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(iii) Whether the executing court was correct in rejecting the application of petitioner to set aside the auction sale on the ground of illegality, fraud and collusion in publishing and conducting the sale?

2. This Revision is brought from the order passed by learned Sub Judge, Ottappalam on E.A. No.57 of 2009 in E.P. No.56 of 2002 in O.S. No.405 of 2001. Respondent No.1-decree holder instituted the suit for recovery of money due from respondent No.2. 25 cents and a marriage hall situated thereon belonging to respondent No.2 was placed under attachment before judgment on 16.11.2001. The court passed a decree in favour of respondent No.1 allowing him to recover the amount from respondent No.2. That decree was put into execution. Notice under Rule 22 of Order XXI of the Code was served on respondent No.2-judgment debtor but there was no response. Respondent No.1 waned to sell the attached property and produced draft proclamation of sale of the said 25 cents and marriage hall. Notice under Rule 66(2) of Order XXI was issued to respondent No.2. Allegedly on behalf of respondent No.2, that notice was served on one Dr.P.G. Menon (later he informed the executing court that he was not authorised to receive the notice on behalf of respondent No.2). The proclamation of sale was settled fixing the upset price at Rs.5 lakhs (subject to the liability to the Kerala Financial Corporation - for short, "the KFC" to the tune of Rs.80 lakhs). Respondent No.3 purchased the property for Rs.5.50 lakhs (subject to the liability to the KFC) in the court auction held on 04.03.2008. Executing court confirmed the sale in favour of respondent No.3 on 06.08.2008 and issued sale certificate on 30.12.2008. Petitioner, a Private Limited Company claimed to have purchased 44 cents including the 25 cents and marriage hall (sold in court auction) as per sale deed No.2067 of 2002 dated 10.06.2002 executed by respondent No.2 through his Power of Attorney Holder, Dr. P.G. Menon. According to the petitioner, it got possession of the said property on execution of the said sale deed. It was agreed between petitioner and respondent No.2 that the latter would discharge liability to the KFC or other financial institutions due as on the date of sale. While so, the KFC initiated steps against petitioner for recovery of amount and two Directors of petitioner volunteered to clear major portion of that liability. On 15.01.2009 petitioner learnt that in execution of the decree in O.S. No.405 of 2001, 25 cents and marriage hall (which formed part of the 44 cents covered by sale deed No.2067 of 2002) was sold in court auction and purchased by respondent No.3 who is the son of Dr.P.G. Menon. Petitioner filed E.A. No.57 of 2009 to set aside the sale on following grounds:

3. Respondent No.3 resisted the application contending that it is bared by limitation as the application is filed beyond 60 days of the date of sale prescribed under Article 127 of the Act; that petitioner has no locus standi to file the application, signatory to the application (Managing Director of the Company) has no right to present the application or represent petitioner- Company, its Board of Directors has not resolved to file any such application and that sale deed dated 10.06.2002 relied on by petitioner is invalid and void as it is executed after the property was attached before judgment and cannot prevail over the court sale. It is incorrect to say that property is worth more than Rs.two crores. Even as per the sale deed relied on by petitioner value of the 44 cents (including property sold in auction) is only Rs.19 lakhs and that property was subject to a mortgage in favour of the KFC for Rs.80 lakhs, there were also several other creditors who had initiated action against respondent No.2 and the said property. Respondent No.3 purchased the property in court auction subject to all those claims and hence the sale price of Rs.5.50 lakhs is reasonable. Respondent No.3 denied the allegation of illegality, fraud and collusion in publishing and conducting the sale.

4. In the Executing court Exts.A1 and A2 were marked for petitioner. Exhibit A1 is the Certificate of Incorporation of petitioner-Company while Ext.A2 is a letter dated 30.03.2007. Executing court held that there is no evidence of any agreement for sale preceding execution of the sale deed as argued on behalf of petitioner. On the other hand property was attached before judgment on 16.11.2001 but even the sale deed relied on by petitioner is executed only on 10.06.2002, pendente lite after attachment and is hit by Sec.64 of the Code. Exhibit A1 shows that petitioner - company came into existence only on 13.04.2002. Exhibit A2, letter dated 30.03.2007 shows that petitioner was aware of attachment of the property even before 2009. Executing Court held that grounds urged by petitioner to set aside the sale squarely fell under Order XXI Rule 90 of the Code and hence the application (E.A. No.57 of 2009) filed beyond 60 days from the date of sale prescribed under Article 127 of the Act is time barred. It is also found that no evidence is produced to show that petitioner was in possession of the auctioned property at the relevant time. According to the executing court property could not have been sold piece meal since its extent is only 25 cents and the building covered major portion of that property. Hence sale of a portion of the property would have affected convenient enjoyment of rest of the property. Executing court also observed that though property was sold for Rs.5.50 lakhs the sale was subject to liability to the KFC to the tune of Rs.80 lakhs. In the circumstances contention that property was sold for a paltry amount was not accepted. E.A.No.57 of 2009 was dismissed. That order is under challenge in this revision. Learned counsel for petitioner contended that though transfer in favour of petitioner was pendent lite and subsequent to the attachment, petitioner is a 'representative' of respondent No.2 entitled to challenge the court auction sale in the same way respondent No.2 could challenge it. According to the learned counsel non-compliance with Rule 64 of Order XXI of the Code in settling the proclamation of sale affected jurisdiction of the executing court to sell the property and hence sale effected without complying with the said provision is a nullity which could be urged by respondent No.2 and/or as his 'representative' under Sec.47 of the Code. The period of limitation for an application under Sec.47 of the Code is three years (from the date of sale) as per Article 137 of the Act. E.A. No.57 of 2009 has been preferred within the said period. Hence the finding of executing court that E.A. No.57 of 2009 is barred by limitation is not correct. So far as allegation of fraud is concerned it is contended by learned counsel that facts and circumstances of the case indicated that there was fraud and collusion between respondent Nos.1, 3 and Dr.P.G. Menon. Learned counsel contends that though all the relevant documents could not be produced in the executing court those documents are appended to the revision petition and may be received in evidence. Those documents would show the fraud played by Dr.P.G.Menon in obtaining property in the name of petitioner and later getting the property sold in the name of his son for a paltry amount. Learned counsel contended that fraud vitiated even the solemn proceedings of the court. In response it is contended by learned counsel for respondent No.3 that the alleged sale in favour of petitioner is hit by Sec.64 of the Code, it is invalid as against all claims arising under the attachment and hence petitioner has no locus standi to challenge the court sale. It is contended that at any rate on the grounds pleaded it is Rule 90 of Order XXI of the Code that applied and the application ought to have been preferred within 60 days of the sale as required by Article 127 of the Act. It is incorrect to say that there is no compliance with Rule 64 of Order XXI of the Code. Learned counsel has referred me to the order of executing court to buttress his contention that the sale though for Rs.5.50 lakhs was subject to the liability to the KFC to the tune of Rs.80 lakhs and at a time when the property was subject to several attachments at the hands of other creditors. It is contended by learned counsel that as observed by the executing court in the order under challenge property could not have been sold piece meal as severance would have affected enjoyment of rest of the property.

28. So far as allegation of fraud is concerned case of petitioner is that property which is worth more than Rs.two crores is sold for a paltry sum of Rs.5.50 lakhs. That according to the learned counsel is sufficient to indicate the fraud committed by respondent Nos.1 and 3 in collusion with Dr.P.G.Menon, father of respondent No.3. Certainly argument would sound attractive. For, 25 cents and a marriage hall is sold for Rs.5.50 lakhs. But in considering that contention it is necessary to refer to the factual situation. As seen from a copy of sale certificate issued by the executing court and produced by respondent No.3, at the time the property was sold it was subject to a mortgage in favour of the KFC for Rs.80 lakhs. The encumbrance certificate shows liability to the KFC. Executing court fixed the upset price as Rs.5 lakhs and the property was sold for Rs.5.50 lakhs subject to the liability to the KFC. It is revealed from assignment deed No.2067 of 2002 dated 10.6.2002 that petitioner purchased 44 cents (including the 25 cents and marriage hall sold in auction) for a total consideration of Rs.19 lakhs whereas the court sale concerned 25 cents and the marriage hall situated thereon. Petitioner cannot in view of Section 92 of the Indian Evidence Act contend that sale consideration stated in the assignment deed No.2067 of 2002 is not correct. Learned counsel for petitioner referred me to the agreement for sale in favour of 15 persons executed by respondent No.2 concerning the 44 cents and marriage hall therein. There, sale consideration stated is Rs.1.20 crores - made up by Rs.70 lakhs for the land and Rs.50 lakhs for the building, electrical fittings and utensils. I must bear in mind that the said consideration was for the entire 44 cents with the marriage hall, electrical fittings and utensils but the court sale for Rs.5.50 lakhs is of the 25 cents and marriage hall subject to liability to the KFC to the tune of Rs.80 lakhs which brought the value of the property as assessed by the court to Rs.85.50 lakhs. In that situation I am unable to accept the contention that sale of property is for a paltry amount so that this Court has to draw an inference of fraud and collusion.