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  • Section 290 (corresponding to O. 21, R. 68 of the CPC) and the old Section 311
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  • Section 290 (corresponding to O. 21, R. 68 of the CPC) and the old Section 311
Smart Summary

Factual and Procedural Background

This is an appeal by the decree-holder-purchaser against the order dated 10 January 1957 of the learned Subordinate Judge, Meenachil, which had set aside a sale held on 21 February 1956 in execution of the decree in O.S. 192 of 1954. The first defendant (the judgment-debtor) filed an application under Order 21, Rule 90 of the Code of Civil Procedure (CPC) to set aside the sale on grounds of material irregularity and fraud in publishing and conducting the sale.

The subject-matter sold was one half of the Oodukkur right in 7 acres 94 cents of land and a building thereon. The first defendant alleged that the sale was conducted without proper notice, that the decree-holder purchased the property for Rs. 9,458, and that the sale proclamation was published in the local newspaper "Kerala Bhooshanam" only on the actual date of sale (21-2-1956). The decree-holder-purchaser contested the application, denying material irregularity or fraud and arguing that no substantial injury had been caused to the first defendant.

A Commissioner assessed the value of the properties: on the basis of yield at Rs. 9,879-12-4, and on estimated market value at Rs. 11,289-10-8. The first defendant did not adduce evidence to challenge the Commissioner's valuation, and the Subordinate Judge accepted that valuation. The Subordinate Judge nevertheless held that the failure to publish in the newspaper prior to the sale contravened Order 21, Rule 67(2) and set the sale aside.

Legal Issues Presented

  1. Whether publication of the sale proclamation in a designated local newspaper only on the date of sale (i.e., non-compliance with Order 21, Rule 67(2) CPC) amounts to a material irregularity subject to relief under Order 21, Rule 90, or whether such non-compliance renders the sale a nullity (void) that must be set aside without proof of substantial injury.
  2. Whether, given the lower Court's finding that the judgment-debtor sustained no substantial injury and the Commissioner's valuation, the sale should have been set aside despite the publication timing.

Arguments of the Parties

Appellant (Decree-holder-purchaser)

  • Contended that non-compliance with Order 21, Rule 67(2) CPC, at most, amounts to an irregularity which entitles the judgment-debtor to seek relief under Order 21, Rule 90, and does not render the sale void.
  • Argued that the learned Subordinate Judge was wrong to set aside the sale particularly because the Subordinate Judge had found that the judgment-debtor had not sustained substantial injury.
  • Maintained that there was no material irregularity or fraud in publishing or conducting the sale and that no substantial injury was caused to the first defendant.

Respondent / First Defendant (Judgment-debtor)

  • Asserted that the sale was illegal and void because it contravened Order 21, Rule 67(2) CPC by having the newspaper publication only on the date of the sale.
  • Alleged material irregularity and fraud in publishing and conducting the sale and sought the sale to be set aside regardless of proof of substantial injury.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Tasadduk Rasul Khan v. Ahmad Hussain, ILR 21 Cal 66 (Privy Council) Interpretation of the predecessor provisions (Section 290 / Section 311) corresponding to O.21 R.68 and O.21 R.90: non-compliance with the interval/ posting provisions is a material irregularity; relief under the material irregularity provision requires proof of substantial injury. The Court relied on this decision to support the proposition that non-compliance (here, with O.21 R.67(2) / R.68 context) is, at most, a material irregularity and not a nullity; the aggrieved party must prove substantial injury to succeed under O.21 R.90.
Jogendranath v. Nabi Newaj, AIR 1938 Cal 699 Held that mere failure to comply with publicity provisions (O.21 Rrs. 67, 68, 69) does not make a Court sale null and void; such non-compliance is to be treated as material irregularity and remedied via O.21 R.90. The Court followed this decision to reinforce that failing to comply with publication requirements does not automatically invalidate a sale; relief requires treating the failure as material irregularity and proof of substantial injury.
Sm. Ashalata Bose v. Manindra Nath Bose, ILR 1941-2 Cal 570 : (AIR 1942 Cal 275) Followed Jogendranath in treating non-compliance as material irregularity requiring proper application under the procedural provision. Cited as an authority that supports the Calcutta High Court view relied upon by this Court that non-compliance is a material irregularity, not a nullity.
Sharfuddin Hussain v. Radhacharan Das, ILR 46 Cal 255 : (AIR 1918 PC 217) Interpreting a provision with language similar to O.21 R.90 (Section 33 of Act 11 of 1859): a sale shall not be annulled except if made contrary to the Act and then only upon proof that substantial injury resulted from the irregularity. The Court relied on this Privy Council decision to support the proposition that absent proof of substantial injury, a sale affected by the alleged irregularity cannot be set aside.
Jayarama Ayer v. Vridhagiri Aiyer, AIR 1921 Mad 583 Addressed situations where publication misleads as to essential details (place/officer) so as to divert bidders; in such cases the sale may be treated as not having been made under the Code. The Court distinguished this case on its facts, noting it does not support the respondent because there the publication was misleading as to place/officer and diverted bidders — facts unlike the present case.
Natesa Pillai v. Venkatarama Aiyer, AIR 1940 Mad 206 Held that a sale held on a day on which it had been proclaimed that it should not take place is invalid and vitiated by illegality (a nullity) on its facts. The Court observed that this decision is factually different and does not assist the respondent in the present case.

Court's Reasoning and Analysis

The Court began by identifying the relevant procedural provisions: Order 21, Rule 67(1) and (2) (publication of the proclamation "as nearly as may be" in the prescribed manner and, where directed, publication in the Official Gazette or a local newspaper) and Order 21, Rule 68 (requirement of minimum interval of 30 days from affixation of proclamation on the courthouse before sale of immovable property unless judgment-debtor consents).

It was undisputed that the Court had directed publication in a local newspaper (Kerala Bhooshanam) and that such publication occurred only on the date of the actual sale (21-2-1956). The central legal issue identified by the Court was whether this particular non-compliance — publication in the local newspaper only on the day of sale — amounted to a material irregularity (remediable under O.21 R.90 upon proof of substantial injury) or to an illegality/nullity requiring the sale to be set aside without such proof.

The Court examined authority. It relied on Privy Council authority (Tasadduk Rasul Khan) interpreting predecessor statutory provisions corresponding to the present rules to hold that failure to comply with posting/interval requirements constituted a material irregularity and that, in proceedings under the provision dealing with material irregularity, the aggrieved party must prove substantial injury. The Court quoted the Privy Council's observation that the matter must be treated as one of material irregularity under the relevant provision and that the respondents were obliged to prove substantial injury but had given no such evidence.

The Court also invoked the Calcutta High Court decision in Jogendranath v. Nabi Newaj (and a subsequent Calcutta decision following it) which held that the publicity provisions are designed for the protection of judgment-debtors but that mere failure to comply does not render the sale null and void; the aggrieved party must urge the non-compliance as a material irregularity in a proper application under O.21 R.90.

The Court noted the respondent's reliance on Madras decisions (Jayarama Ayer and Natesa Pillai) which, on their facts, held sales to be invalid in circumstances involving misleading publication details or sales held on days proclaimed not to occur. The Court analysed and distinguished those cases on their particular facts and concluded they did not support the respondent's argument that the mere timing of newspaper publication (on the day of sale) automatically renders the sale void in all circumstances.

Applying these authorities, the Court concluded that non-compliance with Order 21, Rule 67(2) in the manner shown here would, at most, constitute a material irregularity and not an illegality or nullity. Consequently, the sale could be set aside only if the judgment-debtor proved substantial injury from the irregularity.

The Court then turned to the facts as found by the Subordinate Judge: the Commissioner’s valuation (yield-based Rs. 9,879-12-4; market-based Rs. 11,289-10-8) was accepted, the sale price realized was Rs. 9,458, and the Subordinate Judge had found that no substantial injury was caused to the first defendant. On that basis, the Court held the sale should not have been set aside.

Holding and Implications

Holding: The appeal is allowed. The order of the learned Subordinate Judge setting aside the sale is set aside, and the first defendant's application under Order 21, Rule 90 is dismissed. Parties will bear their own costs.

Implications:

  • The Court held that non-compliance with Order 21, Rule 67(2) (publication in the local newspaper only on the date of sale) is, at most, a material irregularity and does not automatically render a court sale void or a nullity.
  • Relief for such an irregularity is available under Order 21, Rule 90, but the judgment-debtor must prove that substantial injury resulted from the irregularity; absent proof of substantial injury, the sale should not be set aside.
  • On the facts found by the Subordinate Judge — acceptance of the Commissioner's valuation and a sale price that was not shown to be low or inadequate — there was no substantial injury, and therefore the lower Court's order setting aside the sale was not sustained.
  • The decision applies existing authorities to the question and does not purport to establish a new general principle beyond those authorities; it distinguishes earlier Madras decisions on their facts rather than adopting them as controlling in this case.

Disposition: Appeal allowed.

    Philip v. Thomas .

    Vaidialingam, J.:— This is an appeal filed by the decree-holder-purchaser against the order dated 10th January, 1957, of the learned Subordinate Judge, Meenachil, setting aside the sale held on 21-2-1956, in execution of the decree in O.S 192 of 1954.

    2. The first defendant filed an application under O. 21, R. 90 of the CPC, to set aside the sale on the ground of material irregularity and fraud in publishing and conducting the sale. The subject matter of the sale was one half of Oodukkur right in 7 acres 94 cents of land and a building standing thereon. It was alleged by the first defendant that the sale was conducted on 21-2-1956 without proper notice and that the decree-holder himself purchased the property for Rs. 9458-0-0. Allegations of fraud and material irregularity in the conduct or publishing of the sale were also made by the first defendant. The first defendant also contended that as the publication of the intended sale was made in “Kerala Bhooshanam” only on the date of the actual sale, namely 21-2-1956 the sale is illegal and void. The application was contested by the decree-holder-purchaser (the appellant herein) on the ground that there was no material irregularity or fraud in the publishing or conduct of the sale and that in any event no substantial injury has been caused to the first defendant.

    3. The first defendant appears to have taken out a commission to assess the value of the properties and the Commissioner has valued the properties both on the basis of yield, as also on the basis of the estimated market value. On the basis of yield, the properties were valued in the sum of Rs. 9879-12-4, and on the latter basis, they were valued at Rs. 11,289-10-8.

    4. The first defendant did not adduce any evidence to challenge the valuation of the Commissioner and, in the absence of any other evidence to the contrary, the valuation arrived at by the Commissioner was rightly accepted by the learned Subordinate Judge. The learned Subordinate Judge has also held that the price fetched at the sale namely Rs. 9,458/- cannot be said to be by any means low or inadequate and that the first defendant cannot be said to have sustained any substantial injury.

    5. The main ground of attack on behalf of the first defendant was that the sale itself is illegal and void by reason of the contravention of O. 21, R. 67(2) of the CPC, in view of the fact that the newspaper publication in ‘Kerala Bhooshanam’ was only on 21-2-1956, the actual date of sale. The learned Subordinate Judge was impressed by this contention and has held that this amounts to a contravention of O. 21, R. 67(2) of the CPC and therefore, the sale so held was illegal and in this view the lower Court set aside the sale.

    6. Before us, the learned counsel for the appellant has contended that the non-compliance with the provisions of O. 21, R. 67(2) of the CPC, will, at the most, amount only to an irregularity which may give a right to the judgment-debtor to file an application under O. 21, R. 90 of the CPC, and that the learned Subordinate Judge was wrong in setting aside the sale especially in view of his finding that the judgment-debtor has not sustained substantial injury.

    7. Order 21, R. 67(1) provides that every proclamation shall be published as nearly as may be, in the manner prescribed by R. 54, sub-r. (2). It is not the case of the first defendant that the procedure mentioned therein has not been followed. Clause 2 of the said rule further provides that such proclamation shall also be published in the Official Gazette or in a local newspaper or in both in cases where the Court so directs. In this case, by virtue of this provision the Court appears to have directed the publication of the sale proclamation in a local newspaper namely, Kerala Bhooshanam. There is no dispute that the said publication was made only on 21-2-1956

    8. The question that arises for consideration is whether this publication of the sale proclamation in the newspaper only on the date of sale, amounts to a material irregularity enabling the judgment-debtor to maintain an application under O. 21, R. 90 on the grounds stated therein or whether the sale itself will be a nullity which could be set aside without any further proof of substantial injury by the judgment-debtor.

    9. It is also worthwhile noting one other provision namely O. 21, R. 68 which runs as follows:

    “Save in the case of properly of the kind described in the proviso to H. 43, no sale hereunder shall, without the consent in writing of the judgment-debtor, take place until after the expiration of at least thirty days in the case of immovable property and of at least 15 days in the case of movable property, calculated from the date on which the copy of the proclamation has been affixed on the Court house of the Judge ordering the sale.”

    10. In Tasadduk Rasul Khan v. Ahmad Hussain, ILR 21 Cal 66 (A), the Privy Council had to consider the scope of the old Section 290 (corresponding to O. 21, R. 68 of the CPC) and the old Section 311 (corresponding to O. 21, R. 90 of the CPC). It was contended before their Lordships that the non-compliance with the interval of 30 days between proclamation and sale, made the sale a nullity. But their Lordships rejected this contention and observed as follows at page 69:

    “The proceeding in this case was bi ought by the respondent under S. 311 which deals with material irregularity. The non-compliance with the provisions for posting was a material irregularity………. Both on principle and authority their Lordships are of opinion that the case must be treated, as the respondents themselves treated it, as one of material irregularity to be redressed pursuant to the provisions of S. 311, and in the application of that section it was incumbent on the respondents to have proved that they sustained substantial injury by reason of such irregularity. They gave no such evidence.”

    11. In Jogendranath v. Nabi Newaj, AIR 1938 Cal 699 (B), Edgley, J. held that though the provisions of O. 21, Rr. 67 and 68 like R. 69, have been designed for the protection of judgment-debtors and for the purpose of ensuring that properties of such persons shall not be put up to sale unless due publicity is given to the fact that the sale is to be held, mere failure to comply with those provisions, does not make the Court sale null and void.

    12. The learned Judge has further held that it would be necessary for a person who is aggrieved by the non-compliance with those provisions to treat such non-compliance as material irregularity which he must urge in a properly constituted application under O. 21, R. 90. The decision in AIR 1938 Cal 699 (B), has been followed by a Bench of the Calcutta High Court (B.K Mukherjea and Roxburgh, JJ.) in Sm. Ashalata Bose v. Manindra Nath Bose, ILR 1941-2 Cal 570 : (AIR 1942 Cal 275) (C).

    13. We may also refer to the decision of the Privy Council in Sharfuddin Hussain v. Radhacharan Das, ILR 46 Cal 255 : (AIR 1918 PC 217) (D), where their Lordships had to dear with the provisions for publication of a sale to be conducted under Act 11 of 1859. Section 33 of the said Act which uses similar language found in O. 21, R. 90, provides that no sale shall be annulled by a Court of justice except upon the ground of its having been made contrary to the provisions of the Act and then only on proof that the plaintiff has sustained substantial injury by reason of the irregularity complained of. The irregularity complained of in that case was the non-publication of the notification of sale in the Uriya Gazette. Their Lordships held that inasmuch as no proof has been offered that any substantial injury arose in consequence of the irregularity complained of, the sale cannot be set aside.

    14. The learned counsel for the respondent contends that the non-compliance with the provisions of O. 21, R. 67(2) amounts to an illegality, and any sale held in contravention of the said provisions is void. The learned counsel further contends that the sale has to be set aside even in the absence of any proof of substantial injury caused to the defendants.

    15. In support of his contentions, the learned counsel relies upon the decisions of the Madras High Court in Jayarama Ayer v. Vridhagiri Aiyer, AIR 1921 Mad 583 (E) and Natesa Pillai v. Venkatarama Aiyer, AIR 1940 Mad 206 (F). In our opinion these two decisions do not lend any support to the respondent. In AIR 1921 Mad 583 (E), the facts were entirely different. There the sale appears to have been held at a place and by an officer different from that mentioned in the sale proclamation. The following observation of Old field, J., at p. 585, makes the position clear.

    “It seems to me that if when a proclamation was made any of the usual and effective methods prescribed or permitted by the Court for its publication has been misleading as to details of the matter proclaimed and has been such as not merely not to give information to possible bidders but to divert them to a place where the sale is not to beheld, the result must be that the property has never been sold under the Code at all.”

    16. In AIR 1940 Mad 206 (F), a Bench of the Madras High Court (Burn and Stodart, JJ.) held that a sale held on a day on which it has been proclaimed that it shall not take place is invalid and such a sale is vitiated by illegality and it is a nullity. This decision too does not help the respondent.

    17. in view of the decisions of the Privy Council and the Calcutta High Court, referred to above, it follows that the non-compliance with the provisions of O. 21, R. 67(2) of the CPC will, at the most amount only to a material irregularity which could be relied upon by a judgment-debtor for filing an application under O. 21, R. 90. But the sale so held is not an illegal or a void sale. Such a sale could be set aside only if the judgment-debtor is able to satisfy the Court that he has sustained substantial injury by reason of such irregularity.

    18. On the finding of the lower Court that no substantial injury has been caused in this case the sale should not have been set aside. Having regard to the valuation fixed by the Commissioner in this case, the price fetched in the sale cannot be said to have caused any substantial injury to the 1st defendant much less any consequence of irregularity complained of. The view of the learned Judge that the sale is illegal because it has been held in contravention of O. 21, R. 67(2) is not sound. The order of the learned Subordinate Judge is hereby set aside and this Civil Miscellaneous Appeal is allowed and the application filed by the first defendant under O. 21, R. 90 will stand dismissed. Parties will bear their own costs throughout.

    G.M.J

    19. Appeal allowed.

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    Comments

    Philip v. Thomas .
    (Apr 1, 1957)