Vaidyalingam Pillai vs M.K. Chidambaram Pillai

Kailasam, J.—This is an appeal by the Defendant in Original Suit No. 89 of 1957 against the order of the Subordinate Judge, Tiruchirappalli dismissing his application (E.A. No. 565 of 1961) filed under Order XXI, Rule 90 and Sections 47 and 151 of the Code of Civil Procedure, for setting aside a sale, dated 2nd November 1960 in favour of the Respondent (Plaintiff-decree-holder) in Original Suit No. 89 of 1957.

There are three items of property sold in the Court auction on 2nd November 1960. Items 1 and 2 are landed property and were purchased by the Defendant in 1945 for a sum of Rs. 6,000. Item 3 is a house in the village of Manachanallur. These three items were mortgaged in favour of the Plaintiff for Rs. 10,000. The mortgagee filed a suit under the mortgage and obtained a preliminary decree on 19th November 1957. The final decree was passed on 17th March 1958. He filed an Execution Petition No. 344 of 1958 and the sale was posted on 23rd December 1959. The Defendant filed Execution Application No. 884 of 1959 and prayed for three month''s time for payment of the decree amount, waiving fresh proclamation. The property was again brought to sale on 9th March 1960 but was not sold as there were no bidders. The decree-holder filed Execution Application No. 189 of 1960 for reduction of the upset price. But the Defendant appeared and took time. The petition was posted to 19th April 1960 but no counter was filed by the Defendant. The upset price was reduced. Then again the decree-holder filed Execution Application No. 218 of 1960 for leave to bid and set off. Notice was given but the petition was not opposed by the Defendant. The property was posted for sale on 27th July 1960. But as there were no bidders, the sale was not effected. Again the decree-holder applied for the reduction of the upset price and served notice on the Defendant. This petition was not also opposed and the upset price was reduced. The sale was ultimately held on 2nd November 1960 when the property (items 1 to 3) was purchased by the decree-holder himself for Rs. 3,001, Rs. 3,001 and Rs. 2,501 respectively.

Execution Application No. 565 of 1961 out of which this appeal arises was filed by the Defendant for setting aside the sale held on 2nd November 1960. The Petitioner alleged that there was fraud and material irregularity in publishing and conducting the sale. He listed seven grounds of material irregularity. If was contended that there was discrepancy between the value of the property stated in the proclamation and the real value. It is also alleged that the price for which the property was sold was grossly inadequate. It is also contended that the omission in the sale proclamation to mention the correct revenue or rent payable to the Government resulted in low price. It was further contended that the property was worth very much more but was sold for a grossly inadequate price. According to the Petitioner, in the landed property sold, there were six acres of nanja under cultivation irrigated by two wells. According to him, these six acres were worth Rs. 12,000 where paddy, cholam and kambu crops were raised. He further stated that he spent about Rs. 25,000 for constructing a house and that the property was worth about Rs. 40,000. He valued the nanja lands at Rs. 25,000. He was paying the house-tax in the village on a valuation of Rs. 5,000. The Petitioner also examined the president of the panchayat who deposed that in the panchayat books, the house was valued at Rs. 5,000. On behalf of the decree-holder, P.W. 1 the karnam of Therku Sirupathur village was examined. In cross-examination, he admitted that in a portion of the property paddy was raised and it was irrigated by water from a kuttai.

On an inspection on 22nd July 1959 the amin fixed the value of the three items at Rs. 7,000, Rs. 6,000 and Rs. 5,000 respectively, that is, for a total value of Rs. 18,000. The value was reduced to Rs. 5,100, Rs. 4,600 and Rs. 4,000 on 23rd December 1959. On 8th April 1960 the value was reduced to Rs. 4,000, Rs. 3,000 and Rs. 2,500, respectively, totalling Rs. 9,500. On 27th July 1960, the value was reduced to Rs. 3,825, Rs. 3,450 and Rs. 3,000 totalling Rs. 10,275. Ultimately on 2nd November 1960 the upset price was reduced to Rs. 3,000, Rs. 3,000 and Rs. 2,500, totalling Rs. 8,500. The property was purchased by the decree-holder for Rs. 8,503.

In 1945, the lands comprised in items 1 and 2 were purchased for Rs. 6,500. Certain improvements were made and it is admitted that in item 2, fifty-nine cents are nanja and in about one acre sixty-seven cents paddy crop was raised. There can be no doubt that certain improvements were effected. The house even in the panchayat registers was valued at Rs. 5,000. There can be no doubt that the real value of the house might have been much more than Rs. 5,000. Both the properties were mortgaged for Rs. 10,000 in 1949. Taking into account the general rise in prices, there can be no doubt that the real value could not have been less than the original value given by the amin on 22nd July 1959 in respect of three items at Rs. 7,000, Rs. 6,000 and Rs. 5,000. In this view there cannot be any doubt that the property was sold for a gross under-value. But merely because the property was sold for an under-value, the sale cannot be set aside. Under Order XXI, Rule 90, a person applying to set aside a sale must prove material irregularity or fraud in publishing or conducting it. If material irregularity or fraud, is proved, the sale shall be set aside, if the Court is satisfied that the applicant had sustained substantial injury by reason of such irregularity or fraud. In this ease, apart from showing that the property had been purchased by the decree-holder for an under-value the judgment-debtor has not succeeded in proving any fraud on the part of the decree-holder. It is not disputed that the judgment-debtor had notice at every stage of the proceeding. When the sale was posted on 23rd December 1959, he applied for three months'' time and waived fresh proclamation. In all the execution applications where the upset price was reduced notice was given to the judgment-debtor and he did not oppose any of these petitions. The present case for judgment-debtor that he believed the representation of the decree-holder that the matter would be compromised and therefore did not take any steps is not proved by any evidence and was, therefore, rightly rejected by the lower Court. It was contended by Mr. Gopalaswami Ayyangar that though it had been proved that fifty-nine cents in S. No. 517 were nanja and in one acre sixty-seven cents paddy had been cultivated, the proclamation of sale mentioned the entire six acres sixty-two cents as punja and that because of the failure to describe the property as irrigable to the extent of two acres twenty-six cents, the sale did not fetch a proper price. It is not disputed that in two acres twenty-six cents paddy is cultivated and that it is irrigated by water from a kuttai and a well.

But in the petition the sale was not attacked on the ground that the proclamation did not mention that two acres twenty-six cents were nanja lands. This contention obviously was not raised in the Court below as it has not been dealt with by the lower Court. It is admitted that in the documents under which the property was purchased, viz., exhibits B-1, B-3 and B-6, the property is described only as ayan punja. In the application for setting aside the sale, the judgment-debtor has also described the property as ayan punja. But this circumstances alone will not absolve the decree-holder for the incorrect description in the proclamation. But as pointed out Mr. Raghavachari the proclamation was settled when the property was brought to sale in 1959 describing it as ayan punja. The judgment-debtor applied for three months'' time waiving fresh proclamation. It cannot be disputed that the judgment-debtor could have known the correct description and he did not take steps to correct the description. It is also clear that by waiving fresh proclamation, he accepted the correctness of the description or in any event was satisfied that the description would not in any way affect the price that might be got in the sale.

In Arunachzllam v. Arunachellam ILR (1888) Mad. 19 the Privy Council observed at page 25:

It would be very difficult indeed to conduct proceedings in execution of decrees by attachment and sale of property if the judgment-debtor could lie by and afterwards take advantage of any mis-description of the property attached and about to be sold, which he knew well, but of which the execution creditor or decree-holder might be perfectly ignorant-that they should take no notice of that, allow the sale to proceed, and then come forward and say the whole proceedings were vitiated. That, in their Lordships'' opinion, cannot be allowed, and on that ground the High Court ought not to have given effect to this objection.

In Oirdhari Singh v. Hurdeo Narain Singh (1876) 3 I.A. 230 there was some mistake in the proclamation that sudder jamma was quoted at Rs. 3,000 and odd instead of Rs. 8,000 and odd. In the case cited when the property was brought to sale, the judgment-debtor applied for postponement of the sale stating that he wished to raise money on the terms of the attachment and the notification of sale being maintained. Their Lordships of the Privy Council observed that the judgment-debtor could not properly take objection to that notification by stating that there was an error in it and that the petition amounted to an admission on his part that the notification was correct or that at any rate there was no such mistake or irregularity as would be likely to mislead. The judgment-debtor in the present case having stood by the proclamation and not having taken any steps to correct the description in the proclamation and having waived fresh proclamation, he cannot be heard to contend that because of the incorrect description in the proclamation the sale should be set aside.

Further as already observed, this ground was not put forth as one of the grounds of irregularity for setting aside the sale. Though on the facts I am satisfied that the property was purchased by the decree-holder himself for a gross under-value, the sale cannot be set aside as the judgment-debtor has not succeeded in proving any material irregularity or fraud resulting in injury by reason of such irregularity.

The appeal is dismissed with costs.