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H.S. Siddappa Vs. Lakshmamma and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKarnataka High Court
Decided On
Case NumberCivil Revn. Petn. No. 358 of 1964
Judge
Reported inAIR1965Kant313; AIR1965Mys313; (1965)1MysLJ232
ActsCode of Civil Procedure (CPC), 1908 - Order 21, Rules 89, 90 and 91
AppellantH.S. Siddappa
RespondentLakshmamma and anr.
Excerpt:
.....sale - code of civil procedure, 1908 - revision petition against order directing fresh auction sale - auction sale rejected on ground of being too low - failure to specify in proclamation of sale about mode of sale that is whether property be sold in one lot or in separate lots materially affected result of auction sale - irregularity in publication and conduct of sale resulted in inordinately low price being realized for valuable properties - impugned order resulted in avoidance of sale which suffered from material irregularity - executing court to specify clearly whether properties should be sold in one lot or in separate lots - revision petition dismissed. - section 115: [n.k. patil, j] revision - dismissal of execution petition holding that execution petition filed by.....order(1) the petitioner in this revision petition, was the highest bidder in an auction sale of immovable properties held in ex. 100/63 on the file of the munsiff, arasikere. he deposited one-fourth of the bid amount at the conclusion of the auction sale. by his order dated 18-1-64, the learned munsiff purported not to accept the bid on the ground that it was too low. the amount deposited was directed to be refunded to the petitioner and a fresh sale was directed to be held. feeling aggrieved by the order of the munsiff, the petitioner has filed this revision petition.(2) mr. narasimha murthy, the learned counsel for the petitioner, contended that officer conducting the sale had exercised his discretion and accepted the bid, that the court had not reserved to itself the discretion to.....
Judgment:
ORDER

(1) The petitioner in this revision petition, was the highest bidder in an auction sale of immovable properties held in Ex. 100/63 on the file of the Munsiff, Arasikere. He deposited one-fourth of the bid amount at the conclusion of the auction sale. By his order dated 18-1-64, the learned Munsiff purported not to accept the bid on the ground that it was too low. The amount deposited was directed to be refunded to the petitioner and a fresh sale was directed to be held. Feeling aggrieved by the order of the Munsiff, the petitioner has filed this revision petition.

(2) Mr. Narasimha Murthy, the learned Counsel for the petitioner, contended that officer conducting the sale had exercised his discretion and accepted the bid, that the Court had not reserved to itself the discretion to accept or not to accept the bid made at the auction sale under its order, that the petitioner who was the highest bidder became the purchaser and that the Court had no power not to accept the bid and to direct a fresh sale.

(3) The sale proclamation in this case was issued in the form No. 29 of Appendix E to the Code of Civil Procedure. Condition No. 3 of the sale proclamation states that it shall be in the discretion of the Court or officer holding the sale to decline acceptance of the highest bid when the price offered appears so clearly inadequate as to make it advisable to do so.

(4) In support of his contention, Mr. Narasimha Murthy relied on a decision of this Court in Thippaiah v. Huvinakuli Ramiah, 1963-1 Mys. LJ 61 : The facts of that case are very similar to the facts of the present case. The proclamation in that case was also issued in Form No. 29 of Appendix E to the Code of Civil Procedure. Narayana Pai, J. held that the sale in favour of the highest bidder became complete on the date of the sale itself when the officer conducting the sale declared him the highest bidder, closed the auction and accepted the deposit of 25 per cent of the bid amount and that the Munsiff was wrong in purporting not to accept the bid and ordering a resale of the property. His Lordship observed, that unless the executing Court reserves to itself the discretion under condition No. 3 of the sale proclamation in Form No. 29 of Appendix 'E' to the C.P.C., whether or not to accept the bid made at the auction sale held under its orders, the officer of the Court conducting the sale has himself, without the need of having to make a separate reference to the Court, the discretion of either accepting or not accepting a bid made at the auction held by him, such discretion must be exercised by him before the deposit of 25 per cent of the price accepted by him and that when he knocks down the property to the highest bidder and receives such deposit, the bidder must be deemed to have become the purchaser.

(5) Mr. R.V. Srinivasiah, the learned counsel for the contesting respondent, sought to distinguish the aforesaid case from the present case on the ground that the officer conducting the sale in the present case did not expressly state that he accepted the bid of the petitioner or that he knocked down the property to the petitioner. I think there is no substance in this contention. As observed by Narayana Pai, J., R. 84 of O. 21 C.P.C. does not require that the declaration of accepting the bid should take place in a particular form or should be made in any selected or prescribed words. When the officer conducting the sale accepts the deposit of one-fourth of the bid amount of the highest bidder and closes the auction, the inevitable conclusion is that the said officer declared such bidder to be the purchaser.

(6) In the light to the earlier ruling of this Court, it must be held that the learned Munsiff had no power not to accept the bid and to order a resale of the property.

(7) Having reached this conclusion, I should have ordinarily set aside the impugned order of the learned Munsiff. But, on examining the records it is seen that there was material irregularity in the publication and conduct of sale as will be detailed hereunder.

(8) As many as 13 items of immovable properties were put up for auction sale. Four of these items were Bagayat lands. There was one item of dry Bagayat land. There were two houses of 9 and 7 ankanams respectively. The remaining items were dry lands.

(9) The first sentence of second para in the sale proclamation (which is in Form No. 29 of App. E to CPC) reads as follows:

'The sale will be by public auction, and the property will be put up for sale in lots specified in the schedule.................'

But in the schedule to the sale proclamation was not stated whether all these thirteen items of properties would be sold in one lot or in separate lots. In a proclamation of sale of a number of properties, it is very important to specify whether all those properties would be sold in one lot or whether they would be sold in separate lots so that the prospective bidder may have clear information as to how the properties are going to be sold. If properties are sold in separate lots, a person with moderate means may think of participating in the auction with the object of purchasing one or more lots; but, if properties are sold in one lot, such person may think that he may not have enough means to purchase all the properties in one lot and he may decide not to participate in the auction. When several valuable items of properties are sold by auction, there may be greater compensation among the bidders and a higher aggregate price may be realised if properties are sold in several lots than if all the properties are sold in one lot.

(10) It is seen from the report of the officer conducting the sale that not only he but also the bidders were not clear in their minds whether these properties were put up for sale in one lot or in separate lots. The petitioner and one other bidder who participated in the auction sale both offered separate prices for each of the items. But each item of properties was not sold separately. On the other hand, the officer conducting the same seems to have proceeded on the basis that all the properties have to be sold in one lot.

(11) I think this failure to specify in the proclamation of sale whether the properties would be sold in one lot or in separate lots, has materially affected the result of the auction sale. Though these properties are very valuable, the only for a paltry sum of Rs. 250. It is very likely that the properties would have fetched a much higher aggregate price if they were sold in separate lots. In view of this material irregularity in the publication and conduct of sale, the question is whether I should, in the exercise of power under section 115 C.P.C., interfere with the order of the Munsiff which purports not to accept the bid and directs re-sale of the properties.

(12) Mr. Narasimha Murty, the learned Counsel for the petitioner, has contended that when the learned Munsiff acted without jurisdiction or, at any rate, exercised his jurisdiction, illegally or with material irregularity, this Court is bound to exercise its power under section 115 C.P.C., and set aside the order of the Munsiff. Mr. Narasimha Murty further contended that when there was no application under Rules 89, 90 or 91 of Or. 21 C.P.C., by the decree-holder or any other person having interest in the properties sold, the Munsiff was bound to confirm the sale and this Court also cannot interfere with such sale in revision. Mr. Narasimha Murthy also contended that no one has complained and much less placed any material to show, that any prejudice had been caused to anybody by the aforesaid irregularity in the publication and conduct of sale.

(13) Even without any of the parties having complained or adduced any evidence of prejudice, it is evident that the aforesaid irregularity in the publication and conduct of sale has resulted in an inordinately low price having been realised for very valuable properties. That the learned Munsiff was bound to confirm the sale under R. 92(1) in the absence of an application under R. 89, 90 or 91 of O. 21 C.P.C., does not limit the exercise of the discretion of this Court under section 115 C.P.C to interfere or not to interfere with the impugned order of the learned Munsiff.

(14) Even where the order of the subordinate Court suffers from any of the infirmities stated in clauses (a), (b) or (c) of Section 115 C.P.C., the High Court is not bound to interfere with such order; but the High Court has got discretion to interfere or not to interfere with such order. No doubt, that discretion is a judicial discretion which has to be exercised reasonably and in accordance with the well-recognized principles.

(15) As observed by the Patna High Court in Rameshwar v. Dwarka Prasad, AIR 1925 Pat. 36 it is well established that the High Court is not bound to interfere under Section 115 C.P.C., except in aid of justice.

(16) In Chander Bhan v. Lallu Singh, AIR 1947 All. 343 the trial Court had, by an illegal order, dismissed the plaintiff's suit and by another illegal order, set aside the first illegal order and thus restored the parties to their original position. When the latter order of the trial Court was challenged in a revision petition, Mootham, J., observed as follows:--

'The exercise by the High Court of the powers vested in it by S. 115, Civil P.C., is by the terms of the section itself, discretionary, and accordingly I do not think that the law imposes any obligation on me to exercise those powers in this case. There is no reason to doubt that has the opposite party appealed under O. 43, R. 1, against the order dismissing his suit he would have obtained an order for its restoration; and, in my opinion, this a fit case in which my discretion should be exercised in favour of the opposite party...........'

(17) In Narayan v. Mt. Bhabitri Deby, AIR 1952 Assam 46 where the question arose whether the High Court should interfere in revision with an order of remand passed by the lower appellate Court in the purported exercise of the power under S. 151 C.P.C., the Assam High Court observed as follows:--

'On an extremely technical view in every case where an order has been made irregularly unless grave injustice or hardship could result from a failure to do so, the High Court is not bound to interfere. An order in question is calculated to advance substantial justice though not strictly regular, may not be interfered with in revision.'

(18) In Har Prasad v. Bhagwati Prasad : AIR1933All924 the Allahabad High Court held that the High Court is not bound to interfere in exercise of its power under S. 115 C.P.C. if substantial justice has been done. No doubt, we have to bear in mind the caution uttered by Vivian Bose, J., in Md. Hussain v. Bala Laxman, AIR 1941 Nag. 261 that the substantial justice in this context must relate to the rights to which a party has a legal, as opposed to purely moral claim.

(19) Thus, where the order of a Subordinate Court, though suffers from an illegality or irregularity, has brought about a just result and where setting aside that order would bring about an unjust result, the High Court would not exercise its discretion under Section 115 C.P.C., and interfere with such order.

(20) In the present case, though the learned Munsiff had no power not to accept the bid of the petitioner had to direct a fresh sale, his order has resulted in avoidance of a sale which suffered from material irregularity. I think the sale would have been set aside if either the decree holder or any person having interest in such properties had made an application for setting aside such sale. Hence, this is not a case in which I should interfere with the impugned order of the Munsiff in the exercise of my powers under Section 115 C.P.C.

(21) In the fresh proclamation of the sale of the properties that will be issued as a result of the order (sic) of the impugned order, it is necessary that the executing Court should specify clearly whether the properties should be also apply its mind to the question whether it is more advantageous if the properties are sold in one lot or in separate lots.

(22) In the result, this revision petition fails and the same is dismissed. In the circumstances of the case, there will be no order as to costs.

(23) Revision petition dismissed.


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