PRAYER: CRP (NPD) No. 444 of 2005 against the fair and decretal order dated 11.10.2004 in E.P No. 387 of 2003 in O.S No. 317 of 2000 on the file of the Principal Subordinate Judge, Tirunelveli.
PRAYER: CRP (NPD) No. 460 of 2005 against the order dated 8.10.2004 in E.A.SR No. 19634 of 2004 in E.P No. 387 of 2003 in O.S No. 317 of 2000 on the file of the Principal Subordinate Judge, Tirunelveli.
JUDGMENT
1. Civil Revision Petition No. 444 of 2005 is directed against the order of the learned Principal Subordinate Judge, Tirunelveli dated 11.10.2004 made in E.P No. 387 of 2003 in O.S No. 317 of 2000.
Civil Revision Petition No. 460 of 2005 is directed against the order of the learned Principal Subordinate Judge, Tirunelveli dated 8.10.2004 made in E.A.SR No. 19634 of 2004 in E.P No. 387 of 2003 in O.S No. 317 of 2000.
2. The short facts necessary for the disposal of the above Civil Revision Petitions are as follows:
The respondent herein has filed the Suit against the petitioner in O.S No. 317 of 2000 on the file of the Principal Subordinate Judge, Tirunelveli for recovery of a sum of Rs. 5,25,000/- on the strength of two cheques, one for Rs. 2,25,000/- dated 17.12.1999 and another for Rs. 3,00,000/- dated 17.12.1999 The case of the respondent as put forth by him in the said Suit was that when the two cheques were presented for collection, the same were dishonoured and hence, the said Suit has been filed for recovery of the said, amount. Along with the said Suit, an Application in I.A No. 770 of 2000 has been filed for interim attachment before judgment under Order 38, Rule 5, C.P.C Originally, an interim order of attachment was granted on 8.12.2000 and later the Suit was decreed ex parte on 7.11.2002 The respondent herein has filed E.P No. 387 of 2003 for bringing the properties for sale on the strength of the order of attachment referred to above. The respondent has filed an Application in E.A No. 698 of 2004 for permission to bid in the auction and he was the successful bidder in the auction which was conducted on 6.8.2004 Thereafter, the petitioner has filed an Application under Order 21, Rule 90, C.P.C, to set aside the same. The said Application in E.A.SR No. 19634 of 2004 was filed on 6.10.2004 and the same has been returned for compliance on 8.10.2004 giving one week time. Thereafter, on 11.10.2004, the sale has been confirmed in favour of the respondent. Challenging the order dated 11.10.2004 passed in E.P No. 387 of 2003, C.R.P No. 444 of 2005 has been filed by the judgment-debtor. Challenging the order made in E.A.SR No. 19634 of 2004 dated 8.10.2004, the judgment-debtor has filed C.R.P No. 460 of 2005.
3. Mr. N. Kannan, the learned counsel appearing for the petitioner has submitted the following points for consideration by this Court:
(a) Ex parte decree has been passed in the Suit without following the due procedure of law and hence, the same is not valid. According to the learned counsel, when the counsel for the defendant in the said Suit was not present before the Court, that too, when the matter was not in the list, the Court below should not have passed an ex parte decree against the petitioner, who was the defendant in the said Suit.
(b) The decree holder has preferred an Application in E.A No. 698 of 2004 for permission to bid in the auction and the same has been allowed without any notice to the petitioner/judgment-debtor. According to the learned counsel for the petitioner, notice should have been given in the said Application to the judgment-debtor and after hearing his submission, the Court should have considered the said Application.
(c) Once an Application under Order 21, Rule 90, C.P.C is filed, it should have been decided first before confirming the sale in favour of the respondent herein. According to the learned counsel for the petitioner, such an Application has been filed on 6.10.2004 and the same has been returned on 8.10.2004 giving one week time to the petitioner herein for certain compliance. Before expiry of the said period, sale has been confirmed in favour of the respondent herein on 11.10.2004, sale certificate has been issued and the E.P has been closed. Thus, according to the learned counsel for the petitioner, proper procedure has not been followed in confirming the sale in favour of the respondent.
(d) The value of the properties is more than Rs. 2 crores and the decree-holder should have brought only a portion of the property for sale to satisfy the decree. Without doing so, the entire properties which is valued more than Rs. 2 crores have been brought to sale which is clearly against the provisions under Order 21, Rule 66, C.P.C When the judgment-debtor raised objection regarding sale in his Application under Order 21, Rule 90, C.P.C, after the sale also, the Court has power to look into whether the sale has been held properly if some irregularity is shown by the judgment-debtor.
4. Per contra, Mr. M. Vallinayagam, the learned counsel for the respondent contended that:
(a) The petitioner, who has not questioned the ex parte decree by filing necessary Application to set aside the same, cannot now plead that the ex parte decree obtained by the respondent is not valid. Even in the counter to the execution petition, such plea has not been taken by the petitioner.
(b) The Application filed by the petitioner under Order 21, Rule 90, C.P.C is clearly barred by limitation, since the same has been filed after 60 days.
(c) E.A No. 698 of 2004 filed by the respondent herein seeking permission to bid in the auction was allowed by the Court below, since on two earlier occasions, there were no bidders. Further, in the said Application, notice is not necessary to the judgment-debtor. The Division Bench of the Honourable Supreme Court in Balakrishnan v. Malaiyandi Konar, 2006 (3) CTC 180 has not referred the judgment rendered by the Three Judges of the Supreme Court in Dhirendra Nath v. Sudhir Chandra, AIR 1964 SC 1300. Hence, the ruling by the Three Judges of the Honourable Apex Court reported in Dhirendra Nath v. Sudhir Chandra, AIR 1964 SC 1300 has to be followed rather than the judgment rendered by the Division Bench in Balakrishnan v. Malaiyandi Konar, 2006 (3) CTC 180.
5. I have heard Mr. N. Kannan, the learned counsel appearing for the petitioner and Mr. M. Vallinayagam, the learned counsel appearing for the respondent in both the Revisions.
6. The first and foremost point that has been urged by the learned counsel for the petitioner is that the ex parte decree passed in the Suit in O.S No. 317 of 2000 is not valid, since the provisions of C.P.C have not been followed before an ex parte decree could be passed against the petitioner. The learned counsel further pointed out that when the counsel for the petitioner was not present before the Court below and when the Suit has not been posted in the list, ex parte decree should not have been passed by the Court below.
7. The learned counsel for the respondent disputed the fact that the matter was not posted in the list. Further, the learned counsel for the respondent contended that the petitioner has not challenged the ex parte decree in a manner known to law and hence, he is precluded from questioning the decree passed in the said Suit. Further, the learned counsel for the respondent contended that even in the Execution Petition, no such plea has been taken by the petitioner. I am able to see force in the argument of the learned counsel for the respondent in this regard. When the petitioner has not challenged the ex parte decree passed against him by filing necessary Application to set aside the same, the petitioner cannot challenge the said order in the Execution Petition. Furthermore, no grounds were raised even in the present Civil Revision Petition regarding that point. Hence, I am constrained to hold that the petitioner is not entitled to plead that the ex parte decree has not been passed validly by the Court below.
8. The next point which has been urged by the learned counsel for the petitioner is that the permission that has been sought for by the respondent in E.A No. 698 of 2004 to bid in the auction was allowed by the Court below without notice to the petitioner herein, who is the judgment-debtor. From the records, it could be seen that the said application has been filed on 15.6.2004 and on the same day, the Petition has been allowed without any notice to the judgment-debtor. The Court below should have issued notice to the judgment-debtor before passing order in that Application.
9. In this connection, the learned counsel for the petitioner has drawn my attention to the judgment reported in Venkitammal v. Janaki Ammal, 1971 (84) LW 189, wherein it has been held as follows:
“In Md. Mustafa Maracayar v. Udainachi Ammal, 1966 (79) LW 187, Ananthanarayanan, C.J, laid down that where the permission to bid and set off is sought by a mortgagee, that discretion should be exercised with considerable care, that instances of that kind should be scarce and not liberal, that only where attempts to bring the property to sale has become unsuccessful on a prior occasion and the mortgagee has become unable to realise the debt which is very hold, leave can be granted in such cases, that the discretion of the Court in granting leave should be judicially exercised and that it is desirable that the order granting permission should specify the grounds on which it is granted, particularly where the objections thereto have been overruled.”
10. In the said judgment, the learned Judge has followed the decision reported in Md. Mustafa Maracayar v. Udainachi Ammal, 1966 (79) LW 187 wherein it has been held as follows:
“Where the permission to bid and set off is sought by a mortgagee, that discretion should be exercised with considerable care, that instances of that kind should be scarce and not liberal, that only where attempts to bring the property to sale has become unsuccessful on a prior occasion and the mortgagee has become unable to realise the debt which is very hold, leave can be granted in such cases, that the discretion of the Court in granting leave should be judicially exercised and that it is desirable that the order granting permission should specify the grounds on which it is granted, particularly where the objections thereto have been overruled.”
11. In the present case, as stated already, permission has been sought for to bid in the auction by the respondent herein on 15.6.2004 and the same was allowed on the same date without any notice to the judgment-debtor. Thus, the Court below has erred in allowing the said Application filed by the respondent herein.
12. The next point on which the learned counsel for the petitioner has placed reliance is that once the Application under Order 21, Rule 90, C.P.C is filed, it has to be decided first. Without deciding the said Application, the Court below should not have confirmed the sale in favour of the respondent. Undoubtedly, the Application under Order 21, Rule 90, C.P.C, was filed by the petitioner in E.A.SR No. 19634 of 2004 on 6.10.2004, the same has been returned on 8.10.2004 granting one week time for making certain compliance. While so, the sale in favour of the respondent has been confirmed on 11.10.2004 itself. Thus, according to the learned counsel for the petitioner, when the application under Order 21, Rule 90, C.P.C has been filed to set aside the sale, the Court below should have passed orders in the said Application before confirming the sale in favour of the respondent.
13. Per contra, the learned counsel for the respondent contended that even though the Application has been filed on 6.10.2004, the Application has not been entertained and hence, the petitioner cannot say that the Application under Order 21, Rule 90, C.P.C was pending on the date when the Court below has passed an order confirming the sale in favour of the respondent.
14. I am unable to subscribe my views to the said argument made by the learned counsel for the respondent. When an Application under Order 21, Rule 90, C.P.C was filed on 6.10.2004 and the same has been returned on 8.10.2004 by the Court below granting one week time for making some compliance, the Court below should have awaited till the time expires for compliance of the return, namely, till 15.10.2004 and thereafter, should have passed an order confirming the sale after deciding the application filed by the petitioner under Order 21, Rule 90, C.P.C The hurry in which the order of confirmation of sale passed by the Court below on 11.10.2004 itself is totally erroneous.
15. In this connection, the learned counsel for the petitioner relied on the judgment reported in Ramakrishna Reddiar v. Pichammal, AIR 1981 Mad. 53 wherein this Court has held as follows:
“A perusal of the Original Petition filed by the appellants and the fourth respondent under Order 21, Rule 90, C.P.C, discloses that the initial presentation had been on 7th January 1980 within 30 days from the date of sale held on 7th December 1979. It is also further found from the endorsement that on 10th January 1980, the petition had been returned granting the appellants and the fourth respondent, ten days' time to comply with certain defects and after so complying with the defects, the petition had been re-presented on 21st January 1980 because 20th January 1980 happened to be a Sunday and consequently, the re-presentation on 21st January 1980 would be quite pauper and in order. If it is so, the petition to set aside the sale had already been ‘made’ on 7th January 1980 and therefore any confirmation of sale in favour of the first respondent would only be subject to the result of the Application, viz., E.A No. 62 of 1980.”
16. While deciding so, the learned Judge thereon has relied on the judgment reported in Ramakrishnana v. Parameswara, AIR 1964 Mys. 59, wherein the Division Bench of the said Court has held as follows:
“It is true that no Application under Order 21, Rule 90 can be deemed to have been admitted till either notice of that Application has been ordered to the decree-holder or decree-holders for security if any called for by the Court is given. It cannot however be contended that in view of the First Proviso to Order 21, Rule 90 (added by the Madras High Court), the Application under Rule 90 of Order 21 can be deemed to have been ‘made’ only when it is admitted and not on the date of its presentation. The expression ‘made’ in Order 21, Rule 92(1) cannot refer to the admission of the Petition. In an Application made under Rule 90 of Order 21 as amended by the Madras High Court, there are three different stages if the Court calls for a security from the applicant; firstly there is the presentation of the application, which is the same thing as making the Application, secondly, there is the admission of the application, and lastly the disposal of that Application. But the confirmation under Order 21, Rule 92 can only be made after the Application made by the judgment-debtor to set aside the sale is disallowed. Where the sale is confirmed when such Application is pending the order is illegal. Therefore, the order confirming the sale and not the sale as such will be set aside.”
17. As could be seen from the above said decisions, the Petition to set aside the sale has already been made on 6.10.2004 and therefore, the confirmation of sale in favour of the respondent would only be subject to the result of the said Application. The argument of the learned counsel for the respondent that the application under Order 21, Rule 90, C.P.C can be deemed to have been made only when it is admitted and not on the date of presentation will not hold good.
18. The next point on which the learned counsel for the petitioner placed his reliance is that the properties valued about more than Rs. 1.5 crores have been sold in auction for a paltry sum in favour of the decree-holder. The execution petition has been levied for a sum of Rs. 7,11,550/- and the properties that have been brought to sale are worth more than Rs. 1.5 crores. Furthermore, the respondent has brought more than 12 items of property for sale and the Court below should have brought the property to sale only a portion of the property or one or two of the schedule of properties which would have been sufficient to satisfy the decree. In this connection, the learned counsel for the petitioner has drawn my attention to Order 21, Rule 64, C.P.C which reads as follows:
“Power to order property attached to be sold and proceeds to be paid to person entitled.— Any Court executing a decree may order that any property attached by it and liable to sale, or such portion thereof as may seem necessary to satisfy the decree, shall be sold, and that the proceeds of such sale, or a sufficient portion thereof, shall be paid to the party entitled under the decree to receive the same.”
19. The learned counsel for the petitioner has further drawn my attention to paragraphs 4 to 6 of the counter which shows the value of the properties which have been brought to sale by the respondent. Paragraphs 4 to 6 of the counter in E.A.SR No. 19634 of 2004 reads as follows:
“4. It is submitted that the petition I item property is a pucca house in 4 cents with door No. 3/51. The house is constructed in a total area of 2600 sq.ft with Ground Floor in 1300 sq.ft and first floor in 1300 sq.ft in an area of 2 cents. the building itself is worth Rs. 15,00,000/-. further each cent of the site is worth Rs. 1,00,000/-. Thus the house and site in item No. 1 alone are wroth Rs. 19,000/-.
5. It is further submitted that items 1, 11 and 12 alone are worth Rs. 88,20,000/-. There is an industrial building in an area of 17,000/- sq.ft which alone is worth Rs. 85,00,000/-. There is also a water tank which is worth Rs. 3,00,000/-. Apart from that there is a borewell put up at a cost of Rs. 20,000/-.
6. Further items 2 to 9 are coconut thopes and Ayan punja lands worth Rs. 15,00,000/-. A Commission inspection would clearly show that the properties are worth more than a crore. But, the respondent had played fraud and bid in the Court auction for a paltry sum less than Rs. 10,00,000/-.”
20. The learned counsel for the petitioner has further drawn my attention to the judgment reported in Balakrishnan v. Malaiyandi Konar, 2006 (3) CTC 180 wherein it has been held as follows:
“The provision contains some significant words. They are “necessary to satisfy the decree”. Use of the said expression clearly indicates the legislative intent that no sale can be allowed beyond the decretal amount mentioned in the sale proclamation. See Takkaseela Pedda Subba Reddi v. Pujari Padmavathamma, AIR 1977 SC 1789. In all execution proceedings, Court has to first decide whether it is necessary to bring the entire property to sale or such portion thereof as may seem necessary to satisfy the decree. If the property is large and the decree to be satisfied is small the Court must bring only such portion of the property the proceeds of which would be sufficient to satisfy the claim of the decree holder. It is immaterial whether the property is one or several. Even if the property is one, if a separate portion could be sold without violating any provision of law only such portion of the property should be sold. This is not just a discretion but an obligation imposed on the Court. The sale held without examining this aspect and not in conformity with this mandatory requirement would be illegal and without jurisdiction. See Ambati Narasayya v. M. Subba Rao and Another, 1989 Suppl. (2) SCC 693. The duty cast upon the Court to sale only such portion or portion thereof as is necessary to satisfy the decree is a mandate of the legislature which cannot be ignored. Similar, view has been expressed in S. Mariyappa (Dead) by LRs. and others v. Siddappa and another, 2005 (10) SCC 234.”
21. The above facts coupled with the judgment referred to above will show that the decree-holder has brought the entire properties for sale and knocked away the same for a paltry sum. The Court below has erred in bringing the entire properties for sale, when a portion of the property or few of the properties are sufficient enough to satisfy the decree. So, the argument of the learned counsel for the petitioner on this point sounds reasonable.
22. The learned counsel for the respondent further contended that the judgment rendered by the Three Judges of the Apex Court reported in Dhirendra Nath v. Sudhir Chandra, AIR 1964 SC 1300 has to be taken as a correct proposition of law rather than the judgment reported in Balakrishnan v. Malaiyandi Konar, 2006 (3) CTC 180. Even in Dhirendra Nath v. Sudhir Chandra, AIR 1964 SC 1300, Their Lordships have held in paragraph 5 as follows:
“A party who received the notice of the proclamation but did not attend at the drawing up of the proclamation or did not object to the said defect cannot, maintain an Application under Order 21, Rule 90 of the Code of Civil Procedure. Even if he could, the sale cannot be set aside unless by reason of the said defect or irregularity he had sustained substantial injury.”
Finally, in paragraph 8, Their Lordships have held as follows:
“If that be the legal position, Order 21, Rule 90 of the Code of Civil Procedure is immediately attracted. The concurrent finding of the Courts is that by reason of the non-observance of the provisions of Section 35 of the Act no substantial injury was caused to the judgment-debtor. Further, though notice was given to the judgment-debtor, in one case he did not file objections at all and in the other case, though the judgment-debtor filed objections, he did not attend at the drawing up of the proclamation. The sales are, therefore, not liable to be set aside under the terms of the said provision.”
23. The reading of the above judgment will clearly show that a party, who received the notice of proclamation but did not attend at the drawing up of the proclamation or did not object to the said defect can still maintain an application under Order 21, Rule 90, C.P.C if there is any defect or illegality in the said order and that he had sustained substantial injury. Furthermore, in the said judgment, it has been clearly pointed out that the Courts below have held that no substantial injury was caused to the judgment-debtor and hence, Their Lordships of the Apex Court did not interfere with the orders of the Court below. Hence, the facts of the said case is entirely different from the facts of the present case. The judgment that has been rendered in Balakrishnan v. Malaiyandi Konar, 2006 (3) CTC 180 which has been relied on by the learned counsel for the petitioner is squarely applicable to the facts of the present case and hence, the argument of the learned counsel for the respondent that the said judgment cannot be relied upon is not correct.
24. The learned counsel for the petitioner then submitted that when the judgment-debtor raised objection regarding sale in the Application under Order 21, Rule 90, C.P.C, after sale also, the Court has to look into the fact whether the sale is held properly, if some irregularity is shown by the judgment-debtor. In this connection, the learned counsel for the petitioner has drawn my attention to the judgment reported in Navalkha and Sons v. Ramanya Das, AIR 1970 SC 2037, wherein Their Lordships of the Supreme Court have held as follows:
“The principles which should govern confirmation of sales are well established. Where the acceptance of the offer by the Commissioners is subject to confirmation of the Court, the offeror does not by mere acceptance get any vested right in the property so that he may demand automatic confirmation of his offer. The condition of confirmation by the Court operates as a safeguard against the property being sold at inadequate price whether or not it is a consequence of any irregularity or fraud in the conduct of the sale. In every case it is the duty of the Court to satisfy itself that having regard to the market value of the property the price offered is reasonable. Unless the Court is satisfied about the adequacy of the price the act of confirmation of the sale would not be a proper exercise of judicial discretion.”
25. On the other hand, the learned counsel for the respondent contended that the Application filed by the petitioner under Order 21, Rule 90, C.P.C is clearly barred by limitation. According to the learned counsel for the petitioner, the sale took place on 6.8.2004 and the Application under Order 21, Rule 90, C.P.C has been filed only on 6.10.2004 which is clearly barred toy limitation. I am unable to subscribe my views to the said argument of the learned counsel for the respondent. No doubt, the sale was conducted on 6.8.2004 by the Nazar, but the Court below has accepted the bid only on 10.8.2004 Hence, 10.8.2004 alone has to be taken into consideration to see whether the said Application has been filed within 60 days as contemplated under Order 21, Rule 90, C.P.C
26. In this connection, the learned counsel for the petitioner relied on the judgment reported in Poongavana v. Muthurama, AIR 1953 Mad. 762 wherein it has been held as follows:
“The Central Nazir being an officer immediately subordinate to the District Judge conducts the sale not in the actual presence of the Subordinate Judge, but in a separate place; and even so when the Central Nazir accepts a final bid the sale will become complete only when the Court, which has directed the sale accepts the final bid.”
27. Thus, in the present case, though the sale was conducted on 6.8.2004 by the Nazar, the Court below accepted the final bid only on 10.8.2004 Hence the Application filed under Order 21, Rule 90, C.P.C on 6.10.2004 is well within time.
28. Furthermore, it has to be seen that the sale was conducted on 6.8.2004 7.8.2004 and 8.8.2004 are Saturday and Sunday being holidays for the Court. Hence, the limitation starts from 9.8.2004 The Application filed on 6.10.2004 under Order 21, Rule 90, C.P.C is well within time. Thus, taking into consideration the entire aspects of the matter, I hold that the Application filed under Order 21, Rule 90, C.P.C is within 60 days from the date of sale and hence, the argument advanced on the side of the respondent has to be rejected and the argument advanced on the side of the petitioner has to be accepted.
29. It has to be seen further that under Order 21, Rule 91, C.P.C, the Court can confirm a sale only on two occasions, namely, —
(i) Where no Application is made under Rule 89, 90 or 91; or
(ii) Where such Application is made and disallowed.
In this case on hand, when the Application was made, without disallowing the same, the sale was confirmed. Therefore, in any event, the confirmation of sale by the Court below dated 11.10.2004 is liable to be set aside.
30. Thus, taking into account the entire facts and circumstances of the case and also taking into consideration the law laid down by the Apex Court and also by this Court, I have no hesitation to hold that the Court below has confirmed the sale in favour of the respondent herein without considering the Application filed by the petitioner under Order 21, Rule 90, C.P.C which is totally erroneous. The Court below should not have hurriedly passed the order confirming the sale when the Application filed by the petitioner to set aside the sale has been returned by the Court below on 8.10.2004 granting one week time for certain compliance and at the same time, passing orders confirming the sale on 11.10.2004 itself.
31. Hence, the order of the learned Principal Subordinate Judge, Tirunelveli dated 11.10.2004 made in E.P No. 387 of 2003 in O.S No. 317 of 2000 is liable to be set aside and accordingly, the same is set aside. The learned Principal Subordinate Judge, Tirunelveli is directed to number the Application filed by the petitioner in E.A.SR No. 19634 of 2004 in E.P No. 387 of 2003 in O.S No. 317 of 2000 and dispose of the same on merits after affording opportunity to the petitioner and the respondent. The Civil Revisions Petitions are ordered accordingly. Consequently, the connected C.M.Ps are closed. However, there is no order as to costs.