Court sale under Order XXI Rule 90 can be disturbed only for material irregularity causing substantial injury, not mere low price.

A court-conducted sale of mortgaged industrial property may be challenged under Order XXI Rule 90 CPC, as made applicable by section 32(8) of the State Financial Corporations Act, only on proof of material irregularity in the conduct of the sale and resulting substantial injury. The governing test is not mere inadequacy of price; the applicant must show a direct link between the irregularity and the injury claimed. Where the sale record shows adjournments, efforts to obtain better offers, participation of interested bidders, and a conscious judicial assessment before confirmation, the sale is not liable to be set aside.

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Issues: Whether the sale of the mortgaged industrial properties in court auction was liable to be set aside under Order XXI Rule 90 of the Code of Civil Procedure on the ground of material irregularity in the conduct of the sale causing substantial injury to the judgment debtor.

Analysis: Section 32(8) of the State Financial Corporations Act, 1951 made the provisions of the Code of Civil Procedure applicable as far as practicable in the realisation of the Corporation's dues, so the challenge to the auction had to be tested on the footing of Order XXI Rule 90. The decisive inquiry was whether the executing court had failed to apply its mind to the adequacy of the price and thereby committed material irregularity, and whether such irregularity resulted in substantial injury. The sale proceedings showed repeated adjournments, attempts to secure better offers, presence of interested parties at the auction, and a conscious exercise of discretion by the court before confirming the final bid. Mere inadequacy of price, without proof of material irregularity directly linked to injury, was insufficient to invalidate the sale.

Conclusion: The challenge to the auction sale failed; no material irregularity or substantial injury was established, and the sale could not be set aside. The appeal was therefore allowed in favour of the auction purchaser.

Ratio Decidendi: In a court-conducted sale subject to confirmation, the sale can be set aside under Order XXI Rule 90 only if material irregularity in conducting the sale is proved and that irregularity has caused substantial injury; inadequacy of price by itself is not enough where the court has consciously applied its mind to the fairness of the bid.

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