28.01.2025 09:50
The 12th Civil Chamber of the Court of Cassation made a precedent-setting decision for creditors in enforcement proceedings, stating that the income generated from the property in case of an objection to the priority list should be paid to the rightful owners. Following the Constitutional Court's annulment decision, a change in case law occurred.
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The 12th Civil Chamber of the Court of Cassation has signed a precedent decision that will please creditor citizens in enforcement proceedings. The 12th Civil Chamber of the Court of Cassation stated that, considering the Constitutional Court's annulment decision regarding this matter, if there is an income generated from the objection to the order of priority, 'this income should be paid to the rightful owners.'
According to the information obtained from the Case Law Bulletin Application, the creditor's attorney claimed that the request for the payment of the amount due to his client, along with the interest, was partially accepted and partially rejected by the directorate's action dated 10.01.2022, after the order of priority prepared for the distribution of the money received in the enforcement file was finalized, and requested the annulment of the directorate's action regarding the payment of the interest obtained from the money subject to the order of priority to the Treasury.
FIRST INSTANCE COURT REJECTED THE COMPLAINT
The First Instance Court decided to reject the complaint, stating that there was no legal basis for the payment of the interest income obtained by the directorate to the creditor. The decision was appealed by the complaining creditor's attorney.
The Regional Court of Appeal, determining that the decision of the First Instance Court was appropriate according to Article 36/1 of the Fees Law, decided to reject the application on its merits. The decision was appealed by the creditor's attorney.
COURT OF CASSATION 12TH CIVIL CHAMBER: IF THERE IS AN INCOME GENERATED FROM THE OBJECTION TO THE ORDER OF PRIORITY, THIS INCOME SHOULD BE PAID TO THE RIGHTFUL OWNERS
The 12th Civil Chamber of the Court of Cassation, after the annulment decision of the Constitutional Court, changed its view and included the following statements in its case law.
"The first paragraph of Article 36 of the Fees Law No. 492 states, 'The interest, bonuses, and other benefits of the money deposited in the bank for any reason due to judicial and administrative actions by judges, public prosecutors, and enforcement bankruptcy offices belong to the State.' The second paragraph states, 'The money and estate funds generated as a result of the resolution of disputes and the money deposited in the bank on behalf of the restricted or missing persons are exempt from the provisions of the above paragraph.' However, both of these regulations were annulled by the Constitutional Court's decision dated 04.05.2023, published in the Official Gazette and entered into force on 05.04.2023, on the grounds of being unconstitutional."
"INTEREST INCOME SHOULD NOT BE PAID TO THE CREDITOR"
"The chamber's case law indicates that there is no regulation stating that the money not paid to creditors by the enforcement office will be accrued in the event of an objection to the order of priority in Articles 140 and following of the Enforcement and Bankruptcy Law; however, if there is interest income obtained as a result of the money not paid to the creditor due to the objection to the order of priority being deposited into the bank account by the enforcement director, there is no legal basis for its payment to the creditor, and the money obtained as a result of the accrual belongs to the Treasury. However, due to the annulment of the first and second paragraphs of Article 36 of the Fees Law, which is the basis of the decision, on the grounds of being unconstitutional, it has been changed to the view that if there is an income generated, it should be paid to the rightful owners.
Accordingly, although the relevant legal provision was not annulled and was in force at the time of the decisions of the First Instance and Regional Courts of Appeal, and thus the decisions were appropriate according to the chamber's previous case law; it has been concluded that the annulment decision, which is the basis of the directorate's decision subject to the complaint, should be applied in the current complaint due to the annulment of the legal regulation during the appeal review phase by the Constitutional Court's decision dated 04.05.2023, published in the Official Gazette and entered into force on 05.04.2023.
In this case, it should be decided to annul the part of the directorate's decision regarding the income amount to be recorded as revenue to the Treasury, with the acceptance of the complaint by the First Instance Court, and thus the decision of the Regional Court of Appeal has been overturned, and the decision of the First Instance Court has been annulled."
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