Pran Mohini vs Sheela Verma & Ors
2011 Latest Caselaw 319 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

+      FAO 175/1990

                                          Reserved on: 14.01.2011
                                       Pronounced on: 20.01.2011
       PRAN MOHINI                                        ..... Appellant
                         Through       Mr. K.T. Anantraman, Adv
                   versus

       SHEELA VERMA & ORS                                 .... Respondents

Through Mr. A.K. Sakhuja, Mr. Sunil Dwivedi, Mr. Puneet Saini, Advs.

CORAM:

HON'BLE MR. JUSTICE MOOL CHAND GARG

1. Whether reporters of Local papers may be allowed to see the judgment?

2. To be referred to the reporter or not?

3. Whether the judgment should be reported in the Digest?

: MOOL CHAND GARG,J

1. This is an appeal by a mortgagor, who, in a suit for sale by the mortgagee, suffered a fraudulent ex-parte decree (since set aside). The appeal is resisted by the auction-purchasers, who are Respondents No.2 & 3 before this Court.

2. The final decree for sale was passed ex-parte on 2.05.1980 and the court auction sale is said to have been held on 30.05.1980, i.e., within a period of 28 days. From 30.05.1980, we have, per force, to go back by 15 days because Rule 68 of Order 21 CPC requires a period of at least 15 days after publication. This brings us to 15.05.1980. The auction-purchasers, without any proof of service of notice on the record, want the Court to believe that the whole process of filing the execution; serving the notice for settling the sale proclamation on the judgment-debtor who was admittedly in Madras; actually settled the sale proclamation; and then publishing its notice, was carried out just in a period of only 13 days between 2.05.1980 and 14.05.1980.

3. The background facts are, that on the basis of a simple mortgage of property No. J-3/39 Rajouri Garden, New Delhi, Suit No. 183/75 for sale was instituted on 21.07.1975 by the first respondent (plaintiff Sheela Verma) against the appellant (defendant Pran Mohini) for recovery of `39,849.80. The address of the defendant Pran Mohini was given in the plaint as "2A/71, Ramesh Nagar, Delhi".

4. Summons could not be served, and publication was done in the Hindustan Times (Delhi Edition) on 21.11.1975. This publication was done with the address as 2A/71, Ramesh Nagar, Delhi. Though as established in the evidence recorded during the proceedings for setting aside the ex parte decree, the plaintiff was aware since 1970 of the Madras address of the defendant where she was residing, but this address was not disclosed to the Court and proceedings were taken ex parte. Preliminary decree under Rule 4 of Order 34 CPC was passed ex parte on 15.01.1976 by Shri H.K.S.Malik, ADJ.

5. On 31.07.1979, application for final decree was filed by plaintiff Sheela Verma. Here too, as noted in the order dated 27.08.1983 setting aside the ex parte decree, the plaintiff was corresponding with the defendant at the Madras address, but neither disclosed to the Court the Madras address of the defendant nor disclosed to the defendant the pendency of the court proceedings in Delhi.

6. An application for substituted service in the final decree proceedings was moved on 19.12.1979. Again, there was no reference to the Madras address. A final decree for sale under Rule 5 of Order 34 CPC was passed ex parte on 2.05.1980 by Shri Jagdish Chandra, as the then ADJ, Delhi.

7. No one knows what exactly transpired in the period after 2.05.1980 as the record of the Execution proceedings is said to have been destroyed. But the mortgaged property is stated to have been sold in court auction on 30.05.1980, and purchased by Respondents No.2 & 3 Devinder Singh and Erika for ` 1,29,000/-, who are the Germany based son and daughter-in- law of the tenant Mohinder Kaur in the property.

8. Thereafter, the defendant Pran Mohini filed an application under Order 9 Rule 13 CPC on 19.07.1980 and also moved an interim application for stay of confirmation of sale. By order dated 4.08.1980, confirmation of sale was stayed by the ADJ till the disposal of the application and it is not clear if it was vacated, and when. Objections to the sale under Order 21 Rule 90 CPC also are said to have been filed simultaneously in 1980.

9. The application under Order 9 Rule 13 CPC for setting aside the ex parte decree was allowed and the decree was set aside by a detailed order on 27.08.1983 by the ADJ. There is also an order dated 7.10.1983, which records that the auction purchasers (Respondents 2 & 3 before this Court) sought time to file an appeal against the order dated 27.08.1983 setting

aside the ex parte decree. However, it is not known whether any appeal was filed, and if so, what happened to it.

10. On 28.11.1983, there was an out of court settlement between the appellant Pran Mohini (defendant-mortgager) and the Respondent No.1 Sheela Verma (plaintiff-mortgagee) whereby the claim of the DH was satisfied for ` 50,000/-. Money was paid. In fact, a re-conveyance deed was also executed and registered in favour of the appellant on 30.11.1983. Since nobody appeared for the plaintiff-mortgagee, the 1975 mortgage suit (where the preliminary and final decrees had been set aside on 27.08.1983) was dismissed in default on 14.12.1983.

11. Vide impugned order dated 10.05.1989, the subject matter of the present appeal, Shri G.S. Dhaka, ADJ, passed an order confirming the sale of the mortgaged property in favour of the auction purchasers being respondent Nos. 2 and 3. It was observed that the application filed by the appellant under Order 21 Rule 90 CPC was not pressed by her. It is against the aforesaid order that the appellant Pran Mohini has filed the present appeal.

12. On 7.07.1989, a Sale Certificate was issued. On 11.09.1990, the present appeal was filed against the order dated 10.05.1989 confirming the sale. The delay in filing the appeal was condoned by this court by order dated 16.11.1999 passed in CM No 439/1998.

13. It is the case of the appellant that the ex-parte Decree in this case was obtained by the Mortgagee/DH by playing a fraud on the Court inasmuch as no effort was ever made by the Mortgagee/DH to serve the appellant in the suit or in respect of other proceedings at her correct address at Madras despite the decree holder having knowledge about it. As such said ex-parte decree as well as all other proceedings arising therefrom including auction sale are void ab-initio and are liable to be set-aside. While setting aside the ex-parte decree her allegations that the said decree was obtained by the DH by playing a fraud upon the Court without serving notice upon the appellant at her correct address, has been accepted by the Court. In that view of the matter, it is submitted that the auction sale should also have been set aside rather having confirmed. Moreover, when application filed by the appellant under Order 21 Rule 90 CPC for setting aside the sale on the ground of material irregularity and fraud was pending. It is stated that the impugned order without disposing of her aforesaid application is bad in law.

14. It will not be out of place to mention that besides these objections the appellant also filed a suit for cancellation of the sale document registered as Suit No.3099/1990 after setting aside of the ex-parte decree which has been dismissed in default. According to the appellant this is of no consequence in view of pendency of her application under Order 21 Rule 90 CPC.

15. To appreciate the mind of Ld. ADJ who passed the impugned order, it would be appropriate to take note of the relevant portion of the order:

"In that suit a final decree was passed on 02.05.80 by Shri Jagdish Chandra, the then Addl. District Judge, Delhi and the mortgaged property was put to auction. This property was actually sold in auction on 30.05.80 by the Court auctioneer and the applicant/ auction purchaser purchased this property for ` 1,29,000/- in said auction and deposited the amount as per rules. Thereafter, the JD filed an application under Order 9 Rule 13 CPC on 19.07.80 and also moved an interim application for stay of confirmation of sale and the confirmation sale was accordingly stayed till disposal of the application. The ex-parte final decree was however, set aside by order dated 27.03.83 and thereafter as a result of compromise, the plaintiff did not proceed with the suit. Application under Order 21 Rule 90 CPC was not pressed by the JD at that time except for interim stay. Hence, now the auction purchasers have prayed that the sale be confirmed and a certificate to this effect may be granted to them.

3. Ld. counsel for the applications has contended that since application under order 21 Rule 90 CPC was not pressed by the JD, therefore, the sale has become absolute and needs to be confirmed. He also contended that any objections, if any under Order 21 Rule 90, stood waived when no issue was claimed by the JD on this point and, hence, the Court cannot refuse to confirm a sale on the plea of the JD that the suit amount stood paid to the decree holder. He has cited before me AIR 1967 SC 608.

4. I have gone through the record in the light of the submissions made before me and I find force in the contentions of counsel for the appellant/auction purchasers. It cannot be denied that objections under Order 21 Rule 90 CPC were not pressed by the JD at any stage after obtaining interim stay against confirmation of sale till now nor the JD get the auction sale set aside as per rules. I agree with Ld. Counsel for the applicants that simply because the JD subsequently paid the decreetal amount to the decree holder does not affect the confirmation of sale because it became absolute from the date of auction and was not get set aside.

5. In AIR 1967 Supreme Court 608, the question before Hon‟ble Judge was that whether a sale of immovable property in execution of a money decree ought to be confirmed when it is found that the ex-parte decree which was put into execution has been set aside subsequently,

and the answer of the Hon‟ble Judge was in affirmative and it was held as under:

".....it must be held that the applicants-auction purchaser was entitled to a confirmation of the sale notwithstanding the fact that after the holding of the sale the decree had been set aside. The policy of the legislature seems to be that unless a stranger auction purchaser is protected against the vicissitudes of the fortunes of the suit, sales in auction would not attract customers and it would be to the detriment of the interest of the borrowers and the creditor alike if sales were allowed to be imputed merely because the decree was ultimately set aside or modified."

The sale in that appeal was accordingly confirmed.

6. The above-said authority applies fully to the facts of the present case.

8. In the present case, as already observed, the objections were not pressed by the JD and, hence, circumstances, the sale has become absolute and court cannot refuse to confirm the same.

9. As a result of above discussions I allow the application of the respondent No. 2 and 3 under ex-parte decree which has been decided and confirm the sale of property No.33/39, Rajouri Garden, New Delhi dated 30.05.1980. A certificate to this effect be accordingly issued to the applicants/ auction purchasers."

16. It is the submission of the appellant that the observation made in the aforesaid order, that the appellant had not pressed the application under Order 21 Rule 90 CPC are contrary to record inasmuch as the appellant never made such statement, rather she had been continuously fighting the battle. Her application under Order 9 Rule 13 CPC based upon her allegations that an ex-parte decree was obtained by the respondent by playing a fraud upon the Court has been accepted by the Court. There is nothing on record to show that either a notice of attachment of the suit property or for proclamation of sale was ever served upon the appellant. The appellant had been opposing the sale confirmation throughout on all subsequent dates. In this regard reference has also been made to the various orders passed by the executing court in execution case No.42/81 dealing with the issue of confirmation of the sale. The order passed on this application on 04.08.1980, 29.08.1980, 10.09.1980 which are relevant as well as the order dated 30.08.1983, 07.10.1983 are reproduced hereunder:

"Pr. Shri M.L.Khattar, Adv. for applicant (0.9 R.13 CPC) Sh. Promod Ahuja, Adv. for respondent-D.H.

Reply not filed. Now the reply be filed to the main application as also to the stay application on 29.08.1980. In the meantime confirmation of the sale shall not take place.

Announced.

             4.8.1980
                                            Addl. District Judge: Delhi


       Pr:     Sh. S.C.Kumar, S.A. of applicant
               Sh. Promod Ahuja, Adv. for respondent - D.H.
               Sh. H.K. Sakhuja, Adv. for auction purchaser.

Reply not filed by the respondent - D.H. It be filed on 10.09.1980.

Copy of the stay application be also given to the counsel for auction purchaser who shall file reply thereto on the date fixed. In the meantime auction sale shall not be confirmed.

ADJ/29.08.1980

Pr. Sh. S.C.Kumar, Special Attorney of the applicant None for the D.H.

Shri H.K. Sakhuja, Adv. for auction purchaser

Now for filing of reply by the respondent-decree holder as also for reply to the stay application by the auction purchaser to come up on 1.10.1980.

ADJ/10.09.1980.

Pr. Shri K.L. Sharma, Adv. for plaintiff who has filed his vakalatnama today.

Shri M.L.Khattar, Adv. for JD/deft.

Previous costs of ` 300/- as demanded on 27.08.53 be paid by the deft/JD to plaintiff/DH which shri K.L. Sharma has accepted under protest. As the costs has been paid, ex-parte decree already stands set aside. Registered. Deft. Is allowed to file w/s and to come up for the same on 7.10.83.

Regarding the proceedings for confirmation of sale in execution proceedings on 1.9.81 I had fixed 17.9.81 and had ordered to put up the file along with the connected misc. case No. 42/81 but after that due to slackness of concerned staff, it was not done. He is warned for future. As the suit has already been restored, proceedings regarding sale/confirmation are also to be done. Now, to come up on 7.10.83 for hearing regarding sale/confirmation of sale.

ADJ/30.08.83

Pr: Shri P. Ahuja, Adv. for plaintiff.

Sh. M.L. Khattar, Adv. for deft.

Sh. H.K. Sakhuja, Adv. for auction purchaser

Deft. Counsel wants time for w/s as same is not ready. Strongly opposed. To come up for w/s on 14.12.83 on payment of ` 100/- as costs to plaintiff by deft.

ADJ/7.10.83

Counsel for auction purchaser wants some date regarding hearing and the confirmation matter because he wants to file appeal against the order dt. 27.08.83. Not opposed by plaintiff but opposed by counsel for deft. In the interest of justice, to come up for hearing regarding sale/confirmation of sale on 14.12.83 on payment of ` 30/- as costs to deft. by auction purchaser.

ADJ/7.10.83"

17. The above orders show that the plaintiff, auction purchasers and the appellant were all present before the Court below. Thus the question of the appellant having not pressed her application under Order 21 Rule 90 does not arise. There is also no record to show if any appeal was filed by the auction purchasers against the order setting aside the ex-parte decree in the suit. It appears that on 14.12.1983 nobody appeared for the DH/plaintiff and therefore the suit itself was dismissed in default probably because the DH having received the payment of decretal amount lost interest in the suit. However the appellant who wanted to oppose the sale confirmation caused appearance on 20.07.1984 when the matter was fixed for hearing arguments on the issue of sale confirmation. This shows that the appellant/ judgment debtor never wanted auction sale to be confirmed. At this stage it would be relevant to take note of the order dated 12.01.1984 which reads as under:

"Pr: Sh. M.L. Khattar, Adv. for deft.

Sh. H.K. Sukhija, Adv. for auction purchaser.

Suit has already been dismissed in default on 14.12.83. Counsel for deft. wants date because he wants to seek further instructions from his client regarding confirmation of sale. Strongly opposed. In the interest of justice, case is adjourned on payment of ` 100/- as costs to auction purchaser by deft and to come up for payment of costs and hearing as regarding confirmation of sale and for further proceedings on 2.3.84.

ADJ/12.01.84."

18. Even after this date the appellant had been appearing on each and every date of hearing to oppose the sale confirmation which is evident even from her written arguments filed by her opposing the sale confirmation vide impugned order.

19. In fact, after the tenant in the suit premises, namely, Smt. Mohinder Kaur, mother and mother in law of the auction purchasers, stopped tendering the rent to the appellant, the appellant came to know about the ex-parte preliminary decree as well as the final decree. On her application the confirmation of the impugned auction sale was stayed as aforesaid. The ex-parte proceedings were also set aside vide order dated 27.08.1983. The appellant thereafter also entered into an out of Court settlement with the decree holder on 28.11.1983 and paid a sum of `50,000/- to the said decree holder. The appellant and DH then submitted an application dated 28.11.1983 informing the Executing Court that they had settled the matter out of Court and that the decree holder also executed a re-conveyance deed on 30.11.1983. It is submitted that the order dated 27.08.1983 was never challenged by the auction purchaser and thus it became final. It is submitted that in view of the aforesaid the confirmation of the sale could not have been granted. However the request of the auction purchasers has been allowed by the Executing Court vide order dated 10.05.1989 which is the subject matter of this appeal. It is submitted that the Executing Court has taken an erroneous view that the appellant had not pressed her application under Order 21 Rule 90 CPC despite the fact that no such request was ever made by the appellant. In the facts of this case, reliance by the Executing Court upon a judgment of the Hon‟ble Supreme Court in the case of Janak Raj Vs. Gurdial Singh and Anr. 1967 SC 608 is misplaced. Rather para 6 of that Judgment comes to the rescue of the appellant which has been simply ignored by the ADJ. It is stated that once the ex-parte decree against the appellant was set aside on the ground of fraud, there is no reason for her to have withdrawn her application, more so when no such order is available on record reflecting withdrawal of her application under Order 21 Rule 90 CPC. It is submitted that while the first respondent had no interest left in the matter and therefore is not contesting the appeal, but the auction purchasers namely respondent No.2 & 3 alone are contesting the appeal. It is submitted that para 6 at page 610 of the aforesaid judgment recognizes setting aside of a mortgage decree

due to lack of notice or where no valid decree was in existence on the date of sale.

20. According to the appellant both the preliminary decree as well as final decree passed by the Trial Court in this case were void ab-initio and were a nullity since they were passed without notice to the appellant without any opportunity of being heard and therefore voilative of Section 27 read with Order 5 and Rule 1 & 20, and that of Order 21 Rule 54 and 66 of the CPC.

21. It may also be observed that the ground taken for setting aside the ex-parte decree was that the service of the plaint was not effected upon the appellant/ judgment debtor inasmuch as a false address was given by the decree holder of Delhi knowing fully well that the Delhi house had been sold by her as far back as in 1965 and she had started residing in Madras and her address at madras was also known to the decree holder. The aforesaid case of the JD was accepted by the Court while setting aside the ex-parte decree. Some observations made by the Addl. District Judge in the order allowing the application relevant for appreciating the contentions of the JD about practicing fraud on the Court as mentioned in para 9 & 12 are being reproduced hereunder:

"9. According to the defendant-applicant she came to know regarding the decree on 19.07.80. According to the plaintiff - DH the defendant was properly served before the preliminary decree and before final decree and she had knowledge of the decree and the proceedings and the application is time barred. Marked „A‟ is the notice dated 27.07.72 purported to have been issued by Shri K. Rajendra Chowdhary, Advocate, Supreme Court of India, New Delhi, on behalf of Shiela Verma and in it address of Pran Mohini is written of Madras. As this document has only been marked and has not been exhibited I am ignoring this document. Ex.AW2/A is the air mail envelope on which address of Mrs. P.M. Arora (defendant) is written of Madras. The seal of the post office is there. It shows that this envelope was sent to the defendant on her Madras address. Ex.PW2/B is the letter dated 29.04.70 written by Shiela Verma plaintiff to the defendant. This is a letter on the pad of Cambridge Foundation School - This letter bears the signatures of Shiela Verma at point „B‟. This letter Ex.AW2/B coupled with the envelope Ex.AW2/A shows that plaintiff was knowing Madras address of the defendant on 29.04.1970 and was having correspondence Ex.PW2/C is another letter dated 12.11.1979 written by the defendant to the plaintiff in which she had written that she was surprised to receive registered envelope from her which contained only blank sheets of paper. That registered envelope has also been filed by the defendant- applicant which is marked „X‟. Ex.AW2/F is the letter dated 19.11.1979 written by Shiela Verma plaintiff to the defendant

Pran Mohini at her Madras address. Ex.AW2/G is another letter dated 11.12.1979 written by the defendant to the plaintiff in which she has mentioned in addition to other facts also her Madras address. This letter shows that the letter was sent to the plaintiff by the defendant from her Madras address. The evidence of AW.2 Pran Mohini and Ex.AW2/B, AW2/C, AW2/F, [email protected]/G and other evidence on record clearly show that the plaintiff was knowing the address of the defendant since 1970 as of Madras and plaintiff was having correspondence with the defendant at her Madras address.

12. Before the preliminary decree, summon was ordered to be issued to the defendant for 25.08.75. Unfortunately, it appears that no summon was issued to the defendant for 25.08.75. On the contrary, a show-cause notice was issued due to slackness of the Ahlmad and he only issued show cause notice to the defendant for 25.08.75. The report on the show- cause notice shows that the process-server was informed on the spot that the defendant had sold the house and was not living in house No. 2A/71, Ramesh Nagar, Delhi. In the plaint, the address of the defendant is mentioned as house no. 2A/71, Ramesh Nagar, Delhi. According to the report of the process- server, referred above, it is quite clear that in the year 1975 the defendant was not living at the address given in the plaint and the house had been sold by the defendant. Further the court ordered for issuing of the summon to the defendant for 25.09.75 but unfortunately again due to negligence of the Ahlmad, proper summon was not issued and only show-cause notice was issued. This show-cause notice was also received back unserved by the court and the report of the process server shows that he went on the spot on 22.09.75 and he found the house locked. When the defendant was not served on the address mentioned in the plaint, the plaintiff moved an application u/o 5 R.20 Cpc in which it is alleged that in the mortgage deed the address of the defendant is given as 2A/71, Ramesh Nagar, New Delhi and this is her last known address and at present Pran Mohini defendant in the suit is not living in the aforesaid address and the present postal address of the defendant is not known to the plaintiff. An affidavit was also filed in support of the application and ultimately under the orders of the Court, publication was done, in the Hindustan Times on 21.11.75. This publication was done at the address of house No. 2A/71, Ramesh Nagar, Delhi and it was done for 24.11.75. The Court accepted the service by publication and passed ex-parte decree on 15.01.76. From the evidence of AW.2 Pran Mohini and from the documentary evidence on record, it is quite clear that the plaintiff was knowing the Madras address of the defendant since 1970. It appears that in the year 1975 when the application for substituted service was moved by the plaintiff, the plaintiff was knowing the Madras address of the defendant but intentionally she suppressed this material fact and got the publication done of the defendant on her Ramesh Nagar address which house the defendant had already sold and where the defendant was not residing at the time of institution of the suit and also at the time of the

publication in the newspaper. Under Rule, the newspaper is also sent under certificate of posting to the party concerned but in the file there is no such U.P.C. to show that the paper was sent to the defendant. The newspaper was published in New Delhi and the defendant was residing at Madras, In the circumstances of this case, the possibility that the defendant might not have read the newspaper cannot be ruled out."

22. Further observations which are also relevant are also reproduced:

"Plaintiff in her affidavit dated 20.01.1980 stated that she had gone through and understood the contents of the application u/o 5 R 20 CPC and the contents of the same are correct to her knowledge and belief. In this way on 20.01.80 Shiela Verma, prima facie gave a wrong affidavit. She was knowing Madras address of the defendant on 20.01.80 and also prior to it but appears that she intentionally concealed this fact so that the defendant could not be served on her correct address. According to the case of the plaintiff herself, the son of the defendant had come to her in the year 1979. It appears highly improbable that in case defendant‟s son had come to her in the year 1979 and had discussed regarding the property in dispute, she was not having Madras address of the defendant. The evidence on record clearly shows that house No. 2A/71, Ramesh Nagar, Delhi was sold by the defendant in the year 1965 and she shifted to Madras in the year 1965 and since then she along with her husband are practicing at Madras. In this case it has not been proved that the defendant was having knowledge of the proceedings of the suit. The case of the defendant that she came to know regarding the ex-parte decree on 19.07.80 appears to be probable and reliable."

23. From the aforesaid order, it becomes apparent that the decree holder was fully aware about the appellant having shifted to Madras. He had been corresponding with the appellant at Madras address. In this regard letters Ex. AW 2/B, envelope Ex.AW 2/A, another letter Ex.PW2/C have been proved on record by the appellant. During the proceedings undertaken under Order 9 Rule 13 CPC. The record also goes to show that the appellant even received blank envelope from the decree holder at her Madras address and that the decree holder also wrote another letter dated 19.11.1979 to the appellant at her Madras address. Once the four letters dated 29.04.1970; 12.11.1979; 19.11.1979 and 11.12.1979 were exchanged, for the decree holder to still not give the details of the appellant‟s Madras address to the court, to not inform the appellant of the pendency of the suit and, to top it all, make a prayer to the court in application dated 20.01.1980 that the address is not known and there should be substituted service, was an outright fraud. It was a fraud that goes to the root of the matter. It is, thus, clear that the decree holder

knowing fully well that the appellant had left Delhi and was residing at Madras filed an application under Order 5 Rule 20 CPC for effecting service upon the appellant at her Delhi address i.e. the address given as 2A/71, Ramesh Nagar, New Delhi as her last known address even though, the respondent/DH knew fully well that the appellant had shifted to Madras and, therefore, the obtaining of an order for effecting service on the appellant by way of publication at Ramesh Nagar, Delhi address was a fraud played upon the Court which resulted in passing of the impugned ex parte decree and continuation of other proceedings against the appellant which are all vitiated in view of the fraud played upon her. Thus, the decree dated 2.05.1980 would fail not only for want of service but also because of fraud. It would be a nullity. Therefore, on the facts of this case, it is not only the ex-parte decree that was set aside but a decree that was obtained by fraud and any court auction in pursuance thereof has to be considered in that light.

24. It is also submitted that their intention to oppose the sale confirmation is writ large in view of the presence of the appellant before the Court on various dates even after setting aside the decree, right from 20.07.1984 till the date of passing the impugned order. This shows that there was no occasion for her to withdraw her application filed under order 21 Rule 90 CPC to go as not pressed, the only reason given by the Addl. District judge in the impugned order.

25. In her written arguments, the appellant has thus pleaded that the auction sale which has been confirmed by the Addl. District Judge vide impugned order ought to have been set aside, more so because:-

(i) That there is a judicial finding in this case the appellant (defendant/JD) was never served with the summons in the suit either in person or by a valid substituted service. Thus there is ex-facie violation of the mandatory provisions of Section 27, Order V Rules 1 and 20, O21 rule 54 and 66 of CPC besides the principles of natural justice 'Audi Altrem Partem'

(ii) It is impermissible in law to pass any order affecting the civil rights of a person behind his/her back i.e. without notice and an opportunity to be heard, and any order to the contrary would be a nullity.

(iii) No notice was given to the defendant (appellant herein) either before the passing of the preliminary decree or the final decree, attachment of the property, proclamation of the sale and of the Auction sale of the property/ fixing of the reserve price etc. These are mandatory requirements

and their non compliance will amount to material irregularities vitiating the auction sale ab initio.

(iv) When the decree is a nullity, no one including the auction purchaser, is protected. It is significant that the respondent No.2 & 3, being aware of this position had got themselves imp leaded and resisted the challenge to the ex-parte decree and ultimately accepted the Trial Court‟s order dt. 27.08.1983.

(v) Any claim based on a void sale can be resisted even without having the sale set aside. When there is a proven fraud in the matter of obtaining the decree/ order of auction sale even an application under Order 21 Rule 90 is not required and the court can set aside the sale under its inherent powers. In any case the filing of such an application on behalf of the appellant has not been disputed by the respondents.

(vi) It is the submission of the appellant that any decree including any consequential action obtained by playing fraud on the Court vitiates all the proceedings which results in the decree and its execution. Such decree would not even protect a bona fide auction purchaser. Reference has been made to the following judgments:

               (i)     Mahabir Ram Vs. Rambahadur Dubey AIR 1923
                       Patna 435
               (ii)    Bipin Behari Bejali Vs. Kanthichandra Mandal
                       (1913) 18 IC (Cal) 715
               (iii)   Bhojai Vs. Salim Ullah AIR 1967 AII 221
               (iv)    T.Vijenderadas & Anr. Vs. M. Subramanian &
                       Ors., (2007) 8 SCC 751.

26. It is also stated that in the instant case even otherwise there was a collusion between the decree holder and the auction purchaser inasmuch as the auction purchaser are the daughter and son-in-law of the tenant in the impugned property who were at all times aware of the fact that the appellant/defendant were proceeded ex-parte on the basis of a wrong address.

27. It is stated that once the application of the appellant was pending under Order 21 Rule 90 CPC it was impermissible in law to deal with the application of respondents No.2 & 3, the auction purchasers, for confirmation of the auction sale without disposing of the aforesaid application. This is clear by reading of Order 21 Rule 90 CPC. It is submitted that the impugned order itself records the factum of the pendency of the application under Order 21 Rule 90 read with Section 151 CPC. The pendency of the application was also acknowledged by the

auction purchaser in their objections to the application filed by the appellant.

28. It is also stated that when an ex-parte decree is set aside parties stands relegated to the position that prevailed prior to the passing of the said decree. In such circumstances, the auction sale will be liable to be set aside without resort to provisions of Order 21 Rule 89-92. It is further submitted that even otherwise the recovery of the suit amount through the sale of mortgaged property which is governed by the provisions of Order 34 was not in accordance with law inasmuch as the Trial Court had failed to specify and communicate to the Appellant herein (Mortgagor/defendant/judgment debtor) in terms of Order 34 Rules 2 & 4 CPC either the amount or the time limit by which she was required to deposit in the Court the decretal amount and incidental amount to save her property from being sold, which vitiates all further actions.

29. It is submitted that if time would have been granted by the Court for deposit of decretal amount in Court in terms of Order 34 Rule 3 & 4, it was open for the appellant to comply with those directions and to protect her property as this right was available to her till confirmation of the auction sale. It is submitted that by refusing to set aside the sale, this legal option available to the appellant has been nullified. It is also submitted that at the most the appellant was required to deposit 5% of the purchase money for pursuing his application for setting aside the sale. In this case, the tenant in possession of the suit property since the year 1980 is the mother and mother in law of the auction purchasers who is enjoying the same without payment of any money, whereas the appellant has already paid a sum of `50,000/- towards settlement of the decretal amount to the DH in 1983 itself and as such even that condition on behalf of the appellant stood virtually satisfied and in any case she is always ready and willing even to deposit a further sum of 5% of the sum equivalent to the purchase money for which she has also made an application in this court.

30. Respondents have also filed written submissions. They have submitted that:

(i) The appeal filed by the appellant under Order 43 Rule 1 CPC is not maintainable. Reliance is placed upon a judgment of this Court reported as 16 DLT (1979) 109 DB. Reference has also been made to orders passed by this Court on 22.11.2010 in this case which order is as follows:

"...That going through the provisions of the order 43 Rule

1. The appeal filed by the appellant in so far as the order

in question confirming the sale is not maintainable, whereas the appeal would have been maintainable in case there is an order passed against the appellant dismissing his petition under Order 21 Rule 90 CPC which appears to have not been decided by the ADJ though according to the appellant the order tantamount to deciding his objections also."....

(ii) The entire order sheet of the Trial Court does not show that the application filed by the appellant under Order 21 Rule 90 CPC was kept pending. On the contrary there is a clear finding by the Trial Court as recorded in the order dated 10.05.1989 that the appellants had not pressed their application under Order 21 Rule 90 CPC.

(iii) The impugned order passed by the Trial Court is not in accordance with the judgment delivered by the Hon‟ble Supreme Court in AIR 1967 SC 608 as well as the judgment of this Court in 1987 (1) CSC 146 and 153 (2008) DLT 418. It is submitted that the sale of property by Court auctioneer cannot be negatived after the lapse of 30 years of the auction.

31. It is submitted that after the aforesaid order as many as 48 hearings were conducted but at no stage the appellant ever pressed her application under Order 21 Rule 90. It is submitted that despite orders passed by the Trial Court dated 07.04.1989 giving an opportunity to the parties to file written arguments on 24.04.1989 nothing has been stated by the counsel for the appellant regarding her application under Order 21 Rule 90 CPC.

32. It is also the case of the respondent that right from beginning the appellant has been conducting the proceeding fraudulently and dishonestly inasmuch as:

(i) She filed this appeal after a gap of 16 months of the impugned order.

(ii) She filed a civil suit no. 3099/90 seeking a declaration to the effect that the sale certificate dated 07.07.1989 be declared as null and void. He also claimed that the auction dated 30.05.1980 be also declared as nullity. It is stated that while obtaining the stay order in this appeal the factum of filing the civil suit was not disclosed.

(iii) The appellant claiming himself as the owner of the property filed a petition under Section 14(1)(e) and 14(1)(a) of the Delhi Rent Control Act against the tenant knowing fully well that the suit property has been sold in auction.

(iv) The appellant is guilty of forum shopping inasmuch as he has approached to different for a for virtually the same relief without revealing the facts of this case and as such the conduct of the appellant amounts to forum shopping and cannot be

permitted. Reference has been made to a judgment of the Hon‟ble Supreme Court reported in 2009 (2) SCC 784 and 140 (2007) DLT 790. It is, thus, prayed that the present appeal be dismissed with heavy costs.

33. In these circumstances, the issues which requires consideration by this Court would be:

(i) The factum of pursuing of the application under Order 21 Rule 90 CPC by the appellant or its withdrawal or its not being pressed by them as observed by the Trial Court.

(ii) The effect of pronouncement of the judgment of the Hon‟ble Supreme Court in the case Janak Raj Vs. Gurdial Singh and Anr. 1967 SC 608 in the facts of this case.

(iii) The effect of the order setting aside the ex-parte proceedings against the appellant and to appreciate his contentions that the ex-parte decree was set aside by holding that a fraud was played upon the Court and thereby the entire proceedings were void ab-initio and its effect on the auction sale.

(iv) The effect of filing a civil suit for similar relief which stands dismissed.

(v) The effect of filing eviction suit against the tenant in 1984.

34. At the outset, I may refer to the judgment of the Hon‟ble Supreme Court in the case of Janak Raj Vs. Gurdial Singh and Anr. AIR 1967 SC

608. The facts of that case as noted by the Apex Court are:

"2. The question involved in this appeal is, whether a sale of immovable property in execution of a money decree ought to be confirmed when it is found that the ex parte decree which was put into execution has been set aside subsequently.

3. The facts are simple. One Swaran Singh obtained an ex parte decree on February 27, 1961 against Gurdial Singh for `519/-. On an application to execute the decree, a warrant for the attachment of a house belonging to the judgment-debtor was issued on May 10, 1961. At the sale which took place, the appellant before us became the highest bidder for `5,100/- on December 16, 1961. On the 2nd of January 1962, the judgment-debtor made an application to have the ex parte decree set aside. On January 20, 1962 he filed an objection petition against the sale of the house on the ground that the house which was valued at `25,000/- had been auctioned for `5,000/- only and that the sale had not been conducted in a proper manner inasmuch as there was no due publication of it and the sale too was not held at the proper hour. By an order dated April 19, 1962, the executing court stayed the execution of the decree till the disposal of the application for setting aside the ex parte decree. On October 26, 1962 the ex parte decree against the defendant-judgment-debtor was set aside. On

November 3, 1962 the auction purchaser made an application for revival of the execution proceedings and for confirmation of the sale under O. XXI, r. 92 of the Code of Civil Procedure. On November 7, 1962 the judgment-debtor filed an objection thereto contending that the application for revival of execution proceedings was not maintainable after setting aside the ex parte decree and that the auction purchaser was in conspiracy and collusion with the decree-holder and as such not entitled to have the sale confirmed. It is to be noted here that the case of collusion was not substantiated. On August 31, 1963 the executing court over-ruled the objection of the judgment-debtor and made an order under O. XXI, r. 92 confirming the sale. This was affirmed by the first appellate court. On second appeal to a single Judge of the Punjab High Court, the auction purchaser lost the day. An appeal under Clause 10 of the Letters Patent in the Punjab High Court met the same fate. Hence this appeal."

35. It would now be also relevant to take note of paragraph 4 & 5 of this judgment:

"4. Before referring to the various decisions cited at the Bar and noted in the judgment appealed from, it may be useful to take into consideration the relevant provisions of the Code of Civil Procedure. So far as sales of immovable property are concerned, there are some special provisions in O. XXI beginning with r. 82 and ending with r. 103. If a sale had been validly held, an application for setting the same aside can only be made under the provisions of Rules 89 to 91 of O. XXI. As is well-known, r. 89 gives a judgment-debtor the right to have the sale set aside on his depositing in court a sum equal to five per cent. of the purchase money fetched at the sale besides 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 sale, have been received by the decree- holder. Under sub-r. (2) of r. 92 the court is obliged to make an order setting aside the sale if a proper application under r. 89 is made accompanied by a deposit within 30 days from the date of sale. Apart from the provision of r. 89, the judgment-debtor has the right to apply to the court to set aside the sale on the ground of a material irregularity or fraud in publishing or conducting it provided he can satisfy the court that he has sustained substantial injury by reason of such irregularity or fraud. Under r. 91 it is open to the purchaser to apply to the court to set aside the sale on the ground that the judgment- debtor had no saleable interest in the property sold. Rule 92 provides that where no application is made under any of the rules just now mentioned or where such application is made and disallowed the court shall make an order confirming the sale and thereupon the sale shall become absolute. Rule 94 provides that where the sale of immovable property has become absolute, the court must grant a certificate specifying the property sold and the name of the person who at the time of sale was declared to be the purchaser. Such certificate is to bear date of the day on which the sale becomes absolute.

Section 65 of the Code of Civil Procedure lays down that where immovable property is sold in execution of a decree and such sale has become absolute, the property shall be deemed to have vested in the purchaser from the time when it is sold and not from the time when the sale becomes absolute. The result is that the purchaser's title relates back to the date of sale and not the confirmation of sale. There is no provision in the Code of Civil Procedure of 1908 either under O. XXI or elsewhere which provides that the sale is not to be confirmed if it be found that the decree under which the sale was ordered has been reversed before the confirmation of sale. It does not seem ever to have been doubted that once the sale is confirmed the judgment-debtor is not entitled to get back the property even if he succeeds thereafter in having the decree against him reversed. The question is, whether the same result ought to follow when the reversal of the decree takes place before the confirmation of sale.

5. There does not seem to be any valid reason for making a distinction between the two cases. It is certainly hard on the defendant-judgment-debtor to have to lose his property on the basis of a sale held in execution of a decree which is not ultimately up-held. Once however it is held that he cannot complain after confirmation of sale, there seems to be no reason why he should be allowed to do so because the decree was reversed before such confirmation. The Code of Civil Procedure of 1908 contains elaborate provisions which have to be followed in cases of sales of property in execution of a decree. It also lays down how and in what manner such sales may be set aside. Ordinarily, if no application for setting aside a sale is made under any of the provisions of Rules 89 to 91 of O. XXI, or when any application under any of these rules is made and disallowed, the court has no choice in the matter of confirming the sale and the sale must be made absolute. If it was the intention of the Legislature that the sale was not to be made absolute because the decree had ceased to exist, we should have expected a provision to that effect either in O. XXI or in Part II of the Code of Civil Procedure of 1908 which contains Sections 36 of 74 (inclusive). "

36. The aforesaid case was not a case of fraud in obtaining the ex-parte decree. There was no allegation of fraud before the Supreme Court. The Supreme Court itself recognized this in para 6, which reads as under:

"6. It is to be noted however that there may be cases in which, apart from the provisions of Rr. 89 to 91, the court may refuse to confirm a sale, as, for instance, where a sale is held without giving notice to the judgment-debtor, or where the court is misled in fixing the reserve price or when there was no decree in existence at the time when the sale was held. Leaving aside cases like these, a sale can only be set aside when an application under R. 89 or R. 90 or R. 91 of O. XXI has been successfully made. The court may refuse to confirm a sale where the sale is held without giving notice to the judgment- debtor. Therefore, this case is clearly distinguishable. This

case related to a simple money decree and not a mortgage decree where provisions of Order 34 of CPC apply."

37. In Ram Chandra Arya Vs. Man Singh AIR 1968 SC 954 where reliance was sought to be placed on Janak Raj Vs. Gurdial Singh's (supra) case, the Supreme Court held:

"4. Learned counsel appearing on behalf of the appellant contended that this proposition should not be accepted by us in view of the decision of this Court in Janak Raj v. Gurdial Singh [1967] 2 SCR 77: AIR 1967 SC 608. The decision of that case is, however, not applicable to the case before us at all. In that case, a stranger to the suit was the auction-purchaser of the judgment-debtor's immovable property in execution of an ex parte money decree. Before the sale could be affirmed, the ex parte decree was set aside and the question arose whether the auction-purchaser was entitled to a confirmation of the sale under O. 21, R. 92, C.P.C. The Court held that the sale should be confirmed. The law makes ample provision for the protection of the interests of the judgment-debtor, when his property is sold in execution. He can file an application for setting aside the sale under the provisions of O. 21, Rr. 89 and 90 C.P.C. If no such application was made, or when such an application was made and disallowed, the Court has no choice but to confirm the sale. This principle can be of no assistance to the appellant in the present case, because, in that case, when the sale was actually held, a valid ex parte decree did exist. The sale, having been held in execution of a valid existing decree, was itself valid; and the only question that came up for decision was whether such a valid sale could be set aside otherwise than by resort to the provisions of Rules 89 and 90 of Order 21, Civil Procedure Code. In the present case, the decree, being a nullity, has to be treated as nonest and, consequently, the sale, when held, was void ab initio. In such a case, there is no question of any party having to resort to the provisions of Rr. 89 and 90 of O. 21, C.P.C. to have the sale set aside. Any claim based on a void sale can be resisted without having that sale set aside. ...

4. ... This Court, thus, in that case, clearly recognised that, if there be no decree in existence at the time when the sale is held, the sale can be ignored and need not be set aside under the provisions of Rr. 89 to 91, C.P.C. In the present case, as we have held, the decree passed against Ram Lal was void and has to be treated as non-existent and consequently, the sale must be held to be a nullity."

38. Thereafter, the Hon‟ble Court held in para 8 "A sale is void ab initio if it is held in execution of a decree which is nullity and, consequently, to be treated as non-existent." The court dismissed the appeal and upheld the decision that the decree was a nullity and the sale held in execution of that decree was, therefore, void.

39. In this regard I may also take note of the observations made by the Apex Court in the case of T.Vijenderadas & Anr. Vs. M. Subramanian & Ors. (supra) where the Apex Court having taken note of fraud being played upon the Court has refused granting relief as claimed by the party who wanted to take advantage of the fraud. Relevant observations appear in para 33 & 34 of the judgment which reads as under:

"33. Appellants and their predecessors, therefore, are also guilty of suppressio veri. Ordinarily a statute shall prevail over the common law principle. However, in a case of this nature, in the event of any conflicting interest, this Court in exercise of its equity jurisdiction under Article 142 of the Constitution of India is to weigh the effect of a fraud and the consequence of non-impleadment of a necessary party. We would hold that the scale of justice weighs in favour of the person who is a victim of fraud and, thus, we should not refuse any relief in his favour, only because he might have been wrongly advised. The purport and object for which Order XXI, Rule 92(5) was enacted furthermore would be better subserved if it is directed that the respondents shall pay the amount which the Court paid to the Municipality out of the amount of auction.

34. We have noticed hereinbefore that one of the objects sought to be achieved in amending Order XXI, Rule 92 was to do complete justice to the parties so as to enable the auction purchaser to get back the amount from the decree-holder and revive the execution proceedings so that the decree-holder may proceed against the judgment-debtor for realisation of the decretal amount. In this case, the plaintiffs-respondents had not claimed any relief against the Municipality. The Municipality's right to realise the amount of property tax together with interest, if any, is not in dispute. Although the liability of Venugopal in terms of the 1920 Act to pay the property tax continued, it has been accepted at the Bar that the plaintiffs-respondents was also liable to pay the amount of property tax after the date of sale. In a case of this nature, therefore, the plaintiffs-respondents can be directed to pay the amount of property tax by way of redemption of mortgage in favour of the Municipality."

40. In the case of Bhojai Vs. Salim Ullah (supra), it has been held that "In setting aside on the ground of fraud an auction sale in execution of the decree, the Court does not enforce a statutory remedy having its scope and effect fixed by the terms of a statutory provision, but administers relief on principles of equity, justice and good conscience, and in doing so it is naturally called upon sometimes to balance conflicting claims to its help and protection and then to adopt its decision to the demands of the situation. Which of the two innocent persons, the victim of a fraudulent decree or the bona fide purchaser at an auction sale held in pursuance of

the decree, should be allowed or left to suffer cannot be determined by the Court in consonance with equity, justice and good conscience, without taking into account the extent of their respective sufferings, their conduct, and other relevant considerations. A suit to set aside a decree and a sale on the ground of fraud covering a wider grounds than those mentioned in Order 21 Rule 90(1) of the CPC is maintainable and is not barred by Order 21 Rule 92(3) of the CPC. Some observations made by the Court where also an ex parte decree was obtained by decree holder by playing fraud on the Court and on that basis, the suit property was sold in public auction and where the ex parte decree were set aside on account of fraud in service, the court has made the following observations which are relevant for the controversies involved in this case also:

"9. Much need not be said about the second point. The final decree in dispute is being impeached not on the ground of mere irregularity in the service or want of service of notice, but on the ground that a false report of service on the plaintiff was fraudulently secured by defendant No. 2 and the decree passed by the Court was based on that false report. It is well settled that when there is a deliberate suppression of summons or notice issued to a person on a false report relating to service of summons or notice upon him is secured from the process- server, and the Court is thus led to pass an ex parte decree or order against such person without his acquiring know ledge of the suit or proceeding against him, the decree or order must be regarded as vitiated by fraud. This is particularly so when the suppression of the summons or notice or the securing of a false report of service from the process server, is found to be part of a larger plan of deceit which has for its object something more than merely obtaining an ex parte decree or order."

41. Some more observations made by the Court in the judgment quoted above are also relevant and are reproduced as under:

"13. Even if it is assumed that the appellant was not a party to the fraud and was a bona fide purchaser, the auction sale cannot, in the circumstances of the case, be upheld and left intact. The reason why I emphasis the circumstances of the case is this. It cannot be laid down as an inflexible rule of law holding good in all situations that an auction sale in favour of a bona fide purchaser would remain unaffected even if the decree on which it is based is found to have been fraudulently obtained, just as it cannot be stated as a broad proposition that an auction sale must invariably fall with the decree on which it is based and No. protection can ever be claimed even by a bona fide purchaser if the decree which led to the auction sale is found vitiated by fraud.

In setting aside on the ground of fraud a decree and an auction sale in execution of the decree, the Court does not enforce a

statutory remedy having its scope and effect fixed by the terms of a statutory provision, but administers relief on principles of equity, justice and good conscience, and in doing so it is naturally called upon sometimes to balance conflicting claims to its help and protection and then to adopt its decision to the demands of the situation. Which of the two innocent persons, the victim of a fraudulent decree or the bona fide purchaser at an auction sale held in pursuance of the decree, should be allowed or left to suffer cannot be determined by the Court in consonance with equity, justice and good conscience, without taking into account the extent of their respective sufferings, their conduct, and other relevant considerations. The Court has, there fore, to decide in the context of the facts and circumstances of each case whether or not a bona fide purchaser at an auction sale should be permitted to retain the benefit of the sale when it is found that the decree which forms its basis had been obtained by fraud.

14. It may be pointed out in this connection that, where a sale is set aside under O. XXI, Rule 90 of the C. p. C on the ground of fraud in publishing or conducting it. the question whether the auction purchaser is a party to the fraud or is a bona fide purchaser is not a relevant consideration. Order XXI, Rule 90 of the C. P. C provides a statutory remedy and there is nothing in its terms to exclude from its operation bona fide auction purchasers or restrict its application to those auction sales in which the auction purchaser was not a party to the fraud: vide Mahabir Ram v. Ramhahadui Dubey AIR 1923 Patna 435, Jagdeo v Ujiyari Kunwar MANU/UP/0051/1928 : AIR1928All354 and Mahipali Haldar v Atul Krishna Maitra AIR 1949 Cal 212 But as I have said above, a suit to set aside, on the ground of fraud a decree and an auction sale held in execution thereof is not a statutory remedy and the kind of decree that the court will pass in suits of this nature will vary with what equity, justice and good conscience demand in varying circumstances.

17. The fifth and the last point remain to be considered. If the present suit had been merely for setting aside the auction sale in favour of the appellant on the ground of fraud in publishing or conducting the sale there is No. doubt that the suit would have been barred by Order XXI, Rule 92 (3) of the C. P. C. What is, however, sought to be set aside by means of this suit is not merely the auction sale but also that decree itself in execution of which the auction sale was held, and as such the suit is outside the bar of Order XXI, Rule 92 (3) of the C. P. C. In Bhagwan Das v. Suraj Prasad MANU/UP/0074/1924 : AIR1925 All146 it was held by a Division Bench of this Court that a suit to set aside a sale on the ground of fraud covering wider grounds than those mentioned in Order XXI, Rule 90 (1) of the C. P. C. is maintainable and is not barred by Order XXI, Rule 92 (3) if the C. P. C. The fraud proved in this case was not confined to the publication and the conducting of the auction sale but also covered and vitiated the decree upon which the auction sale was founded. In such circumstance Order XXI, Rule 92 (3) of the C. P. C. has application."

42. In S.P. Chengalvaraya Naidu Vs. Jagannath AIR 1994 SC 853 the Supreme Court observed:

"1. ... It is the settled proposition of law that a judgment or decree obtained by playing fraud on the court is a nullity and non-est in the eyes of law. Such a judgment/decree - by the first court or by the highest court - has to be treated as a nullity by every court, whether superior or inferior. It can be challenged in any court even in collateral proceedings."

43. The observations in Sheo Narayan Mandal Vs. Mangal Sah AIR 2005 Patna 149 which are relevant are also reproduced below:

"9. ... I find that Title Suit No. 10/1972 was decreed ex parte on 3.8.1978 whereafter Misc. Case No. 27/1978 was filed for setting aside the ex parte decree on the ground of fraud and deceit etc. but the question of the validity of service of notices or the question of fraud and deceit played upon the petitioner was decided neither in the said Misc. Case nor in the petition for its restoration as the former was dismissed for default whereas the latter was dismissed merely on the ground of limitation. In the said circumstances, the question of fraud and deceit were neither considered nor decided by any of the aforesaid Courts and hence the case laws relied upon by the learned counsel for the opposite parties as detailed above are not applicable to the facts and circumstances of this case ... ... But here the matter is completely different as no Court has upheld the validity of summons nor any Court has rejected the petitioner's claim of fraud and deceit. Furthermore, the question of fraud, if not rejected earlier, clearly cuts at the very root of any legal proceeding and hence in my view, a fresh Title Suit challenging the ex parte decree in the earlier suit on the ground of fraud is clearly maintainable in the instant case. This aspect of the matter has been completely overlooked by the learned Court below while passing the impugned order."

44. In the absence of any record of the Execution proceedings, one has no option but to go by certain inferences and presumptions. In the suit, for the preliminary decree and the final decree (which were set aside on 27.08.1983), the plaintiff, despite knowing the Madras address of the defendant, gave the defendant‟s previous address of Ramesh Nagar, Delhi, even when she knew that the defendant was no longer living there. From this, an inference can be drawn that the same address must have been given in the Execution proceedings for issue of notice for settlement of sale proclamation. Otherwise, in the proceedings to set aside the decree, the decree-holder and the auction-purchaser would have pointed out the service of notice in the execution proceedings at the Madras address. This

further establishes that there was no service of notice in the Execution proceedings.

45. An ex parte decree can be set aside or refused to be set aside. Even if I assume that it was refused to be set aside, that does not mean notice in the Execution proceedings need not be served or the validity of the proceedings cannot be looked into. If notice was served in Execution, then other factors may have to be looked into. If no notice is served, that by itself makes the sale a nullity. In execution there is no service of notice before settling sale proclamation. This fundamental shortcoming in the execution renders the sale, even if the decree was proper, a nullity.

46. Applying the aforesaid principles in this case it is apparent that the ex-parte decree which is basis of the auction sale itself is vitiated on account of fraud played on the Court as held by the lower Court while setting aside the ex-parte decree vide order dated 23.5.83. Thus on that basis alone the auction sale ought to have been set aside.

47. The question of the appellant having withdrawn her application under Order 21 Rule 90 CPC in the facts of this case does not arise as the appellant had been contesting the proceedings for confirmation of auction sale throughout and had been opposing the same. Thus observation made by the lower Court in the impugned order that the said application was not pressed amounts to the dismissal of that application and thus furnishes a ground of appeal before this court.

48. Interestingly, while going through the various Rules under order XXI, it seems that the impugned order passed by the Ld. ADJ confirming the auction sale is in complete ignorance of the procedure that was to be followed before the auction sale as the appellant had not withdrawn the application moved under Order 21 Rule 90 CPC. The appellant‟s stand is further fortified by the fact that moment an ex-parte order was passed against her, appellant had moved an application under Order 9 Rule 13 CPC pleading that the decree obtained by the respondent was vitiated by fraud. The LD. ADJ also while hearing the application under Order 9 Rule 13 had observed that, "From the evidence of AW.2 Pran Mohini and from the documentary evidence on record, it is quite clear that the plaintiff was knowing the Madras address of the defendant since 1970. It appears that in the year 1975 when the application for substituted service was moved by the plaintiff, the plaintiff was knowing the Madras address of the defendant but intentionally she suppressed this material fact and got the

publication done of the defendant on her Ramesh Nagar address which house the defendant had already sold and where the defendant was not residing at the time of institution of the suit and also at the time of the publication in the newspaper. Under Rule, the newspaper is also sent under certificate of posting to the party concerned but in the file there is no such U.P.C. to show that the paper was sent to the defendant. The newspaper was published in New Delhi and the defendant was residing at Madras, In the circumstances of this case, the possibility that the defendant might not have read the newspaper cannot be ruled out.................................................................."

49. Hence in such circumstances I may observe that the procedure which the Additional District Judge ought to have followed was to serve a notice to the judgment-debtor/appellant under Order 21 Rule 54 or Rule 66 for proclamation of the auction sale and also in compliance to Order 21 Rule 68 was suppose to obtain consent in writing of the sale from the judgment-debtor/ appellant but unfortunately neither notice was served upon appellant nor consent was obtained from her about the alleged sale. Even if it is presumed that a notice was sent to the appellant but it was not sent to her Madras address about which the decree-holder was aware of, rather it had been sent to the Delhi address where the appellant no longer stayed. It is also surprising to note that after the final decree(ex-parte) confirming the ex-parte preliminary decree was passed on 02.05.1980, the auction sale took place on 30.05.1980 i.e in a gap of twenty eight days which in normal circumstances, if the above procedure would have been followed would have taken many more days. Hence it cannot be said that the required procedure was followed by the Learned Additional District Judge while confirming the auction sale.

50. It is well-settled law that a sale without notice to the judgment debtor is a nullity. The following observations in Mahakal Automobiles Vs. Kishan Swaroop Sharma AIR 2008 SC 2061 may be referred to:

"6. When a property is put up for auction to satisfy a decree of the Court, it is mandatory for the Court executing the Decree, to comply with the following stages before a property is sold in execution of a particular decree:

             (a)    Attachment of the Immoveable Property:
               (b)   Proclamation of Sale by Public Auction;
               (c)   Sale by Public Auction

7. Each stage of the sale is governed by the provisions of the Code. For the purposes of the present case, the relevant provisions are Order 21 Rule 54 and Order 21 Rule 66. At each

stage of the execution of the decree, when a property is sold, it is mandatory that notice shall be served upon the person whose property is being sold in execution of the decree, and any property which is sold, without notice to the person whose property is being sold is a nullity, and all actions pursuant thereto are liable to be struck down/quashed."

51. In Desh Bandhu Gupta Vs. N.L. Anand & Rajinder Singh (1994) 1 SCC 131 the Supreme Court held:

"9. ... The compulsory sale of immovable property under Order 21 divests right, title and interest of the judgment debtor and confers those rights, in 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. ... ...

10 Above discussion do indicate discernible rule that service of notice on the judgment debtor is a fundamental part of the procedure touching upon the jurisdiction of the Execution Court to take further steps to sell his immovable property. Therefore, notice under Order 21 Rule 66(2), unless proviso is applied (if not already issued under Order 21 Rule 22), and service is mandatory. It is made manifest by Order 21 Rule 54(1A) brought on statute by 1976 Amendment Act with peremptory language that before settling the terms of the proclamation of sale. The omission thereof renders the further action and the sale in pursuance thereof void unless the judgment debtor appears without notice and thereby waives the service of notice.

12 ... Since the court had not given any notice to the appellant which is mandatory, the need to submit his valuation did not arise. Order 21 Rule 54 Sub-rule (1A) brought 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 court to be fixed for settling the terms of 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 JD 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 JD. 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 ... "

52. It is also pertinent to mention that when the application of the appellant under Order 9 rule 13 was allowed by the Ld. Additional District Judge vide order dated 02.05.1980, the respondents/auction purchasers became aware of the fact that the decree which was obtained by the decree-holder was vitiated by fraud, hence having not challenged the said order dated 02.05.1980 passed by the Ld. ADJ in favour of the appellant, respondents/auction purchaser have become a party to the fraud. The appellant is also not required to make a deposit of five percent of the purchase amount in order to pursue her application for setting aside the sale, as appellant has not made an application under Order 21 Rule 89 rather preferred an application under Rule 90 and perusal of sub clause (2) of Rule 89 goes to show that unless and until appellant withdraws her application under Rule 90 she cannot move an application under Rule 89. Hence the ground taken by the respondents that appellant is suppose to make a deposit of five percent of the purchase money in order to prefer her application for setting aside the sale also goes in vain.

53. The law is settled that the sale in terms of a mortgage for purposes of paying 5% to the purchaser does not become absolute or irrevocable merely on passing an order confirming the sale, but it would attain finality on the disposal of the appeal, if any, filed against an order refusing to set aside the sale. Vide Maganlal Vs. Jaiswal Industries AIR 1989 SC 2113, U. Nilan Vs. Kannayyan AIR 1999 SC 375 and Kharaiti Lal Vs. Raminder Kaur AIR 2000 SC 1148.

54. A. Mariammal Vs. V.S. Balasubramaniam CRP 847 / 1998 decided by the Madras High Court on 3.10.2005 (MANU/TN/2185/2005), held:

"26. Thus, it is well settled that during the pendency of the Appeal, the Mortgagor is entitled to make the deposit under Order 34 Rule 5 CPC. In the case in hand, when the Appeal C.M.A. No. 33 of 1991 was pending, the confirmation of the sale and issuance of the Sale Certificate were only in nebulous state, it cannot be said that merely because of confirmation of sale, the Judgment Debtor was not entitled to deposit the amount."

55. The appeal also lies because there is nothing to show that Objections were withdrawn and I am not satisfied that they would have been withdrawn. I would treat it as an order refusing to set aside the sale under Rule 92 of Order 21 and, therefore, appealable under clause (j) of

Rule 1 of Order 43 CPC. Even if I were to treat it as not appealable, the facts of this case warrant exercise of jurisdiction under Article 227 of the Constitution of India to set aside such an order. In this case, I find that the decree was obtained by fraud and then the sale in execution, carried out within a 28 days period without serving a notice under Rule 66 of Order 21, was another fraud and therefore the sale has to be set aside on that ground alone. Even if I were to assume that there was no fraud, in the auction sale the mortgage having been discharged in 1983 keeping in view the judgment in U. Nilan Vs. Kannayyan (1999) 8 SCC 511 the court has power in this appeal to permit deposit of 5% under Order 35 Rule 5 and set aside the sale. This is only way of additional ground and the sale is set aside on the ground of fraud and non service of notice.

56. More so, the reason given by the Ld. ADJ for confirming the auction sale was that the application under Order 21 Rule 90 had not been pressed, however a glance at Rule 92 clears the position wherein it has been mentioned that unless an application made under Rule 89 or Rule 90 or Rule 91 is disallowed, the Court shall not make an order confirming the sale. The said rule nowhere mentions the fate of an application which has not been pressed hence what could be concluded from the said rule is that the Court has to first decide the application made under Rule 90 and then should confirm the auction sale. However, in the instant case the ADJ had not decided the application under Order 21 rule 90 and had proceeded with the auction sale. Hence in such circumstances the auction sale cannot be said to have been conducted in good faith. The sale is inchoate till appeal is decided.

57. In Mallika Vs. Ayyappy Karunakaran, AIR 1981 Kerala 236, the Court held:

"8. The legal position that emerges from the foregoing discussion is that where an application to set aside a sale is filed under Rule 89 or Rule 90 or Rule 91 of Order 21 C.P.C., and the decision thereon is carried in appeal, generally speaking, there was no finality in regard to the same until the litigation was finally determined by the appellate court. Any order of confirmation passed before the sale became absolute on the termination of the proceedings before the appellate or the revisional authority, would only be inchoate in nature and no finality could be attached to it. ... "

58. Reference can also be made to Pandurangan Vs. Dasu Reddy AIR 1973 Madras 107; and V.A. Narayana Raja Vs. Renganayaki Achi, AIR 1984 Madras 27.

59. The delay in filing the application stood condoned and the said order has not been challenged. As far as the filing of a suit by the JD for declaration of the sale certificate is concerned that was an unnecessary exercise in view of the pendency of the objections of the JD to the auction sale and thus dismissal thereof is of no consequence. In any case the said suit was filed after issuance of the sale certificate for cancellation of the documents executed in favour of the auction purchasers illegally.

60. As far as filing of the civil suit by the appellant is concerned, dismissal thereof in default makes no difference in view of the pendency of the application under Order XXI Rule 90 CPC filed by the appellant.

61. Admittedly, Smt. Mahinder Kaur who is the mother of the second respondent and mother-in-law of the third respondent was a tenant inducted in the suit premises by the appellant. In 1984 when eviction suit was filed by the appellant, the property had not been conveyed to the decree holder. Proceedings for sale confirmation were pending and were being opposed to by the appellant. Thus, filing of the eviction suit against the tenant does not amount to forum shopping but was a right available to the appellant in law.

62. It is been held in several decisions that fraud unravels all. In Jharu Ram Roy Vs. Kamjit Roy (2009) 4 SCC 60 the Supreme Court observed:

"15. Fraud vitiates all solemn acts. ... "

63. In Jai Narain Parasrampuria Vs. Pushpa Devi Saraf (2006) 7 SCC 756:

"28. It is now well settled that fraud vitiated all solemn act. Any order or decree obtained by practicing fraud is a nullity. ... "

64. The latest trend is indicated in judgment of A.V. Papayya Sastry Vs. Govt of Andhra Pradesh (2007) 4 SCC 221 where even the SLP had been dismissed and then on account of fraud, the proceedings were reopened. Supreme Court held:

"38. ... Suppose, a case is decided by a competent Court of Law after hearing the parties and an order is passed in favour of the applicant plaintiff which is upheld by all the courts including the final Court. Let us also think of a case where this Court does not dismiss Special Leave Petition but after granting leave decides the appeal finally by recording reasons. Such order can truly be said to be a judgment to which Article 141 of the Constitution applies. Likewise, the doctrine of merger also gets attracted. All orders passed by the courts/authorities below, therefore, merge in the judgment of this Court and after such judgment, it is not open to any party to the judgment to

approach any court or authority to review, recall or reconsider the order.

39. The above principle, however, is subject to exception of fraud. Once it is established that the order was obtained by a successful party by practicing or playing fraud, it is vitiated. Such order cannot be held legal, valid or in consonance with law. It is non-existent and non est and cannot be allowed to stand. This is the fundamental principle of law and needs no further elaboration. Therefore, it has been said that a judgment, decree or order obtained by fraud has to be treated as nullity, whether by the court of first instance or by the final court. And it has to be treated as non est by every Court, superior or inferior."

65. Consequently, for the reasons as discussed above and considering the factual matrix of this case, the impugned order dated 10.05.1989 is set aside. The auction sale dated 30.05.1980 of property No. J-3/39 Rajouri Garden, New Delhi is declared a nullity and is also set aside. The Sale Certificate dated 7.07.1989 is also cancelled. The auction purchasers shall file the original Sale Certificate in Court within two weeks. Thereafter the amount deposited by the auction purchasers along with all interest accrued thereon can be withdrawn by the auction purchasers. The appellant shall deposit of 5% of the auction sale amount in Court within two weeks from today which can be withdrawn by the auction purchasers. With these observations, the appeal is allowed with no orders as to cost. TCR be sent back forthwith along with a copy of this order. C.M.Nos.438/1998 & 16179/2008

In view of the orders passed above, the applications stand disposed of.

MOOL CHAND GARG, J JANUARY 20, 2010 'ga'