Order XXI Rule 79 CPC - Delivery of Movable Property, Debts and Shares
Order XXI Rule 79 of the Code of Civil Procedure, 1908 (CPC) explains how a purchaser receives movable property, debts or corporate shares purchased in a court execution sale. The delivery procedure depends on the nature and possession of the asset.
What does Order 21 Rule 79 provide?
Rule 79(1): Movable property actually seized
Where the property sold is movable property of which actual seizure has been made, it shall be delivered to the purchaser.
Rule 79(2): Property held by another person
Where the property sold is movable property in the possession of some person other than the judgment-debtor, delivery to the purchaser is made by giving notice to the person in possession prohibiting delivery of the property to anyone except the purchaser.
Rule 79(3): Debts and corporate shares
Where the property sold is a debt not secured by a negotiable instrument, or a share in a corporation, delivery is made by a written order of the Court restricting receipt or payment of the debt or interest, or transfer of the share and payment of dividends or interest, to anyone other than the purchaser, as applicable.
Explanation of Rule 79 CPC
1. Delivery after actual seizure
If the executing authority has physically seized the movable property before the sale, the property is delivered to the successful auction purchaser under sub-rule (1). This covers property capable of actual physical possession.
2. Delivery where a third party has possession
Under sub-rule (2), the court-sale purchaser is protected by notice to the person possessing the property. The notice directs that person not to deliver it to anybody other than the purchaser. The rule provides a legal mode of delivery without necessarily requiring immediate physical seizure from that person.
3. Delivery of debts and shares
Sub-rule (3) applies to a debt not secured by a negotiable instrument and to shares in a corporation. A written court order restricts payments or transfers inconsistent with the purchaser's rights. In the case of a debt, it restrains the creditor from receiving the debt or interest and the debtor from paying anyone except the purchaser. For shares, it restrains the registered holder and relevant corporate officers from unauthorized transfers or payments of dividends or interest.
Key legal terms
- Judgment-debtor: The person against whom a decree has been passed or an order capable of execution has been made, as defined in Section 2(10) CPC.
- Decree-holder: The person in whose favour a decree has been passed or an order capable of execution has been made, under Section 2(3) CPC.
- Execution sale: Sale of property through court execution proceedings to satisfy an executable decree.
- Movable property: Property other than immovable property; Rule 79 distinguishes assets in actual seizure, assets held by others, debts and shares for delivery purposes.
Related provisions of Order XXI
Rule 77 deals with public auction of movable property and payment of the purchase price. Rule 78 addresses irregularities in publication or conduct of movable-property sales. Rule 80 concerns transfer of negotiable instruments and shares. The applicable procedure depends on the asset and the execution order.
Practical significance
A purchaser should identify which sub-rule governs the purchased asset and obtain the necessary delivery, notice or written court order through the executing court. Where rights are disputed, the decree, sale record and applicable procedural provisions should be examined before further action.
Official legal reference
Read the Code of Civil Procedure, 1908 on India Code for the central legislation and applicable schedules. State amendments, High Court rules and subsequent legislative changes should be checked where relevant.
This article provides general legal information and does not replace advice on a particular execution proceeding.