Case: Radhy Shyam Vs. Shyam Behari Singh

1. The respondent had obtained a decree for Rupees 9000/- and odd against the appellant. In execution proceedings taken out by him, the appellants one-fourth share in a house was put up for sale and a proclamation setting out the date and hour when the sale would be held was duly issued. The sale, however, was postponed to July 30, 1956 at the instance of the appellant and on his offering to pay a part of the decretal amount. At the auction sale held on the adjourned date the respondent himself purchased the said one fourth share of the appellant for Rs. 8000/-. The appellant filed an application for settine aside that sale under O. XXI, Rule 90 of theCode of Civil Procedure on the ground that contrary to the provisions of Rule 69 of that Order, the notice relating to the adjourned auction sale did not set out the hour when the auction would be held though the original proclamation under which the auction sale was to be held on the earlier date specified both the hour and the date. The appellant contended that the failure to mention the hour contravened Order XXI, Rule 69 and that such a contravention was a material irregularity which vitiated the sale. The objection was overruled by the Execution Court. The appellant thereupon filed an appeal in the High Court where a single Judge upheld the objection holding that the failure to set out the hour amounted to a material irregularity, in consequence whereof the appellant had been prejudiced by the sale having fetched too low a value. On these findings the learned Judge allowed the appeal and set aside the auction sale. Aggrieved by the said order, the respondent filed a Letters Patent appeal under Cl. 10 of the Letters Patent of the Allahabad High Court and Rule 5 of Ch VIII of the Rules of the High Court. A Division Bench of the High Court reversed the order passed by the learned single Judge and allowed the appeal. Following the Full Bench decision of that High Court in Standard Glass Beads Factory v. Shri Dhar, AIR 1960 All 692   = (1960 All WR (HC) 303) (FB) the Division Bench rejected the appellants contention that no Letters Patent appeal lay against such an order and held that the order of the learned single Judge was a judgment within the meaning of Cl. 10 of the Letters Patent. The Division Bench further held that even assuming that the sale suffered from a material irregularity the learned single Judge was in error in holding that the appellant had established any prejudice to him in consequence of that irregularity. The order of the learned single Judge was reversed and the said sale was upheld. On the High Court refusing a certificate, the appellant obtained special leave from this Court and filed the present appeal.

Court's reasoning:
Some of these decisions, however, are under Sections 109 and 110 of theCode of Civil Procedure and Articles 133 and 134 of the Constitution which would have no bearing on the construction of Clause 10 of the Letters Patent. But before we enter into the controversy as to the meaning of the term judgment in Cl. 10 it would be necessary to remember that the respondent having been declared as the highest bidder became the purchaser of the appellants one fourth share in the said property. No doubt the sale had to be confirmed by the Court under Rule 92 of Order XXI before it could become absolute and in the meantime the appellant could apply under Rule 90 to have it set aside. If the Court, on such an application, were to pass an order setting aside the sale, such an order would clearly affect the rights accrued to by the respondent as a result of the sale. On the other hand, if the application were to be dismissed, such dismissal affects the right of the judgment-debtor under Rule 90. The application under that Rule and the order made thereon, therefore, are not merely procedural matters but are matters affecting the rights of both the auction purchaser and the judgment-debtor7. There can be no doubt that an application under O. XXI, Rule 90 to set aside an auction sale concerns the rights of a person declared to be the purchaser. If the application is allowed, the sale is set aside and the purchaser is deprived of his right to have the sale confirmed by the Court under Rule 92. Such a right is a valuable right, in that, upon such confirmation the sale becomes absolute and the rights of ownership in the property so sold become vested in him. A decision in such a proceeding, therefore, must be said to be one determining the right of the auction purchaser to have the sale confirmed and made absolute and of the judgment-debtor conferred by Rule 90 to have it set aside and a resale ordered. In our view an order in a proceeding under Order XXI, Rule 90 is a judgment inasmuch as such a proceeding raises a controversy between the parties therein affecting their valuable rights and the order allowing the application certainly deprives the purchaser of rights accrued to him as a result of the auction-sale. We, therefore, agree with the High Court that a Letters Patent appeal lay against the order of the learned single Judge8. Rule 90 of U. XXI of the Code, as amended by the Allahabad High Court, inter alia, provides that no sale shall be set aside on the ground of irregularity or even fraud unless upon the facts proved the Court is satisfied that the applicant has sustained injury by reason of such gularity or fraud. Mere proof of a material irregularity such as the one under Rule 69 and inadequacy of price realised in such a sale, in other words injury, is, therefore, not sufficient. What has to be established is there was not only inadequacy of the price but that that inadequacy was caused by reason of the material irregularity or fraud. A connection has thus to be established between the inadequacy of the price and the material irregularity9. The learned single Judge found that the appellant had been prejudiced inasmuch as the said sale realised only Rs. 8000/- though the value of the appellants share was Rs. 20,000/-. This view was founded upon a report made by the Amin of the Executive Court in which that officer had valued the said share at Rs. 20,000/-. The Division Bench, however, held, and in our view rightly, that the learned single Judge was in error in relying upon that report. The record clearly shows that no notice was given to the respondent of the appellants application to have a commissioner appointed to value the property. The trial Court appointed the Amin as commissioner without any such notice and behind the back of the respondent. The Amin made his valuation without giving an opportunity to the respondent to be heard. No opportunity was ever given to the respondent to raise any objection to the said valuation. The report was filed in the trial Court without any notice to the respondent. Indeed no reference was made to the report in the trial court so that the trial court could not give any chance to the respondent to raise any contention against it. It was for the first time brought out before the learned single Judge who accepted if and held on the strength of it that the price realised at the sale was grossly inadequate. In these circumstances the Division Bench rightly held that the learned single Judge erred in relying on such a report10. Barring the report no evidence whatsoever was led by the appellant to show that his share in the said property was worth Rs. 20,000/-, and that therefore the price realised at the auction was inadequate. The Division Bench was, in our view, right in holding that the appellant had failed to show inadequacy of the price or that such inadequacy was occasioned by the said material irregularity11. When it was realised that the contention as to the inadequacy of price cannot be sustained, counsel tried to argue that the said sale fetched Rs. 8000/- only as the proclamation for sale had set out the value of the appellants share at that amount only. No such grievance was made before the trial court, nor was such a grievance incorporated in the memorandum of appeal before the High Court. Also, no such ground has been taken in the special leave petition before this Court. Obviously, the appellant could not raise such a contention before the High Court, much less before this Court.