Fraudulent auction sale can be set aside sua sponte despite limitation and lack of locus standi in the challenger.

An auction sale tainted by inadequate publicity, absence of genuine competition, gross inadequacy of price, and collusion between the judgment-debtor and the auction-purchaser may be treated as fraud on the court and the decree-holder. In such circumstances, limitation does not protect a transaction procured by fraud, and the court may use its inherent jurisdiction to prevent abuse of process and set aside the sale on its own motion. A person lacking direct interest may not have a maintainable challenge under Section 47 or Order 21 Rule 90, but information supplied by that person can still enable the court to act suo motu and order a fresh sale after proper proclamation.

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Issues: (i) whether the auction sale was liable to be set aside for fraud, collusion, and material irregularities in the conduct and proclamation of the sale; (ii) whether a person with no direct interest in the property had locus standi to challenge the sale under the Code of Civil Procedure.

Issue (i): Whether the auction sale was liable to be set aside for fraud, collusion, and material irregularities in the conduct and proclamation of the sale.

Analysis: The sale was found to have been conducted under circumstances showing inadequate publicity, absence of genuine competition, a grossly inadequate price, and an arrangement between the judgment-debtor and the auction-purchaser to keep the bidding nominal. The circumstances established that the process of sale was tainted by sharp practice and fraud on the Court and on the decree-holder. The Court held that limitation could not protect a transaction procured by fraud and that the Court had inherent power to prevent abuse of its own process and to set aside a tainted auction sale suo motu.

Conclusion: The auction sale was liable to be set aside and could not be confirmed.

Issue (ii): Whether a person with no direct interest in the property had locus standi to challenge the sale under the Code of Civil Procedure.

Analysis: The applicant was held not to have a maintainable challenge under Section 47 or Order 21, Rule 90, and his application was not competent on that basis. However, the information brought by him revealed the fraud and enabled the Court to act on its own motion. The absence of locus standi in the applicant did not curtail the Court's inherent jurisdiction to rectify abuse of process and do substantial justice.

Conclusion: The applicant lacked locus standi, but the Court could still act suo motu to set aside the sale.

Final Conclusion: The objections failed as independent proceedings, but the auction sale was nevertheless set aside on the Court's own motion and a fresh auction was directed after compliance with the requirements for a proper sale proclamation.

Ratio Decidendi: A Court may exercise its inherent powers to set aside an auction sale procured by fraud or collusion, and such power is not defeated merely because the immediate applicant lacks locus standi or because limitation is invoked against a fraudulently obtained result.

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