Auction sales may be set aside if material irregularities influence bidding and cause substantial injury to the applicant.

1The 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 O.21 R.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 S.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, Sirmour 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 O.21 R.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 that 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 purchasers 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 coul