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2011 Supreme(Online)(KER) 48126
HIGH COURT OF KERALA
THOMAS P.JOSEPH, J
MANUELSONS FINANCIAL ENTERPRISES (P) LTD – Appellant
Versus
V C BALACHANDRAN – Respondent
OP (CIVIL) 1934/2011
The requirement for a fair value certificate in execution proceedings ensures that the property is sold at a fair and adequate reserve price, especially after delays in the auction process.
Headnote:
Civil - Execution Proceedings - Code of Civil Procedure (CPC) - Order 21, Rule 72 A - The court upheld the execution court's order requiring production of a fair value certificate to ensure that an adequate reserve price is established for the auction of mortgaged property.
Fact of the Case:
The petitioner challenged an executing court's order requiring a fair value certificate to proceed with a sale of mortgaged property after a reserve price was initially set, arguing it was unnecessary since the reserve price was already determined.
Finding of the Court:
The court concluded that the executing court's order was valid under the provisions of the CPC, particularly due to the delay in the sale process which necessitated the refixation of the reserve price through the fair value certificate.
Issues: Whether it was necessary to produce a fair value certificate after a reserve price was initially fixed and the implications under Order 21, Rule 72 A of the CPC regarding property auction.
Ratio Decidendi: The court determined that Rule 72 A mandates the fixing of a reserve price and, due to the delay in the auction process, a fresh proclamation and fair value certificate were necessary for proper execution.
Final Decision: The original petition is dismissed.
JUDGMENT
The order dated 09.03.2011 in E.P. No.39 of 2001 in O.S. NO. 210 of 2000 of the Court of learned Sub Judge, Irinjalakuda directing petitioner/decree holder to produce fair value certificate is under challenge. Petitioner has obtained a decree for recovery of money by sale of the mortgaged property against the respondent. 74 ½ cents which is the mortgage property was brought up for sale. Executing Court directed that it is sufficient to sell a portion of the mortgage property. Petitioner successfully challenged that order in CRP No. 608 of 2006. Respondents sought review of the said order, but, the request was turned down, vide Ext.P4 , order. Respondents challenged Ext.P3 order in CRP NO. 608 of 2006 in the Supreme Court, but failed in their attempt. In the meantime the executing court on 20.02.2010 fixed reserve price for the property at Rs.5,55,970/-. It was also directed that the market price suggested by the respondents be shown in the sale proclamation. The sale however, could not take place within one month. Thereafter, a fresh order was passed by the executing Court on 19.03.2011 directing petitioner to produce the fair value certificate. That order is under challenge.
2. It is contended by learned counsel that since reserve price has already been fixed on 20.02.2010 it is not necessary to refix the same. It is also contended by the learned counsel that what is required is only to incorporate in sale proclamation the market price suggested by the respondents also.
3. Learned counsel for respondents contended that since leave is granted to the petitioner to take part in the bid, Rule 72 A (2) of Order 21 of the Code of Civil Procedure required the Court to fix reserve price of the property and, since the sale did not take place within one month from the original date fixed for the purose, fresh proclamation is to be made. It is for the said purpose that the executing court has directed petitioner to produce fair value certificate.
4. Having regard to statutory provisions referred above I am inclined to accept the argument of learned counsel for respondent. As such there is no reason to interfere with the impugned order.
Original Petition fails. It is dismissed.
THOMAS P JOSEPH JUDGE
