Kakarla Pedda Rama Subba Reddy vs Mukkamalla Krishna Reddy and Mukkamalla Rama Subba Reddy

L. Narasimha Reddy, J.—In this batch of revisions, common questions of fact and law arise. Hence, they are disposed of, through a common order.

The Petitioners are different, but Respondents are common to all the revisions. The Petitioners filed various suits against the 2nd Respondent in different Courts. The suits were decreed and the decrees are said to have become final. The 1st Respondent filed O.S. No. 34 of 2004 against the 2nd Respondent in the Court of Senior Civil Judge, Allagadda. The suit was decreed, and since the 2nd Respondent did not satisfy the decree, he filed E.P. No. 15 of 2006. An item of immovable property was brought to sale on 09-09-2009, which fetched a sum of Rs. 15,60,000/-. The decree in O.S. No. 34 of 2004 is said to be for a sum, below Rs. 2 lakhs. The Petitioners filed applications u/s 73 read with Section 151 Code of Civil Procedure, in E.P. No. 15 of 2006, seeking rateable distribution of the balance of the sale proceeds, after the liability under the decree, in O.S. No. 34 of 2004 is satisfied.

The applications were opposed mainly by the 1st Respondent. According to him, the claims made by the Petitioners do not fall within the scope of Section 73 of Code of Civil Procedure. The trial Court dismissed the applications through individual orders, dated 17-09-2009. Hence these revisions.

Sri I. Venkata Prasad, learned Counsel for the Petitioners submits that the Petitioners have filed execution petitions, much before the property in question was brought to sale, in E.P. No. 15 of 2006, and thereby, they have complied with Section 73 of Code of Civil Procedure. He contends that the view taken by the trial Court, that the applications claiming rateable distribution, ought to have been filed before the property is brought to sale; is untenable in law. He places reliance upon the judgment of this Court in Gopavarapu Ramalinga Swamy Vs. Nimmala Kondalu and Another,

Though notice was served upon the 1st Respondent, he has not chosen to enter appearance.

The 2nd Respondent appears to be a highly indebted person. He borrowed indiscriminately, from various persons, and failed to repay the amounts. Fairly large number of suits were filed, and all of them were decreed. In respect of almost every decree, an execution petition was filed.

The 1st Respondent too obtained a decree against the 2nd Respondent, by filing O.S. No. 34 of 2004 in the Court of Senior Civil Judge, Allagadda. The decree became final and he filed E.P. No. 15 of 2006. An item of immovable property was brought to sale, and it fetched a sum of Rs. 15,60,000/-. The value of the decree obtained by him appears to be for a sum, below Rs. 2 lakhs. The amounts covered by the respective decrees obtained by the Petitioners, in various decrees, are below Rs. 1 lakh. On coming to know that an item of immovable property was sold, and it fetched substantial amount, the Petitioners filed applications u/s 73 of Code of Civil Procedure. The only person, who could have objected to the applications, filed by the Petitioners, was, the 2nd Respondent. The 1st Respondent should not have any grievance, once the amount, covered by the decree, in his favour is realized. Curiously, he opposed the applications filed by the Petitioners. The trial Court ought not to have entertained his objection, at all, once the 2nd Respondent has chosen, not to resist the applications.

The Executing Court placed reliance upon a judgment of this Court, in Sannidhi Krishna Murthy and Another Vs. Ponipireddy Venkata Rao and Others, As in the instant case, in that case also, applications were filed by the holders of decrees, for rateable distribution of the left over sale proceeds. This Court took the view that, unless the application was made before the Executing Court, had received the assets, rateable distribution cannot be ordered. This observation, however, does not appear to be, in consonance with the text of Section 73 of Code of Civil Procedure. The provision reads as under:

Section 73: Proceeds of execution-sale to be rateably distributed among decree-holders:

(1) Where assets are held by court and more persons than one have, before the receipt of such assets, made application to the Court for the execution of decree for the payment of money passed against the same judgment-debtor and have not obtained satisfaction thereof, the assets, after deducting the cots of realization, shall be rateably distributed among all such persons:

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(2) Where all or any of the assets liable to be rateably distributed under this section are paid to a person not entitled to receive the same, any person so entitled may sue such person to compel him to refund the assets.

(3) Nothing in this section affects any right of the Government.

From this, it becomes clear that, what is required to be filed by a person, claiming rateable distribution of assets, held by the Court is, "an application to the Court for execution of the decree for payment of money passed against the same judgment-debtor". A clear distinction needs to be drawn, between an application filed for rateable distribution, u/s 73 Code of Civil Procedure, on the one hand, and an application for execution, which is normally called as E.P. under Order XXI Code of Civil Procedure, on the other hand. What Section 73 of Code of Civil Procedure. insists is that, the person, claiming rateable distribution, must have filed an E.P. before the assets are received by the Executing Court. The question of filing an application, u/s 73 Code of Civil Procedure, for rateable distribution, before the assets are received; does not arise.

The judgment relied upon by the Petitioners herein arose, under a slightly different set of facts. In that case, an application under Order XXXVIII Rule 5 CPC was filed by the person, who claimed rateable distribution. Following the judgment in Jagadish Vaishnav Vs. Farpos Leading Cateror and Others, it was held that, it was not necessary for such a claimant to have filed the E.P., before the Executing Court, receive the assets in different set of execution proceedings. The present case stands on a higher footing, inasmuch as the execution petitions were filed by the Petitioners herein, much before the immovable property, owned by the 2nd Respondent, was brought to sale.

For the foregoing reasons, the C.R.Ps are allowed, and the orders under revisions are set aside. The Executing Court is directed to order rateable distribution of the left over sale proceeds in E.P. No. 15 of 2006, in favour of such of the decree-holders, who have filed E.Ps, against the 2nd Respondent, before 09-09-2009, i.e. the date on which the property was sold.

There shall be no order as to costs.