STATE BANK OF PATIALA Vs. KHOSLA ENGG CO

JUDGEMENT

(1.) This order will dispose of Application under O. 21, R. 90 read with S. 151, CPC for setting aside the auction held on 8-11-1988 filed on behalf of the Judgement debtors. Briefly the facts of the case are that in pursuance of the decree obtained, State Bank of Patiala (hereinafter referred to as Decree holder) obtained orders of sale of property of the applicant J.D. which was land, factory building, machinery etc. situated on Jalandhar-Kapurthala Road and which was sold for an amount of Rs. 2,85,000.00. Judgement-debtor pleads in its application that the court auctioneer published an auction notice which appeared in the Sunday Tribune dated 30-10-1988 to the effect that the property which is land measuring 11 Kanals 4 Marlas along with building and machinery situated in the revenue estate of village Dhwankh Jagir, Tehsil Kapurthala shall be auctioned on 8-11-1988 at 10 a.m. at the Court House, Kapurthala (Emphasis supplied). In the auction notice, it was also mentioned that the old stocks, scrap, machinery, furniture and fixtures etc. were also to be sold. On the date fixed for the auction i.e. 8-11-1988, no auction took place in the court house, Kapurthala from 10 a.m. to 4 p.m. instead thereof, the auction took place at the factory premises located on Kapurthala-Jalandhar road. It is further averred that all the bidders were present in the court House and could not, therefore, expect that the property would be auctioned clandestinely at the premises of factory situated ort the Jalandhar-Kapurthala road. Besides the old stock, scrap, machinery and furniture could not be sold because there was no order of the Senior Sub-Judge, Kapurthala or of this Court to sell the same, On 30-11-1988, an application was made to the Senior Sub-Judge, Kapurthala to the effect that scrap iron which was lying in the premises be separately accounted for and a separate auction of the same be held if the same is to be auctioned but the Senior Subordinate Judge by order dated 2/11/1988 dismissed the application on the ground that as the execution proceedings are being taken under the orders of this court, the judgement debtors may seek his remedy from this court only. It is further averred that the property has been auctioned for a paltry sum of Rs. 2,85,000.00 for the entire building, as well as land, scrap, etc. whereas the actual value of the property at the time of auction was for more and in any case not less than Rs. 4 lacs. With a view to substantiate the plea aforesaid, the applicants have attached with their application an affidavit of one Prem Nath, a prospective purchaser of the property who has stated in the said affidavit that no auction took place in Court House from 10.00 a.m. to 4.00 p.m. on the date fixed where he was present and if a fresh auction was to be ordered, he was prepared to pay an amount of Rs. 4 lacs for the property in dispute. It is also pleaded that the judgement debtors are even themselves prepared to pay Rs. 4 lacs for the entire premises, including scrap, machinery etc. In the light of the facts aforesaid, it is pleaded that there has been material irregularity and fraud in the conduct of the sale and in any case, it is pleaded that the property had been auctioned at a price which was ridiculously low and the judgement debtors were themselves ready to purchase the property at Rs. 4 lacs. A prayer has also been made in the application that sale be not confirmed and the property be re-auctioned. The contents of the application as have been reproduced above have been reiterated on the affidavit by one of the judgement-debtors i.e. Ramesh Khosla. The public auction notice that appeared in the Newspaper has been annexed with the application as Annexure 'C'.

(2.) In response to the notice issued in the aforesaid application both the auction purchaser i.e. Mr. Mohit Rapur as also the Decree-holder/Bank have filed their replies. Inasmuch as reply of both is on identical lines, it shall be sufficient if pleadings of the auction purchaser alone are noticed. By way of Preliminary Objections, it has been pleaded that the application under Order 21 Rule 90, CPC. is not maintainable as the auction purchaser had not been impleaded as a party, It has also been pleaded that with a view to get the sale set aside, offer of sale to another person is wholly impermissible. It is also stated that the property in fact was sold for Rs. 3 lacs and not Rs. 2,85,000/- and therefore the application and affidavit filed by the decree-holder is false. It is also pleaded that the Official Liquidator attached to this court for M/s. Khosla Fans India Pvt. Ltd. has not filed any objections to the auction held and the objections filed by the Judgement-debtors were nothing but a clever move to delay confirmation of sale. The bank has raised a preliminary objection that the application is not maintainable as the property mortgaged and sold in pursuance of the decree granted in favour of the bank and no objection whatsoever have been filed by the Official Liquidator. On merits, it has been pleaded that the court auctioneer held the auction in the court house and he was present in the court premises at 10.00 a.m. on 8-11-1988. Before starting the auction, the bidders requested the auctioneer to point out to them the property for which they are expected to bid and it is for that reason the auctioneer took the bidders to the spot and pointed out the property for which bids were invited. The bidders gave their bid and it was in the court house that the highest bid of Rs. 3 lacs was accepted by the auctioneer at 4.00 p.m. The auction is stated to have been conducted from 10.00 a.m. to 4.00 p.m. as published in the Newspaper.

(3.) It is further pleaded that the auction of the property was held strictly in accordance with the orders of this Court. The objector knew that the auction is to be held on 8-11-1988 but did not move his little finger at the time of auction and did not participate in the bid. It is also stated that the judgement-debtor knew Shri Prem Nath and it was also within his knowledge that the said person who was present on 8-11-1988 in the Court House to offer his bid, otherwise it was impossible for him to have traced him to get his affidavit. It is also stated that the said bidder has falsely supported the claim of the Judgement-debtor due to his relations with him and, therefore, his affidavit is totally false. It is further pleaded that the Senior Subordinate Judge, Kapurthala declined to interfere in the matter on 22-11-1988 and yet the judgement-debtor approached this Court just before the date fixed for confirmation of sale. The offer of the decree-holder to purchase the property for Rs. 4 lacs is stated to be totally belated and it is also averred that there is no irregularity in the conduct of the auction. It is also stated that the property had been sold at the market price that was prevalent at the relevant time and it was not a case of selling the property at a low price as is the case of the judgement debtor.