C.K.T. Arasu vs Sekaran

This civil revision petition has been filed to call for records in pursuant to the fair and decretal order, dated 13.08.2012, made in E.A. No. 3 of 2012 in E.P. No. 87 of 2008 in O.S. No. 1 of 2008, passed by the learned Additional District Munsif, Karaikudi and to set aside the same.

The petitioner is the third party, auction purchaser. The first respondent is the Judgment Debtor and the second respondent is the Decree Holder.

The second respondent filed O.S. No. 1 of 2008 on the file of Additional District Munsif Court, Karaikudi, against the first respondent for recovery of money. The first respondent remained ex-parte and ex-parte decree was passed on 21.07.2008. As the first respondent did not pay the amount decreed, the second respondent filed E.P. No. 87 of 2008 for recovery of a sum of Rs. 91,297/-, being the amount decreed, interest and cost awarded by attachment and sale of the first respondent''s immovable property mentioned therein.

In the E.P., notice was issued to the first respondent. The first respondent entered appearance through his counsel. The first respondent did not file any counter affidavit. Hence, he was set ex-parte and the E.P. was proceeded for sale of the immovable property belonging to the first respondent.

Attachment was effected and the sale papers were filed by the second respondent. The Decree Holder has valued the property as Rs. 1,50,000/-. The Ameena of the Court fixed the value of the property as Rs. 17,00,000/-. Taking into consideration all the materials on record, the learned Judge fixed upset price of Rs. 18,00,000/-. There were no bidders on the day of auction. The second respondent filed an application in E.A. No. 33 of 2011, to reduce the upset price fixed by the learned Judge. Without notice to the first respondent, the upset price was reduced to Rs. 13,00,000/-. Again, there were no bidders. Therefore, the second respondent again filed another application to reduce the upset price. Again without notice to the first respondent, the upset price was reduced to Rs. 10,00,000/-. The petitioner herein offered his bid at Rs. 10,05,000/- and deposited the balance amount within the time limit as per procedure.

The first respondent filed E.A. No. 3 of 2012 in E.P. No. 87 of 2008 in O.S. No. 1 of 2008 under Order XXI Rule 90 CPC, to set aside the sale on the ground that the Courts below committed material irregularity in conducting the sale. The Executing Court failed to ascertain as to whether the entire property attached has to be sold or whether it is sufficient to sell only a portion of the property. According to the first respondent, the property is worth about more than Rs. 50,00,000/-, whereas the amount due is only is Rs. 91,297/-. Further, the Court reduced the upset price without notice to him. In addition to these irregularities, he also contended that the petitioner herein and the second respondent colluded together and played fraud in the auction held, as the offer of the petitioner is Rs. 10,05,000/-.

The second respondent filed statement of objection and denied all the allegations made by the first respondent and contended that the first respondent remained ex-parte. He is not entitled to notice in further proceedings.

The petitioner filed statement of objections, stating that he is a bona fide purchaser and deposited the entire bid amount of Rs. 10,05,000/- and hence, he prayed for confirmation of sale in his favour.

The learned Judge considering all the materials on record, Judgments relied on by the learned counsel for the parties and arguments of the learned counsel for the parties, by the order dated 13.08.2012, allowed E.A. No. 3 of 2012, holding that the Executing Court failed to follow the mandatory procedure while conducting the sale.

Aggrieved by the order dated 13.08.2012, made in E.A. No. 3 of 2012 in E.P. No. 87 of 2008 in O.S. No. 1 of 2008, the petitioner has filed the present civil revision petition.

Originally, the petitioner was represented by the counsel. Subsequently, at the time of hearing, the petitioner argued himself as party-in-person.

Heard Mr. C.K.T. Arasu, petitioner/party-in-person and Mr. A.L. Kannan, learned counsel for the first respondent. Though notice was served on the second respondent and his name is printed in the cause list, he has not chosen to appear either in person or through counsel.

The petitioner argued that the impugned order is liable to be set aside on the following grounds:

(i) After being duly served in the E.P. and being set ex-parte, the first respondent is not entitled to notice thereafter at any stage.

(ii) Having been set ex-parte, the first respondent has no locus standi to file an application under Order XXI Rule 90 CPC.

(iii) Having failed to object to attachment as contemplated under Order XXI Rule 58 CPC, the application filed by the first respondent is hit by principles of estoppel and res judicata.

(iv) The first respondent is not entitled to notice in the application for reduction of upset price.

(v) The impugned order is liable to be set aside, as no notice as contemplated in Form-36 as per Order XXI Rules 90 and 92 CPC.

The petitioner argued elaborately on these points. In support of his submission, he relied on the following Judgments:

(1) Dr. Jamuna Vs. Karmegam,

(2) Saroja Vs. Chinnusamy (Dead) By LRs. and Another [Appeal (Civil) No. 3907 of 2007, dated 24.08.2007]

(3) Dhirendra Nath Gorai and Subal Chandra Shaw and Others Vs. Sudhir Chandra Ghosh and Others,

(4) Barkat Ali and Another Vs. Badri Narain (D) by LRs.,

(5) Shri Ramo Barman and Others Vs. Smt. Dagripriya Kachari and Others [S.A. No. 25 of 1984, dated 10.04.1991, legalcrystal.com/131690].

(6) Budhamal Hajarimal Vs. Laxmibai Bhr. Baburao, .

(7) Kanchana and Another Vs. Vembu Ammal (Deceased) and Others [S.A. No. 1091 of 2000, dated 27.07.2012].

(8) P.S.S. Sathappan Vs. Andhra Bank Ltd. and Others, .

(9) Janak Raj Vs. Gurdial Singh and Another, .

(10) S. Chokalingam Asari Vs. N.S. Krishna Iyer and Others, .

(11) Ambujammal Vs. P. Thangavelu Chettiar and Another, .

(12) Seth Nanhelal Vs. Umrao Singh [1930(58) Law Reports Ind. App. 50].

(13) AIR 1938 525 (Nagpur).

(14) AIR 1938 527 (Nagpur).

(15) AIR 1928 265 (Nagpur).

(16) Sorimuthu Pillai and Others Vs. Muthukrishna Pillai, .

(17) Kailash Chandra Tarafdar Vs. Gopal Chandra Poddar, .

(18) Kadiyala Rama Rao Vs. Gutala Kahna Rao (Dead) By LRs. & Others [Appeal (Civil) No. 2269 of 1981, dated 01.01.2000].

(19) R. Jeyaraman and Another Vs. K.P.V. Sundaramoorthy and Another [C.R.P. (PD)(MD) No. 2324 of 2008, dated 25.08.2009].

(20) Panna Devi Vs. Ram Prasad Pandey (Dead) By LRs. [and Others [2000(10) SCC 159].

(21) B. Susila and Another Vs. Saraswathi Ammal and Others, .

(22) A.U. Natarajan and Another Vs. Indian Bank, .

(23) Union of India Vs. The United India Fire and General Insurance Co. Ltd. and Another, .

(24) Palaniappa Gounder Vs. Nallamuthu Gounder and Others, .

(25) Chandira Vs. Subramanian [2009(8) MLJ 286].

(26) Karuppanna Goundan Vs. Ponnuthayee alias Subbammal and Others, .

(27) Satyadhyan Ghosal and Others Vs. Sm. Deorajin Debi and Another, .

The learned counsel for the first respondent contended that there is no illegality or infirmity in the impugned order and prayed for dismissal of the civil revision petition.

I have carefully perused the materials on record, the Judgments relied on by the petitioner and his arguments and the arguments of the learned counsel for the first respondent.

The Executing Court, by the impugned order, set aside the sale, as the mandatory provision for conducting sale had not been followed by the Court. After attachment of immovable property, the Court has to decide as to whether the entire property has to be sold or it is sufficient to sell only a portion of the property to satisfy the decree amount.

Secondly, at each stage in the E.P., the Judgment Debtor is entitled to notice. In the present case, no notice was given to the first respondent before reducing the upset price. According to the first respondent, the value of the property is more than Rs. 50,00,000/-. By the irregularity committed by the Court and fraud played by the second respondent in collusion between the second respondent and the petitioner, the property was sold for a very low price.

The learned Judge considering these lapses, held that there is irregularity in conducting the auction sale, as mandatory provisions were not followed. The learned Judge extracted the relevant portions of the following Judgments and allowed the application, following the ratio in said Judgments.

(i) Ambati Narasayya Vs. M. Subba Rao and another, .

(ii) Takkaseela Pedda Subba Reddi Vs. Pujari Padmavathamma and Others, .

(iii) K.J. Prakash Kumar, K.J. Hemalatha and K.J. Padmasini Vs. Rasheeda Yasin and G.R. Selvaraj, .

(iv) Palaniappa Gounder Vs. Nallamuthu Gounder and Others, .

These Judgments are squarely apply to the facts of the present case.

The petitioner has argued that once the first respondent was set ex-parte, he is not entitled to any notice in subsequent stages in the E.P. and he has no locus standi to challenge the auction sale and the application filed by the first respondent is hit by principles of estoppel and res judicata. He cited and relied on 27 Judgments referred to me supra.

All these Judgments are not relevant to decide the issue involved in the civil revision petition. The issue is as to whether the learned Judge erred in allowing the application filed by the first respondent on the ground that the Executing Court failed to follow the mandatory provisions and reduced the upset price without notice to the first respondent. Therefore, the Judgments relied on by the petitioner, have no relevance to the issue to be decided in the civil revision petition.

As per order XXI Rule 90 CPC, when an immovable property has been sold in execution of a decree, a person, whose interest are affected by sale, may apply to Court to set aside the sale on the ground of material irregularity or fraud in publishing or conducting it. The condition to set aside the sale is that the person must prove to the satisfaction of Court that he had sustained substantial injury by reason of such irregularity or fraud.

In view of Order XXI Rule 90 CPC, E.A. No. 3 of 2012 in E.P. No. 87 of 2008 filed by the first respondent is maintainable. He has also proved that he has suffered substantial injury by material irregularity committed by the Court.

A perusal of the records and the impugned order of the learned Judge reveals that there is no illegality or material irregularity in the impugned order. The learned Judge considered all the materials on record in proper perspective and applied the correct principles of law and exercised his power judicially. There is no infirmity warranting interference by this Court and the civil revision petition is liable to be dismissed.

In the result, this civil revision petition is dismissed confirming the order of the learned Additional District Munsif, Karaikudi. No costs. Consequently, connected miscellaneous petition is closed. The E.P. is of the year 2008. Therefore, the learned Additional District Munsif, Karaikudi, is directed to dispose the E.P. on merits and in accordance with law as expeditiously as possible, in any event, not later than four months from the date of receipt a copy of this order.