Case Note & Summary
The petitioner, Central Bank of India, filed a writ petition challenging an order dated 18/03/2011 passed by the learned Civil Judge, Senior Division, Margao, which rejected the petitioner's application under Order 21 Rule 58 of the Code of Civil Procedure, 1908 (CPC). The petitioner had claimed that the suit flat was mortgaged in its favour prior to the attachment in execution proceedings. The learned Judge rejected the application on the assumption that the flat was attached pursuant to an order in Special Civil Suit No.34/04 dated 21/04/2005. The petitioner argued that no such document was referred to and that the attachment was after the mortgage, so it could not affect the petitioner's rights. The respondent supported the impugned order, contending that the original vendor purchased the property despite an order restraining alienation. The High Court held that the learned Judge erred in rejecting the application without holding an inquiry and on a wrong assumption. The court set aside the impugned order and directed the learned Judge to decide the application afresh after giving an opportunity to both parties to lead evidence. The writ petition was allowed.
Headnote
A) Civil Procedure Code - Order 21 Rule 58 - Claim Petition - Inquiry - The court must hold an inquiry into the claim of a third party before rejecting an application under Order 21 Rule 58 CPC. The learned Judge failed to conduct such inquiry and proceeded on a wrong assumption that the attachment was prior to the mortgage. (Paras 4-5)
B) Mortgage - Priority - Attachment - A mortgage created prior to attachment in execution proceedings prevails over the attachment. The petitioner's mortgage was executed before the attachment, and thus the attachment cannot affect the petitioner's rights over the suit flat. (Para 5)
C) Civil Procedure Code - Order 21 Rule 58 - Rejection of Claim - Erroneous Assumption - The impugned order was based on a mistaken belief that the suit flat was attached pursuant to an order in Special Civil Suit No.34/04 dated 21/04/2005, which was not supported by any document. The order is liable to be set aside. (Paras 4-5)
Issue of Consideration
Whether the learned Civil Judge erred in rejecting the petitioner's application under Order 21 Rule 58 CPC without holding an inquiry and on the erroneous assumption that the suit flat was attached prior to the mortgage in favour of the petitioner.
Final Decision
The High Court allowed the writ petition, quashed and set aside the impugned order dated 18/03/2011, and directed the learned Civil Judge, Senior Division, Margao, to decide the application filed by the petitioner under Order 21 Rule 58 CPC afresh after giving an opportunity to both parties to lead evidence.
Law Points
- Order 21 Rule 58 CPC
- Mortgagee's right
- Attachment
- Inquiry
- Claim petition
Case Details
2011 LawText (BOM) (10) 85
Writ Petition No.277 of 2011
Shri Sudin M. S. Usgaonkar for Petitioner, Shri C.A. Coutinho for Respondent No.1
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Nature of Litigation
Writ petition challenging rejection of application under Order 21 Rule 58 CPC.
Remedy Sought
Petitioner sought quashing of order dated 18/03/2011 rejecting its claim petition and direction to decide the application afresh.
Filing Reason
The learned Civil Judge rejected the petitioner's application under Order 21 Rule 58 CPC without holding an inquiry and on a wrong assumption that the suit flat was attached prior to the mortgage.
Previous Decisions
The learned Civil Judge, Senior Division, Margao, by order dated 18/03/2011, rejected the petitioner's application under Order 21 Rule 58 CPC.
Issues
Whether the learned Civil Judge erred in rejecting the petitioner's application under Order 21 Rule 58 CPC without holding an inquiry?
Whether the attachment in execution proceedings could affect the rights of the petitioner who had a prior mortgage over the suit flat?
Submissions/Arguments
Petitioner argued that the learned Judge proceeded on a wrong assumption that the suit flat was attached pursuant to an order in Special Civil Suit No.34/04 dated 21/04/2005, and no such document was referred to. The attachment was after the mortgage, so it cannot affect the petitioner's rights. The Judge ought to have held an inquiry.
Respondent argued that the original vendor purchased the property despite an order restraining the judgment debtor from alienating or transferring the suit flat.
Ratio Decidendi
A claim petition under Order 21 Rule 58 CPC requires an inquiry into the claim of the third party. The court cannot reject such application on an erroneous assumption without holding an inquiry. A mortgage created prior to attachment in execution proceedings prevails over the attachment.
Judgment Excerpts
The learned Judge has proceeded on a wrong assumption that the suit flat was attached pursuant to an order passed in Special Civil Suit No.34/04 dated 21/04/2005.
The attachment carried out in the execution proceedings was after the mortgage executed in favour of the petitioner and, as such, in any event such attachment cannot affect the right of the petitioner over the suit flat.
The learned Judge ought to have held an inquiry with regard to the claim put forward by the petitioner before deciding the application filed by the petitioner under Order 21 Rule 58 of C.P.C.
Procedural History
The petitioner filed an application under Order 21 Rule 58 CPC before the Civil Judge, Senior Division, Margao, which was rejected on 18/03/2011. The petitioner then filed the present writ petition in the High Court of Bombay at Goa challenging that order.
Acts & Sections
- Code of Civil Procedure, 1908: Order 21 Rule 58
