1. Execution of money decree — Auction sale of immovable property — Application to set aside sale under Order 21 Rule 90, Code of Civil Procedure. (Para 3 , 4 , 5 )
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1993 Supreme(SC) 765
SUPREME COURT OF INDIA
P.B. SAWANT AND YOGESHWAR DAYAL, JJ.
Satyanarain Bajoria and another, Appellants
Versus
Ramnarain Tibrewal and another, Respondents.
Civil Appeal No. 4872 of 1993 (arising out of S.L.P. (C) No. 8079 of 1986), D/-8-9-1993.
Important Points
A sale in execution of a decree can be set aside under Order 21 Rule 90 CPC if mandatory notices under Rules 22, 54, and 66 are not served. Keeping the judgment-debtor totally ignorant of proceedings constitutes material irregularity and fraud, causing substantial injury.
Subject
Execution of Decree - Setting Aside Sale
Act Referred
Headnote
Code of Civil Procedure, 1908 - Order 21 - Rule 90, 66, 54 and 22 - Limitation Act, 1963 - Article 127 - Auction sale - Claiming sum of money – debtor – Decreed - Debtor was granted a loan and a decree fo ps. was passed against judgment debtor - In judgment-debtor deposited in trial court - On judgment debtor deposited a further sum and thought that he had satisfied decree - On decree-holder made an application claiming another sum - This application was allowed but thereafter he got his execution application dismissed for default - Thereafter for about three years decree-holder remained silent and in, filed another Money Execution Case No. in executing court claiming another sum plus interest - Plea of judgment-debtor in application for setting aside sale was that he had no knowledge of the case whatsoever and all steps had been taken ex parte and without knowledge of judgment-debtor by concealing facts - No process had been served on judgment-debtor and reports have been obtained in collusion with process peon - It was pleaded that amount of decree had been satisfied by the judgment-debtor and nothing left unsatisfied – Held, If it was merely a case of questions of fact proved on record, learned counsel for decree-holder would have been right - It appears lower appellate court had no knowledge whatsoever of how even notice under Order 21 Rule 22 of Code was required to be served or evidence in relation thereto being led in proceedings for setting aside of sale at the instance of judgment-debtor - Lower appellate court could not read order sheet or proceedings purporting - But if judgment-debtor is kept totally ignorant of the execution proceedings right from date of execution application till sale, it cannot be merely called a mere irregularity in attachment and thus of no consequence - However, provisions are made in the Code in sub-rule (2) of Rule 66 of Order 21 that sale proclamation shall be drawn up after notice to both the decree-holder as well as the judgment-debtor and shall state the time and place of sale and other requirements mentioned therein - Lower appellate court totally missed the points which were required to be determined and merely by assuming that even if notice under Order 21 Rule 54 of Code is not served, by virtue of explanation to Rule 90 of Order 21 of Code it is not a material irregularity or illegality to auction sale -Lower appellate court totally misunderstood the importance and efficacy of notices being served in execution proceedings - Court thus allow appeal, set aside judgments of lower appellate court dated and High Court dated and restore order of executing court dated - Appellant would also be entitled to costs - Appeal allowed.
Judgement Key Points
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Advocates:
A.SHARAN, G.S.MISHRA
A.SHARAN, G.S.MISHRA
Table of Contents
2. Judgment-debtor alleged fraud and lack of notice; decree-holder contended the matter involved questions of fact and the application was time-barred. (Para 5 , 11 , 17 )
3. The court found mandatory notices under Order 21 Rules 22, 54, and 66 were not served, and the decree-holder's conduct indicated fraud and substantial injury. (Para 9 , 10 , 13 , 14 , 15 , 17 , 18 , 19 )
4. Total ignorance of execution proceedings due to non-service of mandatory notices and fraudulent conduct constitutes material irregularity and substantial injury justifying setting aside an auction sale. (Para 15 , 17 , 20 )
5. Appeal allowed — Judgments of lower appellate court and High Court set aside — Order of executing court restoring property to judgment-debtor reinstated. (Para 21 )
6. What is the limitation period for filing an application to set aside a sale in execution of a decree?
Under Article 127 of Schedule 1 of the Limitation Act, 1963 (as amended by the Amendment Act 104 of 1976), the period of limitation is sixty days from the date of the sale. (Para 11 , 12 )
7. When is the issuance of notice under Order 21 Rule 22 of the Code of Civil Procedure mandatory in execution proceedings?
Notice is mandatory if an application for execution is made more than two years after the date of the decree, requiring the judgment-debtor to show cause why the decree should not be executed. (Para 13 )
8. What are the notice requirements for the attachment and proclamation of immovable property in execution sales?
Order 21 Rule 54 requires a prohibition order and notice for the judgment-debtor to attend court for settling proclamation terms. Rule 66(2) mandates that the sale proclamation be drawn up after notice to both parties. (Para 14 , 17 )
9. Does a defect in attachment alone justify setting aside a sale, and when is substantial injury presumed?
While a mere defect in attachment may not suffice under the explanation to Rule 90, substantial injury is presumed where the judgment-debtor is kept totally ignorant of proceedings through fraudulent conduct by the decree-holder. (Para 15 , 17 , 20 )
Judgment
YOGESHWAR DAYAL, J.:- Special leave granted.
2. With the counsel of learned counsel for the parties the appeal itself was heard and is being disposed of.
3. This appeal has been filed by Satyanarain Bajoria and another, judgment-debtor, against the order of the High Court dated 8th April, 1986 whereby the High Court dismissed Civil Revision No. 385 of 1986 filed by the judgment-debtor against the order dated 28th November, 1985 passed by the Additional District & Sessions Judge-VI, Munger, who had accepted the appeal filed by the respondents,/ decree-holder against the order of the executing court dated 19th July, 1984 passed in Misc. Case No. 28 of 1978 under Order 21, Rule 90 of the Code of Civil Procedure whereby the trial court set aside the auction sale in Money Execution Case No. 19/55 of 1968.
4. It appears that the judgment debtor was granted a loan of Rs. 4,000 /- and a decree for Rupees 8,256.05 ps. was passed against the judgment debtor in 1964. In November, 1964 the judgment-debtor deposited Rs. 8,000/- in the trial court. On 4th January, 1965 the judgment debtor deposited a further sum of Rs. 391.55 and thought that he had satisfied the decree. On 29th November, 1965 the decree-holder made an application claiming another sum of Rs. 350/-. This application was allowed but thereafter he got his execution application dismissed for default. Thereafter for about three years the decree-holder remained silent and in 1968, filed another Money Execution Case No. 19/55 of 1968 in the executing court claiming another sum of Rs.350/- plus interest. In execution of this application, on 12th September, 1978 the judgment-debtors property i.e. land, situated in the market, consisting of an area of one decimal was sold in auction f or Rs. 1,500/- and was purchased by the decree-holder himself. Before the expiry of the period of limitation for filing objections, namely 60 days as provided under Article 127 of the Limitation Act, 1963, as amended by Section 98 of the Amendment Act, 1976, to set aside auction sale in court, the executing court for non filing of objections, confirmed the sale on 8th November, 1978.
5. The appellants/ Judgment-debtor on 11th November, 1978 i.e. within 60 days, on coming to know of the sale, filed a petition under Order 21 rule 90 of the Code of Civil Procedure for setting aside the sale. The plea of the judgment-debtor in the application for setting aside the sale was that he had no knowledge of the case whatsoever and all the steps had been taken ex parte and without the knowledge of the judgment-debtor by concealing facts. No process had been served on the judgment-debtor and reports have been obtained in collusion with the process peon. It was pleaded that the amount of the decree had been satisfied by the judgment-debtor and nothing left unsatisfied. The decree-holder, had suppressed all notices, summonses and got served "balabala" i.e. merely on papers without actual service. It was also pleaded that the notice published in the local paper showing incorrect number of case and incorrect name of the court was to misguide the judgment-debtor and due to this irregularity and fraud played, the judgment-debtor could not contest the case in time and now it transpired from the order sheets of the case that the decree-holder had got the property of the judgment-debtor sold.
6. The court, who dealt with the application under Order 21 rule 90 of the Code of Civil Procedure noticed two points for decision. First, whether there had been irregularities or fraud in conducting the said sale and second whether the judgment-debtor had suffered substantial injury by reason of irregularity or fraud. The court also noticed that the point of limitation had not been raised.
7. On first issue, the judgment-debtor examined himself and stated that he had no knowledge about the sale of his land in the execution case and that no notice had been served upon him at all. He learnt about the auction sale from one Permanand Kes
