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CASE NO.: Appeal (civil)  2079 of 2006

PETITIONER: Saheb Khan

RESPONDENT: Mohd. Yousufuddin & Ors

DATE OF JUDGMENT: 17/04/2006

BENCH: Ruma Pal, Dalveer Bhandari & Markandey Katju

JUDGMENT: J U D G M E N T (Arising out of SLP (Civil) No.8491 of 2004)

RUMA PAL, J.

Leave granted. The appellant had purchased certain property in a Court  sale.  The High Court has set aside the sale.  The decision of  the High Court has been impugned in this appeal. The disputed property was the subject matter of a suit for  partition between the respondents or their predecessors-in- interest.  The property was not  partible. The Trial Court  accordingly directed sale of the suit property.  An Advocate  Commissioner was appointed to sell the suit property.  The  order directing sale required the Advocate Commissioner "to  sell the suit property in auction between the parties to the suit  or in public auction, if the parties are not coming forward after  following the due procedure like  giving wide publicity".    The Advocate Commissioner issued notice to the parties  to the suit  through their respective advocates on 25th June,  2002.  The notice said that the warrant of commission would  be executed by the sale of the property on 30th June, 2002 by  auction and that the parties were at liberty to participate in  the auction if they desired to. The Commissioner also pasted   notices on the wall of the suit property and distributed  pamphlets advertising  the sale in the locality. On 30th June, 2002, four of the parties were present and,  according to the report of the Commissioner about "20-30  general public offers were made as against the fixed upset  price of Rs. 10 lakhs".  The highest bid was given by the  appellant of Rs. 12 lakhs. He deposited three lakhs being 1/4th  of the bid amount. A report was submitted to Court by the  Advocate Commissioner enclosing inter alia a copy of the  minutes of the proceedings held by the Commissioner signed  by the parties as well as a list of the bidders and their names  and addresses. On 12th August, 2002, the respondent No.1, herein  (who  was the defendant No.4 in the suit) filed an application under  Order XXI Rule 90 read with Section 151 of the Code of Civil  Procedure praying that the auction should be  set aside and  that the sale should be made in favour of one Azhar Quyum  Sidhique for 18 lakhs.  The application was accompanied by  an affidavit affirmed by the said Sidhique in which he said  that he was ready to purchase the suit premises and would  deposit Rs. one lakh within two days and pay the balance  "within any period at the time of registration".  Although by this time, the appellant had deposited the  offered price of Rs. 12 lakhs, the District Judge gave an

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opportunity to the respondent No.1 to bring the said Sidhique  to court to deposit the sum of Rs.18 lakhs. The respondent  No.1, however failed to produce the alleged purchaser. Three  such opportunities were given by the District Judge.  On all  three occasions, the said Sidhique did not present himself in  Court. The District Judge then passed an order holding that  adequate notice had been given by the Advocate Commissioner  for publishing  the sale. The Respondent No.1’s contention  that the sale should have been published in the newspaper  was rejected on the ground that no such direction had been  given by the Court.  The Trial Court also noted that the  Respondent No.1 was not interested to purchase the property  himself and had failed to substantiate his claim that he had  found a purchaser of the property for Rs. 18 Lakhs despite  repeated opportunities.  The Trial Court held that the legally  prescribed procedure had been followed by the Advocate  Commissioner to sell the property and the sale did not suffer  from any irregularities or fraud.  The sale was accordingly  confirmed in favour of the appellant.  Impugning the decision of the District Judge, the  respondent No.1 preferred an appeal before the High Court.   The High Court set aside the sale holding that no notice was  given to the respondent No.1 to purchase the property in  terms of Sections 2 and 3 of the Partition Act, 1893 before  selling the property by public auction. It was also held that it  was unclear whether notice was served on the respondent  No.1 as the signatures on the notice were not legible.  In any  event, the Court was of the view that the provisions of Order  XXI Rules 66 and 67 of the Code of Civil Procedure had been  violated by not giving adequate publicity to the sale. It was  also noted that the respondent No.1 had brought to the notice  of the Court the offer of the said Sidhique for Rs. 18 lakhs. The  High Court said that there was no valid or legal reason for not  accepting or acting upon the offer so brought forward by the  respondent No.1.  In the circumstances, the appeal was  allowed and the sale was set aside. Before us the appellant has contended that the High  Court did not construe the provisions of Order XXI Rule 54(2)  read with Rule 67 (1) correctly.  Although wide publicity had  been directed to be given by the Trial Court, there was no  direction to publish the advertisement in any newspaper. It  was further said that there was no material irregularity in the  conduct of the sale which could justify the High Court in  setting it aside.   It was further  contended that  the alleged  offer brought forward by the respondent No.1 was not followed  up by any actual deposit and could not form the basis of the  High Court coming to the conclusion that the property has  been sold for at an undervalue to the appellant. According to the learned counsel appearing on behalf of  the respondent No.1, by using the word "wide publicity", the  Trial Court had intended that the sale should be advertised in  the newspaper. It was also submitted that  no notice was given  to the respondent No.1 at any stage.  The Advocate  Commissioner’s notice of sale had been addressed to a lawyer,  who did not in fact represent the respondent No.1. It was  further submitted that the sale had been held in collusion  between the other parties and the purchaser and that the sale  had been made at an undervalue.  We are unable to sustain the reasoning of the High  Court.  Order XXI Rule 90 of the Code of Civil Procedure  allows inter-alia any person whose interests are affected by the  sale to apply to the Court to set aside a sale of immovable  property sold in execution of a decree on the ground of "a  material irregularity or fraud in publishing or conducting" the

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sale.  Sub-section (2) of Order XXI Rule 90 however places a  further condition on the setting aside of a Court sale in the  following language: "No sale shall be set aside on the  ground of irregularity or fraud in  publishing or conducting it unless,  upon the facts proved, the Court is  satisfied that the applicant has  sustained substantial injury by  reason of such irregularity or fraud.          Therefore before the sale can be set aside merely  establishing a material irregularity or fraud will not do. The  applicant must go further and establish to the satisfaction of  the Court that the material irregularity or fraud has resulted  in substantial injury to the applicant. Conversely even if the  applicant has suffered substantial injury by reason of the sale,  this would not be sufficient to set the sale aside unless  substantial injury has been occasioned by a material  irregularity or fraud in publishing or conducting the sale. (See:  Dhirendra Nath Gorai and Suibal Chandra Shaw and Ors.  Vs. Sudhir Chandra Ghosh and Ors. (1964) 6 SCC 101;  Jaswantlal Natvarlal Thakkar Vs. Sushilaben Manilal  Dangarwala & Ors. (1991) Supp. 2 SCC 691; Kadiyala Rama  Rao Vs. Gutala Kahna Rao (dead) by  & Ors. (2000) 3 SCC  87).         A charge of fraud or material irregularity under Order  XXI Rule 90 must be specifically made with sufficient  particulars.  Bald allegations would not do.  The facts must be  established which could reasonably sustain such a charge. In  the case before us, no such particulars have been given by the  respondent of the alleged collusion between the other  respondents and the auction purchaser. There is also no  material irregularity in publishing or conducting the sale.  There was sufficient compliance with the orders of Order XXI  Rule 67(1) read with Order XXI Rule 54(2). No  doubt, the Trial  Court has said that the sale should be given wide publicity but  that does not necessarily mean by publication in the  newspapers.  The provisions of Order XXI Rule 67 clearly  provide if the sale is to be advertised in the local newspaper,  there must be specific direction of Court to that effect.  In the  absence of such direction, the proclamation  of sale has to be  made under Order XXI Rule 67(1) "as nearly as may be in the  manner prescribed by Rule  54, sub-rule(2)".  Rule 54 sub-rule  (2) provides for the method of publication of notice and reads  as follows:- "(2) The order shall be proclaimed at  some place on or adjacent to such  property by beat of drum or other  customary mode, and a copy of the  order shall be affixed on a  conspicuous part of the property  and then upon a conspicuous part  of the Court-house, and also where  the property is land paying revenue  to the Government, in the office of  the Collector of the district in which  the land is situate (and, where the  property is land situate in a village,  also in the office of the Gram  Panchayat, if any, having  jurisdiction over that village)".  

The proclamation of the sale by beat of drum was not  mandatory, so long as the sale notice was proclaimed at or

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adjacent to the property. Admittedly, the Advocate  Commissioner distributed the pamphlets advertising  the sale  in the locality several days  prior to holding of the  sale and  also affixed a copy of the sale notice on the property itself. In any event the respondent No. 1 has been unable to  establish that he had suffered substantial injury by reason of  any irregularity or fraud.  The lack of notice under the  Partition Act, 1893 to the respondent No.1 was immaterial  as  it was not the appellant’s case that he would have purchased  the property. No such intention has ever been expressed.  The  respondent No.1’s only grievance is that the property could  have fetched a higher value.  Apart from the alleged affidavit of  the said Sidhique, no other material has been produced by  him in support of the such submission.  On the other hand in  fixing the upset price, the Advocate Commissioner had taken  into account the certificate of market value in respect of the  property issued by the Sub-Registrar Golkunda dated          13th May, 2005 at Rs. 10 lakhs. The respondent No.1 has  never complained that the upset price had been wrongly fixed.  The appellant’s offer was above the market value. Additionally,  the respondent No.1 was given several opportunities to  produce the purchaser, who was allegedly willing to pay a  higher price.  The purchaser was never produced.  As against  this, the appellant has duly deposited the entire amount of Rs.  12 lakhs in Court.  The District Judge, was in the  circumstances correct in rejecting the so called offer of the  said Sidhique.   In the circumstances, the High Court erred in setting  aside the sale in favour of the appellant. The decision of the  High Court is unsustainable both in fact and in law.  It is  accordingly set aside and the appeal is allowed with costs.