Karnataka High Court
Smt. Dwaraka W/O Sameer Hadimani vs Haji Liyakat S/O Nannusab Awati on 26 July, 2024
-1- W.P.NO.100009/2024
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 26TH DAY OF JULY, 2024
BEFORE
THE HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM
WRIT PETITION NO.100009 OF 2024 (GM-CPC)
BETWEEN:
SMT. DWARAKA W/O. SAMEER HADIMANI,
AGE: 65 YEARS, OCC: HOUSEHOLD WORK,
R/O. JAMBAGI ROAD, OPP. VITTAL MANDIR
JAMAKHANDI, TQ: JAMAKHANDI,
DIST: BAGALKOT-587301.
...PETITIONER
(BY SRI. GIRISH A. YADAWAD, ADV.)
AND:
1. HAJI LIYAKAT S/O. NANNUSAB AWATI,
AGE: 65 YEARS, OCC: BUSINESS,
R/O. VIJAYA NAGAR, KUNCHANUR ROAD,
JAMAKHANDI, TQ: JAMAKHANDI,
DIST: BAGALKOT-587301.
2. SMT. FARIDA D/O. LIYAKAT ALI ALAGUR,
AGE: 35 YEARS, OCC: AGRICULTURIST,
R/O. BEHIND DILAWAR GARAGE,
JAMAKHANDI, TQ: JAMAKHANDI,
DIST: BAGALKOT-587301.
3. MEHBOOB S/O. HUSENSAB TALIKOTI,
AGE: 44 YEARS, OCC: REAL ESTATE,
R/O. JAMBAGI ROAD, JAMKHANDI,
TQ: JAMAKHANDI, DIST: BAGALKOT-587301.
...RESPONDENTS
(BY SRI. H.M. DHARIGOND, ADV. FOR R1;
-2- W.P.NO.100009/2024
SRI. SOURABH HEGDE, ADV. FOR R3;
R2-DISPENSED WITH)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF
CERTIORARI TO QUASH THE IMPUGNED ORDERS DATED. 08.01.2019
AND 02.02.2019 PASSED BY THE ADDL. PRINCIPAL SENIOR CIVIL
JUDGE AND JMFC, JAMKHANDI IN EP NO. 1/2017 VIDE ANNEXURE-
D, IN THE INTEREST OF JUSTICE AND EQUITY.
THIS PETITION HAVING BEEN HEARD AND RESERVED FOR
ORDERS ON 25.07.2024, COMING ON FOR PRONOUNCEMENT OF
ORDERS THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
The captioned writ petition is filed assailing the order of issuing sale proclamation against present petitioner in respect of CTS No.4377/B and consequent sale conducted by the Executing Court on 02.02.2019.
2. The facts leading to the case are as under:
The case has got a checkered history. The respondent/Decree Holder entered into an agreement of sale with present petitioner/Judgment Debtor on 22.08.2011. The respondent/Decree Holder paid a sum of Rs.10,00,000/- out of the total sale consideration of Rs.31,00,000/- toward part performance. The present petitioner in terms of agreement, failed to get the land surveyed and clear all the encumbrances and she went on postponing in spite of repeated request by respondent/Decree Holder. Petitioner failed to perform her part -3- W.P.NO.100009/2024 of contract and complete the transaction. On the contrary she executed a sham sale deed in favour of respondent No.2, who is none other than her daughter on 24.01.2012. Respondent No.1/Decree Holder gave up his claim under the agreement and filed a suit seeking recovery of earnest money paid under the agreement on 03.12.2012. The present petitioner tendered appearance and filed written statement and also admitted payment of amount of Rs.10,00,000/-. However, petitioner contended that it is the respondent/Decree Holder, who is guilty of breach as he has failed to perform his part of contract.
3. Trial Court dismissed the suit on the ground that balance amount was not paid. The Appellate Court, however, reversed the judgment and decree rendered by the trial Court. The Appellate Court allowed the appeal and suit was decreed by judgment and decree dated 31.08.2016, thereby directing present petitioner to refund amount of Rs.10,00,000/- along with interest at the rate of 9% per annum from 20.10.2011 till date of realization. This Court dismissed the Second Appeal on 15.09.2022.
4. Pursuant to decree passed by the Appellate Court in R.A.No.31/2014, respondent/Decree Holder initiated execution -4- W.P.NO.100009/2024 proceedings in E.P.No.1/2017. The Executing Court passed an order for issuance of sale proclamation on 08.01.2019. Spot sale was conducted on 23.01.2019 and respondent No.3 quoted the highest bid of Rs.3,95,000/-. Respondent No.3 his bid was accepted and respondent No.3 was called upon to deposit an amount of Rs.1,00,000/-, which was accordingly deposited. Respondent No.3 with permission of the Court deposited balance amount of Rs.2,95,000/- on 16.02.2019. The petitioner/Judgment Debtor assailing the judgment rendered in regular second appeal preferred a Special Leave Petition in S.L.P.No.41267/2022. The Hon'ble Apex Court dismissed the petition on 27.02.2023.
5. The petitioner herein is challenging the sale proclamation and the auction conducted by the Executing Court on the premises that petitioner is ready to pay the entire decreetal amount in terms of memo of calculation submitted by her. It is also contended that sale proclamation issued by the Executing Court and the subsequent Court sale conducted needs interference at the hands of this Court as the property subjected to auction sale, is sold at meager sale price and therefore, if the auction sale is not set-aside, petitioner will be put to serious prejudice and hardship.
-5- W.P.NO.100009/2024
6. Learned counsel appearing for the petitioner reiterating the grounds and in support of his contention has placed reliance on the judgment rendered by the Hon'ble Apex Court in the case of Sukumar Dev Vs Bimala Auddy and others reported in AIR 2014 SC 1000.
7. Per contra, learned counsel appearing for respondent No.3/auction purchaser and the counsel appearing for respondent/Decree Holder by filing a detailed synopsis has requested this Court not to grant any indulgence on the ground that petitioner because of her unfair conduct is not entitled for any indulgence.
8. The counsel appearing for auction purchaser, more particularly pacing reliance on the law laid down by Hon'ble Apex Court in the case of K. Kumara Gupta Vs Sri Markendaya & Sri Omkareswara Swamy Temple and others reported in (2022) 5 Supreme Court Cases 710, would point out that sale auction one's concluded, Courts should normally not grant any indulgence. He would contend that the Courts must encourage the auction conducted through Court and should also protect the rights of auction purchaser. He would contend that petitioner having slept over her rights -6- W.P.NO.100009/2024 for a considerable length of time, now cannot seek to set-aside auction sale properly conducted by Executing Court on the ground that she is willing to deposit the balance decretal amount. Any indulgence at this juncture would not only seriously prejudice the auction purchaser, who has deposited Rs.3,95,000/- in the year 2019, but such an indulgence at the hands of the Court, would undermine the recovery proceedings conducted by the Courts and no auction purchaser will come forward to purchase the properties, which are subjected to litigation.
9. Heard the learned counsel appearing for petitioner and respondents.
10. Before this Court, delves upon the case on hand, this Court deems it fit to taken cognizance of order XXI Rule 89 and 92 of the CPC and same are extracted, which reads as under;
89. Application to set aside sale on deposit.--(1) Where immovable property has been sold in execution of a decree, any person claiming an interest in the property sold at the time of the sale or at the time of making the application, or acting for or in the interest of such person may apply to have the sale set aside on his depositing in Court,--
(a) for payment to the purchaser, a sum equal to five per cent. of the purchase-money, and -7- W.P.NO.100009/2024
(b) for payment, to the decree-holder, the amount specified in the proclamation of sale as that for the recovery of which the sale was ordered, less any amount which may, since the date of such proclamation of sale, have been received by the decree-holder.
(2) Where a person applies under rule 90 to set aside the sale of his immovable property, he shall not, unless he withdraws his application, be entitled to make or prosecute an application under this rule.
(3) Nothing in this rule shall relieve the judgment-
debtor from any liability he may be under in respect of costs and interest not covered by the proclamation of sale.
92. Sale when to become absolute or be set aside.--(1) Where no application is made under rule 89, rule 90 or rule 91, or where such application is made and disallowed, the Court shall make an order confirming the sale, and thereupon the sale shall become absolute:
Provided that, where any property is sold in execution of a decree pending the final disposal of any claim to, or any objection to the attachment of, such property, the Court shall not confirm such sale until the final disposal of such claim or objection.
(2) Where such application is made and allowed, and where, in the case of an application-under rule 89, the deposit required by that rule is made within [sixty days] from the date of sale, [or in cases where the amount deposited under rule 89 is found to be deficient owing to any clerical or arithmetical mistake on the part of the depositor and such deficiency has been made good within such time as may be fixed by the Court, the Court shall make an order setting aside the sale]:
Provided that no order shall be made unless notice of the application has been given to all persons affected thereby:
[Provided further that the deposit under this sub-rule may be made within sixty days in all such cases where the period of thirty days, within which the deposit had to be made, has not expired before the commencement of the Code of Civil Procedure (Amendment) Act, 2002.] -8- W.P.NO.100009/2024 (3) No suit to set aside an order made under this rule shall be brought by any person against whom such order is made.
[(4) Where a third party challenges the judgment- debtor's title by filing a suit against the auction purchaser, the decree-holder and the judgment- debtor shall be necessary parties to the suit. (5) If the suit referred to in sub-rule (4) is decreed, the Court shall direct the decree-holder to refund the money to the auction-purchaser, and where such an order is passed the execution proceeding in which the sale had been held shall, unless the Court otherwise directs, be revived at the stage at which the sale was ordered]
11. Order XXI Rule 89 R/w Rule 92 of CPC provides timeline and last opportunity to the judgment debtor and any interested person to set-aside the sale auction. Judgment debtor's failure to file an application under Order XXI Rule 89 of CPC, within the stipulated time as state in Order XXI Rule 92 framed effectively precludes from challenging the auction sale at this juncture. Order XXI Rule 89 of CPC R/w Rule 92, which is culled up supra clearly mandate that an application to set- aside auction sale must be made within 60 days from the date of sale. From the records, it is clearly evident that, the Judgment debtor has not filed any application under Order XXI Rule 89 of CPC. The Judgment debtor action indicates a significant delay in addressing the matter. The petitioner/judgment debtor entered into an agreement for sale in the year 2011, but failed to honour the agreement. The -9- W.P.NO.100009/2024 respondent/Decree Holder did not opt to enforce the agreement by filing a suit for specific performance. The Decree for refund rendered by the Appellate Court in the year 2016 was challenged by the petitioner before this Court. Having failed before this Court, a Special Leave Petition was also filed.
12. The petitioner's actions throughout the proceedings demonstrate a pattern of unfair conduct and intentional delay. Initially, to avoid enforcement of the sale agreement, she transferred the property to her daughter through a registered sale deed on 24.01.2012. The petitioner acknowledged and admitted the payment of Rs.10,00,000/- in her written statement, yet failed to honor the agreement. The respondent, noting the petitioner's conduct, abandoned his claim for specific performance and instead sought refund of the money paid, which the petitioner also contested. Despite her counsel's claims of her being a poor lady, her persistent litigation up to the Supreme Court and her delay in addressing the decreetal amount, even waiting until after the auction sale in 2019 to offer payment, indicate a lack of bona fides. The petitioner's use of the advance amount paid by the agreement holder and her consistent contestation of the suit further underscore her unfair advantage and enrichment. Given these facts, no - 10 - W.P.NO.100009/2024 indulgence can be granted. The auction purchaser's rights, having deposited the bid amount in 2019, deserve protection to uphold the certainty and finality of a transparent auction process. Any leniency at this stage would not only prejudice the auction purchaser but also undermine the integrity of judicial sales, discouraging future participation and confidence in court- conducted auctions.
13. In the absence of applications under Rules 89, 90, or 91, the scope for setting aside an auction sale is significantly limited. The provisions are designed to provide a clear and final opportunity for interested parties to contest the sale within a specific timeframe. If this opportunity is not utilized, the sale becomes absolute and cannot be set-aside. The CPC mandates strict adherence to the timelines specified for filing applications to set aside an auction sale. Failure to comply with these timelines results in the sale being confirmed and becoming absolute. This strict adherence ensures procedural efficiency and fairness in the judicial sale process. Courts have limited discretion to intervene once the timelines have lapsed and no applications have been filed. This limitation is crucial to maintaining the finality and certainty of judicial sales, ensuring that the rights of auction purchasers are protected. The - 11 - W.P.NO.100009/2024 principle here is to avoid protracted litigation that could undermine the stability of property transactions conducted through judicial auctions.
14. The provisions aim to protect the rights of auction purchasers who have participated in a transparent process. Setting aside a sale without following the prescribed procedure would undermine the integrity of judicial auctions and discourage future participation. Auction purchasers invest considerable resources and rely on the finality of these sales; therefore, their interests must be safeguarded against undue challenges.
15. In the present case, the petitioner failed to file an application under Order XXI Rule 89 within the 60-day period. Her delay in addressing the matter and her unfair conduct throughout the proceedings preclude her from obtaining relief at this stage. The auction purchaser, having deposited the bid amount in 2019, has vested rights that deserve protection. Granting indulgence now would undermine the certainty and finality of the auction sale and adversely affect the auction purchaser. The court's responsibility is to ensure that the - 12 - W.P.NO.100009/2024 integrity of the auction process is upheld, and that the rights of bona-fide purchasers are not jeopardized by belated claims.
16. The scope for setting aside an auction sale is tightly constrained by the provisions of Order XXI Rules 89 and 92 CPC. In the absence of timely applications seeking to set aside the sale, the auction sale becomes absolute, and the courts are bound to confirm it. This framework ensures the finality of judicial sales and protects the rights of bona fide auction purchasers, thereby maintaining the integrity of the judicial auction process. The clear procedural requirements and timelines serve to prevent frivolous or undue challenges, providing a stable and reliable process for all parties involved.
17. While narrating facts, this Court has taken cognizance that, to avoid the enforcement of agreement, petitioner promptly transferred the property to her daughter under registered sale deed dated 24.01.2012. The payment of earnest money of Rs.10,00,000/- is in the year 2011 is acknowledged and admitted by petitioner in unequivocal terms in the written statement. The judgment debtors action not only indicates delay in addressing the matter, her conduct right from the date of agreement, is found to be grossly unfair and lacks - 13 - W.P.NO.100009/2024 bona-fides. Therefore, a short question that arises for consideration before this Court is whether petitioner's contention can be entertained at this stage. Auction purchaser right while depositing a sum of Rs.3,95,000/- in the year 2019, deserves protection at the hands of the Court. The auction process was conducted transparently and the present petitioner consciously remained absent and inspite of repeated notice, did not come forward to deposit decreetal amount. Granting indulgence, post auction, clearly undermines the certainty and finality of an auction sale. The petitioner has come forward to deposit the entire sale amount immediately after auction in the year 2019. Courts have to weigh the equity of both the parties. Petitioner who has continued to litigate and has utilized a huge sum of Rs.10,00,000/- paid in the year 2011 and has enriched herself by utilizing an advance amount paid by agreement holder, does not deserves any indulgence at this juncture.
18. Given the procedural lapse and there being significant delay on the part of judgment debtor in not depositing decreetal amount, at least immediately after auction sale, no indulgence can be granted. This is a fit case to reject the petitioner's claims as it would seriously and adversely affect respondent No.3/auction purchaser. This Court has to bear in - 14 - W.P.NO.100009/2024 mind that when a citizen participates in the auction conducted by Courts, intends to invest in immovable property. Any amount of monitory compensation will not compensate the title acquired by auction purchaser in a properly conducted auction sale. There is a steep escalation of price of agricultural lands. Therefore, if sale consideration along with moderate interest is returned to respondent No.3/auction purchaser, with the same amount, respondent No.3 cannot buy a portion of land, which was subject matter of auction. The sale price that was deposited by respondent No.3 in the year 2019 has significantly lost its money value. Therefore, equities lean more towards auction purchaser/respondent No.3 than the petitioner herein.
Writ petition being devoid of merits stands dismissed.
Sd/-
JUDGE AM