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2010 Supreme(Mad) 2829
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE G. RAJASURIA
C. Velu @ Venkatesalam & Others
Versus
S. Kandasamy Chettiar (died) & Others
C.R.P.(NPD).No. 1904 of 2005 & C.M.P. No. 1431 of 2008
Decided on : 15-07-2010
For the Petitioners:R. Subramanian, Advocate.
For the Respondents: R4 - S.A. Hafiz, R2 & R3 - No Appearance.
The judgment emphasizes the importance of adhering to the mandatory provisions of law in conducting auction sales and recognizes the right of judgment debtors to deposit the entire dues to set aside the sale.
Headnote:
REA - Court Auction Sale - Order 21 Rule 72(1) and 72-A - The judgment discusses the mandatory provisions of Order 21 Rule 72-A of CPC, the irregularities in the conduct of the auction sale, and the right of the judgment debtors to deposit the entire dues under the final decree to set aside the sale.
Fact of the Case:
The respondents filed a suit to bring the mortgaged property for sale. The executing Court allowed one of the decree holders to participate in the auction without fixing the reserve price as required by Order 21 Rule 72-A of CPC. The judgment debtors sought to deposit the entire dues under the final decree to set aside the sale.
Finding of the Court:
The Court found that the auction sale was conducted with gross irregularities and the executing Court failed to adhere to the mandatory provisions of law. The Court also noted the right of the judgment debtors to deposit the entire dues to set aside the sale.
Issues: Validity of Court auction sale, permission granted to a decree holder without fixing the reserve price, entitlement of judgment debtors to deposit the entire dues at the revision stage.
Ratio Decidendi: The Court held that the auction sale was conducted with gross irregularities and the executing Court failed to adhere to the mandatory provisions of law. The Court also noted the right of the judgment debtors to deposit the entire dues to set aside the sale.
Final Decision: The sale was set aside, and the judgment debtors were directed to deposit the entire dues under the final decree before a specified date, failing which the benefit of the order would not enure to them.
1. Inveighing the order dated 1. 2005 passed by the Subordinate Judge, Sangagiri, in REA No.185 of 2004, this civil revision petition is focussed by the judgment debtors.
2. Heard both sides.
3. Compendiously and concisely the relevant facts necessary and germane for the disposal of this revision petition as well as C.M.P.No.1431 of 2008 would run thus:
.(i) The respondents herein filed the suit O.S.No.393 of 1990 so as to bring the mortgaged property belonging to the revision petitioners for sale. The preliminary decree was passed and subsequently, final decree also was passed.
.(ii) Thereafter, REP.No.4 of 2003 was filed before the executing Court so as to bring the mortgaged property for sale.
(iii) While so, the lower Court in the process of conducting the sale, on seeing that the revision petitioners/judgment debtors did not file any counter, passed order in the REA No.136 of 2004 filed by the R4 herein, who is one of the decree holders under Order 21 Rule 72(1) and 72(A) seeking permission to bid in the Court auction and purchase the property. The said order is extracted hereunder:
"Petition filed under Order XXI Rule 72(1) and Section 72(A) to order to grant permission to the petitioners/DHs/to bid in Court auction and purchase the property in court auction in REP No.4/03 in Original Suit No.393/90 on the file of this Court.
Counter filed. Posted for counter and disposal, but respondent side not ready for enquiry. Heard petitioners side. Petition is allowed."
.(iv) However, the executing Court failed to fix the reserve price as contemplated under Order 21 Rule 72-A(2) of C.P.C.
.(v) It so happened that the said REA.136 of 2004 even though was filed on 19. 2004, it was ordered only on 210. 2004, so to say on the date of sale. Immediately, after such ordering of the petition, Ramalingam-R4 herein participated in the auction sale as the only bidder and he was declared as the successful bidder for the upset price already fixed by the Court even before passing order in the said REA No.136 of 2004. Top it all, R4 herein was the only bidder in the said so called public Court auction sale surprisingly and shockingly.
.(vi) The fact also remains that it was for the first time the property was brought for sale and at that time itself, one of the decree holders, namely, Ramalingam-R4 herein obtained such permission to bid on the date of sale itself and participated in the bid as the sole bidder and he was declared as the successful bidder.
(vii) Animadverting upon such sale, REA No.185 of 2004 was filed under Section 47 of the CPC challenging and impugning the very sale.
(viii) After hearing both sides, the Executing Court dismissed the said REA and confirmed the sale in favour of Ramalingam-R4 herein.
4. Being aggrieved by and dissatisfied with such order of the Executing Court this revision has been filed on various grounds, the gist and kernal of them would run thus:
.(i) The executing Court was not justified in holding that the auction sale held on 210. 2004 was valid, ignoring the mandatory provisions as contained in Order 21 Rule 72-A of CPC.
.(2) The property sold half of was 1 acre 47 cents along with half share in the three mills, namely, ginning mill, oil mill and rice mill.
.(3) As per Order 21 Rule 72, 72(1) and 72-A of CPC, before conducting Court auction sale in pursuance of a mortgage decree, it is mandatory on the part of the Court to fix the reserve price, but without fixing such reserve price, the Court simply granted permission to one of the decree holders, namely R4 herein, to bid in the auction. After granting such permission, no fresh proclamation was ordered, but based on the earlier proclamation itself sale was conducted on the same day.
5. The learned counsel for the revision petitioners/judgment debtors reiterating the grounds of revision would pray for setting aside the said sale and also the confirmation of sale as ordered by the lower Court.
6. The learned counsel for the revis
