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Harindra Nath Mukerji Vs. B. Bhola Nath Sahu and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil;Property
CourtAllahabad
Decided On
Reported inAIR1937All407
AppellantHarindra Nath Mukerji
RespondentB. Bhola Nath Sahu and ors.
Excerpt:
- - if it is satisfied that it is equitable and fair that the defendant's (mahabir awasthi's) property should be sold after the other property has been put up for sale, it will have discretion in the matter. in other words the court directed that the property should be sold in two lots as well as in five lots. in our judgment the contention advanced on behalf of the appellant is not well founded. that being so, the application of the judgment-debtor for setting aside the sale was not only in fact but in substance as well under order 21, rule 90, civil p. according to the learned judge of the court below the judgment-debtor failed to prove that substantial injury had resulted to him by the sale......that irregularity. it was further alleged in the application that:the acceptance of the bid of the decree-holder offered in court is illegal and irregular and is not a sale under the code.2. stripped of all unnecessary details the facts that culminated in the application for setting aside the sale are as follows : harindra nath mukerji executed a simple mortgage deed in favour of bhola nath. the property mortgaged was house property. thereafter harindra nath mukerji sold a portion of the mortgaged property to one mahabir awasthi. bhola nath brought a suit for sale on the basis of his mortgage impleading both harindra nath mukerji and mahabir awasthi. mahabir awasthi contended inter alia that the property purchased by him should be sold only if the mortgaged property that remained with.....
Judgment:

1. This appeal is directed against an order of the Additional Subordinate Judge of Benares rejecting an application filed by Harindra Nath Mukerji appellant for setting aside an auction sale. The application was in terms an application under Order 21, Rule 90, Civil P.C. and was based on the allegation that there was material irregularity in conducting the sale and that the applicant sustained substantial injury by reason of that irregularity. It was further alleged in the application that:

The acceptance of the bid of the decree-holder offered in Court is illegal and irregular and is not a sale under the Code.

2. Stripped of all unnecessary details the facts that culminated in the application for setting aside the sale are as follows : Harindra Nath Mukerji executed a simple mortgage deed in favour of Bhola Nath. The property mortgaged was house property. Thereafter Harindra Nath Mukerji sold a portion of the mortgaged property to one Mahabir Awasthi. Bhola Nath brought a suit for sale on the basis of his mortgage impleading both Harindra Nath Mukerji and Mahabir Awasthi. Mahabir Awasthi contended inter alia that the property purchased by him should be sold only if the mortgaged property that remained with Harindra Nath Mukerji was found insufficient to satisfy the mortgage debt. The case came up to the High Court and Bhola Nath's claim was decreed. The preliminary decree for sale provided that:

When the time comes for sale, the execution Court will have full discretion in the matter. If it is satisfied that it is equitable and fair that the defendant's (Mahabir Awasthi's) property should be sold after the other property has been put up for sale, it will have discretion in the matter.

3. A final decree for sale incorporating the above conditions was passed in favour of Bhola Nath on 9th July 1932. In the course of execution proceedings the decree-holder proposed that the mortgaged property should be sold in two lots, one lot being of the properties that remained with Harindra Nath Mukerji and the other lot being of the properties purchased by Mahabir Awasthi. The judgment-debtor, on the other hand, suggested that a higher price would be obtained if the property was sold in five lots and accordingly prayed that five lots of the mortgaged property be prepared and each lot be sold separately. The Court directed that the sale should take place both according to the proposals of the decree-holder and. of the judgment-debtor. In other words the Court directed that the property should be sold in two lots as well as in five lots. It also directed that the Amin would not have the power to accept the highest bids and the bids shall be submitted to the Court which will have the power to accept or to refuse to accept the highest bids offered by the purchasers with respect to the various lots. Maps of the lots were annexed to the sale proclamation and it was noted in the proclamation that without the order of the Court the sale would not be deemed concluded. The Amin conducted the sale in both the manners referred to above. The total of the highest bids offered on the sale of the mortgaged property in two lots was Rs. 6,000 whereas the total of the highest bids offered on the sale of that property in five lots was Rs. 7,620. The Amin submitted a report to the Court to this effect on 19th January 1934. On the receipt of the Amin's report the Court fixed 26th January 1934, for the decision of the question as to which bid should be accepted and notice of the date fixed was given to the vakils of the decree-holder and the judgment-debtor as also to the bidders who had offered the highest bids.

4. On 24th January 1934, the decree-holder presented an application intimating that he offered Rs. 10,000 for the entire mortgaged property. The case was then taken up on 26th January 1934, and no one offered a higher bid. The Court accepted the offer of the decree-holder and declared him to be the purchaser of the property. Harindra Nath Mukerji then filed the application for setting aside the sale to which reference has already been made. The decree-holder contested the application and maintained that the sale was valid and could not be set aside. The learned Judge of the Court below held that there was neither any irregularity in accepting the bid of Rs. 10,000, nor did the judgment-debtor sustain substantial injury by reason of the acceptance of that bid. He accordingly rejected the application of Harindra Nath Mukerji and confirmed the sale. The fact that there was material irregularity in publishing and conducting the sale cannot be controverted. The sale in execution of a decree contemplated by the Civil Procedure Code is a sale by public auction in the manner prescribed by the Code (vide Order 21, Rule 65, Civil P.C.), and every sale by public auction is to be preceded by a proclamation of sale which inter alia must state the time and place of sale. In the case before us no proclamation about the sale taking place in the Court room on 26th January 1934, was ever issued with the result that the public had no notice of the fact that the Court would invite bids for the sale of the property on that date. The consequence of the omission to issue a sale proclamation was that the general public was denied the opportunity of offering bids higher than the bid of Rs. 10,000 offered by the decree-holder. The omission to specify the time and place of sale by means of a sale proclamation as prescribed by Order 21, Rules 66 and 69 was a material irregularity : vide Babu Ram v. Inamullah : AIR1927All241 , and Abdul Rauf Khan v. Mt. Qumrunnissa : AIR1930All542 .

5. The question then arises whether the sale should have been set aside on the mere ground that there was material irregularity in publishing and conducting the sale, or it was necessary for the judgment-debtor, in order to entitle him to the relief prayed for by him, to prove further that substantial injury resulted to him in consequence of that material irregularity. It is contended on behalf of the appellant that the application by Harindra Nath Mukerji was not an application under Order 21, Rule 90, Civil P.C., but was an application under Section 47, Civil P.C., and that on proof of the irregularity mentioned above he was entitled to an order setting aside the sale. In this connexion it is argued that the sale was a nullity and ought to have been set aside on that ground. In our judgment the contention advanced on behalf of the appellant is not well founded.

6. Section 47, Civil P.C., is very wide in its terms and in one sense all questions relating to the execution, discharge or satisfaction of the decree that arise between the decree-holder and the judgment-debtor are within the purview of that section. Nevertheless the section ought to be so interpreted as not to render redundant the other provisions contained in the Code. When the judgment-debtor objects to the validity of an auction-purchase made by the decree-holder in execution of the decree, the question no doubt is one between the parties to the suit and also relates to the execution of the decree. But this by itself is no warrant for holding that all objections by the judgment-debtor to the validity of an auction-purchase made by the decree-holder or his application for setting aside such sales are necessarily within the scope of Section 47, Civil P.C. The Legislature has by Order 21, Rules 89, 90 and 91 made provision for setting aside sale in certain events, and those rules are applicable to applications made by the judgment-debtor or by the decree-holder for setting aside a sale irrespective of the fact whether the decree-holder or a third person is the purchaser. In other words, even though the decree-holder is himself the purchaser the judgment-debtor may under Rules 89 and 90, and the decree-holder may under Rules 96 and 91, apply to set aside the sale, provided the conditions laid down in those rules are fulfilled. To hold that as between the judgment-debtor and the decree-holder all objections to the sale in execution of the decree or all applications to set aside the same come within the purview of Section 47 would, therefore, be to render the provisions of Rules 89, 90 and 91 redundant and this would be contrary to the recognized canons of the interpretation of statutes. It follows that as between the judgment-debtor and the decree-holder only such applications to set aside an auction-purchase made by the decree-holder was do not come within the purview of Rules 89, 90 and 91 are within the scope of Section 47, Civil P.C. : vide Superior Bank Ltd. Muzaffarnagar v. Budh Singh A.I.R. 1924 All 698.

7. A judgment-debtor or a decree-holder may object to the validity of, or apply to set aside, a sale on the ground that the sale was for some reason or other a nullity, and such objections and applications would undoubtedly fall under Section 47, Civil P.C., as there is no other provision in the Code for setting aside a sale or refusing to confirm the same on the ground that the sale itself was a nullity. A sale may be void for a variety of reasons. The property sold may be property the sale of which is prohibited by law (for instance the particulars specified in Section 60, Civil P.C., occupancy holding etc.) and such a sale is, because of the statutory prohibition, void : Pokhar Singh v. Tula Ram : AIR1935All1016 . Or the Court selling the property may have no jurisdiction to sell the same. The sale in such a case is a nullity : vide Khiarajmal v. Daim (1905) 32 Cal 296, and Narotam Das v. Bhagwan Das : AIR1934All314 . The propositions laid down above are subject to one important exception. In eases in which the execution of decrees is in accordance with Section 68, Civil P.C., transferred to the Collector an objection to the validity of a sale on any ground whatsoever cannot be entertained by the Court executing the decree. It is, therefore, not open in such a case either to the decree-holder or to the judgment-debtor to assail the validity of the sale by means of an application under Section 47, Civil P.C. : vide Bhagwan Das v. Suraj Prasd Singh : AIR1925All146 .

8. The law on the point may briefly be summarized as follows : (1) A sale which is illegal and a nullity cannot be set aside under Order 21, Rules 89, 90 and 91, Civil P.C. In other words, objections to the validity of a sale on the ground that the sale is null and void do not come within the purview of those rules. (2) When the sale is held by the civil Court; and (a) the decree-holder himself is the auction-purchaser and the sale is a nullity, an objection to its validity or an application to set it aside on that ground either by the judgment-debtor or the decree-holder falls within the scope of Section 47, Civil P.C., and a separate suit to set aside the sale is barred; (b) a person other than the decree-holder is the auction-purchaser and the sale is a nullity the sale can be set, aside only on a suit being instituted for the purpose and the execution Court cannot set aside the sale on the ground that it was null and void. (3) If the sale is held by the Collector and it is null and void neither the Collector nor the execution Court can set aside the sale on that ground irrespective of the fact whether the decree-holder or a third person is the auction-purchaser, and a suit by the aggrieved, party to set aside the sale on the ground that it was a nullity is maintainable.

9. In the case before us the application by the judgment-debtor to set aside the sale was specifically under Order 21, Rule 90, Civil P.C., and the ground for setting aside the sale as mentioned in the application was that there was material irregularity in conducting the sale that had resulted in substantial injury to the judgment-debtor. The application no doubt went on to state that the sale was illegal and irregular, but it is manifest that the validity of the sale was not assailed by the judgment-debtor on the ground that the sale was null and void. The Court that accepted the bid of the decree-holder had undoubtedly jurisdiction to hold the sale and property that was sold was liable to sale. The sale was, therefore, not void. It no doubt, as observed above, was irregular. That being so, the application of the judgment-debtor for setting aside the sale was not only in fact but in substance as well under Order 21, Rule 90, Civil P.C. and, therefore, not an application under Section 47, Civil P.C. The application could, therefore, be allowed only if the judgment-debtor succeeded in proving not only material irregularity in publishing and conducting the sale but also the fact that substantial injury had resulted to him by reason of that irregularity. According to the learned Judge of the Court below the judgment-debtor failed to prove that substantial injury had resulted to him by the sale. This finding of the learned Judge appears to us to be correct.

10. The value of the property mentioned in the sale proclamation was Rs. 15,000 and there was an encumbrance of Rs. 8,000 on the same. Its value minus the encumbrance was, therefore, Rs. 7,000. But the decree-holder's bid which was accepted by the Court was Rs. 10,000. The property, therefore, fetched more than its real value. Apart from this it was open to the Court to have accepted the highest bid reported by the Amin and that bid was only of Rs. 7,620. The action of the Court in accepting the bid of Rs. 10,000 offered by the decree-holder was, there-fore, advantageous to the judgment-debtor and no injury resulted to him by the acceptance of that bid. The conclusion, therefore, is irresistible that though there was material irregularity in conducting the sale no substantial injury resulted to the judgment-debtor. The sale could not, therefore, be set aside under Order 21, Rule 90, Civil P.C., and the application of the judgment-debtor was rightly dismissed by the Court below. The appeal is dismissed with costs.


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