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2017 DIGILAW 1741 (RAJ)

MAG RAJ v. LRS OF JAWAN MAL

2017-08-04

DINESH MEHTA

body2017
JUDGMENT : Dinesh Mehta, J. The matter comes upon for consideration of application under Article 226(3) of the Constitution. After hearing at some length, learned counsel for the petitioner submitted that the writ petition itself be decided, for which, other counsels have agreed to and hence the present petition itself is being decided. 2. By way of the present writ petition, the petitioners (objectors) have challenged the order dated 09.03.2017 passed by the learned Additional District Judge, Bali, District Pali (hereinafter to be referred as "Executing Court") whereby, an application filed by them under Order 21, Rule 90 of the Code of Civil Procedure, 1908 has been rejected. 3. The facts necessary for the decision of the present writ petition are that the plaintiff - Jawanmal had filed two suits, one at Ahmedabad and another at Pali. The suit filed at Pali was in relation to recovery of an amount of Rs. 1,60,000/-. During the proceedings of the suit, a compromise was entered into between the plaintiff and defendant and in terms thereof, a compromise decree dated 07.10.2004 came to be passed by the learned Additional District Judge (Fast Track) No.2, Pali. According to the decree, an amount of Rs. 3,00,000/- along with interest @ 18% per annum from 01.01.1989 was required to be paid by the defendant within two years, failing which, his residential house situated at Sumerpur, was ordered to be put to distress. 4. As the Judgment-Debtor failed to pay the amount aforesaid, within the stipulated period, an application for execution came to be filed. 5. The petitioners, being brothers of respondent No. 2-judgment-debtor claimed themselves to be residing in the contentious residential house along with their mother, resisted the execution of the decree by submitting an application under Order 21, Rule 97 of the Code of Civil Procedure, which was rejected by the Executing Court, vide its order dated 07.04.2011. The said order dated 07.04.2011 has been affirmed by this Court, vide its order dated 19.01.2015 in S.B. Civil Execution First Appeal No. 6/2014 titled as "Mag Raj & Anr. v. Jawan Mal & Anr." 6. After disposal of the application under order XXI Rule 97 of the Code of Civil Procedure, the Executing Court proceeded to auction/sell the property, as provided under the relevant provisions of Order 21 of the Code. v. Jawan Mal & Anr." 6. After disposal of the application under order XXI Rule 97 of the Code of Civil Procedure, the Executing Court proceeded to auction/sell the property, as provided under the relevant provisions of Order 21 of the Code. The auction in question was finalised in favour of respondent No. 3 DLV Enterprises Private Limited, as a result of the auction proceedings held between 20.10.2016 and 22.10.2016. 7. After finalisation of the auction in favour of Respondent No.3, the petitioners preferred an application dated 16.01.2017 under Order 21, Rule 90 of the Code of Civil Procedure, inter alia, contending that the sale in favour of said auction-purchaser may not be confirmed. The petitioners' application for setting aside the sale was based on various grounds including that there was a collusion between the judgment-debtor and the decree-holder; the requisite amount of 25% had not been deposited on the spot; and wide publicity of the proposed auction had not been made before holding the auction. 8. After hearing the arguments of both the sides, petitioners' aforesaid application came to be rejected by the learned Executing Court, vide its order dated 09.03.2017, holding the application to be devoid of any merit. 9. Calling in question, the order dated 09.03.2017 passed by the Executing Court, rejecting petitioners' application under Order 21, Rule 90 of the Code of Civil Procedure, Mr. Girish Sankhla, learned counsel for the petitioners, firstly contended that it is a clear case of collusion between the judgment-debtor and the decree-holder, who after fraudulently obtaining the compromise decree have themselves purchased the contentious property. Learned counsel for the petitioners pointed out that the auction purchaser was prepared to purchase the subject property at any costs. Learned counsel for the petitioners argued that as per Order 21, Rule 84 of the Code of Civil Procedure, a purchaser is required to deposit 25% amount of the total sale consideration on the date of auction, whereas in the present case, the auction-purchaser, respondent No.3, admittedly did not deposit the requisite sum of Rs. 12,75,000/- on the date of auction, for which flaw, the sale was liable to be set aside. He submitted that though the aforesaid amount of Rs. 12,75,000/- on the date of auction, for which flaw, the sale was liable to be set aside. He submitted that though the aforesaid amount of Rs. 12,75,000/- was deposited by the auction purchaser, by way of a cheque but, depositing the requisite amount vide cheque cannot be treated to be a due payment of the requisite amount in terms of the requirement of Rule 84 of Order 21 of the Code of Civil Procedure. 10. Learned counsel for the petitioners in addition, argued that the judgment-debtor - Chunni Lal himself had participated in the auction proceedings, for which he invited the attention of this Court towards the auction proceedings held from 20.10.2016 to 22.10.2016. He meekly admitted that though the judgment-debtor Chunni Lal himself did not witness the auction proceedings yet, his son, Lalit Kumar, participated during the date of auction and offered a highest bid of Rs. 51,00,000/- for Respondent No.3 - Company, in which he is a Director. Pointing such facts, learned counsel for the petitioners, contended that the judgment-debtor himself cannot participate in the auction-proceedings and the sale finalised in his favour is thus clearly contrary to law and spirit of the provisions governing auction sale, contained in the Code of Civil Procedure. Mr. Girish Sankhla, learned counsel for the petitioners concluding his arguments, submitted that the auction in question was not given wide publicity and even the value of the property in question was not mentioned in the auction notice, for which, the auction proceedings were vitiated. 11. Per contra, Ms. Shaambhvi B. Mardia appearing on behalf of the plaintiff-respondent No.1 - Jawan Mal, decree-holder, submitted that the present writ petition preferred on behalf of the petitioners is not maintainable. She read the provisions contained in Order 21, Rule 90 of the Code of Civil Procedure and submitted that the petitioners are neither a decree-holder nor purchaser and not even person entitled to share in the distribution of the assets, as such, they cannot maintain an application under Order 21, Rule 90 of the Code of Civil Procedure nor can they approach this Court invoking extra-ordinary writ jurisdiction challenging the order passed by the Executing Court. Mrs. Mrs. Mardia added that all the objections and contentions raised by the petitioners (objectors) - the persons in possession of the contentious property, have already been decided by this Court, vide its judgment dated 19.01.2015, while deciding S.B. Civil Execution First Appeal No.6/2014 filed by the present petitioners; which fact has not been disclosed by the petitioners in the present writ petition. The petition at hand, according to her, was liable to be dismissed firstly, on account of non-disclosure of the material facts and secondly, on the principles of res judicata, inasmuch as, all the rights and objections have already been adjudicated by this Court. 12. Thereafter, Mr. Alkesh Agarwal, learned counsel appearing on behalf of the judgment-debtor Chunni Lal submitted that the arguments advanced by the petitioners, that the judgment-debtor himself had participated in the auction proceedings, is factually incorrect and legally untenable. He pointed out that the person participated in the auction proceedings was Lalit Kumar, who happens to be son of the judgment-debtor Chunni Lal, but he too, instead of participating in his individual capacity had represented respondent No. 3- DLV Enterprises, a company incorporated under the provisions of Companies Act, 1956. He submitted that merely because his son happened to be a Director of the auction purchaser, it cannot be inferred that the judgment-debtor himself had participated in the auction proceedings. In furtherance of his arguments, he invited attention of this Court towards the various provisions contained in Order 21 of the Code of Civil Procedure and submitted that it is only Rule 72 of Order 21 of the Code, which puts an embargo on participation, but such prohibition is also on participation by the decree-holder; and there is no restriction on participation of a judgment-debtor, per-se. 13. He also reverberated the arguments advanced on behalf of the decree-holder (Jawan Mal) that the petitioners have concealed material facts for which, they are not entitled to invoke extraordinary equity jurisdiction of this Court. He pointed out that the petitioners had submitted another application under Order 21, Rule 59 of the Code of Civil Procedure which too, had been rejected by the learned Trial Court, vide its order dated 24.11.2016 wherein, the prayer of the petitioners, not to confirm the sale, had been rejected by the learned Executing Court. Learned counsel Mr. He pointed out that the petitioners had submitted another application under Order 21, Rule 59 of the Code of Civil Procedure which too, had been rejected by the learned Trial Court, vide its order dated 24.11.2016 wherein, the prayer of the petitioners, not to confirm the sale, had been rejected by the learned Executing Court. Learned counsel Mr. Agarwal submitted that the said order dated 24.11.2016 has not even been placed by the petitioners, much less assailed. In light of these submissions, Mr. Alkesh Agarwal prayed that the writ petition filed by the petitioners be rejected. 14. Defending the cause of the auction-purchaser, respondent No.3- DLV Enterprises Private Limited, Mr. Pritam Solanki submitted that the auction proceedings have been conducted in a fair and transparent manner and wide publicity thereto had been given by the Executing Court. In response to the argument of Mr. Sankhla that the requisite amount of 25% was not tendered or deposited immediately on the date of auction, by the auction purchaser, he submitted that such assertion is factually incorrect. Mr. Solanki pointed out that immediately on finalisation of the auction proceedings, the auction-purchaser had tendered a cheque bearing number 486622 of Rs. 12,75,000/- drawn on State Bank of India, which according to him, was in complete satisfaction of the requirement of Rule 84 of Order 21 of the Code of Civil Procedure. He submitted that the argument of Mr. Sankhla in this regard is essentially based on the judgment of the Hon'ble Supreme Court in the case of Manilal Mohanlal Shah & Ors. v. Sayed Ahmed & Ors., reported in AIR 1954 S.C. 349 (Vol. 41, C.N. 84) wherein, Hon'ble Supreme Court had held that if the amount is not deposited in 15 days, the sale is liable to be set aside. While pointing out that the entire amount was paid vide a demand draft immediately on the next working day, i.e., Monday, Mr. Pritam Solanki submitted that Rule 84 of Order 12 of the Code does not prescribe any mode of tendering or paying the amount and in absence of such contemplation, even tendering of cheque is in consonance with the requirement of depositing 25% of the total amount of sale consideration. Pritam Solanki submitted that Rule 84 of Order 12 of the Code does not prescribe any mode of tendering or paying the amount and in absence of such contemplation, even tendering of cheque is in consonance with the requirement of depositing 25% of the total amount of sale consideration. In support of his argument, learned counsel relied upon judgment of the Hon'ble Supreme Court in the case of Rajesh Kumar v. Delhi Development Authority, (2012) 13 SCC 560 and contended that the Hon'ble Supreme Court has held that the provisions of Rule 84 of Order 21 of the Code of Civil Procedure should be liberally construed, and the earlier view of the Supreme Court in the case of Manilal Mohanlal (supra) has been watered down. With these submissions, Mr. Pritam Solanki also urged that the writ petition filed by the petitioners has no substance and the same is liable to be dismissed. 15. Heard learned counsels for the parties at length and perused the material available on record, including the Judgments. 16. Dealing with the arguments of the learned counsel for the petitioners Mr. Girish Sankhla, suffice it to observe that principles of deciding an application under the provisions of Order 21, Rule 90 of the Code of Civil Procedure cannot be mingled with or confused with the principles governing the adjudication of objection under Rule 97 of Order 21 of the Code. Most of his arguments were hovering around the collusion between the Judgment-Debtor and Decree-Holder, which are not required to be dilated upon, as the same were required to be and have been agitated at the stage of decision of the resistance/objection to the execution proceedings, as contemplated under Order 21, Rule 97 of the Code. All such grievances have been voiced and aptly dealt with by the Executing Court and by this Court. The petitioner cannot provide fresh lease of life to such contentions, under the cloak of different provisions namely Order 21, Rule 90 of the Code of Civil Procedure. 17. At this stage, the Court is required to see, as to whether, the procedure prescribed under the various provisions of Order 21 of the Code of Civil Procedure for selling the property and conducting auction has been followed or not. 17. At this stage, the Court is required to see, as to whether, the procedure prescribed under the various provisions of Order 21 of the Code of Civil Procedure for selling the property and conducting auction has been followed or not. In light of the scope of Rule 90, if his arguments are considered, this Court finds that all other arguments except two fall outside the scope of Rule 90. The arguments, which are germane for claiming setting aside of the sale are (i) the approximate value of the property in question has not been mentioned in the auction notice and (ii) that the requisite 25% of amount of total sale consideration as envisaged under Rule 84, has not been deposited immediately. 18. Though all the contesting parties have joined the discourse on all the issues, including the two, noticed in preceding paragraphs, but in the considered opinion of this Court, the aforesaid objections also are not available to the petitioners, who are the persons in possession of the property. The opinion of this Court is based upon a plain reading of Sub-Rule (2) of Rule 90 of Order 21 of the Code of Civil Procedure which reads thus:- "90. Application to set aside sale on ground of irregularity or fraud:- (1) ............... (2) No sale shall be set aside on the ground of irregularity or fraud in publishing or conducting it unless, upon the facts proved, the Court is satisfied that the applicant has sustained substantial injury by reason of such irregularity or fraud." 19. A bare look at this provision goes long way to show that an applicant, seeking setting aside of the auction, while bringing to fore, certain irregularities or infirmities committed or occurred, in conducting the auction proceedings, has to satisfy the Court that he has suffered substantial injuries by such lacunae in the procedure, and the Court is also required to record its satisfaction that the applicant has sustained substantial injuries on account of such irregularities or lapses. 20. 20. In view of the unambiguous and unequivocal language of Sub-rule (2), quoted herein above, even if the arguments of the learned counsel for the petitioners are assumed to be correct, this Court finds that neither in their application before the Executing Court, nor during the course of arguments, the petitioners have been able to point out, much less prove that they have suffered any injury on account of the alleged irregularities. 21. The argument that sufficient publicity of the auction had not been made is not available to the petitioners, as lack of publicity may result in fetching lesser price, for which, the judgment-debtor may be concerned, but not the present petitioners, who are simply claiming possession over the property. As such, lack of publicity or wide publicity of the auction, does not affect the petitioners at all. Similarly the argument, that the auction-purchaser did not deposit the requisite 25% amount of the total sale consideration on the same date, is also of a little avail to the petitioners, because such question of non-deposition of the requisite amount of 25% can be raised only by the competitive bidder(s), having participated in the proceedings. Because non-deposition of the requisite amount on the same day may be a concern of the participant(s), who had participated in the auction proceedings. Notwithstanding above, even if the arguments of Mr. Girish Sankhla are considered, this Court does not find any substance and force in any of his two arguments. 22. Dealing with the first argument, that the sufficient publicity and the approximate value of the property in question had not been disclosed in the auction notice, this Court is of the considered view that the learned Trial Court has recorded its findings, that sufficient publicity was given. 23. During the course of arguments when Mr. Girish Sankhla, learned counsel for the petitioners was asked to substantiate his allegation of lack of publicity, he fumbled, as did his counterpart before the Court below, who failed to build up and substantiate such allegation before the Executing Court. As such, the argument advanced on behalf of the petitioners is an argument in disguise, not supported by any material or evidence. 24. Equally, hollow has been his argument, that the requisite amount of 25% of total sale consideration had not been paid by the auction purchaser. As such, the argument advanced on behalf of the petitioners is an argument in disguise, not supported by any material or evidence. 24. Equally, hollow has been his argument, that the requisite amount of 25% of total sale consideration had not been paid by the auction purchaser. It is an admitted fact that the requisite amount of 25%, i.e., Rs. 12,75,000/- had been tendered by way of cheque dated 22.10.2016 drawn on the State Bank of India, bearing number 486622. 25. A perusal of Rule 84 of Order 21 of the Code of Civil Procedure shows that the Rule simply envisages depositing of 25% of the amount, immediately on completion of the auction proceedings, without prescribing any manner or mode of payment of such amount. The Rule in this regard has to be construed liberally and in coherence with the prevalent practice and law. If the auction purchaser is called upon to deposit the entire amount in cash, immediately on the knocking down of the auction, it would be impermissible under the provisions of Income-Tax Act on the one hand and impracticable on the other. The amount as large as Rs. 12,75,000/-, could be deposited only by way of demand draft or by way of cheque. 26. The facts obtaining in the present case are undisputed that on 20.10.2016, it was the fourth Saturday and the Banks were closed, thus it was practically impossible for the auction purchaser to deposit the amount aforesaid, even by way of demand draft. It is also to be noticed that on the very next available working day, i.e., 24.10.2016, the auction purchaser had paid the entire sale consideration to the tune of Rs. 51,00,000/- by way of a demand draft. 27. The objection as regards accepting the amount by way of cheque could perhaps be raised by the person conducting the auction proceedings. The Executing Court, without raising any such protest or demur, has accepted the cheque offered by the auction purchaser. Once the amount of cheque of requisite amount of Rs. 12,75,000/- had been accepted by the Executing Court, keeping in mind the other surrounding circumstances, viz., on the date of auction, it was fourth Saturday and payment in cash was neither possible nor permissible under the law, this Court is not inclined to interfere. Once the amount of cheque of requisite amount of Rs. 12,75,000/- had been accepted by the Executing Court, keeping in mind the other surrounding circumstances, viz., on the date of auction, it was fourth Saturday and payment in cash was neither possible nor permissible under the law, this Court is not inclined to interfere. This Court is of the considered opinion that the payment by way of cheque has not resulted in any irregularity, much less material irregularity, hitting at the root of the auction proceedings, for which, the entire proceedings can be set at naught. 28. Much has been said by the judgment-debtor and the decree holder about the conduct of the petitioners, that there is concealment of material facts and the writ petition should be rejected on such count alone. This Court is of the opinion that after having heard learned counsels for the rival parties at such length, it would be appropriate to decide the petition on the basis of arguments advanced, instead of dismissing the same on such technical ground. However, as a parting remark, this Court would add that the petitioner have concealed material facts including the orders passed by the Courts of law, for which, they are not entitled to maintain the present petition. 29. As an upshot of the discussions above, this Court concludes that the present petition is devoid of merit. The same is dismissed, however, leaving the parties to bear their own cost. 30. Needless to observe that with the dismissal of the writ petition, the interim order dated 12.04.2017 granted by this Court also ceases to exist.