*THE HON’BLE MR JUSTICE R. KANTHA RAO + C.M.S.A.No.23 of 2001 AND C.M.S.A.No.39 of 2001 % Dated 15.09.2010 # C.M.S.A.No.23 of 2001 Between: Akula Veerraju …Appellant And Karumuru Rukmabai and (9) others …Respondents C.M.S.A.No.39 of 2001 Between: Akula Veerraju …Appellant And Karumuru Rukmabai and (10) others …Respondents ! Counsel for the Appellants: Mr. M.Sivananda Kumar ^ Counsel for the Respondent: Mr. A.Ananda Rao <GIST: > HEAD NOTE: ? Cases referred [1] 1977(3) SCC 337 2 2007(10) SCC 235 THE HON’BLE MR JUSTICE R. KANTHA RAO C.M.S.A.No.23 of 2001 AND C.M.S.A.No.39 of 2001 Date:15.09.2010 C.M.S.A.No.23 of 2001 Between: Akula Veerraju …Appellant And Karumuru Rukmabai and (9) others …Respondents C.M.S.A.No.39 of 2001 Between: Akula Veerraju …Appellant And Karumuru Rukmabai and (10) others …Respondents THE HON’BLE MR JUSTICE R. KANTHA RAO C.M.S.A.No.23 of 2001 AND C.M.S.A.No.39 of 2001 JUDMENT: Both the civil miscellaneous second appeals (C.M.S.As.) arise out of the common judgment dated 13.07.2000 passed by the I Additional District Judge, East Godavari at Rajahmundry in C.M.A.Nos.65 and 102 of 1996. Since these two second appeals are against the common judgment in the above C.M.S.As., they are disposed of by the following common judgment. The appellant in both the present appeals is Akula Veerraju who is the auction purchaser in E.P.No.79 of 1986 in O.S.No.71 of 1979. K.Rukmabai, the decree-holder after obtaining the money decree for an amount of Rs.27,211/- filed the E.P. against the judgment debtor Adapa Subba Rao. Thereafter, Adapa Subba Rao died leaving behind the judgment debtors 2 to 10 as his legal representatives who are his wife and children. During his life time, Adapa Subba Rao partitioned the joint family properties under a registered partition deed. Subsequently, the sale property was sold away to discharge some other debts. However, during his life time, Adapa Subba Rao executed a gift deed dated 25.06.1985 in favour of the third judgment debtor bequeathing the petition schedule property to him. After the said gift deed, the third judgment debtor became the absolute owner of the property and has been enjoying the same in his own right exclusively. Subsequently, in the year 1986 the petition schedule property was attached by the decree holder in E.P.No.79 of 1986. Thereupon, the third judgment debtor filed the claim petition in E.A.No.39 of 1992 in the above E.P. under Order 21 Rule 58 of CPC and sought to raise the attachment. The said claim petition was dismissed on 13.04.1992. Against the said order, the third judgment debtor filed A.S.No.59 of 1992 before the II Additional District Judge, Rajahmundry and obtained interim orders of stay of confirmation of sale. But, ultimately the appeal was dismissed. Subsequently, the executing Court proceeded with the sale of the petition schedule property and it was sold in Court auction in favour of Akula Veerraju for an amount of Rs.1,10,000/-. Thereafter, the judgment debtors filed a petition under Order 21 Rule 90 of CPC before the Additional Sub-Judge, at Rajahmundry in E.A.No.328 of 1993 in E.P.No.79 of 1996 in O.S.No. 71 of 1979 for setting aside the sale held on 09.03.1993. The learned Sub- Judge allowed the petition and set aside the sale held on 09.03.1993 and directed the decree holder to bring part of the petition schedule property i.e. 1/3rd or 1/4th for sale in order to satisfy the decretal amount. Aggrieved by the said order, the decree holder filed C.M.A.No.102 of 1996 and the court auction purchaser filed C.M.A.No. 65 of 1996 which were heard and disposed of by the I Additional District Judge, East Godavari at Rajahmundtry. The learned first appellate Court dismissed both the appeals confirming the orders passed by the Additional Sub- Judge at Rajahmundry in E.A.No.328 of 1993. The present second appeals are filed by Akula Veerraju, the court auction purchaser assailing the concurrent findings of the courts below. The following substantial questions of law have been formulated in the second appeals: a) Whether a judgment debtor having had notice under Order 21 Rule 66(2) of CPC, having failed to furnish his version of the valuation of the property and other grounds for not holding the sale can subsequently question the contents of the proclamation by way of an application under Order 21 Rule 90 of CPC as against the ratio in 1996(1) AWR 576, 1992(1) ALT 666 and 1992 SCW 3458? b) Whether the judgment debtor who had prior knowledge and notice before proclamation having failed to provide his valuation of the property to be incorporated in the proclamation can be permitted to seek the remedy of setting aside the sale under Order 21 Rule 90 of CPC on the ground of inadequacy of consideration especially the difference of the judgment debtor’s valuation and the ale bid amount is very narrow? c) Whether the result of auction purchasers rights and loss should not be taken into account when a sale is sought to be set aside nearly a decade after the sale is held and money is deposited in view of the fact that the auction purchasers money is blocked up in the court without any addition to its value, besides the escalation of the value of the property over all these years? I have heard the learned counsel appearing on either side. The parties will be referred to as ‘the petitioners and the respondents’ as they have been referred by the first appellate Court in the judgment rendered in the C.M.As. According to the petitioners, the value of one acre of land out of the petition schedule land at relevant time is Rs.50,000/-. Even according t the basic value register, it is Rs.13,000/-, but the Court fixed the upset price at Rs.80,000/- for the entire extent of Ac.09.72 cents. The second respondent who was set up by the first respondent decree holder, knocked down the entire property by becoming highest bidder for a paltry sum of Rs.1,10,000/-. The said sale price is very very low. The main contention urged by the petitioners is that when part of the petition schedule property is enough to satisfy the decree which was put to execution, the executing Court committed material irregularity by not setting apart the property for sale to satisfy the decretal amount. On the said grounds, the petitioners sought to set aside the sale which was acceded to by the executing Court as well as the first appellate Court. The grievance of the petitioners is that the third petitioner sustained substantial injury due to the fraud played by the decree holder in not disclosing the actual price of the land and therefore both the Courts below are justified in setting aside the sale as it is vitiated by the material irregularity and the fraud played by the decree holder. On the other hand, it is the contention of the respondents 1 and 2 i.e. decree holder and the court auction purchaser (the appellant) that the property was properly valued. The petitioners having notice about the same did not raise any objection. The contention that the executing Court has to set apart the land which is enough to satisfy the decretal amount is not tenable under law as there is no such duty cast upon the court. The petitioners are estopped form raising such pleas since they had ample opportunity for seeking equities, if any, before the petition schedule property was sold. Therefore, according to the respondents, the petitioners having noticed about the price of the land arrived at did not raise any objection are precluded from filing a petition to set aside the sale and the approach adopted by the courts below in setting aside the sale is wholly erroneous and therefore, it is liable to be set aside in these second appeals. Rule 64 of Order 21 which deals with power to order property attached to be sold and proceeds to be paid to the person entitled, lays down as follows: “Any Court executing a decree may order that any property attached by it and liable to sale, or such portion thereof as may seem necessary to satisfy the decree, shall be sold, and that the proceeds of such sale, or a sufficient portion thereof, shall be paid to the party entitled under the decree to receive the same.” Similarly, Rule 66(2) of Order 21 of CPC envisages among other things that: a) The property to be sold (or, where a part of the property would be sufficient to satisfy the decree such part); b) The revenue assessed upon the estate or part of the state, where the property to be sold is an interest in an estate or in part of an estate paying revenue to the Government; c) Any encumbrance to which the property is liable; d) The amount for the recovery of which the sale is ordered; and e) Every other thing which the Court considers material for a purchaser to know in order to judge of the nature and value of the property. The law on this aspect is now well settled that while conducting auction sale in execution of a decree, the court is under a duty to follow the mandatory requirements contained under Order 21, Rules 64 and 66 of CPC. Failure on the part of the court renders the same void ab initio. The provisions above mentioned do not confer any discretion in the Court, they are mandatory, and the court cannot sell more than such extent of property which is enough to satisfy the decree. I n TAKKEASEELA PEDDA SUBBA REDDI v. PUJARI PADMAVATHAMMA AND OTHERS[1], the Hon’ble Supreme Court held as follows: a) Even though the decree holder had obtained the second decree before the sale, he did not approach the court for amending the decretal amount mentioned in the sale proclamation to include both the decrees. So under the provisions of Order 21, Rule 64 of the Code when the amount as specified in the sale proclamation was duly satisfied by the sale of the first set of properties, the court should have stopped the sale of further items of the properties. It is manifest that where the amount specified in the proclamation of sale for the recovery which the sale was ordered is realized by sale of certain items, the sale of further items should be stopped. Under Order 21 Rule 64 of CPC the executing Court derives jurisdiction to sell properties attached only to the point at which the decree is fully satisfied. The words “necessary to satisfy the decree” clearly indicate that no sale can be allowed beyond the decretal amount mentioned in the sale proclamation. b) The fact that the judgment debtor did not raise an objection on this ground before the Executing Court is not sufficient to put him out of Court because this was a matter which went to the very root of the jurisdiction of the Executing Court to sell the properties and the non-compliance with the provisions of Order 21, Rule 64 of the Code was sufficient to vitiate the same so far as further items of properties were concerned. c) It is true that the decree holder had obtained another decree but there is nothing to show that the decree holder had approached the Court for including the second decretal amount in the proclamation of sale.” The Hon’ble Supreme Court repelled the following contentions urged by the auction purchaser: 1) even if the entire decretal amount was not mentioned in the sale proclamation, it was at best an irregularity which did not cause any prejudice to the judgment-debtor; 2) The judgment debtor did not raise any objection before the Executing Court against continuing sale of the other properties and 3) The decree holder was in possession of another decree against the judgment debtor. In S. MARIYAPPA (DEAD) BY LRS. AND OTHERS v. SIDDAPPA AND ANOTHER[2], the Hon’ble Supreme Court held as follows: “In our view, the High Court has rightly not accepted all the other objections which had been filed by the appellants. However, one objection which needed serious consideration was that before selling the property, the executing court had not considered whether sale of only a part of the property would be sufficient to meet the decretal debt of approximately Rs.8,000/-. The property sold is one acre of agricultural land. It appears to have been sold off for a paltry sum of Rs.1500/- plus a prior mortgage debt of Rs.7,000/-. We had called for the proceedings of the executing court and have gone through the same. We find that, at no stage, the executing court considered whether a sale of only a part of the property would be sufficient to meet the decretal debt.” In the instant case, according to the petitioners, the value of one acre of land in the vicinity of the petition schedule land in their village was Rs.50,000/- at relevant time and even one acre of land is sufficient to satisfy the decree which was put to execution. Admittedly, the decretal amount as per the sale warrant is Rs.27,211/-. But the execution Court without setting apart the amount which is sufficient to satisfy the decree sold the entire extent of Ac.9.72 cents of petition schedule land for a paltry sum of Rs.1,10,000/-. As rightly contended by the petitioners, the amount for which the entire land was sold is very very low. The question as to whether the petitioners (judgment debtors) raised any objection as to the value arrived at and selling the entire petition schedule land is not much relevant. It is obligatory on the part of the execution court to find out as to what extent of the petition schedule land is enough to satisfy the amount due under the decree. But, in the instant case, it does not appear that any such exercise has been done by the execution Court. Since this is a case wherein the court did not at all examine the issue as to what extent of the property is required to be sold for satisfying the decree and sold the property for a sum of Rs.1,10,000/- where the decretal amount is only an amount of Rs.27,211/-. The auction sale conducted by the court is totally vitiated and is liable to be set aside. The laches on the part of the petitioners/judgment debtors is inconsequential because the execution Court failed to observe its statutory duty. While dismissing the C.M.As, the learned first appellate Court directed the execution Court to proceed with the sale of the property duly complying with the procedure laid down under Rules 64 and 66 of Order 21 of CPC. This Court confirms the concurrent findings recorded by the courts below on the above formulated the substantial questions of law involved. For the foregoing reasons, there is absolutely no merit in the appeals and consequently both the appeals are dismissed. There shall be no order as to costs. _______________ R. KANTHA RAO, J Date:15.09.2010. Note: L.R. Copy to be marked. B/O ccm THE HON’BLE MR JUSTICE R. KANTHA RAO C.M.S.A.No.23 of 2001 AND C.M.S.A.No.39 of 2001 Date:15-09-2010 [1] 1977(3) SCC 337 [2] 2007(10) SCC 235