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2021 Supreme(Online)(KER) 10201
HIGH COURT OF KERALA
A.BADHARUDEEN, J
DR. ANANTHA KAMATH – Appellant
Versus
K. KRISHNAN – Respondent
OP(C)/1011/2021
The fixation of an upset price in execution proceedings must be evidenced and reasonable, avoiding reliance on unsubstantiated claims.
Headnote:
Upset Price - Execution Proceedings - CPC Sections - The court interpreted Order 21 Rules 64 and 66 of the CPC, emphasizing that the fixation of an upset price must be based on adequate evidence rather than mere suggestions from parties, and the necessity to sell only as much property as needed to satisfy a decree.
Fact of the Case:
An Original Petition was filed under Article 227 challenging orders related to the fixation of an upset price for a property to satisfy a decree. The petitioner argued that the upset price was excessively high compared to the market value and did not consider the necessary factors.
Finding of the Court:
The court found that the execution court's orders were not adequately supported by evidence and merely relied on a suggestion from the petitioner without substantial backing. It held that the fixation of the upset price was erroneous and unsustainable.
Issues: The main issue was whether the execution court correctly fixed the upset price of the property based on adequate material and whether it appropriately decided on the sale of sufficient property to satisfy the decree.
Ratio Decidendi: The court established that fixation of an upset price must be supported by evidence and not solely by party suggestions, asserting the obligation of courts to determine the necessary portion of property to sell in execution proceedings.
Final Decision: The petition was allowed, and the execution court's orders were set aside, directing a reassessment of the property value.
J U D G M E N T
This Original Petition has been filed under Article 227 of the Constitution of India challenging Exts.P9 and P12 orders passed by the execution court (Sub Judge, Kasaragod). The petitioner herein is the decree holder and the sole respondent is the judgment debtor.
2. The petitioner is aggrieved in the matter of fixation of upset price at Rs.13 lakh per cent in respect of the property sought to be sold to realise the decree debt. According to the petitioner, Ext.P9 fixing the upset price at Rs.13 lakh is not a speaking order. Though E.A No.4/2021 was filed on 26.03.2021 as Ext.P10 to review Ext.P9, the learned Sub Judge dismissed the review petition also on an erroneous appreciation of the facts and the law. While challenging Exts.P9 and P12 it is argued by the learned counsel for the petitioner that the property proposed to be sold comes to 1.06 Acres, essentially a residential property with landlocked situation. Being so, several attempts to sell the properties by private sale or by public auction became futile. Precisely the allegation of the petitioner is that fixation of upset price treating the value of one cent property at Rs.13 lakh is erroneous and is higher than the market value of the property in force. It is submitted further that the upset price ought to be fixed at Rs.3-3.5 lakh per cent.
3. Per contra, the learned counsel for the judgment debtor highlighted an affidavit filed by the petitioner/decree holder before the execution court produced as Ext.R1 in this case. The learned counsel submitted that in para.3 of Ext.R1 produced along with the counter affidavit, the decree holder suggested to fix the upset price at Rs.10 lakh per cent. On perusal of Ext.R1, this submission on the premise to sell the entire extent of property could be gathered.
4. The learned counsel for the respondent placed the following decisions in support of his contention on the point that only portion of the property sufficient to satisfy the decree alone would be sold in public auction and the judgment debtor shall not be unduly harassed.
(i) [1962 KLT 315], K.V.Thomas v. Malabar Industrial Co.Ltd.; (ii) [2015(2) KLT SN 77 (C.No.87)], Augusthy v. Catholic Syrian Bank Ltd.; (iii) [2018 (2) KLT 647], Thambi v. Sivan; (iv) [1996 KHC 559], Harishankar v. Syndicate Bank of India & Ors.
5. However, it is submitted by the learned counsel for the petitioner that the decree holder suggested Rs.10 lakh per cent as the upset price so as to sell the entire extent of 1.06 acres of property. But the execution court not allowed the said prayer and only 46.25 cents were ordered to be sold @ Rs.13 lakh per cent. In fact para.2, para.3 and para.4 of the counter affidavit required to be extracted under:
“2. I say that in the above E.P., 0.46 ¼ acres of land in R.S.No.121/2pt (121/2C1 as per commission plan) in Kasaragod Kasba Village belonging to the respondent was put for sale by fixing the upset price at Rs.10,00,000/- per cent on 19.12.2019 and again posted for sale on 05.03.2020 but no bidders have come forward to bid in the sale thus proposed on 05.03.2020.
3. I say I expect that if the entire properties of the respondent are put up for sale, there is a possibility that it would, be sold, I say therefore it is just and necessary that a fresh sale in respect of the entire properties may be ordered to be sold by fixing the upset price at Rs.10,00,000/- per cent.
4. I say therefore in the interest of justice and equity that the court may be pleased to order fresh sale of the entire E.P. properties by fixing an upset price at Rs.10 lakhs per cent as otherwise I will be put to heavy loss and hardship. “
Precisely, the above extracted portion would indicate that the decree holder sought to fix the upset price @ Rs.10 lakh per cent with suggestion to sell the entire properties.
6. Whether such a suggestion is the sole basis for fixing the upset price is the matter to be considered. No doubt, the legal position that in all execution proceedings the court
