Quashed

M/S.Can Fin Homes Ltd. v. Omana Viswambharan

Kerala HC16 Nov 2009WP(C)/27180/2007

Case brief

AI extract

What is this about?

High Court quashed an order in execution proceedings that barred sale of mortgaged property due to a suit filed by another creditor. Court directed lower court to complete service for a pending decree correction application and to reconsider objections after that application is disposed of, affirming the mortgagee's right to first charge.

What did the court decide?

P7 order quashed; Court below directed to call for service of notice for pending correction petition (E.A. No.7099/2007) and consider the objection after disposal.

M/S.Can Fin Homes Ltd. Vs Omana Viswambharan — Contract and Commercial Disputes | Kerala HC (2009)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT :

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THE HONOURABLE MR. JUSTICE S.S.SATHEESACHANDRAN MONDAY, THE 16TH NOVEMBER 2009 / 25TH KARTHIKA 1931

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WP(C).No. 27180 of 2007(I) -------------------------OS.734/1999 of II ADDL.SUB COURT,THRISSUR .................... PETITIONER(S):

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------------------------M/S.CAN FIN HOMES LTD., HAVING ITS BRANCH OFFICE AT MACHINGAL LANE, THRISSUR-1, REP. BY ITS BRANCH MANAGER.

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BY ADV. MR.C.AJITH KUMAR

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RESPONDENT(S):

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--------------------------1. OMANA VISWAMBHARAN, W/O.VISWAMBHARAN, AGED 39 YEARS, MURIAPURACKAL HOUSE, KOOLIMATTOM, PERINJANAM (VIA), POLLAYI, THRISSUR DISTRICT.

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2. VISWAMBHARAN, S/O.V.K.KOCHURAMAKUTTY, AGED 48 YEARS, VADAKKAN HOUSE, (P.O) ENGANDIYOOR, THRISSUR DISTRICT.

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3. RAJAGOPALAN, AGED 53 YEARS, CHULLIPARAMBIL HOUSE, (P.O) ENGANDIYOOR, CHAVAKKAD TALUK, THRISSUR DISTRICT.

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4. K.A.SADANANDAN, AGED 62 YEARS, JUNIOR HEALTH INSPECTOR, COMMUNITY HEALTH CENTRE, MULLASSERY, THRISSUR DISTRICT, RESIDING AT KUNNATH HOUSE, KUNDALIYOOR, ENGANDIYOOR, CHAVAKKAD TALUK, THRISSUR DISTRICT.

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5. DEVARAJAN, S/O.RAMAKRISHNAN, AGED 42 YEARS, ITHIKKATTU HOUSE, KUNDALIYOOR, ENGANDIYOOR, CHAVAKKAD TALUK, THRISSUR DISTRICT.

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R1 & R2 BY ADVS. MR.P.VIJAYA BHANU,

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MR.M.GEORGE THOMAS. R3 & R4 BY ADV. MR.K.A.SREEJITH R5 BY ADV. MR.MILLU DANDAPANI

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 16/11/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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Kss

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WPC.NO.27180/2007 I

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APPENDIX

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PETITIONER'S EXHIBITS:

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P1: COPY OF THE JDUGMENT DTD. 10/02/03 IN O.S.NO.734/1999OF THE SUB COURT, THRISSUR.

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P2: COPY OF THE DECREE DTD. 10/02/03 IN O.S.734/1999 OF THE SUB COURT, THRISSUR.

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P3: COPY OF THE E.P.NO.457/2003 IN O.S.734/1999 FILED BY PETITIONER BEFORE SUB COURT, THRISSUR DTD. 15/09/03.

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P4: COPY OF THE IMPLEADING PETITION E.A.NO.1149/04 FILED BY 5TH RESPONDENT IN E.P.NO.457/2003 IN O.S.734/1999 DTD. 16/10/04.

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P5: COPY OF THE OBJECTION FILED BY PETITIONER TO E.A.NO.1149/04 FILED BY 5TH RESPONDENT.

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P6: COPY OF THE OBJECTION FILED BY 5TH RESPONDENT IN EP.NO. 457/2003 IN O.S.NO.734/1999.

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P7: COPY OF ORDER DTD. 14/08/07 IN E.P.NO.457/03 IN O.S.NKO.734/1999 PASSED BY THE SUB COURT, THRISSUR.

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RESPONDENT'S EXHIBITS:

N I L

/TRUE COPY/

P.S. TO JUDGE

Kss

S.S. SATHEESACHANDRAN, J.

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- - - - - - - - - - - - - - - - - - - - - - - - - W.P.(C) No.27180 of 2007

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- - - - - - - - - - - - - - - - - - - - - - - - - Dated: 16^th November, 2009

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JUDGMENT

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Petitioner is the decree holder in E.P.No.457 of 2003 in

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O.S.No.734 of 1999 on the file of the Sub Court, Thrissur. The decree holder is a public limited company engaged in finance business. The above suit had been filed to recover the amounts advanced by the company as housing loan to judgment debtors 1 and 2, on the guarantee of respondents 3 and 4, and on an equitable mortgage over the property belonging to the first judgment debtor as security. Suit was decreed as ex parte. When proceedings for sale of the mortgage property continued, the 5^th judgment debtor got himself impleaded in the execution proceedings and raised an objection that in respect of the very same property he had a charge decree in his favour in O.S.No.73 of 1998 of the same court. After his impleadment, 5^th judgment debtor raised an objection against the proceeding for sale of the property contending that in execution of the decree passed in O.S.No.734 of 1999, the property had already been brought to sale and he had purchased it in auction for a sum of Rs.7,24,828/-. The learned Sub Judge, after hearing both sides,

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W.P.C.No.27180/07 - 2 -

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accepting the objections raised by the 5^th judgment debtor, passed P7 order holding that the property is not liable to be sold and the decree holder can move for rateable distribution of the sale proceeds. Propriety and correctness of P7 order is challenged in the writ petition invoking the supervisory jurisdiction vested with this court under Article 227 of the Constitution of India.

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I heard the counsel on both sides. At the time of hearing, it

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has been brought to my notice by the learned counsel appearing for the decree holder that though an equitable mortgage had been created in respect of the decree schedule property while availing the loan by the 1^st and 2^nd judgment debtors with the 3^rd and 4^th judgment debtors as guaranteers and, that the suit was filed against those persons on default of the loan for recovery of money by sale of the mortgage property, the court while decreeing the suit ex parte, omitted to include a charge over the property and realisation of the decree for money by its sale. An application had been moved as E.A.No.7099 of 2007 for correcting and amending the decree and judgment to provide for sale of the mortgaged property for the suit claim decreed, but the enquiry thereof could not be completed as service to one of the judgment debtors remain yet to be completed.

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W.P.C.No.27180/07 - 3 -

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Pending that application, the court has passed P7 order on the basis of the objection raised by the additional 5^th judgment debtor that in a suit for specific performance he had obtained a decree against the first judgment debtor and the property had been purchased by him in sale towards realisation of the decree passed in that suit. Objection raised by him was accepted by the execution court directing the decree holder to move for rateable distribution of the sale proceeds. Since there was a mortgage in favour of the petitioner decree holder company in the present case in respect of the housing loan extended to the first and second judgment debtors, as a secured creditor, the company is entitled to have a first charge over the property and the omission of the court to provide the charge in the judgment and decree, for the correction of which an application is still pending consideration before the court, has to be considered by this court for granting appropriate relief to the petitioner interfering with P7 order, is the submission of the learned counsel. Learned counsel for the additional 5^th judgment debtor pointing out that the decree correction petition was filed only in 2007, contended that no interference with P7 order is called for, and if at all, decree holder is aggrieved of the direction given for rateable distribution given in the same

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W.P.C.No.27180/07 - 4 -

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proceedings, that part of the order can be set aside. I do not find any merit in the submission made by the learned counsel for the 5^th respondent. An application for correction of the decree as E.A.No.7099 of 2007 was pending before the court, in which it had been canvassed that the suit claim is secured by a mortgage and while granting a decree upholding the suit claim, there was omission by the court to grant a decree for realisation of the claim by sale of the mortgage property which was specifically claimed in the plaint. The time lag in filing the correction petition cannot be given any significance and the merit of that petition deserve to be considered by the court in the backdrop whether there was any omission by the court to grant the relief canvassed. Noncompletition of service on one of the judgment debtors is stated to be the reason for nonconsideration of that petition on merits. The court below shall order for service of notice on the judgment debtor who is yet to be served on the petition by substituted service, publishing notice in a national daily at his last known address, for completing the steps to consider the petition (E.A.No.7099 of 2007) on merits. The decree holder shall apply and take steps for such substituted service within three weeks from the date of production/receipt of a copy of this

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W.P.C.No.27180/07 - 5 -

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judgment before the court below. Application, if any, moved by the decree holder shall be considered by the court below and appropriate orders passed specifying the daily in which the publication is to be given effect to, directing such publication and production of the publication. On completion of service as directed, the court below shall consider and dispose E.A.No.7099 of 2007 for correction of the judgment and decree and pass appropriate orders. P7 order is quashed, directing the court below to consider the objections raised by the additional 5^th judgment debtor to the executability of the decree after disposal of E.A.No.7099 of 2007 and subject to the orders passed on that application.

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Writ Petition is disposed as indicated above. Handover copy of the judgment to the counsel on both sides and send a copy of the judgment to the concerned court.

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S.S. SATHEESACHANDRAN, JUDGE

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srd

M/S.Can Fin Homes Ltd. v. Omana Viswambharan

Case brief

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M/S.Can Fin Homes Ltd. v. Omana Viswambharan

Case brief

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