Holding

The stay period is to be excluded from the limitation period, making the application under Order 21 Rule 89 CPC timely.

Summary

The appellants obtained a decree for recovery of money and the decree-holder initiated execution proceedings, resulting in the sale of the appellants' property on 25 November 2003. On the same day a third party obtained a stay of the execution proceedings, which remained in force until 2 December 2004. Because of the stay, the appellants could not file an application under Order 21 Rule 89 CPC to set aside the sale until after the stay was vacated, and they deposited the required amount on 15 December 2004. The execution court dismissed the application on the grounds of insufficient deposit and that it was filed beyond the limitation period prescribed in Article 127 of the Limitation Act; the High Court affirmed the limitation finding. The Supreme Court held that the period during which the execution proceedings were stayed must be excluded from the limitation period, so the application was timely. Consequently, the appeal was allowed, the High Court’s order on limitation was set aside, and the execution court was directed to hear the application promptly.

Issues considered

Whether the period during which execution proceedings are stayed, even if the stay is obtained by a third party, should be excluded from the limitation period under Article 127 of the Limitation Act for filing an application under Order 21 Rule 89 CPC.

Legislation cited

Code of Civil Procedure, 1908s. Order 21 Rule 89
Limitation Act, 1963s. Schedule Article 127

Subjects

limitationexecution proceedingsstay of executionOrder 21 Rule 89sale of propertycivil procedureLimitation Act

Judgment

[2009] 15 (ADDL.) S.C.R. 470

A BANDA CHINNA SUBBARAYUDU & ORS.
v.
THAILAM VISHANATHA RAO & ANR.
(Civil Appeal No. 7153 of 2009)

OCTOBER 27, 2009
B
[ALTAMAS KABIR AND CYRIAC JOSEPH, JJ.]

Code of Civil Procedure, 1908:

c Or. 21, r.89 - Execution proceedings - Application by
judgment-debtors for setting aside the sale - Rejected by
courts below as barred by time - Plea of judgment-debtors
that they were prevented from filing application because of the
stay of execution proceedings on the application of a third
0 party, rejected - HELD: Whether the stay of the execution
proceedings was obtained by the judgment-debtors or by any
other person is hardly relevant except to decide whether the
judgment-debtors could have taken any steps in the ,.-
proceedings which were stayed - If the period b.etween the
E date of granting the stay of the execution proceedings and the
date when the stay was vacated is excluded, then the steps
taken by the judgment-debtors thereafter under Or.21, r.89
CPC would be in time - Since the judgment-debtors were
prevented by stay order from taking any further steps in the
execution proceedings, they would be entitled to the benefit
F of the said period and the same has to be excluded while
considering the question of limitation as prescribed under
Article 127 of the Schedule to the Limitation Act - Order of
High Court, so far as it relates to the question of limitation and
affirming the view of lower courts, set aside - Executing court
G would proceed with the application filed by judgment-debtors
under Or.21, r.89 and dispose of the same at an early date -
Limitation Act, 1963 - Schedule - Article 127.

470
H
BANDA CHINNA SUBBARAYUDU & ORS. v.THAILAM 471
VISHANATHA RAO & ANR.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. A
•,
.. ) 7153 of 2009 .

From the Judgment & Order dated 28.3.2008 of the High
Court of Judicature, Andhra Pradesh at Hyderabad in Civil
Revision Petition No. 4778 of 2007. B
Viswanatha Shetty, M. Vijaya Bhaskar, Vijay Kumar for the
Appellants.

V. Sridhar Reddy, Vardharajulu, V.N. Raghupathy for the
Respondents. c
The following Order of the Court was delivered

ORDER

1. Leave granted. D

2. This appeal is directed against the judgment and order
dated 28th March, 2008, passed by the Andhra Pradesh High
Court in Civil Revision Petition No. 4778 of 2007, dismissing
the Revisional Applications, which had been filed by the
appellants herein. E

3. The appellants suffered a decree for recovery of money
in O.S. 458/98, in the court or Principal Junior Civil Judge,
. Proddatur. Pursuant to the said decree, the respondent No.1
herein, who is the plaintiff-decree-holder, filed Execution F
·Proceedings, 352 of 2000, for sale of the property indicated
.in the said proceedings. On 25th November, 2003, the sale
was conducted and the property in question was sold to the
1
second respondent. On the same date, in an appeal filed by
one ·Chennakkagari Ravindranath Reddy, being A.S. No. 10/ G
2003, the said Execution Proceedings No. 352/2000 were
stayed.

4. Subsequently, in the said Execution Proceedings the
appellants/judgment-debtors filed an application under Order
H

'
472 SUPREME COURT REPORTS (2009) 15 (ADDL.) S.C.R.

A 21 Rule 89 of the C.P.C. to set aside the sale, which had been
held on 25th November, 2003. The respondent No.1 herein filed
objection to the said application for setting aside the sale
mainly on two grounds, namely, (1) that the deposit made by
the judgment-debtor was less than what was required to be
B deposited under Order 21 Rule 89 of the Code; and (2) that
the application had been filed well beyond the period of
limitation prescribed under Article 127 of the Limitation Act.

. 5. The application filed by the appellant/judgment-debtor
was dismissed by the Executing Court on both grounds. Even
C in appeal, the said order was confirmed. When the matter was
taken to the High Court, it found in favour of the appellant as
far as the amount of deposit is concerned. However, the High
Court affirmed the order of the Executing Court, as well as of
the Appellate Court, on the question of limitation. Aggrieved
D thereby, the appellants have preferred the instant appeal.

6. Appearing in support of the appeal, Mr. Shetty, learned
senior counsel, submitted that none of the courts below had
takeri into account the fact that in view of the stay obtained by
E the said Chennakkagari Ravindranath Reddy, it was not
possible for the appellants to take steps in the Execution
Proceedings by filing the application for setting aside the sale.
In this connection, a few dates would be relevant. As noticed
hereinbefore, the suit of the respondent No.1 was decreed in
F 1998 and after the decree was put into execution, the sale of
the judgment-debtor's property was conducted on 25th
November, 2003, on which date Chennakkagari Ravindranath
Reddy obtained a stay of the Execution Proceedings in the
appeal filed by him. The sale was, however, yet to be confirmed.
In the meantime, on 2nd December, 2004, the appeal filed by
G the said third party Chennakkagari Ravindranath Reddy was
dismissed and the stay order stood vecated. An application
was made by the appellant/judgment-debtor under Order 21
Rule 89 CPC and the amount, as required to be deposited
under Rule 89(1 ), was deposited on 15th December, 2004.
H
BANDA CHINNA SUBBARAYUDU & ORS. v.THAILAM 473
VISHANATHA RAO & ANR.
7. Mr. Shetty has questioned the decision of the courts A
_..... ;J
below, including the High Court, on the ground that since the
Execution Proceedings were stayed, albeit, at the instance of
a third party, the appellant was unable to take any steps in the
said proceedings for setting aside the sale and once the stay
was lifted, he proceeded to take steps and that, accordingly, B
the period during which the Execution Proceedings remained
stayed, should have been excluded from the period as
contemplated under Article 127 of the Limitation Act. This factor
does not appear to have been considered by the Executing
Court or the appellate court and was for the first time c
considered by the High Court, which held that the stay of the
proceedings at the instance of a third party could not come to
the aid of the appellant/judgment-debtor for the purpose of filing
. an application under Order 21 Rule 89 of the Code. In effect,
the finding of the High Court was that such pendency would not D
>
come to the aid of the Judgment-debtors for extending the
period of limitation prescribed.

8. The only question we are, therefore, left to answer is
whether the appellants would be entitled to the benefit of the
said period during which he was prevented by the Execution E
Proceedings in taking steps to file the application for setting
aside the sale.

" 9. Having heard learned counsel for the respective parties
,,..
and considering the facts, as disclosed in the records, we are F
---t unable to uphold the decision of the High Court in this regard.
Whether the stay of the Execution Proceedings was obtained
by the judgment-debtor or by any other person is hardly relevant
,;
except to decide whether the judgment-debtor could have taken
!Ill( any steps in the proceedings which were stayed. That a stay
G
of the Execution Proceedings was granted on 25th November,
2003, is admitted. That such stay was vacated on 2nd
December, 2004, is also admitted. If the period between 25th
November, 2003, and 2nd December, 2004, when the stay was
vacated is excluded, then the steps taken by the judgment-
H
474 SUPREME COURT REPORTS [2009] 15 (ADDL.) S.C.R.

A debtor thereafter under order 21 Rule 89 CPC would be in the
time.

10. .In our view, since the appellants were prevented by the ,
stay order from taking any further steps in the Execution
Proceedings, they would be entitled to the benefit of the said
8
period and the same has to be excluded while considering the
question of limitation as prescribed under Article 127 of the
Limitation Act.

11. Having regard to the above, the appeal is allowed and
C the orders of the High Court, so far as it relates to the question
of limitation and affirming the view of the lower courts, is set
aside. The Exeputing Court is directed to pmceed with the
application filed by the appellants herein under Order 21 Order
89 CPC, being E.A. 333 of 2005, and dispose of the same at
D an early date, since the matter has already been considerably
delayed.

12. Having regard to the circumstances involved, tlhere will
be no orders as to costs.

RP. Appeal allowed.