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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No.5988 OF 2007

Chilamkurti Bala Subrahmanyam ….Appellant(s)

VERSUS

Samanthapudi Vijaya Lakshmi & Anr.         …Respondent(s)

J U D G M E N T

Abhay Manohar Sapre, J.

1) This appeal is filed by the auction purchaser

against  the  final  judgment  and  order  dated

23.12.2005 passed by the High Court of Judicature,

Andhra Pradesh  at Hyderabad in Civil Misc. Appeal

No. 1721 of 2000 whereby the High Court allowed

the  appeal  filed  by  judgment  debtor-respondent

No.1  herein  and  set  aside  the  order  dated

20.04.2000  passed  by  the  Senior  Civil  Judge,

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Kovvur in E.A. No. 1020 of 1999 in E.P. No. 46 of

1998  in  O.S.  No.  192  of  1987  dismissing  the

application  filed  by  the  judgment  debtor  under

Order 21 Rule 90 read with 151 of the Code of Civil

Procedure,  1908  (hereinafter  referred  to  as  “the

Code”).  

2) Facts  of  the  case  need  mention,  in  brief,  to

appreciate the controversy involved in this appeal.

3) Respondent  No.2-State  Bank  of  India  is  the

plaintiff/decree holder whereas respondent No.1 is

the  defendant/judgment  debtor  in  O.S.  No.192 of

1987.  Respondent No.2 obtained a money decree

for  Rs.5,15,390/-  against  respondent  No.1  on

16.03.1998 in  O.S.  No.192 of  1987 for   the  loan

given  to  her  by  respondent  No.2  and  which

remained  unpaid  by  respondent  No.1.  Since

respondent  No.1  failed  to  satisfy  the  decree,

respondent  No.2  filed  execution  application  and

brought the schedule property owned by respondent

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No.1-judgment debtor to auction sale through the

process server of  the Court of  Senior Civil  Judge,

Kovvur, in execution proceedings in E.P. No. 46 of

1998  in  O.S.  No.192  of  1987  for  realization  of

decretal dues.

4) The  suit  schedule  property  was,  accordingly,

attached by the executing Court under a warrant.

Notice  was,  accordingly,  issued  to  respondent

No.1-judgment  debtor  in  respect  of  the  said

executing proceedings on 14.07.1999 to which she

filed counter affidavit raising certain objections.  On

31.09.1999,  the  executing  Court  overruled  the

objections raised by respondent No.1 in her counter

affidavit  and  fixed  22.09.1999  as  the  date  of

settlement of terms.  On 22.09.1999, the terms of

proclamation of sale were settled fixing the date for

sale of the said property on 17.11.1999.   

5) Pursuant  to  the  above  referred  proceedings,

proclamation of the sale was issued on 05.10.1999

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by the executing Court under Order 21 Rule 64 of

the Code mentioning therein the conditions of sale.

Proclamation  of  the  sale  was  entrusted  to  the

Process Server of publication on 27.10.1999.  The

Process  Server  gave  endorsement  on  02.11.1999

that  the  sale  proclamation  was  affixed  to  the

house/suit  schedule property  and also by beat of

tom tom near the property and also affixed the same

on the notice board of the Court. On 04.11.1999,

sale  warrant  was  issued  to  the  Bailiff  to  give  15

days’  notice  by  affixing  the  same in  court  house,

making  due  proclamation  of  the  suit  schedule

property.  The  proclamation  of  the  sale  was

published in the newspaper on 05.11.1999 stating

that the sale would be held on 17.11.1999.   

6) On 17.11.1999,  the  property  was brought  to

auction  sale  where  7  bidders  participated.   The

appellant  herein  was  the  highest  bidder  of

Rs.7,15,000/-.   Out  of  the  said  bid  amount,

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Rs.1,78,750/- was paid to the Bailiff.   The Bailiff

filed a return on 18.11.1999 about the sale stating

that he published about sale by tom tom and the

appellant  was  the  highest  bidder  and  the  initial

amount was deposited with respondent No.2-Bank

after deducting poundage.

7) Dissatisfied  with  the  auction,  the  judgment

debtor filed an application under Order 21 Rule 90

seeking setting aside of the sale,  inter alia,  on the

ground that the proclamation was done within 15

days and hence it is illegal,  tom tom wala neither

made  proclamation  and  nor  took  neighbours’

signatures,  proclamation  was  not  published  in

Nagar Panchayat office, publication was defective in

nature because it did not mention the valuation of

the property etc.  It was also objected that the Bank

brought only three bidders whereas if more bidders

had  participated,  the  property  put  to  sale  would

have fetched easily between 12 to 14 lakhs.

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8) By  order  dated  20.04.2000,  the  Senior  Civil

Judge,  Kovvur  found  no  merit  in  any  of  the

objections  raised  by  respondent  No.1  and

accordingly dismissed the application.

9) Challenging  the  said  order,  the  judgment

debtor-respondent  No.1 filed an appeal  before  the

High Court.   

10) The High Court, by impugned judgment dated

23.12.2005,  allowed the  appeal  and set  aside the

order of the executing Court, inter alia, holding that

if  the  judgment  debtor  deposits  a  sum  of

Rs.7,15,000/- being the price fetched at the public

auction within a period of three weeks from the date

of receipt of a copy of the judgment, the sale held

would not be given effect to. It was held that if the

executing Court feels that the amount deposited by

the judgment debtor  is  sufficient  to discharge the

decretal amount, it would not be necessary to put

the  property  to  auction  and  the  amount  so

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deposited earlier by the auction purchaser shall be

refunded to him.  It  was held that  if  the amount

ordered to be deposited by the judgment debtor is

more  than  the  amount  due  to  the  decree  holder,

excess amount, after adjusting the amount due to

the  decree holder/auction purchaser,  be refunded

to the judgment debtor.  It was held that no clear 15

days’  notice  of  sale  as  per  Rules  was  given  and

hence sale held is irregular.  It was lastly held that

in default  of  payment of  Rs.7,15,000/- within the

stipulated period, the appeal shall stand dismissed.

11) Aggrieved by  the  said  judgment,  the  auction

purchaser  has filed this  appeal  by way of  special

leave before this Court.

12) Heard Mr. Basava Prabhu Patil, learned senior

counsel for the appellant-auction purchaser and Mr.

Gagan  Gupta,  learned  counsel  for  respondent

No.1-judgment  debtor  and  Mr.  Sanjay  Kapur,

learned counsel for the Bank-decree holder.

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13) Having  heard  the  learned  counsel  for  the

parties and on perusal of the record of the case, we

are  inclined  to  allow  the  appeal  finding  merit

therein.

14) The  law  which  governs  the  controversy

involved in this appeal is laid down by this Court  in

the case of Saheb Khan vs. Mohd. Yousufuddin &

Ors.,  2006(4) SCC406 (Three Judge Bench). While

examining  the  scope  of  Order  21  Rule  90  of  the

Code, Justice Ruma Pal speaking for the Bench held

as under :

“12. We are unable to sustain the reasoning of the High Court. Order 21 Rule 90 of the Code of Civil Procedure allows, inter alia, any person  whose  interests  are  affected  by  the sale to apply to the court to set aside a sale of immovable property sold in execution of a decree  on  the  ground  of  “a  material irregularity  or  fraud  in  publishing  or conducting” the sale. Sub-rule (2) of Order 21 Rule 90 however places a further condition on the  setting  aside  of  a  court  sale  in  the following language:

“90. (2) No sale shall be set aside on  the  ground  of  irregularity  or fraud in publishing or conducting it unless,  upon the facts proved, the  court  is  satisfied  that  the

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applicant  has  sustained substantial  injury  by  reason  of such irregularity or fraud.”

13. Therefore before the sale can be set aside merely establishing a material irregularity or fraud  will  not  do.  The  applicant  must  go further  and  establish  to  the  satisfaction  of the  court  that  the  material  irregularity  or fraud has resulted in substantial injury to the applicant.  Conversely  even  if  the  applicant has suffered substantial  injury by reason of the sale, this would not be sufficient to set the sale  aside  unless  substantial  injury  has been occasioned by a material irregularity or fraud  in  publishing  or  conducting  the  sale. (See  Dhirendra  Nath  Gorai v.  Sudhir Chandra  Ghosh;(1964)  6  SCR  1001, Jaswantlal Natvarlal Thakkar v. Sushilaben Manilal Dangarwala, 1991 Supp(2) SCC 691 and  Kadiyala  Rama  Rao v.  Gutala  Kahna Rao,(2000) 3 SCC 87)

14. A charge of fraud or material irregularity under Order 21 Rule 90 must be specifically made  with  sufficient  particulars.  Bald allegations would not do. The facts must be established  which  could  reasonably  sustain such a charge. In the case before us, no such particulars  have  been  given  by  the respondent of the alleged collusion between the  other  respondents  and  the auction-purchaser. There is also no material irregularity in  publishing or  conducting the sale.  There  was  sufficient  compliance  with Order 21 Rule 67(1) read with Order 21 Rule 54(2). No doubt, the trial court has said that the sale should be given wide publicity but that  does  not  necessarily  mean  by publication in the newspapers. The provisions of Order 21 Rule 67 clearly provide if the sale is  to  be  advertised  in  the  local  newspaper, there must be specific direction of the court to  that  effect.  In  the  absence  of  such

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direction, the proclamation of sale has to be made under Order 21 Rule 67(1) “as nearly as may be, in the manner prescribed by Rule 54 sub-rule (2)”. Rule 54 sub-rule (2) provides for the method of publication of notice and reads as follows:

“54.  (2)  The  order  shall  be proclaimed  at  some  place  on  or adjacent to such property by beat of drum or other customary mode, and a copy of the order shall  be affixed on a  conspicuous part  of the  property  and  then  upon  a conspicuous  part  of  the courthouse,  and  also,  where  the property is land paying revenue to the Government, in the office of the  Collector  of  the  district  in which  the  land  is  situate  and, where the property is land situate in a village,  also in the office of the  Gram  Panchayat,  if  any, having  jurisdiction  over  that village.”

15) After  examining the facts  of  this  case in the

light of the law laid down in the case of Saheb Khan

(supra), we are of the considered opinion that the

reasoning  and  the  conclusion  arrived  at  by  the

executing Court deserves to be restored as against

that  of  the High Court in the impugned order.  In

other words, no case was made out by the judgment

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debtor for setting aside of the sale of the property in

question on the ground of committing any material

irregularity or fraud in publishing or in conducting

the  sale  so as to  enable   the  Court  to  invoke its

powers under Order 21 Rule 90 (2) of the Code.  

16) It  is  noticed  that  respondent  No.  1,  in  her

application  for  setting  aside  the  sale,  had  mainly

raised four objections. Firstly, clear 15 days’ notice

was not given for sale of the properties as required

under  the  Rules.  Secondly,  the  valuation  of  the

property  was  not  properly  mentioned  in  the

concerned documents so as to enable the parties to

know its proper valuation prevailing on the date of

sale.  Thirdly,  the market value of  the property on

the date of auction was more than the price actually

fetched  in  the  auction,  and  fourthly,  no  proper

publication  including  beating  of  drum  was  made

before the date of auction due to which there was

less participation of the bidders in the auction sale.

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17) The  executing  Court  dealt  with  all  the  four

objections  with  reference  to  the  record  of  the

proceedings and found as a fact that  none of  the

objections had any merit.  The High Court, however,

found  fault  in  the  same  though  not  in  all  but

essentially in the matter relating to giving of clear

15  days’  notice  and  the  manner  in  which  it  was

issued and finding merit in the objection, set aside

the sale on imposing certain conditions enumerated

above.

18) In  our  considered  opinion,  as  mentioned

above,  the  executing  Court  was  justified  in

overruling  the  objections and we concur  with  the

reasoning  and  the  conclusion  of  the  executing

Court.  

19) We also find on facts that  firstly,  the proper

publicity  was  given  for  auction  sale  in  papers  so

also by beat of drums pursuant to which as many

as  seven  bidders  including  the  appellant  herein

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participated in the auction sale. Had there been no

publicity, it would not have been possible for seven

persons to participate in the auction proceedings.  

20) Secondly,  the  details  of  the  valuation  of  the

property  were  duly  mentioned,  namely,  decree

holder's valuation at Rs.2,75,000/- likewise,  Amin’s

valuation  at  Rs.4  lacs  whereas  the  property  was

sold in auction for Rs.7,50,000/-. In this view of the

matter, it could not be said that the bidders did not

know  the  valuation  or/and  that  it  was  not

mentioned in the auction papers.  

21) Thirdly, judgment debtor did not adduce any

evidence  nor  brought  any bidder  to  purchase  the

property for a higher price than the purchase bid

(Rs.7,50,000/-) except to say in the application that

value of  the property was between Rs.12 lakhs to

Rs.14  lakhs.  In  our  view,  this  objection  has  no

substance for want of any evidence.

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22)  Fourthly, there was adequate publicity given

with the aid of beat of drums in the locality.  It was

proved with  the  record of  the  executing  Court  as

was rightly held by the executing Court and lastly,

in our view, a clear 15 days’ notice was given for

auction  sale  fixed  for  17.11.1999  when  counted

from 05.10.1999.  In other words, 15 days have to

be counted from 05.10.1999 because it  is on this

date the order was issued as contemplated under

Order 21 Rule 64 for proclamation of sale fixing the

date of sale as 17.11.1999.

23) The  executing  Court,  therefore,  substantially

and  in  letter  and  spirit  followed  the  procedure

prescribed under Order 21 Rules 64 and 66 of the

Code while conducting the sale of  the property in

question.

24) The  law  on  the  question  involved  herein  is

clear. It is not the material irregularity that alone is

sufficient for setting aside of the sale. The judgment

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debtor  has  to  go  further  and  establish  to  the

satisfaction  of  the  Court  that  the  material

irregularity  or  fraud,  as  the  case  may  be,  has

resulted  in  causing  substantial  injury  to  the

judgment-debtor in conducting the sale.  It  is only

then the sale so conducted could be set aside under

Order 21 Rule 90(2) of  the Code. Such is not the

case here.

25) In the light of aforesaid discussion,  we are of

the  considered  view  that  none  of  the  objections

raised by respondent No.1 had any merit and nor

any  of  the  objections  constituted  any  kind  of

material irregularities so as to enable the Court to

set aside the sale under Order 21 Rule 90(2) of the

Code.  So far  as the plea of  fraud was concerned,

admittedly, it was not raised and, therefore, it did

not fall for consideration.

26) Learned Counsel for the respondent has placed

reliance on the decisions in Gajadhar Prasad & Ors.

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Vs. Babu Bhakta Ratan & Ors., (1973) 2 SCC 629,

Ambati Narasayya vs. M. Subba Rao & Anr., 1989

Supl(2)  SCC  693,  Desh  Bandhu  Gupta  vs.  N.L.

Anand & Rajinder Singh,  (1994) 1 SCC 131 and

Saheb Khan vs. Mohd. Yousufuddin & Ors.,(2006)

4 SCC 476. We have gone through these cases and

find that all are distinguishable on facts. When we

have  held  on  facts  that  there  are  no  material

irregularities noticed in the case and that there was

compliance of the provisions of Order 21 Rules 64 to

68 then,  in our view,  the law laid down in these

decisions are of no help to the respondent-judgment

debtor.  

27) In view of foregoing discussion, we are unable

to  agree  with  the  reasoning  and  the  conclusion

arrived at by the High Court which is factually and

legally unsustainable.  Its view is not in conformity

with the law laid down in the case of  Saheb Khan

(supra).  

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28) As  a  result,  the  appeal  succeeds  and  is

allowed.  Impugned order is set aside and that of

the executing Court restored.  

               ………...................................J.

[R.K. AGRAWAL]             

                                                   …...……..................................J.

        [ABHAY MANOHAR SAPRE] New Delhi; May 02, 2017  

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