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 |
| Precedent Value | Binding Authority |
| Overrules / Affirms | Affirms the statutory bar under Order XXI Rule 90(3) CPC |
| Type of Law | Civil Procedure (CPC) |
| Questions of Law | Whether Order XXI Rule 90(3) CPC precludes a judgment debtor from setting aside an execution sale for not selling only so much property as necessary when the debtor could have raised that ground before the sale proclamation. |
| Ratio Decidendi | The 1976 amendment inserting Rule 90(3) CPC bars any application to set aside a sale on grounds that could have been taken before the sale proclamation. A judgment debtor with notice who acquiesces in successive reductions of upset price, yet fails to object timely, is precluded from belated pleas. |
| Judgments Relied Upon |
|
| Logic / Jurisprudence / Authorities Relied Upon | Interpretation of Rule 90(3) as a “caveat emptor” on judgment debtors to raise all pre-sale objections; legislative mandate under amendment; duty under Rule 66(2)(a) CPC to sell only necessary property, subject to waiver by debtor’s failure to object. |
| Facts as Summarised by the Court | The decree-holder’s property was auctioned in 2002 after successive reductions of upset price. Judgment debtors participated in execution, had notice of each price reduction, but did not object that only part of the property should be sold. High Court set aside sale; SC reversed. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts |
| Persuasive For | Other High Courts when interpreting Rule 90(3) CPC |
| Distinguishes |
|
| Follows | Desh Bandhu Gupta vs. N.L. Anand & Rajinder Singh ((1994) 1 SCC 131) |
What’s New / What Lawyers Should Note
- Order XXI Rule 90(3) CPC bars any ground for setting aside a sale that could have been taken before the date of sale proclamation.
- A judgment debtor who receives notice of successive reductions in upset price and fails to object is precluded from belatedly challenging the sale for not selling a portion only.
- High Courts must give full effect to the statutory bar under Rule 90(3) and not apply Rule 66(2)(a) CPC independently to override Rule 90(3).
- Lawyers for purchasers can rely on this decision to resist post-sale applications when debtors had notice and time to object.
Summary of Legal Reasoning
- Identified the narrow issue: effect of Rule 90(3) CPC on belated grounds to set aside an execution sale.
- Traced the pre-1977 Rule 90 CPC and its substitution by the 1976 amendment inserting clause (3).
- Reviewed pre-amendment precedents (Ambati Narasayya; Takkaseela Reddi) requiring sale of only necessary property.
- Analysed Desh Bandhu Gupta’s post-amendment holding that, with notice and acquiescence, a debtor is barred from assailing a sale.
- Applied the bar: debtors had notice of price reductions, failed to object timely to partial sale; HC erred in ignoring Rule 90(3).
- Concluded that the High Court order setting aside the sale must be reversed and earlier orders affirmed.
Arguments by the Parties
Petitioner (Auction Purchaser)
- Judgment debtors had notice of each upset price reduction and failed to raise the objection that only part of the property needed sale.
- Order XXI Rule 90(3) CPC bars any belated ground not raised before sale proclamation.
- The executing Court complied with procedure; sale is valid.
Respondents (Judgment Debtors)
- Executing Court did not examine whether selling only part of the property would satisfy the decree (Rule 66(2)(a) CPC).
- Sale of entire property was illegal and caused substantial injury.
- Claimed not to have received notice of final price reduction.
Factual Background
In 1995 the decree-holder obtained an ex parte decree for ₹3.75 lakh with interest. An execution petition sought sale of a house site in Chennai. From 1999 to 2002 the upset price was successively reduced (from ₹16.25 lakh to ₹11 lakh) after unsuccessful auctions. On 12.09.2002 the property was knocked down for ₹11.03 lakh to G.R. Selvaraj, who paid and obtained a sale certificate in January 2003. The judgment debtors then filed an application under Order XXI Rule 90 CPC to set aside the sale, alleging procedural irregularities, including sale of the entire property. Lower courts dismissed; the High Court set aside the sale; Supreme Court reversed.
Statutory Analysis
- Order XXI Rule 66(2)(a) CPC: executing Court must sell only so much property as is “necessary to satisfy the decree.”
- Order XXI Rule 90 CPC (pre-1977): allowed setting aside sale for material irregularity or fraud.
- Amendment by Act No. 104 of 1976 (effective 01.02.1977) inserted Rule 90(3): “No application to set aside a sale…shall be entertained upon any ground which the applicant could have taken on or before the date on which the proclamation of sale was drawn up.”
- No constitutional issues invoked.
Alert Indicators
- ✔ Precedent Followed – Reaffirms the bar under Order XXI Rule 90(3) CPC as interpreted in Desh Bandhu Gupta.