Karnataka High Court
Y Rupla Naika S/O Late Yamaja Naika vs Mohammed Musthafa S/O B K Iddinabba on 30 October, 2013
Author: Aravind Kumar
Bench: Aravind Kumar
1
R
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 30TH DAY OF OCTOBER, 2013
BEFORE
THE HON'BLE MR.JUSTICE ARAVIND KUMAR
M.F.A.NO.4538/2006 (CPC)
BETWEEN:
Y.RUPLA NAIKA
S/O LATE YAMAJA NAIKA
AGED ABOUT 81 YEARS
R/O SAKHARAYAPATNA IN
KADUR TALUK
BY HIS GPA HOLDER
SRI SEVALAL SANGANA
BASAVA SWAMIJI
SINCE DEAD BY HIS LRS
1. SMT.R.MANJULA
W/O R.SHAMA NAIK
D/O Y.RUPLA NAIK,
AGED 66 YEARS
RESIDING AT NO.37,
PIPELINE ROAD,
MAHALAKSHMIPURAM,
BANGALORE - 560 086
2. SRI.RUPLANAIK GOURISHANKAR
S/O LATE Y.RUPLA NAIK
AGED ABOUT 63 YEARS,
2
RESIDENT OF NO.15,
BRAYTON ROAD,
LIVINGSTON,
NEW JERSEY - 07039
UNITED STATES OF AMERICA
REPRESENTED BY HER
POWER OF ATTORNEY HOLDER
SMT.R.MANJULA
3. SMT.MALATHI NAIK
D/O LATE Y.RUPLA NAIK
AGED ABOUT 60 YEARS
RESIDING AT NO.526,
RAJMAHAL VILAS AND EXTENSION,
BANGALORE - 560 080
REPRESENTED BY HER
POWER OF ATTORNEY HOLDER
MR.SHAMA NAIK
4. SRI.MAHADEV PAMAAR
S/O LATE Y.RUPLA NAIK
AGED ABOUT 59 YEARS,
RESIDENT OF NO.15,
BRAYTON ROAD,
LIVINGSTON,
NEW JERSEY - 07039
UNITED STATES OF AMERICA
REPRESENTED BY HER
POWER OF ATTORNEY HOLDER
SMT.R.MANJULA
5. R.PARVATHI SADANA
W/O VEERENDRA SADANA
AGED ABOUT 55 YEARS
NO.65, ELMWOOD AVENUE,
3
CAMBRIDGE,
ONTARIO N1R4Y5,
CANADA
REPRESENTED BY HER
POWER OF ATTORNEY HOLDER
SMT.R.MANJULA
6. SRI.RUPLANAIK KRISHNAKUMAR
S/O LATE Y.RUPLA NAIK
AGED ABOUT 59 YEARS,
RESIDENT OF NO.15,
BRAYTON ROAD,
LIVINGSTON,
NEW JERSEY - 07039
UNITED STATES OF AMERICA
REPRESENTED BY HER
POWER OF ATTORNEY HOLDER
SMT.R.MANJULA ...APPELLANTS
(BY SRI.M.S.RAGHAVENDRA PRASAD, ADVOCATE)
AND:
1. MOHAMMED MUSTHAFA
S/O B K IDDINABBA
AGED ABOUT 30 YEARS
SITE NO 486, 7TH BLOCK,
KRISHNAPURA IN
MANGALORE TALUK
BY HIS GPA HOLDER,
MOHAMMAD SIRAJ
S/O MOHIDDIN BEARY
AGED ABOUT 46 YEARS
OPP TO ABC (BEHIND COFFEE DAY)
K.M ROAD,
4
CHIKMAGALUR CITY
2. TAJMAL AHAMED
S/O LATE C.H.NAZEER AHAMED
AGED ABOUT 50 YEARS,
PRESENTLY RESIDING AT NO.28
DISPENSARY ROAD,
SHIVAJINAGAR,
BANGALORE - 560 001
3. SRI.K.C.KUMAR
S/O LATE CHANDRAPPA
AGED ABOUT 42 YEARS,
RESIDING AT NO.20/315-2,
HIREMAGALUR VILLAGE
KASABA HOBLI,
CHIKKAMAGALUR TALUK
AND DISTRICT
4. SRI.B.YOGESHA
S/O BASAVEGOWDA
AGED ABOUT 39 YEARS
RESIDING AT NO.4/315-1,
HIREMAGALUR VILLAGE,
KASABA HOBLI,
CHIKKAMAGALUR TALUK
AND DISTRICT ...RESPONDENTS
(BY SRI.V.N.JAGADEESH, ADVOCATE)
THIS MFA IS FILED U/O 43 RULE 1(j) OF CPC
AGAINST THE JUDGMENT AND ORDER DATED
02.03.2006 PASSED ON I.A.VIII IN EX.NO.73/2004 ON
THE FILE OF THE CIVIL JUDGE (SR.DN.),
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CHICKMAGALUR, REJECTING I.A.NO.8 FILED U/O 21
RULE 90 R/W SECTION 151 OF CPC.
THIS MFA COMING ON FOR FINAL HEARING
THIS DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT
This appeal was originally filed by Judgment Debtor and on his demise during the pendency of present proceedings, his legal heirs have been brought on record and they are prosecuting this appeal questioning the correctness and legality of the order passed by Civil Judge (Sr.Dn), Chickmagalur dated 02.03.2006 in Execution Petition No.73/2004 whereunder application filed by original Judgment debtor under Order XXI Rule 90 read with section 151 of C.P.C seeking for setting aside the sale in respect of property bearing Sy.No.315/1 and 315/2 measuring 1 acre 8 guntas situated at Hiremagalur Village, Kasaba 6 Hobli, Chickmagalur (alienated -converted to residential purpose) has been dismissed.
2. Facts in brief leading to filing of this appeal can be crystalised as under:
A suit O.S.No.78/2003 came to be filed by first respondent herein for recovery of money Rs.7,12,621/- and same came to be decreed by Judgment and decree dated 23.01.2004. In order to enjoy the fruits of decree, first respondent herein (hereinafter referred to as `Decree Holder' for the sake of brevity) filed execution petition in Ex.No.73/2004.
Property belonging to the Judgment debtor Sri.Rupla Naika was brought to sale. Sale was ordered to be conducted by the executing Court.
3. An application Interlocutory Application No.V was filed by the decree holder to permit him from participating in the auction and set-off in respect of 7 decretal amount towards purchase money was sought for. Said application was allowed by the Executing Court by Order dated 11.03.2005. By order dated 05.07.2005 sale warrant and sale proclamation came to be issued. Date of spot bid was fixed as 23.08.2005 and for final bid before Court, date was fixed as 03.09.2005.
4. Aggrieved by order dated 05.07.2005 original judgment debtor filed a writ petition before this Court in W.P.No.20270/2005. An order came to be passed staying all further proceedings subject to judgment debtor depositing a sum of Rs.4,00,000/- within two weeks. Undisputedly, said amount was not deposited by judgment debtor. Thereafter, writ petition came to be dismissed by this Court by order dated 04.01.2008 as having become infructuous and sale having been questioned in the present appeal.
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5. In the meanwhile sale proclamation was issued by the Executing Court and sale was conducted at the spot as ordered by the Executing Court on 05.11.2005. Endorsement made by the bailiff in sale proclamation would indicate that it was notified by beat of tomtom at the spot on 16.07.2005 and one copy of sale proclamation was affixed and another copy was affixed in the Court notice board. Spot bid was held on 22.10.2005 in which decree holder's bid for Rs.7,50,000/- was recorded as the highest bid received by the bailiff. A report came to be submitted to the Executing Court by bailiff and it was accepted by the Executing Court on 05.11.2005. Decree holder was granted 15 days time to deposit the difference amount and accordingly, it came to be deposited. Later on Interlocutory Application No. VIII i.e., application in question came to be filed under Order 21 Rule 90 R/w Section 151 of CPC by judgment debtor on 21.01.2006. 9 As noticed hereinabove said application came to be rejected by the Executing Court by order dated 2.3.2006 which is assailed in this appeal.
6. The contention of Sri M.S. Raghavendra Prasad, learned counsel appearing for judgment debtor is that the value of property was much more than the price for which it has been sold and memo filed by the judgment debtor before the Executing Court on 04.06.2005 indicating the value of property has not been taken note of by the Executing Court at the time of issuing sale proclamation and it was incumbent upon the Executing Court to indicate the valuation furnished by the judgment debtor in the sale proclamation as required under Order 21 Rule 66 Clause (f) (Karnataka Amendment) read with Form No.29 vide Appendix - E and non-compliance of this statutory provision has 10 vitiated the sale and proceedings pursuant thereto and hence it has prejudiced the right of judgment debtor.
7. He would further submit that Executing Court ought to have taken note of valuation furnished by judgment debtor at the time of issuing sale- proclamation. On account of valuation not having been indicated in the sale proclamation, Executing Court ought not to have accepted the valuation furnished by the decree holder alone which did not have any basis. He would contend that Executing Court without applying its mind and without embarking upon an exercise to find out the market value of property, it could not have accepted the valuation furnished by the decree holder mechanically. He would also contend that for recovery of decretal amount sale of portion of property in question was sufficient and on account of sale of entire property having been conducted it has 11 prejudiced the right of judgment debtor and on this ground also sale was liable to be set aside. He would also contend that there was no proper publication of proclamation of sale and as such it has caused irreparable loss and injury to the judgment debtor which is substantial and non-consideration of these aspects by the Executing Court while adjudicating the application filed by judgment debtor has resulted in great prejudice to judgment debtor and as such he prays for setting aside the order dated 2.3.2006 by allowing this appeal.
In support of his contentions he has relied upon the following judgments:
(i) AIR 2008 SUPREME COURT 2061:
M/S. MAHAKAL AUTOMOBILES & ANOTHER VS. KISHAN SWAROOP SHARMA
(ii) AIR 1973 SCC 2593:
GAJADHAR PRASA AND OTHERS VS BABU BHAKTA RATAN AND OTHERS 12
(iii) (1994) 1 SCC 131:
DESH BANDHU GUPTA VS N.L. ANAND & RAJINDER SINGH
(iv) AIR 1986 KARNATAKA 268:
SMT MANJAMMA VS. S.N. SURYANARAYANA RAO AND OTHERS
(v) (1987) 4 SCC 717:
M/S. SHALIMAR CINEMA VS. BHASIN FILM CORPORATION
(vi) AIR 1998 KERALA 395:
REGI GEORGE VS. K.K.BHASKARAN NAIR AND OTHERS
(iv) AIR 1989 KARNATAKA 90:
M/S. HOTEL NATARAJ AND OTHERS VS. KARNATAKA STATE FINANCIAL CORPORATION AND OTHERS
(v) AIR 2004 ANDHRA PRADESH:
M. VEERANJANEYULU VS. M.
SARASWATHAMMA
(vi) AIR 1998 KERALA 395:
REGI GEORGE VS. K.K. BHASKARAN NAIR AND OTHERS
(vii) AIR 1965 MADRAS 198:
K.S. NAGENDRA IYER AND ANOTHER VS. M. VARADARAJA PILLAI AND OTHERS 13
(viii) AIR 1977 CALCUTTA 235:JYOTISH CHANDRA RAKHIT VS. SMT PARBATI BALA
(ix) AIR 1997 SUPREME COURT 2106: LAL CHAND VS. VIII ADDL. DISTRICT JUDGE AND OTHERS
(x) ILR 1995 KAR 1816: TRIYAMBAK VENKATESH HEBSUR VS. DHARMARADDI FAKIRADDI KHYADAD
(xi) (1987) 4 SCC 717: M/S. SHALIMAR CINEMA VS. BHASIN FILM CORPORATION AND ANOTHER
(xii) AIR 1990 SUPREME COURT 119: AMBATI NARASAYYA VS. M. SUBBA RAO AND ANOTHER
8. Per contra, Sri Jagadeesh, learned counsel appearing for decree holder as well as subsequent purchaser would support the order passed by the Executing Court. He would contend that there was no irregularity committed by the Executing Court and application Interlocutory Application No. VIII filed by judgment debtor has been rightly dismissed and contends that when judgment debtor has not been able 14 to demonstrate and prove that sale or auction of property in question, resulted in prejudice to Decree Holder, sale should not be set aside even if there were to be any irregularity. He would also draw the attention of the Court to writ petition filed by judgment debtor in W.P.No.20270/2005 challenging sale proclamation where a conditional order came to be passed by this Court and judgment debtor having failed to comply with the directions issued by this Court resulted in dismissal of Writ Petition on 04.01.2008 and this itself, would be an indicator to the fact that judgment debtor intends to protract the proceedings on one ground or the other and as such, prayer sought for by judgment debtor has been rightly negatived by the Executing Court, which does not call for interference by this Court.
In support of his contentions he has relied upon following judgments:
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(i) 1991 SUPP (2) SCC 691:
JASWANTLAL NATVARLAL THAKKAR VS.
SUSHILABEN MANILAL DANGARWALA AND
OTHERS
(ii) AIR 2000 SUPREME COURT 3402:
SRI RAM MAURYA VS. KAILASH NATH AND
OTHERS
(iii) 2001 AIR SCW 2118:
UMESH C. BANERJEE AND K.G.BALAKRISHNAN
9. Having heard the learned Advocates appearing for the parties and on perusal of order under challenge dated 02.03.2006, I am of the considered view that following point would arise for my consideration:
"Whether sale ordered and conducted by the Executing Court is to be set aside on account of any material irregularity? and, whether sale is vitiated on account of non-
compliance of statutory
provisions?"
10. The facts narrated hereinabove would suffice to examine the rival contentions and hence they are not delved upon again as it would be repetition of facts. 16 Parties are referred to as per their rank in executing Court namely Decree Holder as 'Dhr' and Judgment Debtor as 'Jdr'.
11. To enjoy the fruits of decree passed in O.S.No.78/2003 dated 23.01.2004 an execution petition came to be filed on 12.04.2004 by the decree holder (plaintiff) and he sought for sale of property belonging to judgment debtor. He sought for attachment and sale of the immovable property as described in the schedule to execution petition. An order of attachment of property bearing Sy.No.315/2 & 315/1 to an extent of 1 acre 8 guntas alienated land came to be attached by order of attachment dated 27.05.2004 same was attached on 15.06.2004. In the execution petition filed description of property sought for sale has been specifically mentioned as 1 acre 8 guntas alienated land i.e., converted for residential purposes. Hence, at this juncture itself it 17 would be appropriate to examine the contention raised in this regard by the decree holder namely whether land in question was got converted by the decree holder subsequently or it was a land already converted for non-agricultural purposes prior to filing of the execution petition? The very plea of the decree holder in the execution petition itself would clearly indicate that land in question had been converted much prior to the filing of execution petition and as such property brought for attachment and sale has been described as alienated land in the schedule to the execution petition as well as in attachment order dated 7.6.2004 issued by executing Court and also in the report of the bailiff dated 21.06.2004. Infact mahazar dated 15.06.2004 of the bailiff would also evidence this fact.
12. Executing Court after ordering sale of property in question, ordered for issuance of sale 18 proclamation by order dated 5.7.2005. There is no dispute with regard to the fact that sale proclamation available on record was required to be issued as per Form No.29 prescribed under Appendix - E. Said Form available on record is in consonance with format prescribed under Appendix -E except to the extent of omission of two common columns namely "The value of the property as stated by the decree holder" or "The value of the property as stated by the judgment debtor".
13. It is the specific contention of Sri Raghavendra Prasad, learned counsel appearing for judgment debtor that these two columns have been omitted in the sale proclamation issued and valuation as indicated by the judgment debtor in the memo filed on 4.6.2005 is not reflected in said Form No.29 and as such, it has resulted in material irregularity and as 19 such sale is vitiated. He has contended that memo filed before the Executing Court by the judgment debtor indicating the valuation of property has been completely ignored by executing Court. A perusal of records would indicate that in fact a memo came to be filed by Judgment debtor indicating the value of the property on 04.06.2005 and same has been duly served on the learned counsel for Decree holder.
14. Learned Advocate appearing for Judgment debtor also contends then prevailing market value of the said property was more than Rs.25,00,000/-, since said property is "alienated property" falling within the municipal limits and the actual market value per square feet was around Rs.50/-. Hence, it is contended that judgment debtor had prayed for reflecting actual market value of the property in sale proclamation so that prospective buyers would have known correct market 20 value of land brought for sale. In the words of judgment debtor himself contents of memo dated 4.6.2005 reads as under:
"In the above petition, the Dhr. has valued the suit schedule property of the Jdr. for a sum of Rs.7,50,000/- only. But, the Jdr. has got alienated an extent of 1 acre 08 guntas of land out of the S.No.315/2 and 315/1 totally measuring 2 acres 09 guntas of land. And hence, the prevailing market value of the said property is more than Rs.25,00,000/- as the said property is alienated property falls within the City Municipality limits. Further, the actual market value of the sq. feet of Rs.50.00 is prevailing in the market. And hence, if the Hon'ble Court issues proclamation about the suit schedule property, (Attached property), then the actual value of the property mentioned above by the Judgment Debtor may be notified in the proclamation."
15. Despite such memo having been filed, for reasons best known, Executing Court has not reflected the valuation as indicated in the abovesaid memo filed by judgment debtor in the sale proclamation issued. In this background it is to be examined as to whether 21 there is any material irregularity, which has resulted in substantial and irreparable injury to judgment debtor on account of failure on the part of executing court in not undertaking an exercise to find out as to whether valuation as prevailing on the date of auction had not been reflected in the sale proclamation or whether valuation furnished by both the parties namely judgment debtor and decree holder had not been reflected in the sale proclamation or whether exercise had not been undertaken by the Executing Court to find out what was the then prevailing market value of the property which was to be sold in auction and required to be reflected in the sale proclamation. It is for this precise reason last two columns are indicated in Form No.29 Appendix-E which would reflect the valuation of property to be auctioned according to valuation indicated by judgment debtor and valuation as indicated by decree holder is to be reflected to enable 22 the prospective purchaser to exercise his wisdom so that he will have an idea of the prevailing market value. This would be a factor for the proposed purchaser to find out as to what is the actual valuation of property. On the basis of valuations furnished by decree holder and judgment debtor, the prospective purchaser exercises his wisdom to purchase the property or otherwise. Non furnishing of this information in sale proclamation vitiates not only the sale proclamation but the very sale itself, inasmuch as Decree holder always tends to quote lesser price and judgment debtor exaggerates the value. Hence, if both valuation are available, it would enable the prospective purchaser to exercise his prudence and arrive at market value.
16. At this juncture it would be appropriate to note the statutory provisions governing the said issue namely Order 21 Rule 66(2) which mandates the 23 exercise that requires to be undertaken by an Executing Court while issuing sale proclamation. It reads as under:
"66. Proclamation of sales by public auction:-
(1) Where any property is ordered to be sold by public auction in execution of a decree, the Court shall cause a proclamation of the intended sale to be made in the language of such Court.
(2) Such proclamation shall be drawn up after notice to the decree-holder and the judgment-debtor and shall state the time and place of sale, and specify as fairly and accurately as possible--
(a) the property to be sold or, where a part of the property would be sufficient to satisfy the decree, such part;
(b) the revenue assessed upon the estate or part of the estate, where the property to be sold is an interest in an estate or in part of an estate paying revenue to the Government;24
(c) any encumbrance to which the property is liable;
(d) the amount for the recovery of which the sale is ordered; and
(e) every other thing which the Court considers material for a purchaser to know in order to judge of the nature and value of the property;"
Order 21 Rule 66(2)(e) as amended in Karnataka "(e) The value of the property as stated by the decree-holder and the value of the property as stated by the Judgment-debtor."
17. Clause (e) which gives a very wide power to the Executing Court to include any other material information which the Executing Court feels proper or necessary or relevant for a purchaser to know in order to judge the nature of property for purposes of valuation of such property. Additional information regarding valuation as furnished by Decree holder and judgment debtor is also required to be reflected in Form No.66 by 25 the Executing Court in view of the Karnataka Amendment, which has been extracted herein above.
18. The estimate of value of the property is a material fact which enables the purchaser to know the actual value of the property. On such information or particulars being furnished by either of the parties and indicated in sale proclamation intending bidders or purchasers will not be misled or will not be prevented from offering prevailing market value and in order to avoid inadequate consideration being offered such precaution has been taken care of to include the valuation furnished by both the parties. In fact Hon'ble Supreme Court in the case of GAJADHAR PRASAD AND OTHERS vs. BABU BHAKTA RATAN AND OTHERS reported in AIR 1973 SC 2593 has held that non insertion of both the valuations furnished i.e., by decree holder and judgment debtor is a material irregularity 26 and non mentioning of valuation of the property furnished by decree holder is also a material irregularity.
19. Yet again the Hon'ble Apex Court in the context of Order 21 Rule 66(e) has examined as to whether sale would be vitiated on account of non furnishing of price or valuation offered by judgment debtor and has held in the affirmative. It has been held in the case of M/s. MAHAKAL AUTOMOBILES & ANOTHER vs. KISHAN SWAROOP SHARMA reported in AIR 2008 SC 2061 as under:
"8. The admitted position that has emerged is that:
(i) There was no notice served upon the Judgment-Debtor under Order 21, Rule 54 (1-A).
(ii) There was no valuation of the property carried out:27
(iii) There was no proclamation of sale as per the statutory provision of the M.P.Civil Court Rules, 1961 read with Order 21, Rule
66.
(iv) There was no publication of the sale."
20. If there is no mention of valuation furnished by judgment debtor it would amount to a material irregularity. In the case of GAJADHAR PRASAD AND OTHERS vs. BABU BHAKTA RATTAN AND OTHERS reported in AIR 1973 SC 2593 it has been held as under:
"15. A review of the authorities as well as the amendments to Rule 66 (2) (e) make it abundantly clear that the Court, when stating the estimated value of the property to be sold, must not accept merely the ipse dixit of one side. It is certainly not necessary for it to state its own estimate. If this were required, it may, to be fair, necessitate insertion of something like a summary of a judicially considered order, giving its grounds, in the sale proclamation which may confuse bidders. It may also be quite misleading if the Court's estimate is erroneous. Moreover, Rule 66 (2) (e) requires the Court to state only 28 the facts it considers material for a purchaser to judge the value and nature of the property himself. Hence, the purchaser should be left to judge the value for himself. But, essential facts which have a bearing on the very material question of value of the property and which would assist the purchaser in forming his own opinion must be stated. That is after all, the whole object of Order 21, Rule 66 (2)
(e), Civil Procedure Code. The Court has only to decide what all these material particulars are in each case. We think that this is an obligation imposed by Rule 66 (2) (e). In discharging it, the Court should normally state the valuation given by both the decree-
holder as well as the judgment debtor where they have both valued the property; and these do not appear fantastic. It may usefully state other material facts, such as the area of land, nature of rights in it, municipal assessment, actual rents realized, which could reasonably be expected to effect valuation. What could be reasonably and usefully stated succinctly in a sale proclamation has to be determined on the facts of each particular case. Inflexible rules are not desirable on such a question.
16. In the case before us, the execution Court had practically accepted, as its own valuation, without indicating reasonable grounds for this preference, whatever the decree holders had asserted about the value of the property. It did not bother to seriously even consider the objections of the judgment-debtors. We think 29 that the duty to consider what particulars should be inserted in the sale proclamation and how the sale ought to be conducted should be performed judicially and reasonably. If the execution Court does not, as it did not in the case before us, apply its mind or given any consideration whatsoever to the objections of the judgment - debtor, we think a material irregularity would be committed by the execution Court. It is not necessary for the execution Court to order the insertion of a judicially passed order in the sale proclamation itself, but, it should pass an order showing that it applied its mind to the need for determining all the essential particulars, which would reasonably be looked for by a purchaser, and which should be inserted in the sale proclamation. The order should show that it considered the objections, if any, of the decree-holders or the judgment debtors, as the case may be. It should not merely accept unhesitatingly the ipse dixit of one side. We think that the execution Court had not performed its duty fairly and reasonably in this case. After embarking on the difficult task of valuation, it rejected the judgment-debtors' figures by merely observing that they are exaggerated and practically accepted without hesitation whatever the decree-holders submitted, but this valuation was proved to be incorrect judged by the results of auction sales taken as a whole."
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21. Perusal of above referred judgment would indicate that Executing Court did not consider the valuation furnished by judgment debtor seriously as it has happened in the instant case and as such, I am of the view that said judgment would apply in all fours to the facts on hand. In fact the Hon'ble Apex Court in the case of DESH BANDHU GUPTA vs. N.L.ANAND & RAJINDER SINGH reported in 1994 (1) SCC 131 has held that estimate of valuation of property is a material fact which would enable the purchaser to know the valuation of property. To enable the intending bidder to know as to what the fair market value of property is, it will be necessary to incorporate the fair market value as furnished by Decree holder and Judgment debtor. It has been held in DESH BANDHU GUPTA's case referred to supra as under:
"9. However, there is considerable force in the contention of the appellant that the procedure prescribed under Order 21 Rule 31 66 was flagrantly violated by the Executing Court. We have already noted the order of the court to conduct the sale. For judging its legality and validity, it would be desirable to have a bird's eye view of the procedure for sale of immovable property in execution. On an application for execution filed under Order 21 Rule 5 the court shall ascertain the compliance of the prerequisites contemplated under Rule 17 and on finding the application in order, it should be admitted and so to make an order, thereon to issue notice under Rule 22, subject to the conditions specified therein. If a notice was served on the judgment-debtor as enjoined under Order 5 but he did not appear or had not shown cause to the satisfaction of the court, under Rule 23 the court "shall order the decree to be executed". If an objection is raised to the execution of the decree, by operation of sub- rule (2) thereof, "the court shall consider such objections and make such order as it thinks fit". Thereafter in the case of a decree for execution against immovable property an attachment under Rule 54 should be made by an order prohibiting the judgment-debtor from transferring or creating encumbrances on the property. Under Rule 64 the court may order sale of the said property. Under Rule 66(2) proclamation of sale by public auction shall be drawn up in the language of the court and it should be done after notice to the decree- holder and the judgment-debtor and should state "the time and place of sale" and "specify as fairly and accurately as possible"32
the details specified in clauses (a) to (d) of sub-rule (2) thereof. The Civil Rules of Practice in Part L in the chapter 12 framed by the High Court of Delhi 'Sale of Property and delivery to the Purchaser' Rule 2 provides that whenever a court makes an order for the sale of any attached property under Order 21, Rule 64, it shall fix a convenient date not being distant more than 15 days, for ascertaining the particulars specified in Order 21 Rule 66(2) and settling the proclamation of sale. Notice of the date so fixed shall be given to the parties or their pleaders. In Rule 4 captioned 'Settlement of Proclamation of Sale, Estimate of Value' it is stated that on the day so fixed, the court shall, after perusing the documents, if any, and the report referred to in the preceding paragraph, after examining the decree-holder and judgment-debtor, if present, and after making such further enquiry as it may consider necessary, settle the proclamation of sale specifying as clearly and accurately as possible the matters required by Order 21 Rule 66(2) of the Code. The specifications have been enumerated in the rule itself. The proclamation for sale is an important part of the proceedings and the details should be ascertained and noted with care. This will remove the basis for many a belated objections to the sale at a later date. It is not necessary to give at proclamation of the sale the estimate of the value of the property. The proclamation when settled shall be signed by the Judge and got published in the manner prescribed by Rule 33
67. The court should authorize its officers to conduct the sale. Under Rule 68 the sale should be conducted at "the place and time"
specified or the time may be modified with the consent in writing of the judgment-debtor. The proclamation should include the estimate, if any, given by either judgment-debtor or decree-holder or both the parties. Service of notice on judgment-debtor under Order 21 Rule 66(2), unless waived by appearance or remained ex parte, is a fundamental step in the procedure of the court in execution. Judgment-debtor should have an opportunity to give his estimate of the property. The estimate of the value of the property is material fact to enable the purchaser to know its value. It must be verified as accurately and fairly as possible so that the intending bidders are not misled or to prevent them from offering inadequate price or to enable them to make a decision in offering adequate price. In Gajadhar Prasad v. Babu Bhakta Ratan (1973) 2 SCC 629 this Court, after noticing the conflict of judicial opinion among the High Courts, held that a review of the authorities as well as the amendments to Rule 66(2)(e) make it abundantly clear that the court, when stating the estimated value of the property to be sold, must not accept merely the ipse dixit of one side. It is certainly not necessary for it to state its own estimate. If this was required, it may, to be fair, necessitate insertion of something like a summary of a judicially considered order, giving its grounds, in the sale proclamation, 34 which may confuse bidders. It may also be quite misleading if the court's estimate is erroneous. Moreover, Rule 66(2)(e) requires the court to state only nature of the property so that the purchase should be left to judge the value for himself. But, the essential facts which have a bearing on the very material question of value of the property and which could assist the purchaser in forming his own opinion must be stated, i.e. the value of the property, that is, after all, the whole object of Order 21, Rule 66(2)(e), CPC. The court has only to decide what are all these material particulars in each case. We think that this is an obligation imposed by Rule 66(2)(e). In discharging it, the court should normally state the valuation given by both the decree-holder as well as the judgment-debtor where they both have valued the property, and it does not appear fantastic. It may usefully state other material facts, such as the area of land, nature of rights in it, municipal assessment, actual rents realized, which could reasonably and usefully be stated succinctly in a sale proclamation has to be determined on the facts of each particular case. Inflexible rules are not desirable on such a question. It could also be angulated from another perspective. Sub-rule (1) of Rule 66 enjoins the court that the details enumerated in sub-rule (2) shall be specified as fairly and accurately as possible. The duty to comply with it arises only after service of the notice on the judgment-debtor unless he voluntarily appears and is given opportunity in the settlement of the value of 35 the property. The absence of notice causes irremedial injury to the judgment-debtor. Equally publication of the proclamation of sale under Rule 67 and specifying the date and place of sale of the property under Rule 66(2) are intended that the prospective bidders would know the value so as to make up their mind to offer the price and to attend at sale of the property and to secure competitive bidders and fair price to the property sold. Absence of notice to the judgment-debtor disables him to offer his estimate of the value who better knows its value and to publicise on his part, canvassing and bringing the intending bidders at the time of sale. Absence of notice prevents him to do the above and also disables him to know fraud committed in the publication and conduct of sale or other material irregularities in the conduct of sale. It would be broached from yet another angle. The compulsory sale of immovable property under Order 21 divests right, title and interest of the judgment-debtor and confers those rights, in favour of the purchaser. It thereby deals with the rights and disabilities either of the judgment-debtor or the decree-holder. A sale made, therefore, without notice to the judgment-debtor is a nullity since it divests the judgment-debtor of his right, title and interest in his property without an opportunity. The jurisdiction to sell the property would arise in a court only where the owner is given notice of the execution for attachment and sale of his property. It is very salutary that a person's 36 property cannot be sold without his being told that it is being so sold and given an opportunity to offer his estimate as he is the person who intimately knew the value of his property and prevailing in the locality, exaggeration may at time be possible. In Rajagopala Ayyar vs. Ramachandra Ayyar's (AIR (1924) Madras 431), the Full Bench held that a sale without notice under Order 21 Rule 22 is a nullity and is void and that it has not got to be set aside. If an application to set aside such a void sale is made it would fall under Section 47."
22. Under Rule 90 mere irregularity in conduct of sale is not enough to set aside the same and the applicant must also establish having suffered substantial injury on account of such irregularity or illegality as the case may be. Mere substantial injury without material irregularity is not enough, even as material irregularity is not linked directly to inadequacy of the price is insufficient to set aside the sale. Hence, if the executing court without examining as to whether price offered is too low and a better price could have 37 been fetched and sale has been conducted in a perfunctory manner then both the ingredients namely substantial injury as well as material irregularity can be held to be present and sale can be set aside and not otherwise. Thus, applicant has to prove to the satisfaction of the court that he has suffered substantial injury as a result consequence of the irregularity in the conduct of sale. The word 'substantial injury' cannot be put on an abstract principle. It varies from case to case and has to be viewed from the angle of substantial justice or ensuring there is no miscarriage in the administration of justice. Technicalities has to yield to substantial justice.
23. The contention of Sri V.N. Jagadeesh, learned counsel for decree holder that there is no substantial injury caused to judgment debtor and even otherwise in view of subsequent events having taken 38 place namely, decree holder having sold the property to others and third party rights having crept in, substantial injury that would be caused to the decree holder and to the subsequent purchasers would be is much more than the injury that would be caused to judgment debtor, requires to be considered with utmost circumspection for the reasons assigned herein below:
a) Property which has been sold in auction was affirmed by the Executing Court on 04.03.2006 for a value of Rs.7,50,000/-.
The extent sold is 1 acre 8 guntas.
b) Very same property (excluding the extent
acquired for formation of road by
appropriate Government) has been sold by the decree holder himself after a period of about 10 months i.e., on 29.10.2007 for consideration of Rs.2,50,000/- i.e., for an extent of 37 guntas.
39
c) Undisputedly, the decree holder had undervalued the property in question while selling it on 29.10.2007 and as such jurisdictional Special Deputy Commissioner had demanded difference of stamp duty which has since been paid by the Decree holder.
d) Though decree holder contended before the Executing Court that land in question was not a converted land, it belies his own statement inasmuch as, in the very execution petition itself decree holder has unequivocally admitted that land in question purchased by him in the auction is alienated land i.e., converted land and accordingly he has described it in the schedule.
e) Land in question is situated within the municipal limits of Hiremagalur Hobli, Head Quarters which is very nearby to 40 Chikmagalur town and it is at a distance of about 4 kms approximately.
24. Bringing out these facts and alleging that on account of land in question having been sold for a low price judgment debtor filed an application under Order 21 Rule 90 of CPC seeking for setting aside the sale. However, Executing Court while adjudicating the said application has not even made an attempt to find out as to whether there is any truth in what has been stated by the judgment debtor and it has not even examined as to whether Sale Proclamation issued is in accordance with order 21 Rule 66 and whether sale has to be set aside on account of alleged irregularity. The Executing Court has failed to find out as to whether the valuation furnished by judgment debtor as per memo dated 04.06.2005 had been indicated in the sale proclamation 41 or not and on account of not indicating the sale price it had resulted in substantial injury to Judgment debtor.
25. That apart one another curious fact which cannot go unnoticed is: decree holder having sought for permission to participate in the bid was the only bidder who participated in the Court auction conducted by the Executing Court through its bailiff. Undisputedly, when Court sale had been fixed by the Executing Court, no notice had been issued to the bidders who participated at the spot auction. This exercise would have also enabled the Executing Court to ascertain as to whether they could have matched the price offered by the decree holder and this exercise if undertaken would have fetched better price or fair market value of the property in question. Even this exercise was not undertaken by the executing court.
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26. Yet another factor which also requires to be noticed by this Court is that under Sub-Rule (2) of Rule 54 Order 21 when an immovable property is brought for sale, sale proclamation is required to be published in a conspicuous part of the municipal corporation office. Sub-Rule (2) of Rule 54 of order 21 reads as under:
"54. Attachment of immovable property:--
(1) Where the property is
xxxxxxxxxxxxxxxxxx transfer or
charge.
(2) The order shall be proclaimed at some place on or adjacent to such property by beat of drum or other customary mode, and a copy of the order shall be affixed on a conspicuous part of the property and then upon a conspicuous part of the Court-
house, and also, where the property is land paying revenue to the Government, in the office of the Collector of the district in which the land is situate [and, where the property is land situate in a village, also in the office of the Gram Panchayat, if any, 43 having jurisdiction over that village]."
27. In the instant case the endorsement made in the sale proclamation by the Court bailiff would indicate that sale proclamation was published by tomtom on 16.07.2005 and a copy was affixed on the Court notice board and there is no mention with regard to affixture of copy of sale proclamation on the notice board of Grama Panchayat. Places of affixture prescribed under this sub-rule are not alternate places and they are in addition to each other. In fact Coordinate Bench of this court has examined this aspect and held that violation of order 21 Rule 54 (2) vitiates the sale. It has been held as under:
"13. Sri Vardachar drew my attention stating that the material on record did not show that any substantial injury was caused by such irregularity. One of the methods to find out whether substantial injury was caused or not is to see whether the knocking down of the property for a lesser price was 44 due to the irregularities that have occurred in the conduct of the proclamation of the sale and in the actual conduct of the sale. When the sale was held in the year 1977, it was bid for Rs.65,000/-. The property is situate in a most conspicuous part of Mysore City where the value of the properties has been enormously increasing every day. The property, instead of fetching more price, has fetched less price in 1978. The evidence of JDr. 1, JDr.2 and the estate agent would go to show that the property is worth 1 lakh and odd on the date of the sale. It may be just oral evidence. But, it cannot be forgotten that the property in question measures 180' x 60' feet with a building in front, an out-house and some coconut trees. If such a property fetches only Rs.50,000/- it only follows that substantial injury is caused to the owner JDr.No.2. The said substantial injury, as already stated above by me, is due to the material irregularities pointed out by me above. Therefore, the argument of Varadachar in this connection is rejected."
28. Undisputedly, in the instant case no such notice was published in the notice board of the Grama Panchayat. Decree holder alone participated in the Court bid. No notice was issued to bidders who are said to have participated at spot sale conducted. Though 45 valuation indicated in the memo filed on 04.06.2005 by Judgment debtor would reflect that valuation of the property was much more than Rs.25,00,000/-, said valuation as furnished by judgment debtor was not indicated in the sale proclamation and no reasons have been assigned as to why the valuation furnished by judgment debtor is to be discarded. When it is mandatory on the part of the Executing Court to indicate the value furnished by judgment debtor in column No.6 of Form No.29 vide Appendix - E, failure to furnish the said valuation would be pointer to the fact that decree holder was intending to knock off this property for a throw away price. Infact sale proclamation does not even contain the value of the property to be sold.
29. Yet another fact which also requires to be taken note of by this Court is the fact that Judgment 46 debtor along with the application filed under Order 21 Rule 90 of CPC had enclosed the certificate of valuation issued by the jurisdictional Sub Registrar indicating the market value of the property in question as well as adjacent properties that was prevailing as on date of sale proclamation and non-consideration of this aspect by the Executing Court has resulted in substantial injury caused to Judgment debtor on account of such material irregularity. Sale cannot be sustained.
30. Hence, for the reasons aforestated the order of Executing Court cannot be sustained and as such order dated 02.03.2006 passed by the Executing Court dismissing the application filed under Order 21 Rule 90 is hereby set aside and said application is hereby allowed.
47
31. Matter is remitted back to the Executing Court for conducting fresh sale in accordance with law and in the light of observations made hereinabove.
No order as to costs.
Sd/-
JUDGE SBN/DR