V.A. Narayana Raja vs Ranganayaki Achi (died) and Others

G. Ramanujam, J.—This appeal arises out of an order passed by the Court below dismissing an application for setting aside the Court-

auction-sale, filed under Order 21, Rule 90, Civil Procedure Code, by the judgment-debtor who is the appellant herein.

The appellant herein had executed a mortgage of two items of his properties in. the year 1963. A suit Was filed on the said mortgage in O.S.

No. 166 of 1965 in the year 1965. There was a preliminary decree passed in that suit on 29th June, 1966 for Rs. 1,23,088.58 with subsequent

interest thereon. Later, on 28th February, 1967, a final decree had been passed. An execution petition was filed in E.''P. No. 119 of 1967 in

August, 1967, for realising the decree amount by sale of the hypotheca. The said execution petition was originally filed by the decree-holder in

O.S. No. 166 of 196S-. As the decree-holder died later, his legal representatives were brought on record on 30th November, 1967, and on that

day the execution petition was posted to 22nd December, 1967. However, it appears that the execution petition was advanced and taken up on

1st December, 1967, and notice was directed to be issued for 2nd December, 1967. On 2nd December, 1967,neither the defendant, nor his

counsel appeared and the Court had directed the sale of the properties to be held on 22nd January, 1968. Accordingly the sale was held on two

days on 22nd January, 1968 and to 23rd January, 1968 and item 1 has been sold in favour of the 7th defendant for a sum of Rs. 40,000 and item

2 has been sold in favour of the 6th defendant for a sum of Rs. 73,500. On 10th March, 1969, the defendant filed E.A. No. 157 of 1969 under

Order 21, Rule 90, Civil Procedure Code, for setting aside the sale. But, notwithstanding the filing of that application for setting aside, the

executing Court confirmed the sale. Later, the defendant filed E.A. No. 180 of 1969 for approval, of the security furnished by a third party on his

behalf. Since the title deeds have not been produced as directed within time, the said application was rejected. Thereafter, the appellant filed E.A.

No. 716 of 1969, for restoring E.A. No. 157 of 1969 for setting aside the sale. That was dismissed for -default on 12th September, 1969.

Thereafter the appellant filed CM.A. No. 307 of 1971 before this Court and that was allowed. The result was that E.A. No. 157 of 1969 was

restored to file by the Court below.

The stand taken by the defendant-judgment-debtor before the Court below was that respondents 6 and 7 who had purchased items 2 and 1

respectively are close relations of the decree-holder and therefore, the purchases should be taken to be by the decree-holder himself without

obtaining leave to bid. At the time the appellant filed the application for setting aside the sale, he was an undischarged insolvent and therefore, the

entire estate was in charge of the 5th respondent, the Official Receiver. He more or less supported the case of the appellant in his application for

setting aside the sale. The stand taken by the Official Receiver before the executing Court was that if the sale is set aside and the properties are

sold by him after sufficient proclamation, the properties will certainly fetch a very good price.

Respondents 2 and 3 who are legal representatives of the original decree-holder had taken the stand before the executing Court that there was

no irregularity in the conduct of the sale held on 22nd January, 1968, and 23rd January, 1968, that the judgment-debtor was not present at the

time when the sale was held, that there were only a few bidders and they were not inclined to bid for higher amounts than offered by the auction-

purchasers and that there has been due publicity and the properties have been properly valued and as the judgment-debtor was not even present

on the date of sale, his petition is liable to be dismissed. The 7th respondent adopted the stand taken by the respondents 2 and 3. The 6th

respondent who is the purchaser of item 2 contended before the executing Court that there was no irregularity or fraud in publishing or conducting

the sale and that he has purchased the property for his own benefit and not on behalf of anyone else and that the price paid by him was reasonable

and proper. The fourth respondent is a subsequent mortgagee of the suit properties and he did not file any counter-statement.

On a consideration of the claims put forward by the parties, the executing Court held that there was no irregularity in the conduct of the sale and

dismissed E.A. No. 157 of 1969, for setting aside the sale under Order 21, Rule 90. As against the dismissal, the present appeal has been filed.

In this appeal, the learned Counsel for the appellant reiterates the same contentions as were urged before the executing Court. The appellant

also contends that the executing Court erred in advancing the execution petition without notice to the defendant and ordering the sale of the

properties without giving an opportunity to the defendant to put forward his case as regards the value of the properties which are sought to be sold.

The appellant also contends that both the items of properties have been sold for a very low price and that is only due to lack of due publicity.

The following three questions arise for consideration in this appeal-

Whether there was any irregularity in the settlement and publication of the sale proclamation and the conduct of the sale?

Whether the judgment-debtor''s valuation of the properties was not set out in the sale proclamation as required under Order 21, Rule 66(2)?

and

Whether the sale was for a fair and reasonable price?

As already stated, while dealing with the facts, after certain adjournments, the execution petition was posted for 30th November, 1967. On that

day, the execution petition was posted for disposal on 22nd December, 1967. However, the E.P. papers contain an entry on 1st December, 1967

''hearing advanced to 2nd December, 1967''. On 2nd December, 1967, the matter was again adjourned to 4th December, 1967, and the order

passed on that day was as follows:

Call on 4th December, 1967 and inform Mr. K.S.

On 4th December, 1967, the office noted:

Notice of advancement of hearing given to Sri. K. Sarangapani for R-1 and to Mr. Section Palanisami for R-2, on 2nd December, 1967 and G.R.

and the Judge has passed the following order:

Defendant absent. Proclamation and sale on 22-1. Further hearing 23-1

From the above orders passed by the executing Court, on various dates, it is seen that the defendant was not present either on 1st December,

1967 or on 2nd December, 1967 on on 4th December, 1967, when the final order directing proclamation and sale of the properties was passed

by the Court below. The absence of the defendant was due to the fact that the execution petition which was originally posted to 22nd December,

1967, had been advanced to 1st December, 1967, without notice to the judgment-debtor or his counsel"" and orders had been passed in the

absence of the defendant or his counsel. As already stated, in this case, the execution petition was originally posted to 30th November, 1967, and

on that day the matter was further adjourned to 22nd December, 1967. Normally the defendant and his counsel would have expected the matter

to be heard on 22nd December, 1967, the date fixed for the next hearing by the Court. It is the admitted case of the parties before me that no

application was filed by anyone for advancing the hearing of the execution petition. Even the endorsements in the execution petition do not indicate

that any of the parties filed an application for advancement of the hearing of the execution petition from 22nd December, 1967 to an earlier date.

We do not know under what circumstances, the Court has chosen to advance the hearing of the execution petition. On 30th November, 1967, the

Court has chosen to adjourn the matter to 22nd December, 1967, and there is no reason as to why the Court should suo motu take up the matter

on 1st December, 1967, and advance the hearing of the execution petition to 2nd December, 1967. The order passed on 1st December, 1967,

advancing the hearing does not give any reason as to why it was so advanced and at whose instance. By advancing the hearing without an

application by any of the parties considerable prejudice has been caused to the judgment-debtor who had no opportunity to be present at the

Court when the proclamation of sale was ordered on 22nd January, 1968. The prejudice has been caused to the defendant-judgment-debtor as he

could not give his valuation at the time of the settlement of the sale proclamation and the sale has gone on without the judgment-debtor''s valuation

having been shown in the sale proclamation. Apart from the prejudice that has been caused to the judgment-debtor in that he had no opportunity to

have his valuation set down in the sale proclamation, the executing Court has acted in quite an arbitrary and improper manner in advancing the

hearing suo motu without a request from any of the parties. It is a, clear case of abuse of the process of Court. Having adjourned the matter to

22nd December, 1967, the executing Court again took it tip in the absence of the parties on 1st December, 1967 and advanced the same to 2nd

December, 1967, without due notice to the parties concerned. As a matter of fact, on the adjourned date, 2nd December, 1967, the matter was

called and the counsel for the judgment-debtor was not present. So the Court makes an order-

Call on 4th December, 1967, and inform Mr. K.S. (K. Sarangapani for R-1, the judgment-debtor).

There is no evidence that in between 2nd December, 1967 and 4th December, 1967, Mr. Sarangapani, counsel for the judgment-debtor, was in

fact served, though the office note says that notice of advancement of hearing was given to Mr. K. Sarangapani for R-1 and to Mr. Section

Palanisami, for R-2, on 2nd December, 1967 and to Official Receiver. But the case records do not contain the proof of service of the notice of

advancement of hearing on Mr. Sarangapani, the counsel for the judgment-debtor. The absence of the judgment-debtor or his counsel on 4th

December, 1967 would indicate that notice might not have been served for advancing the hearing of the execution petition. In this case, the decree

sought to be executed is for a heavy sum of more than Rs. 1,30,000, and even in the execution petition the properties which are brought to sale

have been valued at Rs. 1,00,000. In a matter involving such heavy stakes the Court should not have adopted such an improper method of

advancing the hearing of the execution petition without proper, notice to the parties and directing the proclamation and sale in the absence of the

judgment-debtor. The way in which the execution petition has been rushed through and the order for proclamation of sale has been obtained

behind the back of the judgment-debtor, leads to the suspicion that the advancement of the hearing and the ultimate order for proclamation of sale

behind the back of the judgment-debtor could have been done at the instance of the decree-holder. The Court also appears to have been played

into the hands of the decree-holder.

Apart from the above circumstances, the counter filed by respondents 2 and 3 before the executing Court clearly indicates that there was no

proper publication. They have admitted that there were only few bidders and even they were not inclined to bid for higher amounts than offered by

the two auction-purchasers. If there are only a few bidders and if there is no competitive bidding on 4th December, 1967, the sale could have been

adjourned to a future date so that there will be competitive bidders.

I am therefore, of the view that there has been an irregularity in the settlement of the sale proclamation and also in the conduct of the sale. On

this ground alone the sale is liable to be set aside. It is, therefore, unnecessary to go into the question as to whether the price for which the

properties were auctioned is lower than the market rate.

The result is the appeal is allowed with costs; and the application for setting aside the sale under Order 21, Rule 90, CPC will stand allowed

with costs.