Allahabad High Court
Vidya Bhan Prakash vs The Second Additional District Judge, ... on 28 January, 1988
Equivalent citations: AIR1988ALL204, AIR 1988 ALLAHABAD 204, (1988) ALL WC 465 (1988) 1 CURCC 1235, (1988) 1 CURCC 1235
ORDER R.R. Misra, J.
1. As a consequence of filing of Original Suit No. 452 of 1967, Smt. Indra Rani (respondent No. 3), hereinafter referred to as the decree-holder, obtained a moneydecree against Sri Nepal Singh, hereinafter referred to as the judgment-debtor. Vide Execution Case No. 47 of 1971 she put the said decree in execution by attachment and sale of a house situate in the town of Goverdhan in Mohalla Danghat in the district of Mathura. The first auction was to be held on 6th May 1972. Before the same could be held, the judgment-debtor filed an application dated 4th May 1972 stating therein that he is prepared to pay the entire decretal amount within a period of two months and in case he failed to do so, the attached property may be sold. The judgment-debtor could not pay the decretal amount within the aforesaid time and, therefore, he moved another application dated 5th March 1973 along with an undertaking that in case he fails to pay the amount within the time set out by the court, the judgment-debtor waives his right of having a fresh proclamation. The said application was also granted by the execution court but the judgment-debtor again failed to pay the decretal amount within the prescribed time. Consequently the sale took place on 20th December 1976 in favour of Sri Vidya Brian Prakash, hereinafter referred to as the petitioner.
2. The property covered an area of 35' X 20' and was sold for a sum of Rs. 15,000/- at the said auction sale. Admittedly the said amount of Rs. 15,000/- was deposited by the petitioner in time. A copy of the Fard Nilam has been filed by the petitioner as Annexure 1 to the writ petition and a copy of the objection dated 17th January 1977 filed by the judgment-debtor under Order XXI Rule 90 of the Code of Civil Procedure to set aside the said auction sale has been filed as Annexure 2 to the writ petition. The parties led oral evidence in regard to the objection. The main ground set out in the aforesaid objection dated 17th January 1977 was that in fact, no auction had taken place on 20th December 1976 as was stated to have been done and that the bid was accepted for inadequate price. On a consideration of the rival submissions of the parties and on perusal of the oral evidence led in that regard by the parties, the execution court vide its order dated 14th September 1979 rejected the objection of the judgment-debtor filed under Order XXI Rule 90 of the Code of Civil Procedure. The execution court held that since the judgment-debtor had himself waived his rights regarding issue of a fresh proclamation, he cannot raise any objection in regard to the same. The court also held that the theory set up by the judgment-debtor that no auction had taken place was incorrect and that the said objection is designed to delay the realisation of the decretal amount on one ground or the other and that in the past the judgment-debtor had succeeded in getting the auction postponed on one ground or the other. The court held that in fact the auction had taken place in accordance with law and that there has been neither any material irregularity nor any fraud in publishing or conducting the sale nor there has been any substantial injury by reason of such irregularity or fraud. Aggrieved against the said order passed by the execution court, the judgment-debtor filed Misc. Civil Appeal No. 122 of 1979 which was ultimately allowed by the Second Additional District Judge, Mathura vide his judgment dated 13th May, 1981. The learned Additional District Judge did not agree with the contentions raised on behalf of the judgment-debtor that no auction sale was made on the spot and the people-present to participate in the bids were misinformed. Although the learned Additional District Judge omitted to take into account the aforesaid earlier undertaking of the judgment-debt or as mentioned by the trial court in its order yet on a consideration of the record and after hearing learned counsel for the parties, he recorded a finding that there has not been any irregularity or fraud in publishing or conducting the sale as contemplated by Order XXI Rule 90 of the Code of Civil Procedure. Moreover, according to the said lower appellate court, the judgment-debtor had not raised any objection before the official appointed for conducting the official sale. Alternatively it also held that mere irregularity or fraud in publishing or conducting the sale wilnot justify setting aside of the sale unless the court feels satisfied that the judgment-debtor had sustained substantial injury. Ultimately the lower appellate court also recorded a finding of fact that on the facts of this case no substantial injury due to the irregularity or fraud in conducting the sale has taken place.
After recording the aforesaid finding of fact the lower appellate court has curiously enough proceeded to consider the question of insufficiency of price and on the basis of the Fard Nilam, a copy of which has been filed as Annexure 1 to the writ petition, and on the ground that the estimated price of the attached house on 6th May 1971 as shown in the affidavit of the decree-holder was at Rs. 6000/-the appellate court somehow came to the conclusion that the price of Rs. 15000/-fetched at the auction sale was inadequate. The lower appellate court, however, held that the aforesaid price fetched at the auction sale was because of the result of some insincere effort on the part of the Amin. The lower appellate court, therefore, came to the conclusion that the price fetched at the aforesaid auction was inadequate. It accordingly allowed the appeal and set aside the auction dated 20th December 1976 with directions to the execution court to take fresh steps towards the auction of the sale. In the operative part of its order, it further directed the Amin to be more sincere towards his job. Aggrieved against the aforesaid judgment dated 13th May 1981 passed by the Second Additional District Judge, Mathura, the auction purchaser has filed the present writ petition in this Court and has challenged the aforesaid order.
3. I have heard learned counsel for the parties at great length.
4. In his objections under Order XXI Rule 90 of the Code of Civil Procedure, the judgment-debtor had raised an objection stating that no auction sale was made on the spot and there was no publication by beat of drum or by proper placing of the proclamation. It was further urged that the price obtained in the auction sale was far below the actual value of the property. From a reading of the orders of the authorities below, it is quite clear that the plea of the judgment-debtor that no auction sale was made on the spot was negatived by both the courts below and it was held that there was no irregularity in the publication or in issuing the sale proclamation. As already stated above, it is noteworthy to find that on an occasion earlier to the sale itself the judgment-debtor had given an undertaking that he will have no objection and that he does waive his rights regarding issue of a fresh sale proclamation. A further finding of fact has been recorded by the lower appellate court that in fact no objections regarding the sale proclamation or any irregularity or fraud in publishing or conducting the sale was brought to the notice of the official at the time of the sale.
5. In the case of his Holiness Mahant Chathondosji Varu (died) His .Holiness Dioyadassan Rajendra Ramdasjee Varu v. The Board of Trustees Tirumalai, AIR 1965 Andh Pra 334 the effect of waiver of issue of a fresh publication of the sale proclamation was considered. It was held in paragraph 14 of the report that in order to obtain an adjournment of the sale, the judgment-debtor had consented to waive the issue of a fresh publication of the proclamation. The effect of waiver, in the opinion of the Andhra Pradesh High Court, was an implied waiver of an objection as to any of the defects apparent on the proclamation.
6. Similar is the view taken by a Division Bench of this court in the case of Ram Krishna Kapoor v. Purshottam Das Poddar, AIR 1981 All 21. In paragraphs, it has been stated thus : --
"In the instant case also the judgment-debtor had waived his right to a fresh roclamation. In other words he agreed that there should be no proclamation of sale at all for the adjourned date. Indeed, it was on this express understanding that the sale was postponed............
The non-publicising of the exact time of the two sales was just an irregularity which never went to the root of the matter."
7. To my mind, in view of the aforesaid waiver and the findings recorded by the courts be low, the objections of the judgment-debtor filed under Order XXI Rule 90 of the Code of Civil Procedure were rightly rejected.
8. Learned counsel for the petitioner has submitted that once the lower appellate court has recorded findings to the effect that there has been no material irregularity or fraud in conducting the sale and that there had been no substantial injury due to the said irregularity in the publication of sale, there was no jurisdiction left with the appellate court to examine the question regarding inadequacy of price. After hearing learned counsel for the parties, I find that there is considerable force in the aforesaid contention raised on behalf of the petitioner. In my opinion, the lower appellate court has not clearly understood the scope and contents of Order XXI Rule 90 of the Code of Civil Procedure, with the result that it fell in error and has passed a wholly wrong order setting aside the auction sale in question.
9. In the case of Ram Krishna Kapoor v. Purshottam Das Poddar (AIR 1981 All 21) (supra), the Allahabad High Court has also in this regard laid down the principles underlying Order XXI Rule 90 of the Code of Civil Procedure at page 23 in the following terms : --
"Before a sale can be set aside under Order 21 Rule 90 C.P.C. it is incumbent on the part of the judgment-debtor to prove that there was material irregularity or fraud in publishing or conducting the sale and that he had sustained substantial injury by reason of such irregularity or fraud. Mere irregularity or fraud in publishing or conducting the sale will not entitle the court to set it aside unless upon the facts proved the court is satisfied that the judgment-debtor has sustained substantial injury by reason of such irregularity or fraud. Therefore, what we have to see in this case is whether or not there has been material irregularity or fraud in publishing or conducting the two sales in this case and also whether or not the judgment-debtor --respondent has sustained substantial injury by reason of such irregularity or fraud."
10. In the case of Radhey Shyam v. Shyam Bihari Singh, AIR 1971 SC 2337, it has been held as follows :--
"Rule 90 of Order XXI of the Code, as amended by the Allahabad High Court, inter alia, provides that no sale shall be set aside on the ground of irregularity or even fraud unless upon the facts proved the Court is satisfied that the applicant has sustained injury by reason of such irregularity or fraud. 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 therefore, not sufficient. 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. A connection has thus to be established between the inadequacy of the price and the material, irregularity."
11. Further in case of Kayjay Industries (P) Ltd. v. Asnew Drums (P) Ltd., AIR 1974 SC 1331 it has been noticed as to what constitutes material irregularity in conducting the sale and further whether inadequacy of price is sufficient for setting aside sale. It has been held in the said case that mere inadequacy of price cannot demolish every Court sale. In paragraph 9, it has further been held as follows : --
"Mere, substantial injury without material irregularity is not enough even as material irregularity not linked directly to inadequacy of the price is insufficient."
In view of the above principles and on the findings arrived at in the instant case by the courts below, in my opinion the lower appellate court could not go into the question of inadequacy of the price of the property fetched at the time of sale and thereby set aside the sale itself.
12. Learned counsel for the respondents has vehemently pressed that on the facts of this case the finding recorded by the lower appellate court that the price fetched at the auction sale was inadequate was proper and the lower appellate court has rightly set aside the sale on account thereof. In my opinion the said contention is not sound. The estimated price of the attached house on 6th May 1971 as shown in the affidavit of the decree-holder was at Rs. 6000/-. In the Fard Nilam, a copy of which has been filed as Annexure I to the writ petition, the reserved price of the property had been shown at Rs. 10,000/-. From a perusal of Annexure 1 to the rejoinder-affidavit, it is also clear that the judgment-debtor had during the pendency of the execution proceedings and while getting the earlier auction sale postponed himself demolished certain constructions of the property in question. In this view of the matter also, in my opinion, when one takes an overall view of the picture the price as fetched at the relevant auction was not inadequate and the finding recorded by the first appellate court to the contrary is perverse and is based on conjectures.
13. Moreover, there is yet another reason why because of the findings recorded by the lower appellate court in paragraph 4 of its order, the lower appellate court could not legally enter into the question of adequacy of price, A Court sale is a forced sale and, notwithstanding the competative element of a public auction, the best price is not often forthcoming. The judge must make a certain margin for this factor. Besides this, if court sales are too frequently adjourned with a view to obtaining a still higher price it may prove a self-defeating exercise because public will lose faith in the actual sale taking place and such frequent postponement of sale may strain the credibility of the Court sale itself and may yield diminishing returns. This view of mine also find support from the decision of the Supreme Court in the case of Kayjay Industries (P) Ltd. v. Asnew Drums (P) Ltd. (AIR 1974 SC 1331) (supra). In paragraph 9 of the said case, the Supreme Court has observed as follows : --
"But it is not as if the Court should go on adjourning the sale till a good price is got, it being a notorious fact that court sales and market prices are distant neighbours. Otherwise, decree-holders can never get the property of the debtor sold. Nor is it right to judge the unfairness of the price by hindsight wisdom. May be, subsequent events, not within the ken of the executing court when holding the sale, may prove that had the sale been adjourned a better price could have been had. What is expected of the judge is not to be a prophet but a pragmatist and merely to make a realistic appraisal of the factors, and if satisfied that in the given circumstances, the bid is acceptable, conclude the sale .....No speaking order is called for and no meticulous post mortem is proper. If the Court has fairly even if silently, applied its mind to the relevant considerations before it while accepting the final bid, no probe in retrospect is permissible. Otherwise, a new threat to certainty of Court sales will be introduced."
14. There can be no doubt that an application under Order XXI Rule 90 of the Code of Civil Procedure to set aside the auction sale concerns the right of a person declared to be the purchaser. Such a right is a valuable right and that upon such confirmation the sale becomes absolute and the right of the ownership in the property so sold becomes vested in the auction purchaser. In the present case after taking into account the principles underlying Order XXI Rule 90 of the Code of Civil Procedure and after taking the view that the objections of the judgment-debtor under Order XXI Rule 90 had no merit the property so sold became vested in the auction purchaser who had deposited the entire sale amount of Rs. 15,000/- on the date of sale in the year 1976 and the said amount is still lying in court.
15. From a scrutiny of the order passed by the lower appellate court it appears that the lower appellate court was too much influenced by the fact that the Amin was not much sincere towards his job. However, I find that it is only an administrative matter and will not affect judicial proceedings and the rights of the parties.
16. Learned counsel for the respondents has, during the course of his agruments laid much stress upon the Fard Nilam and the finding recorded by the lower appellate court in that regard. I, however, find that there is nothing unnatural in the Fard Nilam regarding bids that have been noted by the Amin. It may be that out of the various persons present at the time of bidding for the purchase of the property in question there may ultimately be a competition between the decree-holder and the auction purchaser. But that by itself is not sufficient to hold that the said auction was suspicious in nature. Factually, however, I find that in pursuance of the aforesaid appellate order and thereafter in view of the stay order passed by this Court, no auction sale has taken place. Learned counsel for the respondents submits that the decree-holder has in fact been paid the entire decretal amount on 26th November, 1982. In my opinion, the mere fact that the decree-holder has been paid by the judgment-debtor after about 6 years of the auction sale in question is of no relevance in so far as the rights of the auction purchaser at the said sale are concerned
17. Sri S.R. Misra, Advocate appearing for the judgment-debtor, has during the course of his arguments relied upon a decision of the Andhra Praidesh High Court in the case of Satyanarayana Soni v. State of Andhra Pradesh (1987) 2 Cur CC 118. It has been held in this case that unless there is nexus between the inadequacy of price fetched and the, irregularity or fraud in conducting the sale, the sale cannot be set aside. It has further been held that, "Therefore, if a party, who has an interest in the property sold in execution of the decree is affected by suchsale, he has to establish on facts proved to the satisfaction of the executing court that by reason of irregularity or fraud he sustained substantial injury and that injury has been resulted on grounds of material irregularity or fraud either in publishing the sale proclamation or conducting the sale."
During the course of its judgment, the Andhra Pradesh High Court has relied upon the aforesaid earlier decision of its own Court in Ramdasjee's case AIR 1965 Andh Pra 334. It has held that any material irregularities per se will not invalidate a sale. Such irregularities will have the effect of a voiding the sale only if the connection is established between them and the inadequacy of price realised at the sale". It was further held that inadequacy of price proprio vigpre would not result in avoiding the sales. There must be correlation between the damage suffered by the judgment-debtor and the material irregularity complained of if the inadequacy of the price is the result of factors other than the material irregularities complained of the proviso to Order 21 Rule 90(1) cannot come into operation." As stated earlier the same is also the view taken by the Supreme Court in the case of Radhey Shyam (AIR 1971 SC 2337) (supra).
18. On the findings recorded in the present case by the courts below, the decision cited on behalf of the respondents in the case of Satyanarayana Soni (1987-2 Cur CC 118) (Andh Pra) (supra), in my opinion does support the case of the petitioner. In our case, the execution court had dismissed the objections of the judgment-debtor and the lower appellate court had recorded a finding that no substantial injury had occurred to the judgment-debtor by reason of irregularity or fraud contemplated by the provisions of Sub-clause (2) of Order XXI Rule 90 of the Code of Civil Procedure.
19. Learned counsel for the respondents has also cited two cases of the Supreme Court The fast is Gajadhar Prasad v. Babu Bhakta Ratan, AIR 1973 SC 2593. This case rested upon some objection taken in the sale proclamation. In our case any objection with regard to the sale proclamation was waived by the judgment-debtor and was not taken in his objection as stated above. In this view of the matter, this authority does not support the case of the judgment-debtor at all
20. The other decision of the Supreme Court in the case of Shalimar Cinema v. Bhasin Film Corporation, AIR 1987 SC 2081 is also distinguishable on the facts of that case inasmuch as the judgment-debtor had raised a specific question in that case regarding announcement on the spot and that the auction purchaser did not examine the auctioneer in support of the announcement on the spot Therefore, the inference drawn was that no announcement as alleged was made. No such situation exists in the present case.
21. In the result, the writ petition succeeds and is allowed with costs. The impugned order passed by the lower appellate court in so far as findings have been recorded that the price fetched at the auction was inadequate and that the said auction is set aside deserve to be quashed and are hereby quashed. The order passed by the execution court as well as the findings recorded by the lower appellate court in paragraph 4 of its order are hereby confirmed. The objection dated 17th January 1977 filed by the judgment-debtor under Order XXI, Rule 90 of the Code of Civil Procedure is rejected and the sale in question stands confirmed