2006 (12) TMI 491 - SC - Indian Laws

Property auction halted pending final decree; jurisdiction lacked for premature sale order. Appellant directed deposit, appeal allowed.

The court held that the property could not be auctioned without a formal final decree proceeding. It clarified that only a final decree, not a preliminary ... Whether the property in suit could be put on auction sale without initiating a formal final decree proceeding? Issues Involved:1. Whether the property in suit could be put on auction sale without initiating a formal final decree proceeding.2. Whether the preliminary decree can be executed without a final decree.3. Jurisdictional authority of the court to put the property on auction sale.4. Appropriate remedy and terms for the appellant.Issue-wise Detailed Analysis:1. Auction Sale Without Final Decree Proceeding:The primary issue was whether the property in suit could be put on auction sale without initiating a formal final decree proceeding. The court emphasized that a preliminary decree declares the rights and liabilities of the parties but does not dispose of the suit entirely. A final decree is necessary to execute the partition and make the property saleable. The court stated, 'Without drawing a final decree proceeding, the court could not have put the property on auction sale.'2. Execution of Preliminary Decree:The court clarified that only a final decree could be executed, not a preliminary decree. It referenced Order XXI of the Code of Civil Procedure, which stipulates that property can be sold only in execution of a decree. The court noted, 'A final decree proceeding may be initiated at any point of time. No limitation is provided therefor. However, what can be executed is a final decree, and not a preliminary decree, unless and until final decree is a part of the preliminary decree.'3. Jurisdictional Authority:The appellant raised a jurisdictional question, arguing that the court lacked the inherent jurisdiction to order an auction sale without a final decree. The court agreed, stating, 'The core question is as to whether an order passed by a person lacking inherent jurisdiction would be a nullity. It will be so.' The court further explained that any order passed by a court without jurisdiction is coram non judice and a nullity. This principle was supported by references to previous judgments, including Chief Justice of Andhra Pradesh and Another v. L.V.A. Dikshitulu and Others and MD Army Welfare Housing Organisation v. Sumangal Services (P) Ltd.4. Remedy and Terms for the Appellant:Considering the appellant's conduct and the need to do complete justice, the court directed the appellant to deposit a sum of Rs. 18 lakhs within four weeks before the learned Trial Judge. This amount would be distributed equally between Respondent Nos. 1 and 2. Additionally, the appellant was required to compensate the auction purchaser with interest at 9% per annum from the date of deposit until actual payment. The court stated, 'The appellant furthermore shall deposit such amount in the court within the aforementioned period towards payment of interest by way of compensation @ 9% p.a. from the date of deposit till the actual payment is made, which would be payable to the auction purchaser, which in our opinion is just and reasonable.'The court exercised its jurisdiction under Article 142 of the Constitution of India to provide a just remedy. It referenced Kishori Lal v. Sales Officer, District Land Development Bank and Ors., where a similar direction was issued to ensure complete justice between the parties.Conclusion:The appeal was allowed, and the auction was set aside on the condition that the appellant complied with the court's directions. The decree for partition would stand satisfied upon compliance. The court concluded, 'The appeal is allowed subject to the aforementioned observations and directions. However, in the facts and circumstances of the case, there shall be no order as to costs.'