Application of proceeds
Full Text
(1) Such proceeds shall be brought into Court and applied as follows:—
first, in payment of all expenses incident to the sale or properly incurred in any attempted sale;
secondly, in payment of whatever is due to the prior mortgagee on account of the prior mortgage, and of costs, properly incurred in connection therewith;
thirdly, in payment of all interest due on account of the mortgage in consequence whereof the sale was directed, and of the costs of the suit in which the decree directing the sale was made;
fourthly, in payment of the principal money due on account of that mortgage; and
lastly, the residue (if any) shall be paid to the person proving himself to be interested in the property sold, or if there are more such persons than one, to such persons according to their respective interests therein or upon their joint receipt.
(2) Nothing in this rule or in rule 12 shall be deemed to affect the powers conferred by section 57 of the Transfer of Property Act, 1882 (4 of 1882).
Plain English Summary
Prescribes the strict statutory waterfall priority for distributing sale proceeds realized under Order XXXIV: (1) auction expenses, (2) prior mortgage dues, (3) current mortgage interest and suit costs, (4) current mortgage principal, and (5) residue to the mortgagor or interested claimants.
Key Legal Elements
- Statutory Waterfall Priority: Distribution must follow the exact hierarchical sequence laid down in sub-rule (1).
- Priority Tier 1: Sale execution and auctioneering expenses.
- Priority Tier 2: Prior mortgagee's principal, interest, and costs (where sold free under Rule 12).
- Priority Tier 3: Accrued interest on the decretal mortgage and taxable suit costs.
- Priority Tier 4: Principal mortgage money due under the decretal mortgage.
- Priority Tier 5: Surplus/residue disbursed to the mortgagor or subsequent puisne encumbrancers.
- Preservation of Section 57 TPA: Saving clause protects high court powers to declare property free of encumbrance on capital deposit.
Practical Note
Strict Waterfall Hierarchy & Surplus Claims: 1. No Deviation from Statutory Order: The executing court has no jurisdiction to disburse funds out of sequence. For instance, principal cannot be paid before accumulated interest and costs are cleared, nor can the decree-holder jump over the prior mortgagee's consented claim. 2. Competing Claims to Residue: If subsequent mortgagees, charge holders, or attaching creditors exist, the 'residue' under the fifth clause is paid according to their priority of registration or attachment, and only the eventual balance goes to the judgment-debtor mortgagor.
हिंदी पाठ
(1) ऐसे विक्रय आगमों को न्यायालय में लाया जाएगा और उनका विनियोग (Application) निम्न क्रम में किया जाएगा:—
प्रथमतः, विक्रय के प्रासंगिक या किसी प्रयतित विक्रय में उचित रूप से उपगत सभी व्ययों के संदाय में;
द्वितीयतः, पूर्विक बंधक के मद्दे पूर्विक बंधकदार को शोध्य रकम और उससे संबंधित उचित रूप से उपगत खर्चों के संदाय में;
तृतीयतः, उस बंधक के मद्दे शोध्य समस्त ब्याज के संदाय में जिसके परिणामस्वरूप विक्रय का निदेश दिया गया था, तथा उस वाद के खर्चों के संदाय में जिसमें विक्रय की डिक्री दी गई थी;
चतुर्थतः, उस बंधक के मद्दे शोध्य मूलधन के संदाय में; तथा
अंततः, यदि कोई अतिशेष (Residue) बचता है, तो वह बेची गई संपत्ति में अपना हित सिद्ध करने वाले व्यक्ति को, या एक से अधिक व्यक्तियों को उनके हितों के अनुसार या उनकी संयुक्त रसीद पर दिया जाएगा।
(2) इस नियम या नियम 12 की कोई भी बात संपत्ति अंतरण अधिनियम, 1882 की धारा 57 द्वारा प्रदत्त शक्तियों को प्रभावित करने वाली नहीं समझी जाएगी।