Karnataka High Court
Achutha Prabhu vs Vijaya Bank, Mani Branch And Anr. on 21 February, 2005
Equivalent citations: III(2007)BC182, [2005]128COMPCAS795(KAR), 2005(3)KARLJ403, 2005 AIR KAR R 921, 2005 A I H C 2173, (2005) 3 KANT LJ 403, (2005) 2 CIVILCOURTC 487, (2005) 128 COMCAS 795, 2005 AIR - KANT. H. C. R. 921, (2007) 3 BANKCAS 182 (2005) 2 KCCR 781, (2005) 2 KCCR 781
Author: S.B. Majage
Bench: S.B. Majage
ORDER S.B. Majage, J.
1. In this petition, the petitioner-judgment-debtor has challenged the orders passed by the Executing Court on 23-2-1996, by which his application filed under Order 21, Rule 90 of the CPC to set aside the sale has been dismissed and also the order dated 29-7-2004 passed by the Appellate Court confirming that order.
2. Pacts, giving rise to the petition are: The first respondent-decree-holder Bank obtained a money decree against the petitioner-judgment-debtor in O.S. No. 186 of 1989 and in execution of the final decree passed on 22-6-1991, Execution No. 65 of 1992 was filed for the sale of property shown therein, On the basis of sale papers filed by the Bank, sale notice was issued and served on the petitioner-judgment-debtor and the judgment-debtor appeared through Advocate on 1-6-1992. However, as objections were not filed by judgment-debtor on 1-7-1992, sale proclamation was ordered along with sale warrant, On 31-3-1993, the office noted that the extent of the land shown in the sale papers disclosed 94 cents whereas, RTC disclosed 89 cents. So, revised sale papers were filed on 23-4-1993 showing the land to be sold as 89 cents. Then sale notice was issued and served on judgment-debtor through agent. So, again sale notice was served on the judgment-debtor under RPAD as noted on 27-8-1994 but found absent and did not file objections, sale proclamation was ordered again along with sale notice. Sale proclamation was duly published but sale warrant returned unexecuted as there was no bidder, as could be seen from the order sheet dated 11-11-1994. So, again sale proclamation along with sale warrant was ordered. However, for one or the other reason, it was not issued till 30-9-1995. Further, on account of filing Miscellaneous Case No. 2 of 1995 with regard to 20 cents out of 89 cents of land, on 30-9-1995, sale proclamation with sale warrant was issued for 69 cents fixing spot sale on 13-11-1995 and sale warrant on 16-11-1995. Accordingly, sale proclamation was duly published and returned reporting that spot sale was held for Rs. 60,000/- in the name of second respondent auction purchaser. Then auction was conducted in the Court on 16-11-1995 in which four persons, including respondent 2-Auction purchaser participated and in that, the second respondent was highest bidder for Rs. 75,000/- and as such, it was accepted with a direction to deposit 1/4th of the bid amount, giving time to pay balance bid amount by 1-12-1995. On 1-12-1995 balance bid amount was deposited. So, posted to 3-2-1996 for sale confirmation. However, before that on 14-12-1995, I.A. No. V under Order 21, Rule 90 of the CPC was filed by the petitioner-judgment-debtor through another Advocate, requesting to set aside the sale held in favour of the second respondent on the grounds that there was no spot sale and the land was sold for less value though it is worth more than Rs. 2 lakhs and thus, there was irregularity in the sale, requiring the same to be set aside. The second respondent was given notice and objections were filed. Thereafter, on hearing both sides, the impugned order came to be passed dismissing said application of the judgment-debtor. The judgment-debtor approached unsuccessfully before the Appellate Court and as such, he is before this Court now.
3. It was vehemently argued for the petitioner-judgment-debtor that there was no due or proper publication and proclamation, that proper sale consideration besides the time and date of spot sale were not shown in the sale proclamation, that 69 cents of the land was not required to be sold as, even if a part of it had been sold, that could have satisfied the decree, that there was no sale at the spot, that land was sold for a meager price, that opportunity was not given to adduce evidence in support of objections taken in the application filed by him under Order 21, Rule 90 of the CPC, that the sale held was not in accordance with law and hence, the sale conducted in favour of the second respondent-auction purchaser in the Court on 16-11-1995 should have been set aside by the executing Court but not done by it and also by the Appellate Court and hence, requested to set aside the same.
On the other hand, the learned Counsels for the first and second respordents i.e., Bank and auction purchaser have supported the impugned orders since, according to them, the objections taken were not at all tenable under law and most of the objections taken now cannot be taken at this stage for setting aside the sale and hence, requested to dismiss the petition. Perused the records carefully.
4. At the outset, it may be noted that under Order 21, Rule 90(3) of the CPC, no application to set aside a sale under Order 21, Rule 90 could be entertained upon any ground, which the applicant could have taken on or before the date on which the proclamation of sale was drawn up. That apart, as per explanation given thereto, mere absence of, or defect in, attachment of the property sold shall not, by itself, be a ground for setting aside a sale under the said Rule.
5. The object of Order 21, Rule 90(3) of the CPC is to make the judgment-debtor to be more circumspect and to inform the Court, right in time, of his objections. But, if he omits to do so without satisfactory cause, he cannot be heard to say on such objections subsequently. In the case of Desh Bandhu Gupta v. N.L. Anand and Rajinder Singh, the Supreme Court has observed that said provision is like a "caveat emptor" that the judgment-debtor be vigilant and watchful to vindicate pre-sale illegalities or material irregularities and he should not stand by to procrastinate the execution proceedings and if he does so, said Rule forewarns him that he pays penalty for obduracy and contumacy.
6. So, rightly, before the executing Court, the judgment-debtor had not taken such objections, which could have been taken earlier to sale proceedings, and the only objections taken before that Court under Order 21, Rule 90 of the CPC were, not conducting sale at the spot and insufficiency of the sale consideration for the land sold. Still, let me consider the irregularities alleged and relied on before this Court to get the sale set aside.
7. Rule 90(2) of Order 21 of the CPC says that:
"90(2) No sale shall be set aside on the ground of irregularity or , fraud in publishing or conducting it unless, upon the facts proved, the Court is satisfied that the applicant has sustained substantial injury by reason of such irregularity or fraud".
8. In the case of Vaidyalingam Pillai v. Chidambaram Piliai, (1966)1 Mad. L.J. 441 Kailasam, J., (as he then was) has held that, under Order 21, Rule 90 of the CPC, an applicant, who seeks to set aside a sale, should prove that there has been material irregularity or fraud in the publication or conduct of the sale and the mere fact that the property was actually worth much more than what it was sold for is no ground to set aside the sale. It was also held that where the judgment-debtor had notice at every stage of the execution proceedings and the application for reduction of the upset price, but did not choose to oppose any of them, he cannot be heard to say, after the sale is effected, that the price fetched is too low.
9. In the case of Radhy Shyam v. Shyam Behari Singh, the Supreme Court held that in order to set aside an auction sale, mere proof of a material irregularity such as the one under Rule 69 and inadequacy of price realised in such a sale, in other words 'injury', is not sufficient. In addition to such irregularity, what has to be established is that there was not only inadequacy of the price but that that inadequacy was caused by reason of the material irregularity or fraud. In other words, a connection between the two has to be established between the inadequacy of the price and the material irregularity.
10. So also, in the case of Kayjan Industries (Private) Limited v. M/s. Asnew Drums (Private) Limited and Ors., the Supreme Court has also held that mere inadequacy of price cannot demolish every Court sale.
11. Even this Court, in the case of Kapli Siddanagoud v. Gangavvala Siddappa and Anr., 1988(3) Kar. L.J. 360 has held that mere inadequacy of price i.e., the property sold was worth more cannot be countenanced by a judgment-debtor where judgment-debtor did nothing from the time when he was served with the proclamation of sale till the sale was about to be confirmed by his own conduct, he has denied himself the legal rights he had and as such, he cannot raise objection for setting aside the sale after the sale is over.
12. Again in the case of Smt. Hirabai v. Hanumath Krishnaji Bhide and Ors., 1996(7) Kar. L.J. 383 this Court has held that if the judgment-debtor does not participate in the settlement of the terms of proclamation after notice to him, it is not open to a judgment-debtor to contend later that the value of property should have been mentioned in the sale proclamation or, that the Court should have applied its mind in order to ascertain whether entire property was sold or a portion of it for the purpose of satisfying the decree.
13. Further, in the case of R.N. Bhuva v. S.V. Rangaswamy, (1991)1 Mad. L.W. 575 a Full Bench of Madras High Court has held that participation of the judgment-debtor in the settlement of proclamation and his not raising any objection for the extent of property brought for sale may be relevant for the purpose of deciding the application under Order 21, Rule 90 of the CPC and such conduct on the part of the judgment-debtor may also be viewed as a waiver of the provisions of the requirements of Order 21, Rules 64 and 66(2)(a) of the CPC.
14. Similarly, in the case of Sathappa v. Andhra Bank Limited, (1991)2 Mad. LJ. 9 it was held that objections as to the description of the sale property in the proclamation of the sale and as to the value of the property fixed could be raised before the proclamation of sale was settled and they could not be raised under Order 21, Rule 90 against the validity of sale.
15. Again in the case of P.L. V. Giri v. A. Subramaniam, (1992)2 Mad. L.W. 237 it was held that laisde scription of the property as well as bringing more extent of property than what is required, for purposes of satisfying the decree offending Rules 64 and 66 of Order 21, CPC cannot at all be construed as vitiating or nullifying the circumstances rendering the sale itself invalid.
16. Even before a century, in the case of Arunachellam v. Arunachellam, (1889)ILR 12 Mad. 19 the Privy Council has held that a judgment-debtor, having allowed the execution sale of immoveables to be completed without objecting on the ground of insufficiency of description, cannot take it as ground to invalidate a sale.
17. Recently in the case of A. Parvatham v. Bank of Baroda and Ors., AIR 2000 Mad. 326 the Madras High Court has held that where the judgment-debtor had occasion to raise objection before the date of proclamation but failed to raise the same, he cannot be allowed to raise such objections after the proclamation of sale was drawn up.
18. In the present case, as noted already, the judgment-debtor was being represented by his learned Counsel throughout from 1-7-1992 to till 14-12-1995, on which date he filed application under Order 21, Rule 90 of the CPC was filed. But, at no time, any objection was raised either with regard to the inadequacy of price or extent of property put for sale or irregularities alleged in conducting the sale. According to the judgment-debtor, spot sale was to be held on 11-11-1995 but not held though he was waiting with bidders on that date at the spot. If so, he could have participated or brought willing purchasers on 16-11-1995 when, admittedly, sale was held in Court, but he has not done so. However, when the sale was about to be confirmed after the auction purchaser deposited entire sale price, he came up with application under Order 21, Rule 90 of the CPC. This conduct of the judgment-debtor cannot be ignored.
19. He did not raise any objection at any time before sale was held, though he was participating in the proceedings. That apart, how the non-compliance has caused any injury, much less substantial injury, to the appellant is not established by him. In the case of Jaswantlal Natvarlal Thakhar v. Sushilaben Manilal Dangarwala, Supreme Court pointed out that the party, who seeks to set aside the sale, must prove by adducing evidence that substantial injury has been caused to him as a result of non-compliance with the provision contained in Order 21, Rule 72. Leave to bid the sale is a condition precedent for a decree-holder to purchase the property in a Court sale as indicated in Rule 72(1) of the Code. Court is given a discretion to set aside the sale, as provided in Sub-rule (3) where the purchase was made by the decree-holder without such leave. But even in such a case Supreme Court pointed out that without showing substantial injury, no such sale shall be set aside. In other words, Courts are not to set aside a sale ordinarily and unless the applicant satisfies the Court that he sustained (or would sustain) substantial loss or injury, the Court is not obliged to look back for considering whether all formalities have been duly complied with in conducting the sale.
20. Of course, placing reliance on a decision of Patna High Court in the case of Jadunandan Prasad Bhagat and Anr. v. Wajid Ali Mian and Anr., AIR 1932 Fat. 326 it was vehemently argued for the judgment-debtor that an opportunity to adduce evidence was necessary when he filed objections for setting aside the same, but not given, so the impugned order requires to be set aside. There is nothing on record to show that the judgment-debtor has sought opportunity to adduce evidence or that the executing Court refused any opportunity sought for by judgment-debtor to substantiate the objections taken by him. It is not that on the date of impugned order, the judgment-debtor was not represented. If, really, the judgment-debtor wanted an opportunity to adduce evidence, nothing prevented him to seek opportunity before advancing arguments. Having not done so then, he cannot be permitted now to contend that he was not given an opportunity.
21. The learned Counsel for the judgment-debtor has also relied on decisions of this Court in the case of M/s. Annapurna Industries, Rice and Poha Mills, Hebbandi, Bhadravathi and Anr. v. Syndicate Bank, Bhadravathi Branch and Ors., in the case of M/s. Hotel Nataraj and Ors. v. Karnataka State Financial Corporation and Ors. and in the case of Smt. Manjamma v. S.N. Suryanarayana Rao, in support of his argument that the irregularities pointed out by him are material irregularities, which vitiate the sale held in favour of the auction purchaser.
In the case of M/s. Annapurna Industries, it was found that inadequate publicity of the proclamation had resulted in securing a very low price for the property sold whereas, in the case of M/s. Hotel Nataraj, property had been sold for Rs. 4.25 lakhs though it was worth Rs. 7 to 8 lakhs which was admitted by judgment-debtor at one stage and in the case of Manjamma, spot sale had not been held. It is not so in the present case on hand and hence, said decisions do not help the judgment-debtor, So also the decision of the Supreme Court in the case of Ambati Narasayya v. M. Subba Rao and Anr., because it is not shown that by putting a part of the property sold, the amount sought to be recovered by the Bank would have been satisfied,
22. Thus, neither there is any illegality nor error of jurisdiction nor perversity in the impugned order requiring interference by this Court under Section 115 of the CPC. So, absolutely there is no merit or ground whatsoever in the revision petition.
In the result, the petition is rejected with cost.