Putti Kondala Rao & Ors Vs.
Vellamanchili Sitarattamma & ANR  INSC 319 (12 December 1975)
RAY, A.N. (CJ) RAY, A.N. (CJ) BEG, M.
HAMEEDULLAH SARKARIA, RANJIT SINGH SHINGAL, P.N.
CITATION: 1976 AIR 737 1976 SCR (2) 998 1976
SCC (1) 712
Code of Civil Procedure-Order XXI, r.
90-Allegations of substantial injury-If can be implied from facts and
In an application under O.XXI, r. 90, Civil
Procedure Code, the appellants (judgment-debtors) alleged that the sale of their
property pursuant to an order of attachment was illegal for material
irregularities. The trial Court held that where there was an irregularity in
the procedure for sale, the remedy would be to apply to set aside the sale on
proof of substantial injury and that there was no fraud in the sale, as alleged
by the appellants. On appeal, the first appellate Court held that the
auction-purchaser was the husband of the decree-holder and that there was gross
under-valuation of the property and so set aside the sale.
On further appeal, the High Court held that
the application of the appellants was defective and not maintainable and the
Court had no power to set aside the sale unless facts were alleged and proved
by the applicant to the satisfaction of the Court that he had sustained
substantial injury by reason of such irregularity.
Dismissing the appeal,
HELD: (1) The judgment of the trial Court
should be restored. The trial Court was correct in its conclusion and reasons
that the property sold was subject to mortgages and charges and was sold at the
correct price, taking into consideration the price of the properties in the
neighbourhood and other evidence on record. [1000 E, 1001 G] (2) The judgment
of the trial Court was wrongly reversed by the first appellate court.
Substantial justice had been done to the parties. [1001-C] (3) The High Court
was not unjustified in holding that the application for setting aside the sale
was bald and that there was no proper allegation of substantial injury to the
appellants. Sometimes, however, there may not be express allegations of
substantial injury and the same may appear to be implicit from all facts and
circumstances alleged. In the present case, the allegations in the petition
could be read to imply substantial injury to the appellants. The trial Court as
well as the first appellate court heard the parties and decided the case on the
footing that there were allegations of substantial injury to the appellants.
[1001 E-F] Luxmidevi v. Sethani Mukand Kanwar & Ors.,  1 S.C.R. 726,
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 643 of 1975.
Appeal by Special Leave from the Judgment and
order dated the 24-3-1973 of the Andhra Pradesh High Court in C.R.P. No.
M.K. Ramamurthi and B. Parthasarthi for the
B.V. Subrahmanyam and A. Subba Rao for the
The Judgment of the Court was delivered by
RAY, C.J. This appeal is by special leave from the judgment dated 24 March,
1973 of the High Court of Andhra Pradesh.
999 The High Court held that the application
of the appellants, the judgment debtors is defective and not maintainable and
the Court has no power to set aside the sale unless facts are alleged by the
applicant and proved by him to the satisfaction of the court that the applicant
has sustained substantial injury by reason of such irregularity.
The respondents are the decree-holders.
Pursuant to the decree there was an order for attachment and sale of the house
property of the appellants. The sale took place on 7 June, 1960.
The appellants filed an application on 7
July, 1960 under Order XXI Rule 90 of the Code of Civil Procedure to set aside
the sale. On 18 November, 1966 the application was dismissed by the Munsif. On
22 April, 1972 the Subordinate Judge allowed the appeal filed by the judgment
debtors and set aside the sale. The High Court pursuant to the revision
petition presented by the auction purchaser set aside the order of the
Subordinate Court on the ground that the application of the appellants under
Order XXI was defective and not maintainable.
The application was in seven paragraphs. The
first two paragraphs contained the description of the petitioners and the
respondents. In the third paragraph the judgment debtors alleged that the
properties were purchased by the husband of the decree holder. In the fourth
paragraph the judgment debtors alleged that the sale notices were deliberately
suppressed from the knowledge of the judgment debtors. It is also alleged that
the properties were undervalued and were sold in favour of the husband who was
the nominee of the decree-holder. In paragraph 5 it was alleged that the
correct assessments had not been shown. In paragraph 6 of the petition it is
alleged that the sale is illegal for material irregularities and for suppression
of all notices to the petitioners as the respondents 1 and 2 colluded together
and practised fraud upon the petitioners. In paragraph 7 the judgment debtors
prayed for setting aside the sale.
The Munsif by his order dated 18 November,
1966 noticed the contentions which arose for consideration. Those were as
follows. First, whether the judgment debtors had no knowledge of the attachment
or subsequent sale proceedings.
Second, whether the decree holder practised
fraud upon the judgment debtors. Third, whether the sale was illegal.
Fourth, whether the judgment debtors
sustained any substantial injury.
The sale was to be held on 6 June, 1960. That
was a public holiday on account of Bakrid. There was a gazette notification to
that effect. Because the date of sale was a public holiday, the sale was held
on the next day 7 June, 1960. The Munsif held that when the sale is held on a
date different from that notified without an order of adjournment and a further
proclamation of sale it would amount only to an irregularity and the remedy
would be to apply to set aside the sale on proof of substantial injury. The
Munsif held that there was no circumstance to make the sale illegal or invalid.
The Munsif further held that the attachment
was effective from 17 December, 1959. One of the judgment debtors who were the
eldest 1000 brother was present at the time of attachment. The youngest brother
alleged that he was not pulling on well with the family members because he
married a girl of another caste.
The Munsif held that to be an after-thought
because there was no evidence of any discord between the brothers. The Munsif
held that the judgment debtors were living together in the house attached and
that they had knowledge of the attachment.
With regard to the sale notice the Munsif
held that the judgment debtors had knowledge of the attachment and sale and
also held that no fraud was practised.
With regard to the question of substantial
injury the Munsif held that the allegation in the petition that the property
was worth more than Rs. 25,000 and that the decree holder got the same
undervalued was to be rejected. The Munsif came to the conclusion that the
adjacent property and the evidence and material circumstances would show that
the house could not be valued at more than Rs. 25,000. The original sale deed
Ex.B-11 of the adjoining house showed that it was sold for Rs. 12,000. That was
a daba house with a tiled one at the back. The property which was sold was
slightly larger in area than that one. But the Munsif held that the situation
of the house of the neighbouhood properties all indicated that there was no
The property was subject to four mortgages.
The three mortgages were for the sums of Rs. 1000/- Rs. 3500/- and Rs.
1800/- and the fourth mortgage was for Rs.
400/- aggregating Rs. 6700/-. The sale was held subject to those four
mortgages. Interest was at 12 per cent. Interest on the principal amount would
be more than Rs. 1000/- on the date of the sale. The amount of Rs. 6125/- which
was the auction price was subject to the mortgages. Further there was a
maintenance charge in favour of one Kamakshamma for a sum of Rs. 60/- per year.
In this background the Munsif held that the sale was valid.
Before the Subordinate Judge two points for
consideration in the appeal were whether there was material irregularity or
fraud in the publication and conduct of the sale and whether they sustained
substantial loss or injury.
The Subordinate Judge held that the sale on 7
June, 1960 without an order of adjournment was an irregularity.
The price shown in the sale proclamation was
Rs. 6000/-. The decree holder valued the property at Rs. 16,000/-. The Amin
valued the property at Rs. 20,000/- free from all encumbrances. The Subordinate
Judge held that the property was subject to the charge and the sale was subject
to mortgages. The Subordinate Judge came to the conclusion that the auction
purchaser was the husband of the decree-holder and there was gross
under-valuation of the property and set aside the sale.
The decision of this Court in Laxmidevi v.
Sethani Mukand Kanwar & Ors.(1) held that it depends upon several relevant
facts whether the judgment debtor has suffered a substantial injury at a
1001 The features brought out on the
materials in this case are that there was proper service and the sale was held
on 7 June, 1960 because the previous day was a public holiday.
The judgment debtors did not give their
valuation. The property sold was subject to mortgages and charge. The decree
holders have been kept out of the fruit of the decree for about 17 years. The
attempt on the part of the judgment debtors to set aside the sale was an
afterthought as was found by the Munsif. The Subordinate Judge was impressed
with the suggestion that the property was under-valued. The Subordinate Judge
was wrong there. The Munsif was correct in his conclusion and reasons that the
property sold was subject to mortgages and charges and was sold at the correct
price taking into consideration the price in the neighbourhood and other
evidence on record.
The High Court found that there was no
allegation of substantial injury in the petition. It appears from the record
that the Trial Court and the first Appellate Court addressed themselves at
length on the question of substantial injury. Parties were heard. They made
their submissions. The conclusions of the Trial Court and the Appellate Court
Counsel for the appellant submitted that if
we set aside the judgment of the High Court, the matter would have to be
remanded for hearing on other points. It will serve no useful purpose to send
the matter to the High Court on other questions. There has been substantial
justice done to the parties. The judgment of the Trial Court was wrongly
reversed by the first Appellate Court.
The High Court was not unjustified on the
materials to hold that the application for setting aside the sale was bald and
there was no proper allegation of substantial injury to the judgment debtors. Sometimes,
however, there may not be express allegations of substantial injury and the
same may appear to be implicit from all facts and circumstances alleged. In the
present case, the Trial Court as well as the first Appellate Court heard the
parties and decided the case on the footing that there were allegations of
substantial injury to the judgment debtors.
For these reasons we proceed on the basis
that the allegations in the petition could be read to imply substantial injury
to the judgment debtors. It is not necessary to remand the matter to the High Court
because we are of opinion that the judgment of the Trial Court is correct and
should be restored. We, therefore, dismiss the appeal. The appellants will pay
costs to the respondents.
P.B.R. Appeal dismissed.