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Gujarat High Court · body

2018 DIGILAW 775 (GUJ)

VAJUBHAI R CHIKHALIYA v. COLLECTOR

2018-06-22

BIREN VAISHNAV

body2018
JUDGMENT : 1. This petition under Article 227 of the Constitution of India is filed by the original defendant – judgment debtor challenging the orders dated 03.01.2013 passed below applications Exs. 55 and 61 in Special Execution Petition No.1 of 2000 by the learned Principal Senior Civil Judge, Surendranagar. 2. The facts are as under: 2.1 The petitioner was granted land bearing City Survey Ward No. 3 in Revenue Survey No. 1654/2 by an order dated 09.04.1986. The Collector, Surendranagar granted such land for construction of a godown for commercial purpose of storage of cooking gas cylinder as the petitioner had obtained a distribution agency from the Indian Oil Corporation. 2.2 The petitioner had sought an advance from the respondent no. 2 – Syndicate Bank – original plaintiff. The bank by a sanction letter dated 14.03.1986 sanctioned a loan amount of Rs.60,000/- (OSL) and 52,500/- (ODH). Since the petitioner defaulted in payment of loan, the bank preferred Special Civil Suit No. 119 of 1992 for recovery of Rs.1,69,000/- at 19.5% interest. The suit was decreed vide a judgment and order dated 11.10.1999. A statement is made in the petition that the suit concluded exparte. 2.3 After the decree was so passed, the bank preferred Special Execution Petition No. 1 of 2000. From the record of the certified copies produced on behalf of the respondent no. 3, by Mr. Anshin Desai, learned Senior Advocate appearing for respondent no. 3 who is assisted by Mr. Vaibhav Goswami, learned advocate, it is seen that the execution petition was so preferred on 03.01.2000. According to the petitioner, respondent no. 3 on 23.03.2012 filed application Ex. 42 for permission to purchase the land which was the subject matter of the suit. By an order dated 08.04.2012, that application Ex. 42 was allowed and pursuant to an amount of Rs.4,50,000/- offered by respondent no. 3, the sale was confirmed in favour of respondent no. 3 and a sale deed was accordingly entered into on 05.05.2012. 2.4 The petitioner aggrieved by this sale in favour of respondent no. 3 filed an application under Order 21 Rule 90 of the Civil Procedure Code, 1908 (hereinafter referred to as ;the Code’) objecting to the sale. Such application was filed on 06.08.2012. It was the case of the petitioner by that application at Ex. 55 that the sale in favour of respondent no. 3 filed an application under Order 21 Rule 90 of the Civil Procedure Code, 1908 (hereinafter referred to as ;the Code’) objecting to the sale. Such application was filed on 06.08.2012. It was the case of the petitioner by that application at Ex. 55 that the sale in favour of respondent no. 3 could not have been entered into on several counts. In a nut shell, if the objections of the petitioner at Ex.55 are considered, it was the case of the petitioner that : (i) The land which was allotted on 09.04.1986 by the Collector was subject to certain conditions embodied in the letter. Such conditions of the letter would suggest that the land could not have been alienated without the express consent of the State Government. (ii) It was the case of the petitioner that the bank had sought permission to participate in the bid as a decree holder under Order 21 Rule 72 of the Code of Civil Procedure, 1908. No proclamation as envisaged was published prior to the property being put on sale. The petitioner was neither put to notice nor were the application made at Ex. 42 by the respondent no. 3 nor the application at Ex. 39 for permission to appoint a valuer were served on the petitioner – judgment debtor. 2.5 According to the petitioner, therefore, the entire exercise of the property being sold in favour of respondent no. 3 was behind the back of the petitioner and therefore the sale in favour of the respondent no. 3 suffered from material irregularities and/or fraud and therefore ought to be set aside in accordance with the provisions of Order 21 Rule 90 of the Code. 2.6 Also on record are the objections filed by respondent no. 3 in whose favour the sale was executed. In the objections so filed by the subsequent purchaser – respondent no. 3, it was suggested that notices were issued in the newspaper which are on record at Ex. 14. The petitioner - original defendant – judgment debtor did not remain present. Proclamation under Order 21 Rule 66 was issued. Since pursuant to the proclamation no purchaser came forth to bid for the property, the Bank made an application under Order 21 Rule 72 of the Code to participate as a decree holder. Valuation report by virtue of an order under Ex. 39 was made valuing the property at Rs.4,46,000/-. Proclamation under Order 21 Rule 66 was issued. Since pursuant to the proclamation no purchaser came forth to bid for the property, the Bank made an application under Order 21 Rule 72 of the Code to participate as a decree holder. Valuation report by virtue of an order under Ex. 39 was made valuing the property at Rs.4,46,000/-. The respondent no. 3 offered a price of Rs.4,50,000/-. On an application made below Ex. 42, the sale was confirmed in view of the respondent no. 3 and through the intervention of the Court, sale deed was registered on 05.05.2012 and therefore the property has rightly vested in favour of respondent no. 3. 2.7 By the impugned order under challenge, the learned Principal Senior Civil Judge, Surendranagar dismissed the application below Ex. 55 filed by the petitioner holding that since the petitioner had never shown his intentions to deposit the decretal amount and he had not taken any objection, the application was dismissed. By an order of even date, an order was passed below Ex. 61 application filed by the Bank by which the learned trial court allowed the application of the Bank and issued a recovery warrant under the provisions of Order 21 Rule 35 against the petitioner for the purpose of recovery of amount of Rs.6,18,687/-. This in a nutshell is the controversy in the petition on hand. 3. Ms. Vaibhavi Nanavati, learned advocate appearing on behalf of the petitioner has raised several contentions challenging the order by which the application under Order 21 Rule 90 of the Code was rejected. Her contentions are as under: (a) That the entire process of the sale in favour of respondent no. 3 was bad and in violation of the principles of natural justice. (b) The petitioner was not kept in the loop of the entire process by the Court in accordance with the provisions of Order 21 of the Code. (c) No proclamation was issued of the property to be sold. (d) According to Ms. Nanavati, no third party like the respondent no. 3 could have been permitted by the Court to participate directly for purchasing of such property. It was not clear as to under which provision an application at Ex. 42 was made by respondent no. 3 by which the court permitted such sale. (e) This reflects collusion on the part of respondent no. 3 and Bank. 3 could have been permitted by the Court to participate directly for purchasing of such property. It was not clear as to under which provision an application at Ex. 42 was made by respondent no. 3 by which the court permitted such sale. (e) This reflects collusion on the part of respondent no. 3 and Bank. (f) That there was material irregularity in the procedure followed and therefore the application under Order 21 Rule 90 of the Code was rightly made by the petitioner. Incidences to demonstrate material irregularity as argued by Ms. Nanavati are as under: (fa) That there was no auction conducted, the basis on which the property was sold; that no direct sale to a private party could have been permitted. After the permission, when the Bank sought to participate in the auction, no further auction further took place so as to render the sale to the respondent no. 3 valid. That from the jantri prices on record, it is evident that the sale was at a much lower price and therefore the court in its duty ought to have achieved a far and proper price by way of auction. (fb) That provisions of Order 21 Rule 69 were not followed. That the order at Ex. 42 suggests that the proclamation was issued on 17.03.2001 but no purchaser was available. When that was the case it was incumbent under Order 21 Rule 69 that the sale should have been adjourned and a fresh proclamation be issued. 4. Mr. Anshin Desai, learned Senior Advocate appearing with Mr. Vaibhav Goswami, learned advocate on behalf of the respondent has supported the order passed by the learned trial court. Certified copies of the orders have been shown to the court to suggest the following sequence of events. The list of dates which may be necessary for the Court to decide the controversy which Mr. Desai has pointed out are as under: (i) Notice under Order 21 Rule 22 of the Code was issued on 03.01.2000. (ii) On 04.02.2000, the Court passed the order in exercise of power under Order 21 Rule 30 of the Code. Since pursuant to these notices issued by the Court, the petitioner failed to appear and respond to the summons, an application was made at Ex. (ii) On 04.02.2000, the Court passed the order in exercise of power under Order 21 Rule 30 of the Code. Since pursuant to these notices issued by the Court, the petitioner failed to appear and respond to the summons, an application was made at Ex. 12 by the Bank on 19.10.2000 stating that since the notice to the defendants is not being served, substituted service through publication of notice in the newspaper be made. Accordingly, Ex. 14 is on record which is a notice published in the newspaper drawing the notice of the petitioner to remain present on 18.11.2000. (iii) Ex. 16 was again an application made on 01.02.2001 that though the notice was issued, the defendant – judgment debtor has not remained present and though the officers of the Bank had accompanied the bailiff for execution of decree for the purposes of attachment, the defendant is avoiding service and therefore as per the proclamation intended, to permit the Bank to auction the property. Based on this application, an order was passed on 01.02.2001 under the provisions of Order 21 Rule 54 of the Code. A proclamation was accordingly issued on 16.03.2001. 4.1 The Bank by an application under Order 21 Rule 72 of the Code approached the Court requesting to participate and bid for the property, as according to the judgment creditor, despite the proclamation and the auction they were not getting bidders in favour of buying the land. A valuation report was sought for by application Ex. 39 and the Government Valuer valued the property price at Rs.4,46,000/-, 4.2 According to Mr. Desai, learned advocate appearing on behalf of the respondent, the application was made therefore by the respondent no. 3 below Ex. 42 willing to purchase the property at a higher price than one which was valued by the Government Valuer at Rs. 4,50,000/- and the Court on such application passed an order on 08.04.2012. Drawing my attention and taking me through the order below Ex. 42, Mr. Desai contended that the reading of the order indicates that since no purchaser was available and the property was mortgaged by the petitioner to the Bank, and a public notice was put up and the panchnama was drawn on 20.02.2001, the sale so made under Ex. 42 was valid and perfect. 4.3 Subsequently, by an order dated 25.04.2012 passed below Ex. 44 one Mr. 42 was valid and perfect. 4.3 Subsequently, by an order dated 25.04.2012 passed below Ex. 44 one Mr. L.D. Kosia, Deputy Registrar was appointed for execution of the sale deed. Mr. Desai has invited my attention to the sale deed which is annexed to the affidavit-in-reply wherein it is categorically mentioned that the sale deed is executed in the presence of the Court officers. 4.4 Mr. Desai has taken me through the affidavit-in-reply filed by respondent no. 3 and contended that the application under Order 21 Rule 90 of the Code at the hands of the petitioner was misconceived. There was nothing amiss in the procedure that was followed and the provisions of Order 21 Rule 54 and Order 21 Rule 66 of the Code by issuing proclamation and notices were followed. The petitioner had remained absent throughout the entire exercise and it was now therefore not open for him to file an application under Order 21 Rule 19 of the Code to contend that he has not been heard. Taking me through the panchnama executed after the orders, it is pointed out by Mr. Desai that when the panchnama was drawn, the petitioner has remained absent. 4.5 Mr. Desai also contended that rather than filing an application under Order 21 Rule 90 of the Code, it was open for the petitioner to have filed an application under Order 21 Rule 89 for setting aside the sale. If the intentions of the petitioner were genuine he could have deposited the amount in the Court by filing an application under such provision. The depositing of amount in this Court after issuance of notice is clearly an afterthought. 5. It is in the background of these submissions that the legality and validity of the orders under challenge needs to be adjudged. The sequence of events that unfold to the passing of the order under challenge would suggest that : (a) Even admittedly, as is so pleaded in the petition, the decree dated 11.10.1999 was passed exparte. Apparently, it appears that the petitioner did not participate even in the suit proceedings. (b) Certified copies of the order placed on record by Mr. Anshin Desai, learned Senior Advocate appearing for respondent no. 3 would suggest that notices under various provisions of Order 21 namely Order 21 Rule 22, Order 21 Rule 30 proclamation, notice on 16.03.2001 under Order 21 Rule 66 were issued. (b) Certified copies of the order placed on record by Mr. Anshin Desai, learned Senior Advocate appearing for respondent no. 3 would suggest that notices under various provisions of Order 21 namely Order 21 Rule 22, Order 21 Rule 30 proclamation, notice on 16.03.2001 under Order 21 Rule 66 were issued. (c) Preceding the exercise of proclamation carried out by the Court, applications at Exs. 12, 16, 23 and 39 would suggest that as the petitioner had remained absent, the notice could not be served and therefore the bank was constrained to move an application for publication of notice in the newspaper. Hearing was kept on 08.11.2000. On 17.03.2001, 20.07.2001 and 26.07.2001, the defendant – judgment debtor did not remain present. (d) Since the Bank was faced with a situation where neither the defendant – judgment debtor could be served nor did he remain present to participate in the execution proceedings nor did the Bank get a suitable debtor for the property in question, the Bank was constrained to move an application. The valuation report was sought for suggesting that the property could be valued at an amount of Rs.4,46,000/-. It is at this stage that Ex. 42 application was filed by respondent no. 3 offering a higher price of Rs.4,50,000/- on which application on 08.04.2012, the trial court passed an order ordering such sale. The sale was accordingly carried out. The court officer participated in the registration of the sale deed. The panchnama which was drawn on 09.05.2012 after the sale deed was executed had to be so executed in absence of petitioner defendant who was asked to remain present. The panchnama so records that fact. 6. It is in light of these factual averments that the order impugned herein needs to be appreciated again. What is evident is that an application under Order 21 Rule 90 of the Code would lie only to set aside the sale when upon the facts it is proved that the Court is satisfied that the applicant has sustained substantial injury by reason of such irregularity or fraud. From the sequence of dates as narrated hereinabove, what is clear is that the trial court at every step right from the time the execution was initiated on 03.01.2000 issued notices under Order 21 Rule 22 and Order 21 Rule 30 of the Code. From the sequence of dates as narrated hereinabove, what is clear is that the trial court at every step right from the time the execution was initiated on 03.01.2000 issued notices under Order 21 Rule 22 and Order 21 Rule 30 of the Code. When it became apparent that the defendant – original petitioner was not being served, the Bank filed an application under Ex. 12 for publication of a newspaper notice. 7. I am inclined to agree with the findings of the trial court as have been reproduced in paragraph 6.2 of the order to suggest that the conduct of the decree debtor – petitioner herein would amount to avoiding of service of published notice. In event of such conduct, when further procedure was followed under the provisions of Order 21 Rule 54 and Order 21 Rule 66 of the Code, the defendant – judgment debtor appeared and sought time on 23.02.2001. The record would indicate that, thereafter, the proceedings were adjourned to 19.03.2001, 19.04.2001, 20.04.2001, 21.04.2001 and 23.04.2001. Repeated attempts even by the Bank to get a debtor pursuant to a proclamation failed as a result of which in order to get the fruits of the decree and when the respondent no. 3 offered a price higher than the one the valuation report suggested, it cannot be said that the exercise was done behind the back of the petitioner, in light of his conduct as suggested hereinabove nor could it be said that there was collusion on the part of the Bank and the respondent no. 3. 8. As far as the contention of Ms. Nanavati, learned advocate appearing on behalf of the petitioner that the sale could not have been executed in favour of respondent no. 3, as the conditions of the order dated 09.04.1986 would prevent such a sale without the permission of the State Government is concerned, it is not open for the petitioner to show contempt. The privity of contract vis-a-vis the order pursuant to which the land was allotted was between the petitioner and the State Government. What was the issue in the execution proceedings was a transaction of loan purely commercial in nature between the petitioner and the Bank. Admittedly, the petitioner had defaulted in paying up the loans which he was bound to pay to the Bank. What was the issue in the execution proceedings was a transaction of loan purely commercial in nature between the petitioner and the Bank. Admittedly, the petitioner had defaulted in paying up the loans which he was bound to pay to the Bank. No shackles of the order dated 09.04.1986 could therefore prevent the Bank undertaking an execution in response to a decree which was passed in their favour. In satisfaction of such decree, therefore, the condition which bound the petitioner and the State Government would not bind the Bank in its transaction of a loan amount which the petitioner had defaulted. 9. As far as the contention of Ms. Nanavati that it was the duty of the Court to achieve a proper and fair price and jantri rates suggested that the property could have been sold for a higher price is concerned, it is not for a defaulting debtor who has not participated in such proceedings to take such a stand. Moreover, evident it is from the proceedings that the Bank had made several attempts to auction the property and having failed to find a debtor, based on a valuation report which suggested a price of Rs.4,46,000/- and the property was purchased by respondent no. 3 at Rs.4,50,000/-, it cannot be said that a fair and proper price of the auction property was not achieved. Order 21 Rule 54(1-A) of the Code would suggest that it was incumbent upon the judgment debtor to attend the proceedings before the trial Court. Reading of the impugned order would indicate that the conduct of the petitioner was otherwise. 10. As far as proclamation under Order 21 Rule 66 of the Code is concerned, admittedly the proclamation was issued. To suggest that a fresh proclamation be issued is not correct. When once having not participated in the sale proceedings and having consciously remained absent after having sought time on 23.02.2001 and when the Bank found that no suitable debtor was coming forward to buy the property, on the basis of valuation report when a price higher than the one that was valued was offered by respondent no. 3, the entire exercise cannot be branded as surreptitiously held or a collusive one. 3, the entire exercise cannot be branded as surreptitiously held or a collusive one. It was a fair exercise and the conduct of the petitioner itself would suggest that it is not open for him now to cry foul and raise a bogey of material irregularity by invoking Order 21 Rule 90 of the Code. I, therefore, see no reason to interfere in the impugned order passed by the trial Court. 11. For the foregoing reasons, petition stands dismissed. Ms. Nanavati states that by order dated 06.02.2013 passed by this court, an amount of Rs.4,50,000/- was deposited with the trial Court and the interim relief was granted on condition of such deposit. In view of the fact that the petition has been dismissed, the trial court is directed to refund the amount of Rs.4,50,000/- with the accrued interest, if any, to the petitioner on receipt of the writ of the order of this Court. Rule is discharged. Interim relief stands vacated. 13. The learned advocate on behalf of the petitioner requests that the interim relief granted by this Court may be extended for a period of eight weeks so that the petitioner can approach the higher forum. Learned advocate appearing on behalf of the respondent no. 3 objects to the extension of such relief. However, in view of the fact that this Court has held that the conduct of the petitioner would not make it possible for him to have raised an objection in accordance with Order 21 Rule 90 of the Code, I do not think it fit to accede to the request for extending the interim relief as prayed for. Such a request is therefore rejected.