IN THE HIGH COURT OF KARNATAKA AT BENGALURU
S. SUJATHA, RAVI V. HOSMANI, JJ.
Sri Pramod @ Prashanth S/o. Late Babu Shetty and Ors. – Appellants
Versus
Deputy Commissioner, Dakshina Kannada District, Mangalore and Ors. – Respondents
W.A.No.3785/2019 (KLR – RES)
Decided On : 07-03-2022
Consumer Protection Act - Sale Proceedings - Karnataka Land Revenue Act, 1964 - Section 12 of the Consumer Act, 1986 - Section 27 of the Consumer Protection Act - Section 200 of Cr.P.C - Section 176[1][a] of the Karnataka Land Revenue Act, 1964 - Section 167 of the Act - Section 173 of the Act - [Section 12 of the Consumer Act, 1986, Section 27 of the Consumer Protection Act, Section 176[1][a] of the Karnataka Land Revenue Act, 1964, Section 167 of the Act, Section 173 of the Act] - The court discussed the application of Section 12 of the Consumer Act, 1986, Section 27 of the Consumer Protection Act, Section 176[1][a] of the Karnataka Land Revenue Act, 1964, Section 167 of the Act, and Section 173 of the Act in the context of the sale proceedings. The court analyzed the claims to immoveable property attached, setting aside sale, and sale not to be excessive under the relevant acts and sections. The court's decision was influenced by the interpretation of these provisions and their application to the facts of the case.
Fact of the Case:
The respondent Nos.5 to 8 filed a complaint under Section 12 of the Consumer Act, 1986, alleging deficiency in service by M/s. Nalina Finance Corporation. The complaints were allowed, and awards were passed directing M/s. Nalina Finance Corporation to pay certain sums with interest. The properties were attached and brought to sale, which the appellants challenged.
Finding of the Court:
The court found that the appellants did not have locus standi to challenge the sale proceedings, as they were not parties to the compromise decree and the original parties did not challenge the auction sale. The court also rejected the claims made under Section 176[1][a] and Section 167 of the Act, and confirmed the sale in favor of the auction purchaser.
Issues: The issues involved the challenge to the sale proceedings, the application of Section 176[1][a] and Section 167 of the Act, and the locus standi of the appellants to challenge the auction sale.
Ratio Decidendi: The court held that the appellants lacked locus standi to challenge the auction sale, and their claims under Section 176[1][a] and Section 167 of the Act were baseless. The court also emphasized the protection afforded to bonafide auction purchasers and the distinction between decree-holder auction purchasers and strangers to the decree.
Final Decision: The Writ Appeal was dismissed, and the amount in deposit was disbursed to the appellants.
JUDGMENT :
1. This intra-Court appeal is directed against the order dated 20.08.2019 passed by the learned Single Judge in W.P.No.10248/2019 & W.P.Nos.10929-931/2019, whereby the Writ Petitions filed by the appellants herein have been dismissed.
2. The respondent Nos.5 to 8 had filed complaint under Section 12 of the Consumer Act, 1986 in Complaint Nos.197/2011, 198/2011, 199/2011 and 201/2021 against M/s. Nalina Finance Corporation alleging deficiency in service inasmuch as the money invested in fixed deposits not being returned. The said complaints came to be allowed and four awards were passed directing M/s. Nalina Finance Corporation represented by its Managing Partners to pay the sum of Rs.4,25,000/-, Rs.3,50,000/-, Rs.3,75,000/-and Rs.3,00,000/-respectively with interest at 14% p.a., from January 2019 till the date of payment. Pursuant to the orders passed in aforesaid complaints, the complainants filed Execution Petition Nos.13/2012, 14/2012, 15/2012 and 17/2012 under Section 27 of the Consumer Protection Act read with Section 200 of Cr.P.C. In the said Execution Petitions subject properties bearing Sy.No.13/2, 88/2, 90/3, 88/3, 90/2, 104/2, 14/1, 89/5BP2, 89/5A, measuring 0-80 Acres, 0-84 Acres, 1-45 Acres, 0-86 Acres, 0-12 Acres, 0-17 Acres, -10 Acres, 0-79 Acres and 1-24 acres respectively situated at Bolanthur Village of Bantwal Taluk, D.K.District came to be attached. The said properties were brought to sale. The 9th respondent purchased the said properties measuring 9.37 acres in the public auction conducted on 25.10.2017 by the 10th respondent – Tahasildar, Bantwal. The said sale proceedings alleged to be suffering from material irregularity, the appellants filed petition under Section 176[1][a] of the Karnataka Land Revenue Act, 1964 [‘Act’ for short] before the respondent No.1 which came to be dismissed by communication dated 31.05.2019. Form No.4 was forwarded by 10th respondent to jurisdictional Sub-registrar for effecting necessary entries in the register. Being aggrieved, the appellants preferred writ petition which came to be dismissed. Hence, this Writ Appeal.
3. Learned counsel for the appellants would submit that application under 167 [1] of the Act was filed by the appellants but no determination was made as required under the said provision, by the Revenue Officer. Appellants being the owners of the properties in question allotted to their share by virtue of the compromise decree passed in O.S.No.270/2013, no sale proceedings would have been initiated against the said properties attaching the same pursuant to the order passed by the Consumer Forum against Nalina Finance Corporation which was no way concerned with the appellants.
4. The appellants contended that the properties in question have been allotted to their share in the compromise decree dated 11.10.2013 passed in O.S.No.270/2013 on the file of the Principal Civil Judge & JMFC, Bantwal. D.K. There was no order of attachment passed in respect of the properties in question at the time of passing of the said decree. The District Consumer Forum, D.K., Mangalore, ignoring the decree in O.S.No.270/2013 and the subsequent revenue entries has passed an order directing the District Commissioner to recover the amount if not paid by attaching the subject properties. Pursuant to which, the Deputy Commissioner had issued recovery certificate and directed to recover the amount due by sale of the subject properties. Hence, the sale proceedings conducted by the respondent No.10 creating charge on the properties is wholly illegal.
5. Nextly, it was submitted that the paper publication for conducting the auction sale was made on 21.10.2017 and the auction sale was conducted on 25.10.2017 which is not in conformity with Order 21 Rule 68 of CPC. Minimum 15 days time was necessary for conducting the auction sale. Inviting the attention of the Court to Section 173 of the Act, it was argued that the properties to be sold, as far as may be practicable, be proportiona
The main legal point established in the judgment is the protection afforded to bonafide auction purchasers and the distinction between decree-holder auction purchasers and strangers to the decree.
(1) Attachment and auction of property – No application to set aside a sale on grounds of irregularity or fraud can be entertained on any ground which applicant would have taken on or before date on ....
Confirmed auction sales cannot be set aside for alleged inadequacy of price or lack of publicity without proof of fraud or substantial injury.
Auction sales may be set aside if material irregularities influence bidding and cause substantial injury to the applicant.
The court upheld the validity of the execution sale, ruling that the appellant failed to prove material irregularities or substantial injury, affirming the finality of the trial court's decree.
The court affirmed that disputes regarding execution of decrees must be resolved by the executing court, and allegations of fraud must be substantiated with evidence.
whether Section 35 of the Act is mandatory or directory the sale held in violation of the said provision is only illegal but not a nullity and therefore, it can be set aside only in the manner and th....
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