Residential House Exemption U/S 60(1)(ccc) CPC Is Personal To Judgment-Debtor & Not Available To Legal Representatives: Supreme Court
The Bench noted that a transfer of execution to DRT under 1993 Act supersedes Order XXI Rule 22 CPC; non-service of Rule 2 notice does not void auction sale in absence of substantial injury.
Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe, Supreme Court
The Supreme Court has held that the statutory protection under Section 60(1)(ccc) CPC, which exempts one main residential house from attachment and sale, is strictly personal to the judgment-debtor and cannot be invoked by their legal representatives.
The Court further clarified that once execution proceedings are transferred to the Debts Recovery Tribunal (DRT) under Section 31 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (now 1993 Act), the recovery process is governed by the Second Schedule to the Income Tax Act, 1961, rendering Order XXI Rule 22 CPC inapplicable to the validity of the auction sale.
A Division Bench comprising Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe while setting aside a judgment of the Madhya Pradesh High Court, which had remitted an execution matter back to the DRT, Jabalpur for a fresh inquiry into notice defects and residential house exemption, observed, “…the plea of exemption under Section 60(1)(ccc) of the Code is personal to the judgment-debtor and is not available to be raised by his legal representatives”.
“The view taken by the Delhi and Punjab & Haryana High Courts about the interpretation of local amendment to Section 60(1) of the Code, namely Section 60(1)(ccc) of the Code which is applicable to the State of Punjab, Haryana and Delhi has held the field for thirty seven long years. We find no good ground to differ with the view taken by the aforesaid High Courts. Therefore, the plea of exemption under Rule 10 of the Second Schedule read with Section 60(1)(ccc) of the Code is not available to respondent no. 1 and her children”, the Bench further noted.
Senior Advocate Dr. A.M. Singhvi appeared for the appellant and Senior Advocates D.N. Goburdhun, Rajiv Shakdher, Shekhar Naphde appeared for the respondent.
The dispute arose from credit facilities granted by Punjab & Sind Bank to M/s. Sterling Malt & Foods Pvt. Ltd., secured by personal guarantees of its directors including late Mr. Hardayal Singh. Following default, a compromise decree was passed by the District Court, Morena in 1991. Upon default in payment of compromise instalments and the death of Mr. Hardayal Singh in 1994, execution was initiated against his legal representatives (his widow, Smt. Mohini Hardayal Singh, and children). The execution was subsequently transferred to DRT Jabalpur under Section 31 of the 1993 Act.
In September 2004, the Recovery Officer ordered the auction of an unmortgaged residential house situated at Panchsheel Park, New Delhi. The property was auctioned in November 2006 for ₹9.28+ crores to an auction-purchaser, Ms. Sheela Gehlot. The respondent-widow challenged the execution, contending that no notice under Order XXI Rule 22 CPC or Rule 2 of the Second Schedule to the Income Tax Act, 1961 was served, and claimed exemption for the residential property under Section 60(1)(ccc) CPC.
Reversing the High Court judgment that had set aside the sale confirmation, the Supreme Court restored the auction sale and held:
-Inapplicability of Order XXI Rule 22 CPC: Transfer of execution to the DRT under Section 31 of the 1993 Act clothes the Recovery Officer with powers under Section 29 read with the Second Schedule to the Income Tax Act, 1961, overriding CPC execution procedures.
-Absence of Notice Not Fatal: Non-service of notice under Rule 2 of the Second Schedule to the 1961 Act does not void the sale when the legal representatives possessed full knowledge of the execution proceedings through prior applications and suffered no substantial injury.
-Section 60(1)(ccc) CPC Exemption: The protection under Section 60(1)(ccc) CPC is personal to the judgment-debtor alone and does not devolve upon legal representatives merely because they reside in the house.
Accordingly, the Court allowed the civil appeals filed by the Auction-Purchaser, and Punjab & Sind Bank, dismissed the appeal filed by the judgment-debtor's son, and set aside the judgment of the Madhya Pradesh High Court.
Cause Details: Sheela Gehlot v. Mohini Hardayal Singh & Ors. (Neutral Citation: 2026 INSC 863)
Appearances:
Appellant: Dr. A.M. Singhvi, Senior Advocate.
Respondents: D.N. Goburdhun, Rajiv Shakdher, Shekhar Naphde, Senior Advocates.