Decided on December 03,1970

Venkitammal And Anr. Appellant
JANAKI AMMAL Respondents


G.Ramanujam, J. - (1.) THE Judgment -debtors, whose properties have been sold in execution of the mortgage decree in O.S. No. 79 of 1967 on the file of the District Munsif, Sattur and whose application for setting aside the sale had been dismissed, are the petitioners herein. The execution sale was sought to be set aside mainly on three grounds : (1) that the Court had given permission to the decree -holder under Order 21, Rule 72, Civil Procedure Code, to bid and set -off without notice to the petitioners, (2) that such leave to bid and set -off had been given even at the first sale, and (3) that there has been a gross inadequacy in the price when the decree -holder purchased the properties at Rs. 2,100 while the properties are alleged to be worth more than a Rs. 40,000. As regards the first and second grounds, the first Court overruled them and held that the provisions of the Code of Civil Procedure, do not contemplate that a notice to the judgment -debtor should be given before leave to bid and set -off is given to the decree -holder and that such leave to bid and set -off can be given only in respect of second and subsequent sales and not in the first sale, and that as such the purchase by the decree -holder on the basis of the leave to bid and set -off granted by the Court cannot be said to be illegal or void. As regards the third ground relating to the allegation of gross undervalue and the inadequacy of the price, it took the view that the value of the properties cannot be as large as claimed by the petitioners and that the prices for which the properties have been purchased by the decree -holder were fair and reasonable. It rejected the two documents, filed by the petitioners judgment -debtors; Exhibit A -1, an earlier proclamation in E.P. No. 271 of 1961 in O.S. No. 171 of 1960 on the file of the same Court, and Exhibit A -2, another proclamation issued on 10th October, 1967 in E.P. No. 196 of 1967 in O.S. No. 320 of 1967 on the file of the same Court, to show that the houses in question were valued for more than Rs. 10,000 in 1962 and for more than Rs. 8,000 in 1967 on the ground that the fact that the properties were not sold when proclaimed earlier showed that the properties were not worth the price mentioned in the proclamation and that there is no reason given as to why the properties were not sold for the prices previously fixed. Ultimately the first Court held that there was no irregularity in the conduct of the sale.
(2.) THE Appellate Court had also expressed the view that the permission granted under Order 21, Rule 72 without notice to the judgment -debtors was valid as no notice to the judgment -debtor is contemplated under that Rule, and that there is also no prohibition for the Court granting the permission under Order 21, Rule 72 even in the first sale. As regards the value also, the appellate Court held that the price fetched was fair and reasonable. Regarding Exhibits A -1 and A -2 the Appellate Court expressed the view, that though they show that the upset price for the suit properties was fixed at a larger amount in the earlier orders, it was not known whether there were any bidders for such prices and as such those documents might not be of any help to find out the true value of the property. Both the Courts below have also expressed that the petitioners having remained ex parte after service of notice in the E P. and having allowed the properties to be sold should not be heard to say that the prices fetched were too low. In this revision the learned Counsel for the petitioners contends that the mere fact that the petitioners remained ex parte after service of the notice in the E P does not debar them from questioning the 'sale if it has been held contrary to the provisions of the statute or if the sale is vitiated by any irregularity. The learned Counsel contends that the executing Court is in error in granting leave to bid and set -off even in the first sale and that too without notice to the judgment -debtors. Reliance is placed on the following decisions.
(3.) IN Sheonath Doss v. Janki Prosad Singh, I.L.R.(1899) Cal. 132, it has been held that leave to bid and setoff should be given very cautiously and the relevant observations are as follows: It should, in our opinion, be given only when it is found, after proceeding with the sale, that no purchaser at an adequate price can be found, and even then it should be given only after some enquiry, that the sale proclamation has been duly published. In Raghavachariar v. Murugesa Mudali : AIR 1923 Mad 635 Schwabe, C.J., dealing with the consideration to be taken into account while acting under Order 21, Rule 72 observed as follows: The main question for the Court to consider is whether it is to the advantage or disadvantage of every one concerned in order to obtain the highest price that the plaintiff should be allowed to bid or not. In Varadaraju Pillai v. Gandapodi Nanniar, (1950) M.W.N. 111 :, (1950) 1 M.L.J. 680 Krishnaswami Nayudu, J., after referring to the decision in Sheonath Doss v. Janki Prosad Singh, I.L.R.(1899) Cal. 132, and the observations in Raghavachariar v. Murugesa Mudali, I.L.R.(1923) Mad. 583 :, 44 Mad. 680, expressed as follows: I respectfully agree with the learned Judges in this decision, Raghavachari's case, I.L.R.(1923) Mad. 583 :, 44 Mad. 680, that the question to be considered is whether it will be to the advantage of every one concerned that leave to bid ought to be given on the application of the decree -holder. I could also observe that in this case the application for leave to bid was made for the very first sale and even for the first sale the decree -holder without any material that he could place before the Court, apprehends that the properties may not fetch a good price. Though I am not in entire agreement with the conditions laid down by the learned Judges in the Calcutta case to enable a decree -holder to obtain permission to bid I am however of opinion that the power to grant leave to bid must be cautiously exercised and unless the Court is satisfied from the circumstances shown in the affidavit that otherwise an advantageous sale could not be obtained, no such leave should be granted. In Mohammed Mustafa Maracayar v. Udaianachi Ammal : (1966) 79 L.W. 187 :, (1966) 1 M.L.J. 373, Ananthanarayanan, C.J. laid down that where the permission to bid and set -off is sought by a mortgagee, that discretion should be exercised with considerable care, that instances of that kind should be scarce and not liberal, that only where attempts to bring the property to sale has become unsuccessful on a prior occasion and the mortgagee has become unable to realise the debt which is very old, leave can be granted in such cases, that the discretion of the Court in granting leave should be judicially exercised and that it is desirable that the order granting permission should specify the grounds on which it is granted, particularly where the objections thereto have been overruled. The above decisions indicate that the Court, while considering the grant of permission under Order 21, Rule 72, should take into account certain objective matters and that the discretion should be exercised on judicial lines and not arbitrarily. Though Order 21, Rule 72, does not provide for any notice to the judgment -debtor or any reasoned order being given by the Court, it is desirable for the Court to give notice to the judgment -debtor to show cause as to why the permission should not be granted under Order 21, Rule 72 and to pass a reasoned order if objections are raised. Though the statute does not provide for any notice, it is well established that the Court, exercising judicial functions, should normally give notice to the patty who is likely to be affected by that order and cannot pass an order behind the back of the party, offending the principles of natural justice.;

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