Elumalai Naicker vs Kishtambal Ammal

M.N. Chandurkar, C.J.—The revision petition by the judgment debtor is directed against the order of the District Munsif, Kancheepuram,

by which he granted the application of the decree-holder and reduced the upset price of the property advertised for sale to Rs. 10,000/- .

Admittedly, in execution of a money decree, the judgment-debtor''s agricultural property which consists of 8 small pieces of agricultural lands

totalling 4.34 acres was attached. In execution proceedings commenced by E.P. 37 of 1980 which was renumbered as E.P. No. 112 of 1981, the

sale was advertised for 27th July, 1981, but was adjourned at the instance of the judgment-debtor as he paid a part of the amount.

We are not concerned with the two or three other occasions when the sale was adjourned from time to time, but it needs to be mentioned that

when the sale was due to be held on 27th July, 1981, the sale did not go through on account of the absence of the bidders. At that time, the upset

price was fixed by the Court at Rs. 60,600/- . The decree-holder, finding that her attempt to sell the property was not bearing fruits, applied for

reduction of the upset price. At one stage, she herself had given the value of the property as Rs. 15000/- . However, in the application for

reduction of the upset price, she asked for Rs. 10,000/- to be fixed as the upset price. The principal District Munsif, Kanchee-puram, made a

summary order reducing the upset price to Rs. 10,000. It is this order which is challenged by the judgment-debtor in this revision petition.

Though initially a question was raised in the course of the arguments as to whether, having regard to the fact that a new proviso has been added

in O. 21, R. 66, C.P.C. the local amendment made in the form of sub-cl. (d-1) in 0. 21, R. 66(2) which made it obligatory on the court to mention

the upset price fixed by the Court in the sale proclamation, ceased to be effective, having regard to the facts of the present case, it does not appear

necessary to go into this wider question. Order 21, R. 66(2), C.P.C. gives the details of the matter which are required to be specified ''as fairly and

accurately as possible'' when the sale proclamation is made. Among the items which are required to be specified ''the upset price fixed by the

Court'' was introduced by way of local amendment in Madras as Cl. (d-1). Two provisos have now been added when the CPC was extensively

amended by Act 104 of 1976. The two Provisos read as follows :--

......Provided that where notice of the date for settling the terms of the proclamation has been given to the judgment-debtor by means of an order

under R. 54, it shall not be necessary to give notice under this rule to the judgment-debtor unless the court otherwise directs;

Provided further, that nothing in this rule shall be construed as requiring the Court to enter in the proclamation of sale its own estimate of the value

of the property, but the proclamation shall include the estimate, if any, given, by either or both of the parties.

The second proviso provided that the provisions of O. 21, R. 66, C.P.C. should not be construed as requiring the Court to enter in the

proclamation of sale its own estimate of the value of the property but the proclamation had to include the estimate, if any, given, by either or both

of the parties. Undoubtedly, the first part of the second proviso indicates that it was not obligatory on the part of the Court to enter in the

proclamation of sale its own estimate of the value of the property. Whether this had the effect of rendering ineffective cl. (d-1) which was

introduced by way of local amendment does not fall for consideration.

The question which falls for consideration in this case is whether the executing court was justified in reducing the upset price to Rs. 10,000. It

can hardly be disputed that where the court has the power to fix an upset price, it has also the power to reduce it. It has also been so held in A.U.

Natarajan and Another Vs. Indian Bank, in which the Division Bench observed as follows--

.....We are therefore of opinion that the Court''s power to fix an upset price for the property, which includes within it a right to reduce the upset

price whenever necessary has not only been available to the Court all through, but such a right is an irremovable one, and the said right has not

been impinged in the least by the second proviso introduced by Act 104 of 1976. Of course, as pointed out in B. Susila and Another Vs.

Saraswathi Ammal and Others, when the court fixed the upset price the Court is not determining the rights of any of the parties before it and the

fixation of the upset price is only for facilitating the conduct of the sale and, at the same time, safeguarding the interests of the judgment-debtor by

fixing a reserve price. Notwithstanding the fixation of the upset price and notwithstanding the fact that a bidder has offered an amount higher than

the upset price, it will still be open to the judgment-debtor to approach the executing Court and adduce proof that the property has been sold for a

low price on account of some material irregularity or fraud in the publication or conduct of the sale and have the sale set aside.

As observed above, when the court fixes the upset price that fixation is only for facilitating the conduct of the sale and to safeguard the interests of

the judgment-debtor by fixing a reserve price. The object of fixing the upset price is to fix the lowest sum for which the property which is being

auctioned will be sold or in other words, it is the sum from which the bidding may start. The upset price, therefore, has some relation to the price

which the property intended to be sold in the auction is expected to fetch. When the Court gives the upset price, it cannot do so merely on the ipse

dixit of either the judgment-debtor or the decree-holder. What should be the amount to be fixed as the upset price must, therefore, be determined

after an objective consideration of all the relevant facts to which the Court must apply its mind, so as to safeguard the interests of the judgment-

debtor. It is true that for fixing the upset price, no elaborate enquiry may be required to be made, but the upset price cannot also be any figure

having no relation whatsoever to the minimum price which the property intended to be sold is expected to fetch at the auction sale. In a case where

there is not sufficient material on record to arrive at a figure of the upset price, there is enough power for the Court to make a summary enquiry.

Indeed, there is an express provision in O.21. R. 66, C.P.C. which enables the Court to summon any person whom it thinks necessary'' to

summon and may examine him in respect to any such matters and require him to produce any document in his possession or power relating thereto

for the purpose of ascertaining the matters to be specified in the sale proclamation. The court must, therefore, have before it the necessary material

with regard to the nature of the property, whether the property is agricultural property, the use to which the property was being put, whether the

cultivation is dry cultivation or wet cultivation and such other factors which ultimately go to determine the value of the property.

In the instant case, there is nothing on the face of the order made by the learned District Munsif, which indicates as to on the basis of what

circumstances he has determined Rs. 10,000/- , as the upset price. It is obvious that he had accepted the ipse dixit of the decree-holder. As

already pointed out, the decree-holder himself had estimated the price of the property at Rs. 15,000/- . To say the least, the order made by the

learned District Munsif, is wholly arbitrary in nature and deserves to be set aside.

The learned District Munsif is directed to apply his mind to the question as to what should be the proper upset price which he may determine

after making such enquiry as he may deem fit. Accordingly, this revision petition is allowed. The order reducing the upset price to Rs. 10,000/- is

set aside and the executing Court is directed to take fresh steps to have the upset price fixed and proceed with the execution proceedings in

accordance with the law. There will, however, be no order as to costs.