 to 101 CPC, envisages that all objection to the execution proceedings has to be raised under the said provisions and not by way of an independent suit. And on such objection being filed, the executing court is duty bound to consider and decide the objections filed, with complete care and circumspection. Where the executing court ignores or overlooks the important issue/s involved in the objections, the Order of attachment is liable to be set aside. **This was mentioned in Maya Devi Vs. Lalta Prasad, 2015 (5) SCC 588
- Property of third parties, other than judgment debtor, cannot be attached:** In the execution of decree by way of attachment and sale of immovable property, where the objection is set up contending the independent title, distinct or different from that of the judgment debtor, in respect of the property sought to be attached, in such cases, the court is duty bound to protect the interest of such genuine parties. **(Brahmdeo Chaudary Vs. Rishikesh Prasad 1997(3) SCC 694)
- Objection to execution by pendentelite purchaser - Not maintainable:-** It is settled law that person purchasing the property from the judgment debtor during the pendency of the suit has no independent right to resist, obstruct or object the execution of the decree. Further, a transferee pendente lite is not entitled to get his claim adjudicated. ( Usha
**Sinha Vs. Dina Ram AIR 2008 SC 1997)
- Attachment of property in execution of decree, sale during the attachment is void, mode of release of attached property:-** That the attachment of immovable property is made by an Order prohibiting the judgment debtor from transferring or charging the property in any way, and all persons from taking any benefit from such transfer or charge. (Order 21 Rule 54 CPC). An attachment of the property in execution of a decree will continue until the said property is sold and the sale is confirmed, unless it is determined or removed as per the law. 'Therefore, the sale of the attached property during the continuation of attachment is void. (Section 64 CPC). However, the attachment of the property is determined or removed in any of the following ways: ( 1 ) By deemed withdrawal under Order 21 Rule 55 CPC:- That an attachment is deemed withdrawn, under Order 21 Rule 55 CPC, in the following circumstances: (a) On payment into the court, the decreed amount with all costs, charges and expenses resulting from attachment. ( 2 ) By determination under Order 21 Rule 57 CPC:- That when an execution application is dismissed for reasons whatsoever, the court is required to direct whether the attachment shall continue or cease and shall also indicate the period up to which the attachment shall continue or the date on which such attachment shall cease. But where the court dismisses the execution petition, but omits to give the direction that the execution shall continue, in such cases, the attachment gets determined in terms of Rule 57 of Order 21 CPC. ( 3 ) Release of the property from attachment under Order 21 Rule 58 CPC:- When any claim is preferred to the property attached in execution, or any objection is made to the attachment, on the ground that the property is not liable to such attachment and the court, on adjudication of the claim or the objections, releases the property from attachment. ( 4 ) Determination by Operation of Law:- That where the on account of any statute declaring the attachment in execution shall cease to operate, or where the decree (in respect of which the property is
WHEN SUIT LIES
Sub-Rule (5) of Rule 58 declares that where a claim preferred or objection raised is not entertained by the executing court on the ground that (i) the property was sold before the claim was preferred or objection was raised; or (ii) claim or objection was designedly or unnecessarily delayed, it is open to the aggrieved party to file a suit to establish his right (Sawai Singhai Nirmal Chand Vs. Union of India, AIR 1966 SC 1068) Third party, a person or a legal representative, not a party to the decree, can file independent suit to challenge the decree (Section 47 CPC and Order 21 Rule 58 & 97 CPC):- That an aggrieved person who is not a party to the suit and a decree has two options to challenge a decree, either to file an appeal by obtaining the leave to appeal or to file an independent suit to challenge such decree. However, such facility would be available even to a legal representative of the deceased party to the proceedings, if such legal representative has an independent right of his own. (Manduva Vs. Manager, AIR 2012 AP 66 (Hyd) and in Sha Sultana Vs. Anil 2012 (5) ALT 546 (Hyd) Third party, a person or a legal representative, not a party to the decree, recourse to Order 21 Rule 58 & 97 CPC, would not be appropriate:- That the remedies available under the provisions of Order 21 Rule 58 and 97 CPC, are having limited scope, and will be resorted to by the party to the proceeding, who has no grievance for the decree, but the objection in the execution of such a decree. Therefore, the remedies available such provisions would not be suitable for a person who is not a party to the proceeding, and is aggrieved by such decree. But if, such a third party resorted to the remedy under Rule 58 of Order 21 CPC, such application must be treated as a plaint, and shall be adjudicated accordingly. SECTION 47 AND ORDER 21, RULE 58: DISTINCTION Both Section 47 and Order 21, Rule 58 of the Code are similar in certain aspects. Both of them relate to execution proceedings. Both enact that all questions covered by them should be decided by executing court. Both the provisions expressly bar filing of a suit. In spite of these similarities, there is essential distinction between the
two. Whereas Section 47 applies to parties to the suit (or their representatives), Order 21, Rule 58 applies to third parties (or their representatives). Section 47 not only bars a suit but also bars an appeal. Order 21, Rule 58 bars a suit but not an appeal. On the contrary, sub-Rule (4) of Rule 58 expressly states that the Order passed by the executing court "shall have the same force and be subject to the same conditions as to appeal (or otherwise) as if it were a decree". Finally, bar of suit under Section 47 is absolute and unqualified, while bar under Order 21, Rule 58 is conditional and qualified. Claim can be preferred even after sale but before confirmation of sale It was held that no claim can be entertained after the attached property is brought to sale. But it is not good law in view of the earlier judgments of A.P. High Court which was approved by the Apex Court. The leading authority from the High Court is in Magunta Mining Co. Case , where it was held that whenever a claim is preferred under Order 21 Rule 58 against attachment of immovable properties, the fact that the properties are sold or that the sale was confirmed, will not deprive the Court of its jurisdiction to adjudicate upon the claim. It is said that the inquiry into the claim can be proceeded with by the trial Court or the appellate Court and in the event of the claim being allowed, the sale and the confirmation of sale shall to that extent be treated as a nullity and of no effect, as the JDr had no title which could pay to the Court auction purchaser. This judgment was not brought to the notice of the High Court in Damodar Naidu's case (supra). Subsequently the Supreme Court approved the decision in Magunta's case (supra) and held categorically that mere holding the auction does not bar the objections under Rule 58 of Order 21. The word "sold" used in clause (a) of Rule 58 has to be read meaning thereby a complete sale including the confirmation of the auction. When that confirmation of sale not having taken place, it cannot be said, the objection by the claimants was ill founded or untenable. The AP High Court thus rectified the mistake committed in Damodar's case (supra) in Kurupudi Santha Lakshmi case.
Order under Order 21 Rule 58 is appealable under Order 41 - Revision does not lie There was a contention that the Order passed in a petition filed under Order 38 Rule 8 is subject to revision under Order 43. But this is a misconception as held by the Hon'ble AP High Court. It is stated that Order 43 Rule 1 deals with appeals from Orders. It does not cover an Order passed in a claim petition under Order 21 Rule 58 CPC. An Order adjudicating a claim petition whether instituted under Order 38 Rule 8 CPC, an Order 21 Rule 58 CPC, as per the provisions in Order 21 Rule 58(4) CPC, is to be treated as a regular decree and it is Order 41 CPC but not Order 43 which deals with the appeal to be filed over such an Order. The Hon'ble High Court in Ushasri Agro Agencies (Chit Funds), Khammam vs. Giridhar Auto Finance (P) Ltd, Khammam, 2003 (2) ALD 370 , held that the Order passed in a claim petition is appealable as per the provisions of Order 41 CPC. A second appeal therefore, lies to High Court. (Bollapalli Venkata Rao vs. Ch.Subbaiah , 1982 LS (SRC) 99C) Stay of sale Order 21 Rule 59: Where before the claim was preferred or the objection was made, the property attached had already been advertised for sale, the Court may- (a) If the property is movable, make an Order postponing the sale pending the adjudication of the claim or objection, or (b) If the property is immovable, make an Order that, pending the adjudication of the claim or objection, the property shall not be sold, or that pending such adjudication, the property may be sold but the sale shall not be confirmed, and any such Order may be made subject to such terms and conditions as to security or otherwise as the Court thinks fit. In brief:- Where before the claim was preferred or the objection was raised, the property attached has already been advertised for sale, the Court may (a) if the property is movable, postpone the sale; or (b) if the property is immovable make an Order that the property shall not be sold or that it may be sold but the sale shall not be confirmed.
Stay of sale when the application under Rule 58 is filed The provision is Rule 59 of Order 21. It provides two kinds of Orders: (a) if the property is movable, postponing the sale pending the adjudication of the claim and (b) in case of immovable property, the property shall not be sold or it may be sold making the sale subject to confirmation, till the adjudication into the claim is made. The provision did not postulate filing of any separate petition to Order stay, along with the application of claim under Rule 58. It appears from the language of the provision, whenever a claim application is filed, the Court on its own Order postponement of sale pending such adjudication or that to sell but shall not confirm it. Much case law is not developed in this area. But in practice, in the Courts, separate applications under Rule 59 of Order 21 are being filed. Scope: The aim of this provision is to grant stay when the claim petition is pending. Conditional Order of the Court in stay petition for furnishing security is void, illegal, irregular and results in failure of Justice - Smt.Rekha Rani Dey vs. Shyam Sundar and others - AIR 1976 Calcutta 229 (DB). If the executing Courts were to stay its hands till investigation into a claim petition is not finally decided, then it would result in depriving the decree-holder of his possession by filing repeated spurious claims - Shreenath vs. Rajesh followed in Shamsher Singh vs. Naher Singh (2019) 17 SCC 279 - AIR 1998 SC 1827 - 1998 (4) SCC 543 An execution petition dismissed after receipt of Stay Order is not void and the limitation for fresh execution application begins from the date of its dismissal - Sripathi Rangaiah vs. Batkari Maisamma and another - A IR 1958 AP 722-1958 (1) ANWR 531 Now we have to see some Judgments covered by Order 21 Rule 58 CPC:- Power Machines Vs. State of MP 2017 (7) SCC 323 Order 21 Rule 58 CPC, provides for an objection to attachment of property and the procedure is provided under Order 21 for adjudication of objections. In case objection is not entertained, there is a right to file the suit as provided in Order 21 Rule 58(1) CPC.
Manan singh Vs. Mustt Lal Badan AIR 2006 Pat Attachment before judgment in suit - objection as to its validity, held, in the circumstances, not sustainable Balavant N. Viswamitra Vs. Yadav Sadashiv AIR 2004 SC 4377 All irregular or wrong decrees or Orders are not necessarily null and void. An erroneous or illegal decision, which is not void, cannot be objected in execution or collateral proceedings. Smt. Sundari Vs. Bhola Nath AIR 2004 All 293 Sale of property fraudulently to defeat the money decree - void, attract Section 53(1), T.P. Act. Satyamsetti Somaraju Vs. Ramisetti Naidu AIR 2004 AP Application under Order 38 Rule 8 CPC, to raise attachment dismissed for default, restoration application not filed subsequently second application under Order 21 Rule 58, on same cause of auction, barred (Order 9 Rule 9 CPC). Harijit Singh Vs. Manji kaur, AIR 2004 P&H 379 Attachment of undivided share of Hind Joint Family in execution effect of Delichand Vs. Bhandari Das, AIR 2004 Raj 70 Attachment of ancestral property, objections to - scope of DL Sridhar Vs. CR Chandra Mohan AIR 2008 Kant 51 Agreement of sale of property covered by execution petition, prior to attachment of property by the court but sale subsequent to attachment-sale will prevail over the attachment. Some more important judgments with regard to claim petitions, ( 1 ) All questions including right, title or interest of the claimant settled finally in execution proceedings itself and not by a separate suit and appeal in the manner provided U/Sec.96 of CPC - AIR 1983 AP 166 = 1 983 (2) ALT 23 (NRC), AIR 1984 Punjab & Haryana 391 (DB), AIR 1987 SC 1443
( 2 ) This provision is an exhaustive remedy as a suit and the Orders passed thereon are treated as decrees without restricting any right of appeal - Bollapalli Venkat Rao vs. Chantarvedula Subbaiah and another - AIR 1983 AP 166 (170) ( 3 ) If the Legal representative of the judgment-debtor is having right in an attached property the remedy to claim is only U/Sec. 47 but not under this provision - S.T. Ramalingam Pillai vs. Dhanalakshmi & Co., Madurai through its Partner Dhanam Krishnamachari & others - AIR 1972 Madras 190 ( 4 ) This provision will apply when there is an attachment only - Baddepudi Narasareddi vs. Satyanarayana Reddi and others - AIR 1962 AP 137 (DB), 2005 (1) ALT 640 ( 5 ) Executing Court has inherent power to deal under Sec. 151 of CPC with regard to the objections or claim under this Rule is not maintainable in respect of the properties attached is in alienable or by a purchaser of property attached purchased either privately or execution of another decree. Parachari Veeraiah vs Yalavarti Veeraraghavayya and others - AIR 1961 AP 298 (DB), AIR 1970 Orissa 164 ( 6 ) Under sub-clause (3) of this provision, the Court is empowered either to allow or disallow the claim or objection or continue the attachment proceedings subject to mortgage, charge or other interest in favour of any person or pass such Orders as it deems fit. According to sub-Rule (4) of Rule 58 of Order 21 of amended Code, where an Order is passed under Rule 58(3), the said Order will have the same force and subject to the same conditions as to appeal or otherwise as though it were a decree. It is however, to be borne in mind that such an Order will have the incidents of decree only, and that by itself, is not a decree. B.Nookaraju vs. M.S.N. Charities and others - AIR 1994 AP 334 As per sub-clause (2) of this provision, all questions (including questions relating to right, title or interest in the property attached) arising between the parties to a proceeding or their representatives under the Rule, which are relevant for the adjudication of the claim or objection, shall be determined by the Court dealing with the claim or objection and not by a separate suit and, therefore, it is clear that to
( 15 ) The attachment cannot be free from the obligations under the contract of sale, then the necessary sequitur must follow that even after factum of sale the objections would still lie before the sale is made absolute - Kancherla Lakshminarayana vs. Mattaparthi Syamala - AIR 2008 SC 2069 ( 16 ) Attachment before judgment cannot maintain an application under this provision to object the sale of the property by the Court - Parachuri Veerayya vs.Yalavarti Veeraraghavayya - AIR 1961 AP 298 ( 17 ) Where the executing Court had wrongly raised the attachment and the decree-holder has filed a suit which took him 12 years to succeed and he then applied for effecting the sale of the property in executing, held it was open to the decree- holder to move the executing Court to revive his application which had been dismissed as a consequence of the Court's wrong Order. The release from attachment was only provisional in character and was subject to the result of the suit under Order 21 Rule 63 - Ummachi Kannummal Mohammed Pathummal vs Subramonia Pillai - AIR 1980 Kerala 216 (DB) ( 18 ) This provision also apply to the attachment made before judgment- Ouseph Sakaria vs. Cherian AIR 197 Kerala 159 (DB), V. Alwar Chetty vs. Madala Pichaiah Naidu AIR 1962 AP 469, Auto Saks vs. Shushila Sinha AIR 1966 Allahabad 278 ( 19 ) During the pendency of insolvency proceedings, lodge by the father of a joint Hindu family a decree was obtained against the father and son and in executing of the decree, the son's share in the joint Hindu family was attached before the adjudication of the insolvency proceedings. Held, the son's share had been properly attached - Sajja Jaganmohan Rao vs. Uppalapati Babu Rao AIR 1975 AP 278 (FB) = 1975 (2) ALT 144 (FB) ( 20 ) There is absolutely no bar and on the other-hand it is permissible as contemplated by Order 38, Rule 11 and 11-A Code of Civil Procedure for a petition filed under Order 38 Rule 8 Code of Civil Procedure to be continued even beyond the date of decree of the suit. Such an application has got to be tried as if it is a plaint as per Order 21 Rule 58(2) and (4). J.Rama Murthy vs. Srinivas Corporation General
Merchants and Commission agents - AIR 1989 AP 58 = 1987 (2) ALT 670. ( 21 ) Claim petition withdrawn subject to file separate suit and the Court granted permission to file fresh suit, hence suit on a later date is maintainable - 1979 (1) ALT 84 (NRC) (FB) ( 22 ) A minor after attaining majority can file a suit to set-aside the dismissal of his claim petition to set-aside the attachment and sale, if the guardian neglected in conducting the litigation to safe-guard the interest of the minor - Ulaganathan Chettar vs. Durairajan - AIR 1982 Madras 424 ( 23 ) No claim petition will be entertain, where the claim petitioner designedly or un-necessarily delayed - Barnes Investments Limited vs. Raj K.Gupta - AIR 2001 SC 2818 = 2001 (7) SCC 94 ( 24 ) Court can sell the attached property even the claim petition pending, but the Court cannot confirm the sale till the disposal of the claim petition - Nirode Ranjan Dey vs. Union of India and others - AIR 1974 Guwahati 14 ( 25 ) When a claim petition is pending, postponement of sale on terms as to security and imposession of certain terms and conditions renders an Order is illegal - Rekha Rani Dey vs.S hyam Sunder Dhar - AIR 1976 Calcutta 229 (DB) ( 26 ) A claim petition is dismissed as barred by limitation an appeal lies against that Order - Mohd Yousuf vs. Jyotsana Ben - AIR 1996 MP 197 ( 27 ) After amendment of this Rule an Order passed Rule 58 operates as resjudicata in a subsequent stage claiming title - Mangru Mahto vs. Thakur Taraknathji Tarkeswarnath - AIR 1967 SC 1390 ( 28 ) Objection by purchaser with regard to illegality of the attachment can be raised in appeal for first time - Pathumma vs.Kuntalan Kutty - AIR 1981 SC 1683 ( 29 ) Second appeal lies over an appellate Order passed an Order under this provision. The Court fee payable on claim petition as per Article 11 (1) of Court fee Act. The Court fee payable on appeal is the same. But when the claim petition is rejected filing of suit is provided and the
