Upset price in execution sale must rest on objective material; arbitrary reduction without basis cannot stand.

In execution sale proceedings, the upset price functions as a reserve price to facilitate sale while protecting the judgment-debtor's interest. Although the executing court may fix or reduce that price, the exercise must rest on objective material relating to the property's nature, use, and other relevant valuation factors. A reduction made without any disclosed basis, and merely on a party's assertion, is arbitrary and cannot stand. The Madras HC therefore held that the reduced upset price was unsustainable and set aside the order, directing the executing court to reassess the proper upset price after enquiry and then proceed in accordance with law.

---

---

Issues: Whether the executing court was justified in reducing the upset price fixed for sale of the attached property without any material basis and whether such reduction was arbitrary.

Analysis: The upset price in execution sale is intended to serve as a reserve price for facilitating the sale and safeguarding the judgment-debtor's interests. While the court has power to fix and also reduce the upset price, that power must be exercised on an objective consideration of relevant circumstances bearing on the value of the property. The court must have material before it regarding the nature and use of the property and other relevant factors, and the figure fixed cannot be based merely on the ipse dixit of a party. In the absence of any indication in the order as to the basis for fixing the reduced upset price, the reduction could not be sustained.

Conclusion: The reduction of the upset price to Rs. 10,000 was arbitrary and unsustainable. The order was set aside and the executing court was directed to reconsider the proper upset price after enquiry and then proceed with execution in accordance with law.

---