Inadequately fixed upset prices based on outdated property valuations can lead to material irregularities justifying the annulment of property sales in execution proceedings.

JUDGMENT

P.G. Ajithkumar, J.

This is an appeal filed under Order XLIII, Rule 1(i) of the Code of Civil Procedure, 1908 . The appellant challenges the order of the Sub Court, Chavakkad in E.A.No.28 of 2020 in E.P.No.16 of 2017 in O.S.No.639 of 2013.

2. On 30.08.2022, when this matter came up for consideration, we noticed that the cause title in the certified copy of the impugned order was incorrect. E.A.No.28 of 2020 was filed by the 2nd judgment debtor; whereas the name of the decree holder was shown as the petitioner in the impugned order. Therefore, on the request of the appellant, the certified copy was returned to the appellant for carrying out necessary correction in its cause title. The appellant accordingly got back the certified copy of the impugned order and after getting it corrected re-submitted.

3. Heard the learned counsel appearing for the appellant and the learned counsel appearing for the respondents.

4. O.S.No.639 of 2013 was filed seeking a decree of recovery of money. It was decreed on 08.11.2016 and the appellant filed E.P.No.16 of 2017 for recovery of money in terms of the decree. The property of the 1st respondent, which is his share in 23 cents of land comprised in Sy.No.244/1 of Pallipram Amsom was brought on sale. The property was sold on 29.11.2019. The 1st respondent filed E.A.No.28 of 2020 invoking the provisions of Order XXI, Rule 90 of the Code for setting aside the said sale. Essential contention raised by the 1st respondent was that actual value of the property was not furnished by the appellant before the execution court and that resulted in total undervaluation and fixation of a totally inadequate upset price for the purpose of public auction. 5. It was contended that fair value fixed in the year

2009 was taken as the basis for fixing the upset price; whereas the fair value of the property was revised many times and at the time of settling the proclamation, its fair value was Rs.10,89,000/- per Are. The appellant resisted the said contention by submitting that such a contention should have been raised at the time of settlement of proclamation and as the 1st respondent failed to do so, he was debarred from raising the said contention in view of the provisions of Order XXI, Rule 90(3) of the Code.

6. It is the settled principle that inadequacy of sale price is not always a sufficient reason for setting aside a sale. But when the upset price was fixed, totally disregarding the real state of affairs and that resulted in absolute prejudice to the judgment debtor, that would vitiate the sale. The Sub Court relied on the principles laid down by the Apex Court Desh Bandh Gupta v. N.I.Ananda and Rajinder Singh [ (1994) 1 SCC 131 ] and this Court in Gopalaswami Kounder v. Ramaswari Kounder and other [AIR 2006 Ker.138 : 2006 (2) KLT 595] held that the failure on the part of the execution court in estimating the probable value of the property and fixing a totally inadequate price of the land would become material irregularity and vitiate the sale. When many times fair value of the land in question was revised and refixed manifold, the execution court should not have proceeded with accepting the valuation in the year 2009. 7. The sale was on 29.11.2019 and the fair value fixed and notified immediately prior to the said day should have been the basis for fixing the upset price. It is a matter of common knowledge that fair value fixed by the Government, which is for the purpose of levying stamp duty on conveyance deeds may not always be the actual market price. From the materials on record, it is quite clear that the execution court did not apply mind while fixing the upset price and deciding whether the sale of the whole of the property or a party would be sufficient to satisfy the decree. In such circumstances, the view taken by the execution court that there occurred material irregularity in publishing and conducting the sale resulting in substantial injury to the 1st respondent can only be said to be correc