Back
2000(2) Supreme 2
SUPREME COURT OF INDIA
(From Andhra Pradesh High Court)
S.B. Majmudar & Umesh C. Banerjee, JJ.
Kadiyala Rama Rao -Appellant
versus
Gutala Kahna Rao (Dead) by LRs. & Ors. -Respondents
Civil Appeal No. 2269 of 1981
Decided on 18-2-2000
Counsel for the Parties :
For the Appearing Parties : T.S. Krishna Murthy Iyer, M.S. Ganesh, Sr. Advocates. M. Seshachari, G.S. Ramarao, P.K. Rao, K.R. Nagaraja, Aloke Bhattacharya, T.V.S.N. Chari, Nikhil Nayyer, Ms. B. Sunita Rao, Ms. Rajani K. Prasad, C.V. Subba Rao, Advocates.
Held : On a plain reading of the provisions of Order 21, Rule 90 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 third requirement as above needs however special mention by reason of the factum of incorporation of the principles analogous to the doctrine of constructive res judicata as envisaged under Section 11 of the Code. The legislative intent is clear and categorical in both the provisions as above that in the event of an intentional relinquishment of a known right, question of proceeding further would not arise. The provisions of Order 21 Rule 90 thus categorically envisage that material irregularity and fraud alone would confer jurisdiction on to the Executing Court to set aside the same. (Paras 7, 8 & 10)
(ii) Code of Civil Procedure, 1908 -Order 21, Rule 90-Setting aside of auction sale-Petition by Judgment-Debtor contending he has no saleable interest-Petition not maintainable-Saleable interest does not come within ambit of Order 21, Rule 90.
Held : Question of saleable interest does not come within the ambit of Order 21 Rule 90 and as such the Judgment-Debtor had no locus standi to apply to the Court for setting aside the sale. In the present factual context, 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 Judgment-Debtor since the purchaser s right would otherwise be clouded therewith by reason of there being no saleable interest in the property so far as the Judgment-Debtor is concerned. Order 21 Rule 91 is specific on this score and a right has been conferred on to the purchaser only. (Para 10)
Order 21 Rule 90 does not envisage the 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 the issue of saleable interest can only be agitated by the purchaser in terms of Order 21 Rule 91 and not in any event 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 thereto 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. (Para 14)
(iii) Code of Civil Procedure, 1908-Order 21, Rule 90 r/w Section 115-Revision petition against order refusing to set aside auction sale-Maintainable under Section 115. (Para 15)
JUDGMENT
Banerjee, J.-This appeal pertains to the question of validity of a court sale in regard to an immovable property.
2. The facts in the appeal may briefly be adverted in order to appreciate the issue involved effectively.
3. 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 in 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.
4. 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.
5. 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 High Court and hence the Appeal before this Court.
6. 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] Application to Set aside sale on ground of irregularity or fraud.-(1) Where any immovable property has been sold in execution of a decree, the decree-holder, or the purchaser, or any other person entitled to share in a rateable distribution of assets, or whose interests are affected by the sale, may 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.
7. 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.
8. The third requirement as above needs however special mention by reason of the factum of incorporation of the principles analogous to the doctrine of constructiv
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
