R. L. MEHARWADE v. GARUDA CHIT AND TRADING COMPANY PRIVATE LIMITED, HUBLI
1996-06-13
M.F.SALDANHA
body1996
DigiLaw.ai
M. F. SALDANHA, J. ( 1 ) THE facts of this civil revision petition are illustrative of how, on a super technical plea litigation that is virtually two decades old will still have to be reopened. In the year 1978, the immovable property belonging to the judgment-debtor was attached by the original decree-holder and after a lapse of 3 years, on 14-8-1981 the auction sale was held in which the auction purchaser who is the present petitioner purchased the property. He paid the 25% price and in respect of the balance amount, the record indicates that he deposited the same around the end of October 1981 which was beyond the period of 15 days within which he was required to pay the balance price. Since certain valid reasons have been adduced by him, the court accepted the balance payment. On 14-9-1981, the present respondent 3 to this petition filed an application before the trial court under order 21, Rule 90, C. P. C. alleging that the sale was vitiated due to irregularity and fraud and that the sale should be set aside. The solitary ground pleaded was that the applicant who claimed to be the brother of the judgment-debtor stated that he has a share in the property and that consequently the sale was irregular to this extent and that further more, the decree-holder misrepresented to the court that the judgment-debtor was the absolute owner and that on these grounds the sale should be set aside. It is material to note that despite adequate opportunities afforded by the court, tha't the applicant persistently remained absent and therefore the application was dismissed. The court thereafter confirmed the sale. The applicant who is the present respondent 3 went in appeal and the appeal court remanded the matter for fresh hearing on la. No. Vii. In the second round of litigation which went on virtually up to the year 1988, the parties were heard and the learned trial judge upheld the two contentions, the first one being that the applicant had a share in the property that had been auctioned and secondly that the auction purchaser who is the present petitioner had not deposited the balance amount within the mandatory period of 15 days and that therefore the sale itself is liable to be set aside.
The auction purchaser carried the matter in appeal and the appeal court confirmed the view taken by the trial court with minor modifications. The appeal court set aside the finding with regard to fraud or irregularity but upheld the view that since the time period of 15 days had been transgressed, that the sale was liable to be set aside. The two courts placed reliance on the decision of the Supreme Court in Manilal Mohanlal Shah and others v Sardar Sayed Ahmed Sayed Mahmad and another. The view taken by the Supreme Court was that reading rules 84 and 85 of order 21 the court must uphold the contention that the initial payment in an auction sale must be made forthwith and the balance within 15 days and that this period cannot be extended. The court also took the view that if this time period is transgressed, that the sale is automatically set aside and that the only option left is to resell the property. It is against the appellate order that the present civil revision petition has been filed. ( 2 ) THE petitioner has contended that he is a bona fide purchaser, that he has acted in good faith and that he has deposited the money pursuant to a court auction. He has further contended that at no time was he aware of the fact that there was anything wrong with the sale proceedings. More importantly however, what is pointed out is that the attachment was levied in the year 1978 and therefore, over 3 years the respondent 3 did not come forward and raise any objection to the same. It is also pointed out that the respondent did not prosecute his application before the trial court in the first instance which was why the petitioner not only paid the money but his sale was confirmed and he contends that after this long period of 15 years if the sale were to be set aside, irreparable loss and damage would be caused to him. Serious mala fides have been alleged against the respondent 3 and it is contended that he has been set up by the judgment-debtor who has not raised any objections at any point of time and that therefore this court ought not to interfere. The learned Advocate who appears on behalf of respondent 3 has denied the allegations.
Serious mala fides have been alleged against the respondent 3 and it is contended that he has been set up by the judgment-debtor who has not raised any objections at any point of time and that therefore this court ought not to interfere. The learned Advocate who appears on behalf of respondent 3 has denied the allegations. He maintains that his client was unaware of the attachment and that he challenged the auction sale very shortly after coming to know about the same. He submits- that he has been prosecuting the litigation ever since and that he is in no way responsible for the long delay in the disposal of the ptoceedings. He therefore submits that he is in no way liable for any loss or prejudice that lias been caused to the present petitioner. ( 3 ) AS regards the position in law, the appeal court has come to the conclusion that there was neither any fraud nor irregularity and this finding has not been challenged by the respondent 3. I have no reason therefore to interfere with that finding. On the aspect of the time factor, the decision of the Supreme Court referred to by me supra does very clearly take the view that the time limit is mandatory and this view has been followed by this court in a few of the subsequent decisions. It is because of this position in law that the trial court and the appeal court held that the auction sale is liable to be set aside. That view to my mind cannot be interfered with but it will be equally necessary to ensure that the prejudice that has been caused to the present petitioner is sufficiently offset. ( 4 ) I need to record here that the respondent 3 contends that he is the brother of the judgment-debtor and that consequently he has a share in the property that was attached. Though a contention has been raised that he was unaware of the attachment, it is inconceivable that this could have been so and under these circumstances, it is more than clear to the court that the respondent 3 was acting totally and completely in collusion with the judgment-debtor.
Though a contention has been raised that he was unaware of the attachment, it is inconceivable that this could have been so and under these circumstances, it is more than clear to the court that the respondent 3 was acting totally and completely in collusion with the judgment-debtor. This is further clear because he has waited until the auction sale has taken place and has thereafter come forward and challenged it whereas the judgment-debtor himself has neither challenged the sale nor has he appeared at any time before any of the courts. This circumstance very clearly indicates mala fides on the part of the respondent 3. The manner in which he conducted the litigation before the lower courts leaves much to be desired because the learned trial judge has recorded that after filing the application, he persistently remained absent on several dates of hearing, that he did not produce any material before the court and that the application came to be dismissed. Apart from this, even when the trial court confirmed the auction sale of which he had knowledge, no application was made for purposes of ensuring that the sale was not confirmed. Had this been done, the present petitioner would have been out of the picture because the money deposited by him would have been returned and a fresh sale would have been held at that stage itself. The position that now emerges is that the present petitioner is gravely and seriously prejudiced for no fault of his and at the instance of respondent 3 after a long lapse of 15 years. The respondent 3 would therefore be liable for all losses that have occurred to the auction purchaser during the interim period because all this has been due to the action instituted by the respondent 3. To my mind, the contention adopted by him is a highly technical one and since he insists on proceeding on that basis, the respondent 3 shall be equally liable to compensate the auction purchaser for the entire set of losses under all heads that have occurred to him as a result of the action of respondent 3. ( 5 ) THE order passed by the trial court and the appeal court setting aside the sale is accordingly confirmed.
( 5 ) THE order passed by the trial court and the appeal court setting aside the sale is accordingly confirmed. It shall be open to the trial court to resell the property after hearing the parties and to the extent of the share of the original judgment-debtor only. The present petitioner shall have every right to participate in that auction insofar as he was the earlier auction purchaser and in the event of his being successful, the amount paid by him earlier shall be offset against the price. It shall however be necessary, before ordering the auction, for the learned trial judge to hear the parties and to quantify the amount of loss that has accrued to the present petitioner which amount the respondent 3 shall be liable to deposit in court prior to the holding of a fresh auction. This shall be condition precedent. ( 6 ) SUBJECT to these directions, the civil revision petition fail sand stands disposed of. No order as to costs. The learned trial judge shall endeavour to complete these procedures within the time limit of six months from today. --- *** --- .