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2009 DIGILAW 750 (KER)

K. P. Chandrad v. A. Nizar

2009-08-12

V.RAMKUMAR

body2009
Judgment : The sole defendant in O.S.No.157 of 1994 on the file of the Sub Court, Alappuzha is the appellant in this Appeal. The said suit, instituted by one Sajit John who was the predecessor- in-interest of respondents 2 to 4 herein, was one for specific performance of an agreement for sale. The agreement for sale was marked as Ext.A1 dated 15.10.1993. The said suit was contested by the appellant and as per judgment and decree dated 6.2.2001, the Court refused to grant specific performance of the contract but instead granted a decree for return of the advance amount of Rs.30,000/-with interest due thereon. Since the appellant did not pay the amount decreed, his property was brought to sale. Initially 7 = cents out of 21 cents of property valued at Rs.60,000/-was put up for sale. As per the final sale proclamation the entire 21 cents shown as worth Rs.60, 000/- was put up for sale and was sold on 29.2.2008 for a sum of Rs.1,01,200/- which works out to Rs.4819 per cent. On 28.3.2008, the appellant filed E.A.No.184 of 2008 under Order 21 Rule 90 C.P.C for setting aside the sale on the ground that a low price was shown for the property, that the sale proclamation contained a mis- description, since the existence of the house in which the appellant was residing was not shown in the sale proclamation, that the price initially shown was brought down to the extreme detriment of the appellant resulting in sale of the property for an unconscionably low price and that there was procedural irregularity by way of non-compliance of Rule 330 of Civil Rules of Practice, Kerala. 2. The application was opposed by the 1st respondent, auction purchaser who inter alia, contended that the appellant/ judgment debtor, who did not object to the settlement of the sale proclamation or the description of the property therein, was precluded from raising the above amount for setting aside. 3. The court below after hearing both sides as per the impugned order dated 6.4.2009 accepted the contentions of the auction purchaser and dismissed the application. Hence this appeal. 4. I heard the learned counsel for the appellant as well as the learned counsel appearing for the 1st respondent, auction purchaser. 5. 3. The court below after hearing both sides as per the impugned order dated 6.4.2009 accepted the contentions of the auction purchaser and dismissed the application. Hence this appeal. 4. I heard the learned counsel for the appellant as well as the learned counsel appearing for the 1st respondent, auction purchaser. 5. Advocate Shri. Chacko, the learned counsel for the Auction Purchaser made the following submissions before me in support of the above impugned order:- This is a case in which the suit was filed as early as in the year 1994. The suit, after the protracted trial, was finally decreed on 6.2.2001. E.P.No.236 of 2003 was filed on 19.12.2003 for realization of Rs.61,845/-. The appellant, judgment debtor had not raised any objection to the notice under Order 21 Rule 66 C.P.C. The draft sale proclamation was settled on 13.10.2004 and that again without any objection. The sale was conducted on 29.8.2004. It is exactly on the 30th day that the appellant filed the present application for setting aside the sale under Order 21 Rule 90 C.P.C. After the 1976 amendment of the C.P.C. Sub Rule 3 to Order XXI Rule 90 reads as follows:- "No application to set aside a sale under this rule shall be entertained upon any ground which the applicant could have taken on or before the date on which the proclamation of sale was drawn up." Even before the incorporation of the said provision in the Code, the Apex Court in Dhirendra Nath Gorai and Subal Chandra Shaw and others v. Sudhir Chandra Ghosh and others (1964(6) SCR 1001) had observed as follows:- "The non-compliance with the provisions of Section 35 of the Act (Bengal Money Lenders Act) is a defect or a irregularity in publishing or conducting the sale. A party who received the notice of the proclamation but did not attend at the drawing up of the proclamation or did not object to the said defect cannot maintain an application under Order XXI Rule 90 of the Code of Civil Procedure. A party who received the notice of the proclamation but did not attend at the drawing up of the proclamation or did not object to the said defect cannot maintain an application under Order XXI Rule 90 of the Code of Civil Procedure. Even if he could, the sale cannot be set aside unless by reason of the said defect or irregularity he had sustained substantial injury." The court below, after adverting to the progression of the execution petition by referring to the proceedings so far, has come to the right conclusion that the appellant has not sustained any substantial injury and has overruled the grounds put forward to set aside the sale. The order does not call for any interference. 6. I am afraid that I cannot agree with the above submissions. In the case of settlement of the sale proclamation it could be legitimately contended that the judgment debtor who did not object to the same is precluded from disputing the facts referred to in clauses a to d of Order XXI Rule 66(2) C.P.C. But clause (e) of the said provision reads as follows:- "Every other thing which the Court considers material for a purchaser to know in order to judge of the nature and value of the property" That is an obligation cast on the court to incorporate such relevant particulars which even the decree holder omits to furnish. If there has been any failure on the part of the Court in that regard, the judgment debtor to whom notice has been given cannot be found fault with for not raising objections with regard to omissions which the court considers material. There are binding judicial pronouncements both by the Apex Court and this Court as to what all consideration which should weigh with the Court while putting up for sale the property of the judgment debtor. If a sale is conducted ignoring the binding verdicts in that behalf it would stand the risk of being set aside notwithstanding the failure on the part of the judgment debtor to raise objections at the appropriate stage. 7. Now coming to the facts of this case, one of the criticisms made against the court sale was the low price shown in the property. The plaintiff in the suit when examined as PW1 had admitted that the property in question would fetch Rs.20,000/- per cent. 7. Now coming to the facts of this case, one of the criticisms made against the court sale was the low price shown in the property. The plaintiff in the suit when examined as PW1 had admitted that the property in question would fetch Rs.20,000/- per cent. That would mean that the property was worth Rs.4, 20,000/-. He was examined in the year 2001. It was this property which was sold on 29.2.2008 (that is 7 years of the examination of the plaintiff before court) for a sum of Rs.1,01,200/- which works out to Rs.4,819/- per cent. In Regi George v. Bhashakaran Nair (1998 (2) KLT 640) a Division Bench of this Court observed that equal endeavour should be made to fetch adequate price and it is imperative on the part of the court to probe into the question whether the fraud or irregularity alleged has resulted in obtaining inadequate price. The Bench further observed that throughout entire process of sale, it shall be the endeavour of the court to obtain the adequate price for the property put up for sale and that fetching inadequate price in the auction sale would amount to "substantial injury" contemplated under sub-Rule (2) of Rule 90 of Order XXI. In Thankamma v. Leelamma - 2008 (2) KLT 500, this Court observed as follows:- "8. Non-application of mind is a material irregularity which vitiates the sale. Sale of land at Rs.83, 509/- after ten years of the transaction between the parties at Rs.92,250/-is bad. The drawing up of the proclamation of sale and settlement of its term by non-application of judicial mind renders the sale a nullity, being void. The execution court has a statutory duty and a legislative mandate to apply its mind before settling the terms of proclamation and satisfy that if part of such property as seems necessary to satisfy the decree should be sold, if the sale proceeds or portion thereof is sufficient for payment to the decree holder, so much of that property alone should be ordered to be sold in execution. It is a mandate of the legislature which cannot be ignored. It is a mandate of the legislature which cannot be ignored. Non-application of mind to the question whether sale of a part of the property would satisfy the decree debt is a material irregularity causing substantial injury to the judgment debtor attracting O. XXI R.90 C.P.C. In this case, a portion of the property put to sale would have been sufficient to satisfy the decree. Sale of the entire property for an amount of Rs.83,509/- caused substantial injury to the judgment debtor. The procedure adopted by the execution court bristles with several irregularities touching the jurisdiction of the courts. They are not only material irregularities causing substantial injustice, but are in violation of the mandatory requirements of the rules." Thus, the fact that a property which was worth around Rs.4 1/4 lakhs in the year 2001 even according to the plaintiff in the suit, was sold in the year 2008 for a sum of Rs.1,01,200/- cannot be lost sight of and court cannot shut its eyes to such an unconscious price for which the property was sold. It is pertinent in this connection to advert to E.A. No. 424 of 2008 filed by the appellant for the issuance of a commission to ascertain the value of the residential building in the property. It was mercilessly dismissed by the court below. 8. There was yet another material irregularity of the court below bringing down the price from Rs.8000/- per cent to Rs.2,867/- per cent. Initially 7 = cents of property alone was proclaimed for sale at a price of Rs.60,000/-. This works out to Rs.8000/-per cent. That was fully in accord with the decision of the Apex Court in Ambati Narasayya v. M. Subba Rao - AIR 1990 SC 119. Subsequently, the court had increased the extent to 21 cents without altering the price of Rs.60,000/-. This was an eventuality which could not have been anticipated by the judgment debtor and it does not fall under sub-Rule 3 of Order XXI Rule 90 C.P.C. In Seethammal v. Senthil Finance & another -AIR 1996 SC 1551, the court had reduced the valuation to Rs.50,000/-of the property which was originally valued at Rs.75,000/-. The property was, however, sold for Rs.15,100/-. This act of the court bringing down the price to the detriment of the judgment debtor was adversely commented upon by the Apex Court. The property was, however, sold for Rs.15,100/-. This act of the court bringing down the price to the detriment of the judgment debtor was adversely commented upon by the Apex Court. To the same effect is the decision in M/s. Klorofarm v. Union of India - (2000 (2) KLT 854). 9. It is an admitted fact that the description of the property put up for sale did not show the existence of the F.A.O. No. 128/2009: 10 house in which the appellant is residing. This mis-description by way of omission had certainly dissuaded the intending bidders from participating in the auction. The question has to be considered from the perspective of the person whose property is being sold as also from the perspective of the class of intending bidders when they come across the sale proclamation advertised in the newspapers or any other medium. It is the obligation of the court to ensure that the judgment debtor whose property is being sold is entitled to a fairly accurate description of his property so as to secure the presence of such class of bidders who would make fair bids of the property having regard to the size, location and other features of the property. A material mis-description in a sale proclamation would vitiate the sale. (See Jaikisandas Balchand Pamnaiii v. Municipal Corporation of Greater Bombay - AIR 1991 Bombay 341) In Rukmani Ammal v. Subramaniya - AIR 1940 Madras 82, the description of the property given in the sale proclamation was punja, but the property was actually a thope containing large number of mango and coconut trees. The above mis-description resulted in intending bidders not participating in the auction and this was held to be a ground falling under Order XXI Rule 90 C.P.C. In Rajaram Nathuji Pathode v. Maniram Sambha Kose -AIR 1975 Bombay 1, the existence of a well suited for irrigating the property was omitted to be shown resulting in the sale not attracting more bidders and that was held sufficient to set aside the sale. 10. As mentioned earlier, besides the decree holder, the court also had a statutory obligation to ensure that the sale was conducted in such a manner as to fetch adequate price for the property sold and that only such extent of the property as would satisfy the decree, alone is to be put up for sale. 10. As mentioned earlier, besides the decree holder, the court also had a statutory obligation to ensure that the sale was conducted in such a manner as to fetch adequate price for the property sold and that only such extent of the property as would satisfy the decree, alone is to be put up for sale. The decree holder knew that the appellant/judgment debtor is residing in the house situated in the property. Still, he did not care to show the existence of the house in the draft sale proclamation. The court also did not make an enquiry as contemplated under Order XXI Rule 66 (4) C.P.C. The resultant position was that the sale took place at a grave undervaluation occasioned on account of the failure on the part of the decree holder as well as the court to carry out their respective obligations under Rule 66 of Order 21 C.P.C and the consequence was that the appellant had sustained "substantial injury". Hence, as observed by the Privy Council in Marudanayagam Pillai v. Manickavasakam Chettiar - AIR 1945 PC 67, however dilatory or unsatisfactory the conduct of the appellant might have been, he has not, on the facts of the case, debarred himself from pointing out the aforementioned illegalities in the conduct of the sale. 11. There is also the infraction of Rule 330 of the Kerala Civil Rules of Practice as per which the decree holder was bound to file in court an affidavit by himself or by some other person acquainted with the property giving the particulars prescribed under Order XXI Rule 66 C.P.C and incorporating the details referred to in the said Rule. If the said provision had been complied with, the entire details pertaining to the property including the residential house situated in the property would have come on record and would have informed the court of its obligation to incorporate those particulars in the sale proclamation. That was also not done. Such being the case, the sale conducted by the court on 29.02.2008 was vitiated by material irregularity justifying the application under Order XXI Rule 90 C.P.C. The impugned order is accordingly set aside and E.A. No. 184 of 2008 filed by the appellant before the court below shall stand allowed and the court sale conducted on 20.09.2008 shall stand set aside for the reasons indicated above. As provided under Order 21 Rule 93 C.P.C the 1st respondent/auction purchaser shall be entitled to refund of the purchase money with 7.5% interest. In the result, this appeal is allowed as above. No costs. Dated this the 12th day of August, 2009.