Prolonged execution proceedings Defeat Right of Party Succeeded in Establishing its Claim in Civil Proceedings: Supreme Court

The Supreme Court observed that it is often said in our country that another legal battle, more prolonged, starts in execution proceedings defeating the right of the party which has succeeded in establishing its claim in civil proceedings. 

Court Observation 

The three judges bench of Justice Sanjay Kishan Kaul, Justice S. Ravindra Bhat and Justice M.M. Sundresh said that the dragging of the proceedings for three decades have been a grave injustice to the Appellant, who have been deprived of the enjoyment of the property despite having paid the full auction price 30 years back. Merely because the Respondent is an Improvement Trust does not give it a license to take a citizen’s right for a ride.  

The court noted that the acquisition proceedings in respect of the land in question sought to deprive the owners of their land which had to be paid for in terms of the provisions of the LA Act. 

The court further noted that the amount of compensation was determined by the reference court under Section 18 of the LA Act and the matter was not taken further. Thus, both the owner and acquiring beneficiary agreed to the compensation as determined by the Tribunal. The next step should have been to immediately pay the amount to the owners which did not happen. 

Background 

The dispute about the non-payment of acquired land under the Land Acquisition Act, 1984 has spanned over more than three decades. Respondents were the original owners of the land, which was acquired by Ludhiana Improvement Trust, Respondent. The compensation determined by the Respondent Trust was not acceptable to the land owners, thus, reference was sought in terms of Section 18 of the LA Act.

Arguments 

Senior Advocate P. S. Patwalia, appearing for the Appellant urged that the Appellant was a bona fide successful auction purchaser having purchased the property in a public auction with the consideration amount duly deposited.

He submitted that the sale certificate was also issued in the Appellant’s favour and despite this the Appellant has not been able to enjoy the property for 30 years due to pendency of the litigation.

He urged that the Respondent Trust as Judgment Debtor could not satisfy the test by merely pointing out material irregularity but had to further establish to the satisfaction of the Court that the material irregularity or fraud has resulted in causing substantial injury to the Judgment Debtor. 

Senior Advocate Neeraj Kumar Jain, appearing for the Respondent Trust, sought to support the impugned judgment on the ground that the High Court had found material irregularities and illegalities causing substantial injury to the Respondent Trust.

He submitted that the non disclosure at the time of filing of the application under Order XXI Rule 66 of the said Code qua the land whereby the land comprised in Khasra No. 271 had also been sold in the public auction was material as only the land comprised in Khasra No.272 could have been sold. 

Decision 

The court said that the owners were made to run from pillar to post and ultimately the execution proceedings were filed six years after the amount had been so determined. This conduct of the Respondent Trust itself is not condonable and this is what resulted in the proceedings for execution, the auction and the matter being dragged on for decades.  

The court viewed that there is no irregularity or discrepancy in identification of the property when the site plan was filed with it.

The court observed that the Respondent Trust did not even comply with the requirement of Order XXI Rule 89 by depositing the decretal amount along with 5 percent of the auction amount.

The court said that the Respondent Trust behaved as if it had some superior right to appropriate the property of the owners without paying for it contrary to the mandate of the LA Act. That would be hardly called a case of fraud in such a situation. 

The mandatory nature of the twin conditions to be satisfied before an auction sale can be set aside as provided under Order XXI Rule 90(3) of the said Code which has been discussed by this Court in various judicial pronouncements” the court stated. 

The court noted that Order XXI of the Code is exhaustive and in the nature of a complete Code as to how the execution proceedings should take place. The various stages of Order XXI of the Code when violated cannot give right to some extra indulgence merely because the Respondent Trust is an Improvement Trust. There cannot be a license to prolong the litigation ad infinitum. 

The court set aside the judgment of the High Court and sustained the view taken by the Executing Court in the order as sustained by the Appellate Court in its order. 

The court also granted costs to the Appellant against Respondent trust quantified at Rs.1 lakh.

Case title: M/S. Jagan Singh & Co. v/s Ludhiana Improvement Trust & Ors. 

Citation: CIVIL APPEAL NO.371 OF 2022

Click here to read the Order/Judgment 

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