Rejecting the petitioner's revision, the High Court held that non-fixation of the reserve price under Rule 72A Order XXI CPC renders a mortgagee's purchase voidable, not void. The sale cannot be challenged under Section 47 CPC; the remedy is a specific application under Rule 72A before the 60-day period expires. Transferees have locus standi as representatives.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT :
THE HONOURABLE MR. JUSTICE M.SASIDHARAN NAMBIAR
MONDAY, THE 14TH JULY 2008 / 23RD ASHADHA 1930
CRP.No. 133 of 2006()
--------------------AGAINST THE ORDER DATED 6/2/2006 IN EA 1376/02,EP 353/88 IN OS.68/1986 of PRINCIPAL SUB COURT,ERNAKULAM ....................
REVISION PETITIONER: PETITIONER:
-------------------------------------------------------
MRS. SAJU GEORGE, WIFE OF T.V.GEORGE, AGED 56, HOUSE NO.36/715, SPICES STREET, LIZY ROAD, ERNAKULAM.
BY ADV. SRI.K.C.CHARLES
RESPONDENTS: RESPONDENTS:
--------------------------------------------------
1. THOMAS, SON OF POULOSE, AGED ABOUT 55, KIDANGATTU HOUSE, AMMANKOIL ROAD, ERNAKULAM (NOW AT KUNDANGATTU HOUSE, PARAMBITHARA ROAD, KOCHI-16).
2. CHANDRASEKHARAN NAIR, AGED 64, SON OF KARTHIAYANIAMMA, KOLLAMPARAMBU VEEDU, PLACHERY, ELAMAKKARA, ERNAKULAM.
3. P.CHANDRU, SON OF K.PANCHAVARNAM, AGED 43, HOUSE NO. 8/747, KARIMOKAL ROAD, VADAYAMPATHU MOOLAKKARA, PUTHENCRUZ P.O., PIN-682 308.
BY ADV. SRI.P.P.JACOB,CAVEATOR - R1 SRI.GEORGE VARGHESE NARAYANPARAMBIL - R3
THIS CIVIL REVISION PETITION HAVING BEEN FINALLY HEARD ON 27/06/2008 ALONG WITH CRP NO. 137 OF 2006, CRP NO. 138 OF 2006 AND CRP NO. 139 OF 2006, THE COURT ON 14/07/2008 PASSED THE FOLLOWING:
Kss
ORDER IN I.A.NO.628/2006 IN C.R.P.NO.133/2006
DISMISSED
14/07/2008
SD/- M.SASIDHARAN NAMBIAR,JUDGE
/TRUE COPY/
P.S.TO JUDGE
Kss
M.Sasidharan Nambiar,J. ======================= C.R.P Nos.133,137,138&139 of 2006 =======================
Dated this the 14th day of July, 2008
Whether a transferee of a judgment debtor
subsequent to the decree is a representative of the judgment debtor and whether he is entitled to challenge the court auction sale in execution of the decree, under section 47 of Code of the Code of Civil Procedure. When the mortgagee decree holder
bid the property in court auction sale, if the court failed to fix reserve price as provided under sub rule (2) of Rule 72A of Order XX1 of Code of Civil Procedure, whether the sale is void. If the judgment debtor files an application under Rule 90 of Order XX1 of Code of Civil Procedure to set aside the sale, whether judgment debtor himself or his representative is entitled to file a petition to set aside the sale under section 47 of Code of Civil Procedure. These are the interesting
C.R.P.Nos.133 of 2006 & connected cases 2
questions to be decided in these revision petitions.
C.R.P.Nos.133 of 2006 & connected cases 3
court auction sale, second respondent sold 15 cents
of the mortgaged property in favour of the petitioner in C.R.P.133/2006 (the claim petitioner in E.A.1376/2002) under sale deed dated 14.3.1996 and 12.760 cents in favour of the petitioner in C.R.P.137/2006 (the claim petitioner in
E.A.1281/2002) under sale deed dated 14.3.1996 and another 15 cents in favour of the petitioner in C.R.P.No.138/2006 (claim petitioner in
E.A.1403/2002). Another portion was sold by second respondent in favour of Bharathiya Vidya Bhavan as
per sale deed dated 29.6.1998 and 31.7.1998. The
respective claim petitioners after delivery of the property by the court filed respective claim petitions before the executing court under section 47 of Code of Civil Procedure to set aside the
sale contending that court auction sale as confirmed by the court is void on the ground that it was the decree holder who bid and purchased the mortgaged property when executing court did not fix reserve price as provided under sub rule (2)
C.R.P.Nos.133 of 2006 & connected cases 4
of Rule 72A of Order XX1 of Code of Civil Procedure. Third respondent an assignee from first respondent subsequent to the court auction sale was later impleaded in the petitions. The case of the petitioners is common. Case was that as court sale was without fixing reserve price, sale is void and first respondent decree holder did not derive any right by the sale though sale confirmed by the executing court. It was also alleged that the property is worth more than Rs.35 lakhs and was purchased by the decree holder for a paltry sum of Rs.1,91,443/- and therefore the sale is to be declared null and void.
3.First respondent resisted the petition contending that petitions are not maintainable as the court auction sale was confirmed and property
was taken delivery. It was contended that petitioners, who are strangers to the decree, have no locus standi to file the petitions. It was also contended that second respondent judgment debtor had filed a petition under Rule 90 of Order XX1 of
C.R.P.Nos.133 of 2006 & connected cases 5
Code of Civil Procedure to set aside the sale which was later dismissed and hence petitioners being his transferees are not entitled to file the petitions to set aside the sale under section 47. It was also contended that first respondent purchased the property in court auction after getting leave from the court to bid and purchase and if at all there is any irregularity in conducting the sale, remedy is only to file a petition to set aside the sale as provided under the provisions of Order XX1 and no petition under section 47 will lie.
two attachments over the mortgaged property and second respondent got the attachment released and paid the entire decree debt to first respondent decree holder who assured that execution
proceedings would be dropped and therefore second respondent did not follow up the case but the decree holder played fraud on him. It is admitted
by him that he had assigned portions of the
C.R.P.Nos.133 of 2006 & connected cases 6
mortgaged property in favour of the respective petitioners subsequent to the decree.
was taken delivery on 19.12.2001 by the first respondent decree holder auction purchaser and thereafter 22.670 cents out of that property was purchased by him for a consideration of Rs.4.5 lakhs and he has been in possession of the property and he mortgaged that property by depositing the title deed to H.S.B.C Bank and as petitioners are not parties to the suit or the execution proceedings or representatives in interest of the party to the decree or execution petition, they have no right to file the petitions.
dated 6.2.2006 which is challenged in these revision petitions.
C.R.P.Nos.133 of 2006 & connected cases 7
and learned counsel appearing for first respondent decree holder and third respondent were heard.
appearing for petitioners is that provisions of Rule 72A of Order XX1 are mandatory and violation of the mandatory provisions will make the sale void and though first respondent was granted leave to bid, court did not fix reserve price as provided under sub rule (2) of Rule 72A and for that sole reason the sale is void. Learned counsel relied on the decision of this court in Mrs.Achamma Cyriac v.
K.F.C. & Others (1996(1) K.L.J.755), Gopaldas Mohata v. Fulchand (1997(1) KLT SN (Case No.40), Anto Nitto v. The South Indian Bank Ltd (ILR 1998 (1) Kerala 495), Nedungadi Bank Ltd. v. Ezhimala Agrl.Products (2003(3) KLT 1011), Manilal Mohanlal Shah v. Sardar Sayed Ahmed Sayed Mahmad (A.I.R.1954 S.C.349), Padmaja v. Sajeev (2006(1) KLT 265), D.S.Chohan v. State Bank of Patiala (1997) 10 SCC 65) and argued that though the Division Bench in
C.R.P.Nos.133 of 2006 & connected cases 8
Antony v. Catholic Syrian Bank (1994(2) KLT 341) held that provisions of Rule 72A can be waived
the subsequent decision in Anto Nitto's case (supra) did not agree with the view and held that right cannot be waived and that was again followed by subsequent Division Bench in Nedungadi Bank Ltd
v. Ezhimala Agrl.Product (2003(3) KLT 1011) and
therefore it is to be found that the court auction sale conducted in violation of the mandatory provisions of sub rule (2) of Rule 72A of Order XX1 is null and void. Learned counsel relying on the
dictum in Ramanna v. Nallaparaju (A.I.R. 1956 SC 87) argued that when the court sale is void there is no necessity to file a petition under Rule 90 of Order XX1 and fact that the court auction sale is null and void can be raised in a petition filed under section 47 of the Code. Learned counsel also argued that though petitioners are transferees of the judgment debtor subsequent to the date of the decree, nevertheless they are representatives of the second respondent and in between the judgment
C.R.P.Nos.133 of 2006 & connected cases 9
debtor and petitioners the transfer is valid and therefore being representatives of judgment debtor petitioners are entitled to file petitions under section 47 of the Code of Civil Procedure and learned Sub Judge was not justified in dismissing the petitions as not maintainable.
respondent argued that second respondent judgment debtor himself filed a petition to set aside the sale under Rule 90 of Order XX1 and it was
dismissed and transferees from the judgment debtor are not entitled to file a petition under section 47 later. It was also argued that they have no
locus standi to file petition as they are claiming
right subsequent to the date of the decree. Learned counsel also argued that even if there is violation of the provisions of sub rule (2) of Rule 72A of Order XX1, remedy is only as provided under sub rule (3) of Rule 72A and without filing a petition to set aside the sale as provided under sub rule (3) of Rule 72A of Order XX1 within the
C.R.P.Nos.133 of 2006 & connected cases 10
period of limitation sale cannot be set aside by filing petition under section 47 of Code of Civil Procedure. The learned counsel further argued that the very fact that sub rule (3) of Section 72A provides for setting aside the sale for violation of the provisions of sub rule (2) establish that a sale conducted without fixing the reserve price is neither null nor void but is valid unless set aside as provided under sub Rule (3) of Rule 72A. The argument is that the non fixation of the
reserve price may entitle judgment debtor to file an application under sub rule (3) of Rule 72A to set aside the sale or a petition under Rule 90 of Order XX1 to set aside the sale on material irregularity in conducting the sale and no petition under section 47 of Code of Civil Procedure will lie on the basis that such a sale is void. Relying on the Full Bench decision of this Court in
Govinda Menon v. Varkey (1970 K.L.T. 440) it was argued that violation of Rule 72 of Order XX1 an identical provision was held to be only an
C.R.P.Nos.133 of 2006 & connected cases 11
irregularity and in such a case sale is to be set aside under sub rule (3) of Rule 72 and the same principle apply to any violation of the provisions of Rule 72A also and therefore courts below rightly dismissed the petitions.
this Court in Chacko Pyli v. Iype Varghese (1955
K.L.T.739) argued that when petitioners are claiming right under a transfer from the judgment debtor subsequent to the date of the decree, as provided under section 52 of Transfer of Property Act petitioners are not entitled to claim any right and
they cannot be the legal representatives of the judgment debtor and therefore they have no locus standi to file an application under section 47 of Code of Civil Procedure and as rightly found by courts below petitions are not maintainable.
Learned counsel supporting the argument of the learned counsel appearing for first respondent argued that when the judgment debtor availed of the
C.R.P.Nos.133 of 2006 & connected cases 12
remedy provided under Rule 90 of Order XX1 though unsuccessfully, transferees from the judgment debtor are not entitled to challenge the sale on the ground of violation of the provisions of Rule 72A in conducting the sale and at best it could only be a ground to set aside the sale either under
sub rule (3) of Rule 72A of Order XX1 or Rule 90 of Order XX1 and petitioners are not entitled to seek the remedy provided under section 47 of Code of Civil Procedure. It was argued that when judgment debtor could not have filed petitions to set aside the sale after a period of sixty days from the date of sale the period of limitation cannot be avoided by the circuitous method of filing petitions under section 47 of the Code and hence
revision petitions are only to be dismissed.
C.R.P.Nos.133 of 2006 & connected cases 13
Though learned counsel appearing for first respondent relying on the decree argued that it is not a mortgaged decree, I cannot agree. Suit was for the mortgage money instituted by the mortgagee by sale of the mortgaged property. The decree provide for sale of the mortgaged property for realisation of the mortgage money. Though the wording in the decree is defective, still it is a mortgage decree. First respondent mortgagee
obtained the decree against second respondent on 11.12.1987. But petitioners purchased the rights of the judgment debtor over portions of the property only on 14.3.1996. Section 47 of Code of Civil Procedure (hereinafter referred to as the Code) provides that all questions arising between the
parties to the suit, in which the decree was passed, or their representatives and relating to the execution, discharge or satisfaction of the decree, shall be determined by the court executing the decree and not by a separate suit. Sub section (3) provides that where a question arises as to
C.R.P.Nos.133 of 2006 & connected cases 14
whether any person is or is not the represenative of a party, such question shall, for the purposes of this section be determined by the Court. The argument of learned counsel appearing for respondents is that being a transferee subsequent to the date of the decree, petitioners cannot be a representatives of the judgment debtor and as they are not parties to the suit in which the decree was passed, they have no locus standi to file the petitions. Though reliance was placed on the Full
Bench decision of this Court in Chacko Pyli (Supra) what was considered therein is only the question whether a transferee of a judgment debtor is a legal representative of the judgment debtor as defined under sub section (11) of Section 2 of the Code. Under sub section (11) of Section 2 “legal representative” is defined as means a person who in law represents the estate of a
deceased person, and includes any person who intermeddles with the estate of the deceased and where a party sues or is sued in a representative
C.R.P.Nos.133 of 2006 & connected cases 15
character, the person on whom the estate devolves on the death of the party so suing or sued. Section 47 enables not only the judgment debtor or a legal representatives of a judgment debtor but any of his representatives, to approach the court to determine any question relating to the execution, discharge or satisfaction of the decree. Though courts below finding that transfer in favour of petitioners were subsequent to the date of the decree held that transfer is hit by the provisions of Section 52 of Transfer of Property Act, as rightly pointed out by the learned counsel appearing for petitioners, even a transfer pendente lite is good as between the parties thereto. The only limitation is that transfer of his rights will be subject to the decree and execution thereof in the litigation pending which the transfer is made. Between the transferor and
the transferee, the transfer is valid and binding. The only drawback is that the transferee is bound by the decree and plaintiff or the decree holder
C.R.P.Nos.133 of 2006 & connected cases 16
can ignore the transfer even if he has notice of the transfer and proceed with the suit with the original party on record and the transferee would be bound by the ultimate result of the litigation. The legal position is thus well settled. It cannot be disputed that petitioners who are the transferees from the judgment debtor subsequent to the date of the decree, are nevertheless representatives of the judgment debtor in respect of portions of the property transferred in their favour. To that extent, they could definitely claim
the rights of the judgment debtor. They are representatives of the judgment debtor as provided under section 47 eventhough the transfer was subsequent to the date of the decree and they were not parties to the suit or the decree. The resultant position is that eventhough petitioners are transferees of portions of the decree schedule property, subsequent to the date of the decree, as the transfer is valid and binding in between the judgment debtor transferor and his transferees,
C.R.P.Nos.133 of 2006 & connected cases 17
petitioners are representatives of the judgment debtor to the extent of the property transferred in their favour and the petitions filed by them under section 47 of the Code is maintainable.
C.R.P.Nos.133 of 2006 & connected cases 18
Neither petition nor the affidavit filed in support of the petition seeking permission to bid and purchase refers about the reserve price. The
order only shows that first respondent was permitted to bid and purchase. No reserve price as provided under sub rule (2) of Rule 72A of Order XX1 of the Code was fixed. It is for the failure
to seek fixation of the reserve price and also failure of the court to fix reserve price while granting permission as provided under sub rule (2), the sale is challenged as null and void. Before considering the question whether the said noncompliance would make the sale null and void
another contention raised by respondents, that petitions under section 47 by the transferees of
the judgment debtor are not maintainable as previous petition filed by the judgment debtor himself to set aside the sale under Rule 90 of Order XX1 of the Code was dismissed is to be decided. It is not disputed that the judgment debtor had in fact filed a petition under Rule 90
C.R.P.Nos.133 of 2006 & connected cases 19
of Order XX1 of the Code to set aside the sale contending that there was material irregularity in conducting the sale. That petition was later dismissed for non-prosecution.
application under Rule 90 of Order XX1 to set aside the sale, by that action he accepts the factum of the sale and challenges the sale on the ground that the sale is vitiated by material irregularity or fraud in publishing or conducting the sale. The Full Bench of Madras High Court in A.P.V.Rajendran
v. S.A.Sundararajan (AIR 1980 Madras 123) analysed the distinction between a petition under section 47 and a petition under Rule 90 of Order XX1 as follows:-
“Though Section 47 is very wide in its terms and in one sense all questions relating to the execution, discharge or satisfaction
of the decree that arise
C.R.P.Nos.133 of 2006 & connected cases 20
between the decree holder and the judgment-debtor are within the purview of that section, nevertheless that section ought to be so interpreted as not to render redundant the other provisions contained in the Code, particularly Rules 89, 90 and 91 of Order 21, and as between the judgment-debtor and the decree holder only such applications to set aside an auction purchase made by the decree holder as do not come within the purview of Rules 89,90 and 91 of Order 21 are within the scope of Section 47 of the Code. Notwithstanding
C.R.P.Nos.133 of 2006 & connected cases 21
the wording of Section 47 which is enough to cover all applications to set aside sales on the ground either of illegality or of irregularity, its scope has naturally to be restricted so as to give due effect to Order 21, Rule 90 C.P.C. Thus, if the sale is sought to be set aside on the ground of material irregularity in publishing and conducting the sale within the meaning of Order 21, Rule 90, then Section 47 cannot come into play at all, and the sale could be set aside only by invoking Order 21, Rule 90. But if
C.R.P.Nos.133 of 2006 & connected cases 22
the sale is claimed to be
void for certain illegality or voidable on ground of material irregularities not referred to in O.21, Rule 90 then Section 47 has to be invoked and in such cases Order 21, Rule 90
C.P.C cannot come into
play at all.”
A learned single Judge (as His Lordship then was)
in Rajarethna Naikkan v. Parameswara Kurup (1997 (1)KLT 777) considered this aspect and held:-
“The Supreme Court while
affirming that decision referred to the decision in Dhirendranath v. Sudhir Chandra (AIR 1964 SC 1300)
and pointed out that any objection to the drawing up
C.R.P.Nos.133 of 2006 & connected cases 23
of a sale proclamation would be within the purview of O.XX1 R.90 of the Code and not outside it, and that in that particular case, the grounds that were taken fell within the purview of O.XX1 R.90 of the Code and hence not within the purview of S.47 of the Code of Civil
Procedure. This decision thus indicates that though the object of both the proceedings may be to avoid the sale held in execution of a decree, a proceeding initiated under O.XX1 R.90
of the Code of Civil Procedure cannot be said to be a proceeding for the same relief as the one that may
C.R.P.Nos.133 of 2006 & connected cases 24
be sought for in the application under S.47 of the Code. In Saheed v. Aluminium Fabricating C. (1985 KLT 991) a Division Bench of this Court has also indicated this distinction. The Division Bench has held. “It is the material irregularity or fraud which affects the method and manner of publishing the proclamation and the actual conduct of the sale that clothes the court with a jurisdiction to set aside the sale under O.21 R.90 CPC. Where O.XX1 R.90 applies, S.47 is not available. However, where there is inherent illegality
C.R.P.Nos.133 of 2006 & connected cases 25
in the execution application, such as want of leave of court appointing a receiver, it is a matter arising in execution,
outside the purview of O.XX1
R.90 and thus, within the
scope of S.47 of the Code.”
It was held that in a case where the judgment debtor is proceeding under section 47 of the Code he attacks the sale either on the ground that it is void or that it is voidable on the ground of illegality not covered by Rule 90 of Order XX1 of the Code and when he seeks setting aside of sale by invoking Rule 90 of Order XX1 he is accepting the factum of sale or the reality of the sale and he is only questioning the sale on the basis of the material irregularities referred to in Order XX1 Rule 90. His Lordship then held:-
“In the case of simultaneous
application under O.XX1 R.89
C.R.P.Nos.133 of 2006 & connected cases 26
| of the Code and O.XX1 R.90 |
|---|
| of the Code, it has been |
| recognised that whereas in |
| making the application under |
| O.XX1 R.89 of the Code, the |
| judgment debtor accepts the |
| validity of the sale, in |
| making an application under |
| O.XX1 R.90 of the Code, he |
| is questioning the validity |
| of the sale and hence he |
| cannot prosecute both the |
| applications simultaneously. |
| But is that the position |
| when an application under |
| O.XX1 R.90 of the Code and a |
| application under S.47 of |
| the Code are sought to be |
| simultaneously prosecuted? I |
| think not because the |
| grounds available for |
C.R.P.Nos.133 of 2006 & connected cases 27
setting aside a sale under O.XX1 R.90 of the Code are not the same as the grounds available under S.47 of the Code and in the words of the Division Bench where O.XX1 R.90 applies, S.47 is not available. In Mangal Prasad v. Krishna Kumar Maheshwri (AIR 1992 SC 1857) the Supreme Court has pointed out that an application under S.47 of the Code cannot be treated as an application under O.XX1 R.90 of the Code and hence the bar prescribed under O.XX1 R.89(2) of the Code insisting on withdrawal of the application for setting aside the sale would not
C.R.P.Nos.133 of 2006 & connected cases 28
come into play at all. It is therefore, clear that the relief that is sought for in an application under O.XX1 R.90 of the Code of Civil Procedure, is not the same as the relief that can be claimed in an application under S.47 of the Code, though both can result in the relief of setting aside the sale being granted. I am therefore, of the view, that the doctrine of election cannot apply to disable the judgment debtor from maintaining an application under S.47 of the Code of Civil Procedure, merely because he has earlier filed an application
C.R.P.Nos.133 of 2006 & connected cases 29
under Order XX1 R.90 of the Code. The decision of the Calcutta High Court in Sri.Madan Mohan v. Bejoybati Dasi (AIR 1954 Cal.202) was only one relating to applications under O.XX1 R.89 and Order XX1 R.90 of the Code and in view of the decision of the Supreme Court in Mangal Prasad's case the principle referred to therein cannot be extended to an application under S.47 of the Code of Civil Procedure and in the light of the discussion above, to apply the doctrine of election in the case of applications under O.XX1R.90 and S.47 of the Code of
C.R.P.Nos.133 of 2006 & connected cases 30
Civil Procedure. I therefore, overrule the contention on behalf of the decree holder that the judgment debtor having earlier applied for setting aside the sale under O.XX1R.90 of the Code is estopped from filing an application under S.47 of the Code of Civil Procedure.” (underline
supplied)
C.R.P.Nos.133 of 2006 & connected cases 31
Rule 90 of Order XX1. Therefore dismissal of the
application under Rule 90 of Order XX1 will neither bar the filing of a petition under section 47 of the Code or act as estoppel against the representatives of the judgment debtor from challenging the sale under section 47 of the Code. Therefore fact that judgment debtor had earlier challenged the sale under Rule 90 of Order XX1 and it was dismissed for non-prosecution will not preclude petitioners who are the representatives of the judgment debtor from challenging the sale by filing petitions under section 47 of the Code.
provides the power to the executing court to order sale of the property attached. Under the
said Rule executing court is to order sale of any property attached by it or such portion thereof as may seem necessary to satisfy the decree and
direct the sale proceeds to be paid to the decree holder to realise the decree debt. Rule 65 of
C.R.P.Nos.133 of 2006 & connected cases 32
Order XX1 of the Code provides how the sale is to be conducted. Rule 66 provides for proclamation and sale by public auction. Rule 67 provides the mode of making proclamation. Sub rule (1) of Rule
72 provides that no holder of a decree in execution of which the property is sold shall, bid or purchase the property without the express permission of the court. Sub rule (2) provides that where a decree holder purchases with the permission as provided under sub rule (1), the purchase money and the amount due under decree may be set off against one another subject to the provisions of Section 73 of the Code relating to rateable distribution among several decree holders
and the executing court shall enter up satisfaction of the decree in whole or in part. Sub rule (3) provides that where a decree holder purchases, by himself or through another person, without such permission, as provided under sub
rule (1) court on the application of the judgment debtor or any other person whose interest
C.R.P.Nos.133 of 2006 & connected cases 33
are affected by the sale may set aside the sale
by order and in that case the cost of such application and order and any deficiency of price which may happen on resale shall be paid by the decree holder.
force with effect from 1.2.1977. Rule 72A reads:-
“Mortgagee not to bid at sale
without the leave of the Court- (1) Notwithstanding
anything contained in rule 72,
a mortgagee of immovable property shall not bid for or purchase property sold in execution of a decree on the mortgage unless the court grants him leave to bid for or purchase the property.
(2) If leave to bid is granted to such mortgagee, then the
C.R.P.Nos.133 of 2006 & connected cases 34
Court shall fix a reserve price as regards the mortgagee, and unless the Court otherwise directs, the reserve price shall be-(a) Not less than the amount then due for principal, interest and costs in respect of the mortgage if the property is sold in one lot; and
(b) in the case of any property sold in lots, not less than such sum as shall appear to the court to be properly attributable to each lot in relation to the amount then due for principal, interest and costs on the mortgage.
(3) In other respect, the
C.R.P.Nos.133 of 2006 & connected cases 35
provisions of sub-rules (2) and (3) of rule 72, shall apply in relation to purchase by the decree holder under that rule.”
When Rule 72 of Order XX1 of the Code applies to execution of all types of decrees and no decree holder is entitled to purchase the property sold in execution of the decree without the express permission of the court, Rule 72A of Order XX1 of the Code applies only to a mortgage decree. Rule 72 enables the court to grant permission to a decree holder to bid for or purchase the property sold in court auction sale in execution of the
decree. No condition is attached to the said power. While granting permission as provided under sub rule 1 of Rule 72 of Order XX1 of the Code, court need not fix any reserve price. But when it is the case of a mortgage and permission is sought to bid and purchase in the court auction sale, by the mortgagee decree holder of a mortgage
C.R.P.Nos.133 of 2006 & connected cases 36
decree, court is competent to grant leave to bid for or purchase the property sold in execution of the decree.
the decree holder to bid or purchase the property
sold in execution of the decree with the permission of the court and decree holder is entitled to bid for purchase the property. Though Rule 72A of Order XX1 of the Code also
provides that a decree holder of a mortgage decree shall not bid for or purchase the property sold in execution of a decree on the mortgage unless court
grant him leave to bid for or purchase the property, the court must fix the reserve price. Leave of the court as provided under sub rule (1) of Rule 72A of Order XX1 of the Code is mandatory for the decree holder of a mortgage decree to bid for or purchase the property sold in execution of
the decree on the mortgage. But the leave as
provided under sub rule (1) can be granted by the court only under sub rule (2). Under sub rule
C.R.P.Nos.133 of 2006 & connected cases 37
(2) if leave is to be granted to a holder of a decree to bid or purchase the property sold in execution of the decree on the mortgage, court shall fix a reserve price. Under sub rule (2) court shall fix a reserve price as regards the mortgage and unless the court otherwise directs reserve price shall be not less than the amount then due for principal, interest and costs in respect of the mortgage if the property is sold in one lot and in case of any property sold in lots not less than such sum as shall appear to the court to be properly attributable to each lot in relation to the amount then due for principal, interest and cost on the mortgage. It is the said condition which distinguishes the right of a holder of a mortgage decree to purchase the property from the right of a holder of an orginary decree to bid and purchase the property in execution of the decree on the mortgage. Sub rule (3) of Rule 72 of Order XX1 provides where a decree holder purchases by himself or through
C.R.P.Nos.133 of 2006 & connected cases 38
another person in violation of the provisions of sub rule (1), on the application of the judgment debtor or any other person whose interests are effected by the sale, court may, set aside the sale if it thinks fit, in which case the costs of such application and order and any deficiency of price which may happen on the resale and all expenses attending it, shall be paid by the decree holder. Under sub rule (3) of Rule 72A of Order XX1, provisions of sub rule (3) of Rule 72 is made applicable in case of the violation of the provisions of the sub rule (1) or (2) of Rule 72A. In the nature of the scheme so provided Rule 72A is to be understood as an additional stringent condition provided to the right of the decree holder to bid for and purchase as well as the power of the court to grant leave to the decree holder on his request.
C.R.P.Nos.133 of 2006 & connected cases 39
and whether the sale is null and void for the non compliance or it is only an irregularity which would entitle the judgment debtor or any person whose interests are effected by the sale, to apply to set aside the sale either under sub rule (3) of
Rule 72A or Rule 90 of Order XX1 of the Code.
Question is whether such a non-compliance would make the court sale void enabling the judgment debtor or his representative to challenge the validity of the sale as provided under section 47 of the Code of Civil Procedure.
and whether the violation makes the sale void. Approving the decision of the Privy Council in
Radha Krishna v. Bishewar Sahay (AIR 1922 PC 336 )
their Lordships held that sub rule (3) of Rule 72 is only directory and not mandatory. It was held:-
“A decree-holder cannot purchase
C.R.P.Nos.133 of 2006 & connected cases 40
property at the Court auction in execution of his own decree without the express permission of the Court and that when he does so with such permission, he is entitled to a set off but if he does so without such permission, then the Court has a discretion to set aside the sale upon the application by the judgment debtor or any other person whose interests are affected by the sale (Rule 72). As a matter of pure construction this provisions is obviously directory and not mandatory.”
A Full Bench of this Court in Govinda Menon v.
Varkey (1970 KLT 440) had followed the very same view. It was held that such a sale is not void and
such violation could only be a ground to set aside the sale. The Full Bench held:-
C.R.P.Nos.133 of 2006 & connected cases 41
“Lack of permission to bid as contemplated by Rule 72 Order XX1 of the Code of Civil Procedure as is clear from sub-rule(3) thereof cannot make the sale held without sanction, void. That can only be a ground for having the sale set side.”
Apex Court in Dhirendra Nath v. Sudhir Chandra (A.I.R.1964 SC 1300) analysing the provisions of Rule 64 and Rule 90 Order XX1 that under Rule 64 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 under Rule 66, when a property is ordered to be sold in public auction court shall cause proclamation of the intended sale is to be made and such proclamation shall specify as fairly and accurately as possible, the property to be sold and such proclamation shall be drawn up after notice to the decree holder and judgment debtor and under the
C.R.P.Nos.133 of 2006 & connected cases 42
provisions court has power to direct sale of the entire property or a part thereof to satisfy the decree and shall specify the said property directed to be sold in the proclamation fixed after giving notice to both the decree holder and the judgment debtor, it was held that non-compliance with the conditions of Rule 64 or Rule 66 is a material irregularity which would entitle the sale to be set aside under Rule 90 and will not make the sale void. Considering the violation of the mandatory conditions provided under Order XX1, Chief Justice Subba Rao posed the question whether an act done in breach of the mandatory provision is per force nullity. The following view of Mookerjee, J. in
Ashutosh Sikdar v. Behari Lal Kirtania (ILR 35
Calcutta 61) were quoted with approval.
“....no hard and fast line cane
be drawn between a nullity and an
irregularity; but this much is clear, that an irregularity is a
deviation from a rule of law
C.R.P.Nos.133 of 2006 & connected cases 43
which does not take away the foundation or authority for the proceeding, or apply to its whole operation, whereas a nullity is a proceeding that is taken without any foundation for it or is so essentially defective as to be of no avail or effect whatever, or is void and incapable of being validated.”
It was held that whether a provision falls under
one category or the other is not easy of discernment but in the ultimate analysis it depends upon the nature, scope and object of a particular provision. Approving the workable test laid down by Justice Coleridge in Holmes v. Russell (1841) 9 Dowl 487 which reads:-
“It is difficult sometimes to
distinguish between an irregularity
and a nullity; but the safest rule
to determine what is an irregularity
C.R.P.Nos.133 of 2006 & connected cases 44
and what is a nullity is to see whether the party can waive the objection; if he can waive it, it amounts to an irregularity; if he cannot, it is a nullity.”
their Lordships held that a waiver is an intentional relinquishment of a known right, but obviously an objection to jurisdiction cannot be waived. It was finally held :
“Where the court acts without inherent jurisdiction, a party affected cannot by waiver confer jurisdiction on it, which it has not. Where such jurisdiction is not wanting, a directory provisions can
obviously be waived. But a
mandatory provision can only be waived if it is not conceived in the public interests; but in the interests of the party that waives it.”
C.R.P.Nos.133 of 2006 & connected cases 45
In a later decision Apex Court in Rafique Bibi v.
Sayed Waliuddin (2004) 1 SCC 287) considered the distinction between a void decree and a voidable
decree. It was held that a decree is a nullity if
the court passing the decree has usurped a jurisdiction which it did not have and a mere wrong exercise of jurisdiction does not result in a
nullity. The lack of jurisdiction in the court passing the decree must be patent on its face in
order to enable the executing court to take cognizance of such a nullity based on want of jurisdiction, else the normal rule that an executing court cannot go behind the decree must
prevail. It was cautioned that two things must be
clearly born in mind while considering the
question. Firstly, the court will invalidate an order only if the right remedy sought by the right
person in the right proceedings and circumstances. Their Lordships held:-
“6. What is “void” has to be clearly
understood. A decree can be said to
C.R.P.Nos.133 of 2006 & connected cases 46
be without jurisdiction and hence a
nullity, if the court passing the decree has usurped a jurisdiction which it did not have; a mere wrong exercise of jurisdiction does not result in a nullity. The lack of jurisdiction in the court passing the decree must be patent on its face in order to enable the executing court to take cognizance of such a nullity based on what of jurisdiction, else the normal rule that an executing court cannot go behind the decree must prevail.
C.R.P.Nos.133 of 2006 & connected cases 47
have no absolute sense; their meaning is relative, depending upon the court's willingness to grant relief in any particular situation. If this principle of illegal relativity is borne in mind, the law can be made to operate justly and reasonably in cases where the doctrine of ultra vires, rigidly applied, would produce unacceptable results.” (Administrative Law, Wade and Forsyth, 8th Edn, 2000 p.308). Secondly, there is a
distinction between mere adminstrative orders and the decrees of courts, especially a superior court. “The order of a superior court such as the High Court, must always be obeyed no matter what flaws it may be thought to contain. Thus a party who disobeys a High Court injunction is punishable for contempt of court even though it was
C.R.P.Nos.133 of 2006 & connected cases 48
granted in proceedings deemed to have been irrevocably abandoned owing to the expiry of a time-limit.
A decree suffering from the illegality or irregularity of procedure, cannot be termed inexecutable by the executing court the remedy of a person aggrieved by such a decree is to have it set aside
in a duly constituted legal proceedings or by a superior court failing which he must obey the command of the decree. A decree passed by a court of competent
C.R.P.Nos.133 of 2006 & connected cases 49
jurisdiction cannot be denuded of its
efficacy by any collateral attack or in incidental proceedings.”
20.A learned single Judge of this court in
Mrs.Achamma Cyriac v. K.F.C. & Others (1996(1)
K.L.J.755) had incidentally considered the effect of violation of the provisions of Rule 72A of Order XX1of the Code. Following the earlier decisions in
Abdulla v. Syndiate Bank (1996 (1) KLT 9) and in Sreedharan & Ors. v. Federal Bank Ltd (1996(1) K.L.J.20) where it was held that reserve price fixed by the court under sub rule (2) of Rule 72A of Order XX1 of the Code should not be less than
the amount then due under the decree and when the mortgagee decree holder purchases the property
on getting reserve price fixed, the sale
consideration will go in discharge of the decree debt as provided under sub rule (2) of Rule 72 of
Order XX1 and thus it is mandatory for getting the reserve price fixed, which should not be less than the amount due under the decree for the mortgagee
C.R.P.Nos.133 of 2006 & connected cases 50
decree holder to purchase the property in court auction. Holding that in that case executing court failed to consider the entire facts and circumstances of the case and the value of the property, it was held that the sale was a nullity. It is clear from the said decision that the learned
single Judge on the facts found that executing court before directing sale did not consider the question whether it is necessary to bring the entire attached property to sale or such portion thereof will be sufficient to satisfy the decree and held that the sale held without examining these aspects and not in conformity with the relevant provisions makes the sale illegal and without jurisdiction. It was thereafter violation of the provisions of Rule 72A was considered and held that the sale is a nullity in the circumstances of the case. Learned single Judge did not consider the Full Bench decision in Govinda Menon's case (supra).
C.R.P.Nos.133 of 2006 & connected cases 51
case (supra) considered the question whether non-compliance of the provisions of Rule 72A of Order XX1 would make the sale void. His Lordship (as His Lordship then was) following the guidelines of the Apex Court in Dhirendra Nath's case (supra) held that the right provided under sub rule (3) is
either to the judgment debtor or any person affected by the sale and therefore that right could be waived and hence violation of the provisions of sub rule (2) of Rule 72A by itself is not a ground to set aside the sale under Rule 90 of Order XX1 without establishing material irregularity. His Lordship speaking for the Bench held:
“Now the question is, what is the consequence of non-compliance of the aforesaid mandatory provision. Would its non-compliance entail a
quash of the sale. To decide this,
the object of incorporation of the provision cannot be overlooked. We pointed out earlier the background.
C.R.P.Nos.133 of 2006 & connected cases 52
From it we can discern that the purpose of incorporating such a rider is to safeguard the interest of the mortgagor. If the mortgagor is the judgment debtor, it is open to him to waive the right so granted. In this context we notice that the application to set aside the sale can be filed under R.90 of O.21. Sub-rule (1) enables the affected person to apply to set aside the sale on the ground of “a material irregularity” or fraud in
publication of conducting a sale.”
Considering the facts and following the decision of
the Apex Court in Jaswantlal Natwarlal Thakkar v. Sushilaben Manilal Dangarwala (AIR 1991 SC 770) it was held that a party who seeks to set aside the sale must prove by adducing evidence that substantial injury has been caused to him as a
result of non-compliance with the provision
C.R.P.Nos.133 of 2006 & connected cases 53
contained in O.21 R.72, it was held:“Leave to bid the sale is a condition precedent for a decree holder to purchase the property in a court sale as indicated in R.72 (1) of the Code. Court is given a discretion to set aside the sale, as provided in sub rule (3) where the purchase was made by the decree holder without such leave. It must be remembered that even in such a case Supreme Court pointed out that without showing substantial injury no such sale shall be set aside. In other words, courts are not to set aside a sale ordinarily and unless the applicant satisfies the court that he sustained (or would sustain) substantial loss or injury, the court is not obliged to look back
C.R.P.Nos.133 of 2006 & connected cases 54
for considering whether all formalities have been duly complied with in conducting the sale.”
A subsequent Division Bench in Anto Nitto's case (supra)) took a different view. The Division Bench had also considered the decision in Antony's case. On the facts it was found that though in the petition filed by the decree holder for leave of the court to bid for and purchase the property sold on the mortgage, there was a prayer to fix a reserve price and What was fixed by the court was only upset price and it cannot be treated as the reserve price as provided under Rule 72A. Analysing the difference between the upset price and reserve price, it was found that both are different and Rule 72A contemplates fixation of reserve price and normally it was mandatory on the part of the court to fix the reserve price at an amount not less than the amount due for principal, interest and cost as per the decree and for fixing
C.R.P.Nos.133 of 2006 & connected cases 55
the reserve price at an amount lesser than that total amount as indicated in the rule, Court is bound to give reasons for effecting such reduction
and under Rule 72A court is bound to fix the
reserve price either at the time of giving permission or at least simultaneously after
granting such permission and it is the duty of the court even in the absence of a counter by the judgment to fix the reserve price keeping in mind the requirement of the provisions contained in sub rule (2) of Rule 72A it being the fundamental duty of the executing court. Following the essential elements as held by the Apex Court in
Provash Chandra Dalul v. Bishwanath Banerjee (A.I.R.1989 S.C.1834) it was held that it is the
actual intent to abandon or surrender a known right or such conduct as warrants the inference of the relinquishment or such right.
compliance of the requirement of Section 72A following the decision of Justice K.Ramaswamy (as
C.R.P.Nos.133 of 2006 & connected cases 56
His Lordship then was) in P.Rama Reddy v. P.Sundara Rama Reddy (A.I.R 1986 A.P. 29) it was
held:-
“.....From the language thus
manifested by the statute, it gives in unmistakable terms the
legislative animation that it intended to relieve the mortgagor from all the liabilities incurred under the mortgage. It also seems to eradicate or at least aimed to nip in the bud the incurable tendency on the part of the decree holder to take undue advantage of the Court sale by purchasing the hypothecation at a lower price by procuring collusive bidders at a farce of sale and to knock off the property at a minimal price and then to take recourse to recover the residue of the decree debt by other
C.R.P.Nos.133 of 2006 & connected cases 57
process available under the Code.”
The Division Bench held that sub rule (2) of Rule 72A has two purposes out of which one cannot be waived.
“It is clear that of the above two purposes one at least cannot be treated as something intended to benefit the judgment debtor alone. While the one is exclusively to safeguard the interest of the judgment-debtor the other is intended to serve a public purpose also, namely to nip in the bud itself an incurable and pernicious tendency on the part of the decree holder to take undue advantage of the court sale and to practice fraud even in court proceedings.
We may also refer in this connection to the observations of Subba Rao, J. in Dhirendra Nath v.
C.R.P.Nos.133 of 2006 & connected cases 58
Sudhir Chandra where the learned Judge was dealing with the right of a party to waive strict compliance with certain provisions of law.
“....a mandatory provision can only be waived if it is not conceived in the public interests, but in the interests of the party that waives it......” In the light of the above principle regulating the right of a party to waive compliance with mandatory provisions of law, had been necessary for us to take a final decision in the matter, we would have held that compliance with the requirements of rule 72A
(2) cannot be waived by the judgment debtor since it is not a provision incorporated solely of
C.R.P.Nos.133 of 2006 & connected cases 59
or his benefit. It is a provision intended to remove a social evil.”
The effect of violation of sub rule (2) ofRule 72A of Order XX1 was stated as follows:-
“In view of our finding that the sale in this case is one held in violation of one of the mandatory requirements of sub-rule(2) of rule 72A of Order XX1, we are inclined to take the view that it is a case where the validity of the sale can legitimately be challenged under sub-rule (3) of rule 72A read along with sub-rule (3) of rule 72 C.P.C and E.A. 674 of 1993 is liable to be considered as one filed under that rule also. As a case where sub-rule (3) of rule 72A applies, it may not be necessary for the appellant to satisfy the requirements of Order
C.R.P.Nos.133 of 2006 & connected cases 60
XX1, rule 90 for getting the sale
set aside. It has been so held specifically by a Full Bench of the Madras High Court in K.Suresh
Babu v. K. Balasubramaniam. We are in respectful agreement with the view expressed by the Full Bench in the above decision and would follow the same in this
case.”
Another Division Bench subsequently considered the same question in Nedungadi Bank Ltd v. Ezhimala Agrl.Products (2003(3) KLT 1011). The contrary view taken by the Division Bench in Antony's case (supra) and Anto Nitto's case (supra) were taken note of by the by the Division Bench. It was held:-
“In the instant case also we find
that even the total upset price
fixed for all the properties sold
was below one third of the decree-
C.R.P.Nos.133 of 2006 & connected cases 61
debt and we are of the view that there has been no waiver by the original decree holder bank of its right to have reserve price fixed for the properties while being given leave under O.XX1 R.72. Non-fixation of the reserve price in this case certainly amounted to a material irregularity vitiating the very sale. According to us, the benefits arising out of the statutory obligation of the court to fix a reserve price under O.XX1 R.72A(2) is not one which can be waived.” 23.The crucial question therefore is what is the effect of a sale conducted by the court in execution of a mortgage decree wherein the decree holder was granted leave to bid for and purchase but without fixing reserve price as provided under sub rule (2) of Rule 72A of Order XX1 and
C.R.P.Nos.133 of 2006 & connected cases 62
purchased by the mortgagee decree holder. Whether the sale is null and void or it is only voidable and is to be set aside either under sub rule (3) of Rule 72A or Rule 90 of Order XX1.
appearing for petitioners is that the Full Bench decision of this court in Govinda Menon's case (supra) was based on the law which was then
existing as declared by the Apex Court in
Ramanna's case (supra) and in view of subsequent
law laid down by the Apex Court in D.S.Chohan &
another v. State Bank of Patiala (1997) 10 SCC 65) where it is found that sub rule 2 of Rule 72A of Order XX1 is not directory but mandatory the decision of the Full Bench does not hold good. Their Lordships in D.S.Chohan's case (supra) held:-
“In view of the specific requirement
contained in sub-rule (2) of Rule 72A of Order 21 CPC that in cases where leave to bid is granted to the
C.R.P.Nos.133 of 2006 & connected cases 63
mortgagee, the Court shall fix a reserve price as regards the mortgagee and unless the court otherwise directs the said reserve price has to be in consonance with requirement of clauses (a) and (b), it was incumbent for the court to fix the reserve price. In the order dated 2.1.1981 the Court, while permitting the respondent mortgagee to make the bid, did not give any direction regarding fixing the reserve price. The sale in favour of the respondent having been made in violation of the mandatory provisions of Order 21, Rule 72A(2) CPC cannot be upheld and has to be set aside.”
The learned counsel for petitioners argued that as held by the subsequent Division Bench in Anto Nitto's case (supra) and in Nedungadi Bank Ltd
C.R.P.Nos.133 of 2006 & connected cases 64
(supra) sub rule (2) of Rule 72A cannot be waived and as held by the Apex Court in Dhirendra Nath's case (supra) violation of a mandatory provision would make the sale void and therefore findings of the executing court is not sustainable. Learned counsel appearing for respondents argued that sub rule (3) of Rule 72 and sub rule (3) of Rule 72A
are identical and the Full Bench decision of this Court in Govinda Menon's case (supra) settled the position and it is binding on the court and at best the sale conducted in violation of the provisions
under sub rule (2) can be set aside under sub rule (3) of Rule 72A or under Rule 90 of Order XX1
establishing substantial injury caused by such sale.
prohibits a holder of a decree from bidding for or purchasing the property sold in execution of the decree without the express permission of the court, sub rule (3) provides for a remedy to set aside the
sale conducted in violation of sub rule (1)
C.R.P.Nos.133 of 2006 & connected cases 65
whereunder decree holder purchases the property without the express permission of the court. Sub rule (3) specifically provide that if the court thinks fit, on an application filed by either the judgment debtor or any other person whose interests are affected by the sale may set aside the sale.
Sub rule (3) thus provides a right to any judgment debtor or any person whose interests are affected by the sale, to apply to the executing court to set aside the sale if sale was conducted in violation of sub rule (1) of Rule 72 of Order XX1. Similarly Rule 72A prohibits any holder of a mortgage decree from bidding or purchasing the property sold in execution of the decree on the mortgage, if leave to bid for or purchase the property is not granted by the court. Sub rule (2) mandates that if the court is granting leave to bid for or purchase, it shall fix reserve price as regard the mortgagee and the reserve price so fixed shall not be less than the amount then due for the principal, interest and cost in respect of the
C.R.P.Nos.133 of 2006 & connected cases 66
mortgage if the property is sold in one lot and if the property is sold in different lots not less than such sum as shall appear to the court to be properly attributable to each lot unless otherwise directs. Sub rule (3) of Rule 72A provides that if a sale is conducted in violation of sub rule (1) or (2) then the judgment debtor or any other person whose interests are affected is entitled to apply to set aside the sale as provided thereunder. If the result of violation of the provisions of Rule 72(1) or sub rule (1) or sub rule (2) of Rule 72A makes the sale void or null, there is no necessity for a provision like sub rule (3) either in Rule 72 or Rule 72A to set aside the sale. If the sale is null or void as canvassed, it need not be set aside as even otherwise it will be invalid. It is thus clear that the sale even if was conducted in violation of sub rule (1) of Rule 72 or sub rule
(1) or (2) of Rule 72A, sale will not
automatically become invalid. Such a sale will
be valid unless it is set aside either under sub
C.R.P.Nos.133 of 2006 & connected cases 67
rule (3) of Rule 72 or 72A or under Rule 89 or Rule 90 of Order XX1 of the Code. Rule 90 provides a right to the decree holder auction purchaser or any other person entitled to a share in rateable distribution of the assets, or whose interests are affected by the sale to apply to the court to set aside the sale on the ground of material irregularity or fraud in publishing or conducting the sale. Thus the judgment debtor or his representative or any person affected by the sale, can apply under Rule 90 to set aside the sale on the ground of material irregularity or fraud in publishing or conducting the sale. But if the sale is to be set aside under sub rule (1) of Rule 90, as contemplated under sub rule (2) of Rule 90 of Order XX1,in addition to material irregularity or fraud in publishing or conducting the sale, court must be satisfied that applicant has sustained substantial injury by reason of such irregularity or fraud.
C.R.P.Nos.133 of 2006 & connected cases 68
Article 127 of Limitation Act the period to set aside a sale in execution of the decree, including any application by a judgment debtor is 60 days from the date of sale. Therefore if a sale is conducted in execution of the mortgage decree and the judgment debtor or any person affected by such sale did not file an application to set aside the sale for violation of the provisions of sub rule (1) or sub rule (2) of Rule 72A of Order XX1 of the Code if the sale is not void due to such
violation, after the expiry of 60 days period from the date of sale, remedy of setting aside the sale
will be lost. Therefore if the sale is not null and void, after the expiry of the sixty days period provided under Article 127, judgment debtor cannot challenge the sale based on the case that
the sale was conducted in violation of sub rule (1) of Rule Rule 72A.
provided under either sub rule (3) of Rule 72A of
Order XX1 or Rule 90 of Order XX1 is barred by
C.R.P.Nos.133 of 2006 & connected cases 69
expiry of the sixty days period as provided under Article 127 of Limitation Act whether the sale could be challenged by invoking Section 47 of the Code. Neither in Anto Nitto's case(supra) nor in Nedungadi Bank Ltd case (supra)it was held that the violation of Rule 72A (2) of Order XX1 of the Code would make the sale void. Division Bench in the former case only held that the sale is liable to be set aside as provided under sub rule (3) of Rule 72A and the requirement under sub rule (2) of Rule 90 of Order XX1 of the Code namely substantial injury is not to be established. In the latter case that aspect was not decided at all. When sub rule (3) of Rule 72 and sub rule (3) of Rule 72A of Order XX1 specifically provide for setting aside the sale, for violation of either sub rule (1) of Rule 72 or sub rule (1) or sub rule (2) of Rule 72A of Order XX1, can it be said that the sale conducted in violation of the said provisions would result in making the sale a nullity or void.
C.R.P.Nos.133 of 2006 & connected cases 70
Jain (AIR 1997 SC 1006) laid down the principle of harmonious construction. When there are conflicting provisions in an Act, which cannot be reconciled with each other, they should be so interpreted so as to give possible effect to both. The observation of Lord Davy in Canada Sugar Refining Co. v. R.(1898) AC 735 was quoted with approval as follows:-
“Every clause of a statute should be
construed with reference to the context and other clauses of the Act, so as, as far as possible, to make a
consistent enactment of the whole statute or series of statutes
relating to the subject matter.”
Analysing the earlier decisions Their Lordship summed up the principles as follows:-
“On a conspectus of the case law
indicated above, the following
principles are clearly discernible.
(1) It is the duty of the Courts to
C.R.P.Nos.133 of 2006 & connected cases 71
avoid a head on clash between two sections of the Act and to construe the provisions which appear to be in conflict with each other in such a manner as to harmonise them.
(2) The provisions of one Seciton of a statute cannot be used to defeat the other provisions unless the Court, in spite of its efforts, finds it impossible to effect reconciliation between them.
(3) It has to be borne in mind by all the courts all the time that when there are two conflicting provisions of the Act, which cannot be reconciled with each other, they should be so interpreted that, is possible, effect should be given to both. This is the essence of the rule of “harmonious construction”.
(4) The Courts have also to keep in
C.R.P.Nos.133 of 2006 & connected cases 72
mind that an interpretation which reduces one of the provisions as “dead letter” or “useless lumber” is not harmonious construction.
(5) To harmonise is not to destroy any statutory provision or to render it otiose.”
If violation of sub rule (1) and (2) of Rule 72A
has the effect of making the sale void, there is no necessity for a provision like sub rule (3) at all. If by the violation of sub rule (1) and (2) of Rule 72A, the sale is void or is a nullity, there is no necessity for a judgment debtor or any person whose interests is affected by such sale to apply under sub rule (3) of Rule 72A to set aside the sale within the period of 60 days from the date of the sale. If violation of sub rule (1) or (2) of Rule 72A makes the sale void sub rule (3) would become otiose or redundant. As declared by the Supreme
Court in Sultana Begum's case (supra) an interpretation which reduces one of the provision
C.R.P.Nos.133 of 2006 & connected cases 73
as a “dead letter” or as “useless lumber” is not a harmonious construction and to harmonise is not to destroy any statutory provision or to render it otiose.
procedure whereunder a sale conducted in violation of the provisions of sub rule (1) of Rule 72. If in the sale conducted, the decree holder purchases the property without the express permission of the court, he is not entitled to the set off as provided under sub rule (2). But the sale is liable to be set aside on an application
filed under sub rule (3) of Rule 72. Thus the
right given to the judgment debtor or any person effected by such sale, which was conducted in violation of the provision of sub rule (1), is to
set aside the sale at the risk and expenses of the
decree holder. Similarly, if such a sale is
conducted and the mortgagee decree holder bid for and purchases the property on the mortgage in violation of sub rule (1) or without the court
C.R.P.Nos.133 of 2006 & connected cases 74
fixing a reserve price as provided under sub rule
(2) of Rule 72A, the sale is liable to be set aside under sub rule (3) of Rule 72A. In both the cases, as in the case of an application filed under
Rule 90 of Order XX1, petitioners need not establish any substantial injury resulted by such sale. If the sale is conducted in violation of sub rule (1) of Rule 72 or sub rule (1) or (2) of Rule 72A of Order XX1 that itself is sufficient
to set aside the sale without establishing any substantial injury caused by such sale. But in both cases, if the sale is not set aside under sub rule (3), the sale will be a valid sale. If so it cannot be said that the sale is void. It cannot be said that sale conducted by the court without fixing the reserve price, though leave was granted to the mortgagee decree holder to bid and purchase
the property on the mortgage is without jurisdiction making the sale void or a nullity. Therefore the court auction sale, though conducted in violation of sub rule (2) of Rule 72A is not a
C.R.P.Nos.133 of 2006 & connected cases 75
sale conducted without the inherent jurisdiction. If that be so, the sale cannot be void for violation of sub rule (1) or sub rule (2) of Rule 72A of Order XX1 of the Code. The violation under sub rule 72A would only enable the judgment debtor or any person effected by such sale to apply to the executing court under sub rule (3) to set aside the sale. Though he need not establish, in such an application, that substantial injury has resulted by such sale, his remedy is to get the sale set aside as provided under sub rule (3). It may be that instead of filing a petition under sub rule (3) an application is filed under Rule 90 of Order XX1 and in that application the sale may be set aside treating the petition as one filed under sub rule (3) of Rule 72A without establishing the substantial injury provided under sub rule (2) of Rule 90 of Order XX1. But neither the judgment debtor nor his representative nor any person affected by such sale is entitled to file a petition under section 47 contending that the sale
C.R.P.Nos.133 of 2006 & connected cases 76
is void. Both provisions operate on different spheres. It is more so because sub rule (3) of Rule 72A of Order XX1 provides a special remedy for the specific violation. Affected party can opt only that remedy. Any other view would make sub rule (3) of Rule 72A of Order XX1 of the Code otiose. Moreover when an application to set aside the sale as provided under sub rule (3) can be filed only within sixty days from the date of sale as provided under Article 127 of Limitation Act 1963, it cannot be allowed to be circumvented by recourse to Section 47 of Code of Civil Procedure.
incorporating Rule 72A of Order XX1 of Code of Civil Procedure is that when the mortgagee decree holder is granted leave to bid and purchase, the mortgagor shall be relieved from all the liabilities incurred under the mortgage in addition to eradicate the evil tendency on the part of the mortgagee decree holder to take undue advantage of purchasing the property at a lower price by
C.R.P.Nos.133 of 2006 & connected cases 77
procuring collusive bidders at a farce sale. It is to prevent knocking off the property at a minimal price resulting in leaving no residue of the decree debt. If that be the purpose of providing Rule 72A of Order XX1, when the mortgage property was sold and purchased by first respondent for
Rs.1,91,443/-, which covers the entire liability on the mortgage at that time, and is not less than the reserve price that could have been fixed under sub rule 2 of Rule 72A, it cannot be said that the sale is bad in law. It is more so when the value seen in the sale deeds obtained by the petitioners from the second respondent is less than the value at which the property was purchased by the first respondent in the auction sale. In such circumstances, there is no merit in the Civil Revision Petitions. They are dismissed.
M.Sasidharan Nambiar Judge
tpl/-
M.SASIDHARAN NAMBIAR, J.
----------------------------C.R.P.Nos 133/06,137/06, 138/06 & 139 /06
ORDER
14th JULY,2008
3 issues framed by the court
Whether a court auction sale in execution of a mortgage decree is void if the court failed to fix a reserve price as mandated by Rule 72A of Order XXI of the Code of Civil Procedure.
Whether a transferee of the judgment debtor, who purchased property after the decree but before the auction, has locus standi to challenge the sale under Section 47 of the Code of Civil Procedure.
Whether the dismissal of a petition by the judgment debtor under Rule 90 of Order XXI precludes his representative from challenging the same sale under Section 47 on grounds of illegality.
Colour shows how this judgement treated each authority
Mrs. Achamma Cyriac v. K.F.C. & OthersReferred¶61
Mrs. Achamma Cyriac v. K.F.C. & Others (1996(1) K.L.J.755)
D.S. Chohan v. State Bank of PatialaExplained¶348
D.S. Chohan v. State Bank of Patiala (1997) 10 SCC 65 · Who else cites this
Manilal Mohanlal Shah v. Sardar Sayed Ahmed Sayed MahmadExplained¶62
Manilal Mohanlal Shah v. Sardar Sayed Ahmed Sayed Mahmad (A.I.R.1954 S.C.349) · Who else cites this
A.P.V.Rajendran v. S.A.SundararajanExplained¶118
A.P.V.Rajendran v. S.A.Sundararajan (AIR 1980 Madras 123) · Who else cites this
Rajarethna Naikkan v. Parameswara KurupExplained¶131
Rajarethna Naikkan v. Parameswara Kurup (1997 (1)KLT 777)
Govinda Menon v. VarkeyDistinguished¶161
Govinda Menon v. Varkey (1970 K.L.T. 440)
Chacko Pyli v. Iype VargheseDistinguished¶83
Chacko Pyli v. Iype Varghese (1955 K.L.T.739)
Mangal Prasad v. Krishna Kumar MaheshwriExplained¶152
Mangal Prasad v. Krishna Kumar Maheshwri (AIR 1992 SC 1857) · Who else cites this
Rafique Bibi v. Sayed WaliuddinExplained¶246
Rafique Bibi v. Sayed Waliuddin (2004) 1 SCC 287 · Who else cites this
Sultana Begum v. Prem Chand JainExplained¶384
Sultana Begum v. Prem Chand Jain (AIR 1997 SC 1006) · Who else cites this
3 provisions across 2 enactments
Mrs. Saju George
Thomas
Chandrasekharan Nair
P.Chandru
M.Sasidharan Nambiar
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
