Kamla Prasad v. State Bank Of India — 1987 DIGILAW 186 (PAT)

Judgment P. S. Mishra, J. 1. Heard learned Counsel for the petitioners and learned counsel for the auction purchaser opposite-party. There is no appearance at the hearing of this application on behalf of the decree-holder opposite-party. 2. The learned Fourth Additional Subordinate Judge, Motihari has rejected the application filed on behalf of the judgment-debtor petitioners for setting aside sale of a shop belonging to them and run in the name and style of M/s. Arun Vastralaya, on the ground that the application was filed beyond the period of 30 days as prescribed under Article 127 of the Limitation Act, 1963 . 3. The decree-holder opposite-party (the State Bank of India) had advanced a loan to the petitioners, which loan the petitioners failed to repay. The Bank instituted Money Suit No.50 of 1978 which was eventually heard and decided against the petitioners by the learned Subordinate Judge, Motihari. When the said decree was put in execution, the petitioners appeared and prayed for instalments. The learned Subordinate Judge directed for the satisfaction of the decree by payment of the decretal amount in instalments. The petitioners thereafter paid some instalments but failed in paying off all the instalments. This occasioned attachment of the shop of the petitioners and sale thereof in the sale conducted on 10-10-1983. The auction purchaser (Opposite-party No.2)purchased the shop for a sum of Rs.3,000 only. Before, however, the sale was confirmed on 22-12-1983, the petitioners applied for setting aside the sale on grounds, inter alia, that the property sold was grossly under-valued and that no notice of the said sale was ever served upon any one of them. Holding, however, that the application on behalf of the petitioners was one under order XXI, Rule 90 of the Code of Civil Procedure and it had to be filed within thirty days of the sale and finding that the application was filed beyond the period of thirty days, the learned Subordinate Judge dismissed the prayer to set aside the sale and rejected the application. 4. The petitioners thereafter moved this Court invoking its revisional jurisdiction. 4. The petitioners thereafter moved this Court invoking its revisional jurisdiction. Admitting the application to hearing on 28-3-1984, this Court directed that further proceedings in the execution case would remain stayed subject to the conditions that the petitioners would pay to the credit of the decree-holder opposite-party No.1 a sum of Rs.4,000 within two months from that date and would further pay the remains claims of the decree-holder within two months thereafter. While the petitioners paid Rs.4,000, as directed, they applied by making a fresh application for extension of time for depositing the remaining amount of arrears on the ground that they were prevented in depositing the money as directed by this Court, because petitioner No.2 who was a chronic patient of leprosy, had fallen seriously ill. This Court extended the time for depositing the remainder of the decretal money. It has been stated in the supplementary affidavit filed on behalf of the petitioners that the entire decretal money has been deposited by the petitioners in the execution case. 5. A judgment-debtor defaulting in satisfying the decree makes himself liable to attach any property belonging to the judgment-debtor and issue proclamation of the intended sale of the attached property for the satisfaction of the decree. The decision to sell any property attached by the court or such portion thereof as may be necessary to satisfy the decree as provided under order XXI, Rule 64 of the Code of Civil Procedure has to be taken by the court concerned and has to be conducted by an officer of the court or by such other person as the court may appoint in this behalf as prescribed under Order XXI, rule 65 of the Code. Such sale has to be made by public auction and a proclamation to the said effect has to be issued as provided under Order XXI, rule 66 of the Code. Such sale has to be made by public auction and a proclamation to the said effect has to be issued as provided under Order XXI, rule 66 of the Code. Clause (2) of Rule 66 of Order XXI of the Code requires that the proclamation has to be drawn after noting to the decree holder and the judgment-debtor stating the time and place of sale and specifying as fairly and accurately as possible, the property to be sold, 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, any iucumbrance to which the property is liable, the amount for the recovery of which the sale is ordered, and every other thing which the court considers material for a purchaser to know in order to juuge the nature and value of the property. It is only in the case of an order under Rule 54 of Order XXI, with which this case is not concerned, that without notice to the judgment-debtor the court or the officer or such other person appointed in this behalf by the court can proceed to issue proclamation. On the ground of material irregularity or fraud in publishing and conducting sale, any person whose interests are affected by the sale, may apply to the court to set aside the sale by making an application in terms of Rule 90 of Order XXI of the Code. Such application has to be made within thirty days of the sale at provided under Article 127 of the Limitation Act. 6. In the instant case, however, the petitioners have pleaded that they had no notice of any sale proclamation in respect of the shop issued by the court and when they came to know about it on 20-12-1983, they applied for setting aside the sale. 7. The learned Subordinate Judge, however, was not impressed by this plea of the petitioners and has found that it is not a case of ignorance of the petitioners of the execution proceeding and the plea that petitioner No.2 was ill is not supported by any medical certificate or any cash-memo in proof of purchase of medicine. 8. 7. The learned Subordinate Judge, however, was not impressed by this plea of the petitioners and has found that it is not a case of ignorance of the petitioners of the execution proceeding and the plea that petitioner No.2 was ill is not supported by any medical certificate or any cash-memo in proof of purchase of medicine. 8. A perusal of the order of the learned Subordinate Judge makes it clear that he has not drawn any distinction between the knowledge of the execution proceeding and the knowledge of the sale proclamation. The law has given a mandate to give notice to the decree-holder and the judgment-debtor of the sale proclamation informing them about the time and place of the intended sale and the property sought to be sold with the decretal claim disclosed therewith. When a challenge to the sale on the plea of want of notice is raised, the court cannot assume knowledge of the sale proclamation only on the basis that the person challenging the sale (judgment-debtor) had the knowledge of the execution proceeding. This approach of the learned Subordinate Judge has resulted in gross miscarriage of justice and failure to exercise jurisdiction to consider whether the sale was vitiated on account of fraud and other material irregularities or not. 9. Prescription in Article 127 of the Limitation Act of a period of limitation of 30 days from the date of sale, if not understood in the context of such proceedings in which notice of the sale proclamation is not served upon the judgment-debtor, to run from the date of knowledge will result in discretous consequences. Courts have been faced with the cases where the irregularities affecting the sale had been caused by the fraud of the decree-holder or other party to the sale and judgment-debtors had to apply for computation of the period until they learn about the sale. 10. A Full Bench of the Calcutta High Court in Mohendra Narain V/s. Gopal, ILR (1890) 17 Cal 769, has taken the view that in such a case, whether the sale has been confirmed or not, the time for making the application is to be computed from the date when the fraud first became known to the judgment-debtor. 10. A Full Bench of the Calcutta High Court in Mohendra Narain V/s. Gopal, ILR (1890) 17 Cal 769, has taken the view that in such a case, whether the sale has been confirmed or not, the time for making the application is to be computed from the date when the fraud first became known to the judgment-debtor. A similar view has been taken in Ram Pershad Lal and others V/s. Chamari Singh and others, AIR 1922 Pat 422, in which it has been observed : - "i do not think that this contention can be supported. I have been referred to a decision by Broadway, J. , of the Lahore High Court bashiram V/s. Hasan Mahomed (1) but am not able to follow the reasoning given therein. Where the sale or an irregularity affecting the sale has by the fraud of the decree-holder or other parties to the sale been kept concealed from the judgment-debtor, he is entitled to apply under Rule 90 whether the sale has been confirmed or not, and the time for making the application is to be computed from the date when the fraud first became known to him, Mohendra narain V/s. Gopal (2) Golam Ahmad V/s. Judishthur (3 ). There is nothing in Order XXI Rule 90 which limits the filing of an application to the period prior to confirmation of the sale. " 11. The learned Subordinate Judge has apparently not been ignorant of this position in law, as he has in his judgment taken notice that a plea that petitioner No.2 was ill had been taken for computing the period of limitation from the date of knowledge. He has, however, rejected this plea on the ground that it was not supported by any medical certificate or any proor of the ailment. The view of the learned subordinate Judge that the judgment-debtor or any other person making application under Order XXI, Rule 90 of the Code would produce proof by way of evidence in support of his plea for computing the period of limitation from the date of knowledge is not understandable. The view of the learned subordinate Judge that the judgment-debtor or any other person making application under Order XXI, Rule 90 of the Code would produce proof by way of evidence in support of his plea for computing the period of limitation from the date of knowledge is not understandable. If a fact alleged requires proof, even in a summary enquiry, like one envisaged by Order XXI, Rule 90 of the Code and allied provisions thereof, a party has to be afforded opportunity to lead evidence, without affording such opportunity to say that no proof has been given for the plea advanced, shall be a serious error prejudicing the party concerned. Such error shall also be in my view, an error are to irregular exercise of jurisdiction. 12. Learned Counsel for the purchaser-opposite-party has contended that he was called by the proclamation, like any other person, to participate in the auction and his interest in the sale now is vital, for, attracted by the call for the sale he came believing that there would be no impediment to his right as a purchaser in the auction. He has relied on an observation in Sardar govindrao Mahadik and another V/s. Devi Sahai and others, 1982 BBCJ 147, in which a Bench of the Supreme Court has quoted a passage from the judgment in Janak Raj V/s. Gurdial Singh, AIR 1967 SC 608 , which is as extracted : "the policy of the Legislature seems to be that unless a stranger auction-purchaser is protected against the vicissitudes of the fortunes of the suit, sales in execution would not attract customers and it would be to the detriment of the interest of the borrower and the creditor alike if sales were allowed to be impugned merely because the decree was ultimately set aside or modified. " This observation is, no doubt, based on the principle that any act done in exercise of a statutory function must fairly see the interests of all concerned and a stranger auction-purchaser shall have his interest to protect, which the court cannot ignore. In Govindrao Mahadiks case (Supra) itself the Supreme Court has pointed out that the said principle has to be harmonised with other principles of equity. In Govindrao Mahadiks case (Supra) itself the Supreme Court has pointed out that the said principle has to be harmonised with other principles of equity. It cannot be denied that a judgment-debtor shall have equity in his favour in case the property put to sale is grossly undervalued or no opportunity is given to him to save his property by satisfying the decree. The Supreme court has clearly indicated that the Court always adopt a logical course which is to avoid that which is inequitous and adopt that which promotes equity. 13 Having considered the matter before me, have no hesitation in concluding that the learned Subordinate Judge has committed error of law resulting in failure to exercise jurisdiction and material irregularity in exercise of jurisdiction and if allowed to stand, his order shall be most inequitable and run counter to the principle of justice and fair play. 14. Learned Counsel for the purchaser-opposite-party has contended in the end that by setting aside the order of the learned Subordinate Judge, the case should be remitted to his court for re-hearing in accordance with law on the question of limitation as also on the question, whether there was any fraud or material irregularity in the sale proclamation or not. Had there been no satisfaction of the decree and the decree-holder would still be complaining that its decree was yet to be satisfied. I would have preferred the course suggested by learned counsel for the purchaser-opposite-party. Purchasers interest is in no way prejudiced as his money is fully protected and he shall be, in law, entitled to withdraw the same. Since the decree has already been satisfied, as stated in the affidavit, and there is no rejoinder to it, in my view, no re-hearing on any of the point in the court of the learned Subordinate Judge is necessary, but it shall be open for the decree-holder to appear before the learned Subordinate Judge and show that the decree has not been yet satisfied and for the judgment-debtor to show that the decree has been fully satisfied. In case the learned Subordinate Judge is of the view that the decree has not yet been fully satisfied, he may proceed to examine the validity of the plea raised by the petitioners. In case the learned Subordinate Judge is of the view that the decree has not yet been fully satisfied, he may proceed to examine the validity of the plea raised by the petitioners. If, however, he comes to the conclusion that the decree has already been satisfied, he shall not be required to proceed any further. It is, however, hoped that the decree-holder, which is one of the premier bankers of the country, shall not behave harshly only for realisation of any interest that might not have been paid by the judgment-debtor and shall be satisfied if the judgment-debtor shall pay the interest up-to-date. 15. In the result, the application is allowed, the order of the learned subordinate Judge, Motihari in Misc. Case No.22/7 of 1983/84, dated 1-2-1984 is set aside. There shall, however, be no order as to costs. Application allowed.