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2018 DIGILAW 290 (KER)

Varghese S/o. Late Chiramel Anthony v. Jewel Rock Hire Purchase Kuries (P) Limited

2018-03-27

P.N.RAVINDRAN, R.NARAYANA PISHARADI

body2018
JUDGMENT : P.N. Ravindran, J. This appeal arises from the order passed by the Court of the Second Additional Subordinate Judge of Thrissur on 18.9.2012 dismissing E.A.No.1571 of 2011 in E.P.No.197 of 2006 in O.S.No.218 of 1998, an application filed by the appellant herein, to set aside the sale held on 19.9.2011 in execution of a decree passed by the said court. The brief facts of the case are as follows: 2. The first respondent herein instituted O.S.No.218 of 1998 in the Court of the Subordinate Judge of Thrissur for a decree allowing it to realise from the defendants and their assets the sum of Rs.4,80,000/- with interest at 6% per annum from the date of suit (6.4.1998) till realisation. Varghese, the appellant, was the fourth defendant therein. Besides him, Jose, Rosily Jose, Baby Johnson and Thomas were on the party array as defendants 1 to 3 and 5. Defendants 1 and 5 were set ex-parte. The other defendants entered appearance and contested the suit. After trial, the learned trial judge decreed the suit by judgment delivered on 19.11.2003 allowing the plaintiff to realise the sum of Rs.4,80,000/- with interest at 6% per annum from the defendants and their assets. The plaintiff was also held entitled to recover the sum of Rs.34,391/- towards costs from the defendants and their assets. 3. When the decree debt was not satisfied, the decree holder took steps to bring the decree schedule property to sale. After notice to the judgment debtors the sale proclamation was settled on 10.8.2011 and the decree schedule property was brought to sale and sold on 19.9.2011. In that sale, T.P. Anto, the second respondent herein was the sole bidder. He purchased the property for the sum of Rs.50,26,000/-. He deposited the sum of Rs.13,00,000/- representing 1/4th of the bid amount on 20.9.2011 and the balance bid amount on 30.10.2011. Even before the balance amount was deposited, the appellant herein filed E.A.No.1571 of 2011 under Order XXI Rule 90 of the Code of Civil Procedure with a prayer that the sale held on 19.9.2011 may be set aside. He had in the affidavit filed in support of the said application averred that as there was a call for hartal by major political parties on 19.9.2011, there was want of bidders. He contended that as a result thereof, the property did not fetch a reasonable price. He had in the affidavit filed in support of the said application averred that as there was a call for hartal by major political parties on 19.9.2011, there was want of bidders. He contended that as a result thereof, the property did not fetch a reasonable price. He further contended that taking advantage of the call for hartal, the decree holder clandestinely made the second respondent participate in the auction and that it was without a valid authorisation that an Advocate bid the property on behalf of the auction purchaser. He had a further contention that the property was worth Rs.75,00,000/-. The decree holder as well as the auction purchaser resisted the application. They contended that there is no material irregularity or fraud in publishing and conducting the sale. 4. Before the execution court, the appellant examined himself as PW1, T.P. Anto, who had bid the property as PW2 and a neighbouring land owner as PW3. He also produced and marked as Exts.A1 and A2, two newspaper reports to prove that there was a call for harthal on 20.9.2011; Ext.A1 being the Mathrubhumi Daily dated 20.9.2011, Thrissur Edition and Ext.A2 being the Mathrubhumi Daily Thrissur Edition dated 19.9.2011. On application filed by the appellant an Advocate Commissioner was appointed to inspect the property brought to sale and the report submitted by him was marked as Ext.C1. The vakalath nama executed by the auction purchaser on behalf of Sunil Konnanath, Advocate, was marked Ext.C2, the sale proclamation as Ext.C3 and the sale warrant as Ext.C4. Though no oral evidence was adduced on the side of the respondents, a copy of W.P.(C)No.27172 of 2010 filed by the appellant in this court was produced and marked as Ext.B1. After considering the rival contentions the execution court held that there is no material irregularity or fraud in publishing and conducting the sale. The execution court accordingly dismissed E.A. No.1571 of 2011 by order passed on 18.9.2012. The said order is under challenge in this appeal. 5. We heard Sri. Athul Shaji, learned counsel appearing for the appellant, Sri. P. Santhosh, learned counsel appearing for the first respondent, Sri. G. Sreekumar (Chelur), learned counsel appearing for the second respondent, Sri. P.B. Subramanyan, learned counsel appearing for respondents 3 and 4 (judgment debtors 2 and 3) and Sri. The said order is under challenge in this appeal. 5. We heard Sri. Athul Shaji, learned counsel appearing for the appellant, Sri. P. Santhosh, learned counsel appearing for the first respondent, Sri. G. Sreekumar (Chelur), learned counsel appearing for the second respondent, Sri. P.B. Subramanyan, learned counsel appearing for respondents 3 and 4 (judgment debtors 2 and 3) and Sri. Jamsheed Hafiz, learned counsel who was called upon to address arguments touching upon the right of an Advocate, who was not professionally engaged to appear in the suit, to act as the agent of the auction purchaser. Learned counsel for the appellant as well as Sri. Jamsheed Hafiz submitted that in the instant case, the execution court had not allowed Sunil Konnanath, the lawyer who had filed Ext.C2 vakalath nama, to bid on behalf of the second respondent and therefore on that short ground, the impugned sale is liable to be set aside. Inviting our attention to Rules 22 and 22A in Part VI of Chapter II of the Bar Council of India Rules, learned counsel submitted that an Advocate who has been professionally engaged cannot directly or indirectly bid for or purchase, either in his own name or in any other name, for his own benefit or for the benefit of any other person, any property sold in execution of a decree or order in any suit, appeal or other proceeding, that though the said prohibition does not prevent an Advocate from bidding for or purchasing for his client, any property which his client may himself legally bid for or purchase, the Advocate has to be expressly authorised in writing in this behalf, that in the instant case no such authorisation has been produced and therefore, on that score also, the impugned sale is liable to be set aside. 6. Sri. Jamsheed Hafiz, learned counsel supported the said submissions. 6. Sri. Jamsheed Hafiz, learned counsel supported the said submissions. Learned counsel also brought to our notice that though for the purpose of Section 47 of the Code of Civil Procedure, the auction purchaser is also deemed to be a party to the suit or other proceedings, in view of the provisions contained in Rule 22 of the Bar Council of India Rules above referred to, coupled with the stipulation in Rule 342(3) of the Civil Rules of Practice, Kerala, the second respondent should have executed a power of attorney authorising Sunil Konnanath, Advocate, to bid on his behalf in the auction held on 19.9.2011 and that as such authorisation has not been produced, it has to be held that it was without authority that Sunil Konnanath, participated in the auction on behalf of T.P.Anto, the auction purchaser. Sri. P.B. Subramanyan, learned counsel appearing for respondents 3 and 4 reiterated the said submissions and further submitted that as the sale was held on 19.9.2007, the entire balance sale consideration should have been deposited within 15 days therefrom namely on or before 5.10.2011, that in the instant case, one-fourth of the bid amount was not deposited on the date of the sale but only on the next day namely on 20.9.2011, thereby violating the stipulation contained in Order XXI Rule 84 of the Code of Civil Procedure, that notwithstanding the order passed by the execution court on 20.9.2011 that the balance sale consideration should be deposited within 15 days, the balance sale consideration was deposited only on 30.10.2011 beyond the stipulated period of 15 days and therefore, on the terms of Order XXI Rule 85 of the Code of Civil Procedure, the sale held on 19.9.2011 is liable to be set aside. 7. Per contra, Sri. P. Santhosh, learned counsel appearing for the decree holder submitted that once the sale is conducted and the auction purchaser deposits the sale consideration, the question whether the person who had bid on behalf of the auction purchaser was validly authorised recedes to the background and even assuming that there was any irregularity, that by itself will not invalidate the sale. Sri. Sri. G. Sreekumar (Chelur), learned counsel appearing for the auction purchaser reiterated the said submission and further contended that even assuming that Sunil Konnanath, Advocate, had bid on behalf of the auction purchaser without lawful authority, that by itself is not a reason to set aside the sale. Learned counsel also submitted that it is not stipulated either in the Civil Rules of Practice, Kerala or in the Code of Civil Procedure that a person bidding on behalf of another should produce a special authority and therefore, in the absence of such a stipulation no exception can be taken to the impugned sale. Learned counsel also submitted that in the instant case, the property was sold for a sale consideration of Rs.50,25,000/- and having regard to the area of the land brought to sale and the improvements therein, by no stretch of imagination can it be said that reasonable price was not fetched in the auction. 8. We have considered the submissions made at the Bar by learned counsel appearing on either side. We have also gone through the pleadings and the materials on record. The impugned sale was held on 19.9.2011. Order XXI Rule 84 of the Code of Civil Procedure stipulates that on every sale of immovable property the person declared to be the purchaser shall pay immediately after such declaration a deposit of twenty - five per cent of the amount of his purchase-money to the officer or other person conducting the sale. It is also stipulated that in default of such deposit, the property shall forthwith be re-sold. In the instant case, though the sale was held on 19.9.2011 for Rs.50,26,000/-, one-fourth of the said sum was not deposited on that day. It was deposited only on 20.9.2011. 9. When the execution petition came up for consideration before the execution court on 20.9.2011, as ordered earlier, after noticing the fact that one-fourth of the bid amount was deposited on that day, the execution court adjourned the execution petition to 21.11.2011 for confirmation of the sale with a direction to deposit the balance sale consideration within 15 days. As the sale was held on 19.9.2011, on the terms of Order XXI Rule 85 of the Code of Civil Procedure, the balance sale consideration should have been deposited on or before 4.10.2011. As the sale was held on 19.9.2011, on the terms of Order XXI Rule 85 of the Code of Civil Procedure, the balance sale consideration should have been deposited on or before 4.10.2011. Order XXI Rule 85 stipulates that the full amount of purchase money payable together with the amount required for the general stamp paper for the certificate under Rule 94 shall be paid by the purchaser to the court before the court closes on the fifteenth day from the date of the sale of the property. Computed in accordance with the stipulations contained in Order XXI Rule 85, it is indisputable that the entire balance purchase money should have been deposited on or before 4.10.2011. Such deposit was however made only on 30.10.2011, which is beyond the time limit stipulated in Order XXI Rule 85. The Apex Court has in Messrs Takur Cold Storage v. Punjab Financial Corporation [(1987) 4 SCC 72] held that noncompliance with the mandatory provisions contained in Order XXI Rule 85 would render the sale a nullity. This aspect of the matter however appears to have escaped the attention of the court below as also the counsel who appeared in the court below. In our considered opinion, on that short ground itself, the impugned sale is liable to be set aside. 10. There is also yet another reason why we are persuaded to interfere with the impugned sale. Rule 342(3) of the Civil Rules of Practice, Kerala stipulates that no court shall allow a person to bid for another except under special authority from him. In the instant case, the special authority is stated to be Ext.C2 vakalath nama. It was executed by the auction purchaser in favour of Sunil Konnanath, Advocate, on 31.7.2011. It was presented in Sub Court, Thrissur on 19.9.2011. Though the vakalath nama bears court fee stamps of the value of Rs.6/- as also Advocates' Welfare Fund stamps of the total denomination of Rs.21/-, it does not bear the seal of the Sub Court, Thrissur. The vakalath nama also does not authorise Sunil Konnanath, Advocate, to bid on behalf of T.P. Anto, the auction purchaser. The vakalath nama only authorises him to appear in E.P.No.197 of 2006 in O.S.No.218 of 1998 to conduct, prosecute or defend the same and all proceedings that may be taken in respect of any application for execution of any decree or order passed therein. The vakalath nama only authorises him to appear in E.P.No.197 of 2006 in O.S.No.218 of 1998 to conduct, prosecute or defend the same and all proceedings that may be taken in respect of any application for execution of any decree or order passed therein. It also empowers the Advocate to compromise any proceeding on his behalf and to appear in all miscellaneous proceedings in the suit or matter till all decrees or orders are fully satisfied or adjusted and to produce in court any money document or valuable security on his behalf or to apply for their return or to receive back the same and to apply for and obtain copies of all the documents in the record of the proceedings. A copy of Ext.C2 vakalath nama is appended to this judgment. The said vakalath nama does not in our opinion authorise Sunil Konnanath to bid on behalf of T.P. Anto. 11. We are persuaded to arrive at such a conclusion also by reason of the provisions contained in Rules 22 and 22A occurring in Part VI of Chapter II of the Rules framed by the Bar Council of India, which are extracted below: “22. An Advocate shall not, directly or indirectly, bid for or purchase, either in his own name or in any other name, for his own benefit or for the benefit of any other person, any property sold in the execution of a decree or order in any suit, appeal or other proceeding in which he was in any way professionally engaged. This prohibition, however, does not prevent an advocate from bidding for or purchasing for his client any property which his client may himself legally bid for or purchase, provided the Advocate is expressly authorised in writing in this behalf.” “22A. An advocate shall not directly or indirectly bid in court auction or acquire by way of sale, gift, exchange or any other mode of transfer either in his own name or in any other name for his own benefit or for the benefit of any other person any property which is subject matter of any suit appeal or other proceedings in which he is in any way professionally engaged.” The first part of Rule 22 applies only to Advocates who are professionally engaged. It stipulates that an Advocate shall not, directly or indirectly, bid for or purchase, either in his own name or in any other name, for his own benefit or for the benefit of any other person, any property sold in the execution of a decree or order in any suit, appeal or other proceeding in which he was in any way professionally engaged. The second part of Rule 22 which is an exception to the first part stipulates that the prohibition does not prevent an Advocate from bidding for or purchasing for his client any property which his client may himself legally bid for or purchase, provided the Advocate is expressly authorised in writing in this behalf. Rule 22A which was introduced in the year 1998 also deals with an Advocate who is professionally engaged. It is evident from Rule 22 above referred to that even an Advocate who is not professionally engaged can participate in a court sale for the purpose of bidding for or purchasing on behalf of his client the property brought to sale, only if his client has expressly authorised him in writing in that regard. This stipulation has to be read in the light of the stipulation in Rule 342(3) of the Civil Rules of Practice, Kerala, which stipulates that no court shall allow a person to bid for another except under special authority from him. Rule 342 of the Civil Rules of Practice, Kerala is extracted below: “342. Declaration of purchaser.- (1) The highest bidder in the auction shall, subject to the provision in Order XXI, Rule 88 of the Code, be declared to be the purchaser and the sale price and the name of the purchaser shall be noted by the Judge in the sale warrant under his signature. (2) The said purchaser shall acknowledge his purchase by subscribing to a sale memorandum briefly reciting the property sold, the sale price, and the full name and description of the purchaser. (3) No Court shall allow a person to bid for another except under special authority from him.” 12. In the instant case, as stated earlier, Ext.C2 vakalath nama does not constitute a special authority. The vakalath nama does not authorise or empower Sunil Konnonath, Advocate to bid on behalf of T.P. Anto. (3) No Court shall allow a person to bid for another except under special authority from him.” 12. In the instant case, as stated earlier, Ext.C2 vakalath nama does not constitute a special authority. The vakalath nama does not authorise or empower Sunil Konnonath, Advocate to bid on behalf of T.P. Anto. Therefore for that reason also, we are also of the opinion that the sale in favour of T.P. Anto is liable to be invalidated. Though it was contended before us by learned counsel appearing for the decree holder as well as the auction purchaser that there is no express provision in the Rules requiring an auction purchaser to produce the authorisation given to the bidder, having regard to the stipulations in Rule 342(3) of the Civil Rules of Practice, Kerala, we are not persuaded to accept the said submission. Rule 342(3) of the Civil Rules of Practice, Kerala is in our opinion an injunction against the court from allowing a person to bid for another if he does not have with him a special authority executed by that person. In the instant case, no such special authority was produced before the Amin who conducted the sale. The expression used in Rule 22 of the Rules framed by the Bar Council of India is 'express authorisation' and the expression used in Rule 342(3) of the Civil Rules of Practice, Kerala is “special authority”. Ext.C2 vakalath nama does not even refer to the sale held on 19.9.2011. It does not either expressly or impliedly authorise Sunil Konnonath to bid on behalf of T.P. Anto or purchase the property brought to sale. By no stretch of imagination can it be said that the vakalath nama which does not even refer to the sale and does not authorise Sunil Konnonath to bid in the auction or purchase the property on behalf of T.P. Anto would constitute an express authorisation or a special authority. Sunil Konnonath could not have therefore bid on behalf of T.P. Anto on the strength of Ext.C2. The sale in our opinion is liable to be invalidated on that score as well. 13. That apart, we find from the papers before us that when the sale was conducted on 19.9.2011 there were only three persons present. Sunil Konnonath could not have therefore bid on behalf of T.P. Anto on the strength of Ext.C2. The sale in our opinion is liable to be invalidated on that score as well. 13. That apart, we find from the papers before us that when the sale was conducted on 19.9.2011 there were only three persons present. They were the learned counsel appearing for the decree holder, the learned counsel appearing for the judgment debtor and Sunil Konnonath, the counsel engaged by T.P. Anto, the auction purchaser. There was no other bidder present at the time of the sale evidently for the reason that there was a call for hartal on that day. Though the sale cannot be said to be vitiated by reason of the fact that there was a hartal on 19.9.2011, having regard to the fact that the other two persons, who were present, were disqualified by virtue of Rules 22 and 22A of the Bar Council of India Rules from participating in the auction, the conclusion is inescapable that in the sale held on 19.9.2011 there was only one bidder. If more persons had participated, may be the property would have fetched a higher amount. That is an aspect which we cannot completely ignore while considering the question whether the sale in the instant case should be set aside or not. For the reasons stated above, we allow the appeal, set aside the impugned order and allow E.A.No.1571 of 2011 in E.P.No.197 of 2006 in O.S.No.218 of 1998 on the file of the Court of the II Additional Subordinate Judge of Thrissur. Consequently, the sale held on 19.9.2011 in execution of the decree passed in O.S.No.218 of 1998 shall stand set aside. The amount deposited shall be refunded to the auction purchaser. It will be open to the decree holder to take fresh steps to have the decree schedule property brought to sale if the decree is not satisfied or to proceed against the money already deposited by the judgment debtor pursuant to the interim orders passed by this court.