Supreme Court: residential property exemption is personal to judgment-debtor

The Supreme Court has ruled that the protection from attachment of a judgment-debtor's main residential house under Section 60(1)(ccc) of the Code of Civil Procedure (applicable in Punjab and Delhi) is personal to the judgment-debtor and cannot be claimed by legal representatives after his death. A bench of Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe set aside a Delhi High Court order that had allowed the widow of a deceased guarantor to seek such exemption.

The case arose from recovery proceedings by Punjab & Sind Bank against a company and its guarantors. After a compromise decree was defaulted, the bank got a residential property in New Delhi auctioned. The judgment-debtor's widow challenged the auction, arguing the property was exempt. The court held that the provision refers to a house belonging to and occupied by the judgment-debtor himself, making the exemption personal. It endorsed earlier Delhi and Punjab & Haryana High Court rulings that legal representatives are distinct from judgment-debtors.

The court also held that failure to serve notice under Order XXI Rule 22 CPC did not invalidate the auction because the execution was transferred to the Debts Recovery Tribunal, which follows a special recovery mechanism under the Recovery of Debts and Bankruptcy Act. The auction was upheld.