GAJADHAR PRASAD & ORS. v. BABU BHAKTA RATAN & ORS.
Citation: [1974] 1 S.C.R. 372; 1973 INSC 139
Court: Supreme Court of India
Bench: KUTTYIL KURIEN MATHEW, M. HAMEEDULLAH BEG
Judgment date:
Case summary
1973 INSC 139. Supreme Court of India judgment dated 1973-08-14. GAJADHAR PRASAD & ORS. v. BABU BHAKTA RATAN & ORS. Read the judgment and case details on...
Judgment text
376 SUPREME COURT REPORTS [ 1974] 1 S. C. R. :372 GAJADHAR PRASAD & ORS. v. BABU BHAKTA RATAN & ORS. A11gu. rt 14, 1973 [K. K. MATIIEW AND M. H. BEG, JJ. J • Code of Civil Procedure (Act S of 1898), 0. 21, r. 66(2)(e)-Scope of. In execution of a decree, six houses of the judgment debtors were sold. In ·the sale proclama. tion, 3 houses were shown as one item, two bungalows as one . , item and the remaining house as another item. The valuation of each item in the proclamation was practically that given by the decree-holders. The Amin put up tor sale the 3 houses comprised in one item as separate houses and the total amount realised from the sale of the 3 houses was 2! times the amount in the sale proclamation. The two bungalows were however sold as a single unit and purchased by the decree holders. After the sales, the judgment debtors . applied for setting aside the sales on the ground of fraud and material irregu· laritv in conducting them, and also complained of substantial injury.
The ex~u tion court and the High Court, in appeal, dismissed the applications. In appeal to this Court, HELD : The 2 bungalows should be sold afresh after judicialJy considering and deciding the question lVhether they can be sold separately and what parti- . culars should be inserted in the sale proclamation. [380C--D] (a) The object of 0. 21, r. 66(2)(e), C. P. C. , is that essential facts having ,. · . a bearing on the question of value of the property and which would assist the pur. cliaser in forming his cwn. opinion on the value must be stated by the Court. The Court should normaily state the v&Juation given by both the decree-bolder . . as weIJ as the judgment debtor where they have both. valued the property and these do not appear fantastic. It may useftilly 'State other material facts. such as the area of Iand 7 n~ture of the rights in it, municipal assessment, actual rents realised, which cou1d reasonably be expected to· affect the valuation. 'Vhat -". :ould be reasonably 3.
nd usefuIJy stated succinctly in a sale proclamation has to be determined on the facts of each pacticular case. It is not necessary for the execution court to state its own estimate; nor is it necessary for th~ execution court to . order the insertion of a judi:ially pa"ised order in the sale proclamation itself. but. it should pass -an order showing that it had applied its mind to the need for determinir:. g a11 the ess. ential particulars, which would reasonablv be looked for by a purchaser and which should be insected in the · saJe proefarnation. The order should show that the Court had considered' the objection. if any, of the decree-bolder or the judgment-debtor as the case may he. and the Court should not ·merely accept the ipse dixit of one side. [378C-HJ In the present case, the judgment-debtors had given their valuation and even applied for the appointment of a eommissioner at their expense to report on matters aJlectic.
g the value of the property, but, the execution court had practi-caUy accepted, as its own valuation, without indicating reasonable grounds for this preference, whatever the decree-holder had asserted about the ,·alue of the -property. The area of the compound in which the l\vb bungalows were situa~ed ' . \vas not mentioned in the sale proclamation, ar~. though this land v. ·as nu:rool le;isehold land neither the unexpired period of lease nor rent were mentioned. lt was not s! ated whether the bungalows would be sold as one or two iterm of propecty, thoul'.! b the ju taken as a whole u [3790_:4] Therefore, th:: execution court had not perfonned its duty fairly and reason- ;;b1y. I-Jenee, there \Vas a material irregularity in conducting the safe. 1379 G] GAJADll"'R PRASAD v. B. D. RATAN (Beg, J. ) 373 Case law considered. [Whether decree-holders' conduct amounted to actual fraud practised on the Court, not decided].
[3790-EI (b) The result of the separate sales of the 3 houses comprised in one item was tha! when the sale price5 were added up, they fetched a considerably higher price than that put upon the propertLs when Jumped together in one Jot. The High Court found that the sale of the two bungalows separately ~ould probably have similarly fet:hed a higher price. Therefore, there is enough evidence to indicate that the judgment-debtors baa suffered substantial injury in so far as the sale of the 2 bungalows is concerned. [3. SOA-B] C1v1L APPELLATE JURISDSCTION: Civil Appeal No. 1648 of 1967. Appeal by special leave from the judgment and decree dated the 9th day of January 1964 of the High Court of Judicature at Allahabad in First Appeal No. 81 of 1957. J. N. Chatterjee and E. C. Aggarwala for the appellant. The Judgment of the Court was delivered by- BEG, J.
-This is a judgment debtors' appeal, by Certificate of fit-ness of the case for appeal to this Court granted by the High Court of Allahabad, arising out of an application filed under Order 21, Rule 90, Civil Procedure Code. The Respondent decree-holders had obtained a decree for about Rs. 76,000/- against the appellants in a mortgage suit. In execution of that decree sales of three items of property, shown as houses belong-ing to the Judgment debtors took place on 5-5-1955 and 7-5-1955. The items were described as follows in the sale proclama(. :m : ''Boundaries ----· ----------------- -------· East West North South 1. puoca build h. ,use b.! 'lring pre- U1iv~rsity Lane and House of Colonel vious No. 8 and present No. 5 Road temple of Mari um Ganj F. situate in Colonefgunji city of KaJiji Bibi& Roud Allahabad, together · with site Mohd. aild building materials entfrc Ra1a. 16 anna share value at Rs. 10,350/·. BO. tire houSe b~aring previous House of J. , ) V. A. S. Ye/lappa !
"'(I) AIR 1927 Mad. 1009. (2) AIR 1949 Mad. 398. GAJADHAR PRASAD V. B, B. RATAN (Beg, /. ) 371 Naidu v. G. Venugopal Naidu,(') and the Allahabad High Court, in Md. Said Khan v. Md. Abdus Sami Kha11 & A11r. , (') Dwarka Dass v. Bhawani Prasad & Ors. ,(") have held that it is unnecessary for the Court to give its own estimate. The Calcutta High Court in Rajah Ramessur Proshad11arai11 Singh v. Rai Sham Krissen & Ors. ,(') Saurendra Mohan Tagore v. Rurruk Chand & Ors. ,(') Bejoy Singh 6 8 Dadhulla v. Ashutosh-Gossami & Ors. ,( ) Lachira v. Ra111es/1war 7 Singh & Ors. ,( ) Pashupati Nath Maliah & Anr. , v. Bank of 8 Behar,( ) New Birbhum Coal Co. Ltd. v. Surendra Nath Laik & Ors. ,(') the Patna High Court, in Raghunath Singh v. Hazari Sahu & Ors. ,(1°) and Mt. Golab Kuer & A11r. v. Mt. Bibi Saira & 11 Ors. ,( ) and the Rangoon High Court, in A. M. K. M. Firm V. 12 Baishmaw,( ) have expressed opinions favouring giving of the Court's own estirilate of the value of the property to be sold.
But, a mere acceptance of the valuation given by the decree-holder has been he! <! to be material irregularity in A. M. K. M. Firm v. Baishmaw (Supra). Th~ High Court of Bombay, in Charandas Vasanji & Anr. v. 3 Dossabhoy Maganlal & Ors. ,(1 ) Premaraj Panna/al Shop v. Sadabaz & Ors. , ( ") has held that, although, it is not necessary for the exe~ution Court to value the property to be sold, yet, it may do so if it thinks fit. In Sitabai Rambhau Marathe v. Gangadhar Dhanram Marwadi & 1 Anr. ,( ') however, the Bombay High Court held that the Court is bound to hold an enquiry as to the value of the property and to state it in the sale proclamation. _ Although the Madras High Court had held that it is not necessary for the Court to give its own valuation, it expressed the opinion that it is desirable, where there is a wide divergence between the valuation of the decree-holder and of the judgment debtor, to have property valued through an Amin and to state it in the proclamation.
The Calcutta view, in some of the cases mentioned above, was tltl! f, although the Court need not give its own valuation of the ptopeity in the sale proclamation, it would be justified in stating tl)e valuation given by the parties. .. It may be noticed here that there have been amendments of Order 21, Rule 66 by different High Courts from 1929 onwards dealing with the question of valuation. The Calcutta a,1d the Punjab High Courts have made it clear that "it shall not _be necessary for the Court itself to give its own estimate of the value of the property but the proclamation shall in~lude the estimate, if any, given by either or both the parties". Jn Andhra Ptadesh, Order 21, Rule 66(2\(e) has been amended to make it obligator;y to give the value of the property as stated : (i) by the decree-holder; (ii) by the judgment-debtor. The (I) AIR 1958 Mad. 423. (2) AIR 1932 All 664. (3) AIR 1960 All. 510. (4) VIII Calcutta Weekly Notes 257. (5) XII Calcutta Weekly Notes 542.
(6) AIR 1924 Cal. 589. (7) AIR 1930 Cal. 781. (8) AIR 1932 Cal. 141. (9) AIR 1934 Cal. 205. (10) AIR 1917 Pat. 381. (11) AIR 1919 Pat. 372. (12) AIR 1937 Rangoon 137. (13) AIR 1939 Born. 182. (14) AIR 1956 Born. 248. (15) AIR 1935 Born. 331. [ 1974] 1 s. c. &. Madras and Kerala High Courts have also adopted the rule as amendtd by the Andhra Pradesh High Court. The Madhya Pradesh High Court amendment only mentions that the particulars to be pro· vided may include the decree-holder's estimate of the approximate market pric. e. The Patna High Court amendment provides :- "that no estimate of the value of the property, other than those, if any, made by the decree-holder and judgment- Jebtor resjlcctively together with a statement that the Court does not vouch for the accuracy of either, shall 'be inserted in the sale proclamation".
A review of the authorities as well as the amendments to rule 66 (2) (e) makes it ·abundantly clear that the Court, when stating the esti-mated value of the property to be sold, must not accept merely the ipse dixzt of one side. It is certainly n6t necessary for it to state its own estimate. If this were required, it may, to be fair, necessitate insertion of something . like a summary of a judicially considered order, giving its grounds, in the sale proclamation, which may confuse bidders. It may also be quite misleading if the Court's estimate is erroneous. Mon:over, Rule 66(2)(e) reqnires the Court to state only the facts it considers material for a purchaser to judge the value and 1rntu:·e of the property himself. Hence, the purchaser should be left to judge the value for himself.
But, essential facts which have a bearing on the very material question of value of the _property and which would assist the purchaser in forming his own opinion must be stated That is, after all, the whole object of Order 21, Rule 66(2)(e), Civil Procedure Code. The Court has only to decide what all these material particulars are in each case. We think that this is an obli-gation imposed by Rule 66(2)(e). In discharging it, the Court should norrnaily state the valuation given by both the decree-bolder as well as the judgllleGt debbor where they have both valued the property, and these do not appear fantastic. It may usefully state other material facts, such as the area of land, nature of rights in it, municipal assess· ment, actual rents realised, which could reasonably be expected to affect valuation. What could be reasonably and usefully stated succinctly in a sale proclamation has to be determined on the facts of each particular case.
Inflexible rules are not desirable on such a question. In the case before us, the execution Court had practically accepted, as its own valuation, without indicating reasonable gronnds for this preference, whatever the decree holders had asserted about the value of the property. It did not bother to seriously even conside1' the objec" tions.. of the judgment·debtors. We think that the duty to consider what particulars should be inserted in the sale proclamation and how the sale ought to be conducted should be performed judicially and rea· sonably. If the execution <;:ourt does not, as it did not in the case before us, apply its mind or give any consideration whatsoever to the objections of the judglllent-debtor, we think a material irregularity would be committed by the execution Court. It is not neces-sazy for the execution Court to order the insertion of a judicially passed order in the sale proclamation itself, but, it should pass an GAJADHAR PRASAD V. B. B. RATAN (Beg, J.
) 379 order showing that it applied its mind to the need for determining all the essential particulars, which would reasonably be looked for by a purchaser, and which should be inserted in the sale proclamation. The order should show that it considered the objections, if any, of the decree-holders or the judgment debtors, as the case may be. It should not merely accept unhesitatingly the ipse dixil of one side. We think that the execution Court had not performed its duty fairly and reasonably in this case, After embarking on the difficult task of valuation, it rejected the judgment debtors' figures by merely observing that they are exaggerated and practically accepted without hesitation whatever the decreeholders submitted, but this valuation was proved to be incorrect judged by the results of auction sales taken as a whole. Mr. J. N. Chatterji relied upon the following passage in Mamda-nayagam Pillai v_ Manickavasakam Chettiar('') : "If t! J.
e respondent knew the true facts, if he purchased at what he knew was too low a figure based on an upset price accepted by the Court owing to his own initial misrepresenta-tion and subsequent suppression of material facts, his conduct would amount to fraud on the Court as the learned subordinate ju~ge points oμt" lt is not necessary for us to decide whether the decree-holders' conduct in the case before us would amount to actual fraud practised on the Court with regard to the valuation. The judgment-debtors were there. with their own valuation and had even applied for the appointment of a Commissioner at t! J. eir expense to report about matters affectmg the value of the proper! ~'· They had asserted that the two bungalows at Tej Bahadnr Sapru Road would fetch a much higher value if sold separately. The execution court should have at least performed the duty of considering whether these objections were well-founded.
We find from a perusal of the sale proclamation in this case that 'f even the area of the compound in which the two bungalows were situated was not there. The land in the compound is evidently nuzool leasehold land but the unexpired period of the lease or rent payable on it are not mentioned. It was not stated whether the bungalows, which were valued separately, would be sold as one or two items of property. Probably, it was left to the Amin to exercise his own dis-cretion in this matter, as he had exercised it in the case of Colonelgunj property. The cumulative effect of all the katures of the case mentioned above is that we think that there was material irregularity here in the conduct of the execution sale of the two bungalows. We now turn to the question of substantial injury.
The result of the separate sales of the houses in Colonelgunj was that, when sale prices were added up, they fetched a considerably higher pdce than that put upon these properties, lumped together in one lot, by the decree-holders. The High Court had also found that sales of the two bungalows on the Tej Bahadur Sapru Road separately would probabli (I) AIR 1945 PC. 67 @ 70. similarly have fetched a higher price. The affidavit dated 19-7-1947 filed by the judgment-debtors, as stated above, had not been contro-verted by any material put forward by the decree-holders. We, therefore, think that there is enough evidence to indicate that the judgment-debtors had suffered substantial injury so far as the sale of the two bungalows numbers 8 & 10 on Tej Bahadur Sapru Road, Allahabad, is concerned. The result is that we allow this appeal to the extent that we set aside the judgments and orders of the High Court and of the execution Court with regard to the sale of bungalows Nos.
8 & 10, together with their compound, and dismiss it as regards the other properties. We also set aside the execution sale of 7-5-1955 of these two bungalows with all the land in their compound. We order that these two bungalows will be sold afresh after judicially consideriiJ. g and deciding the question whether they can be sold separately and what partiC\llars should be inserted in the sale proclamation. The parties will bear their own costs. V. P. S. Appeal partly allowed ,_ I
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