High Court of Kerala dismissed appeals filed by auction purchaser against Execution Court order setting aside a sale under Order XXI Rule 90 CPC. Court held inclusion of strangers' property in proclamation was material irregularity causing substantial injury.
Appeals dismissed; execution court order setting aside sale confirmed.
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 A.M.SHAFFIQUE
&
THE HONOURABLE MR.JUSTICE N.ANIL KUMAR
TUESDAY, THE 24TH DAY OF SEPTEMBER 2019 / 2ND ASWINA, 1941
FAO.No.204 OF 2015
AGAINST THE ORDER IN EA No.277/2014 in EP No.3/2013 in OS 278/2008 DATED 28-03-2015 OF SUB COURT, MAVELIKKARA
APPELLANT/4th RESPONDENT:
STANLY MATHEW MANNADIYIL HOUSE, PALLIPPAD PO, HARIPPAD, ALAPPUZHA DISTRICT
BY ADVS. SRI.GEORGE VARGHESE(PERUMPALLIKUTTIYIL) SRI.A.R.DILEEP SRI.MANU SEBASTIAN RESPONDENTS/PETITIONERS & RESPONDENTS 1 TO 3:
1 P.KANAKARAJ VARNIKALAYAM VEEDU, NADAYIL KUTTIYIL BHARANIKKAVU NORTH MURI, KATTANAM VILLAGE-690 541.
**2 SUVARNAKUMARI @SHOBHA VARNIKALAYAM VEEDU, NADAYIL KUTTIYIL BHARANIKKAVU NORTH MURI, KATTANAM VILLAGE-690 541 (DIED, LR'S RECORDED).
3 SAMUEL MATHEW ST.MARY'S COTTAGE, MATTOM NORTH MURI, KANNAMANGALAM VILLAGE-690 106 .
FAO Nos.204 and 205/15
-:2:-
4 VARGHESE SAMUEL PUTHENVEETIL, KOTTARKAVU, MAVELIKKARA-690 101. (4TH RESPONDENT IS DELETED FROM THE PARTY ARRAY AT THE RISK OF THE APPELLANT VIDE ORDER DATED 17.11.2015 IN IA.NO.1289/2015)
5 SANTHAMMA VARGHESE PUTHENVEETIL, KOTTARKAVU, MAVELIKKARA-690 101.
6 VARNIKA.T.RAJ D/O. LATE SUVARNAKUMARI @ SHOBHA, VARNIKALAYAM VEEDU, NADAYIL KUTTIYIL, BHARANIKKAVUR NORTH MURI, KATTANAM VILLAGE
7 VARNINI .T RAJ D/O. LATE SUVARNAKUMARI @ SHOBHA, VARNIKALAYAM VEEDU, NADAYIL KUTTIYIL, BHARANIKKAVU, NORTH MURI, KATTANAM VILLAGE IT IS RECORDED THAT THE 1ST RESPONDENT AND THE ADDITIONAL RESPONDENTS 6 AND 7 ARE THE LEGAL HEIRS OF DECEASED 2ND RESPONDENT , AS PER ORDER DATED 14.09.2018 IN IA NO.1/2018.
R1-2 BY ADV. SRI.R.ROHITH R1-2 BY ADV. SRI.P.S.RAGHUKUMAR R1-2, R6-7 BY ADV. SRI.K.SASIKUMAR R1-2 BY ADV. SRI.S.ARAVIND R3 BY ADV. SRI.A.SHAFEEK (KAYAMKULAM) SRI T KRISHNANUNNI -SR ADV -AMICUS CURIAE
THIS FIRST APPEAL FROM ORDERS HAVING BEEN FINALLY HEARD ON 29.07.2019, ALONG WITH FAO.205/2015, THE COURT ON 24.9.2019 DELIVERED THE FOLLOWING:
FAO Nos.204 and 205/15
-:3:-
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE
&
THE HONOURABLE MR.JUSTICE N.ANIL KUMAR
TUESDAY, THE 24TH DAY OF SEPTEMBER 2019 / 2ND ASWINA, 1941
FAO.No.205 OF 2015
AGAINST THE ORDER IN EA NO.357/14 IN EP NO.3/13 IN OS 278/2008 DATED 28-03-2015 OF SUB COURT, MAVELIKKARA
APPELLANT/5TH RESPONDENT:
STANLY MATHEW
MANNADIYIL HOUSE, PALLIPPAD PO, HARIPPAD, ALAPPUZHA DISTRICT.
BY ADVS. SRI.GEORGE VARGHESE(PERUMPALLIKUTTIYIL) SRI.A.R.DILEEP
RESPONDENTS/PETITIONER & RESPONDENTS 1 TO 4:
1 RAVEENDRAN NAIR S/O.LATE RAGHAVAN PILLAI, RESIDING AT SURAVI VEEDU, PONNARAMTHOTTAM MURI, MAVELIKKARA VILLAGE, MAVELIKKARA TALUK-690 541.
2 SAMUEL MATHEW
S/O.M.SAMUEL, ST.MARY'S COTTAGE, MATTOM SOUTH MURI, KANNAMANGALAM VILLAGE-690 106.
*3 THE CAPITAL BANKERS P.N.SAMUEL MEMORIUM SHOPPING COMPLEX, KOTTARKAVU MURI-690101, REPRESENTED BY ITS MD. VARGHESE SAMUEL.
FAO Nos.204 and 205/15
-:4:-
*4 VARGHESE SAMUEL PUTHENVEEDU, KOTTARKAVU, MAVELIKKARA-690 101.
*W/O.VARGHESE SAMUEL, PUTHENVEEDU, KOTTARKAVU, MAVELIKKARA-690 101 (RESPONDENTS 3 TO 5 ARE DELETED FROM THE PARTY ARRAY AT THE RISK OF THE APPELLANT VIDE ORDER DATED 22/12/2015 IN IA NO.1482/2015.
R1 BY ADV. SMT.ASHA ELIZABETH MATHEW R2 BY ADV.SRI.A.SHAFEEK
THIS FIRST APPEAL FROM ORDERS HAVING BEEN FINALLY HEARD ON 29.07.2019, ALONG WITH FAO.204/2015, THE COURT ON 24.9.2019 DELIVERED THE FOLLOWING:
FAO Nos.204 and 205/15
-:5:-
J U D G M E N T
Shaffique, J.
The auction purchaser of certain item of property is the appellant in these cases, challenging the common order in EA No.277/2014 and EA No.357/2014 in EP No.3/2013 which arises from OS No.278/2008, by which the execution court had set aside the sale in his favour.
FAO Nos.204 and 205/15
-:6:-
No.125/2005 of Sub Court, Mavelikkara. Pursuant to the sale becoming absolute, he filed EA No.266/2012 before the Execution Court in EP No.230/2006 for delivery of possession which was pending consideration.
FAO Nos.204 and 205/15
-:7:-
the matter. The contention urged by the auction purchaser was that if at all it is found that in respect of 1.93 Ares, the judgment debtor did not have any saleable interest, the boundary of the property is to be fixed based on the possession and the sale is to be confirmed after fixing the boundary of the available property. He also contended that he is a bonafide purchaser. The upset price fixed for the property was 6,99,256/- and the extent of property in the proclamation was shown as 3.54 Ares in Sy.Nos.82/9, 10, 11 and 12 and the building thereon. The market value shown in the schedule was 15 lakhs. The decree-holder had attached 4.54 Ares and the building thereon within the very same boundaries.
FAO Nos.204 and 205/15
-:8:-
irregularity in conducting the sale and the sale is to be set aside. Accordingly, the application was allowed invoking Order XXI Rule 90 of C.P.C.
(i) Kunjukrishnan v. Sankaran Potti (1971 KLT 553).
FAO Nos.204 and 205/15
-:9:-
This is a case in which a learned Single Judge of this Court while considering the competency of a person to apply to set aside a sale under Order XXI Rule 90, after having referred to earlier judgment of the Full Bench in Calcutta High Court, held that the petitioner is supposed to have purchased the property prior to attachment and his interest is not affected by the sale. That was a case in which the attachment was ordered on 28/11/1962 and the property was sold on 24/6/1963. Petitioner who filed the application under Order XXI Rule 90 contended that he purchased the property from the plaintiffs, who were judgment-debtors as the decree was for costs, on 20/8/1962 i.e., even prior to the attachment.
(ii) The Full Bench of Calcutta in Asmuthunnissa
Beegum v. Ashruff Ali [ILR 15 Calcutta 488] held that where an application is filed under Order XXI Rule 90 by a person other than a decree-holder or one emitted to share in a rateable distribution of assets, such person must be one whose interests are affected by the sale. A person claiming by title paramount to judgment-debtor cannot contend that his interests will be affected by the sale.
FAO Nos.204 and 205/15
-:10:-
FAO Nos.204 and 205/15
-:11:-
material irregularity or fraud in publishing or conducting the sale. It was therefore held that Order XXI Rule 90 application was maintainable. Though there was a conflict in the judgment between the Judges hearing the matter, the third Judge opined that the petition was maintainable. That was a case in which the petitioner filed an application under Order XXI Rule 90 for setting aside the sale alleging material irregularity and fraud. He purchased the property as per sale deed dated 17/10/1962 from one Krishnan. Krishnan was the defendant in OS No.92/1962 and a decree was passed against him on 13/3/1963. The property was attached in execution on 16/7/1963. The petitioner initially filed claim petition under Order XXI Rule 58 stating that she purchased the property prior to the attachment and prayed for lifting the attachment. The same was dismissed. The present petition was later filed after sale of property in which a question arose as to whether an application under Order XXI Rule 90 was maintainable. It was held by Justice Kailasam at paragraph 13 as under:-
“13. A claim petition under Order 21, Rule 58 is preferred against attachment of a property in the
FAO Nos.204 and 205/15
-:12:-
execution of a decree on the ground that on the date of the attachment, the objector had some interest in or was possessed of the property attached. Such a claim may be disallowed under Order 21, Rule 61 by the Court on the finding that the property at the time of the attachment was in the possession of he judgment-debtor in his own right. When once such an order is made, and there is no challenge by way of a suit under Rule 63, the order made on the claim or objection petition shall be conclusive. Whatever may be the result of the finality of the order under Order 21, Rule &3, a person who either owns the property or holds an interest in the property by virtue of a title acquired before such sale may apply for setting aside the sale under Order 21, Rule 89. So also any person whose interests are affected by the sale may apply to the Court to set aside the sale on the ground of material irregularity or fraud in publishing or conducting the sale under Order 21, Rule 90. The rights conferred under Order 21, Rules 89 and 90 are limited enabling the persons specified to apply for setting the sale. So far as this right to apply for setting aside the sale is concerned, the decision in 44 Mad LJ 325 = (AIR 1923 Mad 487 (2)) held that the effect of the dismissal of the claim under Order 21, Rule 58 was not to decide finally that the petitioner had no interest to ask that the sale should be set aside on payment of the decree amount plus five per cent, into court, but only to decide that the claimant had no right to have the attachment raised. The Court held that "It is impossible to conceive how the dismissal of the claim petition could operate as res judicata to prevent the admission of an application to
FAO Nos.204 and 205/15
-:13:-
pay the decree amount and get the property released after the sale". The rights conferred under Rules 89 and 90 of Order 21 are only limited, that is to enable the person concerned to have the sale set aside. Certain rights might have become final because of the order passed under Order 21, Rule 58 not being challenged by a civil suit under Order 21, Rule 63, But that would not operate as res judicata to prevent an application for setting aside the sale under Rule 89 or 90 of Order 21. If the petitioner could prove that his interests are affected by the sale, the sale is liable to be set aside on the ground of material irregularity or fraud in publishing or conducting the sale. I therefore-hold that an application under Order 21. Rule 90 is maintainable in the circumstances. Though the order passed under Order 21, Rule 58 has become final it does not operate as res judicata. The order made under Order 21, Rule 58 will be final only for some purposes and that will have to be taken into account in disposing of the application” .
The said finding was accepted by the other learned Judge at
paragraph 21 as under:-
“21. I am quite clear that the appellant is a person "whose interests are affected by the sale" as contemplated under Order 21, Rule 90 of the Code”.
Asmuthunnissa Begum (supra) and also a judgment of the learned Single Judge of Madras High Court in Cherappan v.
FAO Nos.204 and 205/15
-:14:-
Sankara Aiyar (AIR 1941 Madras 680). It was held that Asmuthunnissa's case (supra) was decided based on S.311 of the Code of Civil Procedure which was different from the present Code. The said decision cannot be made applicable and for that reason itself, the view in Cherappan (supra) was not correctly decided. It was also held that the decision in Dhanammal v. Veeraraghava Naidu (AIR 1923 Madras 487) was not brought to the notice of the learned Single Judge. In Dhanammal (supra), it was held that an application based on title paramount to that of the judgment-debtor is maintainable under Order XXI Rule 89. Therefore, it was held by the Division Bench that if Order XXI Rule 89 application is maintainable, an application under Order XXI Rule 90 is also maintainable by a person holding paramount title.
FAO Nos.204 and 205/15
-:15:-
decree. That was a case in which the appellant objector held a mortgage over the judgment-debtor.
Others (2014 (3) KLT 779), the learned Single Judge of this Court held that a stranger cannot file an application invoking Section 47 of C.P.C. before the Execution Court. If he claims that there is undervaluation of the property, the remedy is to approach the Execution Court by filing application under Order XXI Rule 90.
FAO Nos.204 and 205/15
-:16:-
petition came up for hearing only on 11/4/1980, the impugned order was passed on a misconception of facts. That apart, it was held that the judgment-debtor has no locus standi to apply to the Court for setting aside the sale on the allegation that he has no saleable interest. That was a case in which contention urged was that the Municipality while assigning the land in favour of the judgment debtor had indicated that there will be no saleable interest for a period of 15 years. It is in that background the Apex Court held that saleable interest can only be challenged by the purchaser invoking Order XXI Rule 91. It is also pertinent to note that Kunjukrishnan (supra) was decided by this Court based on the law in Asmuthunnissa Begum (supra). The Madras High Court in Saraswathi Ammal (supra) did not agree with the judgment in Asmuthunnissa Begum (supra) and rightly so observing the wording in Section 311 of the earlier Code. Order XXI Rule 90 reads as under:-
“ 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 ratable distribution of
FAO Nos.204 and 205/15
-:17:-
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.
(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 h irregularity or fraud.
(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.
Explanation.-The mere absence of, or defect in, attachment of the property sold shall not, by it be a ground for setting aside a sale under this rule.”
The words “or whose interests are affected by the sale” are of very wide implication and cannot be given a restricted meaning at all. The said view had been expressed by Division Bench of Calcutta High Court in Shyamlal Purohit (supra). Can it be said that if a person's property has been sold in execution, his rights are not affected by the sale before Court. Definitely, such sale of his property will create several other complications including an attempt to take possession of the property and also a cloud on his title.
FAO Nos.204 and 205/15
-:18:-
what has to be pleaded and proved is that there is material irregularity or fraud in publishing or conducting sale and the Courts should be satisfied that the applicant has sustained substantial injury by reason of such irregularity or fraud. This is a case where even before putting the property in execution and even before attachment, the contesting respondent or their predecessor in interest and in one case his transferor had purchased the property in Court auction itself. It is in evidence that out of 3.54 Ares and a building proclaimed for sale, a substantial portion of 1.93 Ares has already been sold in favour of the contesting respondents. When the property of a person is sold in execution of a decree, it cannot be stated that his interest is not affected in any manner. He has specifically pleaded that his property has been sold in execution of the decree, which apparently is a material irregularity in the conduct of sale. If the sale is confirmed, necessarily, the auction purchaser gets absolute interest in the property which would also amount to substantial injury being caused to the contesting respondents. When there is no doubt about such facts, we are of the view that the Court below was justified in setting aside the sale.
FAO Nos.204 and 205/15
-:19:-
FAO Nos.204 and 205/15
-:20:-
By including the property of strangers, if a proclamation is drawn up, that itself is a material irregularity and therefore the contention that there is no pleading of material irregularity cannot be sustained especially when the contesting respondents had clearly stated in the petition that their property had also been proclaimed for sale.
We do not think that the contentions urged by the appellant are sustainable. Appeals are hence dismissed, without any order as to costs.
Sd/-
A.M.SHAFFIQUE
JUDGE
Sd/-
N.ANIL KUMAR
Rp True Copy
JUDGE
PS to Judge
3 issues framed by the court
Whether a person whose property was erroneously included in a sale proclamation can maintain an application under Order XXI Rule 90 CPC to set aside the sale due to material irregularity.
Whether the inclusion of property belonging to third parties in the sale proclamation constitutes material irregularity justifying the setting aside of the sale.
Whether the remedy of the contesting respondent is to file an application under Order XXI Rule 90 CPC rather than Rule 99 or 101.
Colour shows how this judgement treated each authority
Kunjukrishnan v. Sankaran PottiReferred¶73
(1971 KLT 553)
Asmuthunnissa Beegum v. Ashruff AliDistinguished¶74
[ILR 15 Calcutta 488]
Shyamlal Purohit and another v. Jagannath Ray and anotherFollowed¶78
(AIR 1969 Calcutta 424) · Who else cites this
Saraswathi Ammal v. M.ReddiarReferred¶79
(AIR 1975 Madras 147) · Who else cites this
Shiam Lal v. Jaswath Singh and othersFollowed¶98
(AIR 1933 Allahabad 54) · Who else cites this
Parasuraman K v. Srinivasa Raghavan and OthersFollowed¶102
(2014 (3) KLT 779)
Kadiyala Rama Rao v. Gutala Kahna RaoFollowed¶103
[(2000) 3 SCC 87] · Who else cites this
1 provisions across 1 enactments
STANLY MATHEW
P.KANAKARAJ
RAVEENDRAN NAIR
SAMUEL MATHEW
THE CAPITAL BANKERS
A.M.SHAFFIQUE
N.ANIL KUMAR
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
