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Kerala High Court
T.V.RAMAKRISHNAN,K.NARAYANA KURUP
Anto Nitto - Appellant
Versus
South Indian Bank Ltd. - Respondent
Decided On : 10/23/1997
SALE - APPLICATION UNDER ORDER XXI, RULE 72A(3) - SUMMARY
Fact of the Case:
The appeal is against the order dismissing an application filed under Order XXI, Rule 90 read along with Section 151 of the Code of Civil Procedure for setting aside the sale of two items of immovable properties. The suit was filed by the respondent-Bank for realization of money by the sale of mortgaged properties described in the plaint schedule. The suit was decreed for recovery of an amount of Rs. 90,71,727.23 together with 15% interest from the date of suit and costs amounting to Rs. 10,31,148.00 by the sale of the mortgaged properties and also from the defendants personally. The appellant, the second judgment-debtor, filed an application to set aside the sale on the grounds that the sale was effected without fixing a reserve price for the properties in accordance with the mandatory provisions contained in Order XXI, Rule 72A, C.P.C. The appellant contended that the upset price fixed and price for which the properties were sold were ludicrously low when compared to the actual worth of the properties. The appellant also raised objections regarding the value of the properties shown by the decree-holder in the draft proclamation. The Court directed amendment of the proclamation by incorporating the value of the properties as shown in the objection. The proclamation was amended accordingly, showing Rs. 4 crores as the value of item No. 1 property and the incomplete building situated therein. The Court dismissed the application for setting aside the sale, finding no merit in the contention that the upset price fixed was too low and that the sale was vitiated by material irregularity, fraud, and illegality in the conduct of sale. The Court also rejected the appellant's contention that the decree-holder prevented intending bidders from participating in the auction. The Court found that the appellant had not substantiated the contention that the sale caused substantial injury to the judgment-debtors. The Court also found that the offer made by the appellant to pay the entire debt together with interest at 5% commission cannot be accepted as the same was conditional on the decree-holder executing the sale deed in respect of the properties in favor of the nominee of the appellant.
Finding of the Court:
The Court found that the sale was not vitiated by material irregularity, fraud, and illegality in the conduct of sale. The Court rejected the appellant's contention that the decree-holder prevented intending bidders from participating in the auction and that the appellant was not served with notice under Order XXI, Rule 66. The Court also found that the appellant had not substantiated the contention that the sale caused substantial injury to the judgment-debtors. The Court also found that the offer made by the appellant to pay the entire debt together with interest at 5% commission cannot be accepted as the same was conditional on the decree-holder executing the sale deed in respect of the properties in favor of the nominee of the appellant.
Issues: The main issue was whether the sale in question is liable to be set aside or not, considering the objections raised by the appellant regarding the value of the properties, the upset price fixed, and the conduct of the sale.
Ratio Decidendi: The Court held that the sale was not vitiated by material irregularity, fraud, and illegality in the conduct of sale. The Court also rejected the appellant's contention that the decree-holder prevented intending bidders from participating in the auction and that the appellant was not served with notice under Order XXI, Rule 66. The Court also found that the appellant had not substantiated the contention that the sale caused substantial injury to the judgment-debtors. The Court also found that the offer made by the appellant to pay the entire debt together with interest at 5% commission cannot be accepted as the same was conditional on the decree-holder executing the sale deed in respect of the properties in favor of the nominee of the appellant.
Final Decision: The Court dismissed the application for setting aside the sale, finding no merit in the contentions raised by the appellant.
RAMAKRISHNAN, J. :- This appeal is against the order dismissing an application, E.A. 674 of 1993, filed under Order XXI, Rule 90 read along with Section 151 of the Code of Civil Procedure for setting aside the sale of two items of immovable properties effected on 15-6-1993 in E.P. 652 of 1991 in O.S. No. 666 of 1988 on the file of the Pri. Sub Judge, Ernakulam. Appellant is the second judgment-debtor. Respondent, the South Indian Bank Limited is the decree-holder and auction-purchaser of the properties.
2. The main question arising for consideration is whether the sale in question is liable to be set aside or not which has to be considered in the backdrop of the following facts and circumstances.
3. The suit was filed by the respondent-Bank for realisation of money by the sale of mortgaged properties described in the plaint schedule. Suit was decreed for recovery of an amount of Rs. 90,71,727.23 together with 15% interest from the date of suit and costs amounting to Rs. 10,31,148.00 by the sale of the mortgaged properties and also from the defendants personally. Since the liability was not discharged within the time allowed by the decree, E.P. 652 of 1991 was filed on 12-7-1991 claiming a total amount of Rs. 1,37,30,901.03. A draft sale proclamation was also filed along with the E.P. for sale of the two items of properties described in the schedule to the E.P. The upset price fixed for item No. 1 in the draft proclamation was Rs. 95 lakhs and that of item 2 was Rs. 5 lakhs. Notice under Order XXI, Rule 66, C.P.C. was issued on 27-3-1991. Order sheet in the E.P. would show that the appellant was served with notice before 16-10-1991. Service of notice was ultimately completed by effecting substituted service by publication as regards some of the respondents, only in the month of October, 1992. The decree-holder filed E.A. 1123 of 1992 on 14-10-1992 specifically under Order XXI, Rule 72A(2), C.P.C. praying for fixing reserve price for items 1 and 2 as Rs. 95 lakhs and Rs. 5 lakhs respectively. On 15-10-1992 the appellant along with the legal representatives of the 5th defendant (5th judgment-debtor) filed objections in the matter of settlement of proclamation. Apart from pointing out certain illegalities and irregularities in the decree passed, it was contended that no notice was served on them under Order XXI, Rule 66. It was further submitted that boundaries of the properties shown in the proclamation are not correct and that the value of the unfinished building standing in item No. 1 has not been shown separately in the proclamation. It was also contended that the upset price shown for item 1 property is very much less than its market value. According to the objectors the properties would be worth at least Rs. 3 crores as it is one situated by the side of M. G. Road, Ernakulam, near Deepa Theatre. Extent of item No. 1 property is nearly 32 cents and the plinth area of the unfinished building situated therein which is almost completed is 30000 sq. ft. The building itself will cost more than Rs. 1 crore. It was thus submitted that all the material particulars shown in the proclamation are incorrect and the sale on the basis of the proclamation will cause substantial prejudice to the judgment-debtors. Taking note of the objections raised regarding the value of the properties shown by the decree-holder in the draft proclamation, the Court has directed amendment of the proclamation by incorporating the value of the properties as shown in the objection. The proclamation was accordingly amended by indicating the value of the properties as Rs. 3 crores and the value of the unfinished building as more than Rs. 1 crore. After the proclamation was amended as directed by the Court, on 10-2-1993 the Court has passed the following order on E.A. 1123 of 1992.
"Amended draft produced. Upset price fixed for item No. 1 as Rs. 95 lakhs and item No. 2 Rs. 5 lakhs. Proclaim and sell on 27-5-1993."
Later, on 31-3-1993 the decree-holder filed E
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