Kerala High Court

Anitha Kuply vs Marikkar Plantations (P) Ltd on 5 April, 2024

Author: Anil K.Narendran

Bench: Anil K.Narendran

FAO No.26 of 2022              1




           IN THE HIGH COURT OF KERALA AT ERNAKULAM
                            PRESENT
          THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN
                               &
      THE HONOURABLE MR. JUSTICE HARISANKAR V. MENON
  FRIDAY, THE 5TH DAY OF APRIL 2024 / 16TH CHAITHRA, 1946
                       FAO NO.26 OF 2022

  AGAINST THE ORDER DATED 09.11.2021 IN E.A.NO.2/2020 IN
  E.P.NO.130/2018 IN OS NO.130 OF 2016 OF ADDITIONAL SUB
                      COURT, KOTTAYAM
                         ----------

APPELLANT:

           ANITHA KUPLY, AGED 55 YEARS, W/O KURIAN KUPLY,
           KOLKOZHICHIRA HOUSE, KAYPURAM, MUHAMMA P.O.,
           THANNERMUKKAM SOUTH VILLAGE, CHERTHALA TALUK-682
           585, REPRESENTED BY HER POWER OF ATTORNEY HOLDER
           LUKE STEPHEN, AGED 64 YEARS, S/O JOSEPH STEPHEN,
           RESIDING AT PULIMOOTTIL HOUSE, THODUPUZHA TALUK,
           IDUKKI DISTRICT-685 584.
           BY ADVS.
           P.THOMAS GEEVERGHESE
           CHACKO SIMON
           TONY THOMAS (INCHIPARAMBIL)
           E.S.FIROS
           SIDHARTH SABU

RESPONDENTS:

     1      MARIKKAR PLANTATIONS (P) LTD., 41/3611,
            OLD RAILWAY STATION ROAD, KOCHI-682 018,
            REPRESENTED BY IS DIRECTOR MR FM SHAMEER
            MARICKAR, S/O DR YM FAZIL MARICKAR, RESIDING AT
            A-6 KENT NALUKETTU, CHAKKARAPARAMBU, VENNALA
            P.O., EDAPPALY SOUTH VILLAGE, ERNAKULAM-682 028.
 FAO No.26 of 2022               2




     2      M/S NEST REALITIES INDIA (P) LTD, COMPASS,
            5TH FLOOR, NH 47 BYEPASS, CHAKKARAPARAMBU, NEAR
            VYSALI BUS STOP, ERNAKULAM-682 032, REPRESENTED
            BY IS DIRECTOR MR FM SHAMEER MARICKAR, S/O DR YM
            FAZIL MARICKAR, RESIDING AT A-6 KENT NALUKETTU,
            CHAKKARAPARAMBU, VENNALA P.O., EDAPPALY SOUTH
            VILLAGE, ERNAKULAM-682 028.
     3      MR. FM SHAMEER MARICKAR, S/O.DR YM FAZIL
            MARICKAR, RESIDING AT A-6, KENT NALUKETTU,
            CHAKKARAPARAMBU, VENNALA P.O.EDAPPALLY SOUTH
            VILLAGE, ERNAKULAM-682 028.
            BY ADVS.
            SINDHU S KAMATH
            KRISHNA PRASAD. S
            SWAPNA S.K.
            ROHINI NAIR
            SURAJ KUMAR D.



THIS FIRST APPEAL FROM ORDERS HAVING BEEN FINALLY HEARD ON
25.03.3024, THE COURT ON 05.04.2024 DELIVERED THE FOLLOWING:
 FAO No.26 of 2022                  3




   ANIL K. NARENDRAN & HARISANKAR V. MENON, JJ.
    --------------------------------------------------------------
                       FAO No.26 of 2022
     --------------------------------------------------------------
              Dated this the 5th day of April, 2024

                          JUDGMENT

Harisankar V. Menon, J.

The decree holder in E.P.No.130 of 2018 in O.S.No.130 of

2016 on the file of the Additional Sub Judge, Kottayam, is the

appellant herein. This appeal is filed against the order dated

09.11.2021 in E.A.No.2 of 2020 in E.P.No.130 of 2018, by which

the execution court has set aside the sale under Order XXI Rule

90 of the Code of Civil Procedure, 1908 (for short, CPC), at the

instance of the judgment debtors (respondents herein).

2. The decree sought to be executed was a compromise

decree whereby the plaint schedule property was charged for the

realisation of Rs.54,15,228/- with interest at 10% per annum,

chargeable cumulatively with monthly interest from 1st February,

2018, from the judgment debtors. It is seen that the case was

posted for proclamation and the sale of decree scheduled

properties on 04.03.2020 and on the same day it was purchased

by the decree holder. The property sold in auction was having a

total extent of 39.68 Ares.

3. Later, the judgment debtors 1 to 3 filed E.A.No.2 of

2020 in E.P.No.130 of 2018 in O.S.No.130 of 2016 under Order

XXI Rule 90 of CPC for setting aside the sale. In the above

petition, it is pointed out by the applicants-judgment debtors 1

to 3, that the description of the property in the schedule as 36.44

Ares comprised in resurvey No.218/2 and 84 square meters of

land comprised in resurvey No.219/8 was not correct, since out

of the total extent, 2.01 Ares is situated in resurvey No.218/2-2,

43 square meters in resurvey No.218/2-3, 34 Ares in resurvey

No.218/2-4, 2.40 Ares in resurvey No.219/5 and 84 square

meters in resurvey No.219/8-1. It is also pointed out that the

judgment debtors were not having an absolute saleable interest

in the property, since the property of 39.68 Ares belongs to the

first judgment debtor, wherein the second judgment debtor had

constructed an apartment building complex having a total built-

up area of 2.5 lakhs square feet comprising of 165 apartments,

several of which were already sold out to third parties with

undivided right in the land. Therefore, it was pointed out that

the property cannot be said to belong to the first judgment debtor

absolutely and the property was having a market value of Rs.3

crores and the apartments were having a market value of more

than Rs.75 crores, which aspect was purposefully and

fraudulently suppressed by the decree holder in the execution

petition, because of which the upset price happened to be fixed

at Rs.40,00,000/- alone. It is further pointed out by the

judgment debtors that no notices were served on the purchasers

of the apartments because of which their interests are also

affected. Ultimately, it was prayed that the sale not being in

accordance with law, ought not to have been confirmed, since

there is an irregularity and lapse in the preparation of the sale

proclamation which goes to the root of the matter. The judgment

debtors specifically pointed out that the decree-holder had

interest only in a three bed room apartment bearing No.12(A)

TB1 having a super built-up area of 1465 sq.feet on the 13th floor

of "Nest Orchid Apartments" along with a car parking area, the

sale of which alone is sufficient to satisfy the decree.

4. The decree holder also filed objections contending that

the petitions filed under Order XXI Rule 90 of CPC as above are

not maintainable either in law or on facts, that the same property

scheduled and charged by the compromise decree passed was

alone put for sale, that the judgment debtors agreed that the

decree-holder shall be entitled to sell the decree scheduled

property for recovering the amount due to her, that as the decree

scheduled property was put to sale, the judgment debtors are

estopped from raising any objection against the same, that sale

has been published and conducted in compliance with the law,

that the description of the property in the proclamation schedule,

valuation and fixation of upset price by the court was in the

presence of the judgment debtors and therefore, the judgment

debtors ought to have taken the grounds now raised at the time

of drawing up the proclamation for sale.

5. The trial court by the impugned order dated

09.11.2021, found that it is the duty of the decree holder to

provide a proper description of the property and to ensure that

only such portion of the property to satisfy the decree is sold, the

violation of which mandatory requirements definitely amounts to

material irregularity, which makes the sale vitiated. It is further

found that merely because the judgment debtors remained silent

during the execution proceedings, it cannot be said that the

burden cast upon the decree holder has been discharged.

Therefore, the trial court found that since the description of the

property was not correct and since the property sold in execution

fetches a high value, as also since the judgment debtors did not

have a saleable interest over the whole decree scheduled

property, there is material irregularity in publishing and

conducting the sale, on account of which the sale requires to be

set aside. Therefore, the application filed by the judgment

debtors 1 to 3 was allowed by the execution court.

6. It is against the said order dated 09.11.2021 in

E.A.No.2 of 2020 in E.P.No.130 of 2018 in O.S.No.130 of 2016

that the present appeal is filed by the decree holder-auction

purchaser before this Court.

7. Heard the learned counsel appearing for the

appellant-auction purchaser-decree holder and the learned

counsel appearing for the respondents-petitioners-judgment

debtors.

8. It is contended by the learned counsel for the

appellant that the property auctioned in the sale is a decree

scheduled property charged by consent and therefore, the

appellant or the respondents cannot alter the property

description during the execution proceedings. The learned

counsel relied on Order XXI Rule 90(3) of CPC and submitted that

the grounds raised in the application for setting aside the sale

filed before the execution court were "pre-existing

circumstances", which could have been pointed out by the

judgment debtors while finalising the sale proclamation and since

they remained silent, subsequently, an application under Order

XXI Rule 90 of CPC cannot be entertained. It is also pointed out

that the finding that the properties are worth much more than

the decree debt is made without considering the mortgages-

charges on the property, since the respondents (judgment

debtors) did not point out the mortgages in favour of the Kerala

Transport Development Finance Corporation. The learned

counsel for the appellant also relied on the decision of this Court

in Dhanalakshmi Bank Limited v. Divakaran [2000 (2) KLT

231] to contend that the embargo under Order XX1 Rule 90(3)

of CPC applies to the facts and circumstances of the case. He also

relied upon another judgment of this Court in K.V. Antony v.

Catholic Syrian Bank Ltd. [1994 (2) KLJ 339], wherein the

importance of Order XXI Rule 90(3) of CPC has been reiterated.

9. The learned counsel for the respondents-judgment

debtors relied on the decision of the Apex Court in Narasayya v.

Subba Rao [AIR 1990 SC 119 : 1990 (1) KLJ 213] to contend

that the execution court ought to have noticed that for the

realisation of a small amount compared to the value of the

property, the entire property through the description in the

execution petition ought not have been permitted to be sold in

auction. The learned counsel also relied on the decision

rendered by a Division Bench of this Court in Nirmala v.

Sundaresan [2023 (5) KHC 282] in which one of us [Anil K.

Narendran, J.] was a party to contend that the limitation under

Order XXI Rule 90(3) of CPC may not apply in all cases especially

when the sale was being conducted in violation of the mandatory

requirements of the rule or is vitiated by material irregularity.

10. It is seen that the execution petition was filed for the

realisation of an amount of Rs.54,15,228/- with interest from 1st

February, 2018. As against this, the property that was placed for

sale was a property extending to 39.68 Ares wherein a multi-

storied residential apartment building complex was already

constructed, having a total built-up area in excess of two lakh

sq.meter, comprising 165 apartments. It is also noticed that out

of the above apartments, many have already been sold in favour

of the purchasers on account of which their rights are also

affected. The decree-holder was aware of the existence of the

multi-storied apartment complex in the property in question. This

is especially so when the entire dispute was with respect to an

apartment in the 13th floor which was agreed to be purchased by

the decree holder. However, these aspects were not brought to

the notice of the execution court while drawing up the

proclamation of sale. In our considered view, this is a material

irregularity which goes to the root of the matter. It is true that

Order XXI Rule 90(3) of CPC provides that no application to set

aside a sale shall be entertained upon any grounds which the

applicant could have taken on or before the date on which the

proclamation of sale was drawn up. This Court in Nirmala [2023

(5) KHC 282] reiterated that where the sale was held in violation

of mandatory requirements of the rule or is vitiated by material

irregularity, Order XXI Rule 90(3) of CPC would not be applicable.

Paragraph 20 of the said decision reads thus;

"20. Similarly, as provided under Order XXI Rule 90(3) of the CPC, no application to set aside the sale under this Rule shall be entertained upon any ground on which the applicant could have taken on or before the date on which the proclamation of sale was drawn up. In P.K.Kuruvila v. Corporation Bank [2008 (1) KHC 258 : 2008 (1) KLT 604] this Court held that where the sale was held in violation of mandatory requirements of the rule or is vitiated by material irregularity, Order XXI Rule 90(3) of the CPC would not be applicable. Notably, in the decision in Nani Gopal Paul v. T.Prasad Singh and others [AIR 1995 SC 1971] the Apex Court held that normally an application to set aside the sale has to be filed within the

period of limitation and the said procedure need not be insisted upon when obvious and manifest illegality was committed in conducting court sale."

Thus it is clear that when there is a material irregularity, the

embargo under Order XXI Rule 90(3) of CPC may not have any

application. Here a perusal of the facts and circumstances of the

case would reveal that while drawing up the proclamation of sale

on the basis of the petition filed, the execution court has not

taken into consideration of the fact that for the realisation of the

amount of around Rs.60 lakhs, a multi-storied apartment

complex building and the property wherein that apartment

complex is situated are put for sale. It might be that the

judgment debtors could have pointed out this, earlier. However,

the decree holder was also aware about the existence of the

actual facts and figures while filing the execution petition as well