The main legal point established in the judgment is the court's duty to ensure the credibility of court sale, obtain an adequate price for the property, and provide compensation for the auction purchaser.

P.A. Mohammed, J.

This appeal arises from an order passed by the Subordinate Judge's Court, Muvattupuzha on an application filed under O. XXI R.90 of the Code of Civil Procedure. The appellant before us is the auction-purchaser who was the third respondent in the above application.

2. The application, E.A. No. 119 of 1995 was filed by a third party seeking to set aside the auction sale conducted on 7.6.1995 in execution of the decree in O.S. No. 590 of 1986. The second respondent is the decree-holder and the third respondent is the judgment-debtor. The decree-holder filed E.P.No.173 of 1992 seeking to execute the decree for the realisation of Rs. 65,274/- with interest at 13%. In the execution immovable properties comprised in survey numbers 290/2B, 290/28/3/10,290/2B4-11 and 293/7 having a total extent of 74 cents were attached. Those properties were put to auction sale as per the orders of the court. In the auction the appellant offered Rs. 3,52,000/- and she was declared to be the purchaser. She deposited one-fourth of the bid amount on 7.6.1995 and the balance on 20.6.1995, within the time allowed by the court. However, the first respondent alleged that there was fraud in publishing and conducting the sale. Ultimately, after the enquiry the said application was allowed by he court below and accordingly set aside the auction sale held on 7.6.1995.

3. The Court below found that the first respondent had obtained a decree against he judgment-debtor in O.S. No. 180/91 and in execution in E.P. No. 173/72 the very same property was attached and hence he was entitled to have rateable distribution of he same proceeds of the property. It was further found that there was no proper publication of notice regarding auction and thus the sale was vitiated for material irregularity. The evidence would sufficiently reveal that the property would fetch not less than Rs. 7,00,000/- but it was sold for Rs. 3,52,000/-. The first respondent in the evidence tendered by him as PW. 1 expressed his readiness to purchase the auction property at a price above Rs. 6 lakhs.

4. On behalf of the appellant it was argued that the court below had committed an error in setting aside the auction sale validity conducted by the court below. In this context, the counsel highlighted that the court should have endeavored to sustain the court sale as laid down by the Supreme Court in Motors & Investments ltd. v. New Bank of India & Ors. (1997) 2 SCC 271). On the other hand counsel for the first respondent submitted that the impugned order passed by the court below is not liable to be interfered with. He further pointed out that the property has been sold in court auction on a lesser rate than it would have fetched in the normal course. At any rate the impugned order shall not be disturbed for the reason that the executing court failed to determine the question of sale ability' of the property before ordering sale as required under O. XXIR. 64 of the Code of Civil Procedure. In support of this plea the counsel has placed reliance on the decision of the Supreme Court in Arnbati Narasayya v. N. Subba Rao (AIR 1990 SC 119).

5. O. XXI Rule 90(1) authorises the court to set aside the sale of any immovable property sold in execution of the decree on the ground of material irregularity or fraud in publishing or conducting it on an application made to it by the decree-holder or the purchaser or any person entitled to share in a rateable distribution of assets or whose interests are affected by the same. However, sub-r.(2) thereof provides that no sale shall be set aside on the ground of irregularity or fraud in publishing the sale or conducting it unless the court is satisfied that the applicant has sustained substantial injury by reason of such irregularity or fraud. Sub-rr. (1) and (2) are not alternative but conjunctive. The requirements provided in sub-rr. (1) and (2) are pre-requisites to be satisfied before setting aside a sale by the Court. Of course in M/s. Ka