SANKARANARAYANAN NAIR Vs. PARAVOOR CENTRAL CHITTY FUND LTD

JUDGEMENT

(1.) The judgment debtor in O.S. No. 26 of 1953 filed C.M.P. No. 3465 of 1960 for setting aside the Court sale under O.21 R.90 of the Code of Civil Procedure on the ground of irregularity and fraud in the publication and conduct of the sale and resultant substantial injury by reason of such irregularity and fraud. The lower court dismissed the application and hence this Civil Miscellaneous Appeal by the judgment debtor.

(2.) For setting aside the court sale either fraud or material irregularity or both either in the publication or conduct or both of the sale and substantial injury by reason of such irregularity or fraud have both to be established. In this case the property having an extent of 90 cents situated about three furlongs east to the Mahatma Gandhi College in Trivandrum was sold for Rs. 5,505-91 nP. on 30th July 1960. In the proceeding for setting aside the court sale a Commissioner was appointed, who has been examined as Dw. 2. He has filed Exts. D1 to D3, being sale deeds of neighbouring properties, and on the basis of the prices paid under those documents, he has fixed the price of the property in dispute at Rs. 170/- per cent, whereas the price fetched at the court sale was only Rs. 61/- per cent. In the sale proclamation the value of the property stated under O.21 R.66 (2) (e) was Rs. 2000/- as stated by the decree holder and Rs. 30,000/- as stated by the judgment debtor. The property, as I have already indicated, was sold for Rs. 5,505/-.

(3.) Basing on these facts Mr. T.N. Subramonia Iyer, the learned advocate of the appellant, contends that substantial injury has resulted as a consequence of the gross under-valuation of the property in the sale proclamation. It may be mentioned that no other irregularity or fraud has been substantiated. It is settled law that, if as a result of gross under valuation the property proclaimed was sold at a grossly inadequate price, the substantial injury resulting from such low price is the result of the material irregularity of fixing the upset price at a grossly low figure (vide Ismail Sheriff Sahib v. Sankara Panicker, 1960 KLJ 833 and Sri Raja Bommadevara Naganna Naidu Bahadur Zamindar Gara v. Sri Raja Bommadevara Venkatrayulu Naidu Bahadur Zamindar Gara, AIR 1945 PC 178 ). In the Privy Council decision referred to above Sir Madhavan Nair observed that in order to set aside a sale under O.21 R.90 it should be proved (1) that there was material irregularity or fraud in publishing or conducting the sale and (2) that the applicant had sustained substantial injury by reason of such irregularity or fraud. His Lordship further held that mere irregularity or fraud in publishing or conducting the sale would not entitle the court to set it aside, unless upon the facts proved the court was satisfied that the applicant had sustained substantial injury by reason of such irregularity or fraud. Sir Madhavan Nair observed further that the burden of proof of substantial injury might be discharged not only by direct evidence connecting the material irregularity or fraud with the substantial injury, but also by circumstantial evidence, that is evidence from which a reasonable inference might be drawn that the substantial injury was the result of the material irregularity or fraud. Therefore, if the upset price is grossly low in comparison with the value of the property, it can be safely presumed that the low price fetched at the sale is as a consequence of the grossly low upset price.