BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
R. VIJAYAKUMAR, J.
Raghavan (Died) & Ors. - Appellants
Versus
Sivakumar & Ors. - Respondents
C.R.P. (MD). No. 530 of 2012
Decided On : 05-10-2023
CIVIL REVISION PETITION - Recovery of Money - Code of Civil Procedure - Order 21 Rule 90 - Limitation Act - Inherent Power of the Court - Excessive Execution - Rights of the Auction Purchaser
Fact of the Case:
The revision petitioner challenged the order of the Subordinate Court dismissing his application under Order 21 Rule 90 of C.P.C to set aside a Court auction sale. The property was brought to auction for recovery of a sum of Rs.36,000, but was sold for Rs.5,03,500. The Executing Court set aside the sale due to material irregularity and fraud, which was reversed by the First Appellate Court.
Finding of the Court:
The Court found material irregularity in fixing the upset price, excessive execution, and upheld the revision petitioner's right to file the application under Order 21 Rule 90. It also recognized the inherent power of the Court to set aside a sale due to fraud, and enhanced the interest rate for certain charges.
Issues: The issues revolved around material irregularity and fraud in the auction sale, the revision petitioner's locustandi to file the application, excessive execution, and the rights of the auction purchaser.
Ratio Decidendi: The Court held that the revision petitioner had the right to file the application under Order 21 Rule 90, recognized the inherent power of the Court to set aside a sale due to fraud, and found the auction sale to be an excessive execution. It also emphasized the rights of the auction purchaser and enhanced the interest rate for certain charges.
Final Decision: The order of the First Appellate Court was set aside, and the decreetal order of the Executing Court was restored with certain modifications. The Civil Revision Petition was allowed with observations.
JUDGMENT
(Prayer: Civil Revision Petition filed under Section 115 of Code of Civil Procedure, to set aside the fair and decreetal order dated 29.10.2011 in CMA.No.2 of 2011 on the file of the Sub Court, Padmanabhapuram reversing the fair and decreetal order dated 12.01.2011 passed in E.A.No. 29 of 2010 in E.P.No.81 of 2008 in O.S.No.125 of 2006 on the file of the Principal District Munsif Court, Padmanabhapuram by allowing this civil revision petition.)
1. The first respondent in a suit for recovery of money is the revision petitioner herein challenging an order of the Subordinate Court, Padmanabhapuram dismissing his application under Order 21 Rule 90 of C.P.C reversing the order passed by the Executing Court.
(A).Factual Matrix:
2. The second respondent herein as plaintiff had filed O.S.No.125 of 2006 on the file of the Principal District Munsif Court, Padmanabhapuram for the relief of recovery of money of a sum of Rs.36,000/-. It was alleged by the plaintiff that the first defendant and the second defendant are husband and wife and they had fraudulently induced the plaintiff to deposit the money in their financial company and in returning the said amount.
3. The plaintiff had further contended that the first defendant with an intention to defraud the depositors, had transferred the suit mentioned property in favour of the third defendant who is none other than his father-in-law. The plaintiff further contended that the third defendant is formaly impleaded in the case only because of the fact that the property now stands his name.
4. The defendants filed a written statement disputing the claim and after contest, the suit was decreed as prayed for on 15.02.2007.
5. In order to execute the said decree, the plaintiff had filed E.P.No.81 of 2008 to bring the property standing in the name of the third defendant for auction through Court. In the execution proceedings, the first defendant (the claim petitioner) was set exparte. The second defendant who is the wife of first defendant had filed vakalat through her Counsel. Since the third defendant had passed away, the decree holder had filed E.A.No.256 of 2008 to record his daughter, (the second defendant) as the legal representative of the third defendant. Since no counter was filed by the second defendant, the petition was allowed on 22.01.2009. The second defendant /second respondent later remained exparte and a test batta was ordered on 25.08.2009.
6. The schedule properties was brought to Court auction on 03.02.2010 in which, the first respondent in the revision petition namely Sivakumar was the successful bidder. The first defendant/first respondent had filed E.A.No.29 of 2010 on 10.02.2010 under Order 21 Rule 90 of C.P.C to set aside the sale on the ground that he had not received any notice in the execution proceedings and he came to know about the Court auction only when the notice was pasted.
7. It was further alleged that all the legal heirs of the deceased third defendant were not impleaded, despite a memo was filed by him on 20.01.2020. He had further contended that the suit schedule properties had already been attached in a different proceedings. The valuation of the property is more than two crores and the properties had been sold for just Rs.5,00,000/-.
8. The decree holder had filed a counter disputing all the allegations and contended that the second defendant/second respondent who was already a party in the execution proceedings had not raised any objection with regard to non-impleadment of the other legal heirs. It was further contended by the decree holder that the property that is brought to auction belongs to the third defendant and hence, the first respondent cannot file application under Order 21 Rule 90 of C.P.C. It was further contended that the property was properly valued and all the procedures were strictly followed before bringing the properties for auction.
9. The first defendant/revision petitioner in the meantime had filed first appeal before the Subordinate C
The court established that a party challenging a court auction sale must provide clear evidence of irregularities, and mere assertions without supporting evidence are insufficient to set aside a sale....
The court affirmed that disputes regarding execution of decrees must be resolved by the executing court, and allegations of fraud must be substantiated with evidence.
A sale in execution of a decree cannot be set aside unless the judgment debtor proves material irregularity, fraud, or substantial injury.
The executing court must ensure only necessary property is sold to satisfy a decree, and dismissal of a claim under Order XXI Rule 58 does not bar a subsequent application under Order XXI Rule 90 for....
The court affirmed that Section 5 of the Limitation Act does not apply to applications under Order 21 Rule 90 of the CPC, emphasizing the need for timely objections in execution proceedings.
The court emphasized the application of Order XXI Rule 90 of the CPC in cases of substantial irregularities causing injury to the judgment-debtor and cited legal precedents to support its decision.
Confirmed auction sales cannot be set aside for alleged inadequacy of price or lack of publicity without proof of fraud or substantial injury.
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