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PETITIONER: LAL CHAND

       Vs.

RESPONDENT: VIIITH ADDL. DISTRICT JUDGE & ORS.

DATE OF JUDGMENT:       21/02/1997

BENCH: K. RAMASWAMY, S. SAGHIR AHMAD

ACT:

HEADNOTE:

JUDGMENT:                          O R D E R      Leave granted.  We have  heard learned  counsel on both sides.      This appeal  by special  leave arises from the judgment of the  High Court of Allahabad, made on November 9, 1995 in Civil Miscellaneous Writ Petition No.2680/89.      The admitted  position is that the plaintiff-respondent had entered into an agreement with the appellant to purchase 43 decimals  of land  in plot  No.389/2 situated  in Umraha, District Varanasi for a sum of Rs.6625/-. A sum of Rs.2000/- was paid  as earnest  amount while  the balance  amount  has already been  paid in the form of loan. The respondent filed the suit  seeking specific  performance  of  the  agreement, which relief ultimately was refused; but a decree for refund of the  earnest money  was granted. Since the amount was not paid, the  respondent had  brought  the  properties  of  the appellant, to  the extent  of one  acre, 52-1/2  decimals to sale. The  same came  to  be  questioned  by  filing  of  an objection under  Order XXI, Rule 90, CPC which was dismissed by the  court below and upheld by the High Court. Thus, this appeal by special leave.      Two question  have arisen in this case, namely, whether the auction  was properly  conducted by  the executing court and whether  the respondent-decree  holder was  entitled  to participate in the auction to bid and had the sale confirmed in that  behalf? It  is not  in dispute that the land, viz., plot Nos.24  and 25  of admeasuring  33 decimals totalling 1 acre 52-1/2  decimals was  brought to  sale to  realise  the decreetal  amount  of  Rs.10,921-50.  The  court  fixed  the valuation at Rs.11,000/-. On a sale conducted by Amin of the court, the  bid was knocked down on April 30, 1983 in favour of the respondent-decree holder for a sum of Rs.12,000/-. As stated earlier,  the question  has arisen  whether the  sale conducted in execution of the  decree is valid in law? Order XXI, Rule 72, CPC envisage as under:      "72. Decree-holder  not to  bid for      or buy  property without permission      -- (1)  No holder  of a  decree  in      execution of which property is sold      shall,    without    the    express

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    permission of the court, bid for or      purchase the property.           Where decree-holder purchases,      amount of  decree may  be taken  as      payment  --  (2)  where  a  decree-      holder    purchases    with    such      permission, the purchases-money and      the amount  due on  the decree may,      subject  to   the   provisions   of      Section 73,  be set off against one      another, and  the  Court  executing      the   decree    shall   enter    up      satisfaction of the decree in whole      or in Part accordingly.           (3)  Where   a   decree-holder      purchases, by  himself  or  through      another   person,    without   such      permission, the  Court may,  if  it      thinks fit,  on the  application of      the judgment-debtor  or  any  other      person whose interests are affected      by the sale, by order set aside the      sale; and  the costs of price which      may happen  on the  re-sale and all      expenses  attending  it,  shall  be      paid by the decree-holder."      A reading thereof clearly indicates that no holder of a decree in execution of which property is sold shall, without the express permission of the Court, bid for or purchase the property. In the event of such a purchase, on an application by the  judgment-debtor or  any other person whose interests are affected  by such  a sale,  set aside  such a  sale.  In paragraph 13  of the  petition, the  appellant  has  stated, among others, thus:      "After the  said auction  sale, the      judgment-debtor filed and objection      under  Order   XXI.  Rule  90.  CPC      mainly on  the following grounds in      the   Court   of   Munsif   Havali,      Varanasi :-      (i)  The  decree-holder   purchased      the  said   land  through   auction      without the permission of the Court      :"      In the  counter-affidavit filed  by the  respondent, he has not  specifically denied  in that  behalf except stating that it  is a  matter of  record.  The  proceedings  of  the auction do  indicate  that  if  he  was  really  the  person permitted to  participate in  the bid, one would necessarily expect an  active participation  in  the  auction.  But  the proceedings do show that after one Bali Ram Prasad, had bid, earlier, for  Rs.10,000/- but  later offered Rs.11,500/- and one Srinath  had offered  a sum  Rs.11,000/-, as a last bid, the respondent  offered Rs.12,000/-  so as  to be within the outer limit  of valuation  fixed by  the Court  to ward  off future onslaught  on court  sale. Since there was no further offer  made   by  anybody   thereafter  out   of  the   five participants in  the bid, the bid was knocked down in favour of the  decree-holder-respondent. Under  the  teeth  of  the mandatory language  of Order  XXI, Rule  72, CPC,  he has no right  to   bid  in  the  auction  without  obtaining  prior permission  of   the  Court.  As  a  consequence,  the  sale conducted was  clearly in  flagrant violation  of Order XXI, Rule 72, CPC.      It is  also to  be seen  that the  sale  was  conducted

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without there  being any  proper notice  and publicity as is evident from  the report  submitted by the Court Amin. After the bid  was started,  sale was  notified in  the village by beat of  drum and  thereafter people started coming and five persons including  the respondent  participated in  the bid. This part  of the  procedure adopted  is clearly illegal and caused great  prejudice to the interest of the appellant. In Desh Bandhu  Gupta vs. N.L. Anand & Rajinder Singh [(1994) 1 SCC  131],   this  Court   had  pointed  out  the  mandatory requirements of the procedure, as indicated therein, thus:      "The contentions  of S/Shri Madhava      Reddy and Gujral that the appellant      had not  given  hes  valuation  and      that, therefore,  it is not open to      him to  raise the  objections after      the sale is unacceptable. Since the      court has  not given  any notice to      the appellant  which is  mandatory,      the need  to submit  his  valuation      did not  arise. Order  21 Rule  54,      sub-rule (1-A)  brought in  by 1976      Amendment  Act  mandates  that  the      Court should  require the judgment-      debtor to  attend the  court  on  a      specified date  to take  notice  of      the  date  to  be  proclamation  of      sale.  Form   24  of  Appendix  ‘E’      second para and the court Rule also      envisage the  mandate.  It  is  are      reminder to the court that it has a      statutory duty  to issue  notice to      the     judgment-debtor      before      settlement   of    the   terms   of      proclamation of sale. Then only the      proviso to  Rule 66(2)  comes  into      play dispensing  with  multiplicity      of notice  and not  dispensation of      mandatory compliance  of notice  to      the judgment-debtor.  Had it been a      case where  notice was  served  and      the  appellant   lay  be,   without      objecting to  the  valuation  given      would be  put against the appellant      to impugn  the irregularities after      the sale  or the  under - valuation      settled  by   the  court   in   the      proclamation of  sale. The  further      contention of both the counsel that      merely because  there is  no  order      under  Order   21  Rule  66(2),  it      cannot  be   construed   that   the      Execution Court had not applied its      mind in  settling the  terms of the      proclamation of  sale,  is  one  of      desperation./   Except   giving   a      schedule of  dates  for  conducting      the  sale   the   Execution   Court      totally  abdication   its  duty  to      scrupulously   comply    with   the      mandatory  procedure  and  did  not      apply its  mind  to  the  mandatory      duty cast on it by Order 21 Rule 66      To settle the terms of proclamation      of  sale,  and  proper  publication      under  Rule  67.  After  April  20,

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    1979, the  court has merely ensured      its publication on the court notice      board  and   on  the  site  at  the      respective dates  and  no  further.      This Court  is Shalimar  Cinema vs.      Bhasin Film  Corpn. [(1987)  4  SCC      717] held that the court has a duty      to see  that  the  requirements  of      Order  21   Rule  66  are  properly      complied with.  It is  incumbent on      the court  to be  scrupulous in the      extreme. No  action of the court or      its officer  should be  such as  to      give rise  to the criticism that it      was   done   in   a   casual   way.      Therefore, a  proclamation of  sale      drawn casually  without  compliance      of the  mandatory requirement and a      sale held in furtherance thereof is      not a  sale in  the eye  of law. We      are of the considered view that the      procedure adopted  by the  court in      non-compliance of Order 21 Rules 66      and 67 is in flagrant breach of the      mandatory  provision,   it   is   a      nullity ab initio."      There is  yet another  infirmity which goes to the root of the  matter. It is seen that the respondent, in fact, had a contract  to purchase  43 decimals  of  land  and  in  the execution, managed  to give  the list  of  all  other  lands totalling 1  acre 52-1/2  decimals and  the decree  for  Rs. 10,000/- and  odd was  sought to  be put  to execution,  and purchased the  land for  Rs.12,000/-. In other words, he has over-reached his  original agreement  which he failed in the suit itself by participating and getting sale in his favour. There is no attempt made for sale of a reasonable portion of the property  for realisation of the decree debt. Order XXI, Rule 64 expressly mandates as under :      "64.  Power   to   order   property      attached to be sold and proceeds to      be paid  to person entitled. -- Any      court executing  a decree may order      that any  property attached  by  it      and liable to sale, or such portion      thereof as  may seem  necessary  to      satisfy the  decree, shall be sold,      and that the proceeds of such sale,      or a  sufficient  portion  thereof,      shall be paid to the party entitled      under the  decree  to  receive  the      same."      This part  of the  case was  also  considered  in  Desh Bandhu Gupta’s case (supra) thus :      "Yet  another   contention  of  Mr.      Gupta is  that the sale of the plot      of 550  sq. yards  is in  excess of      the execution and the order to sell      it is the result of non-application      of mind  touching the  jurisdiction      of the  court  rendering  the  sale      void   or    manifestly    illegal.      Therefore, the need to invoke Order      21 Rule  90 does  not arise  and it      can be  set aside under Section 47,      CPC.

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         Proviso  to  sub-rule  (4)  of      Rule 17  of Order  21 provides  the      procedure    to     receive     the      application for  execution  of  the      decree. In the case of a decree for      payment of  money, the value of the      property attached  shall, as nearly      as may  be ,  correspond  with  the      amount due  under the decree. Rule;      64  of   Order   21   charges   the      Executing Court  that it  may order      attaching of  any property  to  the      extent that such portion thereof as      may seem  necessary to  satisfy the      decree would  be sold".  It is also      enjoined under  subrule  (2)(a)  of      Rule 66  of Order  21 that  where a      part  of   the  property  would  be      sufficient to  satisfy the  decree,      the same be sold by public auction.      Form 27  of  Appendix  E    of  the      schedule  also  directs  the  court      auctioneer to  sell so  much of the      said property  as shall realise the      sum in  the said  decree and costs.      The  Code,   therefore,  has  taken      special care  charging the  duty on      the Executing  Court and  it has  a      salutary  duty  and  a  legislative      mandate to  apply its  mind  before      settling the  terms of proclamation      and satisfy  that if  part of  such      property  as   seems  necessary  to      satisfy the  decree should  be sold      if the  sufficient for  payment  to      the  decree-holder  or  the  person      entitled under  decree  to  receive      the  amount   and  so   much   that      property alone should be ordered to      be sold  in execution.   In  Ambati      Narasayya vs.  M. Subba  Rao, [1989      Supp. (2)  SCC 693] this Court held      that it  is the  duty cast upon the      court under  Order 21  Rule  64  to      sell  only   such  properly   or  a      portion thereof as may be necessary      to satisfy  the  decree,  it  is  a      mandate of  the  legislature  which      cannot  be   ignored.  Therein  for      execution of  a decree  of a sum of      Rs.   2000/-    and   costs,    the      appellant’s  10   acres  land   was      brought to sale which was purchased      for a sum of Rs.17,000/- subject to      discharge of  a prior  mortgage  of      Rs.2,000/-. This  Court  held  that      without   the   court’s   examining      whether a  property could  be sold,      the sale held was not in conformity      with the  requirement of  Order  21      Rule 64  and  it  was  held  to  be      illegal and  without  jurisdiction.      The sale  was  set  aside  and  the      court  was   directed  to  put  the      judgment-debtor  in  possession  of

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    the land  and to  refund  the  sale      amount  to  the  auction-purchaser.      Further  direction   was  given  to      execute the  decree  in  accordance      with  law.  In  Mangal  prasad  vs.      Krishna  Kumar   Maheshwar   [1992)      Supp.. (3)  SCC 31] a shop was sold      to realise  a decree  debt of about      Rs.29,000/- and  the sale  price at      the auction  was Rs.  one lakh  and      odd. This  Court finding that it is      excessive execution,  set aside the      sale and   directed  return of  the      sale   amount   to   the   auction-      purchaser with  interest @  12%. In      Takaseela  Pedda  Subba  Reddy  vs.      Pujari Padmavathamma  [(1977) 3 SCC      337] to  recover the decree debt in      two decrees the properties situated      in  two   different  villages  were      brought  to   sale.  In  the  first      instance  the   property   in   ‘D’      village  fetched   a  sum   of  Rs.      16,880,  which  was  sufficient  to      satisfy the  decretal  amount.  The      property in  ‘G; village  was  also      sold  which   fetched  a   sum   of      Rs.12,000. This Court set aside the      sale of G‘’ village. Admittedly the      site in  sale is  to the  extent of      550  sq.   yards,  situated   in  a      commercial ares  around  which  the      petroleum     installations     are      established. Though,  as  contented      by Shri  Madhava Reddy,  that there      may  be   building  regulation  for      division of  the property,  may  be      100 yards  or 150 yards out of its,      or   whether    undivided   portion      thereof would  have  satisfied  the      decree   debt.    it    could    be      legitimately  concluded   that  the      court did not apply its mind at all      to this aspect as well."      In Ambati  Narasavya vs.  M. Subba  Rao [1989 Supp. (2) 693 at 695, this court had pointed out as under:      "It is  of importance  to note from      this   provision    that   in   all      execution  proceedings,  the  court      has to  first decide  whether it is      necessary  to   bring  the   entire      attached property  to sale  or such      portion   thereof   as   may   seem      necessary to satisfy the decree. If      the  property   is  large  and  the      decree to  be satisfied  is  small,      the  court  must  bring  only  such      portion  of   the   property,   the      proceeds   of    which   would   be      sufficient to  satisfy the claim of      the decree holder, it is immaterial      whether  the  property  is  one  or      several. Even  if the  properly  is      one, if a separate portion could be      sold    without    violating    any

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    provisions of law only such portion      of the  property  should  be  sold.      This, in our opinion, is not just a      discretion,   but   an   obligation      imposed on  the court. Care must be      taken to  put only  such portion of      the   property    to    sale    the      consideration    of     which    is      sufficient to meet the claim in the      execution petition.  The sale  held      without examining  this aspect  and      not   in   conformity   with   this      requirement would  be  illegal  and      without jurisdiction."      Similar view  was taken  in Takaseela Pedda Subba Reddy vs. Pujari Padmavathamma [(1977) 3 SCC 337 at 340].      Thus ,  we hold  that the  sale of  the property of the appellant  conducted  by  the  executing  court  is  clearly illegal. However,  the appellant  is  directed  to  pay  the decreetal amount,  interest on  the principal earnest amount of Rs.3,000/-  @ 12%  per annum from the date of deposit and the costs of execution as well as impounding fee @ 5% on the sale amount of Rs.12,000/-.      The appeal is accordingly allowed. No costs.