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1985 Supreme(AP) 130

Andhra Pradesh High Court
Judges : K.RAMASWAMY
P.Rami Reddy - Appellant
Versus
P.Sundara Rama Reddy - Respondent
C.M.A.No.309/79
Decided On : 03-25-85
Advocates Appeared :
Mr. M.V. Ramana Reddy

Headnote:CIVIL PROCEDURE CODE, Order XXI, Rule 72-A as introduced by the Act of 1976 - Expression unless the Court otherwise direct Ambit and meaning of - Leave granted by the Court permitting the mortgagee decree-holder to bid for or purchase property sold in execution of a decree without fixing the reserve place - Sale held is illegal.

       Held: The language couched in Rule 72 A makes manifest from the words "the Court shall fix the reserve price" for sale shall not be less than the amount due under the decree i.e., the principal amount, interest thereon and costs, if the land is sold in one lot Shall be coterminous with the extinguishments of the debt due. If it is sold in more than one lot, the reserve price shall be so apportioned consistent with the nature of the property, the extent thereof or quality and the amount sought to be recovered and shall be evenly distributed so as to apportion the debt wd liquidation thereof. From the language thus manifested by the statute, it gives in unmistakable terms the legislative animation that it intended to relieve the mortgagor from all the liabilities incurred under the mortgage. It is the mandatory duty of the executing court while granting leave to the mortgagee-decree holder either under Order XXI Rule 72(1) or under Order 72(1), to comply with the fixation of the reserve price in conformity with the mandatory conditions stipulated under sub-rule (2)(a) or (b) of Rule 72-A. The non-compliance thereof renders the grant of permission to the mortgagee-decree holder fatal and per se illegal, The exercise of discretion under sub -rule 2 of Rule 72-A is in the nature of an exception and for the exercise thereof the legislature carved out large leeway to be Court by employing the language "the court unless otherwise directs." When permission to mortgagee is granted in conformity with Rule 72-A, then and then only the mortgagee could make avail of the statutory benefit of setoff under Rule 84 (2) of Order 21. Otherwise, the mortgagee on the sale being knocked down in his favour shall pay immediately 25% of the amount of purchase money as envisaged under Rule 84(1) and in default thereof the property shall forthwith be resold. In this case, the permission granted to the appellant is palpably illegal and the sale also became illegal.

       C.M.A. Dismissed.

K. RAMA SWAMY, J.

( 1 ) THE appellant-decree-holder obtained a final decree in a mortgage suit, on Jan. 18, 1971 on the foot of a mortgage deed dated July 27,1959. He laid the execution in E. P. NO. 48 of 1972. Items 1 and 12 of the E. P. Schedule were sold on Sept. 4, 1978 in which the second respondent herein purchased item 12 and the third respondent purchased item 1 of the E. P. Schedule. To set aside the sale, an application has been filed under O. XXI Rr. 89 and 90 of the Civil P. C. the lower Court set aside the above sales. As against that order in respect of item 12 of E. P. Schedule the present appeal has been filed. At this stage it is necessary to clarify that the third respondent did not file any appeal. Therefore the order setting aside the sale made in his favour was allowed to become final.

( 2 ) THE sale was set aside on three grounds. The second respondent acting on behalf of the decree-holder, played fraud on the Court in undervaluing the property by the Amin. The bidders who participated in the auction are only collusive bidders propped up by the second respondent. The permission granted to the decree-holder to bid in the auction is personal and the second respondent is not entitled to bid on behalf of the appellant and he cannot get the right to set off as contemplated under O. XXI R. 72 (1) of the Code of Civil Procedure. As he did not deposit th purchase price on the date of sale, the sale became illegal.

( 3 ) IN this appeal Sri M. V. Ramana Reddy, learned counsel for the appellant strenuously contends that the entire approach of the lower Court is vitiated by error of law. There is no fraud played by the second respondent. The Amin has committed the mistake in putting the incorrect value of the property in the saleistihar. The Commissioner appointed by the Court himself valued the land at Rs. 5,000/- per acre. That was also part of the record. Therefore the finding that the second respondent played fraud is not tenable. He also further contended that the bidders are independent bidders. They have nothing to do with the second respondent. His main forceful contention is that the application, E. A. No. 58 of 1978 is to permit the second respondent to bid in the auction on behalf of the decree-holder. When the lower Court said that the petition was allowed as prayed for, it means that the second respondent was permitted to bid on behalf of the appellant. The further condition stipulated in the order that the sale price shall not be less than the upset price is imposed only to the appellant personally. On so reading it must be construed that the second respondent is permitted to bid on behalf of the decree-holder. Thereby the sale is not vitiated for non-deposit of the amount as contemplated under R. 84 (1) of O. XXI C. P. C.

( 4 ) THOUGH the respondent is served, he is not appearing either in person or through counsel. The last contention is sufficient to dispose of the appeal. So it is not necessary to go into the first and second contentions raised by the learned counsel for the appellant. The appellant filed an application under O. XXI R. 72 of the Code of Civil Procedure requesting the Court to permit the second respondent to bid in the auction. The order passed thereon reads thus:"notice served on the judgment-debtor. Judgment-debtor called absent. Set ex parte. Petition allowed. Decree-holder is permitted to bid subject to the bid being higher than the upset price. He can also adjust the bid amount to the decree amount. "

( 5 ) THE order is susceptible of two constructions. One is that the decree-holder is permitted to bid in the auction and the bid amount shall not be less than the upset price. He is permitted to set off. The other one as contended for the appellant. It is true that the petition itself is to permit the second respondent to bid in the auction on behalf of the decree-holder. That petition was allowed. Therefore the permission was granted to the second respondent to bid on the auction o




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