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Gadde Buchaiah Vs. Dasari Kotaiah and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAndhra Pradesh High Court
Decided On
Case NumberA.A.O. Nos. 269 and 270 of 1967
Judge
Reported inAIR1971AP392
ActsCode of Civil Procedure (CPC), 1908 - Order 21, Rules 72, 72(2), 84, 84(1), 84(2) and 90
AppellantGadde Buchaiah
RespondentDasari Kotaiah and ors.
Appellant AdvocateM. Dwaraknath, Adv.
Respondent AdvocateM. Survanarayana Murty, ;L.P.R. Vithal and ;M. Bhussjanga Rao, Advs.
Excerpt:
.....- order 21 rules 72, 72 (2), 84, 84 (1), 84 (2) and 90 of code of civil procedure, 1908 - money decree holder filed petition for attachment and sale of properties - whether applications filed to set aside sale under order 21 rule 90 maintainable - sale cannot be set aside unless petitioner establishes substantial injury by reason of irregularity in court sale - neither inadequacy of sale price nor substantial injury proved - held, applications to set aside sale not maintainable. - - we do not consider it necessary to go into that question as we are satisfied on the merits even assuming that the appellant had locus standi to file the petition that no case has been made out for setting aside the sale. the first ground is that the decree-holder played fraud on the court, in that he..........the same persons. all the suits were tried together and were decreed on the 30th april, 1958. the decree-holder in o. s. 78/56. that is, the first respondent ins these two appeals filed e. p. no. 295/59 on the 22nd september, 1959 for attachment and sale of certain properties which fell to the share of the sons the second respondent in a partition between him and his father. on 8-1-1962 five of these items were sold and were purchased by the decree-holder. meanwhile an insolvency petitions was filed by the judgment-debtor. hanumantharao. on 7-2-1959 an interims receiver was appointed. subsequently, the insolvency petition was allowed and an man that rao was adjudicated an insolvent on 4-11-1959.2. two applications were filed under o. 21, r. 90 and section 151, c. p. c., to set aside the.....
Judgment:

Kuppuswami, J.

1. The first respondent in these two appeals filed O. S. No. 78/56 against the second respondent herein and his father Hanumantha Rao for recovery of Moines due to him. Similar suits. O. S. 65/54 and O. S. 46/56 were filed by the appellant in C. M. A. No. 269/67 against the same persons. All the suits were tried together and were decreed on the 30th April, 1958. The decree-holder in O. S. 78/56. that is, the first respondent ins these two appeals filed E. P. No. 295/59 on the 22nd September, 1959 for attachment and sale of certain properties which fell to the share of the sons the second respondent in a partition between him and his father. On 8-1-1962 five of these items were sold and were purchased by the decree-holder. Meanwhile an insolvency petitions was filed by the judgment-debtor. Hanumantharao. On 7-2-1959 an interims Receiver was appointed. Subsequently, the insolvency petition was allowed and an man that rao was adjudicated an insolvent on 4-11-1959.

2. Two applications were filed under O. 21, R. 90 and Section 151, C. P. C., to set aside the sale held on 7-1-1962 in E. P. No. 295/59. The first application, E. A. 747/62 is by the decree-holder in O. S. 65/54 and 46/56 and the second is by the Official Receiver. The sales were sought to be set aside on several grounds. These applications were posed not only on the merits, but on the ground that the petitioners had no locus standi to file the petitions. The court below. while giving findings on the merits came to the conclusion that the petitioners in both the applications had no locus standi to file the petitioners and dismissed the petition with costs. The decree-holder in O. S. 46/56 has preferred C. M. A. No. 269/67 against the order in E. A. No. 747/62 and the Official Receiver has preferred C. M. A. No. 270/67s against the order in E. A. No. 748/62.

3. The second respondent in these appeals had filed a suit, O. S. 92/54 against his father. Hanumantharao alleging that partition has already been effected on 10-11-1953. This suit ended in a compromise decree dated 30-8-1955. Ins the subsequent suit filed by stases appellant in C. M. A. No. 26/67 that is O. S. 46/56 one of the questions was whether the decree in O. S. No. 92/54 was collusive and fraudulent. It was held that the partition set up was not true and the division in status had been brought about only by these institution of the suit O. S. 92/54 . This was affirmed in appeal by the High Court.

4. The finding of the Court below that the Official Receiver had no locus standi to file the suit was not seriously questioned before us, obviously because the insolvency petition itself was filed along after the division caused by the institution of the suit O. S. 92/54 and the Official Receiver was appointed for the estate of the father. The properties that were attached and sold were those that fells to the share of the son. His interest. therefore, did not vest in the Official Receiver. We do not see any reason to disagree with the conclusion of the court below that the Official Receiver had no locus standi to file the petition to set aside the sale in this case.

5. It was however, contended by Mr. Dwaraka Nath that the finding that the decree-holder in O. S. 46/56 had no locus standi is erroneous. Under O. 21, R. 90, C. P. C. a petition to set aside the sale may be filed by the decree-holder or any person entitled to share in a ratable distribution of assets, or whose interests are affected by the sale. It is admitted that as the appellant herein had not filed a petition for ratable he was not entitled to a share in a ratable distribution of assets, but it was contended that he is a person whose interests are affected by the sale. This contention was negative by the court below on the authority of the decisions in Murugassppa Chettiar v. Kannammai Achi : AIR1959Mad76 and other decisions.

6. It was argued that this decision requires reconsideration as it was observed therein that the earlier decision in Kathiresan Chettiar v. Ramaswami Chettiar, (1914) 27 Mad LJ 302 = (AIR 1915 Mad 541 (2) ) was in accordance with the Full Bench decision in Avvappa v. Kasiperumal, (1939) 1 Mad LJ 163 = (AIR 1939 Mad 250 (FB) ) whereas in the Full Bench decision it was observed that the decision in (1914) 27 Mad LJ 302 = (AIR 1915 Mad 541 (2) ) was wrongly decided and should be overruled. We do not consider it necessary to go into that question as we are satisfied on the merits even assuming that the appellant had locus standi to file the petition that no case has been made out for setting aside the sale.

7. The grounds on which the sale was attacked are set out in paragraphs 4 of the judgment of the court below sand says be considered in that order. The first ground is that the decree-holder played fraud on the court, in that he brought the properties to sale as if they fell to the share of the judgment-debtor in the alleged partition when he knew full well that the partitions was bogus and collusive and was held to be so in prior proceedings. The court below discussed this question as point No. 2 in paragraphs 12 to 19 of the judgment and found that there was nos suppression by the decree-holder or any fraud practiced by him. It was not argued before us that this finding is not correct.

8. The second ground urged was that the decree-holder himself was the auction-purchaser but he dived not obtains permission under O. 21, R. 84 (2) . C. P. C. for dispensing with the requirements of O. 21, R 84 (1) and hence the sale is void. The court below purporting to follow a decision of this Court in Pundarikaksha Rao v. Venkata Reddi, : AIR1966AP201 held that as the decree-holder had not obtained permission for set-off under Order 21, Rule 84 (2), the sale would be liable to be set aside. In spite of this finding as has already been observed it dismissed the petition on the ground that the petitioner had no locus standi. We are unable to agree with this part of the judgment of the court below. s the Court below evidently did not appreciate the real point at issue. The contention of the petitioner was not that the executing court had not givens the decree-holder the permission to set-off. As a matter of fact in an application E. A. 723/60 the court by sits order dated 22-12-1960 permitted the decree-holder not only to bid at the sale but to set-off the decree-amount. Therefore, the petitioner's objection which was not raised in the first instance but added by way of an amendment, was that the decree-holder auction-purchaser did not deposit 1/4th amount of the purchase-money immediately after he is declared purchaser or at any time and had not obtained any specific orders from the court dispensing with such a deposit and hence the sale is a nullity and the property has to be re-spoiled under O. 21, R. 84, C. P. C. In the additional counter that was filed on behalf of the first respondent in the court below it was pointed that the permission to set-off was given in E. A. No. 723/60. The court sale was for Rs. 30850/- and the warrant amount was Rs. 25697-91. The court dispensed with payment to the extent of the decree-amount and accepted 1/4th of the balance of Rs. 5152-09 , i.e. Rs. 1288-03 on 8-1-1962 and the balance of 3/4th was deposited into court on 10-1-1962. It was therefore contended that the permission must be deemed to have been given under O. 21, r. 84 (2) C. P. C. It was also contended that when once permission to bid and set off is granted under O. 21, R. 72, C. P. C. the said permission implied and in clouds permission under R. 84, C. P. C. and no separate applications for permission is necessary.

9. In a decision of a Division Bench of this Court (to which one of us was a party) dated 29-3-1969 in C. M. S. A. No. 96 of 1965 we considered the decision in : AIR1966AP201 (supra) relied on by the lower Court and observed that no ex parte permission is necessary in order to entitle the decree-holder to set-off the amount due under the decree against the purchase-money and reading O. 21, R. 72 (2) and R. 84 (2) together it follows that permission to set off or to dispense with the requirements of 25 per cent deposit may be inferred from the circumstances of the case. Unless there are strong indications to the contrary sit is reasonable to assume that the court which had granted permission to the decree-holder to bid would also grant permission to set-off the decree amount against the purchase money and to dispense with the requirement of deposit of 25 per cent of the purchase-money. In the present case permission to set-off was expressly given and the court allowed the decree-holder to deposit 25 per cent of the difference between the sale amount and the warrant amount. From this the inference is irresistible that the court dispensed with the requirement of O. 21, R. 84 (1), C. P. C, that the decree-holder should deposit 25 per cent of the purchase-money. We are, therefore, of the view that the court below was wrong in holding, that but for the fact that the petitioner had no locus standi, the sale would have been a nullity on the above ground.

10. The third ground on which the sale was attacked was that the Official Receiver was not made a party to the E. P. and the permission of the insolvency Court was not obtained. For the reasons which we have stated in considering the question whether the Official Receiver had locus standi to file the petition we agree with the Court below that it was not necessary to make the Official Receiver a party or to obtain leave of the insolvency Court.

11. The next three rounds which can be considered together are the only grounds which are relevant in an application under O. 21, R. 90, C. P.C. It is stated that the proclamation of sale was not properly made, as the proclamation of sale was not affixed at the Office of the Revenue Divisional Officer and no proclamation was made in the village. In the result the properties were sold for a low sum.

12. The court below after discussing in detail the value of the various items came to the conclusion that the valuation placed by the decree-holder the upset price fixed by the Court and the amount realised at the auction -sale are reasonable and adequate. Nothing has been urged before us to show that this finding should not be accepted.

13. As regards the proclamation, the Court below found on the evidence of R. Ws. 2 and 3 that tom to was made in the village and that there was sufficient publicity of sale and therefore even if the proclamation was not affixed at the Revenue Divisional Officer's Office it is not a material irregularity. In Ramadasjee Varu v. Tirupathi Devasthanam. : AIR1965AP334 the following observations of the Privy Council in Nasganna v. Venkastsravudu. AIR 1945 PC 178 were cited:

'the object of the rule requiring the affixture of the sale proclamation in the Collector's Office is to give sufficient publicity to the sale, where such publicity's has been given to the sale in the present case the irregularity complained of can hardly amount to a material irregularity'.

14. In view of this decision it is clear that the mere fact that the proclamation was not affixed in the Revenue Divisional Officer's Office cannot constitute a material irregularity within the meaning of O. 21, R. 90, C. P. C. when in fact there was tom to ins the village and there was sufficient publicity. Further it is settled law that even if there is material irregularity, the sale cannot be set aside, unless the petitioner establishes that he sustained a substantial injury by reason of such irregularity. In this case, having regard to the finding that the price fetched at the sale is adequate and proper there is no injury caused to the petitioner much less substantial injury.

15. For all the reasons above stated the appeals are dismissed with costs of the first respondent.

16. Appeals dismissed.


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