Decided on June 26,1970



- (1.) The appellant is the judgment-debtor. The respondent obtained a mortgage decree against the appellant in the year 1962 in O.S. No. 72 of 1961 on the file of the Subordinate Judge's Court, Ramanathapuram. The hypotheca is the cinema theatre in Rajapalayam. Admittedly this was valued by the Commissioner appointed by Court at Rs. 2,91,320. In or about 1968 when the theatre was brought to sale pursuant to the mortgage decree the amount due under the decree was about Rs. 2,38,695. On the basis of the value as fixed by the Court, the upset price was also fixed but was reduced from, lime to time as there were no bidders at such auctions purported to be held in execution of the decree. Ultimately, on 12th August, 1969, the upset price was reduced to Rs. 2,25,000 and the properly was also sold for Rs. 2,25,000. On an earlier occasion this Court had to consider whether a sale of this very hypotheca in execution of the above decree for a sum of Rs. 2,100 subject to encumbrances was proper. In (K. Ramachandran v. S.S. Somasundaram Chettiar and Ors.) L.P.A. No. 98 of 1964 Anantanarayanan, C. J., and Natesan, J., by their order dated 7th March, 1967, set aside the sale and found that there were certain suspicious circumstances which warranted the forced sale being set aside. The proceedings that followed thereafter and which culminated in the impugned sale are the subject-matter of the appeal before us.
(2.) The appellant contended that the property was worth very much more than the decree amount and that in the sale held on 12th August, 1969, it was knocked off for a ridiculously low price, In those circumstances he filed an application under Section 151, Civil Procedure Code, along with his application for setting aside the sale under Order 21, Rule 90 for an order that the application may be accepted without calling for any security as required under the rule. This was opposed by the respondent on the ground that under Order 21, Rule 90 it is imperative that such security to the satisfaction of the Court for an amount equal to that mentioned in the sale warrant or to that realised by the sale, whichever, is less, has to be called for or in the alternative a direction to deposit such amount in Court be made. The respondent in his counter referred to various activities of the appellant, characterised by him as unlawful, and ultimately he would state that the sale having been concluded after several' adjournments no further indulgence should be given and if at all the application under Order 21. Rule 90 filed by the appellant has to be entertained, it should be done after calling for security or after a direction to the appellant to _ deposit the amount as required under the rules. The learned Subordinate Judge, Sivaganga, who enquired into the matter, finds that the property was valued by the Commissioner at Rs. 2,91,320 but without adverting to any further facts or material but following the imperative mandate under Order 21, Rule 90, Civil Procedure Code, was of the view that there was no reason to dispense with the security as required therein. He ultimately dismissed the application with a direction to the appellant to furnish security for a sum of Rs. 2,25,000. It is as against this the present appeal has been filed.
(3.) Learned Counsel for appellant contends that it is not incumbent on the Court at all times to demand additional security without considering the merits of the case and the material on record. His case is that the circumstances of the instant case cannot prompt the Court to call for fresh security end in any event as the value of the hypotheca. is far in excess of the decree amount, the lower Court ought not to have summarily rejected the application for dispensing with the security on the basis of the antecedent history of the appellant and without adverting to the relevant material on record. Learned Counsel for the respondent would urge that the call for security is well founded and the Court has no jurisdiction to pass any other order as the statutory prescription in Order 21, Rule 90, enjoins upon the Court to do so.;

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