Locus Standi to File Application under Order 21 Rule 97 CPC — Unsettling the Settled Law?

Introduction

“It is an old saying that the difficulties of the litigant in India begin when he has obtained a decree”¹. To eschew the said difficulty, the Civil Procedure Code, 1908² (hereinafter referred to as “CPC”) was enacted in the year 1908 and Order 21³ was brought into fore elucidating the procedure for execution of decree.

That, until 2022, the law on locus standi to file an application under Order 21 Rule 97 CPC⁴ is quite clear that, any person including a third party who is in possession of immovable property can file an application under Order 21 Rule 97 to safeguard and adjudicate his rights. However, in the year 2022, the Supreme Court of India, in Sriram Housing Finance & Investment (India) Ltd. v. Omesh Mishra Memorial Charitable Trust⁵, held that under Order 21 Rule 97, it is only the “decree-holder” who is entitled to make an application in case where he is offered resistance or obstruction by “any person”, thereby unsettling the settled law. However, the said decision in Sriram Housing Finance case⁶, in the opinion of the author, is per incurium as the same is contrary to the law laid by the Supreme Court of India in plethora of its judgments and also contrary to the true purport of Order 21 Rules 97 to 103 CPC.⁷

Order 21 Rules 97 to 106 CPC

Order 21 Rules 97 to 106 CPC are embodied under the title and caption “Resistance of delivery of possession to decree-holder or purchaser”. Order 21 Rule 97 CPC⁸ deals with “Resistance or obstruction to possession of immovable property” and states that, in the event holder of a decree for possession of immovable property or the purchaser of such property sold in execution of decree is resisted or obstructed by “any person” in obtaining possession of the property, he may make an application to Court complaining of such resistance or application. It can be elicited undisputedly that, an application under Order 21 Rule 97 CPC can be filed prior to dispossession of “any person” in execution of Decree for possession of immovable property. However, Order 21 Rule 99 CPC⁹ contemplates a situation where “any person” other than judgment-debtor is dispossessed by holder of a decree for possession of immovable property or the purchaser of such property sold in execution of decree, he may make an application under Order 21 Rule 99 CPC¹⁰ complaining of such dispossession. Ergo, it can be elicited that, the prerequisite for filing an application under Order 21 Rule 99 is dispossession of “any person” other than judgment debtor.

That, a conjoint reading of Order 21 Rules 98, 100 and 101 CPC amply discloses that, in lieu of instituting a separate Suit for adjudication of right, title, interest or share of any person, the executing court is empowered to determine inter alia said issue of right, title, interest or share of any person under Order 21 Rule 97 or Order 21 Rule 99.

That, Order 21 was amended in the year 1976 and it is sine qua non to note the distinction between pre-amendment law and post-amendment law pertaining to Order 21 Rules 97 to 103 CPC. The Supreme Court of India, in para 13 of Shreenath v. Rajesh¹¹ categorically notes the aforesaid distinction as under:

13. So far sub-clause (1) of Rule 97 the provision is the same but after the 1976 Amendment all disputes relating to the property made under Rules 97 and 99 are to be adjudicated under Rule 101, while under unamended provision under sub-clause (2) of Rule 97, the executing court issues summons to any such person obstructing possession over the decretal property. After investigation under Rule 98 the court puts back a decree-holder in possession where the court finds obstruction was occasioned without any just cause, while under Rule 99 where obstruction was by a person claiming in good faith to be in possession of the property on his own right, the court has to dismiss the decree-holder’s application. Thus even prior to 1976, right of any person claiming right on his own or as a tenant, not party to the suit, such person’s right has to be adjudicated under Rule 99 and he need not fall back to file a separate suit. By this, he is saved from a long litigation. So, a tenant or any person claiming a right in the property on the own, if resists delivery of possession to the decree-holder, the dispute and his claim has to be decided after the 1976 Amendment under Rule 97 read with Rule 101 and prior to the amendment under Rule 97 read with Rule 99. However, under the old law, in case order is passed against the person resisting possession under Rule 97 read with Rule 99 then by virtue of Rule 103, as it then was, he was to file a suit to establish his right. But now after the amendment one need not file suit even in such cases as all disputes are to be settled by the executing court itself finally under Rule 101.

Ergo, all disputes, including disputes of “any person” other than judgment debtor or decree-holder pertaining to right, title, share or interest over suit schedule property can be determined by executing court itself, without undergoing another rigmarole of separate trial. The penumbra behind the 1976 Amendment can be gleaned as to avoid “multiplicity of proceedings”.

With this penumbra in mind, it is just and necessary to dwell into the disputed aspect/unsettled aspect of settled law, as to “who has the locus standi to institute an application under Order 21 Rule 97 CPC” and whether a third party to the lis i.e. other than decree-holder or auction purchaser can file an application under Order 21 Rule 97 CPC in order to protect their possession and adjudicate their rights over schedule of property.

Decision of “Sriram Housing Finance & Investment (India) Ltd. v. Omesh Mishra Memorial Charitable Trust”

As stated supra, the Supreme Court of India, in Sriram Housing Finance & Investment (India) Ltd. v. Omesh Mishra Memorial Charitable Trust¹² (“Sriram Housing Finance Case”) held that under Order 21 Rule 97, it is only the ‘decree-holder’ who is entitled to make an application in case where he is offered resistance or obstruction by “any person”. Further, the Supreme Court noted that any third party other than decree-holder or purchaser of schedule of property in auction in pursuance of execution of decree is not entitled to make an application under Order 21 Rule 97 CPC. The relevant portion is extracted hereunder:

24. On conjoint reading of the aforesaid provisions, it can be observed that under Rule 97, it is only the “decree-holder” who is entitled to make an application in case where he is offered resistance or obstruction by “any person”. In the present case, as admitted by the appellant itself, it is a bona fide purchaser of the property and not the “decree-holder”. As available from the material placed on record, it is the respondent Trust along with legal heirs of late N.D. Mishra who are the decree-holders and not the appellant. Therefore, it is obvious that the appellant cannot take shelter of Rule 97 as stated above to raise objections against execution of decree passed in favour of the respondent. Further, Rule 99 pertains to making a complaint to the Court against “dispossession” of the immovable property by the person in “possession” of the property by the holder of a decree or purchaser thereof.¹³

However, the said decision is per incurium and contrary to the true purport of Order 21 Rule 97 for more than one reason, namely:

(a) That, it is apposite to mention here that the said decision was rendered by the Supreme Court in the year 2022 and the Coram of the Bench is 2 Judges. However, in the year 1998, the Coordinate Bench i.e. 2 Judges of the Supreme Court of India in Shreenath case¹⁴ (Shreenath case) had specifically dealt with the self-same contention that “it is only ‘decree-holder’ who is entitled to make an application in case where he is offered resistance or obstruction by ‘any person’” under Order 21 Rule 97 CPC and categorically held that the said contention is wholly incorrect and any person holding possession of immovable property on his own right can object to the execution proceeding under Order 21 Rule 97 CPC.

In the said case of Shreenath¹⁵, the issue before the Supreme Court was viz.:

5. whether the third party in possession of a property claiming independent right as a tenant not party to a decree under execution could resist such decree by seeking adjudication of his objections under Order 21 Rule 97 of the Civil Procedure Code, 1908?¹⁶

And after taking note of Order 21 Rules 97 to 103, the Supreme Court held that:

4. …a third person claiming to be in possession of the property forming the subject-matter of decree in his own right can resist delivery of possession even by filing an objection under Order 21 Rule 97 of the Civil Procedure Code, 1908 in the executing court itself and if that is done, the objection shall have to be determined by the executing court itself. The provisions of Rule 99 in the new CPC will not defeat the right of such person to get his objection decided under Rule 97 which is a stage prior to his dispossession.¹⁷

Further, aforesaid proposition of law enunciated in Shreenath case¹⁸ was further followed and approved by Supreme Court of India in Har Vilas v. Mahendra Nath¹⁹ (Har Vilas case) and Asgar v. Mohan Varma²⁰ (Asgar case). As such, until 2022, the law is settled that any person i.e. including a third party who is in possession of immovable property can file an application under Order 21 Rule 97 CPC to safeguard and adjudicate his rights including that of title and possession. However, aforesaid Shreenath case²¹, Har Vilas case²² and Asgar case²³ were neither referred to nor distinguished in Sriram Housing Finance case²⁴. Without reference to the settled position of law as enunciated in aforesaid judgments or without any discussion of aforesaid decisions, the Supreme Court laid down a contrary view. As such, said Sriram Housing Finance judgment, insofar as the judgment pertaining to lack of locus standi of any person other than decree-holder or auction-purchaser to file an application under “Order 21 Rule 97 CPC” is contrary to the law laid by Coordinate Bench of the Supreme Court in Shreenath case²⁵, Har Vilas case²⁶ and Asgar case²⁷. Hence, Sriram Housing Finance judgment²⁸ is per incurium and does not lay down the law.

(b) Further, at first blush and from bare reading of Order 21 Rule 97 CPC, it appears that it is only “decree-holder” or “auction purchaser” who can file an application under Order 21 Rule 97 CPC. However, it is sine qua non to note that, procedural law is handmaid of justice and has to be interpreted to sub serve the justice but not to elude the same. If more than one interpretation of procedural law is possible then the one which curtails the procedure without eluding justice shall be adopted. If the interpretation of Supreme Court in Sriram Housing Finance case²⁹ is accepted then any third party in possession of the immovable property will be put to irreparable loss as he has no remedy prior to his dispossession and he will then be left with sole remedy under Order 21 Rule 99 CPC which requires prior dispossession of such party. Such remedy which was available prior to dispossession will be curtailed and will lead to institution of suit by such third party, thereby opens the flood gates of litigation, which the legislation at the first instance intends to curtail. As such, said interpretation is contrary to law.

(c) That, Order 21 Rules 97 to 103 provide the sole remedy both to the parties to a suit as well as to a stranger to the decree put to execution.³⁰ In the event aforesaid interpretation in Sriram Housing Finance case³¹ is accepted then the remedy of such third party prior to his dispossession is taken away. As such, the third party cannot be left remediless.

(d) That, without reference to the settled law as enunciated earlier by the Coordinate Bench of the Supreme Court of India, Sriram Housing Finance case³² is a feeble attempt to unsettle the settled law. Further, the execution proceedings are often met with obfuscation and time-consuming process. Unsettling the settled law and taking away the remedy of third parties is deleterious to the process of execution itself.

Therefore, insofar as the observation of the Supreme Court of India in Sriram Housing Finance case³³ that “only holder of decree for possession of immovable property or purchaser of immovable property in auction-sale in pursuance of execution” can file an application under Order 21 Rule 97 is contrary to law laid by Coordinate Bench in various judgments of the Supreme Court as stated supra, as such, same cannot be considered to be the law and ergo, per incurium. Hence, any person including a third party or tenant, who is in possession of immovable property, can file an application under Order 21 Rule 97 CPC to adjudicate his grievance.