GEORGE Vs. SHIRLEY VARKEY

JUDGEMENT

(1.) The 2nd judgment-debtor in E.P. No. 615 of 2000 in O.S. No. 440 of 1998 in Sub Court, Ernakulam, is the appellant. His application for setting aside the sale of the property of the 1st judgment-debtor, a Private Limited Company, in which he was the erstwhile Managing Director and at present continuing as a shareholder as vitiated by fraud and material irregularity was negatived by the learned Sub Judge, and hence the appeal.

(2.) The decree-holder brought to sale the property of the 1st judgment-debtor-Company to realise a sum of Rs. 2,30,00,000/-, the sum due under the decree with interest and costs. The liability outstanding against the company under two other decrees, O.S. No. 677/04 and O.S. No. 678/04 was also included in the proclamation and thus, the upset price was shown as Rs. 4,35,00,000/-. The 2nd judgment-debtor had contended that the centage value of the property was Rs. 25 lakhs and the Advocate Commissioner deputed by the court had fixed that value as between Rs. 40 to 50 lakhs. Proclamation issued for sale incorporated the above valuation of the property also. The property having an extent of 43.6 cents in Marine Drive lying to the west of Shanmugham road belonging to the 1st judgment-debtor proclaimed for sale was knocked down for 19 crores by the highest bidder, the third respondent. Impeaching the sale as vitiated by fraud and material irregularity, two applications were moved under Order 21 Rule 90 C.P.C., one by the 2nd judgment-debtor, the present appellant and another who had advanced money to the 1st judgment-debtor-company to purchase a flat proposed to be constructed in the property brought to sale. The applications numbered as E.A. Nos. 347/08 and 338/08 filed by the appellant and the purchaser for the flat respectively, after being heard together, were dismissed with costs under the order impugned in the appeal by the learned Sub Judge. The applicant in E.A. No. 338/08, the purchaser for the flat has submitted to the order and as such the challenges canvassed by him to impeach the sale need not be gone into in this appeal, preferred by the other applicant, the 2nd judgment-debtor. But it deserves to be pointed out that both the applicants had not made the auction purchaser as a party in their respective applications, but, later, the present appellant impleaded him as the additional third respondent in this application.

(3.) In this appeal the challenges mooted by the appellant against the sale alone survive for consideration to determine the correctness of the order passed by the learned Sub Judge holding that the sale in favour of the third respondent auction purchaser is unassailable. A twofold challenge was pressed into service by the appellant to assail the sale as illegal. Sale of the entire property of 43 cents to satisfy the liabilities outstanding against the 1st judgment-debtor-company was not at all required as such liabilities could have been cleared of by sale of a portion of the property is the case of the appellant. Sale should have been conducted by calling a global tender which would have invited bidders at large, and thereby fetching the maximum price for the property in auction, was the other ground mooted to impeach the sale. The decree-holder and the auction purchaser filed separate counter affidavits contending that no valid ground existed for setting aside the sale. Competency of the appellant to challenge the sale as a shareholder of the 1st judgment-debtor-company moving an application under Order 21 Rule 90 C.P.C. was also questioned by these respondents.