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1989 Supreme(Mad) 456
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE NAINAR SUNDARAM, THE HONOURABLE MR. JUSTICE K.M. NATARAJAN & THE HONOURABLE MR. JUSTICE BELLIE
R.N. Bhuva
Versus
S.V. Rangaswamy & Another
C.R.P. Nos. 1027 & 2351 of 1986
Decided On :Decided on : 19-09-1989
Act Referred
Headnote
Whether a Court auction sale held in contravention of O. 21, R. 64 and O. 21, R. 66(2)(a) of C.P.C, by selling more extent of property than necessary is a nullity being a sale without jurisdiction even in cases where the judgment-debtor had participated in the settlement of proclamation and did not raise any objection for the extent of property brought for sale?
Fact of the Case:
The decree-holder brought the property of the judgment debtor which is a house with 6 grounds and 30 sq.ft. of land for sale. The amount payable under the decree was Rs. 11,083.92. The upset price of the property was fixed at Rs. 8,00,000/-. At the instance of the judgment debtor and on payment of small amounts in instalments the sale was adjourned several times and finally the Court refusing to further adjourn the sale held the auction on 22.12.1981. The property was sold for Rs. 6,02,000/-. Thereafter the judgment debtor filed a petition E.A. No. 415 of 1982 under O. 21, R. 90, C.P.C, to set aside the sale alleging among others that the provisions of O. 21, Rr. 65 to R. 68, C.P.C, were not complied with and the sale is vitiated. This application was resisted by the decree-holder as well as the auction purchaser contending that in spite of notice to him and himself appearing in the matter the judgment-debtor did not raise any objection as to any noncompliance of the provisions of O. 21, Rr. 65 to R. 68, C.P.C, and that every requirement of law has been satisfied and therefore there is no ground for setting aside the sale. The Court negatived the allegation of the judgment-debtor and dismissed the petition. As against this order the judgment-debtor preferred an appeal in C.M.A. No. 337 of 1984 before the learned II Additional Judge, City Civil Court, Madras. The learned Judge concurred with the executing Court on most of the findings, but on the only ground that the sale of the entire property was not justified and only a portion of the property should have been sold and hence the sale is against the provisions of O. 21, R. 64, C.P.C, and therefore the sale is without the jurisdiction of the Court and therefore even though the judgment-debtor has not raised any objection in this regard before sale, the sale has to be set aside, he allowed the appeal. To come to the conclusion that there was excessive execution in violation of O. 21, R. 64, C.P.C, the learned judge relied on the decision of the Supreme Court in T.P.S. Reddi v. Padmavathamma and followed by this Court in Kumaraswamy Gounder v. P.P. Ramaswamy Nadar and another.
Finding of the Court:
1. A court auction sale held in contravention of O. 21, R. 64 and O. 21, R. 66(2)(a), C.P.C, by selling more extent of property than necessary is not a nullity. 2. Such a contravention could be the subject matter of grievance if there is a warrant for it in an application under O. 21, R. 90, C.P.C. 3. The participation of the judgment debtor in the settlement of proclamation and his not raising any objection for the extent of property brought for sale may be relevant for the purpose of deciding the application under O. 21, R. 90, C.P.C, and such conduct on the part of the judgment debtor may also be viewed as a waiver of the provisions of the requirements of O. 21, R. 64 and O. 21, R. 66(2) (a), C.P.C. 4. The pronouncements of this Court in (i) Kumaraswami Gounder v. P.P. Ramaswamy Nadar and another (ii) Subba Naicker v. Durai Raj and (iii) L. Balu v. Periasami and others have come to be rendered on the peculiar facts and circumstances of the cases dealt with by the respective learned Judges and they should not be understood to have incorrectly interpreted any pronouncement of the highest Court in the land. 5 In any event, the principles to govern the contingencies have been now adverted to and expatiated in the light of the pronouncement of the highest court in the land by giving the present answers to the reference and certainty they shall form the guidance and govern the questions as and when they arise.
Issues: 1. Whether a Court auction sale held in contravention of O. 21, R. 64 and O. 21, R. 66(2)(a) of C.P.C, by selling more extent of property than necessary is a nullity being a sale without jurisdiction even in cases where the judgment-debtor had participated in the settlement of proclamation and did not raise any objection for the extent of property brought for sale? 2. In view of the decision of the Supreme Court in Dhirendra Nath v. Sudhir Chandra whether the decisions in Kumaraswamy Gounder v. P.P. Ramaswamy Nadar, in Subba Naicker v. Durai Raj, and in L. Balu v. Periasami have correctly interpreted the scope of the judgment in T.P.S. Reddi v. Padmavathamma?
Ratio Decidendi: 1. In the case of a single property of the judgment-debtor which is brought to sale, if the judgment-debtor after receipt of the sale notice does not plead anything in respect of the extent of the property that would be sufficient to meet the amount to be realised in the execution proceedings, he cannot, after the property is sold, object to the sale contending that the entire property is more than the extent necessary to be sold and therefore the provisions of O. 21, R. 64, C.P.C. is infringed and the sale is liable to be set aside; 2. Such a sale is not a nullity; 3. Even if the judgment-debtor does not plead that lesser extent of Property would be sufficient to realise the decree amount, if it prima facie appears to the court that a lesser extent would be sufficient, then if there is no objection from the judgment-debtor and no valid objection from the decree holder such lesser extent of property can be sold; 4. If two or more items of properties are attached for sale those properties can be sold one by one and When any one or more properties in/are sold and the sate proceeds thereof covers the decree amount then the remaining properties shall not be sold. If the court considers it expedient to sell the properties in one or more lots and orders so, if the judgment debtor makes no objection for the sale, he cannot later assail the same stating that the properties ought not to have been sold in one lot or lots. 5. The above said four propositions of law have to be applied in the case of a share or shares of the judgment debtor attached in the property.
Final Decision: The Civil Revision Petitions are allowed, the order of the learned District Judge is set aside, and the order of the Executing Court is restored.
Key Points: - A court-auction sale in contravention of O. 21, R. 64 and O. 21, R. 66(2)(a) by selling more extent than necessary is not per se a nullity; it can be challenged under O. 21, R. 90 if substantial injury is shown. (!) (!) (!) - When multiple attached properties are sold, proceeds must cover the decree amount; otherwise, further sales may be unwarranted and subject to challenge. (!) (!) - Non-compliance with O. 21, R. 64 and R. 66(2)(a) is a material irregularity, not an automatic nullity; waiver and the debtor’s participation can influence whether relief is granted under O. 21, R. 90. (!) (!) (!) - The debtor’s participation in proclamation and failure to object can be relevant to whether a lesser extent could have satisfied the decree and may affect subsequent challenges under O. 21, R. 90. (!) (!) - The dominant principle is that only the extent necessary to satisfy the decree may be sold; selling excess can be subject to review under the stated provisions, with varying interpretations depending on whether the sale concerns a single large property or multiple properties. (!) (!) (!) - The high court emphasizes that the questions must be answered in light of the balance between jurisdiction and irregularities, with the Supreme Court decisions guiding whether such irregularities amount to nullity or only irregularities. (!) (!) (!) - Final posture: the judgment confirms that such questions are to be guided by material irregularity standards rather than automatic nullity, with allowances for waiver where applicable. (!) (!)
What is the legal effect of a court auction sale where more extent of property is sold than necessary to satisfy the decree?
What are the consequences of non-compliance with O. 21, R. 64 and O. 21, R. 66(2)(a) CPC in court auction sales?
What factors affect whether participation by the judgment-debtor in settlement of proclamation or waivers can validate or invalidate a sale under O. 21, R. 90 CPC?
R. Krishnamoorthy for petitioner in C.R.P. No. 1027/86 and second-respondent in C.R.P. No. 2351 of 1986 R.S. Venkatachari for first-respondent in both the C.R.Ps. Ms. A. Kamaladevi for 2nd respondent in C.R.P. No. 1027/86 & petitioner in C.R.P. No. 2351 of 86.
Nainar Sundaram, J.
1. The questions which the learned single Judge Sivasubramanian, J., deemed fit to refer to an appropriate Bench for answers, and which questions have given us an opportunity to do some investigation into the implications of the provisions concerned, in the light of the pronouncements of the highest Court in the land run as follows:
“1. Whether a Court auction sale held in contravention of O. 21, R. 64 and O. 21, R. 66(2)(a) of C.P.C. by selling more extent of property than necessary is a nullity being a sale without jurisdiction even in cases where the judgmentdebtor had participated in the settlement of proclamation and did not raise any objection for the extent of property brought for sale?
2. In view of the decision of the Supreme Court in Dhirendra Nath v. Sudhir Chandra)(AIR 1964 SC 1330), whether the decision in Kumaraswami Goundcr v. P.P. Ramaswamy Nadar (1980 TLNJ 47); in Subba Naicker v. Durai Raj (98 L.W. 352-1985 II MU 123) and in D. Balu v. Periasami (100 L.W. 918) have correctly interpreted the scope of the judgment in T.P.S. Reddy v. Padmavathomma (AIR 1977 SC 1789=90 L.W. 124 S.N.)?”
O. 21, R. 66(2(a), C.P.C, after its amendment by Central Act 104 of 1976, reads as follows:
“Proclamation of sale by public auction: Such proclamation shall be drawn up after notice to the decree-holder and the judgment-debtor and shall state the time and place of sale and specify as fairly and accurately as possible
(a) the property to be sold or, where a part of the property would be sufficient to satisfy the decree, such part.”
O. 21, R. 64, C.P.C, which has not undergone any change by Central Act 104 of 1976, reads as follows:
“Power to order property attached to be sold and proceeds to be paid to person entitled: Any Court executing a decree may, after notice to the decree holder and judgmentdebtor, order that any property attached by it and liable to sale, or such portion thereof as may seem necessary to satisfy the decree, shall be sold, and that the proceeds of such sale, or a sufficient portion thereof, shall be paid to the party entitled under the decree to receive the same.”
O. 21, R. 66(2)(a), C.P.C, is only a corollary to O. 21, R. 64, C.P.C. One more provision in C.P.C. may also have to be referred to and that is O. 21, R. 90, and it reads as follows, after the amendment by the Central Act 104 of 1976:
“Application to set aside sale on ground of irregularity or fraud:1. Where any immovable property has been sold in execution of a decree, the decree-holder, or the purchaser, or any other person entitled to share in a rateable distribution of assets, or whose interests are affected by the sale, may apply to the Court to set aside the sale on the ground of a material irregularity or fraud in publishing or conducting it.
No sale shall be set aside on the ground of irregularity or fraud in publishing or conducting it unless, upon the facts proved, the Court is satisfied that the applicant has sustained substantial injury by reason of such irregularity or fraud.
No application to set aside a sale under this rule shall be entertained upon any ground which the applicant could have taken on or before the date on which the proclamation of sale was drawn up.
Explanation: The mere absence of, or defeat in, attachment of the property sold shall not, by itself, be a ground for setting aside a sale under this rule.”
2. The first part of Question No. 1 stands answered in the negative in my view by the pronouncement of the Supreme Court in Dhirendra Nath v. Sudhir Chandra 1 first part of Question No. 1 being:
“Whether a Court auction sale held in contravention of O. 21, R. 64, and O. 21, R. 66(2)(a) of C.P.C, by selling more extent of property than necessary is a nullity being a sale without jurisdiction.”
In that case, the question with regard to the validity of a Court-sale held in contravention of S. 35 of the Bengal Money Lender Act, 1940 (Bengal Act 10 of 1940), hereinafter referred to for brevity as Bengal Act, ca
