1998 Supreme(HP) 172
High Court Of Himachal Pradesh
D.RAJU,LOKESHWAR SINGH PANTA
H.P.FINANCIAL CORPORATION - Appellant
Versus
HIMACHAL SHODDY MILLS LTD. - Respondent
F.A.O. (Ord.) Nos. 165 of 1992 and 3 of 1993
Decided On : 09/08/1998
Mr. Ajay Kumar Advocate. For the Respondents:Mr. Kuldip Singh, (for Nos. 4 & 5) and Mr. D.D. Sood, Sr. Advocate with Mr. Anuksh Sood, (for Nos 2 (a) & 2(b).
Headnote:CIVIL PROCEDURE CODE, 1908 - Order 21 Rule 90 - Auction sale by Court - Setting aside of - Objections u/o 21 Rule 90 - Suit of Financial Corporation for recovery of al1ount decreed - Execution - Property sold in Court auction Auction not held at time fixed in proclamation - Property purchased at a very low price by real brother of Advocate of Judgment - Debtors Other bidders who were present was dissuaded by said Advocate by making propaganda that State Government will not grant permission to non-agriculturist - Proved that property was sold for an inadequate price - Auction sale was not conducted in accordance with time schedule - Also proved that Advocate, brother of auction purchaser and Court auctioneer dissuaded other bidders - Executing Court was not right in exercising its discretion to confirm the sale in the light of well settled principles of law - Order of executing Court set aside.
Lokeshwar Singh Panta, J.: The aforesaid two appeals have been taken up and heard together arising as they do out of a common order dated 25.11.1991 of the District Judge, Sirmaur District at Nahan dismissing the objection petitions under Order 21 Rule 90 of the Code of Civil Procedure filed by the appellants-decree holders and judgment debtors against the sale of the mortgaged property in favour of the respondents-auction purchasers Sh. Onkar : Singh and Sh. Narinder Singh Shah. Appeal No. FAO (Ord) 165 of 1992 has been filed by Himachal Pradesh Financial Corporation, Decree-holder-Objector and appellants Sh. Udey Gupta and Smt Rakhi Gupta are the Judgment -debtors-objectors in FAO No. 3 of 1993. In both the appeals same and similar questions of facts and law are involved, they would stand disposed of by this common judgment.
2. The relevant facts necessary for deciding these appeals may be stated as under:- The suit of appellant-Financial Corporation was decreed by the Court against the judgment-debtors M/s. Himachal Shoddy Mills Ltd. and others for the recovery of loan amount Execution petition under Sec. 31 of the State Financial Corporations Act, 1951 came to be filed by the appellant- Corporation against the judgment -debtors in the Court of District Judge, Sinn our District at Nahan. Sh. N. A. Sheikh, Advocate was appointed as Court Auctioner by the Court for conducting auction of the property of judgment- debtors consisting of premises of M/s. Shoddy Mills Ltd. Paonta Sahib, measuring 11-19 bighas and the entire machinery of the unit The Court auctioner issued proclamation of sale in two news papers and the auction was fixed for 26.12.1990 at site from 11 a.m. to 3 p.m. The reasonable price of the aforesaid property was estimated at Rs. 36,11,220/-. The Court Auctioner held the auction on the scheduled date and sold the mortgaged property for Rs. 12,14,000/- in favour of auctioner purchasers S/Shri Onkar Singh and Narinder Singh and submitted his report to the learned District Judge. The decree-holder-judgment-debtors -appellants herein filed objection petition under Order 21 Rule 90 CPC against the sale of the property. The appellant-Himachal Pradesh Financial Corporation averred in its objection petition that the sale by public auction was conducted after the fixed hours i.e. at 3.30 pm and was concluded by 4 pm though the auction was fixed and was to be conducted between 11 am to 3 pm as per the sale notice. It was stated mat the appellant-decree -holder will suffer substantial injury because one of the highest bidder respondent Sh Narinder Singh Shah is the real brother of Sh. A.S. Shah, Advocate, who represented the judgment-debtors-appellants. It was also pleaded that the value of the property was assessed through Local Commissioner at Rs. 36,11,220/-in the year 1989 and the loan outstanding recoverable including the interest was Rs. 92,45,209.51 paise up to 31.5.1990 against the judgment-debtors -appellants and that the property had been sold in public auction at a very nominal price. It was also further pleaded that the bidders who were present at the time of auction were debarred and dissuaded by Sh. A. S. Shah, Advocate, from giving bids by making propaganda that the State Government will not grant permission for purchase of the property by the non-agriculturist and the auction amount will remain blocked and thus no bidder was ready to participate in the auction. It was thus alleged that one of the auction purchaser is the real brother of Sh. A.S. Shah, Advocate, and in order to help him, he made false propaganda so that other persons could not give bid and the property could be purchased in auction by his brother at a nominal price. In his objection petition, the original judgment debtor Sh. Rajinder Gupta, whose legal representatives are appellants herein in the second appeal pleaded that the Court appointed Sh. I.C. Gupta as a Commissioner to know the details of the property to be auctioned who subm