CENTRAL BANK OF !NOIAversusM/S. MADAN LAL AND BROTHERS AND ORS.
- Citation
- 1995 INSC 667
- Decided
- 1 November 1995
- Disposal
- Disposed off
Holding
The appellant is at liberty to first sell the hypothecated property, apply the proceeds to satisfy the decree, and may pursue other assets or defendants for any shortfall, with excess proceeds payable to the respondents.
Summary
The Central Bank of India obtained a decree against M/s. Madan Lal and Brothers for a debt and directed execution against a hypothecated factory premises. The respondents contended that the property should be sold at its market value, with the proceeds applied to the decree, and that any shortfall could be recovered from other assets. The Supreme Court held that the bank may first sell the hypothecated property and apply the sale proceeds to satisfy the decree, and if the proceeds are insufficient it may pursue other assets or defendants, while any excess must be returned to the respondents. The Court affirmed that the appellant is at liberty to proceed in this manner under the law. Consequently, the appeal was dismissed and the lower court’s order was upheld.
Issues considered
- Whether the appellant can sell the hypothecated property and apply the proceeds to satisfy the decree
- Whether a shortfall after such sale can be recovered from other assets or defendants
- Whether any excess proceeds must be returned to the respondents
Legislation cited
Subjects
Judgment
CENTRAL BANK OF !NOIA A
v.
M/S. MADAN LAL AND BROTHERS AND ORS.
NOVEMBER J, 1995
[K. RAMASWAMY AND KJRPAL, JJ.J B
Civil Pmcedure Code, 1908:
Section SI-Decree in execution-Satisfaction of-Sale of hypothecated
pmpe1ty to realise decretal debt-In case of shortfall to proceed against any C
other asset or pe1:\·onally against any other defendant-Directions issued.
In this appeal by the appellant-Bank against the High Court's judg-
ment, the respondents contended that the hypothecated property may be
assessed at its market value as on date and may be put to execution; and
that in case the property was not sufficient, proceedings may be taken for D
recovery of the bala~ce dues in accordance \vith law.
Disposing of the appeal, this Court
HELD : The appellant is at liberty, in the first instance, to proceed
with the sale of the aforesaid property and realise the decretal debt from E
the sale proceeds and to have the same satisfied with the decree in
execution. In case there is any shortfall, it would be open to the appellants
to proceed against any other assets or personally against any other defen-
dants in accordance with law. If sale proceeds are in excess, it is needless
to n1ention that the amount in excess of the decretal an1ount would be paid F
over to the respondents. [700-E]
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 10022 of
1995.
From the Judgment and Order dated 20.7.90 of the Punjab & G
Haryana High Court in C.R. No. 185 of 1990.
Rishi Kcsh, for the Appellant.
Dr. Sumant Bhardwaj and Ms. Mridula Ray Bhardwaj for the
- Respon<lent~.
699
H
700 SUPREME COURT REPORTS [1995] SUPP. 4 S.C.R.
A The following Order of the Court was delivered :
It is stated that respondents 5-7 are the legal representatives of
respondent No. 4. Therefore, the need to substitute them is obviated. They
would represent the estate of the deceased-4th respondent.
B Leave granted.
We have heard the counsel on both sides. In all fairness, the counsel
for the respondents had slated that hypotheca, namely, the factory
premises situated at G.T. Road, Pha1,>Wara, ground floor marked as A, B,
C, D, E, F, G, H, and I together with all structure existing thereon, with
C all the shade, Kothas, boundary walls etc. etc. as men(ioned in the Schedule
to the plaint be assessed at its market value as on date and may be put to
execution. The amount realised out of sale thereof would be credited to
the account of decree in question. In case the property is not sufficient,
then it would be open to the respondents to proceed for the recovery of
D the dues by proceeding against other orders or proceedings accordance
with law. We appreciate the fair stand taken by the learned counsel for the
respondents. Accordingly, the appellant is at liberty, in the first instance,
to proceed with the sale of the aforesaid property and realise the decretal
debt from the sale proceeds and to have the same satisfied with the decree
in execution. In case there is any shortfall, it would be open to the
E appellants to proceed against any other assets or personally against any
other defendants in accordance with law. If sale proceeds are in excess, it
is needless to mention that the amount in excess of the decretal amount
would be paid over to the respondents .
The appeal is accordingly disposed of. No costs.
F
G.N. Appeal disposed of.
Search Indian case law
Ask in plain English, not just keywords. 25,000 AI words free, no card.