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2023 Supreme(Kar) 525

IN THE HIGH COURT OF KARNATAKA AT DHARWAD BENCH
SREENIVAS HARISH KUMAR, RAMACHANDRA D. HUDDAR, JJ.
Raghunath Gouda S/o. Gurunath Gouda Patil – Appellant
Versus
Sri. G.D. Venkatesh s/o. Dodda Basappa – Respondent
Regular First Appeal No. 100051 of 2021 (-) C/W Regular First Appeal No. 100140 of 2021
Decided on : 07-09-2023

Advocates:
Advocate Appeared:
For the Appellant :SRI. S.G. KADADAKATTI, SRI. A. R. PATIL, ADVOCATE
For the Respondent: SRI. M. M. PATIL, ADV. SRI. U. G. KATTIMANI, SRI. A.R. PATIL, SRI. VISHALKUMAR, SRI. PRASHANT HOSAMANI, SRI. M. M. PATIL, SRI. S. G. KADADAKATTI, SRI. PRASHANT HOSAMANI, ADV.

Execution proceedings should be conducted expeditiously, and objections should be disposed of promptly to prevent unwanted litigation. Setting aside an auction sale requires establishing a connection between inadequacy of price and material irregularity/fraud.

Headnote:JUDGMENT - Execution Proceedings - Order XXI Rule 97, Order XXI Rule 89, Order XXI Rule 94, Section 47 of CPC - The court discussed the applicability of Order XXI Rule 97 of CPC, which deals with resistance or obstruction to possession of immovable property. The court emphasized that the executing court must be cautious while dealing with such applications and should not allow frivolous claims to delay the execution of the decree. The court also highlighted the limited nature of issues that can be adjudicated under Section 47 of CPC, which is aligned with the consequential provisions of Order XXI. The court noted that various objections filed during execution proceedings often lead to a retrial-like situation, causing a failure in realizing the fruits of the decree. The court emphasized the need to dispose of objections expeditiously and prevent unwanted litigation. The court also discussed the requirements for setting aside an auction sale, stating that mere inadequacy of price is not sufficient, and a connection must be established between the inadequacy and material irregularity or fraud. The court concluded that the objections raised by the appellants did not warrant interference with the well-reasoned order passed by the executing court.

Fact of the Case:

The case involved questions regarding the setting aside of an auction sale of a property in execution proceedings, the issuance of a sale certificate, and the determination of the rights of the objectors. The DHR filed a suit for specific performance of a contract, and the suit was decreed in part. The decree holder initiated execution proceedings, and the property was put up for auction. The appellants, who were objectors and JDR No.3, filed applications to determine their rights and set aside the auction sale. The executing court dismissed the applications, leading to the appeals.

Finding of the Court:

The court found that the objections raised by the appellants did not warrant interference with the order passed by the executing court. The court emphasized the need to dispose of objections expeditiously and prevent unwanted litigation. The court also noted that the objections did not establish substantial injury or material irregularity/fraud to set aside the auction sale.

Ratio Decidendi:

The court held that objections raised during execution proceedings should be disposed of expeditiously to prevent unwanted litigation. The court emphasized the limited nature of issues that can be adjudicated under Section 47 of CPC and the need to establish a connection between inadequacy of price and material irregularity/fraud to set aside an auction sale. Final Decision: The appeals filed by the appellants were dismissed, and the orders passed by the executing court were affirmed.

Judgement Key Points

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JUDGMENT :

    “i) Whether JDR No.3 can seek setting aside of auction sale of the property attached in Execution Proceedings No.27/2018?

ii) If so, in view of compromise between DHR, JDR Nos.1 and 2, auction purchaser and objector No.1, can she insist to issue sale certificate in her name as she is ready to pay/deposit the decreetal amount?

iii) Whether objector Nos.1 and 2 being the children of JDR Nos.1 and 3 respectively can seek determination of their rights in the execution proceedings in which JDR Nos.1 and 3 are parties?”

are the questions to be decided in these appeals.

2. These two appeals arise out of an order dated 26.03.2021 passed by Senior Civil Judge, Huvinahadagali, in Execution Petition No.27/2018. R.F.A.No.100051/2021 is filed by objector Nos.1 and 2 challenging the order passed on I.A.No.14 filed by them under Order XXI Rule 97 read with Section 151 of CPC to determine the right, title or interest in the property described in the scheduled appended to the application in the said execution petition whereas R.F.A.No.100140/2021 is filed by JDR No.3 under Order XXI Rule 89 of CPC to set aside the auction sale dated 28.04.2018 conducted by the Executing Court.

3. Parties to these appeals are referred as per their ranks before the Executing Court for the purpose of convenience.

4. The brief facts leading up to these execution appeals are as under:

The DHR filed a suit against JDR Nos.1 to 3 in O.S.No.52/2009 on the file of Prl. Sr. Civil Judge and JMFC, Hospet, seeking the relief of specific performance of contract based on agreement of sale dated 04.08.2008 executed by JDR Nos.1 to 3 being defendants in the said suit in respect of landed property bearing Sy.No.251A measuring 7 acres 15 cents situated at Magala village. It was alleged in the said suit that JDR Nos.1 to 3 executed the said agreement of sale agreeing to sell the suit schedule property for Rs.5,73,757/-and received Rs.2,50,000/-on 04.08.2008. Plaintiff/DHR further paid Rs.1,75,000/-to the defendants on 18.10.2008. In all he paid Rs.4,25,000/-. In the said suit, defendant Nos.1 and 2 i.e., JDR Nos.1 and 2 were placed exparte. It was JDR No.3 i.e., defendant No.3 who contested the suit by filing written statement. On contest, the said suit came to be decreed by granting the relief of refund of earnest money paid by the plaintiff/DHR and the relief of specific performance of a contract was rejected. The learned Court granted interest on the earnest money @ 24% p.a. from 04.08.2008 till realization as per the judgment and decree dated 08.10.2010.

5. This judgment and decree for refund of money was put to execution by the DHR by filing execution petition initially before Prl. Sr. Civil Judge, Hospet, in Ex.P.208/2011 and subsequently it was transferred to the Court of Sr. Civil Judge, Huvinahadagali, in view of the establishment of Sr. Civil Judge, at Huvinahadagali, and it was renumbered as Ex.P.No.27/2018.

6. Despite service of notice of the execution petition, the JDRs did not pay the decreetal amount. Therefore, the DHR took coercive steps to recover the said amount. In that process, he filed IA No.2 under Order XXI

Rule 54 of CPC. When such an order was passed, it was JDR No.3 who made available the particulars of Sy.No.265 measuring 13 acres 28 guntas and filed a memo to attach the said property and made a submission on 22.01.2015 before the Executing Court to sell the property for satisfaction of decree. Accordingly, the Executing Court attached the said property as per the procedure and put the said property for auction. In the meantime, JDR No.1 sought recall of attachment of the attached property by filing IA No.4 but the executing court on hearing both the sides dismissed IA No.4 as per the orders dated 30.09.2015. The said order attained finality as none of the parties challenged the said order before the Appellate Forum.

7. Thereafter, as per the procedure, spot sale and court sale were conducted. 13 bidders participated. One Hanumantharedddy was the highe

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