Madras High Court
A. Parvatham vs Bank Of Baroda, Represented By Its ... on 7 April, 2000
Equivalent citations: AIR 2000 MADRAS 326, (2000) 2 MAD LJ 683, (2000) 2 BANKCAS 535, (2000) 3 MAD LW 533, (2001) 2 RECCIVR 83, (2001) 3 ICC 168, (2001) 1 CURCC 425
Author: P. Sathasivam
Bench: P. Sathasivam
ORDER
1. Judgment-debtor in O.S.No. 336 of 1989 on the file of Subordinate Judge, Tiruppur, against the dismissal of her petition E.A.No. 4 of 1998 filed by her under Order 21, Rule 90 read with Section 47, C.P.C., to set aside the court auction sale held on 16.7.1997, has filed the present appeal before this Court.
2. The first respondent herein-Bank of Baroda obtained a mortgage decree against the appellant herein in O.S.No.336 of 1989 on the file of the Subordinate Judge, Tiruppur and brought the suit properties for Court auction sale in E.P.No.14 of 1993 and in the Court auction held on 16.7.97, the 2nd respondent herein has purchased the properties for Rs.14,79,000. According to the appellant herein, the value of the properties is around Rs. One crore and even in 1993 the Amin's value itself was Rs.60 Lakhs and the property had been sold for a very low value due to incorrect description of the properties in the sale proclamation and for want of proper publicity about the sale and due to material irregularities and fraud in publishing and conducting the sale, she filed E.A.No.4 of 1998 to set aside the sale. It was her case that the suit properties consist of three door numbers and the buildings are of Madras terraced and tiled buildings consisting of ground and first floors in an area of 17 cents in the heart of Tiruppur town and the full and correct description of the properties have not been given in the sale proclamation and the real value of the properties is Rupees One Crore and for want of proper publication and material irregularities in the publication and conduct of the sale substantial injury has been caused to her and the properties have been sold for a very low price, she also contended that the entire properties need not have been brought for sale and even if a part of the properties had been brought for sale, the decree could have been satisfied.
3. The respondents herein contested the application by filing separate counter affidavits. It is stated that there was proper publication for sale and the properties had been sold for the due and correct price and the petition was filed to protract the execution proceedings.
4. Before the Court below, besides examining the petitioner herself as P.W.1, an Assistant from Sub Registrar's Office, Tiruppur, was examined as P.W.2, an approved chartered Engineer was examined as P.W.3 and Exs. A-1 to A-5 were marked. On the side of the respondents, one Balu, purchaser of the suit properties, 2nd respondent herein was examined as R.W.1. They also marked Exs. B-1 to B-5 in support of their defence. The Court below, after considering the oral and documentary evidence adduced, rejected all the contentions raised on the side of the petitioner/appellant herein regarding the value of the properties sold and the irregularities in the publication and conduct of sale and by the impugned order, dismissed her application. Aggrieved by the said order, she filed the present appeal before this Court.
5. Heard the learned senior counsel for the appellant- and the learned counsel for the respondents.
6. Mr. V.K. Muthusamy, learned senior counsel for the appellant, after taking me through the various objections raised with regard to the auction sale held on 16.7.1997 as well as the impugned order of the learned Subordinate Judge, has raised the following contentions:-
(i) The property sold in the court auction was not property described;
(ii) No proper notice was issued to the petitioner in the execution proceedings;
(iii) Sale proclamation was not properly drawn;
(iv) The sale price fetched is inadequate;
(v) The auction purchaser/2nd respondent herein is the agent of the decree-holder;
(vi) The sale proclamation did not contain the value of the Judgment-debtor as contemplated by proviso to Order 21. Rule 66(2); C.P.C.
(vii) The property is an extent of 17 Cents of land with a constructed area of 7400 sq.ft. and situated in the heart of Tiruppur could easily fetch above Rs.30,00,000 and in the light of the oral evidence of P.Ws. 2 and 3 and the documentary evidence of Exs. A-3, A-4 and A-5, the Court below committed an error in rejecting the claim of the petitioner;
(viii) The court below erred in bringing the entire property for sale when the execution petition was levied for Rs.9.50 lakhs and the Amin's value itself was Rs.60,00,000 and apart of the property alone should have been brought for sale.
7. On the other hand, learned counsel appearing for the 2nd respondent/auction purchaser would contend that the court below strictly followed all the procedures contemplated under the Code, that the judgment-debtor was given adequate notice and opportunity at every stage and that the main object of the petitioner/judgment-debtor is to delay the proceedings as far as possible. He also contended that the 2nd respondent herein is a bona fide purchaser for value. He further contended that even though the alleged irregularities were available even at the time of drawing up of sale proclamation, without filing proper petition at the appropriate time, no application to set aside the sale under Order 21, Rule 90 shall be entertained after proclamation of sale was drawn up. He also contended that even on the alleged irregularities, the court below has considered all the materials and passed orders on merits, holding that those irregularities in drawing up of sale proceedings or in the publication of sale have not been made out by the petitioner/appellant herein. It is further contended that the evidence produced by the petitioner/appellant herein was considered by the court below in detail and it has correctly come to the conclusion that no ground is made out to invoke Order 21, Rule 90, C.P.C. Learned counsel for the first respondent-Bank while reiterating the same contentions, adopted the arguments of the second respondent.
8. I have carefully considered the rival submissions.
9. In order to consider the points raised by both sides, it is better to refer Order 21, Rule 90, C.P.C., which reads thus:-
"Order 21, Rule 90. Application to set aside sale on ground of irregularity or fraud,- (i) Where any immovable property has been sold in execution of a decree, the decree-holder, or the purchaser, or any other person entitled to share in a rateable distribution of assets, or whose interests are affected by the sale, may apply to the Court to set aside the sale on the ground of a material irregularity or fraud in publishing or conducting it.
(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.
(3) No application to set aside a sale under this rule shall 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.
Explanation- The mere absence of, or defect in, attachment of the property sold shall not, by itself, be a ground for aside setting/a sale under this rule."
It is clear that on the ground of material irregularity or fraud in publishing or conducting the sale the person affected can approach the Court to set aside the sale. However, as per clause (2) of Rule 90, he has to establish that he sustained substantial injury by reason of such irregularity or fraud. Like-wise, as per clause (3) if such person had occasion to raise objection before the date of proclamation and failed to raise the same, he cannot be allowed to raise such objection after proclamation of sale was drawn up. I have already noted the objections raised by the petitioner/appellant. Among those objections, inadequacy of the sale price and certain defects in conducting sale are the main grounds expressed by the petitioner. Before considering the merits of such objection, I shall refer certain decisions referred to by the learned senior counsel for the petitioner/appellant. In the case of A. U. Natarajan v. Indian Bank, Madras, , the Division Bench of this Court has held thus, "We have already pointed out the difference in meaning between the words 'value' and "upset price' or 'reserve price'. What the proviso in question lays down is that in a proclamation of sale the estimate of the value of the property as given by either or both the parties, should necessarily find a place. But, no duty was cast on the court to enter in the sale proclamation its own estimate of the value of the property. The reason for the Legislature having worded the proviso in the manner done is not far off to see. The court making an estimate of the value of the property and entering it in the proclamation of sale would become necessary only when an upset price has to be fixed for the property. Since the Legislature has now made it obligatory that the estimate of the value of the property as given by either or both the parties, should necessarily find a place in the proclamation of sale, the need for the court to fix an upset price may not arise in all cases..."
The Division Bench also held that in order to safe guard the interest of the judgment-debtor, the court can certainly exercise its discretionary power under the first limp of the proviso and give its own estimate of the value of the property in the sale proclamation.
10. In Gajadhar Prasad v. Bhakta Ratan, , Their Lordships have held that mere mention by the execution court in the sale proclamation, of the valuation of the properties (sought to be attached) as stated by the decree-holder, without assigning any reason for the non-mention of the valuation as put by the judgment-debtor was material irregularity when the judgment-debtor suffered substantial injury by the sale.
11. In Elumalai Naicker v. Kishtambal Ammal, AIR 1988 Mad.106 it was held that when the court gives the upset price, it cannot do so merely on the ipse dixit of either the judgment-debtor or the decree-holder. What should be the amount to be fixed as the upset price must therefore, be determined after an objective consideration of all the relevant facts to which the court must apply its mind, so as to safeguard the interests of the judgment-debtor.
12. In Manjamma v. S.N. Suryanarayana Rao, , a learned single Judge of Karnataka High Court has held that non-publication of sale proclamation on notice board of Municipal Corporation though property situated within Corporation limits is violation of mandatory provision of order 21, Rule 54(2) (Karnataka) read with order 21, Rule 67.
13. In M/s Annapurna Industries v. Syndicate Bank, a learned single Judge has held that where the properties involved were industrial land and buildings with machinery, situated in a small village away from neighbouring important towns which required wide publicity to the proclamation as there might not have been persons interested in such property in the small village, however for two years the proclamation was published on the site in the village by beat of tom-tom and by affixing the sale proclamation to boundary stone in the land, and thereafter instead of publishing the same either in the official Gazette or in the newspaper having wide circulation, it was published in a local newspaper which attracted no bidders and though in such cases it was imperative for the Court to have taken resort to order 21, Rule 67(2). C.P.C. the Court went on mechanically issuing four more proclamations and after finding a bidder offering l/3rd of the valuation of the property, accepted the same as the highest price offered by the bidder, such sale was liable to be annulled.
14. In Palaniappa Gounder v, Nallamuthu Gounder and others 1982 L.W.(95) 584. this Court has held as follows:-
"It is therefore quite evident that after the introduction of Tamil Nadu Amendment in Order 21, Rule 66 (d) (i) and the amendment effected in R,196 of the Civil Rules of Practice, it is not open to the court to reduce the upset price already fixed without notice to the judgment-debtor."
This has been followed in Palaniappa Gounder v. Subramania Gounder, 1993 T.L.N.J. 165.
15. In Rajagopal v. Muthulakshmi, , it was held that the inclusion of the judgment-debtor's valuation in the proclamation is a mandatory requirement.
16. In Desh Bandhu Gupta v. N.L. Anand and Rajinder Singh, . the Hon'ble Supreme Court has held that the execution court has obligation normally to state the valuation given by both the decree-holder as well as judgment-debtor .
17. Learned counsel appearing for the second respondent has relied on the following decisions in support of the impugned order. In K.K. Gounder v. P. Gounder, , after referring to Order 21, Rule 66(2) and in the absence of judgment-debtor utilising the notice in the court, the learned single Judge of this Court has held as follows:-
"It is clear from the language of this rule that the value of the property as stated by the judgment-debtor can be specified by the court only if the judgment-debtor appears in the execution proceedings and states the value of the property as per his estimate. Learned counsel for the appellant says that two years prior to the filing of this execution petition, while E.P.246 of 1969 was pending, he filed an application to set aside an ex parte order passed against him and in the course of an affidavit filed in support of that application he had stated that the property that was being brought to sale was worth Rs.50,000 and that the court ought to have looked into the prior records and inserted in the sale proclamation the statement of the judgment-debtor as regards the value of the property, I am entirely unable to accept this proposition. If the judgment-debtor fails to appear in an execution petition and fails to state in that execution proceedings his estimate of the value of the property, it is no part of the duty of the court to make a research into the prior proceedings to any other proceedings between the parties in order to find out if the judgment debtor had stated the value of the property. To say that if the court fails to perform this impossible duty of conducting a research into the prior proceedings and finding out if the judgment-debtor has stated his value in those proceedings, it should be held guilty of a material irregularity is, in my view, to make a mockery of the technicalities of law without any regard for the realities in which the executing courts are called upon to function. I may also add that even if it is regarded as a material irregularity, there is proof that as a result thereof the appellant has suffered any injury."
18. In Vaidyalingam Pillai v. Chidambaram Pillai, 1966 (I) M.L.J 441. Kailasam, J., (as he then was has held that under Order 21, Rule 90 of the Civil Procedure Code 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. His Lordship has also held that 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. His Lordships has further 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. His Lordships has further held that where the proclamation of sale was settled and the judgment-debtor did not raise any objection to the description of the property therein, and only wanted time to pay the decree amount, but allows the sale to be proceeded with he cannot at a later stage be allowed to take advantage of any bona fide error in description, to attack the sale.
19. In Dhirendra Nath v. Sudhir Chandra, . Their Lordships have held that objection as to defect in sale proclamation not raised at the time of drawing up of sale proclamations cannot raise under Order 21, Rule 90 C.P.C.
20. In R.N. Bhuva v. S.V. Rangaswamy and Bhima Rao Badami, 1991 (1) L.W. 575, the Full Bench of this 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, C.P.C., 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, Rule 64 and Order 21, Rule 66(2)(a). C.P.C.
21. In Sathappan v. Andhra Bank Ltd., 1991 (II) M.L.J. 9, Srinivasan, J. (as he then was) has 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 the sale. His Lordships has also held that under Sub-rule (3) of Rule 90 of Order 21, it is provided that no application to set aside the sale shall be entertained upon any ground which the applicant can take on or before the date on which the proclamation of sale was settled.
22. In Sridevi v. H. Natesan, 1988 (2) L.W. 234 Ratnam, J., (as he then was) has held that here is no need when the entire property is described by its four boundaries, to make specific mention about either the electrification or the existence of a well or the availability of a vacant space within the four boundaries and that all these would be taken in by the boundary description given. His Lordships has further held that the lower appellate Court was. therefore, in error in holding that the omission to specifically refer to those matters would vitiate the sale and that the view taken by the lower appellate court that the first respondent had suffered a substantial injury by the sale of the property is erroneous.
23. In P.L.V. Giri v. A.Subramaniam and others, 1992 (2) L.W. 237, Janarthanam. J., has concluded that even otherwise, the so-called mis description of the property as well as bringing more extent of property, than what is required, for purposes of satisfying the decree, to say, offending respectively Rule 64 and 66 of Order 21, C.P.C. cannot at all be construed as vitiating or nullifying circumstances rendering the sale itself invalid, and if at all, such factors can be termed as irregularities, which would be taken into consideration, in an application filed for setting aside the sale under Order 21, Rule 90, C.P.C.
24. In Arunachellam v. Arunachellam and another I.L.R.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 afterwards alleged by him, viz., insufficiency of description within the requirements of Section 287, he having been throughout aware of what the description was the sale is not invalid on this ground alone without more. No evidence having been given in the Court executing the decree of substantial injury having resulted by reason of such irregularity, i.e., the alleged mis-description.
25. In Kayjay Industries v. Asnew Drums, , Their Lordships have held that mere inadequacy of price cannot demolish every Court sale.
26. In V.P. Praseethan v. T. P. Sivarama Krishnan, , the judgment-debtor was aware of the fact that his property was being sold in execution of decree obtained against him.
He had been making payments and seeking adjournment of sale. There was valid proclamation of sale and the property was in remote place and there were no bidders and on two occasions the upset price had to be reduced, in such a circumstance, the Division Bench of Kerala High Court has held that it cannot be said that the sale was for a lesser amount and cannot be lightly set aside.
27. In the case of G. Laganathan v. S. Chenniya Chettiar, . Rengasamy, J., has held that guideline value cannot be a basis for determination of market value of the land. According to him, valuation register on the basis of the notification under Section 47-A of the Stamp Act is for collection of Revenue and it cannot be the basis for determination of the market value of the land.
28. In the light of the various decisions, now I shall consider whether the petitioner has made out any case for interference. It is seen from the records that the first respondent herein, Bank of Baroda obtained a preliminary decree on mortgage on 29.1.1991 and final decree was passed on 30.12.1991. Pursuant; to the said decree the first respondent filed E.P.No. 14 of 1993 on 19.1.93 to recover the said amount. The executing court issued notice to the appellant as well as other debtors. After paper publication, the appellant herein was called absent and set ex parte. By order dated 30.4.1993, the Court below passed an order for drawing up of the sale proclamation on 8.6.93. Admittedly, the appellant herein did not furnish the value of her properties. Hence the sale proclamation was drawn up based on the decree-holder's value and the court's value. The first sale was fixed on 21.7.1993. However, on that day no bidders came forward to purchase the property for the upset price of Rs.30,00,000. Hence, the decree-holder filed an application in E.A.No.615 of 1993 to reduce the upset price, it is to be noted that in that application, the appellant herein appeared through her counsel and filed a counter opposing the reduction of the upset price. In such a circumstance, the court below, by an order dated 7.1.1994. directed to conduct the sale once again at the same upset price. It is also seen that the sale for the second time was directed too be held on the same terms and conditions contained in the sale proclamation drawn on 6.4.1994, for which the appellant never raised any objection, Even for the sale held on 6.4.1994, there were no bidders and, therefore, the first respondent filed an application in E.A.No. 249 of 1994 to reduce the upset price to Rs.10,00,000, however, the Court below reduced the upset price to Rs.25,00,000. By Order dated 29.7.94, the sale was directed to be held on 14.9.94. Even for the sale held for the third time on 14.9.94, the appellant failed to object the terms of the sale proclamation even though she filed counter opposing the reduction of the upset price. In respect of the sale held for third time i.e., on 14.9.94. no bidders came forward to purchase the property at Rs.25,00,000. Again on 26.9.1994, in E.A.No.559 of 1994, the first respondent requested the court to reduce the upset price. The appellant filed her counter opposing the reduction of the upset price. The Court below after considering the rival claim, reduced the price to Rs.20,00,000, by way of order dated 25.11.94 in E.A.No. 559 of 1994 and directed the sale to be held on 18.1.95 for the fourth time. The sale was adjourned to 18.1.1995 and on that date since there were no bidders, the sale had not taken place. Once again, the first respondent filed an application in E.A.No.70 of 1995 to reduce the upset price. After several adjournments, finally by order dated 9.2.1996 the upset price was fixed at Rs.15,00,000 and the sale for the fifth time was directed to be held on 27.3.96. Even on that date, there were no bidders. Accordingly, the first respondent filed another application in E.A.128 of 1996 to reduce the upset price from Rs.15,00,000 to Rs.14,75,000 and directed the sale to be held on 16.7.97, after proper publication or sale. It is seen from the records that the paper publication for sale was published in Daily Thandhi on 9.7.1997. In the sale held on 16.7.97, the second respondent was the highest bidder along with four others and his offer of Rs.14,79,000 was accepted and he was declared to be the successful bidder. It is further seen that on that date itself, he deposited 1/4th amount, namely. Rs.3,69,750 and on 29.7.1997 he deposited another sum of Rs.12,12,780. It is clear that the second respondent had deposited the entire sale price, poundage and stamp duty etc., within time. it is clear that the appellant herein was put on notice on each and every occasion and as a matter of fact, on many occasions, she participated by filing counter statements opposing the reduction of upset price. However, the fact remains that she did not challenge the orders passed by the court below reducing the upset price then and there considering the fact that no bidders came forward by way of appeal. It is also clear that though she filed an objection for reduction of the upset price, she did not raise any objection at the time of drawing up of sale proclamation pointing out the defect. In such a circumstance, as observed by Their Lordships of the Supreme Court in Dhirendra Nath v. Sudhir Chandra, though notice was given to her. she did not attend at the drawing up of the proclamation, accordingly the sale held is not liable to be set aside under Order 21,Rule 90 C.P.C. The same position has been reiterated in the Full Bench decision of this Court reported in R.N. Bhuva v. S.V. Rangaswamy and Bhima Rao Badami, 1991 (1) L.W. 575.
29. Regarding the mis-description of the property, it is seen from the sale proclamation that the property description given in the sale-deed executed in favour of the appellant is given as description of property in the sale proclamation. The boundaries, door No. extent and other particulars are same both in the sale-deed of the year 1968 and in the sale proclamation. In this regard, it is useful to refer the decision of Ratnam J (as he then was) reported in Sridevi v. H. Natesan, 1988 (2) L.W.234 that when the property is described by its four boundaries, there is no need to mention the other details such as electrification. existence of well or the availability of vacant space within the four boundaries. AS a matter of fact, Janarthanam. J.. in P.L.V. Giri v. A.Subramaniam and others, 1992 (2) L.W. 237 has gone into the extent of saying that mis- description of the property as well as bringing more extent of property, than what is required, for purposes of satisfying the decree cannot at all be construed as vitiating or nullifying circumstances rendering the sale itself invalid. I have already observed that the appellant herein did not raise any objection while drawing up of sale proclamation and she allowed the sale completed without objection to the property description. In such a circumstance, she cannot contend that the sale is invalid at a later date. The execution proceedings clearly show that for want of bidders, the sale was postponed on four occasions and only on fifth time, after reduction of the upset price to Rs.14,75,000, the second respondent came forward to purchase the same for Rs.14,75,000 and deposited the entire amount immediately. I am also satisfied that on each occasion, the Court below ordered notice to the appellant herein and the proposed sale also was published in the local daily, namely, Thinathandhi. Hence, it cannot be contended that there was no due publicity. As a matter of fact, the Hon'ble Supreme Court in Kayjay Industries v. Asnew Drums, has held that inadequacy of price is not a ground for setting aside the sale. Apart from this, the appellant had not established for setting aside the sale in the enquiry. She had not produced any record to show the value of the property on the date of the sale. I have already referred to the decision of Rengasamy.J., in G. Loganathan v. S. Chenniya Chettiar, stating that guideline value cannot be a basis for determination of market value of the land.
30. Regarding the other contention that the entire property need not have been brought for sale and even if a part of the properties had been brought for sale, the decree could have been satisfied, it is seen from the sale proclamation dated 16.7.1997 that the total amount due to the decree-holder was Rs.13,60,788 and the entire suit property was sold for Rs.14,79,000. In such a circumstance, the contention that a part of the properties alone is sufficient for discharge of the entire decree due is liable to be rejected.
31. Under these circumstances, I am satisfied that the sale proclamation was properly drawn up on each occasion and proper publication was given in respect of the sales held on various dates. Equally I do not find any irregularity in the publication and conduct of the sale and I hold that the appellant has not made out any substantial injury in the court auction sales upto the last sale held on 16.7.1997, I do not find any error or infirmity in the order impugned; accordingly the appeal fails and the same is dismissed. No costs. Consequently C.M.P.No.20138 of 1999 is also dismissed.