TMI Blog1993 (9) TMI 350X X X X Extracts X X X X X X X X Extracts X X X X ..... at the amount deposited by him may be credited to the account of the respondent. The first respondent filed E.P. No. 1974 of 1978 in the court of the Addl. Sub-Judge, Ist Class for sale of the appellant's plot of land bearing plot No. 31/35, Punjabi Bagh, New Delhi, a commercial area of an extent of 550 square yards to recover ₹ 7780.33 which includes costs. On November 4, 1978 warrant of its attachment was issued under Order 21 Rule 54 in Form 24 of Appendix 'E' of the Schedule to CPC. On becoming aware of that the appellant filed an objection petition contending that since he had already deposited in the Rent Control case ₹ 13,440, more than the decretal amount, in the Rent Control Court, the decree stands satisfied and became inexecutable. He also pleaded that Execution Court is devoid of jurisdiction as its pecuniary jurisdiction is limited to ₹ 25,000. Arguments were heard thereon. Ultimately on April 20, 1979 the Court passed the order thus: Order dictated on this date. The decree- holder has moved an application under Order 21 Rule 66, CPC for warrant of proclamation of sale by public auction of the property of JD- I. Accordingly allow the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions, considered the scope of Order 21 Rule 90(3) and held that by its operation pre- sale illegalities or irregularities do not vitiate the sale and dismissed the appeal. The High Court dismissed the revision in limine. Thus this appeal by special leave. 3. Mr Gupta, the appellant, an Advocate argued in person. The first respondent, the decree-holder, is also an Advocate, but appeared through Mr Gujral, learned senior counsel. The auction-purchaser was represented by Mr K. Madhava Reddy, the learned senior counsel. The contention of Mr Gupta that the Execution Court having been conferred with pecuniary jurisdiction up to ₹ 25,000, had no jurisdiction to execute the decree against the property whose value is ₹ 3,50,000, is devoid of substance. Under Order 21 Rule 10 of CPC an application for execution should be made to the court which passed the decree . Therefore, the value of the property sold at the execution is more than ₹ 25,000 does not take away the jurisdiction of the trial court. In Banwar Lal v. Prem Latal(1990) 1 SCC 353 : AIR 1990 SC 623 this Court held that the value of the property sold in execution is not relevant to determine the jurisdiction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at there were other liabilities which the appellant had not discharged, bears no foundation. Even otherwise there was no order of attachment of that amount by any court. The finding of the appellate court that the deposit was not to the credit of the suit is also not legal. In our considered view neither the stand of the first respondent nor the reasoning of the courts below are tenable. When the arrears of rent for which the decree was made was already in deposit to the knowledge of Anand in his eviction case and when the appellant objected to the execution, the Executing Court either should have directed the appellant to withdraw the money and credit the same to the suit account before its attachment was made or it should have passed an order under Order 21 Rule 23(2) which postulates thus: Where such person offers any objection to the execution of the decree, the court shall consider such objection and make such order as it thinks fit . It is, therefore, the mandatory duty of the Executing Court to consider such objection and to make an order in that behalf. No such order has been made. It is true that in the contempt application filed by the appellant against the first resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... affected since the realisation of his decree debt is put off and he would be obligated to initiate execution proceedings afresh to recover the decree debt. Therefore, in the proceedings under Section 47 or Order 21 Rule 90, the decree-holder is the affected necessary party. Though the auction-purchasers need to be impleaded eo nomine as respondent as the property was purchased jointly at the court sale, it is enough that one among them had been impleaded as a party. It is not necessary to implead all the joint purchasers. 6. The contention of Mr Gupta that as Form 29 of Appendix 'E' prescribes that when an auction-purchaser participated in the bid on behalf of a third party, he should file his power or authority to bid at the auction on behalf of the third party, and in its absence the sale itself is a nullity, is devoid of substance. The rigour of the need to obtain power or authority arises only when he acts as an agent but not when he had, per himself and other's behalf, participated in the bid. Prudence requires that the sale officer should satisfy himself whether the participant is a real or proxy bidder. It should exclude the proxy unless he places before him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to conduct the sale. For judging its legality and validity, it would be desirable to have a bird's eye view of the procedure for sale of immovable property in execution. On an application for execution filed under Order 21 Rule 5 the court shall ascertain the compliance of the prerequisites contemplated under Rule 17 and on finding the application in order, it should be admitted and so to make an order, thereon to issue notice under Rule 22, subject to the conditions specified therein. If a notice was served on the judgment-debtor as enjoined under Order 5 but he did not appear or had not shown cause to the satisfaction of the court, under Rule 23 the court shall order the decree to be executed . If an objection is raised to the execution of the decree, by operation of sub-rule (2) thereof, the court shall consider such objections and make such order as it thinks fit . Thereafter in the case of a decree for execution against immovable property an attachment under Rule 54 should be made by an order prohibiting the judgment-debtor from transferring or creating encumbrances on the property. Under Rule 64 the court may order sale of the said property. Under Rule 66(2) proclamatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estimate of the property. The estimate of the value of the property is a material fact to enable the purchaser to know its value. It must be verified as accurately and fairly as possible so that the intending bidders are not misled or to prevent them from offering inadequate price or to enable them to make a decision in offering adequate price. In Gajadhar Prasad v. Babu Bhakta Ratan (1973) 2 SCC 629 : (1974) 1 SCR 372 this Court, after noticing the conflict of judicial opinion among the High Courts, held that a review of the authorities as well as the amendments to Rule 66(2)(e) make it abundantly clear that the court, when stating the estimated value of the property to be sold, must not accept merely the ipse dixit of one side. It is certainly not necessary for it to state its own estimate. If this was required, it may, to be fair, necessitate insertion of something like a summary of a judicially considered order, giving its grounds, in the sale proclamation, which may confuse bidders. It may also be quite misleading if the court's estimate is erroneous. Moreover, Rule 66(2)(e) requires the court to state only nature of the property so that the purchaser should be left to jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... favour of the purchaser. It thereby deals with the rights and disabilities either of the judgment-debtor or the decree- holder. A sale made, therefore, without notice to the judgment-debtor is a nullity since it divests the judgment- debtor of his right, title and interest in his property without an opportunity. The jurisdiction to sell the property would arise in a court only where the owner is given notice of the execution for attachment and sale of his property. It is very salutary that a person's property cannot be sold without his being told that it is being so sold and given an opportunity to offer his estimate as he is the person who intimately knew the value of his property and prevailing in the locality, exaggeration may at time be possible. In Rajagopala Ayyar v. Ramachandra Ayyaar AIR 1924 Mad 431 : ILR 47 Mad 288 :46 MLJ 104 the Full Bench held that a sale without notice under Order 21 Rule 22 is a nullity and is void and that it has not got to be set aside. If an application to set aside such a void sale is made it would fall under Section 47. 10. Above discussion indicates a discernible rule that service of notice on the judgment-debtor is a fundamental part o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant which is mandatory, the need to submit his valuation did not arise. Order 21 Rule 54, sub-rule (1-A) brought in by 1976 Amendment Act mandates that the court should require the judgment-debtor to attend the court on a specified date to take notice of the date to be fixed for settling the terms of the proclamation of sale. Form 24 of Appendix 'E' second para and the Court Rules also envisage the mandate. It is a reminder to the court that it has a statutory duty to issue notice to the judgment-debtor before settlement of the terms of proclamation of sale. Then only the proviso to Rule 66(2) comes into play dispensing with multiplicity of notices and not dispensation of mandatory compliance of notice to the judgment-debtor. Had it been a case where notice was served and the appellant lay by, without objecting to the valuation given by the decree-holder, certainly that would be put against the appellant to impugn the irregularities after the sale or the under-valuation settled by the court in the proclamation of sale. The further contentions of both the counsel that merely because there is no order under Order 21 Rule 66(2), it cannot be construed that the Execut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ects the court auctioneer to sell so much of the said property as shall realise the sum in the said decree and costs. The Code, therefore, has taken special care charging the duty on the Executing Court and it has a salutary duty and a legislative mandate to apply its mind before settling the terms of proclamation and satisfy that if part of such property as seems necessary to satisfy the decree should be sold if the sale proceeds or portion thereof is sufficient for payment to the decree-holder or the person entitled under the decree to receive the amount and so much of that property alone should be ordered to be sold in execution. In Ambati Narasayya v. M. Subba Rao 1989 Supp (2) SCC 693 : AIR 1990 SC 119 ' this Court held that it is the duty cast upon the court under Order 21 Rule 64 to sell only such property or a portion thereof as may be necessary to satisfy the decree. It is a mandate of the legislature which cannot be ignored. Therein for execution of a decree of a sum of ₹ 2,000 and costs, the appellant's 10 acres land was brought to sale which was purchased for a sum of ₹ 17,000, subject to discharge of a prior mortgage of ₹ 2,000. This Court hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rregularities. He should not stand by to procrastinate the execution proceedings. If he so does, Rule 90(3) forewarns him that he pays penalty for obduracy and contumacy. Equally it is a reminder that the court should be strict to comply with the procedural part under Rule 54(1-A) before depriving the judgment-debtor of the remedy under Order 21 Rule 90 CPC. If he had notice from court and acquiesced by taking no action before the date of sale, he would be precluded to assail its legality or correctness thereafter. It is seen that the appellant had not been served with or given notice at the time of drawing up the proclamation of sale and as a fact no proclamation of sale was drawn up by the Executing Court except accepting the ipse dixit of the decree-holder. The procedure adopted by the Executing Court bristles with several irregularities touching the jurisdiction of the court. They are not only material irregularities causing substantial injustice but are in violation of the mandatory requirements of the rules. In Kayjay Industries (P) Ltd. v. Asnew Drums (P) Ltd.(1974) 2 SCC 213 : (1974) 3 SCR 678' the sale proclamation was settled after notice to the parties and after seve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 SCR 77 : AIR 1967 SC 608 relied on by Shri Madhava Reddy, in execution of ex parte decree for a sum of ₹ 519, the property of the judgment-debtor was brought to sale and was sold for a sum of ₹ 5,100. Thereafter the judgment-debtor made an application to set aside the ex parte decree. An objection was raised to the sale on the ground that the value of the house was ₹ 25,000 and it was auctioned for a sum of ₹ 5000. The ex parte decree was set aside. On application made by the auction-purchaser, the sale was confirmed. It was contended that since the ex parte decree was set aside the confirmation of sale need to be set aside, which was negatived by all the courts. In that background it was held that confirmation of the sale was not illegal and the inadequacy of the price was not a ground to set aside the sale. The ratio therein has to be considered in the light of its own scenario. The facts in this case are entirely different. The case of Chinnammal v. P. Arumugha(1990) 1 SCC 513 also does not help the auction-purchaser. Therein it was found that pending appeal the money decree was executed and the properties were brought to sale. The High Court allowed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd it must be established that by reasons of illegalities or irregularities in conducting the sale, the judgment-debtor has sustained substantial injury. In Dhirendra Nath Gorai v. Sudhir Chandra Ghosh (1964) 6 SCR 1001 : AIR 1964 SC 1300 this Court held that non-compliance of Section 35 of the Bengal Money Lenders Act does not render the sale void. It is only an irregularity. The judgment-debtor having had the knowledge did not file any objection. He did not attend the court for drawing up of the proclamation of the sale. On those circumstances the sale was held not liable to be set aside. 17. Under Section 47 all questions relating to execution, discharge or satisfaction of the decree should be determined by the Executing Court alone. The pre-sale illegalities committed in the execution are amenable to the remedy under Section 47. Post-sale illegalities or irregularities causing substantial injury to the judgment-debtor are covered under Order 21 Rule 90. Sub-rule (1) thereof covers the field of material irregularities or fraud in publicity or conducting the sale. Sub-rule (2) enjoins proof thereof and the court should find that by reason thereof the applicant sustained substa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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