1993 (9) TMI 351 - SC - Indian Laws

Supreme Court overturns auction sale due to irregularities, granting costs to appellant.

Satyanarain Bajoria And Another Versus Ramnarain Tibrewal And Another

Satyanarain Bajoria And Another Versus Ramnarain Tibrewal And Another - 1994 AIR 1583 1993 (2) Suppl. SCR 225 1993 (4) SCC 414, 1993 (5) JT 243, 1993 (3) ... Issues Involved:1. Irregularities or fraud in conducting the auction sale.2. Substantial injury to the judgment-debtor due to irregularity or fraud.3. Limitation period for filing objections to the auction sale.4. Service of notice under Order 21 Rule 22 of CPC.5. Compliance with Order 21 Rule 54 and Rule 66 of CPC.Detailed Analysis:1. Irregularities or Fraud in Conducting the Auction Sale:The judgment-debtor contended that he had no knowledge of the auction sale and that all steps were taken ex-parte by concealing facts. He claimed that no process had been served on him and that reports were obtained in collusion with the process peon. The executing court found material irregularity in publishing and serving notices and concluded that the land was sold at a very low value, resulting in material loss to the judgment-debtor.2. Substantial Injury to the Judgment-Debtor Due to Irregularity or Fraud:The executing court noted that the land was situated in a prime market area and was sold for a significantly low amount. The judgment-debtor suffered substantial injury due to the irregularities and fraud in the auction process. The lower appellate court's failure to recognize this and its erroneous assumption that there was no substantial injury was highlighted.3. Limitation Period for Filing Objections to the Auction Sale:The lower appellate court erroneously believed that the limitation period for setting aside the sale was 30 days, as per the old Limitation Act, 1908. However, the correct limitation period under the amended Limitation Act, 1963 is 60 days. The judgment-debtor filed the petition within the 60-day period, making it timely.4. Service of Notice under Order 21 Rule 22 of CPC:The lower appellate court incorrectly relied on order sheets to assume service of notice under Order 21 Rule 22. The Supreme Court emphasized that actual proof of service was required. The judgment-debtor was not served with the notice, depriving him of the opportunity to pay the decretal amount and avoid the auction.5. Compliance with Order 21 Rule 54 and Rule 66 of CPC:The Supreme Court found that the judgment-debtor was not personally served with the notice of attachment under Order 21 Rule 54. The sale proclamation was published with incorrect details, and there was no evidence of compliance with the requirements of Rule 54 and Rule 66. These rules are crucial for safeguarding the rights of both the decree-holder and the judgment-debtor.Conclusion:The Supreme Court concluded that the entire execution process was fraught with irregularities and fraud, leading to substantial injustice and loss to the judgment-debtor. The appeal was allowed, and the judgments of the lower appellate court and the High Court were set aside. The order of the executing court setting aside the auction sale was restored, and the appellant was awarded costs.