Sri Manjunath Kudva vs Sri Ganesh Kudva and Others

B.V. Pinto, J.—This writ petition is filed seeking to set aside the order dated 06.11.2013 passed by the 1st Additional Senior Civil Judge & CJM, Mangalore in FDP No. 35/2000 in which the trial Court has refused to grant one more time to the petitioner to comply with the directions issued for depositing the amount agreed to be deposited towards the purchase of the share of the other parties in the suit schedule property. The petitioner and the respondents are the parties before the trial Court in OS No. 98/1993 which suit is filed in respect of the shares of the petitioner and the respondents in the suit schedule property which is 13 cents of land in Mangalore City comprising of a residential house therein which was belonging to the father of the petitioner and respondents. The suit came to be decreed holding that the petitioner and the respondents are entitled to 1/6th share in the suit schedule properties. Since the property was indivisible, final decree proceedings in FDP No. 35/2000 was instituted by the petitioner/respondents No. 1. The petitioner is 2nd respondent in FDP proceedings and an auction was held in respect of the suit schedule properties and the trial Court at the first instance fixed the upset price of Rs. 1,11,50,000/- and since no bidders came forward, the upset price was reduced to Rs. 80,00,000/- by an order dated 07.09.2012. Ultimately, the auction was held on 24.05.2013 before the Advocate Commissioner appointed by the Court and in the said auction, bid amount of 350,00,000/- was accepted by the respondent No. 1. However, it is the case of the petitioner that, he was not present and only respondent No. 1 and his advocate participated in the auction. The grievance of the petitioner is that, the trial Court should not have straight away reduced the upset price from Rs. 1,11,50,000/- to Rs. 80,00,000/- and since the said proposal to reduce the upset price to Rs. 80,00,000/- was published by the Court Commissioner, there were no bidders for the amount above Rs. 80,00,000/- and therefore, the successful bid has been accepted as Rs. 80,00,000/-. It is his submission that, since the petitioner is in occupation of the premises and that he intends to remain in the said premises by paying the shares of other sharers of the suit, he has requested to consider his prayer to purchase the shares of other sharers and in that view the petitioner has requested for time to pool a sum of Rs. 67,00,000/- being the value of the shares of other sharers. It, is the case of the petitioner that his request for further time has been negatived by the trial Court. In the affidavit annexed to the application for granting time, he has stated that, he was not well and that he is a diabetic patient and due to hypertension he was unable to move around and pool the required amount. However, he was interested in purchasing the shares of other sharers. Hence, he submits that the impugned order may be set aside and he may be permitted to purchase the shares of other sharers and retain the property.

Sri Anandarama, learned Counsel for the petitioner submits that, the parties who have bid in the auction have not sought permission from the Court to bid in the auction and secondly, the Court has not recorded its satisfaction regarding the auction conducted by the Court Commissioner. Hence, he submits that, the impugned order is liable to be set aside.

Learned Counsel for the petitioner has cited the following ruling:--

Navalkha and Sons Vs. Ramanuja Das and Others,

A) Companies (Court) Rules (1959) R. 273.--Sale subject to confirmation-Property does not vest in auction purchaser unless sale is confirmed -Before Confirmation Court must satisfy itself that price fetched is reasonable-Sale confirmed without being so satisfied � Confirmation is not proper exercise of jurisdiction- (Civil P.C. (1908), O. 21, R. 92).

Where the acceptance of the offer by the Commissioners is subject to confirmation of the Court the Offerer does not by mere acceptance get any vested right in the property so that he may demand automatic confirmation of his offer. The condition of confirmation by the Court operates as a safeguard against the property being sold at in-adequate price whether or not it is a consequence of any irregularity or fraud in the conduct of the sale. In every case it is the duty of the Court to satisfy itself that, having regard to the market value of the property, the price offered is reasonable. Unless the Court is satisfied about the adequacy of the price the act of confirmation of the sale would not be a proper exercise of judicial discretion. Gordon Das Chuni Lal Dakuwala Vs. T. Sriman Kanthimathinatha Pillai and Another, .

B) Companies (Court) Rules (1959), R. 273--Sale held not by public auction and without due publicity-Confirmation of such sale-Prejudice is inherent-Court in appeal will set aside confirmation.

Rule 273 of the Companies (Court) Rules provides that all sales shall be made by public auction or by inviting sealed tenders or in such manner as the judge may direct. Where the auction in question no doubt was conducted in a public place but it was not a public auction inasmuch as it was not open to the general public but was confined to two named persons, and secondly it was not held after due publicity, but immediately after it was decided upon, the sale in question was not a public sale which implies sale after giving notice to the public wherein every member of the public is at liberty to participate. The denial of opportunity to purchase the property by persons who would have taken part in the auction bid but for want of notice is a serious matter.

Sri K. Chandranatha Ariga, learned Counsel for respondents on the other hand submits by drawing the attention of the Court to the observations made by the trial Court that several opportunities were given to the petitioner to pay up the share, but he has not. deposited the amount of other sharers before the Court and therefore, the trial Court by holding that there is no compliance has directed on 18.09.2013 that the sale would be treated as confirmed and has adjourned the matter to 19.10.2013. Even on the subsequent dates of adjournment there was no compliance, therefore the trial Court has rejected the prayer of the petitioner to grant further time to him and has directed for issuance of sale certificate in the name of the petitioner in the FDP proceedings as well as in the name of respondent Nos. 3, 4 and 5 before the said Court. He has further drawn the attention of this Court to the fact that the suit is of the year 1993 and the FDP proceedings is of the year 2000 and the litigation has continued for the last 20 years and therefore, the trial Court has rightly rejected prayer to grant further time to the petitioner.

I have carefully gone through the entire materials on record, more particularly, the order of the trial Court and also the report of the Advocate Commissioner regarding the conduct of auction sale. I have also gone through the affidavit filed by the petitioner before the trial Court. On a careful consideration of the materials on record, I do not find any irregularity or illegality in the order passed by the trial Court in fixing the upset price from Rs. 1,11,50,000/- to Rs. 80,00,000/-. The said re-fixation is as a result of there being no bidders to purchase the property on the upset price of Rs. 1,11,50,000/-. The trial Court in exercise of its discretion and enquiry has observed that Rs. 80,00,000/- is fair and reasonable price that would fetch to the suit schedule property. It is also to be noted that on the date of public auction, no other persons have come forward to bid to the suit schedule property for a higher amount and therefore, it cannot be said that fixation of the upset price of Rs. 80,00,000/- is either improper or irregular. I am of the opinion that the submission of the learned Counsel for the petitioner does not deserve to be accepted, so far as the decision of the trial Court is concerned.

It is apparent from the records that the trial Court has given its consent for the sale and has proceeded with the confirmation of sale. No objections are filed after orders have been passed, though the petitioner has raised objection to set aside the auction sale and in view of the fact that no bidders were coming for long time and in order to settle the dispute between the parties at an earlier date, the trial Court has passed the impugned order which is well within the jurisdiction of the trial Court. I do not find any perversity or illegality in the order passed by the trial Court. Therefore, this petition has no merits and the same is liable to be dismissed. Accordingly, the writ petition is dismissed.