1. Execution of decree under Bihar Money Lenders Act, 1974 — Valuation of property for sale. (Para 2 , 3 )
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2000 Supreme(SC) 816
SUPREME COURT OF INDIA
A.P.Misra : M.B.Shah
Umakant Mishra (Dead) Through Lrs.
Versus
Dinanath Prasad Shah (Dead) Through Lrs
Case No. : 2519 of 1989
Date of Decision : 4/19/00
Under Sections 18 and 19 of the Bihar Money Lenders Act, 1974, it is mandatory for the executing court to hear both parties before fixing property value. Valuations fixed ex parte are invalid and can be legally refixed by the court to ensure a proper execution sale.
Headnote:(A) Bihar Money Lenders Act, 1974 - Sections 18 and 19 - Execution of decree - Valuation of property - Mandatory requirement to hear parties - Procedure for proclamation - Failure to follow mandatory provisions renders valuation invalid - Executing court entitled to refix valuation if original process was ex parte (Paras 2, 3, 8).
(B) Execution Proceedings - Review of valuation - If valuation is fixed without following the statutory mandate of hearing parties, the court has jurisdiction to recall and refix the same (Paras 7, 8).
Facts of the case:
In an execution proceeding for a loan decree, the property valuation was fixed ex parte without providing a hearing to the judgment-debtor. The judgment-debtor applied for refixation of the valuation, and the executing court, after hearing the parties, set aside the ex parte order and refixed the valuation. An auction sale was conducted subject to the outcome of this valuation application. Consequently, the executing court refused to confirm the sale. This decision was reversed by the District Court and the High Court on the ground that the executing court had no jurisdiction to review the valuation fixed by the trial judge.
Findings of Court:
The court found that the mandatory provisions of Sections 18 and 19 of the Bihar Money Lenders Act, 1974, require the executing court to hear both parties and estimate the value of the property to ensure only the necessary portion is sold to satisfy the decree. Since the initial valuation was conducted ex parte, the executing court correctly refixed the valuation and subsequently refused to confirm the sale.
Issues: Whether the executing court has the authority to review and refix the valuation of property when the initial valuation was conducted without providing the judgment-debtor an opportunity to be heard, in violation of the Bihar Money Lenders Act.
Ratio Decidendi: The statutory mandate under Sections 18 and 19 of the Bihar Money Lenders Act, 1974, necessitates a hearing of the parties before estimating the value of the property. Any valuation determined ex parte in violation of this mandatory requirement is erroneous and can be legally refixed by the executing court to ensure the proclamation of sale is accurate and fair.
Result: Appeal allowed.
Act Referred
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Table of Contents
2. Executing court can review valuation fixed ex parte; decree-holder contends court lacks such jurisdiction. (Para 1 , 5 , 6 , 7 , 8 )
3. Valuation fixed without hearing judgment-debtor violates mandatory sections 18 and 19 of Bihar Money Lenders Act. (Para 8 )
4. Executing court must hear parties before fixing property valuation under section 18 of the Act. (Para 2 , 8 )
5. Appeal allowed; orders of High Court and Additional District Judge set aside; trial court order confirmed. (Para 9 , 10 )
6. Can an executing court review the valuation of property fixed without hearing the judgment-debtor under Section 18 of the Bihar Money Lenders Act, 1974?
Yes, the executing court can and must review such valuation if fixed ex parte, as the Act mandates hearing the parties before estimating value. (Para 2 , 3 , 8 )
7. What is the legal effect of refixing the valuation of property after setting aside ex parte valuation?
Refixing valuation deems the earlier sale set aside; the court must then follow fresh procedures under Section 19 of the Act. (Para 4 , 6 , 8 )
8. Under the Bihar Money Lenders Act, can property be sold at a price lower than the value specified in the sale proclamation?
No, Section 19 expressly prohibits selling property at a price lower than the value stated in the proclamation. (Para 2 , 8 )
M.B.SHAH, J.
(1) THIS appeal is filed against the judgment and order dated 20-6-1987 passed by the High Court of Patna rejecting Civil Revision No. 1078 of 1984 holding that the executing court has no right to review the valuation fixed by the trial Judge. The said revision application was filed by the appellant judgment-debtor against the order dated 31-3-1984 passed by the IVth Additional Subordinate Judge, East Champaran, Motihari in Miscellaneous Appeal No. 17/5/7 of 1982, whereby the Additional District Judge set aside the order dated 19-2-1982, passed by the Munsif in Execution Ca.seNo.51of 1978.
(2) TO appreciate the contentions raised by the parties, it would be necessary to set out a few facts. The appellant is the judgment-debtor and the parties are governed by the provisions of the Bihar Money Lenders Act, 1974 (hereinafter referred to as "the Act"). Section 18 of the said Act specifically provides that when an application is made for the execution of a decree passed in respect of loan or interest on loan advanced by the sale of the judgment-debtors property, the court executing the decree shall, notwithstanding anything to the contrary contained in any other law, hear the parties to the decree and estimate the value of such property and that portion of such property which would be sufficient to satisfy the decree. Section 19 of the Act further provides that the proclamation of the intended sale of the property in execution of the decree is required to include mainly so much of the property of the judgment-debtor which can satisfy the decree and is also required to state the value of the portion of the property to be sold as determined under Section 18 of the Act. Further mandate of the section is "such property or portion of the property, as the case may be, shall not be sold at a price lower than the price specified in the said proclamation".
(3) IN the present case, it is an admitted fact that judgment-debtor filed an application on 30-9-1980, before the executing court stating that valuation of the property fixed by the court was not proper and was fixed without giving any opportunity of hearing to the judgment-debtor. At the time of hearing of the said application, the judgment-creditor agreed that opportunity of hearing was not given to the applicant and he has not raised any objection for the contentions raised by thejudgment-debtor that the process was not served before fixing the valuation of the land. Therefore, the executing court raised the issue "whether the valuation of the lands given in the schedule of the execution proceeding fixed by the Court after ex parte hearing is correct and if not, what should be the proper valuation of the lands given in the execution talika". After hearing the parties, by order dated 8-5-1981 the Court set aside the ex parte order dated 28-8-1980 fixing the valuation of the property as required under Section 18. The Court set aside the fixation of the valuation @ Rs.316 per katha and refixed the same @ Rs.1000 per katha.
(4) NO appeal was filed against that order.
(5) THEREAFTER, the decree-holder filed an application dated 19-5-1981 under Order 21 Rule 92 CPC seeking preparation and delivery of sale certificate. This application was dismissed by the executing court vide order dated 19-2-1982, whereby the court arrived at the conclusion that the sale was held as per order dated 13-10-1980 with a condition that it was subject to Order 21 Rule 59(b) of the Civil Procedure Code. For this purpose, the trial court specifically mentioned that on 30-9-1980, the judgment-debtor appeared before the executing court and filed a petition under Section 47 of the Civil Procedure Code and that application was admitted after hearing both the parties on 9-10-1980. Thereafter, the judgment-debtor filed further application for staying the execution proceedings and as the aforesaid application was moved on 13-10-1980, the day on which the sale was
