Equivalent Citation: AIR2006SC1871, 2006(4)MhLj764,
(2006)4SCC476
IN THE SUPREME COURT OF INDIA
Code of Civil Procedure, 1908, Order 21, Rule 67 – Law of Execution – Provides for
advertisement in newspaper for which there should be specific direction by Court – Proclamation
by beat of drum also not mandatory – Advocate Commissioner distributing pamphlets several
days prior to date fixed for sale in locality, besides also affixing notice copy on property itself –
Case does not warrant setting aside such sale.
Code of Civil Procedure, 1908, Order 21, Rule 90 – Law of Execution – To set aside sale
of immovable property in execution of a decree, mere establishment of fraud or material
irregularity is not sufficient - Applicant must further satisfy Court that it has resulted in
substantial injury to Applicant – Conversely, even if substantial injury is made out, sale cannot
be set aside if there is no material irregularity or fraud in process of sale – Bald allegations are
not sufficient to set aside sale by Court when ingredients of provisions of law are not satisfied.
Decided On: 17.04.2006
Appellants: Saheb Khan
Vs.
Respondent: Mohd. Yusufuddin and Ors.
Hon'ble Judges: Ruma Pal, Dalveer Bhandari and Markandey Katju, JJ.
Civil — Court Sale — Immovable property — Order XXI, Rules 66 and 67, Order XXI, Rule 90 and
1Section 151 of the Code of Civil Procedure, 1908 — Appellant had purchased certain property in a
court sale — Disputed property was the subject-matter of a suit for partition between the
respondents or their predecessors-in-interest — Trial court directed sale of the suit property —
Commissioner was appointed to sell the suit property, who issued notice to the parties to the suit
through their respective Advocates — Highest bid was given by the appellant and he deposited
one-fourth of the bid amount — Respondent filed an application to set aside the auction — By this
time, the appellant had deposited the offered price — Trial court held that the procedure followed
by the Advocate Commissioner did not suffer from any irregularities or fraud — On appeal, the
High Court set aside the sale — Hence, present appeal — Held, charge of fraud or material
irregularity under Order XXI, Rule 90 must be specifically made with sufficient particulars — Wide
publicity was not necessarily mean by publication in the newspapers — Respondent unable to
establish any substantial injury by reason of any irregularity or fraud — Impugned order of High
Court set aside — Appeal allowed
2. The appellant had purchased certain property in a Court sale. The High Court has set aside the sale.
The decision of the High Court has been impugned in this appeal. The disputed property was the subject
matter of a suit for partition between the respondents or their predecessors-in-interest. The property was
not partible. The Trial Court accordingly directed sale of the suit property. An Advocate Commissioner
was appointed to sell the suit property. The order directing sale required the Advocate Commissioner "to
sell the suit property in auction between the parties to the suit or in public auction, if the parties are not
coming forward after following the due procedure like giving wide publicity".
3. The Advocate Commissioner issued notice to the parties to the suit through their respective advocates
on 25
th
June, 2002. The notice said that the warrant of commission would be executed by the sale of the
property on 30
th
June, 2002 by auction and that the parties were at liberty to participate in the auction if
they desired to. The Commissioner also pasted notices on the wall of the suit property and distributed
pamphlets advertising the sale in the locality.
4. On 30
th
June, 2002, four of the parties were present and, according to the report of the Commissioner
about "20-30 general public offers were made as against the fixed upset price of Rs. 10 lakhs". The
highest bid was given by the appellant of Rs. 12 lakhs. He deposited three lakhs being 174
th of the bid
amount. A report was submitted to Court by the Advocate Commissioner enclosing inter alia a copy of the
minutes of the proceedings held by the Commissioner signed by the parties as well as a list of the bidders
and their names and addresses.
5. On 12
th August, 2002, the respondent No. 1, herein (who was the defendant No. 4 in the suit) filed an
application under Order XXI Rule 90 read with Section 151 of the Code of Civil Procedure praying that the
auction should be set aside and that the sale should be made in favour of one Azhar Quyum Sidhique for
18 lakhs. The application was accompanied by an affidavit affirmed by the said Sidhique in which he said
that he was ready to purchase the suit premises and would deposit Rs. one lakh within two days and pay
the balance "within any period at the time of registration".
6. Although by this time, the appellant had deposited the offered price of Rs. 12 lakhs, the District Judge
gave an opportunity to the respondent No. 1 to bring the said Sidhique to court to deposit the sum of Rs.
18 lakhs. The respondent No. 1, however failed to produce the alleged purchaser. Three such
opportunities were given by the District Judge. On all three occasions, the said Sidhique did not present
himself in Court. The District Judge then passed an order holding that adequate notice had been given by
the Advocate Commissioner for publishing the sale. The Respondent No. 1's contention that the sale
should have been published in the newspaper was rejected on the ground that no such direction had
been given by the Court. The Trial Court also noted that the Respondent No. 1 was not interested to
2purchase the property himself and had failed to substantiate his claim that he had found a purchaser of
the property for Rs. 18 Lakhs despite repeated opportunities. The Trial Court held that the legally
prescribed procedure had been followed by the Advocate Commissioner to sell the property and the sale
did not suffer from any irregularities or fraud. The sale was accordingly confirmed in favour of the
appellant.
7. Impugning the decision of the District Judge, the respondent No. 1 preferred an appeal before the High
Court. The High Court set aside the sale holding that no notice was given to the respondent No. 1 to
purchase the property in terms of Sections 2 and 3 of the Partition Act, 1893 before selling the property
by public auction. It was also held that it was unclear whether notice was served on the respondent No. 1
as the signatures on the notice were not legible. In any event, the Court was of the view that the
provisions of Order XXI Rules 66 and 67 of the Code of Civil Procedure had been violated by not giving
adequate publicity to the sale. It was also noted that the respondent No. 1 had brought to the notice of the
Court the offer of the said Sidhique for Rs. 18 lakhs. The High Court said that there was no valid or legal
reason for not accepting or acting upon the offer so brought forward by the respondent No. 1. In the
circumstances, the appeal was allowed and the sale was set aside.
8. Before us the appellant has contended that the High Court did not construe the provisions of Order XXI
Rule 54(2) read with Rule 67(1) correctly. Although wide publicity had been directed to be given by the
Trial Court, there was no direction to publish the advertisement in any newspaper. It was further said that
there was no material irregularity in the conduct of the sale which could justify the High Court in setting it
aside. It was further contended that the alleged offer brought forward by the respondent No. 1 was not
followed up by any actual deposit and could not form the basis of the High Court coming to the conclusion
that the property has been sold for at an undervalue to the appellant.
9. According to the learned Counsel appearing on behalf of the respondent No. 1, by using the word
"wide publicity", the Trial Court had intended that the sale should be advertised in the newspaper. It was
also submitted that no notice was given to the respondent No. 1 at any stage. The Advocate
Commissioner's notice of sale had been addressed to a lawyer, who did not in fact represent the
respondent No. 1. It was further submitted that the sale had been held in collusion between the other
parties and the purchaser and that the sale had been made at an undervalue.
10. We are unable to sustain the reasoning of the High Court. Order XXI 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-section (2) of Order XXI Rule 90 however
places a further condition on the setting aside of a Court sale in the following language:
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 applicant has sustained substantial injury by reason of
such irregularity or fraud.
11. 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 and Suibal Chandra Shaw and Ors. v. Sudhir Chandra Ghosh and Ors.
MANU/SC/0018/1964 : [1964]6SCR1001 ; Jaswantlal Natvarlal Thakkar v. Sushilaben Manilal
Dangarwala and Ors. MANU/SC/0190/1991 : AIR1991SC770 ; Kadiyala Rama Rao v. Gutala
Kahna Rao (dead) by and Ors. MANU/SC/0112/2000 : [2000]1SCR1045 .
12. A charge of fraud or material irregularity under Order XXI 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
3also no material irregularity in publishing or conducting the sale. There was sufficient compliance with the
orders of Order XXI Rule 67(1) read with Order XXI 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 XXI Rule 67 clearly provide if the sale is to be advertised in the local newspaper,
there must be specific direction of Court to that effect. In the absence of such direction, the proclamation
of sale has to be made under Order XXI 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:
(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 Court-house, 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).
The proclamation of the sale by beat of drum was not mandatory, so long as the sale notice was
proclaimed at or adjacent to the property. Admittedly, the Advocate Commissioner distributed the
pamphlets advertising the sale in the locality several days prior to holding of the sale and also affixed a
copy of the sale notice on the property itself.
13. In any event the respondent No. 1 has been unable to establish that he had suffered substantial injury
by reason of any irregularity or fraud. The lack of notice under the Partition Act, 1893 to the respondent
No. 1 was immaterial as it was not the appellant's case that he would have purchased the property. No
such intention has ever been expressed. The respondent No. 1's only grievance is that the property could
have fetched a higher value. Apart from the alleged affidavit of the said Sidhique, no other material has
been produced by him in support of the such submission. On the other hand in fixing the upset price, the
Advocate Commissioner had taken into account the certificate of market value in respect of the property
issued by the Sub-Registrar Golkunda dated 13
th May, 2005 at Rs. 10 lakhs. The respondent No. 1 has
never complained that the upset price had been wrongly fixed. The appellant's offer was above the
market value. Additionally, the respondent No. 1 was given several opportunities to produce the
purchaser, who was allegedly willing to pay a higher price. The purchaser was never produced. As
against this, the appellant has duly deposited the entire amount of Rs. 12 lakhs in Court. The District
Judge, was in the circumstances correct in rejecting the so called offer of the said Sidhique.
14. In the circumstances, the High Court erred in setting aside the sale in favour of the appellant. The
decision of the High Court is unsustainable both in fact and in law. It is accordingly set aside and the
appeal is allowed with costs.
4
Print Page
(2006)4SCC476
IN THE SUPREME COURT OF INDIA
Code of Civil Procedure, 1908, Order 21, Rule 67 – Law of Execution – Provides for
advertisement in newspaper for which there should be specific direction by Court – Proclamation
by beat of drum also not mandatory – Advocate Commissioner distributing pamphlets several
days prior to date fixed for sale in locality, besides also affixing notice copy on property itself –
Case does not warrant setting aside such sale.
Code of Civil Procedure, 1908, Order 21, Rule 90 – Law of Execution – To set aside sale
of immovable property in execution of a decree, mere establishment of fraud or material
irregularity is not sufficient - Applicant must further satisfy Court that it has resulted in
substantial injury to Applicant – Conversely, even if substantial injury is made out, sale cannot
be set aside if there is no material irregularity or fraud in process of sale – Bald allegations are
not sufficient to set aside sale by Court when ingredients of provisions of law are not satisfied.
Decided On: 17.04.2006
Appellants: Saheb Khan
Vs.
Respondent: Mohd. Yusufuddin and Ors.
Hon'ble Judges: Ruma Pal, Dalveer Bhandari and Markandey Katju, JJ.
Civil — Court Sale — Immovable property — Order XXI, Rules 66 and 67, Order XXI, Rule 90 and
1Section 151 of the Code of Civil Procedure, 1908 — Appellant had purchased certain property in a
court sale — Disputed property was the subject-matter of a suit for partition between the
respondents or their predecessors-in-interest — Trial court directed sale of the suit property —
Commissioner was appointed to sell the suit property, who issued notice to the parties to the suit
through their respective Advocates — Highest bid was given by the appellant and he deposited
one-fourth of the bid amount — Respondent filed an application to set aside the auction — By this
time, the appellant had deposited the offered price — Trial court held that the procedure followed
by the Advocate Commissioner did not suffer from any irregularities or fraud — On appeal, the
High Court set aside the sale — Hence, present appeal — Held, charge of fraud or material
irregularity under Order XXI, Rule 90 must be specifically made with sufficient particulars — Wide
publicity was not necessarily mean by publication in the newspapers — Respondent unable to
establish any substantial injury by reason of any irregularity or fraud — Impugned order of High
Court set aside — Appeal allowed
2. The appellant had purchased certain property in a Court sale. The High Court has set aside the sale.
The decision of the High Court has been impugned in this appeal. The disputed property was the subject
matter of a suit for partition between the respondents or their predecessors-in-interest. The property was
not partible. The Trial Court accordingly directed sale of the suit property. An Advocate Commissioner
was appointed to sell the suit property. The order directing sale required the Advocate Commissioner "to
sell the suit property in auction between the parties to the suit or in public auction, if the parties are not
coming forward after following the due procedure like giving wide publicity".
3. The Advocate Commissioner issued notice to the parties to the suit through their respective advocates
on 25
th
June, 2002. The notice said that the warrant of commission would be executed by the sale of the
property on 30
th
June, 2002 by auction and that the parties were at liberty to participate in the auction if
they desired to. The Commissioner also pasted notices on the wall of the suit property and distributed
pamphlets advertising the sale in the locality.
4. On 30
th
June, 2002, four of the parties were present and, according to the report of the Commissioner
about "20-30 general public offers were made as against the fixed upset price of Rs. 10 lakhs". The
highest bid was given by the appellant of Rs. 12 lakhs. He deposited three lakhs being 174
th of the bid
amount. A report was submitted to Court by the Advocate Commissioner enclosing inter alia a copy of the
minutes of the proceedings held by the Commissioner signed by the parties as well as a list of the bidders
and their names and addresses.
5. On 12
th August, 2002, the respondent No. 1, herein (who was the defendant No. 4 in the suit) filed an
application under Order XXI Rule 90 read with Section 151 of the Code of Civil Procedure praying that the
auction should be set aside and that the sale should be made in favour of one Azhar Quyum Sidhique for
18 lakhs. The application was accompanied by an affidavit affirmed by the said Sidhique in which he said
that he was ready to purchase the suit premises and would deposit Rs. one lakh within two days and pay
the balance "within any period at the time of registration".
6. Although by this time, the appellant had deposited the offered price of Rs. 12 lakhs, the District Judge
gave an opportunity to the respondent No. 1 to bring the said Sidhique to court to deposit the sum of Rs.
18 lakhs. The respondent No. 1, however failed to produce the alleged purchaser. Three such
opportunities were given by the District Judge. On all three occasions, the said Sidhique did not present
himself in Court. The District Judge then passed an order holding that adequate notice had been given by
the Advocate Commissioner for publishing the sale. The Respondent No. 1's contention that the sale
should have been published in the newspaper was rejected on the ground that no such direction had
been given by the Court. The Trial Court also noted that the Respondent No. 1 was not interested to
2purchase the property himself and had failed to substantiate his claim that he had found a purchaser of
the property for Rs. 18 Lakhs despite repeated opportunities. The Trial Court held that the legally
prescribed procedure had been followed by the Advocate Commissioner to sell the property and the sale
did not suffer from any irregularities or fraud. The sale was accordingly confirmed in favour of the
appellant.
7. Impugning the decision of the District Judge, the respondent No. 1 preferred an appeal before the High
Court. The High Court set aside the sale holding that no notice was given to the respondent No. 1 to
purchase the property in terms of Sections 2 and 3 of the Partition Act, 1893 before selling the property
by public auction. It was also held that it was unclear whether notice was served on the respondent No. 1
as the signatures on the notice were not legible. In any event, the Court was of the view that the
provisions of Order XXI Rules 66 and 67 of the Code of Civil Procedure had been violated by not giving
adequate publicity to the sale. It was also noted that the respondent No. 1 had brought to the notice of the
Court the offer of the said Sidhique for Rs. 18 lakhs. The High Court said that there was no valid or legal
reason for not accepting or acting upon the offer so brought forward by the respondent No. 1. In the
circumstances, the appeal was allowed and the sale was set aside.
8. Before us the appellant has contended that the High Court did not construe the provisions of Order XXI
Rule 54(2) read with Rule 67(1) correctly. Although wide publicity had been directed to be given by the
Trial Court, there was no direction to publish the advertisement in any newspaper. It was further said that
there was no material irregularity in the conduct of the sale which could justify the High Court in setting it
aside. It was further contended that the alleged offer brought forward by the respondent No. 1 was not
followed up by any actual deposit and could not form the basis of the High Court coming to the conclusion
that the property has been sold for at an undervalue to the appellant.
9. According to the learned Counsel appearing on behalf of the respondent No. 1, by using the word
"wide publicity", the Trial Court had intended that the sale should be advertised in the newspaper. It was
also submitted that no notice was given to the respondent No. 1 at any stage. The Advocate
Commissioner's notice of sale had been addressed to a lawyer, who did not in fact represent the
respondent No. 1. It was further submitted that the sale had been held in collusion between the other
parties and the purchaser and that the sale had been made at an undervalue.
10. We are unable to sustain the reasoning of the High Court. Order XXI 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-section (2) of Order XXI Rule 90 however
places a further condition on the setting aside of a Court sale in the following language:
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 applicant has sustained substantial injury by reason of
such irregularity or fraud.
11. 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 and Suibal Chandra Shaw and Ors. v. Sudhir Chandra Ghosh and Ors.
MANU/SC/0018/1964 : [1964]6SCR1001 ; Jaswantlal Natvarlal Thakkar v. Sushilaben Manilal
Dangarwala and Ors. MANU/SC/0190/1991 : AIR1991SC770 ; Kadiyala Rama Rao v. Gutala
Kahna Rao (dead) by and Ors. MANU/SC/0112/2000 : [2000]1SCR1045 .
12. A charge of fraud or material irregularity under Order XXI 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
3also no material irregularity in publishing or conducting the sale. There was sufficient compliance with the
orders of Order XXI Rule 67(1) read with Order XXI 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 XXI Rule 67 clearly provide if the sale is to be advertised in the local newspaper,
there must be specific direction of Court to that effect. In the absence of such direction, the proclamation
of sale has to be made under Order XXI 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:
(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 Court-house, 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).
The proclamation of the sale by beat of drum was not mandatory, so long as the sale notice was
proclaimed at or adjacent to the property. Admittedly, the Advocate Commissioner distributed the
pamphlets advertising the sale in the locality several days prior to holding of the sale and also affixed a
copy of the sale notice on the property itself.
13. In any event the respondent No. 1 has been unable to establish that he had suffered substantial injury
by reason of any irregularity or fraud. The lack of notice under the Partition Act, 1893 to the respondent
No. 1 was immaterial as it was not the appellant's case that he would have purchased the property. No
such intention has ever been expressed. The respondent No. 1's only grievance is that the property could
have fetched a higher value. Apart from the alleged affidavit of the said Sidhique, no other material has
been produced by him in support of the such submission. On the other hand in fixing the upset price, the
Advocate Commissioner had taken into account the certificate of market value in respect of the property
issued by the Sub-Registrar Golkunda dated 13
th May, 2005 at Rs. 10 lakhs. The respondent No. 1 has
never complained that the upset price had been wrongly fixed. The appellant's offer was above the
market value. Additionally, the respondent No. 1 was given several opportunities to produce the
purchaser, who was allegedly willing to pay a higher price. The purchaser was never produced. As
against this, the appellant has duly deposited the entire amount of Rs. 12 lakhs in Court. The District
Judge, was in the circumstances correct in rejecting the so called offer of the said Sidhique.
14. In the circumstances, the High Court erred in setting aside the sale in favour of the appellant. The
decision of the High Court is unsustainable both in fact and in law. It is accordingly set aside and the
appeal is allowed with costs.
4
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