| SooperKanoon Citation | sooperkanoon.com/816144 |
| Subject | Civil |
| Court | Chennai High Court |
| Decided On | May-18-1993 |
| Reported in | (1993)2MLJ169 |
| Appellant | T. Duraiswami |
| Respondent | Lakshmi and anr. |
| Cases Referred | In Kailasam v. Muthusamy |
Pratap Singh, J.
1. This appeal is directed against order in E.A. No. 870 of 1991 in E.P.A. No. 6 of 1991 in O.S. No. 4 of 1987 on the file of Subordinate Judge of Erode, in which the learned Subordinate Judge had dismissed the petition filed by the appellant for setting aside the court auction sale.
2. The petitioner's/the appellant's case is briefly as follows:
He is the judgment-debtor. Item No. 1 in the execution petition was sold on 24-10-1991 for Rs. 1,05,000. As per Order 21, Rule 66(2)(e), Civil Procedure Code, the execution court need not fix the upset price of the property to be sold. It is an obligation imposed upon the court to give the value of the decree holder and judgment-debtor. While so, the amin, a court officer was deputed to inspect the property to be sold and give his valuation and in this case the Amin had fixed the value at Rs. 3 lakhs. The sale proclamation effected by the court contained the value of the judgment-debtor, the value of the Amin and the value of the decree-holder viz. Rs. 8 lakhs, Rs. 3 lakhs and Rs. 1 lakh respectively. On the date of auction viz., 24-10-1991, the Court officer made an attempt to sell the property at Rs. 8 lakhs. There was nobody to bid. Therefore, the Court officer recorded it. The Court officer ought to have intimated the court that there was no bid and ought to have obtained further direction. On that, the Court shall send notice to the judgment-debtor. Then only, the Court officer ought to have proceeded to the next value viz., Rs. 3 lakhs. For this value also there was nobody to bid and the property was not sold. Here also, the Court officer has not intimated the court and hence the next value viz., the value given by the decree-holder was taken as the upset price. The decree holder had availed the opportunity and made his friends to take part in the proceedings and the property was auctioned for Rs. 1,05,000. All the three stages came into play without the knowledge of the petitioner. It is in gross violation of the rules and regulations. It is fraud committed by the court. The proclamation was defective, since it does not speak at what rate the property is going to be sold. Hence the sale held on 24-10-1991 is to be set aside, as it is vitiated by material irregularity. Otherwise the petitioner would be put to irreparable loss and hardship.
3. The decree-holder/first respondent resisted the claim on the following grounds:
There was no material irregularity or fraud in publishing or conducting the sale. The Petitioner has not sustained any substantial injury. It is incorrect to say that Court officer ought to have intimated the court and should have obtained further direction. The procedure adopted by the Court officer is not illegal. The petitioner was present on the date of sale in the court and at the time of auction by the Court officer. He has filed the present petition only to protract the proceedings and defeat this respondent from enjoying the fruits of the decree. No fraud was committed by the court. The claim that proclamation is defective is not true.
4. After enquiry, the learned Subordinate Judge had dismissed the petition. Aggrieved by the same, the petitioner has come forward with this appeal.
5. Mr. C. Chinnaswami, the learned Senior counsel, appearing for the appellant, would submit that the upset price for which the property was slated for auction should have been progressively reduced and that in this case it was reduced from Rs. 8 lakhs to Rs. 3 lakhs and then to Rs. 1 lakh and it is not correct and had resulted in substantial injury to the appellant. I have heard Mr. P.G. Xavier and Mr. K. Raviraja Pandian, learned Counsels appearing for respondents 1 and 2 respectively in this regard. I have given careful consideration to the submissions made by rival counsels. The first objection taken in the affidavit filed by the appellant in the court below, in support of the application to set aside the sale, is that the Court officer need not have inspected the property and given his valuation and the court below ought not to have noted the value given by the Amin and this is not in accordance with Order 21, Rule 66(2)(e), Civil Procedure Code. For appreciation of this contention, Order 21, Rule 66(2)(e), as per the Madras High Court Amendment needs extraction and it reads as follows:
66. Proclamation of sales by public auction: (2) 'The terms of such proclamation shall be settled in court after notice to the decree holder and judgment-debtor except in cases where notices have already been served under Order 21, Rule 64 and such proclamation shall state the time and place of sale and specify as accurately as possible:
(a) the property to be sold;
(b) the revenue assessed upon the estate, or part of the estate, where the property to be sold is an interest in an estate or part of an estate paying revenue to the Government;
(c) any encumbrance to which the property is liable;
(d) the amount for the recovery of which the sale is ordered;
(d.1) the upset price fixed by the Court, and
(e) the value of the property as stated (i) by the decree-holder and
(ii) by the judgment-debtor; and
(f) every other thing which the court considers material for a purchaser to know in order to judge of the nature and value of the property.
It provides for noting down the value of the property as stated by the decree holder and as stated by the judgment-debtor. It does not oblige the court to note the valuation given by the Court officer/ Amin in the sale proclamation. But it does not either prohibit or bar giving the valuation of the Court officer/Amin of the property.
As per Order 21, Rule 66(2)(f), every other thing which the Court considers material for a purchaser to know in order to judge of the nature and value of the property can be given. The valuation of the property given by the Court officer/Amin would be a material for a purchaser to note in order to judge the nature and value of the property. One thing is that there is no bar or prohibition to note the valuation of a Court officer/Amin of the property; The second thing is that such a note or valuation of the Court officer/Amin regarding value of the property would come within the ambit of Order 21, Rule 66(2)(f) referred to supra. So I am clear that mentioning the value given by the Court officer/Amin would not at all make the sale proclamation defective in the eye of law.
6. The other objection taken in the affidavit filed by the petitioner in support of the application in the court below, is that at every stage when the property was not sold at the value given by the judgment-debtor and then at the value given by the Court officer/Amin, the Court officer should have intimated that fact to the court and then obtained the direction of the court and should have been proceeded further, does not have the backing of any provision of law in the Civil Procedure Code. None of the provisions in the Civil Procedure Code and particularly Order 21, obliges the Court officer to inform the court at every stage when the property could not be sold at the valuation given by the judgment-debtor and then get directions and then further proceed with the auction proceedings. While so, neither this objection would stand.
7. The objection put forth now by Mr. C. Chinnaswami, the learned Senior Counsel, is that the upset price should have been reduced progressively and not from Rs. 8 lakhs to Rs. 3 lakhs and then from Rs. 3 lakhs to Rs. 1 lakh. Even according to the petitioner, the property could not be sold for Rs. 8 lakhs and there were no bidders for that amount. Neither was there any bidder for the next value of Rs. 3 lakhs. While so, the court officer had taken the next value, the value given by the decree-holder. There is absolutely no evidence to show that this value given by the decree-holder was totally inadequate and does not reflect the market value of the property. Furthermore, it is a notorious fact that a court auction sale would not fetch the market value of the property in such an auction. Thus, there is nothing to show that there was any material irregularity and there was any substantial injury flowing from such material irregularity. In the absence of such evidence, the procedure adopted by the Court officer by taking Rs. 1 lakh as the bidding price when he was not able to get any bidders for Rs. 3 lakhs would not render the sale invalid.
8. In Navalkha and Sons v. Ramanuja Das (1970) 2 S.C.J. 96, it was held that it is the duty of the Court in every case to satisfy itself that having regard to the market value of the property, the price offered is reasonable and adequate. In Kanjay Industries (P)Ltd. v. New Drums (P)Ltd. (1974) 2 S.C.J. 326, the Apex Court has laid as follows:
The expression 'material irregularity in the conduct of sale' must be benignly construed to cover the climax act of the Court accepting the highest bid. Indeed, under the Civil Procedure Code, it is the Court which conducts the sale and its duty to apply its mind to the material factors bearing on the reasonableness of the price offered, is part of the process of obtaining a proper price in the course of the sale. Therefore, failure to apply its mind to this aspect of the conduct of the sale may amount to material irregularity. Mere substantial injury without material irregularity is not enough even as material irregularity not linked directly to inadequacy of the price is insufficient. And where a court mechanically com ducts the sale or routinely signs assent to the sale papers, not bothering to see if the offer is too low and a better price could have been obtained, and in fact the price is substantially inadequate, there is the presence of both the elements of irregularity and injury. But it is not as if the Court should go on adjourning the sale till a good price is got, it being a notorious fact that Court sales and market prices are distant neighbours. Otherwise, decree holders can never get the property of the debtor sold. Nor is it right to judge the unfairness of the price by hind sight wisdom.
9. In Kailasam v. Muthusamy (1992) 1 L.W. 437, Justice Srinivasan had held that after the amendment of the Civil Procedure Code by Act 104 of 1976, there is no necessity for the court to fix the upset price. The learned Judge had further held that under Clause (c) of Rule 66(2), the court is only to mention in the said proclamation every-thing which the court considers material for a purchaser to know in order to judge the nature and value of the property and that does not mean that the court is bound to fix the upset price.
10. In the instant case before me, there is neither any material to come to a conclusion that there was any material irregularity nor there is any material to show that it had resulted is substantial injury to the judgment-debtor. When none of the elements are present and when none of the objections taken by the judgment-debtor for assailing the court auction sale finds acceptance with me, the inevitable result is that this appeal, which has got no merits, will have to be dismissed and shall stand dismissed.