Children’s Inherited One-Third Share Protected As Madras HC Sets Aside Joint-Property Auction For Father’s Debt, Directs Sale Only Of His Two-Thirds

The first and second appellants were the children of the first respondent and Mercy Sweetylin. Their parents jointly purchased the first item of property in the execution schedule; Mercy Sweetylin died in 2005, leaving the first respondent and the appellants as her heirs.

The second respondent finance company obtained an arbitral award against the first respondent and another borrower, then sought execution against the property. The property was attached and sold by court auction to the third respondent on 8 February 2019.

The appellants claimed that they jointly inherited one-third of the property and applied to set aside the sale, alleging that their share had been sold although they were not judgment-debtors. The Principal District Court dismissed the application; the appellants appealed.

The Court considered the provisions of the Code of Civil Procedure governing the challenge and appeal, including Section 104 and Order 43 Rule 1(j), and the appellants’ application under Order 21 Rule 19(1) and Section 151.

On limitation, it considered Article 127 of the Limitation Act, which prescribes 60 days to set aside a court sale, and Articles 60 and 137, which it applied to conclude that the application was within time in light of the appellants’ minority.

It also considered Aarifaben Yunusbhai Patel v. Mukul Thakorebhai Amin, on Article 127 and the inapplicability of Section 5 of the Limitation Act to execution proceedings, but distinguished it on the facts.

The Court held that execution could not extend to the appellants’ inherited share when they were not judgment-debtors.

The Court found that the sale deed recorded the first respondent and Mercy Sweetylin as joint owners, each holding an equal share. On her death, the appellants and the first respondent inherited her share; accordingly, the appellants jointly held one-third of the property, while the first respondent held two-thirds.

Because the appellants were not borrowers under the award, the Court held that their share should not have been attached or sold to satisfy the award against the first respondent and another borrower. The attachment of the entire property, despite the title documents showing joint ownership, was a patent error, and the sale confirmation could not stand to the extent it included the appellants’ share.

The Court rejected the limitation objection, holding that the application was timely having regard to the appellants’ minority and the limitation provisions it considered.

The Principal District Court was directed to restore the execution petition and permit the second respondent to amend it to seek attachment and sale only of the first respondent’s two-thirds share, excluding the appellants’ joint one-third share, and thereafter proceed according to law. No order as to costs.