SRI RAJA BOMMADEVARA NAGANNA NAIDU BAHADUR ZAMINDAR GARU vs SRI RAJA BOMMADEVARA VENKATRAYULU NAIDU BAHADUR ZAMINDAR GARU

Headnote Court Copy Facts Arguments Court observation Judicial Analysis Case Map Category Hierarchy Table of Content

1945 Supreme(SC) 34

PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD PORTER, LORD GODDARD, SIR MADHAVAN NAIR AND SIR JOHN BEAUMONT.
SRI RAJA BOMMADEVARA NAGANNA NAIDU BAHADUR ZAMINDAR GARU - Appellant
Versus
SRI RAJA BOMMADEVARA VENKATRAYULU NAIDU BAHADUR ZAMINDAR GARU - Respondents
On appeal from the High Court at Madras.
Decided On : July. 30. 1945.

Important Points

To set aside a court sale under Order 21, Rule 90 CPC, both material irregularity and substantial injury must be proven. Substantial injury can be established via circumstantial evidence. Omissions are not material irregularities if they are impossible to fulfill or if the rule's purpose is otherwise achieved.

Subject

Civil Law - Execution of Decrees

Act Referred

CIVIL PROCEDURE CODE: O.21 R.90, O.21 R.66

Headnote

(A) Code of Civil Procedure - Order 21, Rule 90 - Setting aside court sale - Material irregularity or fraud - Substantial injury - To set aside a sale, it must be proved that there was material irregularity or fraud in publishing or conducting the sale and that the applicant sustained substantial injury by reason of such irregularity or fraud.

(B) Proof of substantial injury - Burden of proof - The burden to prove substantial injury may be discharged not only by direct evidence connecting the material irregularity or fraud with the injury, but also by circumstantial evidence from which a reasonable inference may be drawn that the injury was the result of the irregularity or fraud.

(C) Order 21, Rule 66, sub-rule 2(b) - Specification of revenue - Omission to state the revenue assessed on an estate or part of an estate is a material irregularity only where it is possible to state the amount accurately or approximately; it has no application where the property sold is a portion of an estate upon which no separate revenue has been fixed.

(D) Order 21, Rule 54 read with Rule 67 - Affixture of proclamation in the collector's office - While generally a material irregularity, such omission may not be material if sufficient publicity has been given to the sale through other means, such as wide advertisement in daily newspapers and affixture in a nearby court compound.

Facts of the case:
A judgment-debtor applied to set aside a court sale of properties on the grounds of material irregularity and fraud. The primary irregularities alleged were the failure to mention the revenue assessed on the properties in the sale proclamation and the failure to affix the proclamation in the collector's office. The properties were purchased by the decree-holder at a price found to be inadequate by the trial court.

Findings of Court:
The failure to state the revenue was not a material irregularity as the properties were parts of an estate without separately fixed revenue. The failure to affix the proclamation in the collector's office was not a material irregularity because the proclamation was affixed in the nearby district judge's court and widely advertised in newspapers, fulfilling the object of publicity. No evidence established that the low sale price was a result of these omissions.

Issues: Whether the omission to specify revenue and the failure to affix the sale proclamation in the collector's office constituted material irregularities that caused substantial injury to the judgment-debtor.

Ratio Decidendi: The court held that for a sale to be set aside under Order 21, Rule 90, both a material irregularity and substantial injury must be proven. Substantial injury can be inferred from circumstantial evidence. However, a procedural omission is not a "material irregularity" if the requirement is impossible to fulfill or if the underlying purpose of the rule, such as publicity, is effectively achieved through other means.

Result: Appeal fails, and should be dismissed with the costs of the first respondent.

Legal Category Hierarchy

Advocates:
Solicitors for the appellant: Lambert & White.
Solicitors for the first respondent: Hy. S. L. Polak & Co.

Judgement

28 Law. Rep. 72 Ind. App. 287 ( 1944- 1945) Raja Bommadevara Naganna Naidu B.Z. Garu V. In Re.

Appeal (No. 8 of 1942) from a judgment and decree of the High Court (January 23, 1940) reversing a judgment and decree of the court of the Subordinate Judge of Ellore (April 16, 1937).

The following facts are taken from the judgment of the Judicial Committee. This appeal arose out of an application by the appellant, who was a judgment-debtor, to set aside a court sale of six items of property belonging to him which had been sold in execution of the decree in Original Suit No. 38 of 1919 in the Court of the Subordinate Judge of Ellore, obtained against him by the first respondent, the decree-holder. This appeal related only to three items of the properties, being items 4, 5 and 6, specified in the sale proclamation. At the sale the properties were purchased by the decree-holder himself. The application to set aside the sale was made under Or. 21, r.90, of the Code of Civil Procedure, which empowered the court to set aside a sale on the ground of a material irregularity or fraud in publishing or conducting it. That power of the court was subject to the proviso that no such sale be set aside on the ground of irregularity or fraud unless " upon the facts proved the court is satisfied that the applicant " has sustained substantial injury by reason of such irregularity " or fraud."

The Subordinate Judge of Ellore, to whom the application had been made, set aside the sale on the grounds that the sale proclamation did not mention the revenue assessed on the properties as required by Or. 21, r. 66, sub-s. 2 (6), and that the sale proclamation was not published in the collectors office as required by Or. 21, r. 54, read with r. 67, of the Code of Civil Procedure, and that as a result of those irregularities the appellant had suffered substantial injury in that the sale prices were unreasonably low. The High Court of Madras (Wadsworth and Patanjali Sastri JJ.) reversed that decision by its order dated January 23, 1940, holding that in the circumstances of the case the omission to mention the Government revenue was not a material irregularity; and that the failure to affix the sale proclamation in the collectors office, though it was an irregularity, caused no substantial injury to the appellant. This appeal was brought against the above decision of the High Court. Besides the irregularities referred to, the appellant had also alleged fraud in his petition, but both the courts in India found that no fraud had been committed.

The question for determination in this appeal was whether or not the appellant was entitled to set aside the court sale by reason of the above mentioned irregularities.

1945. June 7, 11. Khambatta for the appellant. Both the failure to state in the sale proclamation, as required by Or.21, r. 66, sub-r.2 (6), of the Code, the revenue assessed on the properties to be sold, and the failure to affix the sale proclamation in the collectors office, as required by Or.21, r. 54, read with r. 67, are material irregularities in the conduct of the sale by public auction. Both of those omissions have been held by the Board, even independently, to be serious defects, and the appellant is entitled to succeed on either of them. It is the duty of the court to see that the provisions of the Code regarding the sale proclamation are carried out Marudanayagam Pillai v. Manickavasakam Chettiar (( 1944) L. R. 72 I. A. 104.). The importance of having the proclamation affixed in the collectors office is that it would be only there that any intending purchaser would expect to find the revenue payable on the lands or their probable value. Tekait Krishna Prasad Singh v. Moti Chand (( 1913) L.

R. 40 I.A. 140 ,144.) shows the importance which is attached to the requirement in the Code for the fixing of the proclamation. The present case is not as strong as Girdhari Singh v. Hurdeo Narain Singh (( 1876) L. R. 3 I. A. 230.) because here it is