Jagir Singh vs Piara Singh and anr.

J.S. Sekhon, J.

Piara Singh plaintiff, in a suit for specific performance of the agreement of mortgage successful got a decree for Rs. 8,200/ with future interest at the rate of 6% per annum against Jagir Singh defendant but the amount was directed to be paid in four instalments, the last being payable on June 15, 1986. It appears that the judgmentdebtor failed to pay the amount in instalments which resulted in taking out execution proceedings against him for the total amount of Rs. 11,820.25. During the execution proceedings, the judgmentdebtor filed objection to the effect that the land in dispute may not be sold in public action as the judgmentdebtor was prepared to pay the amount in four 6 monthly instalments. The executing Court dismissed this objection on 7.3.1987 as the judgmentdebtor had already failed to pay the amount in instalments. However, the application of the decreeholder under order XXI rule 66 of the Code of Civil Procedure (hereinafter called as `the Code'') for sale of the land was accepted. A proclamation under order XXI rule 66 of the Code was drawn up and in pursuance thereof the sale of the attached land insuring 16 Kanals was conducted on 24.3.1987. The judgmentdebtor then filed the objection petition 9.4.1987 under provisions of Order XXI Rule 90 of the Code on manifold grounds, the only relevant ground being that in issuing proclamation of sale, the Court had committed many material irregularities which have resulted in substantial loss to the judgmentdebtor as his land worth Rs. 50,000/ was sold for Rs. 15,200/ only. The decreeholder resisted those objections contending that the same could have been filed by the judgmentdebtor at the time of drawing up proclamation of sale. The executing Court dismissed the objection petition of the judgment debtor by holding that mere inadequacy in the price of the land was not sufficient to set aside the sale under the above referred provisions of the Code. For this reliance was placed on the findings of the Supreme Court in M/s. Kayjay Industries (P) Ltd M/s. Asnew Drums (P) Ltd. and others, AIR 1974 Supreme Court 1331. It was also held that in view of the decision of the High Court in Mal Singh v. The Moga Central Cooperative Bank Ltd., and others, 1982 PLR 494, objections regarding the proclamation should have been taken before the auction of the land. The judgmentdebtor then went in appeal against the above referred order of the executing Court which was dismissed by the learned Additional District Judge, Amritsar, on similar grounds. The judgmentdebtor being aggrieved against the order of the first appellate Court has come up in revision before this Court.

I have heard the learned counsel for the parties besides perusing the record.

Regarding the maintainability of objections about issuing a proclamation of sale or auction, it transpires that the Division Bench of this High Court in Madan Lal v. Amar Phul and others, 1986 PLJ 319 : 1986 R.R.R. 604 had held that all objections became available to the applicant after drawing up proclamation of sale and till the date of sale can be raised after auction sale as the proviso to Order XXI rule 90 of the Code about the objection against proclamation of sale had to be raised before auction sale was conducted had been repealed with effect from 1st February, 1977. It was further held that the decision of this Court in Mal Singh''s case (supra) before the Amending Act No. 104 of 1976 came into force was wholly irrelevant. Thus there is no doubt that the objections regarding the drafting of proclamation of sale were available to the judgmentdebtor even after the auction sale.

The question then arises whether material irregularity has been committed by the executing Court in the sale of the attached land of the judgmentdebtor. The sale warrant was directed to be issued by the executing Court vide its order dated 7.3.1987, to the following effect :

(i) Be pasted on the notice board of the Court on 13.3.1987.

(ii) At the spot on 18.3.1987.

(iii) Sale on 2.4.1987.

(iv) Report on 9.4.1987.

But strange enough, due to the mistake of the Execution Clerk, the date of sale in all these proclamations was depicted as 24.3.1987 instead of 2.4.1987. The lower appellate Court had depicted it as typographical mistake as the date on sale 2.4.1987 was typed as 24.3.1987. According to the provisions of rule 68 of Order XXI of the Code, where the sale of the land is held without the consent, in writing of the judgmentdebtor, it shall take place after the expiry of at least 15 days in the case of immovable property from the date of which the copy of the proclamation has been affixed on the notice board of the Judge ordering the same. In the present case even if it is taken, though there is no specific evidence in the regard, that the proclamation was pasted on the notice board of the Court on 13.3.1987, then the sale could not be before 28.3.1987 but strange enough it was held on 24.3.1987 i.e. four days earlier than the one required under the statutory provisions of the above referred rule. Thus it is certainly a case of material irregularity in effecting the sale and the prejudice to the judgmentdebtor due to the lack of publication of sale inherent in curtailing the period of holding sale from less than 15 days to 11 days from the date of pasting proclamation on the notice board of the Court. Thus it obviously resulted in attracting less buyers of the land in dispute and fetching less price. It is noteworthy that only six persons took part in the auction of the land in dispute and ultimately the brother of the decreeholder had purchased the land measuring two acres for Rs. 15,200/ though the land was of Chahi nature being irrigated from the tubewell as is apparent from the copy of the jamabandi for the year 1980. So it is not a case of mere fetching less price of the land but it is a case where material irregularity had resulted in substantial injury to the judgmentdebtor. It appears that the import of the decision of the Supreme Court in M/s. Kayjay Industries'' case (supra) was not properly understood by both the lower Courts. In that case after elaborate discussion, it was held that though the land and building of the factory and its machinery had ultimately fetched Rs. 10,65,000/ in open auction even though the decreeholder had got the land and building valued at 10,46,096/ and the machinery Rs. 7,02,000/ but all the same the Court having exercised a conscious and (sic) decision on concluding the sale at Rs. 11,50,000/, mere inadequacy of the price cannot demolish every Court sale. The circumstances which weighed with their Lordships of the Supreme Court in coming to that conclusion were that a distress sale by the Court is bound to attract less buyers especially when the factory and it machinery were lying closed since long. Following observations of the Supreme Court in Navalkha & Sons v. Sri Ramanaya Das and Ors., AIR 1970 Supreme Court 2037, were relied upon :

"The principles which should govern confirmation of sales are well established. Where the acceptance of the offer by the Commissioners is subject to confirmation of the Court the offerer does not by mere acceptance get any vested right in the property so that he may demand automatic confirmation of his offer. The condition of confirmation by the Court operates as a safeguard against the property being sold at inadequate price whether or not it is a consequence of any irregularity or fraud in the conduct of the sale. In every case, it is the duty of the Court to satisfy that having regard to the market value of the property the price offered is reasonable. Unless the Court is satisfied about the adequacy of the price the act of confirmation of the sale would not be a proper exercise of judicial discretion."

By relying upon the above referred observations, it was held :

"Be it by a receiver, the Commissioner, liquidator or Court this principle must govern. This position has been propounded in many rulings cited before us and summed up by the High Courts. The expressions `material irregularity in the conduct of the sale'' must be benignantly construed to cover the climax act of the Court accepting the highest bid. Indeed, under the Civil Procedure Code, it is the Court which conducts the sale and its duty to apply its mind to the material factors bearing on the reasonableness of the price offered is part of the process of obtaining a proper price in the course of the sale. Therefore, failure to apply its mind to this aspect of the conduct of the sale may amount to material irregularity. Mere substantial injury without material irregularity is not enough even as material irregularity not linked directly to inadequacy of the price is insufficient. And where a Court mechanically conducts the sale or routinely signs assent to the sale papers, not bothering to see if the offer is too low and a better price could have been obtained, and in fact the price is substantially inadequate there is the presence of both the elements of irregularity and injury. But it is not as if the Court should go an adjourning the sale till a good price is got, it being a notorious fact that Court sales and market prices are distant neighbours. Otherwise, decree holders can never get the property of the debtor sold. Nor is it right to judge the unfairness of the price by hindsight wisdom. May be, subsequent events, not within the ken of the executing Court when holding the sale, may prove that had the sale been adjourned a better price could have been had. What is expected of the judge is not to be a prophet but a pragmatist and merely to make a realistic appraisal of the factors, and if satisfied that in the given circumstances the bid is acceptable, conclude the sale. The Court may consider the fair value of the property, the general economic trends, the large sum required to be produced by the bidder, the formation of a syndicate, the utility of postponements and the possibility of litigation, and several other factors dependent on the facts of each case. Once that is done, the matter ends there. No speaking order is called for and no meticulous postmortem is proper. If the Court has fairly, even if silently, applied its mind to the relevant consideration before it while accepting the final bid, no probe in retrospect is permissible. Otherwise a new threat to certainty of Court sale will be introduced."

Thus the import of the observations of the Supreme court in M/s. Kayjay Industries'' case (supra) is very clear and to the effect that mere inadequacy in the sale consideration of the property is not in itself sufficient to set aside the Court auction of the property and that there must be a material irregularity in the conduct of the sale and it should result in substantial injury to the debtor. In M/s. Kayjay Industries'' case (supra) there was no substantial irregularity in the sale as the executing Court had consciously got the bid enhanced to Rs. 11,53,000/ even though the earlier sales adjourned from time to time, the last bid a little over Rs. 10,00,000/ was on the lower side than the bid in the earlier auction.

In Navalkha and Sons'' case (supra), the Supreme Court had further held that where the auction in question no doubt was conducted in a public place but it was not a public auction in as much as it was not open to the general public but was confined to main persons only and secondly it was not held after due publicity, the prejudice was inherent and thus the confirmation of the sale was set aside. Again in Laxmi Devi v. Mukand Kanwar and others, AIR 1965 Supreme Court 834, it was observed by the Supreme Court that substantial injury was implicit in the material irregularity alleged in the application by respondent No. 1 who had a charge of maintenance upon the disputed property and it was put to auction without disclosing such charge.

For the foregoing reasons, there is no escape to conclude that the above referred material irregularity in conducting the sale without a notice of at least 15 days has resulted in substantial injury to the judgmentdebtor and, therefore, the impugned order of the lower appellate Court or of the executing Court being not sustainable are hereby set aside by accepting this revision petition. There is, however, no order as to costs. The executing Court is directed to redraft the proclamation of sale and proceed in accordance with law.