IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 26TH DAY OF APRIL, 2019 BEFORE THE HON'BLE MR.JUSTICE ASHOK G. NIJAGANNAVAR M.F.A. NO.1791 OF 2019 (CPC) BETWEEN:
SRI BORAIAH, S/O LATE KUNTA BORAIAH, AGED ABOUT 77 YEARS, R/AT NO.78/2, 9TH CROSS, 15TH MAIN, J.C. NAGAR, KURUBARAHALLI, BENGALURU - 86. ... APPELLANT (BY SRI SAMEER S N, ADVOCATE) AND:
1. NAGABYRAIAH, S/O LATE BORIAH AGED ABOUT 56 YEARS, R/AT NO.88, MALLESHWARAM COLONY, KHB MAIN ROAD, IJOORU, RAMANAGARA DISTRICT - 562101.
2. SHIVAKUMAR, S/O BORAIAH, AGED ABOUT 42 YEARS, R/AT NO.78/2, 9TH CROSS, 15TH MAIN, J.C. NAGAR KURUBARAHALLI, BENGALURU - 86. ... RESPONDENTS (BY SRI KAMALESHWARA POOJARY, ADV. FOR R1) **** THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER ORDER 43 RULE 1(J) OF THE CPC, AGAINST THE ORDER DT.21.02.2019 PASSED ON IA NO.10 IN EX.3407/2016 ON THE FILE OF THE 31ST ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU CITY (CCH-14), DISMISSING IA NO.10 FILED U/O.21 RULE 90 OF CPC.
THIS APPEAL COMING ON FOR ORDERS THIS DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT This appeal is filed challenging the impugned order dated 21.02.2019 passed on I.A. No.10 under Order XXI Rule 90 of CPC in Execution No.3407/2006 by the XXXI Additional City Civil & Sessions Judge (CCH-14), Bengaluru.
02. The facts briefly stated are that the appellant being the judgment debtor No.1 and owner in possession of the property bearing No.78/2, situated at 9th cross, 15th main, J.C. Nagar, Kurubarahalli, Bengaluru-86, had filed an application under Order XXI Rule 90 of CPC, for setting aside the sale dated 03.11.2018. The Trial Judge dismissed the application. Being aggrieved by the said order, the appellant has preferred the present appeal.
03. The grounds urged in the appeal are that the Trial Judge did not call for valuation of the property for the purpose of auction either from the decree holder or judgment debtor No.1. The Trial Judge did not decide on the price for the purpose of sale. The Trial Judge has committed an error in holding that the judgment debtor has failed to prove the fraud played upon him. The Trial Judge has failed to consider the grounds that the court bid was not notified for prospective bidders.
04. Reiterating the contentions made in the appeal memo, the learned counsel for the appellant would contend that the valuation of the property is not shown in Appendix-E, which is the format prescribed in CPC. There is material irregularity in conducting the auction sale, which has resulted in miscarriage of justice. In support of his contention, he has relied on a judgment of the High Court of Karnataka in M.F.A. No.4538/2006 in the case of Y.Rupla Naika vs. Mohammed Musthafa and others.
05. Per contra, the learned counsel for the respondents submitted that in the present execution petition, four times proclamation was issued by the Court. On two occasions, sale proclamation could not be executed. Thereafter, on the fourth occasion, the decree holder himself had participated in the public auction and purchased the suit schedule property. There is no material irregularity, as alleged by the judgment debtor. No justifiable grounds are made out to set aside the impugned order. Thus, the appeal deserves to be dismissed.
06. In view of the rival contentions, the only question that requires to be answered is whether there are valid grounds that the trial Court has committed error in rejecting I.A. No.10 under Order XXI Rule 90 of CPC.
07. It is an admitted fact, that the decree holder had filed an execution petition when the judgment debtor failed to pay the decretal amount and the property was brought for auction sale four times. One of the main contention of the counsel for the appellant is that the valuation of the property is not maintained in the Appendix-E and the valuation should have been suggested by the judgment debtor on decree holder. In the instant case, the order passed by the executing Court discloses that the decree holder had suggested the value before the Court regarding the valuation of the property showing it as Rs.50.00 lakhs. It is pertinent to note that, both the judgment debtor / decree holder had filed Joint Memo dated 10.07.2018, which reads as under:
“The Objector and Judgment Debtor in the above Execution Petition most respectfully submit that, they are ready to pay the decretal amount with agreed rate of interest and other cost within three months from today to the Decree holder and as a token of understanding they are tendering D.D. of Rs.5,00,000/- to the decree holder bearing D.D. No.347301 dated 5.7.2018 drawn on Canara Bank.
In the event the Objector and JDR fail to pay the amount within three months, they have no objection to auction E.P. schedule property in public and they have also no objection for Decree holder to participate in the bid and purchase the E.P. schedule property.
Wherefore, both Decree holder, Objector and J.D.Rs. most respectfully pray to grant three month time by accepting this Joint Memo as last chance to the J.D.Rs. and Objector in the interest of justice and equity.”
08. After filing of the Joint Memo and on expiry of 3 months period as prayed for by the judgment debtor in the Joint Memo, the auction sale was conducted. Thus, the grounds urged by the appellant regarding fraud or misrepresentation are not at all justified. Even according to the decree holder, the valuation was suggested regarding the property to be auctioned and the same has been accepted by the executing Court. Merely because, the decree holder himself purchased the property for a sum of Rs.48.00 lakhs, less than the valuation suggested as Rs.50.00 lakhs is not a ground to set aside the sale.
09. In a decision reported in AIR 2002 KAR 61 in the case of Samrat Ashok Exports Ltd. vs Asst. Provident Fund Commissioner and Recovery Officer and others, the High Court has observed as under:
“15. …. The Court sale is a forced sale and notwithstanding the competitive element of a public auction, the best price is not always forthcoming. The valuer’s report though good as a basis, is not as good as an actual offer and there are bound to be variations within limits between such an estimate, however, careful, and the real bid’s by the seasoned businessman. Mere inadequacy of the price cannot demolish a Court sale. Further, if the Court sale are too frequently adjourned with a view to obtaining a still higher price, prospective bidders will lose faith in the actual sale taking place and may not attend the auction. What is expected of the Court is to make a realistic appraisal of the factors in a pragmatic way and if satisfied that in the given circumstances the bid acceptable it should conclude the sale.”
10. In the instant case, 3-4 times sale proclamation was postponed, and later on the fourth occasion, the decree holder himself has purchased the property in auction sale for the price which is nearer to the valuation suggested. Thus, in view of the observation made in the aforesaid decision, there are no grounds to hold that the auction sale is bad on account of material irregularity or fraud.
11. The counsel for the appellant has relied on a judgment of the High Court of Karnataka in M.F.A. No.4538/2006 in the case of Y.Rupla Naika vs. Mohammed Musthafa and others. In the aforesaid decision, it is observed that the estimate of the value of the property is material fact to enable the purchaser to know its value. It must be verified as accurately and fairly as possible so that the intending bidders are not misled or to prevent them from offering inadequate price or to enable them to make a decision in offering adequate price. But, in the instant case, the judgment debtor even after failing in the said case, has not made any efforts to file the memo regarding valuation of the property. Under these circumstances, the observation made in the aforesaid decision are not aptly applicable to the facts in the present case.
12. On going through the reasons in the impugned order, this Court is of the view that there are no valid grounds to interfere with the impugned order.
13. For the foregoing reasons, the miscellaneous first appeal is dismissed.
No order as to costs.
Sd/- JUDGE SJ