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2010 DIGILAW 615 (AP)

Pabba Satyamma @ Renykunta Balaiah v. Pabba Sathyamma

2010-07-15

G.BHAVANI PRASAD

body2010
JUDGMENT : This Civil Revision Petition is directed against the auction held on 28-01-2010 in pursuance of the order passed in I.A.No.481 of 2005 in O.S.No.55 of 2000 on the file of the Court of Principal Junior Civil Judge, Siddipet. O.S. No.55 of 2000 between the petitioner herein and the respondents herein was filed by the respondents 1 and 2 for partition and separate possession of the suit house bearing Door No.6-2-68 situated at Borra Hanuman Temple, Siddipet and a preliminary decree was passed by the trial Court on 11-12-2003 granting 2/3rd share to the plaintiffs and 1/3rd share to the revision petitioner and respondents 3 and 4 herein. A.S.No.6 of 2004 against the preliminary decree at the instance of the revision petitioner was dismissed by the Senior Civil Judge, Siddipet on 22-10-2005 and Second Appeal No.1569 of 2005 was dismissed by the High Court on 23-06-2006. Thereafter, an Advocate Commissioner was appointed by the trial Court to effect partition of the property by metes and bounds and the Commissioner in his report dated 21-01-2009 stated that the width of the property is only 14 feet 4 inches and in view of its shape, it is difficult to effect partition of the property into nine (9) equal shares. Consequently, the plaintiffs applied for an order for sale of the property under Section 2 of the Partition Act, 1893 (for short "the Act") in I.A.No.481 of 2005. The trial Court ordered in the said petition to sell the property in public auction and distribute the sale proceeds among the sharers as per the preliminary decree. Thereafter, on the direction of the trial Court, a public notice was given by publication in a Newspaper about the auction of property by the trial Court on 21-04-2009. In the meanwhile, the revision petitioner herein came up with I.A.No.324 of 2009 to stay the auction, but the trial Court dismissed the petition by an order dated 01-06-2009 as the procedure being adopted under the Act is permissible and as the subject property cannot be conveniently partitioned as per the preliminary decree. In the meanwhile, the revision petitioner herein came up with I.A.No.324 of 2009 to stay the auction, but the trial Court dismissed the petition by an order dated 01-06-2009 as the procedure being adopted under the Act is permissible and as the subject property cannot be conveniently partitioned as per the preliminary decree. Before that order was passed on the application subsequently, the revision petitioner filed a memo before the trial Court stating that he was ready for amicable settlement with the other parties, which may be considered in the interests of justice and equity and that he was ready to take his share on any side of the property and he clearly specified that he waived publication of auction in Newspaper. Thereafter, on the directions of the trial Court, the Advocate Commissioner again visited the suit property and after making a local enquiry, he submitted his report expressing his view that the market value of the subject property on the average will be around Rs.5,000/- per square yard and the total value will be around Rs.13,00,000/-. Then a paper publication by way of general notice about the auction to be conducted on 28-01-2010 was again made on 03-01-2010. On 28-01-2010, the impugned proceedings took place before the trial Court, during which the trial Court recorded that the upset price was fixed at Rs.13,00,000/- based on the Commissioner's report and the highest bidder was directed to pay 25% of the auction amount on that day and the remaining amount on the 15th day apart from bearing expenses of stamp and poundage. The auction was conducted accordingly by the trial Court after explaining all the terms and conditions to the bidders and the auction was stated to have been conducted after the paper publication was filed and in the presence of the learned counsel for both parties and the bidders. The trial Court also noted that in spite of the revision petitioner waiving the right of fresh publication, still a fresh publication was ordered in the interests of parties. The trial Court further recorded that the auction was conducted in open court in which eight persons participated and one Sri S. Kanakaiah was the highest bidder in whose favour the auction was knocked down at Rs.16,05,000/-. The trial Court also recorded that the highest bidder paid Rs.4,01,500/- towards 25% of the bid amount. The trial Court further recorded that the auction was conducted in open court in which eight persons participated and one Sri S. Kanakaiah was the highest bidder in whose favour the auction was knocked down at Rs.16,05,000/-. The trial Court also recorded that the highest bidder paid Rs.4,01,500/- towards 25% of the bid amount. The grievance of the revision petitioner herein is about conducting the sale without any proclamation under Order XXI Rule 66 of the Code of Civil Procedure and without fixing any reserved bid and fixing an upset price on the advice of the bidders. All the proceedings were claimed to be vitiated by non-application of mind and to be contrary to Section 6 of the Act and hence, the auction is requested to be set aside. During the course of hearing in the revision petition, respondents 1 to 4 filed a memo before this Court stating that the revision petitioner is declared to be only the 1/9th shareholder in the suit house and respondents 1 to 4, who have no dispute concerning the auction and the amount it fetched, are agreeable for dividing the sale proceeds into ten equal shares instead of nine and to give the value of two such shares to the revision petitioner. This offer was stated by the learned counsel for the revision petitioner on instructions to be not acceptable to the revision petitioner. Therefore, the revision petition was heard on merits and Sri K. Govind, learned counsel for the revision petitioner and Sri M. Rajamalla Reddy, learned counsel for the respondents reiterated their respective contentions with reference to various precedents. The point for consideration is whether the sale conducted by the trial Court on 28-01-2010 is liable to be set aside? The Act confers power on the Court to order sale instead of division in partition suits by virtue of Section 2 and the nature of the property, the number of share holders and any other special circumstance making the division of property not possible reasonably or conveniently will enable the Court to sell and distribute the proceeds between the shareholders under the said provision. Section 6 of the Act provides that every sale shall be subject to a reserved bidding and the amount of such bidding shall be fixed by the Court in such manner as it may think fit, and may be varied from time to time. Section 6 of the Act provides that every sale shall be subject to a reserved bidding and the amount of such bidding shall be fixed by the Court in such manner as it may think fit, and may be varied from time to time. Section 7 of the Act directs that the procedure prescribed by the Code of Civil Procedure in respect of sale of a property under a decree or order of any other Court than the High Courts of Calcutta, Madras and Bombay, if the concerned High Court did not prescribe the procedure by any Rules, shall be adopted "as far as practicable" in case of sales directed under the Act. The High Court of Andhra Pradesh is not stated to have prescribed any Rules for such sales under Section 7 (b) of the Act and therefore, the procedure prescribed in the Code of Civil Procedure shall be adopted as far as practicable. The procedure for sale of property under the Code of Civil Procedure is governed by Order XXI Rules 64 to 72 in general. The procedure involves proclamation of sales by public auction after drawing up such a proclamation in accordance with Rule 66, making the proclamation in accordance with Rule 67 and conducting the sale in tune with the next following provisions. It is true that the sale conducted herein was not preceded by any drawal of any sale proclamation strictly as specified in Rule 66 and the public notice issued through a newspaper publication was also not strictly published in accordance with Rule 67. However, a publication was made in the newspaper by the counsel for the plaintiffs obviously on the orders of the trial Court that the subject property was being sold in open public auction by the Court firstly on 21-04-2009 and later on 28-01-2010. Interestingly, the 1st defendant/revision petitioner had filed a memo into Court specifically waiving his right to have a fresh publication of the auction in the newspaper and till the objections were specified in this Civil Revision Petition, he never objected to the procedure being adopted by the trial Court for conduct of the auction earlier. The approximate estimate of the value of the property by the Advocate Commissioner in his report dated 08-12-2009 at Rs.13,00,000/-also appeared to have been not subjected to any objections by the revision petitioner or the other parties to the proceedings. The approximate estimate of the value of the property by the Advocate Commissioner in his report dated 08-12-2009 at Rs.13,00,000/-also appeared to have been not subjected to any objections by the revision petitioner or the other parties to the proceedings. Irrespective of the justification or otherwise for the revision petitioner not to accept the offer given by respondents 1 to 4 herein to give him two shares out of 10 shares in the sale proceeds, the auction was obviously conducted in the presence of the parties and the counsel as endorsed by the trial Court in the impugned order. No objection appeared to have been raised by the revision petitioner or his counsel against the trial Court fixing an upset price of Rs.13,00,000/-basing on the Commissioner's report and fixing such price of Rs.13,00,000/-appears to be in tune with the mandate of Section 6 of the Act under which every sale under Section 2 was made subject to a reserved bidding to be fixed by the Court in such manner as it may think fit, which may even be varied from time to time. While the exercise of judicial discretion by the trial Court in commencing the auction at Rs.13,00,000/-in pursuance of the power conferred on it by Section 6 of the Act does not appear vitiated for any reason, the participation by eight persons in the auction may be indicative of the paper publication made twice or at least the second publication made for the conduct of the auction on 28-01-2010 achieving the desired result of intimating the persons that may be interested in the subject house about the auction proceedings being undertaken. With the above factual background, the primary question is the effect of non-compliance with the provisions of Order XXI of the Code of Civil Procedure strictly, on the auction conducted. Sri K. Govind, learned counsel for the revision petitioner referred to Desh Bandhu Gupta v. N.L. Anand & Rajinder Singh (1994) 1 Supreme Court Cases 131, in which it was laid down that a sale without notice to the judgment debtor will be a nullity and in any view, the Court should apply its mind to the need for furnishing the relevant and material particulars in the sale proclamation. The Apex Court was clear that the estimate of the value of the property is a material fact to enable the purchaser to know its value and when the mandatory requirements of the Rules are not complied with, the sale becomes void ab initio. While the rigour of the mandatory provisions of Order XXI of the Code of Civil Procedure cannot be in dispute, there is an element of relaxation from the strict rigours of Order XXI in respect of sales under the Act as is clear from the positive language of Section 7 itself, which makes such procedure adoptable as far as practicable and not too strictly and rigidly. The Apex Court itself observed in the above cited precedent that what is expected of the Court is to make a realistic appraisal of the factors in a pragmatic way and if satisfied that in the given circumstances the bid is acceptable, it should conclude the sale. The Court may consider the fair value of the property, the general economic trend, the large sum required to be produced by the bidder, the formation of a syndicate, the futility of postponements and the possibility of litigation and several other factors depending on facts of each case. The Supreme Court has pointed out that if the Court has clearly applied its mind to the relevant considerations while accepting the final bid, it is not necessary to give a speaking order nor can its order be examined meticulously. While violation of mandatory requirements of the Rules of Order XXI of the Code of Civil Procedure may make the sale void or voidable under different circumstances, the present sale under the Act being not literally governed by every word and Rules of Order XXI, cannot be scrutinized by the same standards without any elasticity. Learned counsel for the revision petitioner also referred to M/s. Mahakal Automobiles and another v. Kishan Swaroop Sharma 2008 (8) Supreme Court Journal 198, wherein a notice to the person whose property is being sold was held to be mandatory and the absence of such a notice was held to make the same a nullity. Learned counsel for the revision petitioner also referred to M/s. Mahakal Automobiles and another v. Kishan Swaroop Sharma 2008 (8) Supreme Court Journal 198, wherein a notice to the person whose property is being sold was held to be mandatory and the absence of such a notice was held to make the same a nullity. The decision also refers to the mandatory requirement of the manner of arriving at the valuation of the property and specifying it in terms of Order XXI Rule 66 of the Code of Civil Procedure and the decision was rendered following Desh Bandhu Gupta v. N.L. Anand (1 supra) and other precedents on the aspect. On facts of that case, it was found that the mandatory provisions were not complied with and again, the validity of the auction sale conducted herein has to be examined with reference to the facts and circumstances of this case and the language of Section 7 of the Act. Learned counsel for the revision petitioner also relied on Rani Aloka Dudhoria and others v. Goutam Dudhoria and others AIR 2010 Supreme Court 53 arising under the Act itself, wherein the Apex Court referred to the various provisions of the statute and precedents and stated that fixation of the reserved price is mandatory under Section 6 of the Act and the word "reserved price" was stated to mean a price reserved at an auction as the minimum amount realizable by the sale of property. The auction conducted under the Act in that case was frowned upon by the Apex Court due to the delay of 13 years, non-fixation of the reserved price and the absence of notices to the parties. The present case does not involve any such factors, more so, when the trial Court had fixed the upset price at Rs.13,00,000/-based on the report of the independent Advocate Commissioner whose conclusions were based on the local enquiry made by him. In any view, it is seen from the three precedents relied on by the revision petitioner that the question would be, as pointed out by the Apex Court in Desh Bandhu Gupta (1 supra), as to whether the Court made a realistic appraisal in a pragmatic way, kept the fair value of the property in mind and applied its mind to all relevant considerations while accepting the final bid. Sri M. Rajamalla Reddy, learned counsel for the respondents referred to His Holiness Mahant Chethandosji varu v. The Board of Trustees Tirumalai Tirupathi Devasthanams by its Executive Officer and another AIR 1965 Andhra Pradesh 334, for the proposition that mere material irregularities per se will not invalidate a sale and that failure to affix proclamation in municipality is not material irregularity when there is sufficient publicity. The question considered was whether the aggrieved suffered any prejudice and damage by reason of the material irregularities. The Division Bench also held that the effect of waiver of issuance of a fresh publication of the sale proclamation implies necessarily a waiver of an objection as to any of the defects apparent on the proclamation. The Division Bench also noted that even mere inadequacy of price would not result in avoiding a sale unless it is the result of factors that led to the material irregularities. The learned counsel also referred to Vijai Kumar and another v. Madanlal and others 1970 A.P. High Court Notes 211, wherein another Division Bench of this Court was dealing with a case of a sale taking place without any objection and also waiving a fresh proclamation on the earlier date. The Division Bench held that even if there was an error, it was condoned or waived by the judgment debtors and has to be considered as inconsequential. Gadde Buchaiah v. Dasari Kotaiah and others AIR 1971 Andhra Pradesh 392 of another Division Bench of this Court is to a similar effect pointing out that the aggrieved has to establish that he sustained a substantial injury by reason of the material irregularity in the sale. So was the decision V.V. Narayan Chetty v. Nenla Dhanamma and another AIR 1984 Andhra Pradesh 159, wherein it was held that when the judgment debtor failed to attend the Court and participate in the settling of the terms and to give valuation of property, he cannot complain that the sale is vitiated on the ground that the proclamation does not contain his valuation. Proof of substantial injury by reason of any irregularity or fraud was considered a must for succeeding in any application under Order XXI Rule 90 of the Code of Civil Procedure. Sri M. Rajamalla Reddy, learned counsel, also relied on Saheb Khan v. Mohd. Proof of substantial injury by reason of any irregularity or fraud was considered a must for succeeding in any application under Order XXI Rule 90 of the Code of Civil Procedure. Sri M. Rajamalla Reddy, learned counsel, also relied on Saheb Khan v. Mohd. Yusufuddin and others AIR 2006 Supreme Court 1871, in which it was held that failure to establish substantial injury by reason of any irregularity or fraud will not vitiate the sale even if there was material irregularity. The precedents relied on by the learned counsel for the respondents are clearly to the effect that the mere proof of irregularities in conduct of a sale or its publication is not enough, but substantial injury to the person complaining must also be established. Of course, the presupposition is that there was an attempt to follow the prescribed procedure even if there was some material irregularity in it. It is also true that in the present case, the procedure prescribed under Order XXI Rules 66 and 67 etc., was not followed strictly in letter. But, it is seen from the newspaper publication made that the trial Court made an effort to comply with such procedure in spirit. The waiver of fresh newspaper publication by the revision petitioner/1st defendant itself may suggest the absence of any apprehension of inadequate notice to the prospective bidders due to non-compliance with the procedures nor is it complained that any non-mention of the value of the parties in the newspaper publication had any adverse impact on fetching an appropriate price. The price fetched in the auction is Rs.3,05,000/- more than the price estimated by the independent Advocate Commissioner on a local enquiry and also the upset price fixed by the trial Court on the basis of the said commissioner's report. The price fetched, therefore, cannot be considered to be an inadequate or low price, which, ex facie, indicates adverse impact of the material irregularities on the proper conduct of the sale. The price fetched, therefore, cannot be considered to be an inadequate or low price, which, ex facie, indicates adverse impact of the material irregularities on the proper conduct of the sale. As what Section 7 of the Act mandates the Court to do is only to follow the procedure prescribed in the Code of Civil Procedure "as far as practicable" and as the Court appears to have acted fairly and reasonably with due application of mind, there appear no reasons to set aside the auction sale conducted by the trial Court herein and to put the clock back to resume the procedure all over again for conducting the sale. The relevant considerations were definitely kept in mind by the trial Court while accepting the final bid and in the light of the above circumstances, the Civil Revision Petition has to fail. In the result, the Civil Revision Petition is dismissed without costs.