Sri. Mohan Bhat v. Ayyappa. M

Karnataka HC19 Sept 2025WP/21943/2022

Case brief

AI extract

What is this about?

Order XXI Rule 90 CPC; setting aside execution sale; material irregularity or fraud in publishing or conducting sale; substantial injury; inadequacy of price; Article 227 certiorari writ petition; compromise decree under Order 23 Rule 3 r/w Section 151 CPC; specific performance; decree-holder vs judgment-debtor; execution Ex.Case.No.15/2017; Principal Senior Civil Judge and JMFC Bantwal Dakshina Kannada; attachment Order XXI Rule 54; Order XXI Rule 58; Kadiyala Rama Rao v. Gutala Kahna Rao (2000) 3 SCC 87; Desh Bandhu Gupta v. N.L. Anand (1994) 1 SCC 131; writ petition allowed; impugned order set aside.

What did the court decide?

Writ petition allowed: impugned order dated 29.09.2022 on I.A.No.X in Ex.Case.No.15/2017 (setting aside the auction sale) quashed/set aside by writ of certiorari under Article 227 ¶¶65

Sri. Mohan Bhat Vs Ayyappa. M — Writ and Judicial Review | Karnataka HC (2025)

What the court decided

AI extract

Outcome

Writ petition allowed: impugned order dated 29.09.2022 on I.A.No.X in Ex.Case.No.15/2017 (setting aside the auction sale) quashed/set aside by writ of certiorari under Article 227

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Issue for consideration

Whether the auction sale held in execution of Ex.Case.No.15/2017 could lawfully be set aside by the Executing Court under Order XXI Rule 90(1) and (2) CPC in the absence of irregularity or fraud in publishing or conducting the sale (the only plea advanced being inadequacy of price).

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Court's answer

On the facts of the case and the evidence on record, this Court found no irregularity or fraud as required under Order XXI Rule 90(1) and (2) CPC; the ground necessary for setting aside the execution sale under that provision was therefore absent.

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Ratio / Principle

Since the Rule 90 preconditions were not met, the view taken by the Trial Court was held improper in the eye of law, and the impugned order dated 29.09.2022 passed by the Principal Senior Civil Judge and JMFC Bantwal, Dakshina Kannada District in Ex.Case.No.15/2017 was set aside by way of certiorari.

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Detailed headnote1 paragraphs

High Court of Karnataka at Bengaluru (Dr. Justice K. Manmadha Rao, CAV order dated 19.09.2025; W.P. No.21943/2022 GM-CPC): Writ petition under Article 227 filed by the decree-holder (Sri Mohan Bhat) seeking certiorari to quash the order dated 29.09.2022 on I.A.No.X in Ex.Case.No.15/2017 (Prl. Senior Civil Judge & JMFC, Bantwal, D.K. District), whereby the executing court had allowed judgment-debtor Ayyappa M's Order XXI Rule 90 application and set aside the auction sale. Background: suit O.S.No.29/2016 for specific performance compromised on 04.11.2016 under Order 23 Rule 3 r/w S.151 CPC with refund of Rs.26,20,000/- at 12% interest on charge of the schedule property; execution Ex.P.15/2017 followed (balance Rs.19,22,250/- as on 03.03.2021); an earlier Rule 90 set-aside on 08.06.2020 was followed by re-auction (spot sale 16.03.2022; court sale 30.03.2022) and a second Rule 90 application allowed on 29.09.2022. Holding: on the facts and evidence there was no irregularity or fraud as required under Order XXI Rule 90(1) and (2) CPC; the Trial Court's view was improper and the impugned order was set aside; writ petition allowed. Counsel's reliance on Kadiyala Rama Rao v. Gutala Kahna Rao ((2000) 3 SCC 87) and Desh Bandhu Gupta v. N.L. Anand ((1994) 1 SCC 131) was reproduced in the judgment in support of the contention that mere inadequacy of price cannot sustain a set-aside.

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 19^TH DAY OF SEPTEMBER 2025

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BEFORE

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THE HON'BLE DR. JUSTICE K.MANMADHA RAO

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WRIT PETITION NO.21943 OF 2022 (GM-CPC)

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BETWEEN:

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SRI MOHAN BHAT S/O SHIVARAMAIAH AGED ABOUT 46 YEARS RESIDING AT URIMAJALU IDUKIDU VILLAGE AND POST BANTWAL TALUK, D.K.DISTRICT-574 214.

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...PETITIONER

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(BY SMT. NEERAJA KARANTH ADVOCATE FOR SRI K.SHRIHARI, ADVOCATE)

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AND:

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AYYAPPA M S/O LATE MAHABALABHAT AGED ABOUT 38 YEARS RESIDING AT MADKATTE KINADU VILLAGE AND POST BANTWAL TALUK D.K.DISTRICT-574 214.

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…RESPONDENT

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(BY SRI.RAVISHANKAR SHASTRY G., ADVOCATE)

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THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA, 1908, PRAYING TO ISSUE A WRIT OF CERTIORARI BY QUASH THE ORDER ON IA NO.X DATED 29.9.2022 IN EX.P.NO.15/2017 ANNEXURE-Q ON THE FILE OF PRL. SENIOR CIVIL JUDGE AND JMFC BANTWAL, DK DISTSRICT WHICH IS FILED HEREWITH AND MARKED AS ANNEXURE-A MAY FURTHER BE PLEASED TO ISSUE SUCH OTHER WRIT OR ORDERS ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE AND EQUITY.

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THIS PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 20.08.2025 AND COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING:

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CORAM: HON'BLE DR. JUSTICE K.MANMADHA RAO

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CAV ORDER

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This writ petition has been filed seeking to quash the order dated 29.09.2022 on I.A.No.X, passed in Ex.Case.No.15/2017 on the file of the Principal Senior Civil Judge and JMFC Bantwal, Dakshin Kannada District.

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The petitioner herein is the Decree Holder and the respondent herein is the Judgment Debtor (JDR) before the Trial Court.

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The petitioner herein had filed a suit for specific performance of the agreement for sale dated 21.05.2014 in O.S No.29/2016 on the file of Principal Senior Civil Judge and JMFC at Bantwal against Respondent vendor. The said suit came to be compromised between the parties as per the compromise petition filed under Order 23 Rule 3 read with section 151 of CPC dated 04.11.2016, wherein the respondent herein had agreed to refund a sum of Rs.26,20,000/- with interest at 12% within 15 days to the petitioner on the charge of the suit schedule property. However,

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there was also a right reserved to the petitioner to get the sale deed executed through the Court in respect of suit schedule property if the payment is not done. The Judgment Debtor failed to fulfil his obligations as per the comprise decree and thereby constraining the Judgment Debtor to file execution petition in Ex.P. 15/2017. During the pendency of the said execution petition the Judgment Debtor had made certain payment and the Decree Holder had filed a memo of calculation to that effect and as on 03.03.2021 the Judgment Debtor is liable to pay a sum of Rs.19,22,250/-.

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After due process, spot sale and Court sale was held on 06.01.2020 and 20.01.2020 respectively in respect of the schedule properties. However, the JDR/respondent herein had filed an application under order 21 rule 90 of Code of Civil Procedure to set aside the sale. The Executing Court after hearing both the sides set aside the sale as per its order dated 08.06.2020.

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Thereafter, again, matter was posted for steps and in the sale, property was sold for Rs.22,50,000/-. As there was no recovery of amount, again the decree holder had filed a memo with calculation memo, sale paper in three sets, RTC in respect of

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two survey numbers and market value of the property as per the Sub-Registrar office, Vittal on 03.03.2021.

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The Judgment Debtor had filed an application u/s 151 of Civil Procedure Code as per his application dated 14.11.2017 to dismiss the execution petition by contending that memorandum of fact that the sale agreement based on which compromise decree was passed is insufficiently stamped and the compromise decree is also not stamped and therefore cannot be looked into for any purposes and as such the execution petition is not maintainable.

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On 16.11.2018, the petitioner had filed an application I.A. No.II under order XXI Rule 54 read with Section 151 of CPC for attachment of properties shown in the petition schedule and the Court allowed the application.

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The Judgment Debtor then filed I.A.No.IV under order XXI Rule 58 of CPC on 18.06.2019 to lift the attachment. On the same date yet another application was filed seeking for stay of sale of execution of schedule properties. By an order dated 19.06.2019 the Executing Court recalled the order of sale for the time being.

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On 28.10.2019 the respondent/JDR had filed I.A No.VI praying for stay of the sale of execution schedule properties

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contending that he is paying a sum of Rs.70,000/-. As the Judgment Debtor was not making any payment, the Court has ordered for spot sale and Court sale. The spot sale and Court sale were completed by the Court. The respondent/JDR on 05.02.2020 had filed an I.A. under order XXI Rule 90 read with section 151 of

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CPC. The Court by an order dated 08.06.2020 allowed the application by setting aside the sale.

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The petitioner had not paid the decreed amount, another application for sale of attached properties came to be filed. Thereafter, the auction was conducted as per the spot sale dated 16.03.2022 and Court sale dated 30.03.2022. Now, the Judgment debtor on 15.04.2022 filed an application under Order XXI Rule 90 read with section 151 of CPC to set aside the sale. The Court

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after hearing both sides, allowed the application I.A. No.X and set aside the sale by an order dated 29.09.2022.

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Heard learned counsel for the petitioner,* and respondent *.

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Learned counsel for the petitioner would contend that, sale could be set aside only on the ground of irregularity or fraud in publishing or conducting it. Unless, the Court is satisfied that there was irregularity or fraud, it can not set aside the sale. Here

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*Corrected vide Court order Dt:10-10-2025.

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in the case at hand, ground that was pleaded was inadequacy of price. Therefore, the order passed by the Executing Court is perverse.

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It was also contended that in Kadiyala Rama Rao vs Gutala Kahna Rao and Others reported in

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MANU/SC/0112/2000 , the Supreme Court took the view that material irregularity and fraud alone would confer the jurisdiction to set aside the sale but here in the case on hand, there is no irregularity or fraud and therefore unsustainable.

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It was also contended by relying judgment in Desh Bandhu Gupta vs N L Anand and Rajinder Singh reported in (1994) 1 SCC 131 , that there will always be difference between market price and Court sale price and mere inadequacy of price cannot demolish a Court sale.

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It was also contended that the Executing Court has misguided itself by not applying its judicial mind by looking into the sale papers filed by the decree holder. It was further contended that to set aside the sale, there must be substantial injury by reason of such mistake or fraud. In the case on hand, the judgment debtor neither pleaded nor proved the same and

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mere bald allegation would not suffice and therefore, the Executing Court has committed an error by setting aside the sale.

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In support of his contentions, learned counsel for the petitioner has placed reliance on the following judgments:

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Kadiyala Rama Rao v. Gutala Kahna Rao, (2000) 3 SCC 87 : 2000 SCC OnLine SC 430 at page 90

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6. To appreciate the contentions raised in the matter, it would, however, be convenient to note the provisions of Order 21 Rule 90 which reads as below:

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“90. Application to set aside sale on ground of irregularity or fraud.—(1) Where any immovable property has been sold in execution of a decree, the decree-holder, or the purchaser, or any other person entitled to share in a rateable distribution of assets, or whose interests are affected by the sale, may apply to the court to set aside the sale on the ground of a material irregularity or fraud in publishing or conducting it.

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(2) No sale shall be set aside on the ground of irregularity or fraud in publishing or conducting it unless, upon the facts proved, the court is satisfied that the applicant has sustained substantial injury by reason of such irregularity or fraud.

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(3) No application to set aside a sale under this rule shall be entertained upon any ground which the applicant could have taken on or before the date on which the proclamation of sale was drawn up.

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Explanation.—The mere absence of, or defect in, attachment of the property sold shall not, by itself, be a ground for setting aside a sale under this rule.”

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10. The provisions of Order 21 Rule 90 thus categorically envisage that material irregularity and fraud alone would confer jurisdiction on to the executing court to set aside the same. Needless to record here that there is no evidence of fraud or material irregularity, neither even an allegation in regard thereto. The only issue was of saleable interest for a period of 15 years since the deed of sale as executed by the Municipality of Rajamundhry in favour of the judgment-debtor, contained a condition that the property cannot be alienated by the judgment-debtor for a period of 15 years. It is to be noticed at this juncture that question of saleable interest does not come within the ambit of Order 21 Rule 90 and as such the judgment-debtor had no locus standi to apply to the court for setting aside the sale. In the present factual context, statute recognises such a locus standi only in the event of material irregularity or fraud and not otherwise. Apart therefrom, saleable interest can only be challenged by the purchaser and not by the judgment-debtor since the purchaser's right would otherwise be clouded therewith by reason of there being no saleable interest in the property so far as the judgment-debtor is concerned. Order 21 Rule 91 is specific on this score and a right has been conferred on to the purchaser only.

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Desh Bandhu Gupta v. N.L. Anand, (1994) 1 SCC 131 : 1993 SCC OnLine SC 266 at page 147

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15. To get over the difficulty, Shri Madhava Reddy has fallen back on Order 21 Rule 90(3) of the Code, which provides that “no application to set aside a sale under this rule shall be entertained upon any ground which the applicant could have taken on or before the date of which the proclamation of sale was drawn up”.

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On hearing the submissions of * counsel * for both

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sides * on perusal of the material on record and the impugned order dated 29.09.2022 passed by Principal Civil Judge & JMFC, Bantwal, Dakshina Kannada, it is observed that in the present facts of the case and the evidence on record, there is no reasoning irregularity or fraud as required under Order XXI Rule 90 (1) and (2) of CPC.

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In view of the above discussions, the view taken by the Trial Court is not proper in the eye of law. Hence, the impugned order dated 29.09.2022 passed by the Principal Senior Civil Judge and JMFC Bantwal, Dakshina Kannada

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District in Ex.Case.No.15/2017 is hereby set aside.

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Accordingly, the writ petition is allowed .

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Sd/(DR. K.MANMADHA RAO) JUDGE

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Ct-adp

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*Corrected vide Court order Dt.10-10-2025.

Procedural history

How this case reached the court

AI extract

Order under challenge
Order dated 29.09.2022 on I.A.No.X in Ex.Case.No.15/2017, whereby the Executing Court allowed the Judgment Debtor's application under Order XXI Rule 90 CPC and set aside the auction sale held in execution of the compromise decree¶¶20
Principal Senior Civil Judge and JMFC Bantwal, Dakshin Kannada District · 29.09.2022
Prior proceeding
Petitioner (Decree Holder) filed suit O.S No.29/2016 for specific performance of agreement for sale dated 21.05.2014 against respondent vendor before Principal Senior Civil Judge and JMFC at Bantwal¶¶22
Prior proceeding
Suit compromised per compromise petition dated 04.11.2016 under Order 23 Rule 3 r/w Section 151 CPC: respondent to refund Rs.26,20,000/- with 12% interest within 15 days on charge of suit schedule property, with right reserved to have sale deed executed through Court on default¶¶22
Prior proceeding
On default of the compromise decree, execution petition Ex.P.15/2017 filed; certain payments made during pendency; balance of Rs.19,22,250/- computed as on 03.03.2021¶¶24
Prior proceeding
First auction: spot sale on 06.01.2020 and Court sale on 20.01.2020 in respect of schedule properties¶¶25
Prior proceeding
Respondent/JDR applied under Order 21 Rule 90 CPC to set aside the sale; Executing Court set aside the sale by order dated 08.06.2020¶¶25
Prior proceeding
Matter re-posted for steps; property sold for Rs.22,50,000/-; Decree Holder filed calculation memo, sale papers, RTCs and Sub-Registrar market value on 03.03.2021¶¶26
Prior proceeding
Judgment Debtor's application u/s 151 CPC dated 14.11.2017 to dismiss the execution petition, contending the sale agreement underlying the compromise decree was insufficiently stamped and the decree unstamped¶¶29
Prior proceeding
Decree Holder's I.A.No.II dated 16.11.2018 under Order XXI Rule 54 r/w Section 151 CPC for attachment of petition-schedule properties; allowed¶¶30
Prior proceeding
Judgment Debtor's I.A.No.IV dated 18.06.2019 under Order XXI Rule 58 CPC to lift attachment, with a contemporaneous application seeking stay of sale¶¶31
Prior proceeding
By order dated 19.06.2019 the Executing Court recalled the order of sale for the time being¶¶31
Prior proceeding
Respondent/JDR's I.A.No.VI dated 28.10.2019 praying stay of sale, contending he was paying Rs.70,000/-¶¶32
Prior proceeding
After spot and Court sales were completed, JDR's further application under Order XXI Rule 90 r/w Section 151 CPC filed 05.02.2020; allowed by order dated 08.06.2020 setting aside the sale¶¶35
Prior proceeding
Second auction pursuant to fresh sale application: spot sale dated 16.03.2022 and Court sale dated 30.03.2022¶¶36
Prior proceeding
Judgment Debtor's application dated 15.04.2022 under Order XXI Rule 90 r/w Section 151 CPC to set aside the sale¶¶36
Prior proceeding
Executing Court, after hearing both sides, allowed I.A.No.X and set aside the sale by order dated 29.09.2022 (the impugned order)¶¶37

Sri. Mohan Bhat v. Ayyappa. M

Case brief

What is this about?

What did the court decide?

Sri. Mohan Bhat v. Ayyappa. M

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Cases cited

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Procedural history

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