Ratan Lal vs Bank of Bihar, Ltd.

Kulwant Sahay, J.—This is a judgment-debtor''s appeal against an order of the Subordinate Judge of Motihari, rejecting his application under Order 21, Rule 90, Civil P.C., for setting aside a sale of the mortgaged property in execution of a mortgage decree. The mortgage was of a rice mill and a certain piece of land in Raxaul for the sum of Rs. 55,000. This mortgage was taken by the decree-holder on 11th November 1926. He obtained a mortgage decree in due course and the mortgaged properties were sold on 6th June 1932 for the total price of Rs. 9,500 only. The principal objection of the judgment-debtor was, that there was gross under-valuation of the properties in the sale proclamation and the price fetched was utterly inadequate inasmuch as the properties were actually valued at more than two lakhs of rupees. There were allegations of non-service of the notice under O.21, Rule 66, Civil P.C., and also of the sale proclamation and a further objection was taken that there was a misdescription of the property in the sale proclamation.

The learned Subordinate Judge has found that the value of the property was at least double the amount of the mortgage money. In other words it was valued at Rs. 1,10,000. The reason perhaps, although not expressly stated, was that the mortgagee would not advance a sum of Rs. 55,000, unless the property mortgaged was valued at least at double the amount. That might have been so if the valuation as on the date of the mortgage had to be considered. But what the Subordinate Judge had to consider was the actual value on the date of the sale which was six years later. Having regard to the economic depression of which the Subordinate Judge himself makes mention it cannot be said that the value on the date of the sale would be at least double the amount of the mortgage money.

Moreover the mortgage was amongst others of a rice mill which admittedly at the date of the sale and on the date of the sale proclamation was not in working order and the allegation of the decree-holder was that a material portion of the machinery consisting of the engine and boiler had already been removed. Having regard to these considerations, the value as fixed by the Subordinate Judge, namely the sum of Rs. 1,10,000, does not appear to be a proper valuation.

It is however clear that the price fetched at the sale was less than the actual value. The question is whether under-valuation of the property in the sale proclamation in itself was such an irregularity as to entitle the judgment-debtor to ask for the sale to be set aside. Certain decisions have been referred to us as authorities for the proposition that the mere under-valuation of the property in the sale proclamation amounts to an irregularity sufficient to set aside the sale. The proposition so stated is rather too broad. It cannot be said that in every case of under-valuation or under-statement of the value of the property in the sale proclamation there is an irregularity which by itself would be sufficient to set aside the sale. It depends upon the facts and circumstances of each case. In the present case there does not appear to be sufficient reason for holding that a mere under-estimate of the value of the property in the sale proclamation was such an irregularity as to entitle the judgment-debtor to have the sale set aside.

As regards the non-service of the notice under Order 21, Rule 66, Civil P.C., and the non-service of the sale proclamation the learned Subordinate Judge has found that these processes were duly served. Having regard to the evidence on the record I am inclined to agree with the view taken by the learned Subordinate Judge. It has been contended that the daffadar and the chaukidar and other persons who had taken part in the service of these processes were not examined and only the peons who served the processes were examined. The evidence given by the peons is sufficient. It is next contended that there was an irregularity inasmuch as the rent payable in respect of plot No. 2, which was 5 bighas, 12 cottahs of land was not mentioned in the sale proclamation.

This was no doubt a slight irregularity, but in order to entitle the judgment-debtor to ask the Court to set aside the sale on this ground the judgment-debtor ought to have given evidence that it was on account of this irregularity that there was inadequacy of price at the sale. There is no such evidence and this ground is not sufficient to set aside the sale.

The other irregularity mentioned was that the registry office in respect of one of the properties was wrongly described. This also is not an irregularity sufficient to set aside the sale. I am of opinion, that the decision of the learned Subordinate Judge was correct and this appeal must be dismissed with costs. An ad interim receiver was appointed by this Court pending the hearing of this appeal. The receiver should now be discharged.

Courtney-Terrell, C.J.

I agree.