Guntupalli Rama Subbulu vs Jetti Siva Sankara Rao and Another

P.S. Narayana, J.—This civil miscellaneous appeal is filed by the second respondent against the order dated 6-10-2004 passed in EA No. 17 of 2002 in EP No. 27 of 2001 in OS No. 33 of 1990, on the file of the Court of Senior Civil Judge, Bapatla, Guntur District.

The first respondent-judgment debtor in the present civil miscellaneous appeal filed the said application under Order 21 Rule 90 read with Section 151 of the CPC (hereinafter referred to for short ''the Code'' for the purpose of convenience) praying for the relief to set aside the sale conducted on 27-12-2001 in EP No. 27 of 2001 in OS No. 33 of 1990 on the file of the Court of Senior Civil Judge, Bapatla.

It appears that the matter was remanded by this Court with a specific direction to implead the auction purchaser as a party and consequently the auction purchaser, Guntupalli Rama Subbulu was added as a party by an order dated 22-4-2004 in EA No. 38 of 2004. The learned Judge recorded the evidence of PW.1, the petitioner in the said application-judgment-debtor the first respondent herein and came to the conclusion that the sale is vitiated by material irregularity and accordingly allowed the said application. Aggrieved by the same, the second respondent in the said application, the auction purchaser had preferred the present civil miscellaneous appeal under Order 43 Rule 1 of the Code.

Sri V. Viswanatham, the learned Counsel representing the appellant would submit that the mere fact that the appellant is the wife of the second respondent in the present civil miscellaneous appeal, decree holder, by itself cannot be a ground to make an order of this nature setting aside the sale. Even otherwise, the learned Counsel would submit that this is not an application under Order 21 Rule 72(3) of the Code but this is an application filed under Order 21 Rule 90 of the Code and hence the said ground cannot be imported into an application of this nature. While further elaborating his submissions, the learned Counsel contended that the mere fact that the value fetched by virtue of the sale is not the reasonable value, on that ground alone the application cannot be allowed. The learned Counsel pointed out to the relevant findings recorded by the learned Judge and would maintain that in the light of the facts and circumstances the application filed by the first respondent-judgment-debtor has to be dismissed.

Per contra, Sri A.P. Venugopal, the learned Counsel representing the first respondent-judgment-debtor made the following submissions:

The learned Counsel would point out that in the light of the clear language of Order 21 Rule 72(3) of the Code, the wife of the decree holder purchasing the property in Court auction may not be permissible especially in the absence of any express permission from the Court in this regard. Even otherwise, the learned Counsel would submit that apart from the said ground, there are other grounds on which positive findings had been recorded by the learned Judge while setting aside the sale and hence the order impugned in the present civil miscellaneous appeal need not be disturbed in any way.

Heard the Counsel.

The parties hereinafter are referred to as judgment-debtor/decree holder/auction purchaser for the purpose of convenience. The judgment-debtor filed an application, EA No. 17 of 2002 in EP No. 27 of 2001 in OS No. 33 of 1990 on the file of the Court of Senior Civil Judge, Bapatla, under Order 21 Rule 90 read with Section 151 of the Code to set aside the sale conducted on 27-12-2001. The specific case of the judgment-debtor is that he suffered substantial injury as a result of material irregularity and fraud in the public auction in the conduct of the sale. It was averred that the decree holder was dishonest and several irregularities were committed by Amin and fraud was played by the decree holder and the same had resulted in inadequacy of the price. The decree-holder resisted the same denying the allegations. Initially the application was dismissed on 3-9-2002 and the judgment-debtor preferred CMA No. 1930 of 2003 on the file of this Court and the impugned order was set aside and the matter was remanded with a direction to restore and give opportunity to the decree holder to take steps of impleading the auction purchaser. The auction purchaser also filed a counter on similar lines as that of the Decree-holder. PW.1 was examined and no evidence was let-in on behalf of the auction purchaser or the decree-holder. The learned Judge framed the following points for determination:

(1) Whether there is material irregularity in publishing and conducting sale?

(2) Whether the petitioner sustained any substantial injury thereby?

(3) Whether the petitioner is entitled to set aside the sale?

The judgment-debtor as PW.1 deposed about the decree holder filing the suit, obtaining decree and bringing the property to sale. PW.1 also deposed that the attachment proceedings were not in accordance with law and no notices were affixed and no tom-tom had been made in the village and the value of the property sold in the village is more than rupees three lakhs per acre and the value shown is less in the sale papers. Further PW.1 deposed that the wife of the decree holder is the auction purchaser and she has no independent income and the other bidders are also agriculture coolies and mechanics and in the light of the same, PW.1 deposed that substantial injury was caused to him. The learned Judge on appreciation of evidence available on record had taken into consideration the fact that the auction purchaser is none other than the wife of the decree-holder and also recorded yet another finding that the total extent of land Ac.2-82 cents and the worth of the property is about rupees three lakhs and the amount fixed at auction is not reasonable. After recording the reasons, the application was allowed.

Order XXI Rule 72 of the CPC dealing with the decree holder not to bid for or buy property without permission, reads as hereunder:

(1) No holder of a decree in execution of which property is sold shall, without the express permission of the Court, bid for or purchase the property.

(2) Where decree-holder purchases with such permission, the purchase money and the amount due on the decree may, subject to the provisions of Section 73, be set off against one another, and the Court executing the decree shall enter up satisfaction of the decree in whole or in part accordingly.

(3) Where a decree holder purchases, by himself or through another person, without such permission, the Court may, if it thinks fit, on the application of the judgment-debtor or any other person whose interests are affected by the sale, by order set aside the sale; and the costs of such application and order, and any deficiency of price which may happen on the re-sale and all expenses attending it, shall be paid by the decree-holder.

Reliance was placed on Sub-section (3) referred to supra. The words "by himself or through another person, without such permission" would assume some importance.

In the present case the wife of the decree holder is the auction purchaser, is not in serious controversy. In fact no evidence was let-in either by the decree-holder or the auction purchaser and the judgment-debtor examined himself as PW.1 and except this evidence, no other evidence is available on record.

In Lal Chand Vs. VIIIth Addl. District Judge and others, , it was held that Order 21 Rule 72 of the Code is mandatory and so no decree-holder has any right to bid in the auction without prior permission of the Court.

In Kamala Kanta Mohapatra and Another Vs. Debarchan Seth and Another, , it was held that absence of the Court''s permission to decree holder to bid for auction would render the same invalid.

It is no doubt true that in the present case, the judgment-debtor had not filed the application under Order 21 Rule 72 of the Code, but filed an application under Order XXI Rule 90 of the Code. Be that as it may, the fact that the auction purchaser is the wife of the decree holder is not in controversy at all. Even otherwise, this is not only the ground on the strength of which the learned Judge allowed the application filed under Order XXI Rule 90 read with Section 151 of the code. The learned Judge also recorded further reasons in the light of the evidence of PW1 available on record and recorded a specific finding that prejudice is caused to judgment-debtor by virtue of the sale price and also recorded finding that none of the other bidders offered price for second time and only the auction purchaser did so and thereby became the highest bidder and bid was knocked down in favour of the auction purchaser. In the light of the same, specific finding had been recorded that substantial injury was caused to the judgment-debtor and accordingly the sale was set aside. The learned Judge in fact had referred to the decision in Shalimar Cinema Vs. Bhasin Film Corporation and Another, and another decision in S.V. Rama Krishna Vs. R. Subbamma and Another, .

In the light of the reasons recorded by the learned Judge in Paras 10, 11, 12, 13 and 14, this Court is satisfied that the impugned order setting aside the sale does not warrant interference and accordingly the civil miscellaneous appeal shall stand dismissed. However, in the peculiar facts of the case, the parties to bear there own costs.