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1996 DIGILAW 363 (KAR)

AGNES MIRANDA v. LOUIS D SOUZA

1996-07-08

M.F.SALDANHA

body1996
M. F. SALDANHA, J. ( 1 ) HEARD learned advocates. The petitioner before me was one of the beneficiaries in respect of a property situated at mangalore wherein a decree for partition of the property had been passed and in the course of the final decree proceedings, a commissioner was appointed for purposes of selling the property and realising the value thereof. The commissioner followed the usual procedures and held a sale on 31-3-1991. This sale had been preceded by a proclamation published on 18-3-1991 in one of the local language newspapers by the name of 'mungaru'. There were 6 bidders at the auction. Even though it was one plot, the commissioner sub-divided it into 4 plots. The bids in question aggregated to Rs. 4. 17 lakhs and the commissioner put up his report to the court for approval of the auction sale. At that stage the present petitioner raised certain objections, all of which are basically procedural in nature. Briefly stated, it was contended that the auction had not been properly publicised insofar as it ought to have been published in one of the four prominent local newspapers which would have come to the notice of more members of the public; that the auction had not been held at the spot itself but it was held at the commissioner's office; that the time period of 15 days between the proclamation and the actual sale was not observed insofar as only 13 days had elapsed and further more, that the proclamation had not been publicised at the court, municipal office etc. And lastly,as a result of this State of affairs that the price that was realised was very much below the market price which that property ought to have fetched. The learned judge heard the parties and recorded a finding that the objections canvassed were mainly procedural and further more that they were not of sufficient consequence to justify the setting aside of the entire auction and therefore dismissed the objections. It is against this Order that the present civil revision petition has been filed. ( 2 ) THE petitioners' learned Advocate has based hissub missions on one aspect of the matter namely that even though this is a final decree proceeding, that Section 7 (b) of the partition ACT virtually requires the court to follow the procedure that is analogous to the one in execution proceedings. ( 2 ) THE petitioners' learned Advocate has based hissub missions on one aspect of the matter namely that even though this is a final decree proceeding, that Section 7 (b) of the partition ACT virtually requires the court to follow the procedure that is analogous to the one in execution proceedings. He therefore submitted that the provisions of Order 21, C. P. C. would be binding as far as the present sale was concerned. According to him, these provisions have to be read in conjunction with the Karnataka civil rules of practice which also lay down certain procedures as far as such sales go. Learned Advocate submits that the cumulative effect of this situation would be that the breaches which the petitioner had complained about taken both individually and collectively would render the sale bad and therefore it would have to be set aside. ( 3 ) AS against this position, it was vehemently submitted on behalf of the respondents that the objections are basically trivial and that none of them are of any consequence. The most important aspect of the matter in cases such as this, which a court would look at very seriously is as to whether the sale has resulted in a fair realisation of price for which the barometer would be the prevailing market rates. Normally, the court ascertains from the property holder as to what is his estimate and the court also looks to some independent quarters for purposes of fixing the fair value which the property must fetch. Unless this ingredient is satisfied, a court would normally not approve of the sale irrespective of all other factors. Petitioners' learned Advocate tried to emphasise the fact that having regard to the location of this property and its potentiality that the existing market value, would be between Rs. 10,000/- to 15,000/- per cent. The respondents' learned Advocate pointed out that this estimate is slightly on the higher side-but irrespective of that aspect, that there are certain factors which the petitioner has not taken stock of. The first of these is the faet that the property is tenanted and that it would therefore necessarily involve a considerable reduction in prices if settlements have to be arrived at with the tenants. Secondly, the site in question is not level with the road and this is a factor which in a bid lowers its value. The first of these is the faet that the property is tenanted and that it would therefore necessarily involve a considerable reduction in prices if settlements have to be arrived at with the tenants. Secondly, the site in question is not level with the road and this is a factor which in a bid lowers its value. Thirdly, it is pointed out that even the only water source is highly contaminated and this is a minus factor. The learned Advocate submitted that once these aspects are taken into account, that the value of the property would necessarily have to be considerably scaled down and that bearing these factors in mind, the amount of Rs. 4. 17 lakhs which was realised is basically fair and in order. I do concede that in this background and in the absence of any other cogent material that it would be rather hazardous to hold that the price realised was grossly less than the normal market value as at that point of time. ( 4 ) THE procedural objections that were canvassed proceed mainly on the basis of the provisions that I have briefly recounted earlier and the petitioners learned Advocate submitted that any breach of these provisions would ipso facto render the action null and void. This is a view to which I cannot subscribe because in the first instance, a court has got to consider as to whether some procedural variations or even non-compliance has resulted in either an illegality or a gross failure of justice. One cannot adopt a procedure whereunder any minor breach or variation or non-compliance is immediately treated as rendering the transaction null and void. The facts of each case differ from other ones. Where the procedural breach is material and more so where it is of a very substantial nature that a proceeding would be vitiated. This is very different from the concept of voidability which virtually goes to the very root of the matter. The facts of each case differ from other ones. Where the procedural breach is material and more so where it is of a very substantial nature that a proceeding would be vitiated. This is very different from the concept of voidability which virtually goes to the very root of the matter. The petitioners' learned Advocate did rely on an earlier decision of this Court in Manjamma v S. N. Suryanarayana Rao and others, wherein the learned single judge of this court did, in the facts and circumstances of that case had occasion to hold that non-compliance with the provisions of rule 138 along with certain other provisions such as Order 21, rule 54 (2) read with Section 67, C. P. C. would render the transaction null and void. The cumulative effect of what had happened in that case may have justified such a conclusion but to my mind the harshness of that decision cannot apply to the facts of the present case. The contentions that were adopted are basically that the auction was held on the 13th day and not after the lapse of 15 days and further more that the publication was in a considerably insignificant newspaper. Also, that the proclamation was not published at certain places. The spirit of the law is that there must be adequate notice to all those who are interested in participating in the auction sale and the real test would arise from the number of persons who turn up and the result of the auction sale. If in a given instance as many as 16 persons did turn up and if the sale is held and it results in a reasonably fair price emerging, then it would be incorrect to my mind, to interfere on a technical ground and strike down a sale purely because there has been some minor variation of procedure. To my mind, these procedural breaches are curable and they would not vitiate the validity of the action. One more point was raised namely that the commissioner did not hold the sale on the spot. I do concede that under normal circumstances he should have held the auction on the spot itself but if for any reason the venue was shifted, that by itself would not affect the validity of the transaction. ( 5 ) NORMALLY, I would have refused to interfere with the action in question. I do concede that under normal circumstances he should have held the auction on the spot itself but if for any reason the venue was shifted, that by itself would not affect the validity of the transaction. ( 5 ) NORMALLY, I would have refused to interfere with the action in question. What has however happened in the present case is that the petitioner came up to this court against an impugned Order and after hearing the parties this court took the view that the matter requires consideration. Under these circumstances, the petition was admitted and interim relief was granted. The petition has now come up for final hearing and I need to take note of the fact that the sale which took place in march 1991, and which is the subject-matter of this dispute would, under normal circumstances have been confirmed by the trial court somewhere in the middle of the year, 1996. The real question is as to whether the court has to take cognizance of the time lag and to take judicial notice of what has intervened during this period of time. The fact that all prices including the present ones have escalated in value and that therefore the confirmation of the sale in the year 1996 at 1991 prices would be manifestly unfair and improper to the parties is an aspect this court cannot obliterate. It is in these circumstances therefore that irrespective of other considerations, to my mind, the rule of fairness would require that the sale would have to be reheld and if this is required to be done, the trial court can ensure that all the requisite procedures are scrupulously followed. I am conscious of the fact that there is one area from whicn serious opposition could be presented. to such an Order being passed namely the auction purchasers who are third parties, who have nothing to do with the inter se disputes but are likely to be prejudiced to some extent because they have deposited the money in court in keeping with the rules. Though there is no certainty that they would once again be the successful bidders, they are free to participate in the fresh auction sale and if they are the successful bidders, the amounts in question shall be adjusted. Though there is no certainty that they would once again be the successful bidders, they are free to participate in the fresh auction sale and if they are the successful bidders, the amounts in question shall be adjusted. if on the other hand, they are not the successful bidders, then the argument could be pressed that they would perhaps be put to some financial loss. This is however inevitable because at no stage during the proceedings did the auction purchaser apply either to the trial court or to this court to withdraw the amounts that were deposited by him. Normally these amounts would have been invested and if that is the case, they would be entitled to the refund of their money along with accrued interest. If this has not happened, however, then the difficulty which the auction purchaser faces is that the rights would accrue in favour of title auction purchaser only after the sale has been confirmed by the court and since this has not taken place, they will not be in a position to claim any compensation. In this regard, a learned single judge of this court had occasion to consider the question as to whether the auction purchaser can as of right demand interest. In the decision in M/s. Annapurna industries, rice and Poha, Mills, Hebbandi, Bhadravathi and another v Syndicate bank, Bhadravathi Branch and others, this court took the view that it would not be permissible for the auction purchaser to demand compensation by way of interest in cases where the court has set aside the auction sale. That decision to my mind, would squarely apply to the facts of the present case. ( 6 ) HAVING regard to the aforesaid situation, the petition succeeds. The impugned Order is set aside. The trial court is directed to hold and complete the fresh auction within an outer limit of three months from today. For this purpose, the parties are directed to appear before the trial court on 22-7-1996. ( 7 ) THE civil revision petition succeeds and stands disposed of. --- *** --- .