Judgment:
ORDER
P.S. Narayana, J.
The twin contentions raised by the learned Counsel for the petitioner, Sri M. Venkataramana Reddy, are as hereunder:
1. The learned Counsel would submit that prior to proclamation, no opportunity had been given to the revision petitioner-judgment debtor to state his valuation. The learned Counsel also would submit that even if the respondent-decree holder is a secured creditor, the official receiver should again be put on notice or should have been impleaded as party to the execution proceedings. On both the grounds, the learned Counsel would maintain that the revision petitioner-judgment debtor is bound to succeed in the civil revision petition.
2. The present civil revision petition is filed by the revision petitioner-judgment debtor in E.P.No. 112 of 2003 in O.S.No. 62 of 2000 on the file of Senior Civil Judge, Proddatur. This Court ordered notice before admission on 12-8-2005 and also granted interim stay for a limited period. The notice was duly served on respondent-decree holder and none represents the respondent-decree holder.
3. As can be seen from the impugned order, the revision petitioner-judgment debtor is aggrieved of ordering proclamation and sale of the petition schedule mortgaged property by publishing in Vaartha daily newspaper of Kadapa Edition. The grounds of objection already had been referred to supra. As can be seen from the counter filed in E.P. 112 of 2003 by the judgment debtor, these objections were specifically raised. Respondent herein, the decree holder had obtained a preliminary decree against the revision petitioner-judgment debtor on the strength of a mortgage deed and the same was passed on 27-10-2000 and a final decree was passed on 28-10-2002. Subsequent thereto, respondent-decree holder filed the present execution petition to bring the petition schedule properties for sale for realization of the decretal amount.
4. Section 28 of the Provincial Insolvency Act, 1920 deals with the effect of an order of adjudication and Section 28(6) of the said Act specifies that nothing in the section shall affect the power of any creditor to realize or otherwise deal with his security, in the same manner as he would have been entitled to realize or deal with it if this section had not been passed. Section 47(2) of the aforesaid Act dealing with secured creditors no doubt specifies that if the secured creditor relinquishes his security for the general benefit of the creditors, he may prove for his whole debt.
5. In Kalachand v. Jagannath, AIR 1927 P.C. 108, their Lordships of the Privy Council observed as hereunder:
'The alternative in the section applicable to vesting in the Court is inserted to provide for the case of a Receiver not being appointed at the same time as the adjudication of insolvency and to foreclose an argument that vesting is suspended until the actual appointment of a Receiver. The Court only acts through a Receiver, and any estate acquired by or devolving on an insolvent is vested in him as from the date of acquisition or devolution whatever the date of the Receiver's actual appointment'.
6. In R.S.K. Chandrasekaran v. Official Receiver, : AIR1981Mad235 , a Division Bench of the Madras High Court held at paras 4 and 5, as hereunder:
'A combined reading of Sub-sections.(2), (6) and (7) of Section. 28 of the Act will lead to the inference that in the case of a secured creditor his right to realize or otherwise deal with the security will not be affected either by the vesting provided or in Section 28(2) or by the doctrine of relation back provided for in Section 28(7) of the Act. As we pointed out already, in this case the decree for the sale of the property must have been passed much earlier to 30-10-1971, because the execution petition itself was filed in 1970. Even the order of the Court directing the sale of the property should have been passed much earlier to 30-10-1971, because the sale actually took place on 1-11-1971. Under these circumstances, the question for consideration is whether there is any reality in the requirement that the decree-holders should have obtained the permission of the Court for bringing the property to sale or should have given notice to the Official Receiver before obtaining an order for sale. Even giving full effect to the doctrine of relation back provided for in Section 28(7) of the Act, the order of the Court directing the sale of the property having been passed even before 30-10-1971, it could not have been possible in practice for the decree-holders to have given notice to the Official Receiver or to have applied for and obtained the permission of the Court, because on that date even the petition for adjudication was not there and more so the Official Receiver. Hence, looking at the problem purely from the practical point of view, it could not be contended that the sale which took place on 1-11-1971, was liable to be set aside on the ground that the order for sale was made without notice to the Official Receiver and without the permission of the Court.
In our opinion, it is not even necessary to go so far, in view of the provision contained in Sub-section(6) of Section 28, that nothing contained in the section shall affect the power of any secured creditor to realize or otherwise deal with the security in the same manner as it could be entitled to realize or deal with it, if that section had not been passed, and, when it so provides, it proceeds to create a fiction that, with regard to the rights of a secured creditor referred to in sub-section (6) of Section 28, neither Sub-section (2) nor Sub-section (7) of Section 28 should be deemed to have been in existence or enacted. If so, there is no scope for applying either the provisions of vesting or the theory of relation back, so as to restrain or curtail the power of the secured creditor saved' under Sub-section (6) of Section 28.
7. In MT. Jailagi v. Alliance Bank, Simla, AIR 1930 Lahore 855 (2)(D.B.), the Division Bench no doubt observed that a secured creditor can pursue his remedy on his security in the absence of official receiver from the array of parties.
8. The learned Judge of this Court in K. Somaraju v. Ch. L. Satyanarayana, : 1998(2)ALD96 , while dealing with this question in a slightly different context observed as hereunder:
'Even in the decision relied on by the learned Counsel for the petitioner it is observed that the secured creditor is entitled to bring the property for sale after impleading the Official Receiver in the Execution Proceedings. But, in this case, admittedly notice was issued to the Official Receiver and he filed his counter and the purpose of impleading the Official Receiver as one of respondents in Execution Proceedings is to bring it to his notice about bringing of the property to sale and if at all he wants to avail the equity of redemption he can do so and that the decree holder can bring the property to sale after giving notice to the Official Receiver. The other contention that the Official Receiver alone is entitled to bring the property to sale cannot be accepted and on the other hand under sub-section (6) of Section 28 of the Provincial Insolvency Act, 1920 saves the power of the secured creditor to reaize or otherwise deal with his security.'
9. The role of the official receiver in relation to the realization of the decretal amount of a secured creditor who is well protected by Section 28(6) read with Section 47 of Provincial Insolvency Act, 1920 would be limited. The views expressed in this regard appear to be not uniform. It may be sufficient if the official receiver is put on notice in a matter of this nature relating to the fact that the property of the J. Dr, which is the subject matter of a decree on the strength of a mortgage is being brought to sale. Beyond that, the official receiver has no role to play for the reason that unless the secured creditor chooses his option of standing in the queue along with the other creditors, such creditor cannot be forced to relinquish his security and thus the secured creditor is placed on a different footing if the different provisions of the Provincial Insolvency Act, 1920 are carefully scrutinized. Hence, the objection raised by the learned Counsel that without impleading the official receiver as a party, the decree holder-secured creditor, who obtained the decree, on the strength of a mortgage, cannot bring the property to sale at all, in the considered opinion of this Court, is an unsustainable contention. However, decree holder-secured creditor may implead official receiver too in execution proceedings for the aforesaid reasons. Be that as it may, in view of the fact that the official receiver is interested in knowing, relating to what is happening to the property in question, it would be always just and proper to put the official receiver on notice and if need be he may be impleaded as a party in E.P too, in view of the limited interest he is having, as far as secured creditor is concerned, in the light of the scheme of the Act.
10. Yet another objection had been taken, placing strong reliance on the decisions of this Court in B. Kishan Lal v. State Bank of Hyderabad, Nizamabad, : 1999(6)ALT55 , and Khasim Bi v. T.G. Lakshmayya Thimmayya Setty, : 1999(6)ALD402 .
11. In view of the peculiar facts and circumstances, the impugned order is hereby set aside and the matter is remitted to the executing court and the executing court to put the official receiver on notice of the present execution or implead if DHr so chooses and also decide the objections raised by the revision petitioner-J.Dr. in the light of the decisions in B. Kishan Lal and Khasim Bi cases (5 and 6 supra).
12. Accordingly, the civil revision petition is hereby allowed to the extent indicated above. No order as to costs.