Chellamuthu Gounder vs Subbammal and others

Maheswaran, J.—C.R.P. No. 1504 of 1985 is filed against the order in C.M.A. No. 23 of 1984 on the file of the Subordinate Judge, Coimbatore confirming the order passed by the District Munsif, Coimbatore in E.A. No. 1134 of 1983 in E.P. No. 29 of 1982 in O.S. No. 401 of 1974. E.A. No. 1134 of 1983 was an application filed by the Official Receiver, Coimbatore under O. 21, R. 90, C.P.C. C.R.P. No. 1638 of 1985 is preferred against the decree and judgment in C.M.A. No. 46 of 1984 on the file of the Subordinate Judge, Coimbatore Shortly stated, the facts are: The revision petitioner in C.R.P. No. 1504 of 1985 is one Chellamuthu Gounder who is the Court auction purchaser of the property which was brought to sale at the instance of one Subbammal who is the decree-holder in O.S. No. 401 of 1974 out of which the execution application has arisen. The Court auction purchaser, who is the fifth respondent in E.A. No. 1134 of 1983, purchased an extent of 8.67 acres in S. Nos. 154/2A and 153/1 of Akkarai Sengampalli Village, Avanashi Taluk with a well fitted with 5 H.P., motor pumpset, for a consideration of Rs. 15,100. The fourth respondent in the execution application Arumugham was adjudicated insolvent on his petition in I.P. No. 18 of 1979 on the file of the Subordinate Judge, Coimbatore. The second respondent in the execution application Subbiah Gounder also filed I.P. No. 19 of 1979 on the file of the Subordinate Judge, Coimbatore. The third respondent in the execution application Ponnuswamy filed I.P. No. 20 of 1979 on the file of the Subordinate Judge, Coimbatore. The three respondents referred to were adjudicated insolvents on 26-10-1980. The property vested with the Official Receiver. While so, the first respondent Subbammal, who is the revision petitioner in C.R.P. No. 1638 of 1985, filed an execution petition. She did not implead the Official Receiver, Secondly, the executing Court has also not issued a notice under O. 21 R. 22 (c), C.P.C. The Official Receiver, who has filed E.A. No. 1134 of 1983, out of which these civil revision petitions have arisen, for setting aside the sale, would state that the Court auction sale is a nullity and is liable to be set aside as there was no notice under O. 21, R. 22 (c) C.P.C. His further contention is that the mandatory requirements of O. 21, R. 66, C.P.C., have not been complied with. He further says that the property was purchased for a low price of Rs. 15,000 when its market value would be more than Rs. 60,000 and that even without disclosing the value of property as given by the judgment-debtor, the upset price has been fixed and properties worth several lakhs have been sold for Rs. 15,000. The Official Receiver in his application prayed to set aside the sale as the sale is a nullity for want of notice under O. 21, R. 22 (c), C.P.C., and also because the mandatory requirements of O. 21, R. 66, C.P.C., have not been complied with. The revision petitioner in C.R.P. No. 1638 of 1985, who was the first respondent in E.A. No. 1134 of 1983, filed a counter statement and she contended that she brought the property to sale after obtaining permission of the Court and that the Official Receiver himself applied for stay of the sale and then she had the stay vacated and the order of the Court overruling the objection of the Official Receiver will operate as res judicata and, therefore, the petition to set aside the sale by the Official Receiver will not lie. The further case is that the property has fetched a good price.

The learned District Munsif was of the view that the sale is vitiated and set it aside and allowed the petition of the Official Receiver. In appeal, the order was confirmed by the Subordinate Judge. The auction purchaser, who was the first respondent in E.A. No. 1134 of 1983 and Subbammal the first respondent/decree-holder have filed the above revisions. Both the civil revision petitions arise out of the common order passed by the Subordinate Judge confirming the order in E.A. No. 1134 of 1983.

The Official Receiver has attacked the sale on the ground that no notice was served under O. 21, R. 22(c), C.P.C. and also on the ground that mandatory provisions of O. 21, R. 66, C.P.C. have not been followed. He would also say that he should have been impleaded as a party. Mr. Gopalaratnam, learned counsel for the revision petitioners in answer would contend that no notice under O. 21, R. 22(c), C.P.C. is necessary. He will advert to that point first.

It is pointed out by the learned counsel for the revision petitioners that if the Court wants to dispense with the notice, surely it has jurisdiction to do so. My attention was invited to a ruling of a single Judge of this Court in Official Receiver v. Kadir Meera Hussian 1975 (II) M.L.J. 1. That was a case where one Nagamanickam Chettiar was adjudged an insolvent on 27-9-1949. The properties vested with the Official Receiver, subsequently, the father of the insolvent filed a suit against the insolvent and the Official Receiver for partition and separate possession of his half share in the joint family properties. A decree was granted by the Sub Court which was later modified by the High Court and the result was the father was granted a half share in the joint family properties, but the debts of the insolvent were held to be binding on the joint family properties including the share of the father. One Janardhana Naidu instituted a suit against Laksminarayana Chettiar, the father of the insolvent, for recovery of certain sum of money on the foot of a promissory note, Lakshminarayana Chettiar, the father of the insolvent did not appear in Court and an ex parte decree was passed against him in February, 1959. The father of the insolvent Lakshminarayana Chettiar died and Janardhana Naidu filed an execution application but impleaded the dead man and did not implead his legal representative and obtained transaction of the decree to the Erode Sub Court. The decree-holder then filed an execution petition for the attachment and sale of the properties of the deceased Lakshminarayana Chettiar and obtained attachment. After the attachment was effected, the decree-holder found that Lakshminarayana Chettiar was dead and later he filed two applications where by the insolvent, who was the son, was added as the legal representative and the Official Receiver was also impleaded as a party. Notice was ordered to both and the insolvent remained ex parte, but the Official Receiver entered appearance and contested the execution petition. The Objections of the Official Receiver were overruled and execution was ordered. The Official Receiver preferred an appeal which was dismissed. A civil miscellaneous second appeal was filed in the High Court and that was also dismissed and subsequently the properties were sold and a third party purchased the properties. The Official Receiver filed an application under O. 21, R. 90, C.P.C. for setting aside the sale on the ground that the Court auction sale was vitiated by material irregularity and fraud in the publication and conduct of the sale, that there was no proclamation of sale and that was opposed by the decree-holder and the auction purchaser and the petition was later dismissed. The Official Receiver then preferred an appeal to the District Judge of Coimbatore which was also dismissed. The Official Receiver then filed a petition under S. 4 of the Provincial Insolvency Act for a declaration of his title to the properties that have been sold away. That petition was allowed by the Subordinate Judge. Against that order of the Subordinate Judge, a civil miscellaneous appeal was filed before the District Judge, Coimbatore who allowed the appeal. It is against that judgment; a civil miscellaneous second appeal was filed before a learned single Judge of this Court. It is not necessary to further enter into the details of the case. The learned single Judge held that the application is barred by res judicata and dismissed the appeal. In that case, it should be noted that the Official Receiver was brought on record in the execution proceedings after the death of the insolvent''s father and the Official Receiver appeared in Court and according to the learned single Judge, he raised all conceivable objections to the executability of the decree and the sale ability of the property and all these objections were overruled. The learned single Judge held that the Official Receiver would be barred by constructive res judicata from raising again those objections. Such however is not the case here. In the execution proceedings by Subbammal the revision petitioner in C.R.P. No. 1638 of 1985, the Official Receiver was not impleaded. In the affidavit filed in support of E.A. No. 1134 of 1983, the Official Receiver says that when the execution petition has been filed long after the order of adjudication, the first respondent (Subbammal) has not impleaded him as a party to the execution petition. The Official Receiver could not therefore appear in the execution petition and raise any objection about executability. Further, notice under O. 21, R. 22(c) C.P.C. was admittedly not served on the Official Receiver. The contention of the learned counsel for the revision petitioners is that such a notice is not necessary if the Official Receiver had knowledge of the fact that the sale was going to be held on a particular day. In this case, learned counsel, appearing for the revision petitioner''s points out that when the property was brought to sale on an earlier occasion, the Official Receiver applied to the Court for stopping the sale. The sale was ordered to be stopped by the executing Court on 7-2-1983, but the order was rescinded on 11-2-1983 and the sale was ordered for 26-3-1983. Neither the counsel for the revision petitioners nor the counsel for the respondents brought to my notice any order of the Court rescinding the earlier order stopping the sale. It is not clear under what circumstance the order stopping the sale was rescinded and whether the Official Receiver had any knowledge that the sale was posted to 26-3-1983. It is then pointed out by the learned counsel for the revision petitioners that the sale was again adjourned to 11-4-1983 and the sale was held on that day. It is not clear whether these facts were known to the Official Receiver and whether he knew about the actual date of sale. A notice under O. 21, R. 22(c) C.P.C. is a mandatory provision and the principle underlining that mandatory provision is that the interests which would be affected by the execution should be sufficiently represented and to give an opportunity to show cause against the execution. No notice is necessary in cases falling within the proviso to O. 21 R. 22, C.P.C. Their Lordships of the Judicial Committee in AIR 1914 129 (Privy Council) pointed out that a notice under S. 248 C.P.C. (O. 21 R. 22, C.P.C.,) is necessary in order that the Court should obtain jurisdiction to sell the property by way of execution as against the legal representative of a deceased judgment-debtor-Admittedly, no notice under O. 21 R. 22, C.P.C., was given. It is, therefore, manifest that where a notice under O. 21 R. 22, C.P.C., is necessary and if it is not given, the Court will have no jurisdiction to proceed with the execution. Consequently, the sale held in pursuance of that execution will be vitiated.

The further contention of the Official Receiver is that the mandatory requirements of O. 21, R. 66, C.P.C., have not been complied with. The irregularities which he had enumerated are: (1) The subsisting equitable mortgage in respect of the execution petition mentioned the property in favour of one V.P. Kandaswami who is also a respondent in the insolvency petition has been suppressed in the proclamation; (2) Existence of tenancy right in favour of a tenant who is occupying the properties brought to sale was not set out; (3) The judgment-debtors are not shown as insolvents; and (4) The value of the property as given by the judgment-debtor has not been disclosed and valuable properties worth more than several lakhs have been sold for Rs. 15,000.

Omission to state about the encumbrance on the property will be a material irregularity under O. 21, R. 90, C.P.C. Omission to inform intending purchasers that the properties are encumbered must have affected the sale bids and it would cause substantial injury to the judgment-debtor. On this account also the sale has to be set aside.

The next ground is that in the sale proclamation, the occupancy of a tenant of the property brought to sale has not been stated. This would not be a material irregularity because it will not affect the judgment-debtor.

The third ground is that the judgment-debtors are not shown as insolvents. This would be a material irregularity particularly in the absence of the Official Receiver as a party to the proceedings. Mere inadequacy of price may not be an irregularity. The Court is not now called upon to fix the upset price after the amendment of the CPC by Act 104 of 1976. The Courts below were therefore correct in setting aside the sale. The revisions fail and are dismissed with costs.