Decided on August 20,2003



- (1.) The Nedungadi Bank Ltd. (Original decree holder) and the Punjab National Bank, its successor by amalgamation (the present decree holder) are the appellants. The appeal is directed against an order passed by the executing Court dismissing an application filed by the original decree holder for cancellation of sale on grounds of fraud and material irregularity.
(2.) Heard Sri. K.P. Balasubramanian, counsel for the appellants and Sri.C.M. Andrews, counsel for the 15th respondent as well as Sri. M.P. Ashok Kumar, counsel for the 13th and 14th respondents. Perused the lower court records.
(3.) The decree was one for sale of immovable properties based on a mortgage in favour of the original decree holder. A - schedule to the decree had four items of immovable properties out of which item No. 4 was situated outside the local limits of the Payyannur Sub Court wherein the execution proceedings were initiated. As on the date of the execution petition, ie., 27.8.1991, the amount due under the decree was Rs. 6,66,237.70. Execution was sought by sale of the properties, item Nos. 1 to 3 in A - schedule to the decree. The original decree holder suggested upset price of Rs. 60,000/- for item No. 1, Rs. 75,000/- for item No. 2 and Rs. 65,000/- for item No. 3. The 13th judgment - debtor (13th respondent herein) filed objections seriously contending that the market value of the properties is far above the upset price suggested by the original decree holder. Nevertheless the Court accepted the decree holders suggestions and fixed Rs. 60,000/-, Rs. 75,000/-, and Rs. 65,000/- as upset prices respectively for item Nos. 1 to 3. E.A. No. 202 of 1992 filed by the original decree holder under O.21 R.72 for leave to bid in the auction was allowed by the court. In the auction held on 7.1.1993, item Nos. 1 and 2 were purchased by the 14th respondent for Rs. 60,100/- and 75,100/- and item No. 3 was purchased by the 15th respondent for a sum of Rs. 65,300/-. The original decree holder filed the instant application invoking O.21, R.90 of the Code, alleging fraud, collusion and material irregularity. The application was stiffly resisted not only by the auction purchasers, but also by respondents Nos. 11 and 13 who were the owners of the properties. A clerk of the original decree holder in charge of litigation matters was examined as PW.1 on behalf of the petitioner, while no counter evidence whatsoever was adduced on behalf of any of the respondents. The application was dismissed by the executing court which took the view that the petition was short of specific pleadings regarding the fraud alleged; that the court having accepted the upset prices suggested by the original decree holder, it was not open to that decree holder to contend that there has been undervaluation; that the court having granted leave to the original decree holder to bid in auction and that decree holder having not participated in the auction, there is no warrant for a contention that a higher price could have been realised in a proper sale. The court also refused to accept the version of PW 1 that two or three other persons who had been brought over by the Bank to participate in the sale were weaned away by the judgment debtors. According to the court, the circumstance that the auction purchasers were close relatives of the judgment - debtors by itself will not justify an inference regarding perpetration of fraud.;

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