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THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 07TH DAY OF MARCH, 2022
PRESENT
THE HON’BLE MRS.JUSTICE S.SUJATHA
AND
THE HON’BLE MR. JUSTICE RAVI V. HOSMANI
W.A.No.3785/2019 (KLR – RES)
BETWEEN :
1 . SRI PRAMOD @ PRASHANTH S/O LATE BABU SHETTY AGED ABOUT 44 YEARS
2 . SMT.LATHAMANI D/O LATE BABU SHETTY AGED ABOUT 31 YEARS
3 . SRI PRATHAM S/O THARANATHA AGED ABOUT 12 YEARS
4 . SMT.SINCHANA D/O THARANATHA AGED ABOUT 10 YEARS
APPELLANT NO.3 & 4 ARE MINORS THEY ARE REP BY THEIR MOTHER SMT.PRAMILA W/O THARANATHA, MAJOR.
ALL ARE R/AT SURIBAILU HOUSE BOLANTHUR VILLAGE & POST BANTWAL TALUK D.K.DISTRICT-574222
...APPELLANTS
(BY SRI G.RAVISHANKAR SHASTRY, ADV.)
- 2 - AND :
1 . DEPUTY COMMISSIONER DAKSHINA KANNADA DISTRICT MANGALORE-575001
2 . SRI THARANATHA S/O LATE BABU SHETTY AGED ABOUT 44 YEARS SURIBAILU HOUSE BOLANTHUR VILLAGE & POST BANTWAL TALUK D.K.DISTRICT-574222
3 . SMT.NALINA @ NALINAKSHI W/O LATE BABU SHETTY AGED ABOUT 60 YEARS SURIBAILU HOUSE BOLANTHUR VILLAGE & POST BANTWAL TALUK D.K.DISTRICT-574222
4 . SRI DINESH SHETTY S/O LATE BABU SHETTY AGED ABOUT 46 YEARS SURIBAILU HOUSE BOLANTHUR VILLAGE & POST BANTWAL TALUK, D.K.DISTRICT-574222
5 . SRI D.RAMA RAO AGED ABOUT 77 YEARS PADMA NILAYA, KALLADKA BANTWAL TALUK D.K.DISTRICT-574222
6 . SRI RAJESH C/O D.RAMA RAO AGED ABOUT 66 YEARS PADMA NILAYA, KALLADKA BANTWAL TALUK D.K.DISTRICT-574222
7 . SMT.REKHA N., C/O D.RAMA RAO
- 3 - AGED ABOUT 45 YEARS PADMA NILAYA, KALLADKA BANTWAL TALUK D.K.DISTRICT-574222
8 . SRI RADHAKRISHNA C/O D.RAMA RAO AGED ABOUT 48 YEARS PADMA NILAYA, KALLADKA BANTWAL TALUK D.K.DISTRICT-574222
9 . SRI RAM GANESH PRABHU S/O GOPAL PRABHU, MAJOR, R/AT BANTWALA MOODA VILLAGE BANTWAL TALUK D.K.DISTRICT-574211
10 . THE TAHASILDAR BANTWAL TALUK D.K.DISTRICT-574211
11 . SAMAJA SEVA SAHAKARI BANK (N) BANTWAL (NO.7149) REP BY CHIEF MANAGER PREETHI BUILDING, VITTAL ROAD KALLADKA, BANTWAL TALUK D.K.DISTRICT-574222
…RESPONDENTS
(BY SRI G.V.SHASHIKUMAR, AGA FOR R-1 & R-10; SRI ABHISHEK MARLA M.J., ADV. FOR R-2, R-3 & R-4; SRI KRISHNA MOORTHY D., ADV. FOR R-5; SRI A.KESHAV BHAT, ADV. FOR R-9; R-6, R-8 & R-11 ARE SERVED; VIDE ORDER DATED 18.12.2019 NOTICE TO R-7 IS HELD SUFFICIENT.)
THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER DATED 20.08.2019 PASSED IN W.P.No.10248/2019 AND W.P.Nos.10929-931/2019 AND W.P.No.10248/2019 AND W.P.Nos.10929-931/2019 MAY BE ALLOWED AS PRAYED THEREIN AND THIS WRIT APPEALS BE ALLOWED WITH COSTS THROUGHOUT.
- 4 - THIS APPEAL HAVING BEEN HEARD AND RESERVED, COMING ON FOR PRONOUNCEMENT OF JUDGMENT, THIS DAY, S. SUJATHA, J., DELIVERED THE FOLLOWING:
J U D G M E N T
This intra-Court appeal is directed against the order dated 20.08.2019 passed by the learned Single Judge in W.P.No.10248/2019 & W.P.Nos.10929- 931/2019, whereby the Writ Petitions filed by the appellants herein have been dismissed.
The respondent Nos.5 to 8 had filed complaint under Section 12 of the Consumer Act, 1986 in Complaint Nos.197/2011, 198/2011, 199/2011 and 201/2021 against M/s. Nalina Finance Corporation alleging deficiency in service inasmuch as the money invested in fixed deposits not being returned. The said complaints came to be allowed and four awards were passed directing M/s. Nalina Finance Corporation represented by its Managing Partners to pay the sum of Rs.4,25,000/-, Rs.3,50,000/-, Rs.3,75,000/- and Rs.3,00,000/- respectively with interest at 14% p.a.,
- 5 - from January 2019 till the date of payment. Pursuant to the orders passed in aforesaid complaints, the complainants filed Execution Petition Nos.13/2012, 14/2012, 15/2012 and 17/2012 under Section 27 of the Consumer Protection Act read with Section 200 of Cr.P.C. In the said Execution Petitions subject properties bearing Sy.No.13/2, 88/2, 90/3, 88/3, 90/2, 104/2, 14/1, 89/5BP2, 89/5A, measuring 0-80 Acres, 0-84 Acres, 1-45 Acres, 0-86 Acres, 0-12 Acres, 0-17 Acres, -10 Acres, 0-79 Acres and 1-24 acres respectively situated at Bolanthur Village of Bantwal Taluk, D.K.District came to be attached. The said properties were brought to sale. The 9th respondent purchased the said properties measuring 9.37 acres in the public auction conducted on 25.10.2017 by the 10th respondent – Tahasildar, Bantwal. The said sale proceedings alleged to be suffering from material irregularity, the appellants filed petition under Section 176[1][a] of the Karnataka Land Revenue Act, 1964
- 6 - [‘Act’ for short] before the respondent No.1 which came to be dismissed by communication dated 31.05.2019. Form No.4 was forwarded by 10th respondent to jurisdictional Sub-registrar for effecting necessary entries in the register. Being aggrieved, the appellants preferred writ petition which came to be dismissed. Hence, this Writ Appeal.
Learned counsel for the appellants would submit that application under 167 [1] of the Act was filed by the appellants but no determination was made as required under the said provision, by the Revenue Officer. Appellants being the owners of the properties in question allotted to their share by virtue of the compromise decree passed in O.S.No.270/2013, no sale proceedings would have been initiated against the said properties attaching the same pursuant to the order passed by the Consumer Forum against Nalina Finance
- 7 - Corporation which was no way concerned with the appellants.
The appellants contended that the properties in question have been allotted to their share in the compromise decree dated 11.10.2013 passed in O.S.No.270/2013 on the file of the Principal Civil Judge & JMFC, Bantwal. D.K. There was no order of attachment passed in respect of the properties in question at the time of passing of the said decree. The District Consumer Forum, D.K., Mangalore, ignoring the decree in O.S.No.270/2013 and the subsequent revenue entries has passed an order directing the District Commissioner to recover the amount if not paid by attaching the subject properties. Pursuant to which, the Deputy Commissioner had issued recovery certificate and directed to recover the amount due by sale of the subject properties. Hence, the sale proceedings
- 8 - conducted by the respondent No.10 creating charge on the properties is wholly illegal.
Nextly, it was submitted that the paper publication for conducting the auction sale was made on 21.10.2017 and the auction sale was conducted on 25.10.2017 which is not in conformity with Order 21 Rule 68 of CPC. Minimum 15 days time was necessary for conducting the auction sale. Inviting the attention of the Court to Section 173 of the Act, it was argued that the properties to be sold, as far as may be practicable, be proportionate to the amount of the earnest of the land revenue to be recovered and the expensed of attachment on sale. For the recovery of Rs.14,50,000/- totally against the four awards with interest at 14% p.a., putting the properties to an extent of 9.34 acres for auction sale is bad in law. Learned counsel further submitted that in the notification minimum bid was fixed at Rs.31,65,960/-. The properties fetching high
- 9 - value of Rupees Six Lakhs per acre where Areca nut trees were standing were sold for a throw away price of Rs.34,00,000/- for 9.37 acres including the buildings i.e., the house property and the cow shed. Learned Single Judge has failed to appreciate these vital aspects in a right perspective and proceeded to dismiss the writ petitions and the same warrants interference by this Court. It was further submitted that the interest of the appellants with respect to possession of the properties has been safeguarded by this Appellate Court subject to depositing Rs.14,50,000/- before this Court by the appellants which has been duly complied with.
Learned counsel for the appellants submitted that the amount deposited before the State Commission has not been deducted from the total amount ordered by the District Consumer Forum while auctioning the properties. In support of his contentions,
- 10 - learned counsel has placed reliance on the following judgments: 1. Lakshmanasami Gounder V/s. Commissioner of Income Tax Selvamani [AIR (SCW) 1992 Page 551]
Ambati Narasayya V/s. M.Subba Rao and Another [AIR (SC) 1990 Page 119]
Learned counsel appearing for the respondent No.9 argued that these appellants have no locus to challenge the sale proceedings conducted pursuant to the orders passed by the Executing Court in executing the orders of the District Consumer Forum which has reached finality. The rights claimed over the properties in question on the basis of the collusive compromise decree in O.S.No.270/2013 is nothing but a device designed to deprive the rights of decree holder and the auction purchaser. The said O.S.No.270/2013 was filed by the father of the appellant Nos.3 and 4 respondent No.2 herein, subsequent to the order passed by the Consumer District Forum on 20.09.2011 in
- 11 - respect of the subject property claiming the same as a joint family property.
Learned counsel submitted that the respondent No.9 being a bonafide purchaser in the public auction, his rights has to be safeguarded. Thus, it was argued that the learned Single Judge extensively considering the material available on record vis-à-vis the provisions of the Act, has rightly dismissed the writ petitions which deserves to be confirmed by this Court. In support of his contentions, learned counsel has placed reliance on the following judgments: 1. Janak Raj V/s. Gurdial Singh and Another [1967 SCR (2) 77]
Janatha Textiles and Others V/s. Tax Recovery Officer and Another [Civil Appeal No.6539/2003, D.D. 16.05.2008]
Sadashiv Prasad Singh V/s. Harendar Singh and Others [Civil Appeal No.161/2014, D.D. 08.01.1947]
- 12 -
Learned Additional Government Advocate appearing for the respondent Nos.1 and 10 supporting the arguments of the learned counsel appearing for the respondent No.9 submitted that, appellants had neither made any reference to the application filed under Section 167 of the Act in the writ petition proceedings nor in the proceedings initiated under Section 176[1][a] of the Act or any acknowledgement has been filed for submitting such an application under Section 167 of the Act before the Competent Authority. It is for the first time, this ground has been raised by the learned counsel for the appellants in the writ appeal proceedings. Learned Additional Government Advocate has furnished the copies of the letter of District Consumer District Forum addressed to the Deputy Commissioner, Mangalore whereby reference has been made to recovery certificate issued under Section 25[3] of the CP Act and the balance amount payable to the complainant is shown after deducting the amount received in the State Commission.
- 13 -
Learned Counsel for respondent No.5/Complainant submits that the complainant has received the award amount pursuant to the sale proceeds to the extent deposited before the Consumer Forum. Learned counsel submits that the amount deposited earlier by the judgment – debtors/defaulters were deducted in issuing the certificate for recovery as land revenue.
We have heard the learned counsel appearing for the parties and perused the material on record.
Section 167 of the Act reads thus:
“167. Claims to immoveable property attached.— (1) If any claim is set up by a person not claiming under the defaulter, to the immoveable property attached under section 165, the Revenue Officer making the attachment shall hold a summary enquiry into the claim and after such enquiry may admit or reject the claim.
- 14 - (2) The person against whom an order is made under sub-section (1) may, within one year from the date of such order, institute a suit to establish the right which he claims to the property attached; but subject to the result of such suit, if any, the order shall be conclusive.”
Section 176[1][a] of the Act reads thus: “176. Setting aside sale.— (1) Where immovable property has been sold under this Chapter, the defaulter, or any person owning such property or holding an interest therein, may at any time within ninety days of the date of sale apply in the prescribed manner to the Deputy Commissioner to have the sale set aside,—
(a) on the ground of some material irregularity or mistake or fraud resulting in loss or injury to him.”
The main ground of challenge inasmuch as no adjudication made by the concerned authority on the application submitted under Section 167 of the Act is to
- 15 - be negated for want of adequate material to establish the same. No such ground was raised in the application filed under Section 176[1][a] of the Act nor in the Writ Petition proceedings. For the first time in the Writ Appeal proceedings, the said ground is raised regarding the objections filed under Section 167[1] of the Act before the Tahasildar, Bantwal. Annexure-W – copy of the objections filed under Section 167(1) of the Act is furnished along with the application filed under Order 41 Rule 27 of the Code of Civil Procedure [I.A.No.3/2021] sans any acknowledgment. Though the said document is dated 24.10.2017 for the reasons best known to the appellants, even in the writ appeal proceedings, the said I.A.No.3/2021 dated 22.06.2021 is filed on 22.07.2021. As such, we are not inclined to place this document on record as the same is not in conformity with the provisions of Order 41 Rule 27 of CPC.
- 16 - 15. At this juncture, it is beneficial to refer to the case of United India Insurance Company Ltd. vs. Muniswamy and Ors. (M.F.A. No. 10362/2018, D.D. 25.09.2021) where one of us Hon’ble SSJ was a member, it has been held thus: “15. Provisions of Order 41 Rule 27 CPC provide for an opportunity to parties for production of additional evidence before Appellate Court where trial Court refused to admit evidence, which ought to have been admitted or that party seeking to produce additional evidence establishes notwithstanding exercise of due diligence, such evidence was not within knowledge and could not have despite exercise of due diligence, be produced before passing of decree or that the Appellate Court requires it to enable it to pronounce judgment or for any other substantial cause. The averments in the application and affidavit do not make out any case for allowing the application. Firstly, it is not the case of applicant that tribunal refused to admit such evidence though produced
- 17 - before it. It was also not established that applicant was not aware of existence of such additional evidence and could not after exercise of due diligence produced it before Tribunal. The applicant not only examined himself, but also examined driver of vehicle before tribunal and availed sufficient opportunity. In fact, RW-1 has stated about the density register during cross-examination by the counsel for insurer. Having failed to produce the same before the trial Court, it cannot be sought to be produced before appellate Court. It is settled law that an application for production of additional evidence cannot be used as a tool to fill gaps in evidence. Therefore, applicant has not made out any substantial case.”
The same analogy applies squarely to the case on hand. Hence, the arguments advanced on non determination of the claim is baseless and must fail.
Nextly, application filed under Section 176[1][a] of the Act also pales insignificance for the
- 18 - reason that the right, title and interest over the subject property is claimed by the appellants based on the compromise decree passed in O.S.No.270/2013. One of the managing partner of M/s. Nalina Finance Corporation – Tharanatha, respondent No.2 herein, after suffering the judgment and decree before the Consumer Forum, has filed O.S.No.270/2013 seeking for partition before the Principal Civil Judge & JMFC at Bantwal, D.K., claiming the subject properties as joint family properties. In the said suit proceedings, compromise having been arrived between the parties, the subject property is said to have fallen to the extent of 5.30 acres to the joint share of the appellant No.2 with Smt.Nalinakshi and Sri Harisha in so far Sy.Nos.104/2, 14/1, 89/5BP2 and 89/5A measuring 0- 17. 3-10, 0-79, 1-24 acres respectively. The order passed by the District Consumer Forum has reached finality. In the Execution proceedings, the subject properties were attached and the auction sale was
- 19 - conducted. The original parties namely, the managing directors of M/s. Nalina Finance Corporation have not challenged the auction sale. The appellant Nos.1 and 2 being the children of Late Babu Shetty, one of the managing director and similarly, the children of Tharanatha, another managing director – appellant Nos.3 and 4 have challenged the auction sale conducted by the Tahasildar on 25.10.2017. Ex-facie the compromise decree appears to be a collusive decree, the same do not inspire any confidence to entertain their case. Section 176[1][a] of the Act contemplates that on the ground of some material irregularity or mistake or fraud resulting in loss of injury to the person owning such property or an interest therein, with respect to the immovable property sold under Chapter-XIV can seek for setting aside sale of the immovable property. In order to consider such application made under Sub- Section [1] of Clause [a], the Deputy Commissioner has to be satisfied after a summary enquiry that there has
- 20 - been some material irregularity, mistake or fraud in publishing or conducting the sale. Firstly, the applicants should establish that they are owning such property or holding an interest therein. Such rights and interest claimed by the appellants under the collusive compromise decree to stave off the creditors cannot be appreciated.
We are astound by the conduct of the managing partners of M/s. Nalina Finance Corporation who have not raised their voice against the sale proceedings conducted in the execution proceedings. On the other hand, they have set up their children to agitate the matter which was given up by them. Appellant Nos.3 and 4 are the children of the respondent No.2 who were not parties to the compromise decree in O.S.No.270/2013. No share in the subject property has been allotted to appellant No.1. Hence, it can be held without any hesitation, that they have no locus standi to
- 21 - challenge the auction sale. Learned Single Judge has rejected the Writ Petition further noticing that pursuant to auction sale conducted on 25.10.2017 confirmed on 02.05.2019 communication has been forwarded by the respondent No.10 through the jurisdictional Sub- registrar to effect necessary entries in the registration book and possession of the property has also been delivered to the successful bidder – respondent No.9.
The appellants have deposited a sum of Rs.14,50,000/- before this Court in compliance with the order dated 15.10.2019.
To buttress the arguments in respect of material irregularity, reliance was placed by the learned counsel for the appellants on Section 173 of the Act, which reads thus: “173. Sale not to be excessive.— The property to be sold moveable or immoveable, under the provisions of this Chapter, shall, as far as may be
- 22 - practicable, be proportionate to the amount of the arrear of land revenue to be recovered and the expenses of attachment and sale.”
Indisputably, 9 acres 37 guntas of land was sold in auction by making the sale proclamation by issuing the paper publication on 21.10.2017 and the auction sale was held on 25.10.2017. Out of the sale proceeds of Rs.34,00,000/-, a sum of Rs.25,53,475/- was paid by way of demand draft in favour of the president, D.K. District Consumer Forum, Mangaluru payable to the decree holder/complainant and a cheque for an amount of Rs.8,46,525/- was drawn in favour of the appellant Nos.1 and 2 and respondent Nos.2 to 4 and one Sri.Hariprasad. Though the said cheque was issued jointly in the names of the appellant No.2 and others, it is submitted that the said cheque has not been encashed, but the same does not vitiate the sale proceedings. The contention of the appellants that the amounts paid before the judgment debtors before the
- 23 - Consumer Forum is not acceptable since the Deputy Commissioner has acted on the certificate issued by the District Consumer Forum.
It would be apt to refer to the judgments cited by the learned counsel appearing for the parties. In Lakshmanasami Gounder supra, the Hon'ble Apex Court in the context of Section 36 of the Tamil Nadu Revenue Recovery Act, 1864, has observed that the publication is an invitation to intending bidders to prepare and participate at the bid. Unless there is a due publication of the date and place of the sale, the intending purchasers cannot be expected to run after the Sale Officer to find out the date and place of sale and to participate there at. It is held that non compliance of Section 36 i.e., omission to mention the place of sale would visit deprivation to the property to the debtor for an inadequate sale consideration due to absence of competing bidders. The specification of the
- 24 - date and place of the sale is held to be mandatory. Such omission renders the sale not merely irregular but also invalid. With great respect, such flaw is not pointed out by the learned counsel for the appellants in the present case relating to the omission of specification of the place and time of sale.
In the case of Ambati Narasayya supra, the Hon'ble Apex Court has held thus: “7. It is of importance to note from this provision that in all execution proceedings, the Court has to first decide whether it is necessary to bring the entire attached property to sale or such portion thereof as may seem necessary to satisfy the decree. If the property is large and the decree to be satisfied is small, the Court must bring only such portion of the property, the proceeds of which would be sufficient to satisfy the claim of the decree holder. It is immaterial whether the property is one or several. Even if the property is one, if a separate portion could be sold without
- 25 - violating any provision of law only such portion of the property should be sold. This, in our opinion, is not just a discretion, but an obligation imposed on the Court. Care must be taken to put only such portion of the property to sale the consideration of which is sufficient to meet the claim in the execution petition. The sale held without examining this aspect and not in conformity with this requirement would be illegal and without jurisdiction.”
As could be seen, only appellant No.2 has some interest in terms of the compromise decree passed in O.S.No.270/2013 obtained on 11.10.2013 subsequent to the decree passed by the Consumer Forum on 20.09.2011. It is significant to note that the plaintiff in O.S.No.270/2013 Shri Tharanath has obtained loans of Rs.20.00 lakhs in Samaja Seva Sahakari Bank, Niyamitha, Bantwal which got impleaded as petitioner No.5 in the proceedings before the District Commissioner, D.K. District, Mangaluru.
- 26 - Further, Rs.23,53,000/- on 17.12.2014 from State Bank of Mysore, Rs.6 Lakhs from Vijaya Bank (Rs.2 Lakhs each – 3 times) and Rs.20.00 Lakhs from Thumbe Corporation subsequent to passing of the decree from Consumer Forum placing some of the properties as security to borrow the loan as recorded by the District Commissioner and the same remains un- rebutted. It is also pertinent to note that as per the terms of partnership deed, Nalina Finance Partners and the partnership firm are liable to discharge their liability which includes their heirs, legal representatives, successors, administrators, executors and assignees. Shri Babu Shetty was the opposite party No.2 and Shri Tharanath was opposite party No.3 who were the managing partners of Nalina Finance Corporation in the proceedings before District Forum. As such, the appellants cannot escape from the liability being the legal representatives of the managing partners. Depending upon the topography, the lands being
- 27 - situated in different Survey Numbers, the attached property was put into auction sale. The order of attachment was not challenged by the appellants. The writ court failed to interfere with the order passed under Section 176(1)(a) of the Act noticing the nature of the collusive decree which would set aside all the grounds urged by the appellants. No exception can be found with the same.
In the case of Janak Raj supra, the Hon'ble Apex Court while considering the question whether the sale of immovable property in execution of a money decree ought to be confirmed when it is found that ex-parte decree which was put into execution has been set aside subsequently, held that it does not seem ever to have been doubted that once the sale is confirmed, the judgment debtor is not entitled to get back the property even if he succeeds thereafter in having the decree against him reversed. The question whether the same result ought to follow when the reversal of the
- 28 - decree takes place before the confirmation of sale was also addressed and held that auction purchaser was entitled to confirmation of sale notwithstanding the fact that after the confirming of the sale, the decree has been set aside. It has been observed that the policy of the legislature seems to be that unless a stranger auction purchaser is protected against the vicissitudes of the fortunes of the suit, sales in execution would not attract customers and it would be to the detriment of the interest of the borrower and the creditor alike if sales were allowed to be impugned merely because the decree was ultimately set aside or modified.
In Janatha Textiles and Others supra, the Hon'ble Apex Court has referred to Janak Raj supra, further para 16 of Padanathil Ruqmini Amma V/s. P.K.Abdulla [(1996) 7 SCC 668] has been quoted which reads thus:
“23. In Para 16, the court further elaborated the distinction between the decree-
- 29 - holder auction purchaser and a stranger who is a bona fide purchaser in auction. Para 16 reads as under:
“16. The distinction between a stranger who purchases at an auction sale and an assignee from a decree-holder purchaser at an auction sale is quite clear. Persons who purchase at a court auction who are strangers to the decree are afforded protection by the court because they are not in any way connected with the decree. Unless they are assured of title; the court auction would not fetch a good price and would be detrimental to the decree- holder. The policy, therefore, is to protect such purchasers. This policy cannot extend to those outsiders who do not purchase at a court auction. When outsiders purchase from a decree-holder who is an auction-purchaser clearly their title is dependent upon the title of decree-holder auction- purchaser. It is a defeasible title liable to be defeated if the decree is set aside. A person who takes an assignment of the property from such a purchaser is expected to
- 30 - be aware of the defeasibility of the title of his assignor. He has not purchased the property through the court at all. There is, therefore, no question of the court extending any protection to him. The doctrine of a bona fide purchaser for value also cannot extend to such an outsider who derives his title through a decree-holder auction-purchaser. He is aware or is expected to be aware of the nature of the title derived by his seller who is a decree- holder auction- purchaser.””
Thus, a categorical finding has been given that law makes a distinction between a stranger who is a bonafide purchaser of the property at an auction sale and the decree holder purchaser at a Court auction. The strangers to the decree are afforded protection by the Court as they are not connected with the decree. Unless the protection is extended to them, the Court sales would not fetch market value or fair price of the property.
- 31 -
In Sadashiv Prasad Singh supra, the position of law has been crystallized inasmuch as the right of the auction purchaser. The rights of an auction purchaser in the property purchased by him cannot be extinguished except in cases where the said purchase can be assailed on grounds of fraud or collusion. It has been held that the auction purchaser having purchased the property in furtherance of the duly publicized public auction, no interference of the High Court is warranted even on ground of equity.
In the light of these judgments, the rights accrued to the bonafide auction purchaser – respondent No.4 cannot be disturbed after confirmation of sale.
It is significant to note that respondent No.2 herein, Tharanath – the father of petitioner Nos.3 and 4 has not contested the matter in the present proceedings which would certainly indicate the nature of compromise decree in O.S.No.270/2013. The petitioners have not challenged the charge created on the subject properties.
- 32 - 30. To attract Section 176[1][a], three conditions must be satisfied. [i] Application has to be filed by the defaulter or any person owning such property or holding interest therein within 90 days of the date of sale in the prescribed manner to the Deputy Commissioner. [ii] Material irregularity or mistake or fraud [iii] Loss or injury to the applicant.
The petitioners have utterly failed to satisfy these conditions.
At the cost of repetition, it is observed that the claim made under Section 176[1][a] on the basis of a compromise decree to defraud the decree holders cannot be appreciated more so, when it is collusive in nature. No attempt was made to invoke Section 176[1][b] in depositing the amount to set aside the auction sale. It appears to be a chance litigation
- 33 - initiated to protract the proceedings to deny the interest of the auction purchaser/claim of the decree holder.
Learned Single Judge has meticulously analyzed all these aspects, in dismissing the Writ Petition. No ground is found to interfere with the well reasoned order.
For the reasons aforesaid, Writ Appeal stands dismissed.
Registry shall disburse the amount in deposit with accrued interest to the account of the appellants through RTGS.
The appellants shall furnish the details of their bank accounts for compliance.
Sd/- JUDGE
Sd/- JUDGE
NC.