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TMI Blog1980 (9) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... 978 and Kamadhenu Bailings v. Secretary Guruvavur Temple Renovation Committee, Kerala, C. R. P. No. 1127 of 1978, D/- 22-7-1978. The referring Judge also noticed that Ramanuiam. J. in Ramaswami Gounder v. Subramania Iyer, C. R. P. No. 163 of 1979. D/- 12-2-1979 and Nainar Sundaram, J. in K. A. Raiu v. Sivaprakasam. C. R. P. No. 1536 of 1979. D/- 31-8-1979, have taken a contrary view and held that the fixation of upset price would not automatically invalidate the order directing the sale of the propertlt4Hnd that even after the amendment of 0. XXI, R. 66 C. P. Code, by Act 104 of 1976, the power of the executing court to fix the upset price, in appropriate cases, is not taken away. It is with regard to the diversity of views expressed in the decisions referred to above, the learned single Judge directed the papers to be placed before the Honourable the Chief Justice for referring the matter to a Bench and that is how the matter is before us. 2. Mr. V. Natarajan learned counsel for the petitioners, besides bringing to our notice the orders of Sathiadev. J. and certain other decisions, also laid emphasis on the amendment made to O. XXI, R. 66 C. P. Code, by Act 104 of 1976. Mr. G. Ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1927Mad1009 . "Under O. XXI. R. 66 C. P. Code, the court is under no obligation whatever to fix, and state in the proclamation of sale, its own valuation of the property to be sold ". Where the court without its determining the market value of the property to be sold and stating it in the sale proclamation, ordered that the valuations of the decree-holder and of the judgment debtor as well as that of the Commissioner appointed in the case should be mentioned in the sale < proclamation. Held: that there was no irregularity" Vide- Thiruvengadaswami Iyengar v. Goviridaswami Udavar. ILR(1928)Mad 655 :: AIR 1928 Mad 503. The ratio decided in these cases was to the following effect : A Court's valuation may be a real guide to a bidder. but such valuation should be fair and accurate as far as possible: even in such cases where the valuations of the decree holder and the judgment debtor differed from each other hopelessly, the court was not bound' to state its valuation of the property,. since such a statement would at best be a guess and depending upon the circumstances of a case, the court may prefer to abstain from making a guess, the court was under no obligat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ramaswami, J. in Yellappa Naidu v, Venugopal Naidu (1957) 70 MLW 815 AIR 1958 Mad 4231, and the learned Judge, after referring to the several cases decided earlier, summed up as follows- "To sum up, after the amendment of 0. XXI, R. 66 C. P. C., it is now settled law that the court is under no obligation to notify an upset price of its own. In fact, in many cases. it would not even be desirable for the court to do so. The obligation of the court is to state the valuations given by the decree-holder and the judgment-debtor. But they must not be notified as upset prices. The court when ordering the sale with two valuations noted which are discrepant, must adopt one of two courses. If it is desirable in the circumstances of the case for the court to fix in a rough and ready way the upset price of its own, it can do so, because the amended provision does not prohibit the court from fixing its own upset price But, where the court does not desire to fix even in a rough and ready way its own valuation. it will be perfectly within its rights in refraining from doing so and this cannot be canvassed either by way of appeal or revision. But it will instruct the selling officer, either ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et price or modifies either by way of enhancement or reduction of the upset Price originally fixed, it cannot be said that the court is acting pursuant to the obligation imposed upon it under O. XXI. R. H C. P. Code. When the court fixed the upset Price in a sale proclamation, the court is not I determining the rights of any of the parties before it and the fixation of upset price may be an indication of the probable Price which the property may fetch from the point of view of the intending bidders: but it Is not binding either on the decree-holder or the judgment-debtor or even on the court. Notwithstanding the fixation of the upset price and notwithstanding the fact that a bidder has offered an amount higher than the upset price, it is still open to the judgment-debtor to go before the court and allege that the property has not fetched the proper price, and he can have the sale set aside, if he can establish that the inadequacy of the price is the result of material irregularity or fraud in the publication or the conduct of the sale consequently. The fixation of upset price by the court, does not affect the rights of any of the parties, and it is not therefore oven to the judgmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urts were enjoined to fix the upset price and mention it in the sale proclamation besides setting out the values given by the parties themselves, viz, the decree-holder and the judgment-debtor. 8. After the introduction of cl. (d-1), Ismail J. (as he then was), had to consider in S. M. Shamsuddin v. Poyyamani C. R. P. No. 1484 of 1973, order dated 24-8-1973, whether the executing court, while exercising its powers under clause (d-1) was under an obligation to give notice to the judgment-debtor before reducing the upset price originally fixed by it. The learned Judge held that in as much as the fixation of upset price was a statutory performance, the court had perforce to give notice to the judgment-debtor before making any reduction in the upset price. 9. When matters stood thus, Central Act 104 of 1976 brought about further amendments to.. Rule 66 by introducing the following provisions:- "Provided that where notice of the date for settling the terms of the proclamation has been given to the judgment-debtor by means of an order under Rule 54, it shall not be necessary to give notice under this rule to the judgment debtor unless the court otherwise directs: Provided furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich the auction should be commenced, except the widely divergent prices given by the decree-holder and the Judgment debtor. By way of support for his argument, reliance was placed by the learned counsel on the second limb of the proviso which places on the court an inescapable obligation to setout in the sale proclamation the estimates given by either or both of the parties, the relevant words in the proviso running as under - "but the proclamation shall include the estimate, if any, given by either or both of the parties". 12. The rule should be construed, according to learned counsel, in conformity with the principles evolved by courts of law and jurists which have found universal acceptance. The rules are as follows - "The golden rule for the interpretation of Acts is to consider the plain meaning of the words used. The court cannot proceed on the assumption that the legislature has made a. mistake. Even if there is a defect., it is not for the court to add to or amend the words of a Statute or to supply casus omissus. When the language is clear, it Is the duty of the court to give effect to it without calling in aid outside consideration to as certain the inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by this clause may, in our view, relate either to breach of some provision of law or to material defects of procedure affecting the ultimate decision". 13. Having set out the case law on the subject prior to the change brought about by Act 104 of 1976 to Rule 66 as well as the contentions of the petitioners' counsel as to how the second proviso to clause (e) should be construed and that the action of the Subordinate Judge in fixing the upset price for the two lots of properties and subsequently ordering reduction in the upset prices amounted to exercise of powers without jurisdiction, we will now examine the matter in its full perspective. Rule 66 (2) as it originally stood, did not contain any clause relating, to the setting out of the value of the property-either as given by the parties or as estimated by the court. Notwithstanding the absence of any such provisions, it was held in Thiruvengadasami Iyengar v,. Govindasami Udayar, ILR 51 Mad 655:: AIR 1928 Mad 503 which was considered a leading authority, that since the reserve price is also generally fixed by the court, there was no obligation for the court to fix its own valuation of the property and incorporate it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own estimate of the value of the property if deemed fit and include it in the sale proclamation. What has now to be looked into is whether by reason of the amendment brought about to Rule 66 by Act 104 of 1976, particularly by the introduction of the second proviso, the powers of the executing court 'to enter in the proclamation of sale its own estimate of the value of the property' has been taken away. 14. Before we go into that question, we must point out the difference between the value of a property and the upset price for a property brought for sale in a court auction .The word 'value' means as follows - "to estimate or appraise as being worth a specified sum or amount: to estimate the value of (goods, property etc): to appraise in respect of value; to estimate or regard as having a certain value or worth. (Vide Shorter Oxford Dictionary Illustrated vol. 2). On the other hand, the term upset in relation to price, means as follows "stated as the lowest sum for which property exposed to auction will be sold: named as the sum from which bidding may start. (Vide Shorter Oxford Dictionary; illustrated vol. 2). The same term means according to the Concise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. 1867 was passed and the common law rule prevailed in all cases. The result is that now the particulars or the conditions must state whether or not the sale is without reserve or whether a right to bid is reserved." 16. Bearing in mind this distinction between the value of a property and the fixation of upset or reserve price for a property brought for sale in court auction, let us examine the contention of the petitioners that the second proviso to Rule (e) contains an express prohibition on the court from estimating the value of the property and including it as a relevant particular in the proclamation of sale. 17. In the objects and reasons given for enacting Act 104 of 1976 clause 76, sub-clause (xxvi) relating to the amendment to Rule 66 of Order XXI reads as follows - "Certain difficulties have been caused on account of the mistake occurring in the estimated value of the property as stated in the proclamation of sale. Rule 66 is being amended to provide that the court should state merely the value estimated by the parties and should not vouch for the accuracy of such value." We are not taking into aid the statement of objects and reasons for construing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oclamation". Viewed in this background, it may be perceived that Owe Legislature only wanted to ensure that the court did not vouch for the accuracy of any value of the property entered in the sale proclamation. and not that the court should not fix an upset price or reserve price at which the auction should commence for the sale of the property. 19. In the course of his arguments, Mr. Natarajan invited our attention to the pronouncement of the Supreme Court in Gajadhar Prasad v. Rhaki. Ratan: [1974]1SCR372 and argued that the dictum in that case lends force to, his contentions. The relevant portion referred to by the counsel reads a follows- "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 were required, it may, to be fair, necessitate insertion of something like, a summary of a judicially considered order, giving grounds, in the sale proclamation which may confuse bidders. It may also be quite misleading if the court' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale. the need for the Court to fix an upset price may not arise in all cases. The procedure indicated by P. N. Ramaswami, J. in Yellappa Naidu v. Venugopal Naidu (1957) 70 MLW 815 : AIR 1958 Mad 423 can be resorted to i. e., the sale will have to commence at the higher price given by the judgment-debtor and, in the absence of bidders, the price will have to be progressively brought down till it reaches the figure given by the decree holder and again raised up, depending upon the availability of bidders. If in spite of such a procedure the sale does not take place for want of bidders, then it is open to the court, on the application of the decree-holder, to fix an upset price for the property at a rate as near as the Property would be worth in the estimation of the court. If, even then, the sale does not take place, the decree holder can move the executing court to reduce the up set Price. It will be open to the executing court to reduce the upset price or not. depending upon the circumstances of the case, and, if a reduction is to be made. to decide the extent to which the upset price should be reduced. It is only for these reasons, the legislature should have enacted the Proviso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the following terms- Upset price :- In cases, in which the court may consider that the applicant (decree-holder) should not be allowed to bid for less than a sum to be fixed, it shall be competent to the court to give leave to bid at the sale. only on condition that the applicant's (decree-holder's) bid shall not be less than the amount so fixed by the court, which amount shall, as far as practicable, be determined with reference to the Probable market value of the property, or of the lot or lots into which the property is divided for sale." When the decree-holder seeks leave of the court to bid at the auction the court may deem it necessary to fix the upset price of the property with reference to the probable market value of the Property or the lots into which it may be divided for sale. It would be strange logic to say that the court should step in to safeguard the interests of the judgment-debtor only in those cases where decree-holder seeks leave of court to bid at the auction and at other times, the court need not concern itself with fixing an upset price far the property. If such a narrow view is taken, then the decree holder can defeat the object underlying t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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