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
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
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.
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
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
(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.]
(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
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
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
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
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
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
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
