15 July 2024


Supreme Court

Chilamkurti Bala Subrahmanyam v. Samanthapudi Vijaya Lakshmi and Ors.




Sale could be set aside only when material irregularity or fraud results in causing substantial injury to judgment-debtor

Instant appeal is filed by auction purchaser against final judgment passed by High Court of Judicature, Andhra Pradesh whereby High Court allowed appeal filed by judgment debtor-Respondent No. 1 herein and set aside order passed by Senior Civil Judge, dismissing application filed by judgment debtor under Order 21 Rule 90 read with 151 of Code of Civil Procedure, 1908 (CPC). Respondent No. 1, in her application for setting aside sale, had mainly raised four objections. Firstly, clear 15 days' notice was not given for sale of properties as required under Rules. Secondly, valuation of property was not properly mentioned in concerned documents so as to enable parties to know its proper valuation prevailing on date of sale. Thirdly, market value of property on date of auction was more than price actually fetched in auction, and fourthly, no proper publication including beating of drum was made before date of auction due to which there was less participation of the bidders in the auction sale. Executing Court dealt with all four objections with reference to record of proceedings and found as a fact that, none of objections had any merit. High Court reversed the judgment of Executing Court.

Reasoning and conclusion arrived at by Executing Court deserves to be restored as against that of High Court in impugned order. No case was made out by judgment debtor for setting aside of sale of property in question on ground of committing any material irregularity or fraud in publishing or in conducting sale so as to enable Court to invoke its powers under Order 21 Rule 90 (2) of CPC.

Proper publicity was given for auction sale in papers so also by beat of drums pursuant to which as many as seven bidders including Appellant herein participated in auction sale. Had there been no publicity, it would not have been possible for seven persons to participate in auction proceedings.

Details of valuation of property were duly mentioned, namely, decree holder's valuation at Rs. 2,75,000/- likewise, Amin's valuation at Rs. 4 lacs whereas property was sold in auction for Rs. 7,50,000/-. In this view of matter, it could not be said that, bidders did not know valuation or/and that it was not mentioned in auction papers. Judgment debtor did not adduce any evidence nor brought any bidder to purchase property for a higher price than purchase bid (Rs. 7,50,000/-) except to say in application that, value of property was between Rs. 12 lakhs to Rs. 14 lakhs. This objection has no substance for want of any evidence.

There was adequate publicity given with aid of beat of drums in locality. It was proved with record of executing Court as was rightly held by executing Court and lastly, a clear 15 days' notice was given for auction sale fixed for 17th November, 1999 when counted from 5th October, 1999. 15 days have to be counted from 5th October, 1999 because it is on this date the order was issued as contemplated under Order 21 Rule 64 of CPC for proclamation of sale fixing date of sale as 17th November, 1999. Executing Court, therefore, substantially and in letter and spirit followed procedure prescribed under Order 21 Rules 64 and 66 of the CPC while conducting sale of property in question.

It is not the material irregularity that alone is sufficient for setting aside of sale. Judgment debtor has to go further and establish to satisfaction of Court that, material irregularity or fraud, as case may be, has resulted in causing substantial injury to the judgment-debtor in conducting sale. It is only then sale so conducted could be set aside under Order 21 Rule 90(2) of CPC. Such is not the case here.

Supreme Court is of view that, none of objections raised by Respondent No. 1 had any merit and nor any of objections constituted any kind of material irregularities so as to enable Court to set aside sale under Order 21 Rule 90(2) of CPC. Impugned order is set aside and order of Executing Court restored.

Tags : Auction Sale Validity

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