This article is written by Sarabjit Singh, pursuing Certificate Course in Advanced Civil Litigation: Practice, Procedure and Drafting from Lawsikho.com. Here he discusses “Procedure for Execution of a Decree of Sale of Immovable Property”.
After a lot of toils, hard work, determination, emptying of pockets one qualifies from being called a ‘Plaintiff’ to a ‘Decree Holder’, and in the process on an average anything upwards from a decade to more than one decade is consumed. During this journey, the plaintiff who started as an innocent and reluctant litigant metamorphosis’s into a half-baked lawyer. It is akin to a nursery toddler who after years of devotion, sacrifices, and dint of hard-work finally has a post-graduate degree in hand, which in our case we shall call ‘Decree of Sale’.
However, fruits of labor shall only mature after the execution of the ‘Decree of Sale’. The word execution, is not defined but understood to be, ‘a judicial act by which a public officer is empowered to carry judgments or orders into effect’? In other words, it means the carrying into effect the judgment or order delivered in a court of law. Order 21 along with 106 rules in its kitty is the most extensive of all in the Civil Procedure Code (CPC), 1908, it lays bare the procedure involved along with relevant sections, which we shall have at our command to conquer the ultimate summit.
Mostly, the decree of sale of immovable property is awarded for enforcing mortgage deed, charge, or for recovery of money or any other kind of encumbrances as deemed fit by the court. The person in whose favor decree is awarded is called the ‘Decree Holder’, (DH) and the one incumbent to satisfy it is ‘Judgment Debtor’ (JD). Decree of sale comes into being upon adjudication by any court exercising original jurisdiction, and the same can be applied for execution after the prescribed period of appeal, provided it is not preferred by the JD. Per contra, this can go on until the JD gives up or exhausts all his legal remedies.
Limitation & Executing Court
Period of limitation under ‘The Limitation Act, 1963’ for filing of execution petition is 12 years from the date that the decree becomes enforceable. The same shall be filed in the very court that exercised original jurisdiction. However, the court may transfer the same for execution to any other court directly, even if it is situated outside the State. This could be for various reasons such as the immovable property to be sold falls under the territorial jurisdiction of that court etc. While transferring the decree for execution, the court shall send all relevant documents viz. copy of the decree, certificate setting forth that due claim remains unsatisfied or any part that remains, etc.
DH shall move a written application in the court that originally passed the decree or the court to which it has been transferred for execution. The application shall contain all the essential information viz. suit number, name of parties, date of the decree, any appeal preferred or pending, amount due, name of the person against whom execution is sought, and most importantly the mode in which the assistance of the court is required. Presently, we are discussing for the purposes of attachment and sale of immovable property to the satisfaction of the decreed amount. DH should take care to quote the amount which in his estimate is the true value of the immovable property to be sold.
Show Cause Notice
After the executing court has satisfied itself that all defects if any have been cured in the application and has provisionally evaluated without prejudice to the right of the parties the correct amount for the execution of the decree vis-à-vis value of the immovable property a show-cause notice is issued to the judgment debtor. It is an opportunity for him to raise his claims or objections against the execution of the decree on the day and date fixed for hearing. Show cause notice is necessary only if the execution petition is filed after 2 years of passing of the decree, or is against a legal representative or assignee or receiver where DH is declared to be insolvent. However, the court may in its wisdom issue process instead of show cause notice if it foresees unreasonable delay or ends of justice are threatened.
Application for Attachment
Once after the court has decided upon the claims or objections if any, raised by the judgment debtor, against the execution of a decree; the DH shall move an application requesting attachment of immovable property preceding sale. Though sale can take place without attachment, this shall further help in protecting the interests of the DH. The application shall contain complete details of the immovable property so as to help in its identification. Also elaborate the extent of JD interest in the said property, as per his information and belief. Whenever possible, the DH holder shall produce extracts from the registrar’s office showing various details such as interest of parties if more than one, revenue due to the government, encumbrance’s if any in the immovable property, etc.
Prohibiting Alienation of Property
After due diligence, the court shall pass an order prohibiting the JD from transferring or charging the property in any manner such as sale, gift, lease, mortgage or otherwise. The same shall apply to all who may be interested to receive it. Such prohibitory order shall safeguard DH’s interests. The same shall be drawn in writing and posted at a conspicuous place adjacent to the immovable property in question, and also at collector’s office if the said property is land paying revenue to the government. Besides affixing, it shall be publicly proclaimed with the beating of drums and other means. This order shall also require the presence of the JD debtor in court on date fixed for settling the terms of the proclamation for sale.
Objections to Attachment
All claims or objections regard to the attachment of property on the ground that such property is not liable to be attached shall be filed before the executing court. However, such applications shall not be entertained by the court if the claim or objections is preferred after the attached property has already been sold or is unnecessarily delayed by design. In such circumstances, only remedy available to the applicant is to file a separate suit, and the court shall be bound by such outcome. However, w.r.t. all questions pertaining to right, title or interest they shall be adjudicated by the executing court itself.
Preparing Notice of Sale & its Proclamation
The executing court is empowered to attach property, and publicly auction it to pay the person entitled proceeds of the sale in satisfaction of the decretal amount. In this regards, the court shall issue a notice to both DH and JD to present themselves in court on the day and date fixed for drawing proclamation of sale notice. It is prepared in the language of the court and contains all the essentials viz. time and place of sale, specifications and description of property to be sold, revenue assessed if any due, any encumbrance to which the property is liable, decreed amount, estimate value of the property as ascertained by the court, judgment debtor and decree-holder or any other material information necessary that shall aid the purchaser in its evaluation. Care is taken to sell only that part of the property that is necessary to satisfy the decree. The court is also empowered to summon anyone, or demand documents deemed necessary in preparation of this proclamation notice. Henceforth, the court shall order the Nazir of the Court for causing service of this drawn proclamation of sale. The same shall be published and announced by beat of drums. A copy of the same is affixed on a conspicuous part of the property and the courthouse. After performing all such acts, Nazir shall prepare a report for the information of the executing court.
Warrant of Sale
The court shall issue a warrant of sale order in the name of the bailiff to publicly auction as per the details mentioned in the warrant on the date and place specified and report back to court with an endorsement certifying the manner in which sale has been executed or the reason why it has not been executed.
Adjournment, postponement or stoppage of sale
- The court may at its discretion adjourn sale to a specified date and hour, and so can an officer conducting the sale but after recording reasons thereto. And if the auction is taking place within the precincts of the courthouse then only after leave of court.
- Sale can be adjourned when the bid amount is not adequate.
- Sale can be adjourned if the purchaser fails to pay 25% of the bid amount immediately on closing of bid, and postponed if he does not pay the remaining sum within 15 days of the successful bid.
- Provided, if the JD is able to satisfy the court that if the given time he shall be able to raise the decreed amount either by way of leasing, mortgaging or selling the property in question or other property the court may postpone the sale on such terms and for such period as it deems fit. The court shall grant a certificate to the JD in this respect. All monies raised by JD shall be paid to the DH.
- If for any reason purchaser defaults on paying the full bid amount then after defraying the expenses involved in the auction, the remainder sum may be forfeited in the favor of the government, if the court so decides. And the property shall be resold after issuing a fresh proclamation.
- The sale could be stopped any time before the lot is knocked down if the JD tenders to the officer conducting the sale the full decreed amount along with costs and expenses or on producing proof of its deposit in executing court.
- Sale can stay pending adjudication of any claim or objection even if it is received after proclamation of attachment and advertisement for sale. Or conditionally allowed pending adjudication that if property is sold the same shall not be confirmed or pass orders subject to such terms and conditions as to security etc.
Note: If adjournment exceeds 30 days then fresh proclamation is to be issued, published and affixed as mentioned earlier.
Application to set aside the sale
- Any person claiming an interest in the property sold may apply to the court to set it aside subject to payment in court 5% of purchase money and sum equal to that specified in proclamation notice i.e. decreed amount.
- DH, purchaser or any other person having interest in the distribution of proceeds from the sale may apply for setting aside the sale on grounds of fraud or material irregularity in publishing or conducting the auction, provided injury sustained is substantial. No such application shall be accepted if the applicant had an opportunity to approach the court on an earlier occasion but has failed to do so.
- Purchaser may apply to set aside the sale on the ground that the JD has no saleable interest in the decreed property.
Pertaining to all of the above cases, notice is issued to the other party to show cause before adjudication.
If a sale is successful, then the purchaser is required to immediately deposit 25% of the sale amount and the rest within 15 days of successful bid unless DH is the purchaser himself with the prior permission of the court.
Distribution of money realized from sale
After defraying expenses involved in the sale of property, pay to decree-holder his full entitlement, and if any balance remains that shall be given to the JD. If on the contrary money realized from sale is not sufficient to satisfy the decreed amount then the DH can apply to the court for recovery of balance amount provided it is legally recoverable.
Certificate to purchaser
Once the sale has become absolute, and there is no litigation pending in either of the courts i.e. executing court or courts of appeal the court shall issue a certificate in favor of the purchaser containing the details of the property and the day and date he is declared to be the absolute owner of the immovable property. If the property in question is occupied by a tenant the court shall issue a proclamation bringing to his notice the name of the new owner.
Finally, if for any reason the purchaser is being obstructed from gaining possession the court shall intervene on the application, and order the bailiff to put the purchaser in possession of the sold property.
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