Kadiyala
Rama Rao Vs. Gutala Kahna Rao (Dead) by LRS & Ors [2000] INSC 1 (1 January 2000)
S.B.Majumdar, U.C.Banerjee BANERJEE, J.
L.I.T.J
This appeal pertains mainly to the question of validity of court sale in regard
to immovable property. The facts in the appeal may briefly be adverted in order
to appreciate the issue involved effectively.
The
situation is now thus by reason of the legislative changes as above is clear
enough to indicate that an order passed by court subordinate to the High Court
in its appellate jurisdiction, if it is not appealable, would be within the
ambit of Section 115 of the Code and thus a revisional application would be
maintainable. A revisional application against an order which is not appealable
either before the subordinate court or the High court would also be
maintainable. Let us now at this juncture however, come to the contextual facts
in order to appreciate the issue involved more effectively. The petitioner is a
stranger auction purchaser of a house property sold in court auction on 31st
July, 1978 in pursuance of a mortgage decree dated 4.6.1975 passed in
C.S.No.1245 of 1973 on the file of the court of District Munsif, Rajamundhry,
Andhra Pradesh. The court sale of the house property was effected upon payment
of 25% of the sale price offered by the highest bidder.
Subsequently,
the sale was confirmed on 31st July, 1978
upon payment of the full purchase price. On 26th August, 1978 the respondents herein filed an application to set aside
the auction sale dated 31st
July, 1978. The
learned District Munsif Rajamundhry, however by an order dated 31st August,
1978 rejected the said application and thereafter confirmed the sale and
disposed of the Execution Petition on the same day and a cheque for Rs.4420/-
was issued in favour of the Advocate for the decree holder and thereupon the
full satisfaction was duly recorded. It is significant to note that the
appellant took delivery of the house property on 9th November, 1978. Subsequently, on an application filed under Section 115 of
the Code of Civil Procedure before the High Court of Andhra Pradesh, the
respondents herein obtained an interim stay of the proceedings on 22.11.1978
upon deposit of half of the decretal amount. On 4th April, 1980, the High Court however further directed the respondent to
deposit the remaining half of the decretal amount. The records depict that the
respondents duly complied with the orders of deposit. The Revision Petition
thereafter upon hearing was allowed by the High Court and the appellant herein
subsequently filed a Review Petition which was however, dismissed by the order
dated 22nd December, 1980 by the Learned Single Judge of the High Court and
hence the Appeal before this Court. To appreciate the contentions raised in the
matter, it would however, be convenient to note the provisions of Order 21 Rule
90 which reads as below: 90 [S.311] (1)Where any immovable property has been
sold Application to in execution of a decree, the decree-holder, or set aside
sale the purchaser, or any other person entitled to on ground of share in a rateable
distribution of assets, or irregularity or whose interests are affected by the
sale, may fraud. apply to the Court to set aside the sale on the ground of
material irregularity or fraud in publishing or conducting it.
(2) No
sale shall be set aside on the ground of irregularity or fraud in publishing or
conducting it unless, upon the facts proved, the Court is satisfied that the
applicant has sustained substantial injury by reason of such irregularity or
fraud. (3) No application to set aside a sale under this rule shall be
entertained upon any ground which the applicant could have taken on or before
the date on which the proclamation of sale was drawn up.
Explanation:
The mere absence of, or defect in, attachment of the property shall not, by
itself, be a ground for setting aside a sale under this rule.
On a
plain reading of the provisions thus three several factors emerge and which
ought to be taken note of in the matter of setting aside the sale of an
immovable property, viz., (i) material irregularity and fraud in publishing or
conducting the sale; (ii) the Court dealing with such an application is
satisfied that the applicant has sustained substantial injury by reason of such
an irregularity or fraud; and (iii) no application would be entertained upon a
ground which the applicant could have taken on or before the date of drawing up
of the proclamation of sale.
The
only issue was of saleable interest for a period of 15 years since the deed of
sale has executed by the Municipality of Rajamundhry and the Judgement-Debtor contained a condition that the
property cannot be alienated by the Judgment-Debtor for a period of 15 years.
It is to be noticed at this juncture that question of saleable interest does
not come within the ambit of Order 21 Rule 90 and as such the Judgment-Debtor have
not locus standi to apply to the Court for setting aside the sale. Statute
recognizes such a locus standi only in the event of material irregularity or
fraud and not otherwise. Apart therefrom, saleable interest can only be
challenged by the purchaser and not by the Judgement- Debtor since the
purchasers right would otherwise be clouded therewith by reason of there being
no saleable interest in the property so far as the Judgent-debtor is concerned.
Order 21 Rule 91 is specific on this score and a right has been conferred on to
the purchaser only. Let us now at this juncture recount the order against which
the Revision Petition was moved before the High Court. The Order is set out
herein below: Heard Mr. P.M. Gandhi, perused the petition. As stated by Mr. P.M.Gandhi,
petitioners who have had sale notice did not raise the present objection
regarding the nature of property raise i.e., that it is not saleable. However
to give them an opportunity to avoid the sale by paying the E.P. amount their
counsel if asked whether they are willing to pay the E.P. amount. He is not
able to give any positive reply.
Petition
is prima facie devoid of bonafides besides being belated. Hence rejected.
At
this juncture the Andhra Pradesh and Madras Amendment Order 21 Rule 90 are also
to be noticed. The said amendment reads as below: Provided that the Court may,
after giving notice to the applicant, call upon him before admitting the
application, either to furnish security to the satisfaction of the Court for an
amount equal to that mentioned in the sale warrant or to that realized by the
sale, whichever is less, or to deposit such amount in Court:
Provided
also that the security furnished or the deposit made as aforesaid shall be
liable to be proceeded against only to the extent of the deficit on a re-sale
of the property already brought to sale. In the present proviso after the word Provided
insert the word further.
It is
on this score the Learned District Munsif has offered such an opportunity to
avoid the sale by deposit of money, as such there is due compliance thereof, of
the requirement of law in terms of the Andhra Pradesh Amendment to the
provisions of the Code as noticed above. The contextual facts depict that the
Revision Petition was dismissed on 11th April, 1980 that is long after the completion
of sale which has been totally ignored and the Learned Single Judge as a matter
of fact has proceeded on a total misconception of facts. Be it noted that at no
point of time, any question was raised as regards the total purchase price and
as such, a faint attempt on the part of the respondent herein before this Court
to denounce the sale on the ground of quantum of purchase price, in our view,
ought not to be permitted to be raised before this Court at this juncture. The
Learned Singe Judge erroneously proceeded on certain misconception of facts as
also of law by reason of the factum of challenge of sale on the ground of saleability.
Order 21 Rule 90 does not envisage an issue of saleability and the Learned
Single Judge was in error in introducing such a concept under Order 21 Rule 90
of the Code. In any event as noticed above no saleable interest can be agitated
by the purchaser only in terms of Order 21 Rule 91 and not by the
Judgment-debtor. The grounds of challenge is specific in the provision itself
namely, material irregularity or fraud and in the absence of any evidence or
even an allegation in regard thereof in the petition under Order 21 Rule 90,
question of introduction of the concept of no saleable interest or another
opportunity to the judgment-debtor does not and cannot arise. In that view of
the matter, this Appeal succeed. The order passed by the Learned Single Judge
as impugned in this Appeal stands set aside and quashed and in that view of the
factum of the position of the property being with the purchaser, we are not
inclined to issue any directive in that regard.
There
is no order as to costs.
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