IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMAN & THE HONOURABLE MR. JUSTICE P.BHAVADASAN TUESDAY, THE 7TH JULY 2009 / 16TH ASHADHA 1931 FAO.No. 178 of 2004() --------------------- APPELLANT ----------------- PANAKKAT VALSALA AMMA, D/O.MADHAVI AMMA, SWASTHAM, 51 YEARS, KOKKALLUR AMSOM, DESOM, KOYILANDY TALUK. BY ADV. SRI.B.KRISHNAN RESPONDENT(S): --------------- 1. MANAGER, CANARA BANK, BALUSSERY BRANCH, BALUSSERY, (DECREE-HOLDER). 2. PANAKKAT GOPALANKUTTY NAIR, (RESIDING AT POLICE QUARTERS, KOZHIKODE) KOKKALLUR AMSOM,DESOM, POST: KAKKALLUR, KOYILANDY TALUK, (1ST J.D). 3. ANDAMBA MALAYIL KRISHNAN, S/O. KANARAN, ULLIYERI AMSOM, DESOM, POST: ULLIERY, KOYILANDY TALUK, (AUCTION PURCHASER). ADV. SRI.N.D.PREMACHANDRAN FOR R1 THIS FIRST APPEAL FROM ORDERS HAVING BEEN FINALLY HEARD ON 25/06/2009, THE COURT ON 07.07.2009 DELIVERED THE FOLLOWING: P.R.RAMAN & P.BHAVADASAN, JJ. -------------------------------------------------------- FAO 178 OF 2004 -------------------------------------------------------- Dated 7th July 2009 Judgment BHAVADASAN, J. The petitioner, who had EA No.81/00 in EP No.54/97 in OS No.101/90, dismissed by the court below, is the appellant. She had filed a petition to set aside the sale under Order XXI Rule 90 CPC. 2. The Canara Bank had obtained a mortgage decree against the appellant and her husband, who is the 2nd respondent herein. The decree was put in execution. In execution, the property involved i.e., 1 acre and 12.5 cents of land was brought to sale. Ultimately, the property was sold. The third respondent herein is the auction purchaser. 3. According to the appellant, she was only a surety for the loan availed of by her husband. The complaint is that the sale was not properly conducted and it is vitiated by irregularities. It is pointed out that 1 acre and 12.5 cents of land was sold for an amount of Rs.2,50,000/- whereas the value of the property FAO 178/04 2 would be more than Rs.23 lakhs. She would say that the upset price was too low and the court below had also not ascertained whether the entire property needs to be sold or whether a portion of it alone needs to be sold to satisfy the decree. This is a serious irregularity which vitiates the sale. It was also claimed that the sale was not proclaimed in compliance with Order XXI Rule 64 and 66 CPC. The appellant would also claim that the proclamation of sale was not properly drawn up. On the basis of the above allegations, she prayed for setting aside the sale. 4. The court below, after elaborately considering the materials on record, found that no grounds were made out to set aside the sale and accordingly, dismissed the petition. The said order is under challenge. 5. The order for sale of the property involved in the proceedings was made on 10.02.1999. The auction for sale of the property involved in the proceedings was scheduled to be conducted on 24.01.2000. It was then posted to 27.01.2000. On 27.01.2000, the property was sold for a sum of Rs.2,50,000/-. The allegation is that 1 acre 12.5 cents of land is situated in a FAO 178/04 3 prime locality and the property would fetch at least Rs.23 lakhs. The decree amount was far below that amount and it was unnecessary to sell the whole property. The complaint is that going by Order XXI Rule 64 and 66, it was the duty of the court to ascertain whether the whole property needs to be sold or sale of only a portion of the property will be sufficient to satisfy the decree debt. That is the mandatory duty cast on the court and failure to do that, vitiates the sale. It is also complained that no publicity was given about the sale and it was done in a hurried manner. It is further contended that the procedural formality has not been complied with. 6. The appellant contended that if she was allowed to sell the property, it would have fetched much more amount and the sale now made is detrimental to her interest. It is also alleged by her that the present sale is a collusive one between the brother of her husband and the third respondent. 7. The learned counsel appearing for the respondents pointed out that Order XXI Rule 64 may not have any application to the facts of the case, since the decree in the case on hand is FAO 178/04 4 a mortgage decree. Until and unless the decree provides for sale of a portion of the land, the Execution Court cannot take recourse to that procedure in the execution stage. In support of his claim, he relied on the decision of this Court in Bahuleyan v. Moosa (2006(4) KLT 882) and Nedungadi Bank Ltd. v. Ezhimala Agricultural Products (2003(3) KLT 1011). The learned counsel for the respondents pointed out that several opportunities were given to the appellant either to sell the property or to pay the amount, but she took no steps to do either of them. He also invited attention of this court to the fact that except her ipse dixit, there is absolutely no evidence to show that the value of the property is as claimed by her. She did not choose to adduce any evidence in support of her claim. It is also pointed out that the property was posted for sale on several occasions and since there were no bidders, the upset price had been brought down. Had the appellant taken proper steps in time, the present situation would not have arisen. The learned counsel also pointed out that the sale took place in the year FAO 178/04 5 2000 and it may not be interfered with by this court. 8. It may not be possible to agree with the contention that in the case of a mortgage decree, Order XXI Rule 64 and 66 may not have any application. True, going by the various provisions under Order XXXIV relating to mortgage suits, it can be seen that the decree should provide whether the whole property should be sold or only a portion thereof will be sufficient to meet the decree debt. The forms in which the decrees will have to be drawn up also indicate the same thing. 9. In the decisions reported in Regi George v. Bhaskaran Nair (1998(2) KLT 640), Lal Chand v. VIIIth Additional District Judge (AIR 1997 SC 2106), TPS Reddi v. Padmavathamma (AIR 1977 SC 1789), Desh Bandhu Gupta v. N.L.Anand & Rajinder Singh (1994) 1 SCC 131) and S.Mariyappa v. Siddappa (2005) 10 SCC 235), it has been held that it is the mandatory duty on the part of the court to ascertain whether the whole property needs to be sold or whether a portion thereof is sufficient to meet the decree debt. One fact must at once be FAO 178/04 6 noticed that in none of these cases, a mortgage decree was being considered. In the decision reported in Dhanalakshmi Bank Ltd v. Divakaran (2000(2) KLT 231) and Bahuleyan v. Moosa (2006(4) KLT 882), it has been held that the principle that the court should ascertain during the execution stage whether the whole property has to be sold or a portion thereof will be sufficient to meet the decree, does not apply to a mortgage decree, unless the decree provides for the said contingency. 10. It is difficult to accept that Order XXI Rule 64 and 66 cannot apply to a mortgage decree. It is true that in the case of mortgage decrees, going by Order XXXIV and the forms in which the decrees have to be drawn up, the court has to mention whether the whole or a portion of the property needs to be sold. As regards the question as to which is the portion to be sold and what is the value to be fixed are all matters to be determined at the time of execution. For that purpose, the court has to proceed under Order XXI Rule 64 and 66 CPC. FAO 178/04 7 Therefore, it may be not strictly legal to say that these provisions have no application at all, in the case of mortgage decrees. In this regard, Order XXI Rule 67 and 72A may also be seen. 11. In the case on hand, there is nothing to indicate at the first blush that there was any attempt from the part of the court below to ascertain whether the whole property had to be sold or a portion thereof would be sufficient. Going by the above act of the court, the sale would be vitiated. But, there are certain facts, which needs to be taken note of in this case. 12. Even though the appellant/judgment debtor claimed that the value of the property is Rs.23 lakhs, there was no attempt from her side to establish the said fact. It appears from the records that she was given sufficient opportunities to adduce evidence in support of her claim. The records would indicate that a Commissioner was also appointed and the value of the property was ascertained. Initially, when the upset price was fixed at Rs.4,75,000/- and the property was put for sale in public auction, there were no bidders. So, the upset price was reduced to Rs.3,00,000/-. Then also, there were no bidders. So, the FAO 178/04 8 upset price was again reduced to Rs.2,00,000/-. But, unfortunately, due to a clerical error, the upset price was shown as Rs.20,000/- and the property was sold for Rs.20,000/-. When the error was brought to the notice of the execution court, the sale was set aside and the property was again put up for sale in public auction. It appears, in the meantime, the appellant filed EA No.199/93, pointing out that the value of the property would be Rs.8,00,000/-. The Commissioner had assessed the value of the property at Rs.3,99,475/-. It is not discernible from the records as to the basis on which the appellant claimed that the property is worth Rs.23 lakhs. It is significant to notice that the appellant had no case that on each occasion when the sale was fixed, the value claimed by her was not shown in the sales proclamation. Except saying that the property would fetch much higher price, she did not choose to adduce any evidence in support of that claim. Even though EA No.199/93 was dismissed, that was not pursued further. 13. If, by the matter of fact, the claim of the appellant is true, she could have tried to sell the property after obtaining FAO 178/04 9 necessary orders from the court. After several postings, the sale was finally held on 27.01.2000. In the light of the fact that the court below was constrained to reduce the upset price on several occasions and also the fact that the Commissioner had assessed the value at Rs.3.99 lakhs, it will not be possible to say that the court had not ascertained whether it would be sufficient to sell a portion of the property to satisfy the decree debt. From the records, it does not appear that at any point of time, the appellant had any grievance regarding this aspect also. She did not point out that it would be sufficient to sell a portion of the property to satisfy the decree debt. True, even if the judgment debtor has not made a claim to that effect, the court is bound to ascertain the same The court had deputed a Commissioner to ascertain the value of the property and it fixed the upset price initially on that basis. Even though the appellant repeatedly claimed that the property would fetch much higher price, she produced no material in support of her claim. Under these circumstances, it is difficult to accept the claim now made by the appellant that only a portion of the property ought to have FAO 178/04 10 been sold by the court below to satisfy the decree debt. 14. Equally without foundation is the claim that there was other irregularities in the sale conducted by the court below. One of them is that there was no beating of drums as contemplated under law. The court below has found this to be erroneous. It is also seen from the records that the court below had permitted the appellant to bring a purchaser for the property for selling it at a higher price, but the appellant did nothing in the matter. 15. It is surprising that even in the present application for sale, the appellant had felt it unnecessary to produce any evidence as already stated, except stating that the value is very high. She did not make any attempt to establish the said claim. The steps taken by the court below for sale of the property has been elaborately stated in the earlier portion of this judgment. In such circumstances, the appeal is liable to be dismissed and we FAO 178/04 11 do so, confirming the order of the court below. P.R.RAMAN, JUDGE P.BHAVADASAN, JUDGE sta FAO 178/04 12