Summary
| Category | Data |
|---|---|
| Court | Supreme Court of India |
| Case Number | C.A. No.-008887-008887 – 2011 |
| Diary Number | 9413/2009 |
| Judge Name | HON’BLE MR. JUSTICE SANJAY KUMAR |
| Bench |
HON’BLE MR. JUSTICE SANJAY KUMAR HON’BLE MR. JUSTICE ALOK ARADHE |
| Concurring or Dissenting Judges | Both Judges delivered a unanimous judgment |
| Precedent Value | Binding |
| Overrules / Affirms | Affirms the bar under Order XXI Rule 90(3) CPC and the decision in Desh Bandhu Gupta |
| Type of Law | Civil Procedure |
| Questions of Law | Whether Order XXI Rule 90(3) CPC bars a judgment debtor from raising the ground under Rule 66(2)(a) CPC—that only a necessary portion of property be sold—if not raised before the sale proclamation was drawn up. |
| Ratio Decidendi |
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| Judgments Relied Upon |
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| Logic / Jurisprudence / Authorities Relied Upon by the Court | Statutory interpretation of Order XXI Rules 66(2)(a) and 90(3) CPC; the legislative mandate introduced by the 1976 amendment; principle of “caveat actor” in execution proceedings. |
| Facts as Summarised by the Court | A decree for ₹3.75 lakh was passed in 1997 and execution of decree led to multiple price-reduction applications, notices and ex parte proceedings. The property (2,120 sq ft) was sold in 2002 for ₹11.03 lakh. Debtors sought to set aside sale in 2002 under Rule 90 CPC alleging lack of notice for price reduction and non-compliance with Rule 66; applications were dismissed. High Court set aside sale for breach of Rule 66(2)(a) without applying bar under Rule 90(3). Supreme Court restored sale certificate, applying Rule 90(3) bar to belated challenge. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts |
| Persuasive For | High Courts and litigants handling execution petitions |
| Distinguishes | Ambati Narasayya and Takkaseela Pedda Subba Reddi (pre-amendment Rule 90 CPC context) |
| Follows | Desh Bandhu Gupta v. N.L. Anand & Rajinder Singh ((1994) 1 SCC 131) |
What’s New / What Lawyers Should Note
- Confirms that Rule 90(3) CPC operates as a bar against any ground—such as improper sale of entire property under Rule 66(2)(a)—not raised before the sale proclamation.
- Clarifies that post-1977 amendment, a debtor who had notice and did not object pre-sale cannot challenge sale later.
- Reaffirms that absence of notice still permits a late challenge, but only where no notice was served.
- Emphasises counsel must vigilantly raise all available execution objections before the proclamation date.
- Strengthens reliance on Desh Bandhu Gupta for procedural compliance in execution sales.
Summary of Legal Reasoning
- Statutory Bar under Rule 90(3) CPC: Acknowledged the 1976 amendment inserting sub-rule (3), which precludes entertaining any ground not taken on or before the sale proclamation.
- Duty under Rule 66(2)(a) CPC: Reiterated existing law that the executing court must sell only so much of the property as necessary to satisfy the decree (Ambati Narasayya; Takkaseela Pedda).
- Pre- vs Post-amendment Distinction: Held that the bar in Rule 90(3) applies only to sales conducted after 1 Feb 1977; pre-amendment sales remain governed by earlier Rule 90 without sub-rule (3).
- Notice and Acquiescence: Borrowed from Desh Bandhu Gupta: if debtor received notice of sale terms and remained inactive, Rule 90(3) forecloses later objections, even on material irregularity.
- Application to Present Case: Found debtors were duly served at each price-reduction stage, participated and then refrained from challenging the unnecessary sale of whole property. Held they are barred from raising that ground now; High Court’s order set aside.
Arguments by the Parties
Petitioners (Auction Purchaser and LRs)
- Order XXI Rule 90(3) CPC bars any post-sale challenge that could have been raised before sale proclamation.
- Debtors had repeated notice and opportunities at each price-reduction stage but never objected to quantum of sale under Rule 66.
- Lower courts’ refusals to set aside sale are correct and should be affirmed.
Respondents (Judgment Debtors)
- Executing court violated its mandate under Rule 66(2)(a) CPC by selling entire property when part sale would suffice.
- Sale proclamation for reduced upset price was not served, thus debarring them from objecting before sale.
- Sale should be set aside as void for contravention of procedural mandate.
Factual Background
In 1995 a decree for ₹3.75 lakh was passed against the judgment debtors. Execution proceedings followed with attachment of their 2,120 sq ft property and multiple rounds of upset-price reductions from ₹16.25 lakh to ₹11 lakh. No bids were received until the final auction on 12 September 2002, when the auction‐purchaser bid ₹11.03 lakh. The debtors then filed applications under Order XXI Rule 90 CPC to set aside the sale, arguing non-compliance with Rule 66(2)(a) and lack of notice for price reductions. The executing court and first appellate court dismissed their applications; the High Court set aside the sale for breach of Rule 66 without applying Rule 90(3). The Supreme Court restored the sale, holding Rule 90(3) bars their belated challenge.
Statutory Analysis
- Order XXI Rule 64 CPC: Mandates executing court to apply its mind to sell only so much property as necessary to satisfy the decree.
- Order XXI Rule 66(2)(a) CPC: Requires proclamation terms to specify the property and boundaries “as fairly and accurately as possible.”
- Order XXI Rule 90 CPC (Pre-1977): Allowed setting aside sale for material irregularity or fraud; no temporal bar.
- Order XXI Rule 90 CPC (Post-1977): Sub-rule (3) introduced a bar on entertaining any ground not taken on or before the sale proclamation date.
Alert Indicators
- ✔ Precedent Followed – Upholds Desh Bandhu Gupta’s application of Rule 90(3) CPC as a bar to post-sale objections.