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Korapalu Hengsu and ors. Vs. Gowri Hengsu and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Judge
Reported inAIR1925Mad729; 88Ind.Cas.228
AppellantKorapalu Hengsu and ors.
RespondentGowri Hengsu and ors.
Cases ReferredCourt Lakshmi v. Krishnabhat
Excerpt:
civil procedure code (act v of 1908), order xxi, rules 69, 72, 90 - execution of decree--sale--inadequacy of price, whether ground for setting aside sale--procedure. - .....and obtained permission of the court to bid at the auction on condition that they deposited the sale price in court. the sale commenced on 18th july 1921 with an upset price of rs. 3,250 and was continued on the following days and was knocked down on 20th july 1921 to the appellants' pleader for rs. 6,000. the subordinate judge afterwards set aside the sale on the application of respondents nos. 2 and 3 for the reason that the respondents did not get notice of the appellants' application of 18th july 1921 to be allowed to bid. it was 'pointed out to him that the respondents did get notices in march 1921 of the sale proclamation to which was attached a prayer that the execution creditors should be allowed to bid at the auction. these notices were served on respondents nos. 2 and 3 by.....
Judgment:

1. The appellants had a mortgage-decree with costs for Rs. 5,578 in O.S. No. 22 of 1919 against the 1st respondent and seven others on the file of the Sub-Court of South Kanara. The respondents Nos. 2 and 3 had another mortgage-decree for Rs. 5,208 in O.S. No. 23 of 1919 against the same properties. The appellants brought the properties concerned in this appeal to sale and obtained permission of the Court to bid at the auction on condition that they deposited the sale price in Court. The sale commenced on 18th July 1921 with an upset price of Rs. 3,250 and was continued on the following days and was knocked down on 20th July 1921 to the appellants' Pleader for Rs. 6,000. The Subordinate Judge afterwards set aside the sale on the application of respondents Nos. 2 and 3 for the reason that the respondents did not get notice of the appellants' application of 18th July 1921 to be allowed to bid. It was 'pointed out to him that the respondents did get notices in March 1921 of the sale proclamation to which was attached a prayer that the execution creditors should be allowed to bid at the auction. These notices were served on respondents Nos. 2 and 3 by affixture, and one of them (2nd respondent) was present at the auction and only abstained from bidding because he had been unable to raise enough money. The Subordinate Judge upon our requisition has now returned findings (1) that all the parties concerned had notice of the execution petitioners' application to bid, (2) that the properties were sold for an inadequate price, as they are worth not less than Rs. 12,000. Both sides have filed memoranda of objections to the findings, but as there is no substance in any of the objections, we must accept the findings. The facts of this case are unlike those in Thqthu Naick v. Kondu Reddi 1 Ind. Cas. 221 : 32 M.k 242 : 5 M.L.T. 248 where fraud and breach of the conditions, upon which the decree-holder was allowed to bid for the property, were found, the decree-holder having bid in a false name in order to hide the fact that the bid was below the minimum amount for which the Court had permitted him to bid.

3. Here the decree-holders applied for leave to bid in February when they took out execution, and again in March when notices were issued to all the parties for settling the terms of the sale proclamation, and lastly a third time in July at the time of sale. The decree-holders in O.S. No. 23 of 1919 (respondents Nos. 2 and 3) certainly had notice of the appellants' application under Order XXI, Rule 72, on the second of these occasions, and they must have been aware of it on the third occasion as one of them was present at the auction and they are related to each other. An affidavit such as is required by Rule 153 of the Civil Rules of Practice was attached to the last application for leave to bid. It does not appear that this formality was complied with on the earlier occasions.

4. Mr. Ananatakrishna Ayyar for the respondents argued that this amounted to an irregularity. I am unable to treat it as such. The rules only require that the other parties should be given notice of the application. The affidavit is for the Court's information, and the decree-holder is not required by the rules to supply the other parties with a copy of it. Thus it has not been made out that there was any irregularity in publishing or conducting the sale.

5. The fact that the price has been since found to be inadequate is not by itself a ground for setting aside the sale--vide Lak-shmi v. Krishnabhat 8 B.p 424 : 9 Ind. Jur. 40 : 4 Ind. Dec. (N.S.) 658. The inadequacy of the price must be occasioned by some irregularity before the Courts will interfere with the sate--vide Macnaghten v. Mahabir Pershad Singh 9 C.p 656 : 11 C.L.R. 449 : 10 I.A. 25 : 7 Ind. Jur. 164 : 4 Sar. P.C.J. 417 : 4 Shome. L.R. 285 : 4 Ind. Dec. (N.S.) 1086 The final 'bid of Rs. 6,000 was more than the appellants' mortgage-decree amount and far above the upset price. If the Court had thought fit, it might have ordered the sale to start at a higher figure than Rs. 3,250. If he was dissatisfied with the bid of Rs. 6,000, the Subordinate Judge might have refused to knock the property down for that amount and might have, under Order XXI, Rule 69, adjourned the sale in the hope of higher bids being offered next day. Having once concluded the sale the Subordinate Judge was not justified in refusing to confirm it for the mere reasons that the price appears to be inadequate and that other decree-holders having a mortgage over the same property, who did not take any steps at the time to secure that a proper price was realized, have now very little chance of getting their decree satisfied. The appeal is allowed with costs in this Court, and the sale is ordered to be confirmed.

Odgers, J.

6. I do not find any irregularity in the conduct of the sale in this case. It is further not proved that the alleged inadequacy of price was, due to any irregularity which is a. condition precedent to setting aside a sale on this ground. Cf. P.C. in Macnaghten v. Mahabir Pershad Singh 9 C.p 656 : 11 C.L.R. 449 : 10 I.A. 25 : 7 Ind. Jur. 164 : 4 Sar. P.C.J. 417 : 4 Shome. L.R. 285 : 4 Ind. Dec. (N.S.) 1086. Further, the sale of property to a purchaser at a price which subsequently appears too low is not a 'material irregularity.' I am not satisfied that in the present case the price realized was grossly inadequate as found by the Subordinate Court, but accepting that finding it is no ground for, setting aside the sale unless as pointed out by the Privy Council the inadequacy was caused by an irregularity. Inadequacy alone is no ground for setting aside the sale either on the application of a decree-holder or judgment-debtor nor a ground for refusal to confirm by the Court Lakshmi v. Krishnabhat 8 B.k 424 : 9 Jur. 40 : Ind. Dec. (N.S.) 658.


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