Mahesh Kumar Velji vs Punjab National Bank and Others

Hari Nath Tilhari, J.—This revision petition arises from the order dated April 6, 1991, by the Civil Judge, Gadag, in Ex. Case No. 238 of 1988. The application was made by the decree-holder for fixation of the reserve price at Rs. 2,50,000. The judgment-debtors have filed their objections that the price or value of the textile mill along with the residential (garters and other office buildings and the land would not be less than Rs. 6,00,000. They stated that it may be even higher than Rs. 6,00,000. They submitted that they had incurred expenditure of not less than Rs. 2,00,000 while constructing the buildings. The judgment-debtors further contended that the reserve price could not be fixed at less than the dipteral amount. They submitted that it should not be lower than the amount to be realised. The court below fixed the price at Rs. 5,00,000 taking the view that the judgment-debtor himself says that it shall not be more than Rs. 6,00,000. The court observes, admittedly, even according to the judgment-debtors, the value of the properties is not less than Rs. 6,00,000 though judgment-debtor No. 4 has contended in the negative form in his objections that the market price of these two lands is not less than Rs. 6,00,000. It means this is a complete misreading of the objections by the execution court. The judgment-debtors'' intention clearly appears to be that the price of the land, leave aside the buildings, would be higher than Rs. 6,00,000. So it could not be read as if the judgment-debtors have admitted that it would be less than Rs. 6,00,000. The execution court ought not to have put words in the mouth of the judgment-debtors. The execution court has observed that it is the discretion of the court to fix the price. No doubt, discretion may be there, but it has to be exercised judiciously. It appears from the order as also contained in the revision petition that the execution court has fixed the reserve price to be Rs. 5,00,000 without giving valid reasons for its coming to the conclusion that its reserve price would be Rs. 5,00,000. It has further committed an error of jurisdiction in assuming that the judgment-debtors say that it shall be less than Rs. 6;00,000 when judgment-debtors, according to the observation, have stated otherwise which is clear and is to the effect that the judgment-debtors have stated that it shall be on the higher side and it would be more than Rs. 6,00,000. Misreading of the averment or allegation or pleading also tantamounts to the court acting illegally. Further, illegality is committed by the court when it has not taken into consideration the value of the construction, i.e., of the textile mill, the residential quarters and office buildings. When the Legislature used the expression in Order 21, rule 71A to the effect that unless the court otherwise directs, the reserve price shall be not less than the amount due for principal, interest and costs in respect of mortgage if the property is sold, the general principle is that the reserve price is to be taken to be not less than the amount due as principal, interest and costs taken together. But, no doubt, the court has been given power to direct otherwise as well, but a duty is fastened on the court to act judiciously and has power to issue directions. It must examine the value of the property looking to the property and then it may, if comes to the conclusion after looking to the property, direct a lesser price, and it is expected/required tp read the pleadings properly and not put something in the mouth of the judgment-debtor. Therefore, otherwise directions appear to have been given by exercise of jurisdiction non-judiciously and in an illegal manner. As such, in the fixation of the reserve price at something less than the amount of decree, i.e., the principal, interest and costs, in my opinion, the court below has committed a jurisdictional error and has acted illegally. Putting the lesser price definitely will have a tendency to cause substantial injury to the judgment-debtor.

In this view of the matter, this revision has to be allowed and is hereby allowed. The order impugned is hereby set aside. It is open to the court to proceed afresh with the matter or the authority authorised under the law may proceed with the matter according to law.