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2007 Supreme(Ker) 825

IN THE HIGH COURT OF KERALA
KURIAN JOSEPH, K.T. SANKARAN, JJ.
Kuruvilla - Petitioners
Versus
Corporation Bank - Respondents
F.A.O. No.25 of 2007
Decided On : 23-08-2007

Advocates Appeared:
For the Petitioners: C. Vathsalan, K. Rakesh Roshan & V. Thushara.
For the Respondents: S.B. Premachandra Prabhu.

Headnote:

Civil Procedure Code, 1908 - Order XXI Rule 66 & Order XXI Rule 64 - Could the executing court impose a condition for payment of part of the decree amount as a condition for excluding the house and appurtenant land of the judgment debtor from the purview of the court auction sale - Could the executing court refuse to exclude from sale a portion of the property of the judgment debtor on the ground that taking into account the upset price fixed earlier, the decree amount would not be satisfied if a portion of the property is excluded from sale - In view of the wide disparity between the value suggested by the decree holder and the judgment debtor, was the court below justified in fixing the upset price, without any enquiry and in the absence of any data for fixing the upset price - Whether Cl.(a) of sub-r.(2) of R.66, O.XXI of the Code of Civil Procedure would apply to court auction sale in execution of a charge decree - Held, Court is of the view that the court below was not right in dismissing the application for setting aside the sale - Facts and circumstances of the case and the evidence on record would show that sale is vitiated by material irregularity within the meaning of R.90 of O.XXI - Appellant has sustained substantial injury by reason of such irregularity - Court set aside the order passed by the court below and allow the application for setting aside the sale filed by the appellant - Writ Appeal Allowed.

JUDGMENT :

K.T. SANKARAN, J.

1. The questions arising for consideration in this Appeal are:

(1) Could the executing court impose a condition for payment of part of the decree amount as a condition for excluding the house and appurtenant land of the judgment debtor from the purview of the court auction sale?

(2) Could the executing court refuse to exclude from sale a portion of the property of the judgment debtor on the ground that taking into account the upset price fixed earlier, the decree amount would not be satisfied if a portion of the property is excluded from sale?

(3) In view of the wide disparity between the value suggested by the decree holder and the judgment debtor, was the court below justified in fixing the upset price, without any enquiry and in the absence of any data for fixing the upset price?

(4) Whether Cl.(a) of sub-r.(2) of R.66, O.XXI of the Code of Civil Procedure would apply to court auction sale in execution of a charge decree?

2. Judgment debtor No.4 is the appellant. He challenges the order passed by the executing court dismissing his application for setting aside sale under O. XXI R.90 of the Code of Civil Procedure (hereinafter referred to as C.P.C.). On 12-12-1986, a decree was passed against the defendants including the appellant herein for realization of a sum of Rs. 6,49,675.15 with interest and costs. A charge decree was passed, making the property belonging to the appellant a charge for the decree amount. The decree was transferred from Sub Court, Ernakulam, to Sub Court, Kottayam for execution. In the Execution Petition filed by the respondent-decree holder, the properties of the appellant, consisting of two items of immovable property, were sought to be sold. Item 1 consists of 1.80 acres of land with a house therein. The extent of item 2 is 1 acre and 250 sq. links.

3. The property was sold on 31-7-1995. The decree amount due was shown as Rs. 18,97,770.15 in the sale proclamation. At the auction sale, the decree holder purchased item 1 for Rs. 5,40,000/- and item 2 for Rs.3,51,000/-. For the court auction sale, no bidder other than the decree holder was present. Even after the sale of the property of the appellant, the decree debt is not realized. The records would reveal that permission was granted to the decree holder to bid at the auction.

4. The appellant filed E.A. No.565 of 1995 under R.90 of O.XXI C.P.C. to set aside the sale. The executing court dismissed the application. On Appeal as C.M.A. No.161 of 1997, the High Court allowed the appeal, set aside the order and remanded the matter to the executing court for fresh disposal. Taking into account the submission made by the appellant that he was prepared to deposit Rs.10 lakhs, the remand was made conditional on deposit of the amount. The appellant deposited Rs.10 lakhs within the time stipulated. The court below considered the application on the merits and dismissed the application. The present Appeal is filed challenging that order.

5. During the pendency of C.M.A. No.161 of 1997, stay was granted on condition of deposit of Rs. 5 lakhs by the appellant. He did not comply with the interim order. Therefore, sale was confirmed and the decree holder took delivery of the property on 24-6-1998.

6. To comprehend the contentions raised by the parties, it is necessary to state as to what transpired before sale. In the draft sale proclamation, the decree holder suggested the value of the property in items 1 and 2 at Rs. 35,000/- each. In the objections filed by the judgment debtor, he stated that the value of the property as suggested by the decree holder is too low and that the property is situated close to Pampady town. The judgment debtor stated that the properties would fetch a value of Rs. 6,000/- per cent of land. It would appear that the court fixed the upset price at Rs.3,000/- per cent for item 1 and Rs. 3,500/- per cent for item 2. It would also appear that no enquiry was conducted by the executing court before fixing the upset price to as








































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