The main legal point established is that the execution court has the authority to fix and reduce the upset price for a property based on the prevailing market value, and the decree holder cannot be compelled to purchase the property at the reserve price fixed by the court.

The short question that is raised for consideration in this Civil Revision Petition is, whether the execution court, which originally fixed an upset price or reserve price, for the property proposed to be sold, could reduce the same on the ground that, there are no bidders to purchase the property for the price so fixed.

2. Dhanalakshmi Bank Limited, Mundur Branch, is the revision petitioner, and the decree holder in E.P.No.226/2003 on the file of the Sub Court, Thrissur. It brought to sale, 1 acre 23 cents of property at Vellattanjur village, Thalappilly Taluk of Thrissur District. The reserve price fixed was Rs.5 lakhs. When the property was put on sale, there were no bidders. Therefore, the sale was adjourned. The revision petitioner, decree holder, filed an execution application, praying to reduce the upset price fixed, from Rs.5 lakhs to Rs.3.5 lakhs. But through the impugned Order, the court below, dismissed the prayer. Hence, this revision petition.

3. I heard both sides. The learned counsel for the revision petitioner, decree holder, placed reliance on Kuruvila Thomas v. State Bank of Travancore (1989 (2) K.L.J. 485) where it was held that:

“the court cannot compel the decree holder to purchase the property at the reserve price fixed by the court”

4. The learned counsel for the respondents, judgment debtors, on the other hand, placed reliance on Federal Bank Ltd. v. K. Sreedharan and others (A.I.R. 2003 Kerala 199) wherein it was held that:

[If] “there is no tangible evidence on record showing the market value of the property at the time of the sale and the lower court has to conduct an enquiry before fixing the reserve price in accordance with the market value prevalent in the area at the time of the sale”

5. In the case at hand, none of the parties could produce any material before the court below, regarding the actual price that was prevalent in the locality. Even in Annexure ‘C’, the decree holder had not mentioned about the actual value of the property in reference, regarding the market value in the area, except praying that the reserve price may be reduced from Rs.5 lakhs to Rs.3.50 lakhs.

6. In Federal bank Ltd. v. K. Sreedharan and others, cited supra it is seen that, the decree holder filed a petition before the execution court, to reduce the reserve price. It was rejected. Therefore, it came up before this Court, through a Civil Revision Petition. The facts reveal that, earlier the judgment debtors filed another Civil Revision petition, and this Court directed the execution court, to refix the reserve price. Considering the circumstances of the case, the reserve price was fixed basing on the statement filed by the decree holder. When the property was put to sale on several occasions, the sale did not take place, as there were no bidders. The court below, therefore, closed the execution petition. Subsequently, another E.P. was filed, and the decree debt amount, which increased by then, was shown in the execution petition. The decree holder also filed petition, as stated above, to reduce the reserve price, relying on the valuation of the property made by the Tahsildar, and the valuation certificate produced. The Judgment debtors resisted the application. Relying on the above facts, this Court directed the execution court, to conduct an enquiry, with regard to the prevailing market value, and fix the reserve price, in accordance with that market value of the property, as would be found by it. It was directed to proceed with the sale of the property thereafter.

7. In Dr.A.U.Natarajan v. Indian Bank, Madras (AIR 1981 Mad. 151) the Division Bench of the Madras High Court had an occasion to consider Order XXI Rule 66 of the Code of Civil Procedure, after the 1976 amendment of the Code. Before going into the real question, the court examined the meaning of “value”, “Upset price” and Reserve price”. Relying on the dictionary meaning it was held that the word “value” means “to estimate or appraise as being worth a