V S Rao, Krishna Dist 1 Other vs M/S J Finance Company, Krishna ...
2023 Latest Caselaw 939 AP

     THE HON'BLE SRI JUSTICE TARLADA RAJASEKHAR RAO

        CIVIL MISCELLANEOUS APPEAL No.160 OF 2016

JUDGMENT:

The 1st respondent herein is the plaintiff in the Suit O.S.

No.446 of 2009 filed suit for recovery of money basing upon the

promissory note and the said suit was decreed exparte. Later, the

1st respondent herein filed Execution Petition No.80 of 2011 for

realization of amount and got attached property of the appellants

herein who are the defendants in the suit under Order 21 Rule 54

of CPC. Later, the 1st respondent herein also filed an application

under Rule 64 and 66 respectively to Order the property attached

to be sold and sale proceeds to be paid to the decree holder and for

proclamation of sale by public auction. In the said petitions, the

appellants herein were given notices. Accordingly, the execution

Court has sold the property by conducting auction on 06.06.2013,

the same was confirmed on 15.09.2015 and sale certificate was

issued on 18.02.2016.

2. While the things stood thus, the appellants herein who are

the judgment debtors in Execution Petition filed an application

vide E.A. No.118 of 2015 with a prayer to permit to deposit the

warrant amount due as on 06.06.2013 and 5% of the bid amount

and appellant herein also filed EA No.131 of 2013 for setting aside

the sale under Order 21 Rule 89 of CPC instead of under Order 21

Rule 90 of CPC. The said EA 131 of 2013 came to be dismissed.

3. Aggrieved by the said order in E.A. No. 131 of 2013 dated

24.08.2015, the present Civil Miscellaneous Appeal came to be

filed and the appellant herein filed miscellaneous petition No.369

of 2016 in C.M.A. No.160 of 2016 for stay of all further

proceedings in E.P. No.80 of 2011 in O.S. No.446 of 2009 on the

file of the II Additional Senior Civil Judge, Vijayawada and the

same was discussed at para Nos. 13 and 14.

4. The EA No.131 of 2013 was dismissed on the ground "that

the petitioner was served with Rule 54 (1-A) notice but at no time,

any objection was raised till the sale was held and when the sale

was about to confirm only he came up with the present application",

on the said ground, the E.A. No.131 of 2013 in E.P. No.80 of 2011

was dismissed.

5. Assailing the said order, the present Civil Miscellaneous

Appeal came to be filed on the ground that the Court below has

not passed a reasoned order and the description of the boundaries

of west and north are wrongly mentioned which amounts to

defraud the appellant herein and there are certain irregularities in

publishing sale proclamation and property value was shown less,

and he relied on the Judgment in S.P. Changalvaraya Naidu (dead)

by Lrs. v. Jagannath (dead) by Lrs. and others1 for the proposition

non disclosure of relevant and material documents with a view to

obtain advantage amounts to fraud. Without considering the above

said facts, the learned Executing Court has dismissed the

application, hence, prayed to set aside the order in E.A. No.131 of

2013.

6. It is the contention of the appellant herein that the approach

of the executing court has resulted in securing a very low price

and the facts reluctantly proclaiming that prejudice was caused to

the judgment debtor who are appellants before this court, these

facts are not to be heeded and the sale held in contravention of the

law and procedure stated above is confirmed that there would be a

patent failure of justice and it is the duty cast upon this court to

prevent such failure of justice by annulling the same.

7. That the contention of the 1st respondent Decree Holder is

that under Order 21 Rule 90 no sale shall be set aside on the

ground of irregularity or fraud in publishing or conducting it

unless, upon the facts proved, the court should be satisfied that

the applicant has sustained substantial injury by reason of such

irregularity or fraud. And the appellant must go further and

(1994) 1 SCC 1

establish to the situation to the court that the material irregularity

or fraud as a resultant and substantial injury to the appellant even

if the appellant has suffered substantial injury by reason of the

sale this would not sufficient to set aside the sale unless

substantial injury has been occasioned by a material irregularity

or fraud in publishing or conducting the sale.

8. And also further contended that "no application to set aside

a sale under this rule shall be entertained upon any ground which

the applicant would have taken on or before the date by which the

proclamation of sale was drawn up and stated that a notice was

issued under Rule 54 as well as under 64 of Order 21 CPC. The

Petitioner has remained exparte and has not raised a little finger

about the sale and proclamation conducted by the court. Hence,

this contention raised by the appellant here is only for

procrastinate the execution proceedings.

9. And he also would contend that undervaluation by itself may

not be sufficient to infer fraud.

10. And also would contend that to set aside the sale on the

ground of certain irregularities in conducting the sale, there is

limitation prescribed under Article 127 to set aside the sale in

execution of a Decree including any such application by a

judgment debtor is 60 days from the date of sale. And he would

contend that the petitioner cannot put into force Order 21 Rule 90

as he has not filed the application to set aside the sale within 60

days and therefore he cannot pray any illegality, irregularity or

fraud. But in the instant case, the petitioner has not raised any

objection within the stipulated time as such the petition filed by

the petitioner itself barred by the limitation and prayed to dismiss

the appeal and relied on the judgment in Jagati Timmaraju v.

Uppuluri Brahmmanna2. And he also relied on the judgment in

Nerella Chinna Subba Rao v. Gunda Ankarao and another3 for the

proposition "the sale of the property in auction cannot be set aside

on the ground of material irregularities unless those grounds have

been specifically taken on or before the date on which the

proclamation of sale has been drawn up."

11. And he also relied on another judgment in Dipali Biswas and

others v. Nirmalendu Mukherjee and others4 for the proposition a

judgment debtor cannot be allowed to raise objections as to the

method of execution in instalments. After having failed to raise the

issue in earlier rounds of litigations, the appellant cannot be

permitted to raise it now. And he also relied on another judgment

1998 (3) ALD 404

2015 LawSuit(Hyd) 835 equivalent to 2015 (5) ALT 311

AIR 2021 Supreme Court 4756

in Dhirendra Nath Gorai v. Sudhir Chandra Ghosh & others 5

for the proposition that the party who received the notice of the

proclamation but did not attend at the drawing up of the

proclamation or did not object to the said defect cannot maintain an

application under order 21 rule 90 of the Code of Civil Procedure.

Even if he could, the sale cannot be set aside unless by the reason

of the said defect or irregularity he had sustained substantial

injury.

12. Admittedly the petitioner herein has not filed an application

to set aside the sale on the ground of fraud and irregularity within

the stipulated time as contemplated under Article 127 of the

Limitation Act and it is also admitted fact that the petitioner

herein has not deposited the amount as contemplated under

clause (a) of Rule 89 of Order 21 CPC.

13. At this juncture the learned counsel for the appellant would

submit that he has complied with clause (a) of Rule 89 of Order 21 CPC.

The sale proceed itself is compliance of clause (a) of Rule 89 of Order 21

CPC and he has also contended that the issue has been upheld by the

Hon'ble Apex Court in Special Leave Petition to Appeal in SLP (C)

No.6425 of 2016.

AIR 1964 SC 1300

14. Refuting the same, learned counsel for the 1st respondent would

contend that the appellant herein filed miscellaneous petition in CMAMP

No.369 of 2016 in the present CMA and the same has been dismissed by

this Court by an order dated 25.02.2016 and the appellant herein

carried out the matter to the Hon'ble Supreme Court and the Hon'ble

Supreme Court directed to deposit the sale amount of Rs.81,61,000/- in

a fixed deposit and also directed not to dispossess the judgment debtors

from the suit premises till disposal of the appeal pending before this

court and the sale proceed cannot be considered as compliance of Clause

(a) of Rule 89 of Order 21 CPC.

15. It is settled law to set aside the sale on the ground of fraud

or irregularity the petitioner has to state the substantial injury and

the same shall be filed before the proclamation of the sale wherein

the present case the application has been filed after two years of

the sale. And the sale certificate was issued on 08.02.2016 and the

sale was confirmed on 15.09.2015.

16. As per the judgment in Mohan Lal v. Hari Prasad Yadav and

others6 the Executive Court has no jurisdiction whatsoever to

entertain the application purported to be under Order 21 Rule 89

of the Code of Civil Procedure after the period of limitation

prescribed by Article 127 of the Limitation Act.

(1994) 4 SCC 179

17. As per the judgment of the Mahakal Auto Mobiles & others v.

Kishan Swaroop Sharma7 followed a judgment in Deshbadhu

Gupta v. NL Anand8, the Honble Supreme Court reiterated that at

each stage of the execution of the Decree when a property is sold,

it is mandatory that a notice should be served by the person whose

property has been sold in execution of the decree and any property

which is sold without notice to the person whose property is been

sold is a nullity. It is axiomatic from the facts that the notices were

served on the appellant/judgment debtor under Rule 54 and 64 of

Order 21 CPC under such circumstances the court should not

interfere on the ground of the irregularity in conducting the

auction.

18. From the above said law, the appellant is not entitled for any

relief. However, the executing court has passed a cryptic order

without assigning any reasons as indicated in para 4.

19. The Hon'ble Supreme Court in Ravi Yashwanth Bohir v.

District Collector, Raigad and others9." reiterated the requirements

of assigned reasons for conclusion by courts, the reason was heart

beat of every conclusion assigned in the order and without reasons

the order would become lifeless. The Hon'ble Supreme Court

(2008) 13 SCC 113

(1994) 1 SCC 311

(2012) 4 SCC 407

further reiterated that not only the administrative but also judicial

orders must be supported by reasons recorded in it, and while

deciding the issue, the court is bound to give its reasons for its

conclusion. From the impugned order, I found that there is

absolutely no discussion on the issue raised by the appellants

before the executing Court.

20. As contested by the appellant herein the executing court has

not assigned any reasons or the reason which is assigned is not a

valid reason for disposal of the present application. Hence, this

court is inclined to set aside the impugned order and remand back

the matter to adjudicate afresh without un-influencing any of the

observations made in this order.

21. This Civil Miscellaneous Appeal is allowed. However, no

costs.

As a sequel, pending miscellaneous petitions, if any, shall

stand closed.

________________________________________ JUSTICE TARLADA RAJASEKHARA RAO

Date: 16.02.2023 Harin

THE HON'BLE SRI JUSTICE TARLADA RAJASEKHARA RAO

C.M.No. 160 OF 2016

Date: 16.02.2023

Harin