Mahakal Automobiles & ANR Vs. Kishan Swaroop Sharma  INSC 561 (2 April
Dr. ARIJIT PASAYAT & S.H. KAPADIA REPORTABLE CIVIL APPEAL NO. 2598 OF 2005 Dr. ARIJIT PASAYAT, J.
1. Challenge in this appeal is to the judgment of learned Single Judge of
the Madhya Pradesh High Court, Indore Bench.
2. Background facts in a nutshell are as follows:
Respondent had sold 7200 sq.ft. land with some construction on 15/11/1986
for Rs.7.20 lacs to the JDs/appellants and was paid only Rs.1.60 lacs. He had
agreed to accept the remaining amount of Rs.5.60 lacs in 4 installments in 3
years with interest @ 1.50% per month. A charge was created on this property.
Respondent had later filed a Civil Suit No. 13-A/89 (New No. 6-A/1991) for
recovery of amount of Rs.6,31,750/- by sale of such property.
JDs/appellants in their written statements had admitted liability to pay
Rs.5 lacs as principal and Rs.65,000/- as interest and pendentelite interest @
1% per month. They disputed that Babulal was the partner of M/s Mahakal Automobiles.
Thus, the ADJ on 24/9/1 991 gave a judgment and decree under Order XII Rule 6
of the Code, relevant portion of which reads follows:
"As a result application of plaintiff is partly allowed and it is
hereby ordered that defendants Nos. I and 3 shall pay within 6 months from
today Rs.5,65,00/- and interest @1% per month on Rs.5 lacs from the date of
institution of suit i.e. 16/6/1989, otherwise the plaintiff would be entitled
to get a final decree for recovery of his amount by sale of charged property.
Order as to cost would be given at the time of disposal of other points. A
preliminary decree be framed accordingly.
Description of charged property be also given in preliminary decree."
A preliminary decree was accordingly drawn up.
However, it was not drawn in prescribed form No.5-A or 7-C of Schedule of
Appendix-D to the Code of Civil Procedure, 1908 (in short 'the Code').
Admittedly, no accounts were to be taken. Simple arithmetical calculation of
interest would have specified the actual amount payable.
On 28/4/1992 respondent filed an application for execution. Notices to all
JDs/appellants under Order XXI Rule 22 of the Code were issued. On 8/6/1992,
JDs/2 appeared through Shri L.P. Bhargava, Advocate while JD/1 appeared through
Shri P.K. Modi, advocate. All JDs continued to appear regularly till
16/11/1993. In the meantime two applications;
one under Order XXI Rule 58 read with Section 151 of the Code was filed on
8/6/1 992 and the second under order XXI rule 50 read with Section 151 of the
Code was filed on 2/11/1992 by the JDs which were disposed of on 16/12/1992 and
2/11/1992 respectively. No question as to non-executability of the decree had
been raised by the JDs according to the High Court.
On 16/10/1992 the court below directed that name of Babulal Gupta be deleted
from the execution application as there had been no decree against him. A
question was also raised suo motu by the court whether the decree in its terms
being preliminary decree could be executed as it is, or the DH- respondent be
directed to obtain a final decree. The executing court granted several
adjournments for arguments on this question. On 12/2/1993 the executing court
stayed the proceedings of the execution to await the result of proceedings
under Order I Rule 10 and Section 151 of the Code before the trial court in the
original case which was also pending in the same court. On 8/3/1994 order of
the High Court was received in the original case and the execution proceedings
were ordered to be restarted. The execution proceedings as well as the civil
suit were transferred from court to court and none appeared for the JDs in the
execution case, till 14/7/1997.
The High Court by the impugned order set aside the order of the trial court
holding that the I.As. filed by the judgment debtors, respondents in the
appeal, before High Court were to be dismissed. Auction sale in favour of the
respondent-DH was valid and order of its confirmation was upheld.
3. In support of the appeal learned counsel for the appellant submitted as
Records reveal that no Process Fee was
paid by the Decree Holder as per Order dated 4.10.1997.
Attachment of Warrant was not as per
Order 21 Rule 54 (1A) CPC.
No Notice was given to the appellants when execution proceedings got delinked from the suit and got transferred from one court to another.
Attachment proceedings were carried
out in the absence of the Judgment Debtor.
No notice was given to the appellant
under Order 21 Rules 54 and 66(2). The procedure under Order 21 Rule 54 (1A) and
66(2) is mandatory. Hence, the objections taken by way of IA Nos. 1, 2 and 6
should have been accepted (vi) The Court found total absence of drawing up of
the proclamation of sale and its terms by judicial application of mind.
It was held that the executing court
did not follow the mandatory procedure as provided under the Code.
4. It was submitted that the High Court by the impugned order erroneously
reversed the judgment on the ground that the appellant could be presumed to
have known of the proceeding and it is not a case of complete non issue of
service of attachment of warrant and that ratio of the decision in Deshbandhu
Gupta v. N.L. Anand @ Rajinder Singh [1994(1) SCC 131] does not apply.
5. Learned counsel for the respondent on the other hand submitted that the
High Court has analysed the factual position in the background of legal
position as set out by this court.
6. When a property is put up for auction to satisfy a decree of the Court,
it is mandatory for the Court executing the Decree, to comply with the
following stages before a property is sold in execution of a particular decree:
Attachment of the Immoveable Property:
Proclamation of Sale by Public
Sale by Public Auction
7. Each stage of the sale is governed by the provisions of the Code. For the
purposes of the present case, the relevant provisions are Order 21 Rule 54 and
Order 21 Rule 66. At each stage of the execution of the decree, when a property
is sold, it is mandatory that notice shall be served upon the person whose
property is being sold in execution of the decree, and any property which is
sold, without notice to the person whose property is being sold is a nullity,
and all actions pursuant thereto are liable to be struck down/quashed.
8. The admitted position that has emerged is that:
There was no notice served upon the
Judgment-Debtor under Order 21 Rule 54 (1-A).
There was no valuation of the property
There was no proclamation of sale as per the statutory provisions of
the M.P. Civil Court Rules, 1961 read with Order 21 Rule 66.
There was no publication of the sale.
9. In Deshbandhu Gupta's case (supra) it was held as follows:
"The Proclamation should include the estimate, if any, given by either
judgment- debtor or decree holder or both the parties.
Service of Notice on judgment-debtor under Order 21 Rule 66 (2) unless waive
by appellants or remained ex-parte, is a fundamental step in the procedure of
the Court in execution, judgment-debtor should have an opportunity to give his
estimate of the property. The estimate of the value of the property is a
material fact to enable the purchaser to know its value. It must be verify as
accurately and fairly as possible so that the intending bidders are not mislead
or to prevent them from offering inadequate price or to enable them to make a
decision in offering adequate price. In Gajadhar Prasad noticing the conflict
of judicial opinion among the High Courts, said that a review of the
authorities as well as amendments to Rule 66 (2) (e) make it abundantly clear
that the Court, when stating the estimated value of the property to be sold,
must not accept the ipse dixit of one side. It is certainly not necessary for
it to state its own estimate But, the essential facts which had a bearing on
the very material question of value of the property and which could assist the
purchaser in forming his own opinion must be stated, i.e. the value of the
property, that is, after all, the whole object of Order XXI, Rule 66 (2) (e)
CPC. The Court has only to decide what are allthese material particular in each
case. We think that this is an obligation imposed by Rule 66 (2) (e). In
discharging it, the Court normally state the valuation given by both the Decree
Holder as well as the Judgment Debtor where they both have valued the property,
and it does not appear fantastic."
"The absence of Notice causes irremediable injury to the judgment
Equally publication of the proclamation of sale under Rule 67 and specifying
the date and place of sale of the property under Rule 66 (2) are intended so
that the prospective bidders would know the value so as to make up their mind
to offer the price and to attempt that sale of the property and to secure
competitive bidders and fair price to the property sold. Absence of Not to the
Judgment Debtor disables him to offer his estimate of the value who better know
its value and to publicise on his part, canvassing and bringing the intended
bidders at the time of sale. Absence of notice prevents him to do the above and
also disables him to know fraud committed in the publication and conduct of
sale or other material irregularities in the conduct of sale. It would be
broached from yet another angle. The compulsory sale of immovable property
under Order 21 divests right, title and interest of the judgment debtor and
confers those rights, in favour of the purchaser. It thereby deals with the
rights and disabilities either of the judgment debtor or the decree holder. A
sale made, therefore, without notice to the judgment debtor is a nullity since
it divests the judgment debtor of his right, title and interest in his property
without an opportunity. The jurisdiction to sell the property would arise in a
Court only where the owner is given notice of the execution for attachment and
sale of his property. It is very salutary that a person's property cannot be
sold without his being told that it is being so sold and given an opportunity
to offer his estimate as he is the person who intimately knew the value of his
property and prevailing in the locality, exaggeration at time be
10. In M/s. Shalimar Cinema v. Bhasin Film Corporation and Another [1987(4)
SCC 717] it was held that the court has a duty to ensure that the requirement
of order 21 Rule 66 has properly applied. It is incumbent on the court to be
scrupulous in the extreme.
11. The records do not reveal that the appellant-judgment debtor was served
with a notice as required under Order 21 Rule 54(1)(A) of the Code in the
appendix B Forms 23, 24 and
29. It is to be noted that the records reveal that the address of the
appellant as contained in the sale deed was different from the address at which
the process server purportedly affixed the notice on the door and in open court
and at the chorah only. It has also to be noted that under Order 21 Rule 66(2)
the service of the notice has to be personally affected on the judgment debtor.
That also does not appear to have been done. Interestingly, the valuation of
the property as required to be done under the proviso to sub-rule (2) of Rule
66 of Order 21 of the Code has not been done. The same appears to have been
valued on the spot at Rs.9,00,000/- and it was not done by the Court. There are
admittedly other non-compliance with certain requirements. We do not think it
necessary to deal with those aspects in detail in view of the order proposed to
be passed. From the records it is revealed that Rs.14,38,893/- and
Rs.4,46,926/- have been deposited by the appellant purportedly for satisfaction
of the Execution Court Ujjain and Indore respectively. The appellant shall
further deposit a sum of Rs.15,00,000/- within 4 months from today.
The respondent No.1 shall be entitled to withdraw the amount deposited in
the bank with accrued interest. The appellant shall be responsible for payment
of the property tax of the property from the date of execution of sale deed
i.e. 5.12.1986 till date and the same shall be paid deposited with the
concerned authority within the aforesaid period of four months. On payment of
the amounts, the title to the property described in the registered sale deed
will vest free of all encumbrances on the appellant.
12. If any property of the respondent No.1 is there in the property in
question, the same shall vest to respondent No.1 with liberty to remove them as
soon as the payment is made.
13. The appeal is disposed of accordingly. No costs.