Thomas v. Devassy — 1998 DIGILAW 512 (KER)

Judgment :- S. Sankarasubban, J. This C.R.P. is filed against the judgment in CM, A JO of 1996 on the Sleofthe Additional District Court, N. Paravur. The 3rd appellant in the C.M.A. has been impleaded as respondent No. 2 in this revision. The proceedings arise from E.A. 45 3/ 1992 in E.P. 455/1991 in O.S.256/1983 on the file of the Munsiff s Court, Paravur. That application was filed under 0.21 R.90 of C.P.C. to set aside the sale. The facts are as follows: The first respondent in the C.R.P., namely Devassy, obtained a decree against the first petitioner, who is the husband of the second petitioner and father of the 3rd petitioner and 2nd respondent. The decree holder put the decree into execution and purchased in Court sale 58 cents of property comprised in Survey No. 307/8B and 307712B of Varapuzha Village. According to the petitioners, the sale was held fraudulently and without due publicity. 2. The allegations in the application are as follows: The first petitioner is not in a normal state of mind and is suffering from mental disability. On account of financial distress which he had to undergo, he has lost his capacity to take care of the situation that confront him. Hence, the second petitioner - the wife - has filed the present E. A. as next friend of the first petitioner. On 10.4.1985 the first respondent in this petition obtained a decree against the first petitioner for recovering an amount of Rs. 3025/- with 6% interest from the date of suit. Even though an appeal was filed against the decree, the appeal was dismissed on 25.3.1987. On 4.8.1988, the decree holder filed E.P. 509/ 1988 praying for personal execution against the first petitioner and also by attachment and sale of the aforementioned 58 cents of property. According to the proceedings, on 15.10.88 the executing Court passed orders for attaching the58 cents. On 30.11.1988, the property was attached. The judgment debtor was declared ex-parte. The sale proclamation was settled on 19.2.1991. On the basis of the sale proclamation, the property was sold on 27.6.1991 and it was purchased by the decree holder for an amount of Rs. 5134/-. The sale was confirmed and purchase certificate issued to the decree holder on 27.8.1991. On 30.11.1988, the property was attached. The judgment debtor was declared ex-parte. The sale proclamation was settled on 19.2.1991. On the basis of the sale proclamation, the property was sold on 27.6.1991 and it was purchased by the decree holder for an amount of Rs. 5134/-. The sale was confirmed and purchase certificate issued to the decree holder on 27.8.1991. The petitioners came to know of the sale only on 27.9.1992 and the said sale of the property was secretly manipulated and delivery of property was obtained by the first respondent on 12.8.1992. The petitioners contended that there was no proper attachment according to law. Further it was stated that the sale proclamation was not properly drawn up and published as required by law. The extent of property sold is 58 cents. In Varapuzha Village the property will fetch a minimum amount of Rs. 10,000/- per cent. The upset price shown was very low. The property was sold for a grossly inadequate price because of the low upset price shown and that situation was brought into existence by the decree holder fraudulently, deceitfully and with ulterior motive of knocking off the 58 cents for himself for the paltry amount of Rs. 5134/-. The property is worth Rs. 5,80,000/-. The sale of the property conducted after four months from the date of proclamation and that too without a fresh proclamation is illegal. It is further submitted that the application is based on the fraud of the decree holder and, therefore, the period of limitation will commence only from the date of knowledge, viz., 27.9.1992. 3. The first respondent filed objection to the above application. He contended that there was no fraud or material irregularity in publishing or conducting the sale. Petitioners 2 to 4 in the E. A. had no right over the property. The first petitioner is not suffering from any mental disability. He is a practising lawyer. The petition is barred by limitation. Notice and process in the execution petition were served on the' petitioners. The price obtained is reasonable. The allegation that the property would fetch a minimum amount of Rs. 10,000/- per cent is not correct. 4. On the basis of the above pleadings, the executing Court raised two points: (i) Whether the petition is maintainable; and (ii) Whether the sale is liable to be set aside. The price obtained is reasonable. The allegation that the property would fetch a minimum amount of Rs. 10,000/- per cent is not correct. 4. On the basis of the above pleadings, the executing Court raised two points: (i) Whether the petition is maintainable; and (ii) Whether the sale is liable to be set aside. On behalf of the petitioners in the E. A., the third petitioner was examined as PW.1 and the doctor who examined the first petitioner was examined as PW2 and Exts. Al to A24 were marked. On the side of the respondent-decree holder, he got himself examined as RW1 and two witnesses were examined as RWs. 2 and 3. Ext. B1 series was marked on the side of the respondent. A Commission was taken out and the Commissioner has filed Ext. Cl Commission Report, Ext. Cl(a) plan and Ext. Cl(b) valuation statement. The Commissioner in the valuation statement showed that the value of the property will be Rs. 7,36,000/-, and it was further stated in the Commission report that the 58 cents of land does not lie as a one block, but as two blocks. 5. So far as the question of mental disability of the first petitioner, the executing Court took the view that on the basis of Ext. B1 series and on the basis of the evidence of RWs. 2 and 3 that first petitioner was not suffering from any unsoundness of mind. With regard to the validity of the sale, eventhough the Commission report showed that there was wide discrepancy between the actual value of the property and the value shown by the decree holder, it refused to set aside the sale on the ground that no fraud was proved. It also took into consideration the fact that there was no procedural irregularity. It further found that the petition was barred by limitation. Another circumstance which was taken note of by the executing Court was that the first petitioner had filed E. A. 385/1992 for the same relief and that was not passed. Against the dismissal of E.A. 453/1992, an appeal was filed before the District Court as C.M.A. 10/1996. The District Judge agreed with the findings of the executing Court and dismissed the appeal. It is against the above judgment the present C.R.P. is filed. 6. Sri. Against the dismissal of E.A. 453/1992, an appeal was filed before the District Court as C.M.A. 10/1996. The District Judge agreed with the findings of the executing Court and dismissed the appeal. It is against the above judgment the present C.R.P. is filed. 6. Sri. E. V. Nayanar, learned counsel appearing for the petitioners contended that this is a case where the judgment debtor was not served with any notice in the execution proceedings. Further, he contended that the decree holder was guilty of fraud in so far as he intentionally showed a low value for the property when, as a matter of fact, the value of the property was very high. He also highlighted the fact that eventhough the property stands as two items, in order to snatch away the property, the decree holder was shown the property as lying within the one block. As a matter of fact, as per the Commissioner's report it is shown that the property stands in two blocks and the boundaries are different. It was further contended that the views of the Court below regarding the mental disability of the first petitioner was not correct. He further contended that there was no bar of limitation and that the dismissal of E. A. 385/1992 will not act against the petitioner. 7. Sri. S.V. Balakrishna Iyer, learned counsel appearing for the first respondent-decree holder contended that this is a case where the petitioners were aware of the execution proceedings. The first petitioner was an Advocate by profession. There is evidence to show that he was practising till 1993 and hence it is not correct to say that he is a person having mental disability. It was further contended that proclamation was settled after issuing notice to the judgment debtor. There was no objection by the judgment debtor to the proclamation. He denied any fraud being committed and further submitted that the orders of the Courts below were correct. 8. Sri. V. Sivaswamy, learned counsel for the second respondent highlighted the fact that the 58 cents actually consists of two parts. According to him, the boundaries shown in the proclamation schedule are incorrect and that that itself is an act of fraud on the part of the decree holder. 9. The Execution Petition in this case was filed on 4.8.1988. Sri. V. Sivaswamy, learned counsel for the second respondent highlighted the fact that the 58 cents actually consists of two parts. According to him, the boundaries shown in the proclamation schedule are incorrect and that that itself is an act of fraud on the part of the decree holder. 9. The Execution Petition in this case was filed on 4.8.1988. From the proceedings it appears that the notice sent to the judgment debtor could not be served on 15.11.1988. On 6.6.1989 it is stated in the proceedings that judgment debtor was served. It is also seen from the Diary that the notice was served by affixture. Subsequently attachment was effected. When draft proclamation was produced, the Court ordered notice on the proclamation. It was posted on 13.12.1989 for return of notice. It seems, the case was adjourned for a number of times for return of notice. Thereafter there was an entry on 16.8.1990 stating that JD appears. On 30.8.1990, the proceedings state that 'objection filed'. There was a direction to serve copy of the objection on the decree holder. Since this was not served on the decree holder, the Court overruled the objection on 20.10.1990. But a perusal of the proceedings shows that the objection was filed by one Vincent Thomas. In the objection it is stated that he is not the judgment debtor. The judgment debtor was one Thomas, son of Kunnanadan Varkey and that the notice was wrongly served on him. On 24.10.1990 the Court ordered issue of further notice under R.66. It was posted on 8.1.1991 for return of notice. But on 8.1.1991 the Court reviewed the earlier order ordering fresh notice to the judgment debtor and it was stated that notice has been already issued and served on 28.7.1990. Obviously it was served on Vincent Thomas, who filed objection on 30.8.1990. It is a mistake on the part of the Court in not issuing notice to the judgment debtor. If the notice dated 23.7.1990 is not served on the judgment debtor, there was no notice served in the execution proceedings regarding proclamation. The objection filed clearly shows that the notice was not served on the judgment debtor. In paragraph 2 it is stated: "notice is sent to this objector- stranger to the decree, instead of taking steps against the actual judgment debtor". The objection filed clearly shows that the notice was not served on the judgment debtor. In paragraph 2 it is stated: "notice is sent to this objector- stranger to the decree, instead of taking steps against the actual judgment debtor". The Court has not considered this aspect because of the fact that it overruled the objection on the ground that copy of the objection was not served on the decree holder. Further it can be seen that subsequently no notice was served on the judgment debtor till the sale was over. The proclamation was settled on 19.2.1991. Then it was adjourned from time to time and the sale was held on 26.6.1991. So far as the proclamation of sale was concerned, the 58 cents of property has been stated to be lying as one block. The upset price has been shown as Rs. 2,500/-. Four encumbrances are stated, amounting respectively to Rs. 2,500/- Rs. 40,000/-, Rs. 100/- and Rs. 15,000/-. The decree holder purchased the property for Rs. 5,134/-. The petitioners have produced evidence to show that these encumbrances have been discharged. On the request of the petitioners, a Commissioner was deputed. The Commissioner has filed Exts. C1, C1 (a) and C1(b). Ext. C1 is the Commission report, Ext. Cl(a) is the plan while Ext. C1 (b) is the valuation statement of agricultural lands. In Ext. C1 (a) it is stated that 31 cents of property in survey No. 307/12-B lies separately from the 28 cents in Survey No. 307/8 and they situate in an important locality like the Chettibhagom market, Christ nagar Church, Sree Durge Temple, etc. The plan appended to the report shows that the 31 cents and 28 cents lies separately and the boundaries are separate. Ext. C1(b) report shows the land value for 31 cents at Rs. 15,000/- per cent, while that for 28 cents at Rs. 16,000/- per cent. The registered value has put the valuation of both the properties at Rs. 7,36,000/-. Thus, it can be seen a wide disparity between the value stated in the proclamation schedule and the real value of the property. The valuation shown is Rs. 2,500/- while the actual value comes to Rs. 7,36,000/-. This will shock the conscience of any Court. No person should be allowed to take advantage of such things. 7,36,000/-. Thus, it can be seen a wide disparity between the value stated in the proclamation schedule and the real value of the property. The valuation shown is Rs. 2,500/- while the actual value comes to Rs. 7,36,000/-. This will shock the conscience of any Court. No person should be allowed to take advantage of such things. As early as in Marudanayagam v. Manickavasakam, AIR (32) 1945 P.C. 67, the Privy Council observed thus: "If the decree-holder knew the true value of the property but deliberately undervalued it in the sale proclamation and himself purchased the property at what he knew was too Iowa figure based on an upset price accepted by the Court owing to his own initial misrepresentation and subsequent suppression of material facts, his conduct would amount to fraud on the Court and he would not be allowed to take advantage of his own fraud whatever the conduct of the judgment debtor might have been". In Ramizaddin v. Naimaddi, AIR 1933 Calcutta 339, Mitter, J. observed thus: "Where the discrepancy between the value stated in proclamation and the real value is so great as to shock the conscience, this by itself is valuable evidence of the fraud on the part of the decree-holder and sufficient to have the sale set aside." The Patna High Court in the decision reported in Sobhan Khan v. Gangadhar, AIR (31) 1944 Patna 40, has again held that disparity between real value and value in proclamation can lead to an inference of fraud. A Division Bench of this Court in the decision reported in Regi George v. Bhaskaran Nair, 1998 (2) KLT 640, held as follows: "The Court is under a duty to ascertain definitely the property or a portion thereof as the case may be to be sold before entering it in the sale proclamation. The description should be sufficient to identify the property or where a part of the property would be sufficient to satisfy the decree, such part. By failure to apply its mind to this aspect, the conduct of the sale may amount to material irregularity". A perusal of the deposition of RW-1 would show that he was aware of the lie of the properties. But, in spite of that, the decree holder included those properties as one item. By failure to apply its mind to this aspect, the conduct of the sale may amount to material irregularity". A perusal of the deposition of RW-1 would show that he was aware of the lie of the properties. But, in spite of that, the decree holder included those properties as one item. If the properties were included as two items, probably the Court would have sold only one item and it cannot be imagined that property having a total extent of 59 cents is just sold for Rs. 5,134/-. Thus, l am satisfied that in this case substantial injury has been caused to the judgment debtor and it was due to the fraud committed by the decree, holder. 10. Faced with such a situation, learned counsel for the decree holder then raised a contention that the petition is barred by limitation. He contended that after the sale the property was delivered over and the present E. A. was filed sixty days after the sale. Learned counsel for the petitioners submitted that when fraud is committed, the decisions are to the effect that delay has not to be taken into consideration because the duty of the Court is to see that nobody gets advantage of the fraud committed by him. The petitioners have included S. 17 of the Limitation Act in this application under 0.21 R.90. 11. As I have already stated, no notice was served on the judgment debtor with respect to the proclamation and the sale was without his knowledge. So far as delivery proceedings are concerned, from the records it appears that the notice was not personally served. The notice on two items were served by affixture and by publication. PW1 has clearly stated that notice were not received by his father. In this connection it is pertinent to note the contention of the petitioners that the first petitioner is a person of mental infirmity and the petition was filed by his wife as next friend. The third petitioner in the E. A., who is the second respondent here, in his evidence as PW.1 has clearly stated that the first petitioner was suffering from mental infirmity for the last seven years. PW2, the doctor was examined and he has also given evidence to show that the first petitioner was suffering from mental infirmity. But, the Court has disbelieved this on the basis of the evidence of RWs. PW2, the doctor was examined and he has also given evidence to show that the first petitioner was suffering from mental infirmity. But, the Court has disbelieved this on the basis of the evidence of RWs. 2 and 3 and Ext. B1 series. After looking into Ext. B1 series and the deposition of RW2 and 3,1 am of the view that the Court below was not right in holding that the first petitioner was not a person of mental infirmity. The Courts below were rather guided by the fact that the first petitioner has filed certain papers. The words "mental infirmity" are different from the words "unsound mind". This has been interpreted to mean that this will apply to persons who was suffering from any mental infirmity in consequence of which they are incapable of protecting their own interest. The Madras High Court in In re Periaswami Goundan, AIR 1954 Madras 810, considered this question and held that unsoundness of mind is different from mental infirmity and if a person is incapable of protecting his own interest, the provisions of 0.32R.15 CPC will apply. Hence, I do not agree with the reasoning of the Courts below that the first petitioner was not suffering from mental infirmity. But, it is not necessary for me to rely on the above ground as far as the facts of this case was concerned, because on going through the records, I now find that the judgment debtor was not served with any notice; not he had any knowledge of the proceedings. I also hold that fraud has been committed by the decree holder in conducting the sale. In such a situation, I am of the view that the question of limitation does not arise. lam supported in this view by the following decisions: SobhanKhan v. Gangadhar, AIR (31) 1944 Patna 40: "When a person applies under R.90 to set aside an execution sale beyond the prescribed period of limitation, the onus is, in the first place, on him to show that he had no knowledge until within 30 days of the application. Owing to the disparity between the value stated in the sale proclamation and the real value of the property, it is possible to infer fraud in the service of the processes. But the presumption which may arise in such acase irrebuttable by credible evidence that the processes were in fact served. Owing to the disparity between the value stated in the sale proclamation and the real value of the property, it is possible to infer fraud in the service of the processes. But the presumption which may arise in such acase irrebuttable by credible evidence that the processes were in fact served. Where in spite of the undervaluation of the properties, there is evidence which both the Courts below have found to be true that the processes were properly served, the petitioner cannot get over the bar of limitation." In Ramizaddin v. Nalmaddi, AIR 1933 Calcutta 339, it was observed thus: "The learned District Judge is of opinion that the petitioners have not been able to establish that they came to know of the sale within 3 0 days of their application and he commented on the evidence that Gani Mushi had not been examined. But once fraud is established, as it is in the present case, the burden of proof is on the decree-holder or the auction purchaser, as the case may be, of establishing that the person injured by his fraud and suing to recover property has had clear and definite knowledge of those facts which constitute fraud at a time which is too remote to allow him to make the application". Ghulam Kadir v. Negapattinam Municipal Council, AIR (37) 1950 Madras 460, made a distinction in the case of a stranger auction purchaser. It was held that the decree holder's fraud is not sufficient and the bonafide auction purchaser must not be deprived of the benefit of Art.166 of the Limitation Act. But in the present case the decree holder himself is the auction purchaser. In Ismail Rowther v. Mynoon Bivi, AIR 1966 Madras 84, a learned Single Judge of the Madras High Court held as follows: " If the court finds that the material irregularity and fraud had been practised upon, in bringing the properties to sale, either by the decree holder or the judgment debtor, the Court has got inherent jurisdiction to set aside the sale, whether the petitioner has locus standi or not to file the application for setting aside the sale". Basanta Kumar v. Mihirlal, AIR 1968 Calcutta 604, was a case with regard to auction purchaser. The court held that the inherent power cannot be exercised in so far as an auction purchaser is concerned. Basanta Kumar v. Mihirlal, AIR 1968 Calcutta 604, was a case with regard to auction purchaser. The court held that the inherent power cannot be exercised in so far as an auction purchaser is concerned. In Gnan Das v. Paulin Moraes,1998 (2) KLT 88, a Division Bench of this Court held, following the decision of the Supreme Court, that even if a contention was not raised by the petitioner in a petition under 0.21 R.90 that he came to know of the irregularity or fraud at a later stage if any material irregularity or fraud has been committed, it is the duty of the Court to step in and remove the irregularity or fraud. On the basis of the above reasonings, I am of the view that it is a case where fraud has been committed by the decree holder. The judgment debtor did not have any knowledge of the proceedings and it is a case where S.17 of the Limitation Act can be invoked and the petitioners have come within the time from the date of knowledge. 12. Another contention raised by the counsel for the first respondent was that the first petitioner had filed another E. A. for the same relief as E. A. 385/1992. But, that was not pressed. It was not pressed on 19.8.1995 when the present E. A. was pending. I do not think, the dismissal of that E. A. as not pressed will affect the decision in this E. A. as it can be very well taken that it was because of the pendency of the fresh E. A. the old E.A. was not pressed. In the above view of the matter, the orders of the Courts below are set aside, allow E.A. 453/1992 in E.P. 455/1991 in O.S.2546/1983 and direct the executing Court to continue the execution proceedings. The property delivered over to the first respondent will be delivered back to the petitioner and the sale certificate is also cancelled. The E.P. will be posted by the executing Court. The judgment debtor will be given an opportunity to deposit the decree amount up-to-date. If he does not deposit the amount during the time granted by the Court, the decree holder can take proceedings for sale of the required property. C.R.P. is allowed.