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Judgment
The petitioner, who is Judgment Debtor No.2, is before this Court calling in question the concurrent orders passed by the Courts below, whereby the application filed by the petitioner under Order XXI Rule 90 of the Code of Civil Procedure, 1908 (for short, 'the CPC'), seeking to set aside the court auction sale, has been rejected.
The Executing Court, upon consideration of the order sheet and the material available on record, has declined to entertain the objections raised by the petitioner, principally on the ground that the application under Order XXI Rule 90 of the CPC was not filed within the period of limitation prescribed under Article 127 of the Limitation Act, 1963. The Executing Court has taken note of the fact that the petitioner had engaged counsel and that Judgment Debtor No.1 had tendered no objection to the confirmation of the sale. It has further noticed that Judgment Debtor No.1 had filed an application along with a voucher seeking release of a sum of Rs.3,00,000/- deposited by the auction purchaser. Having regard to these circumstances and the fact that the application under Order XXI Rule 90 of the CPC was not presented within sixty days from the date of sale, the Executing Court rejected the application as barred by limitation.
The petitioner carried the matter in appeal. The Appellate Court, upon re-examination of the records, concurred with the findings recorded by the Executing Court and held that the application under Order XXI Rule 90 of the CPC had been filed after confirmation of the sale and beyond the period prescribed under Article 127 of the Limitation Act, 1963. The Appellate Court further observed that, once the sale had been confirmed, the remedy of the petitioner was required to be examined in the context of Order XXI Rule 92 of the CPC. It also held that the order impugned before it did not fall within the ambit of the appealable orders enumerated under Order XLIII Rule 1(j) of the CPC. Consequently, the miscellaneous appeal came to be dismissed.
It is these concurrent orders that are assailed by Judgment Debtor No.2 in the present petition.
The principal grievance of the petitioner is directed against the rejection of the application under Order XXI Rule 90 of the CPC on the ground of limitation and the consequential refusal of the Courts below to examine the objections raised to the court auction sale on merits.
Per contra, Sri Y.K. Narayana Sharma, learned counsel appearing for respondent No.3, seeks to justify the concurrent orders passed by the Courts below. He would submit that the spot sale was held on 28.05.2001, followed by the court auction sale on 02.06.2001. The second respondent, being the auction purchaser, deposited one-fourth of the sale consideration in accordance with the directions issued by the executing Court on 07.06.2001. He would further submit that the balance sale consideration of Rs.3,00,000/- was deposited on 22.06.2001 and that the sale certificate came to be issued in favour of respondent No.3 on 25.08.2001.
Learned counsel would contend that the application filed by the petitioner under Order XXI Rule 90 of the CPC on 19.10.2001 was beyond the period of limitation prescribed under Article 127 of the Limitation Act, 1963, and was, therefore, not maintainable. He submits that the Executing Court was justified in rejecting the application on the ground of limitation, particularly when the sale had already been confirmed and the sale certificate had been issued in favour of the auction purchaser.
In support of his submissions, learned counsel places reliance on the judgments of the Hon'ble Supreme Court in G.R. Selvaraj v. K.J. Prakash Kumar1 and Tanker Karan Gupta v. S. Exam Limited and Others2. Relying upon the aforesaid decisions, he would contend that the petitioner, having participated in the execution proceedings and having regard to the no-objection tendered by the judgment debtors for issuance of the sale certificate, cannot subsequently maintain a challenge to the auction sale.
Learned counsel would further submit that the application under Order XXI Rule 90 of the CPC having been presented beyond the prescribed period of sixty days, the executing Court rightly declined to entertain the same. He would contend that the appellate Court, upon an independent consideration of the material on record, has affirmed the findings recorded by the executing Court and that no ground is made out for interference with the concurrent orders impugned in the present petition. Accordingly, he seeks dismissal of the petition.
Having heard the learned Senior Counsel appearing for the petitioner and the learned counsel appearing for the respondents and upon perusal of the material available on record, the short point that arises for consideration is:
"Whether the concurrent orders passed by the Courts below, rejecting the petitioner's application under Order XXI Rule 90 of the Code of Civil Procedure, 1908, warrant interference by this Court in the exercise of its supervisory jurisdiction?"
Finding on point for consideration:
Before proceeding to examine the rival contentions, it would be appropriate to advert to the relevant factual circumstances emerging from the records. Admittedly, the petitioner herein was arrayed as defendant No.2 in O.S.No.581/1996. The records, as noticed by the Executing Court, indicate that the petitioner did not effectively contest the proceedings in the suit. The decree-holder thereafter initiated execution proceedings for enforcement of the decree, and the property belonging to the judgment debtors came to be brought to sale in the course of such proceedings.
The records further disclose that the sale proceedings culminated in a court auction sale, and the petitioner subsequently filed an application under Order XXI Rule 90 of the CPC on 19.10.2001, seeking to set aside the sale. The material on record indicates that the sale was conducted on 07.06.2001. Thus, the application seeking to set aside the sale was presented beyond the period of sixty days prescribed under Article 127 of the Limitation Act, 1963. The statutory period prescribed under the said Article is sixty days from the date of sale in execution of a decree. Consequently, the application filed by the petitioner was beyond the prescribed period of limitation.
The question of limitation, however, does not stand in isolation. The order sheet maintained by the Executing Court assumes considerable significance in the present case. The entries therein indicate that, on the date when the question of confirmation of sale was taken up for consideration, the counsel appearing for Judgment Debtor No.1, the counsel appearing for the present petitioner and the counsel appearing for the decree-holder submitted that they had no objection to the confirmation of sale. The records further indicate that the counsel appearing for the petitioner stated that he had no instructions from Judgment Debtor No.2. Notwithstanding the said statement, the petitioner, who was represented by counsel in the proceedings, did not take any effective steps at the relevant stage to oppose the confirmation of sale.
The Executing Court thereafter proceeded to confirm the sale, and the sale certificate came to be issued in favour of the auction purchaser on 28.05.2001. Another circumstance that emerges from the record is that Judgment Debtor No.1, soon after the confirmation proceedings, submitted a voucher seeking release of the sum of Rs.3,00,000/- deposited by the auction purchaser towards the balance sale consideration. These circumstances, when examined cumulatively, assume relevance in determining whether the petitioner has made out a legally sustainable ground for interference with the completed execution proceedings.
It is also relevant to notice that the records indicate service of notice of the execution proceedings and the sale proceedings upon the petitioner. The sale notice was served personally on Judgment Debtor No.2, who is the present petitioner. Thereafter, the sale proclamation and sale warrant came to be issued, and a spot sale was conducted by the bailiff, followed by the court auction sale. Despite the service of notice and the availability of an opportunity to raise objections at the appropriate stage, the petitioner did not effectively oppose the execution proceedings or the proposed sale before the executing Court proceeded to confirm the sale.
The principal contention urged by learned Senior Counsel for the petitioner is that the sale proceedings suffer from material irregularities, particularly with regard to the preparation and issuance of the sale proclamation, the valuation of the property and the alleged failure of the auction purchaser to deposit the sale consideration within the prescribed period. According to the petitioner, these circumstances vitiate the sale and warrant its setting aside under Order XXI Rule 90 of the CPC.
The scope of an application under Order XXI Rule 90 of the CPC, however, is not confined to establishing an irregularity or an alleged procedural infirmity in the conduct of the sale. The applicant must establish the existence of a material irregularity or fraud in publishing or conducting the sale and must further demonstrate the requisite substantial injury suffered by reason of such irregularity or fraud. A mere allegation that the procedure adopted by the executing Court was not strictly in conformity with the prescribed procedure would not, by itself, suffice to set aside a completed auction sale. The statutory requirements governing an application under Order XXI Rule 90 of the CPC must be satisfied before the extraordinary relief of setting aside a court auction sale can be granted.
In the present case, the petitioner has approached the executing Court by filing the application on 19.10.2001, whereas the sale had already been conducted and confirmed. The sale certificate was also issued on 28.05.2001. The application was thus presented beyond the period of limitation prescribed under Article 127 of the Limitation Act, 1963. The petitioner has not demonstrated any legally sustainable basis on the material placed before this Court to overcome the bar of limitation. The executing Court, therefore, was justified in examining the application in the context of the statutory period prescribed for challenging a court auction sale.
Article 127 of the Limitation Act, 1963 is not confined to applications under Order XXI, Rule 89 CPC. It applies equally to an application under Order XXI, Rule 90 CPC for setting aside an execution sale on the ground of material irregularity or fraud. The limitation is sixty days from the date of sale. In Aarifaben Yunusbhai Patel v. Mukul Thakorebhai Amin3, the Hon'ble Supreme Court expressly held that a Rule 90 application is governed by Article 127 and that Section 5 of the Limitation Act, 1963 does not apply thereto. This position is consistently followed by the Karnataka, Andhra Pradesh and Kerala High Courts
Equally significant is the petitioner's conduct throughout the execution proceedings. The material on record indicates that the petitioner was aware of the execution proceedings and that notice of the sale had been served upon him. The petitioner did not effectively oppose the sale at the appropriate stage. The order sheet further records the submission of no objection to confirmation of sale by the counsel appearing for the judgment debtors and the decree-holder, though it also records that the counsel appearing for the petitioner had no instructions from Judgment Debtor No.2. This circumstance must be appreciated in the context of the subsequent conduct of the petitioner and the fact that no timely objection was raised before the executing Court prior to confirmation of sale.
It is necessary, however, to clarify that the mere failure of a judgment debtor to contest the suit or to oppose the execution proceedings at an earlier stage would not, by itself, extinguish a remedy expressly available under the CPC. Similarly, a statement made by counsel that there are no instructions from a party cannot automatically be construed as an unequivocal consent by that party to the confirmation of sale. Nevertheless, in the present case, these circumstances assume significance when considered alongside the service of notice, the failure to challenge the sale within the prescribed period, the subsequent confirmation of sale and the issuance of the sale certificate in favour of the auction purchaser.
The petitioner's challenge must, therefore, be examined not merely on the basis of the alleged procedural irregularities but also in the light of the statutory limitation governing an application under Order XXI Rule 90 of the CPC and the stage at which the challenge came to be instituted. The petitioner has approached the executing Court only after the sale had been confirmed and the sale certificate had been issued. In the absence of a legally sustainable explanation for presenting the application beyond the prescribed period, the petitioner cannot seek to reopen the concluded sale proceedings merely by referring to alleged procedural infirmities.
The Executing Court has considered the relevant entries in the order sheet, the circumstances surrounding the confirmation of sale and the date on which the application under Order XXI Rule 90 of the CPC came to be filed. The appellate Court has independently examined the material on record and concurred with the conclusion that the application was barred by limitation. The concurrent findings recorded by the Courts below are founded upon the relevant dates and the material available in the execution proceedings. No patent illegality or perversity is demonstrated in the reasoning adopted by the Courts below so as to warrant interference by this Court.
This Court is conscious of the fact that a court auction sale must be conducted in accordance with the procedure prescribed under the CPC and that any challenge alleging material irregularity must be examined in the light of the statutory requirements governing the conduct of such sale. However, the finality attached to execution proceedings cannot be disregarded in the absence of a legally sustainable challenge presented within the prescribed period. The provisions of Order XXI Rule 90 of the CPC cannot be invoked to reopen a confirmed sale merely on the basis of general allegations of procedural irregularity, particularly when the application itself is barred by limitation and the applicant has failed to establish a legally sustainable ground for entertaining the challenge at that belated stage.
The reliance placed by learned Senior Counsel on Rosali V. v. Taico Bank and Others4, does not advance the petitioner's case. That decision arose under Order XXI, Rule 84 of the CPC and concerned the time within which the purchaser was required to deposit twenty-five per cent of the purchase money. It does not hold that an application under Order XXI, Rule 90 may be entertained beyond the period prescribed under Article 127 of the Limitation Act, 1963.
Likewise, S. Mariyappa and Others v. Siddappa and Another5, is an authority on the substantive requirements of Order XXI, Rule 90, namely proof of material irregularity or fraud in publishing or conducting the sale and consequent substantial injury. While the said decision recognises that certain fundamental defects may render a sale void and fall for consideration under Section 47 of the CPC, it does not dispense with the statutory limitation applicable to an application expressly filed under Order XXI, Rule 90. In any event, the petitioner has neither established such a fundamental jurisdictional defect nor sought relief on that distinct footing within the permissible procedural framework.
In the circumstances, this Court finds no justification to interfere with the concurrent orders passed by the executing Court and the appellate Court. The petitioner has failed to establish that the rejection of the application under Order XXI Rule 90 of the CPC suffers from any jurisdictional error or patent illegality warranting interference in the present proceedings.
Accordingly, the point for consideration is answered in the negative, holding that the petitioner has failed to establish any ground warranting interference with the concurrent orders passed by the Courts below. The application filed under Order XXI Rule 90 of the CPC is barred by limitation under Article 127 of the Limitation Act, 1963, and no patent illegality or perversity is demonstrated in the impugned orders.
Consequently, writ petition stands dismissed.
Pending interlocutory applications, if any, stand disposed of.