S.60(1)(c) CPC | Decree With Statutory Charge Over Property Akin To A Charge Decree: Kerala High Court

The Kerala High Court recently, while disposing of two petitions, held that the exemption provided under Section 60(1)(c) of the Code of Civil Procedure is not applicable to a charge decree or decree where there is a statutory charge, over the property. 

Justice A Badharudeen further opined that there is no reason to differentiate between a charge decree and a decree where a statutory charge is created while considering exemption provided under Section 60(1)(c).

"There is no reason to differentiate a charge decree and a decree where statutory charge is created while considering exemption provided under Section 60(1)(c) of CPC Thus, without much ado, it can be held that a decree where there is a statutory charge over the property is akin to a charge decree."

Counsel appearing for the decree-holder, Advocate K. M. Firoz, submitted that the judgment debtor is not entitled to get any exemption under Section 60(1)(c) where the decree was for getting back advance purchase money, where a statutory charge under section 55(6)(b) of Transfer of Property Act was created. To substantiate this argument, the counsel referred to the Division Bench decision in the Ammini v. K. V. Vibeesh & Ors. where it was held that a judgment debtor, who suffers a money decree, it creates a charge over his property, cannot claim benefit under Section 60(1)(c). 

In this present case, the decree was the outcome of a claim for advance purchase money paid for the property proposed to be sold on the basis of a sale agreement entered into between the decree-holder and the judgment debtor. Therefore, a statutory charge under Section 55(6)(b) of the Transfer of Property Act is there. Going by the ratio in Ammini's case, the court opined that it is settled that when there is a charge decree over a property, during execution, the benefit of exemption under Section 60(1)(c) of CPC cannot be applied.

Furthermore, while answering the question as to whether a decree where there is a statutory charge is akin to a charge decree so as to exclude the said property out of the purview of Section 60(1)(c) CPC, the court held that a charge decree is akin to a decree where there is a statutory charge over the property. 

Counsel appearing for the judgment debtor, Advocate Bobby Mathew Koothattukulam, citing a number of decisions, argued that since the decree-holder accepted the impugned order, the same became final and merged with the order passed by the Munsiff court on 20.6.2018. So, the decree-holder is estopped from disputing the impugned order after conceding the same. 

However, the court observed that since the execution court passed the impugned order, emphasising Section 60(1)(c) CPC ignoring the statutory charge, the said order is patently illegal. 

When there is patent illegal order and is put under challenge, it cannot be said that the same is merged with a subsequent order passed by the court, that too, when the subsequent order is put under challenge by the judgment debtor also.

The court, while setting aside one of the impugned orders in which an exception was provided under S. 60(1)(c) CPC where there was a statutory charge held that the exemption provided under S. 60(1)(c) of the CPC is not applicable to charge decree or to a decree where there is a statutory charge, over the property. 

Case Title: Binoy Kurian v. Varkey Joseph 

Citation: 2022 LiveLaw (Ker) 334

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