PRAGALLAPATI GANGAYYA Vs. NALAM NUKARAJU

JUDGEMENT

(1.) The only point that is raised in this Revision Petition is that the court below in settling the sale proclamation, fixed the upset price for the sale, and that it had no jurisdiction to fix it. It is surprising that this revision petition should have been filed and this objection should have been taken by the Judgment-debtor. It is common knowledge that the fixation of upset price is intended as a protection of the interests of the judgment-debtor so that the property may not be sold for a song, and the judgment debtor in such a case would unnecessarily suffer a loss.

(2.) It is argued before me by Mr. M.S.K. Sastry, that there is no provisioning the Civil Procedure Code for the fixation of an upset price, and that the only provision dealing specifically with 'upset price' is Rule 199 of the Civil Rules of Practise, and that under that rule the upset price will be fixed only where the decree holder applies for permission to bid and set off. It is true that Rule 199(1) of the Civil Rules of Practise deals with an application for leave to bid. It is also quite correct to say that under Rule 199(2) C.R.P. when considering the application of the decree holder the court is given the power to leave to bid at the sale, to the decree holder, only on condition that his bid shall not be less than the amount fixed by the court, which amount shall as far as practicable, be determined with reference to the probable market value of the property. The words 'upset price' occur in the margin and not in the body of the rule. The whole idea of fixing an upset price, as already explained, is to prevent the property being sold away for a very small price. It is usual, at the time of the settlement of the sale proclamation, for the decree holder to give a price of the property to be sold, which is less than the market value. It is equally common for the judgment debtor to mention a figure higher or much higher than the market value of the property. This is understandable as the decree holder is anxious to bid for and purchase the property as cheap as possible if he is given the permission to bid, and the Judgment debtor is anxious to get as much as possible for his property. It is for that reason rule 66(2)(e) of order XXI CPC provides that the value of the property as stated by the decree holder and by the Judgment debtor should also be mentioned in the sale proclamation. If this has not been done in the sale proclamation under consideration, it should now be done.

(3.) As regards the fixation of an upset price, the practise of fixing it obviously has arisen by virtue of Rule 66(2)(f) of Order XXI, Civil Procedure Code, which provides that the court shall specify as fairly and accurately as possible every other thing, which the court considers material for a purchaser to know in order to judge of the nature and value of the property. It is not difficult to appreciate that an intending purchaser would like to know what the Court's estimate of the value of the property is. That would be a factor to enable him to judge the nature and value of the property. Hence it is, that Courts holding execution sales, take upon themselves the task of fixing the upset price after hearing and in the presence of, both the parties. Such a fixation not only serves as a guidance to the intending purchaser, but also serves to prevent the property being knocked down in the auction for a price much below its market value. Hence it is, that the Judgment debtor is always anxious to have the upset price fixed as high as possible and upset price so fixed will be reduced by the court holding execution sale, only in the absence of bidders forthcoming, after continuing the sales for sometime, which gives the impression to the court that, the upset price fixed by it, is perhaps on the high side from the point of view of the public and the intending bidders. Hence I see no point in this Revision petition, which fails and is dismissed with costs.