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(3) The property has been purchased by the 9th respondent for a grossly inadequate price clearly establishes fraud. While the KFC purchased the property on 15-3-76 for Rupees 3,00,100/- the 9th respondent has purchased it for a sum of Rs. 1,30,000/- more than 5 years afterwards on 28-10-81 and that too apparently without any liability to discharge the prior encumbrance in favour of the KFC which was suppressed from the Court.

58. Even in the application to set aside the sale (E. A. 610/81) the KFC had expressed its apprehension that the 9th respondent has bid at the sale in the background of these false particulars contained in the sale proclamation with a view to wrest possession of the property from the KFC. The apprehension so expressed by the KFC was not imaginary. Soon after E. A. 610/81 was dismissed by the Court below as per the impugned order dated 28-1-1987, the Court below confirmed the sale and issued the sale certificates to the 9th respondent. Thereafter the 9th respondent filed E. A. 237/87 on 30-3-1987 before the Court below seeking delivery of the property purchased by him. Besides the original judgment debtors (respondents 2 to 8) in E. A. 610/81, the KFC was impleaded for the first time as the additional 8th respondent in E. A. 237/87. The KFC was not evidently made a party in O. S. 142/ 69 or the execution proceedings therein as already noticed. The KFC was impleaded as 8th respondent in E. A. 237/87, alleging that substantial improvements which existed in the property at the time of the sale on 28-10-1981 have been demolished and removed by the KFC. The averments made in the application for delivery (viz. E. A. 237/87) by the 9th respondent go against the recitals in the sale proclamation in E. P. 263/ 79 which had been filed in Court in October, 1980 wherein it is stated that the improvements like buildings and other structures have already been demolished by the defendants alleged to be even then in possession of the property.

59. The Bank significantly has not filed any counter to the application of the KFC to set aside the sale, even though it is primarily responsible to answer the fraud and irregularity alleged by the KFC in the matter of publishing and conducting the sale. But the responsibility for the correctness of the particulars shown in the sale proclamation is now taken up by the original judgment debtors (respondents 2 to 8) and also by the 9th respondent auction purchaser. Both of them have contended that the KFC is bound by the sale inasmuch as it has purchased the equity of redemption in O. P. 87/69 during the pendency of the suit filed by the Bank as O. S. 142/69. However, there is no contention raised by them that the interests of the KFC are not affected by the sale sought to be set aside. Such a contention could not have been raised in the light of their stand that the KFC is bound by the decree. It is however specifically admitted by all these respondents that the KFC had taken actual possession of the property as Court auction purchaser in E, P. 3/73 in O. P. 87/ 69. It is further stated by respondents 2 to 8 in para 9 of their counter that the sale and delivery of the property in favour of the KFC are binding against the respondents and against the whole world. The 9th respondent in para 5 of his counter has even claimed to have inspected the property prior to the date of the sale and not found any indication of possession with the KFC. The Court below, as per its order dated 28-1-87, dismissed E. A. 610/81 only on the ground that no fraud or irregularity has been made out by the KFC. It was never contended before the Court below that the interests of the KFC are not affected by the sale. It was after the impugned order of the trial Court was passed, that the 9th respondent filed application for delivery as E. A. 237/89 on 30-3-1987 upon which delivery was ordered by the Court on 31-3-1987 and the 9th respondent auction purchaser obtained possession of the property by delivery through Court on 2-4-1987. When the matter came up before the Division Bench, it was contended on behalf of the auction purchaser for the first time that the sale sought to be set aside is not binding on the KFC and that the interests of the KFC are not therefore affected by that sale. In the same breath, it was further contended that the Court sale in favour of the KFC in OP 87/69 was affected by lis pendens on account of the proceeding in O. S. 142/69. The stand taken by the auction purchaser before the Division Bench is therefore self contradictory.

69. I shall presently see under the facts and circumstances disclosed whether the interests of the KFC are affected by the sale in favour of the 9th respondent in O.S. 142/69? The KFC was very much interested in the property since it had obtained the equity of redemption from the original mortgagor and also held its own mortgage right. The only defect in respect of that sale, was that the second mortgagee bank was not impleaded as a party in O.P. 87/69. That proceeding was taken under the State Financial Corporations Act wherein there was no provision to implead any one other than the original debtor. Nevertheless, the result of that defect, if at all it is a defect can only be that the bank as second mortgagee would still be free to redeem the prior mortgage in favour of the KFC even after the Court sale in O.P. 87/69. But instead of making an earnest attempt to redeem the first mortgage in favour of the KFC, what is now attempted is to wrest possession of the property from the KFC without redeeming the mortgage in its favpur. It is to succeed in this attempt that false particulars are given as stated above in the sale proclamation. Such false particulars are given only with intent to defeat and injure the interests of the KFC alone. In order to be entitled to file an application under Order 21, Rule 90, CPC, it is not at all even necessary that the applicant should have even a legal interest in the property sold in Court auction. Thus an attaching creditor of the original judgment debtor has been held to be entitled to apply for setting aside the sale under Order 21, Rule 90, CPC. (See AIR 1939 Madras 250 (FB) -- Ayyappa Naicker v. Kasiperumal Nayakar, AIR 1966 Madras 84 -- Ismail Rowthen v. Mynoon Bivi, AIR 1963 Madras 156 (FB) --Sailappan v. Subbiah and AIR 1932 Calcutta 47; Basanta Kumar v. Prosonna Kumar.) The attaching creditor is affected by the sale not because he has any interest in the property sold (attachment by itself creates no interest in the property attached), but because of the possibility of his getting a decree and the right to proceed against the property attached. It is the duty of the Court to see that the Court sale is conducted in all fairness to all parties concerned irrespective of whether they have any present subsisting interest in the property sold or whether they may acquire such interest only in future. The position of the KFC in the instant case is much stronger. At the time of the Court sale in O.S. 142/69, which took place on 28-10-1981, the KFC had already come to purchase the same property in Court auction in O.P. 87/1969 and come into possession of the property on 13-7-1977 by delivery through Court. The only defect in its title was that it was liable to be redeemed by the second mortgagee bank. The only right of the bank was to redeem the KFC under the circumstances but instead of doing that what the bank did was to proclaim the property as if it is in the actual possession of the original judgment debtors and was not subject to any prior mortgage at all. The Bank did so with a view to see that the auction purchaser who bids in auction in O.S. 142/69 can try to wrest possession of the property from the KFC without redeeming the earlier mortgage in its favour or paving the amount due to it. After the sale on 28-10-81 the KFC filed this application E.A. 610/81 to set aside the sale. The same has been dismissed as per the order challenged in this appeal on 28-1-87. Thereafter the auction purchaser/9th respondent filed E. A. 237/87 on 30-3-87 for delivery of the property. He got an ex parte order for delivery even against the KFC impleaded for the first time in that application for delivery on 31-3-87 and got possession pursuant to that order on 2-4-87. These are developments that took place after the impugned order was passed and the KFC could file this appeal against that order only on 6-4-87. But since the order passed by the Court below on E.A. 610/87 is challenged in this appeal, the application to set aside the sale is still pending before the Appellate Court and the Appellate Court under the circumstances is bound to take judicial notice of what transpired in the meanwhile. The appeal is only a continuation of the proceedings before the original Court. (See AIR 1976 SC 49, Rameshwar v. Jotram, paras 7 to 9), AIR 1975 SC 1409, P. Venkateswarlu v. Motor & General Traders and AIR 1941 FC 5, Lachmeshwar Prasad Shukul v. Keshwar Lal Chaudhuri. The Supreme Court has also held in Deshbandhu Gupta v. N. L. Anand and Rajendar Singh, (1994) l SCC 131 at page 150: (1993 AIR SCW 3458 at p. 3474), that developments that have transpired after the sale should also be taken note of in order to see whether the sale is vitiated by any material irregularity or fraud as contemplated in Order 21, Rule 90 CPC. The very manner in which the 9th respondent/auction purchaser managed to get possession of the property after the impugned order was passed by the Court below clearly demonstrates the fraud practised by him in connivance with the decree holder in the matter of publishing and conducting the sale.

70. The phrase used in Order 31, Rule 90, CPC is "any person whose interests are affected by the sale". But for the sale in question, the auction purchaser could not have obtained possession of the property from the KFC. The sale in question is the very foundation for his claim to get delivery of the property even from the KFC. Such being the case it is well nigh impossible to hold that the interests of the KFC are not affected by the sale. This question can also be considered from another angle as well. As already pointed out, the auction purchaser never challenged the position that the interests of the KFC are not affected by the sale in the counter filed by him. On the other hand he chose to contend that the KFC is bound by the decree in O.S. 142/69 in as much as it has purchased the property in question in execution of the decree in O.P. 87/69 while the lis in O.S. 142/69 was pending. The question whether the sate in favour of the KFC is affected by lis pendens is a question raised by the auction purchaser even before the Division Bench and that is one of the questions referred to the Full Bench at present. Arguments were advanced and several decisions were relied upon on behalf of the KFC to contend that sales in mortgage actions are not governed by the principle of lis pendens. If the KFC were not to challenge the sale under Order 21, Rule 90, CPC and the Court finds that the sale in favour of the KFC is hit by lis pendens, the KFC will be held to be bound by the sale and in such a situation its only remedy could be to have the sale set aside under Order 21, Rule 90, CPC. In fact the auction purchaser/9th respondent has obtained possession of the property from the KFC only on this basis. These circumstances are more than sufficient to lead one to the inescapable conclusion that the interests of the KFC are affected by sale.