KARUMOORI NARASIMHAMURTHY Vs. OFFICIAL RECEIVER

JUDGEMENT

(1.) These appeals arise out of an order of the learned Subordinate Judge of Narasapur passed in an application under Order 21, Rule 90, Civil P.C., to set aside a sale held in execution. The sale was held on 18 April 1933. In the sale two items of property were sold, one being a vacant site and the other a house. The learned Subordinate Judge found that there was material irregularity in the publication of the sale notice. He also held that in consequence of this material irregularity the price realised for the vacant site was substantially less than it would have been but for the irregularity. He therefore set aside the sale of the vacant site. With regard to the house the learned Subordinate Judge found that the price realised was not inadequate and that therefore no substantial loss has been caused to the judgment-debtor. He accordingly refused to set aside the sale of the house. The purchaser of the vacant site has preferred. C. M. A. No. 376 of 1934, and the Official Receiver of West Godaveri has preferred C. M. A. No. 35 of 1935. As regards the appeal No. 376 of 1934 it is contended that the learned Subordinate Judge was wrong in holding that there was any irregularity in the publication. The learned Subordinate Judge examined as witnesses for the respondent the Village Munsif, the Vetti who beat the drum and the process server. The evidence given by these witnesses was extremely meagre. In the ordinary course evidence of such witnesses would be of some importance. In the present case we find that the Village Munsif, though he says that the Vetti beat the drum admits in cross-examination that he did not go into the town of Palcole while the drum was being beaten. The Vetti himself says that the process-server, R. W. 3, came along with him only while he beat the drum in two streets. The process-server says : "I accompanied the Vetti some distance." The learned Subordinate Judge has considered the evidence of several witnesses for the petitioner and has concluded that if there had been any proper publication in the Town of Palcole these witnesses would not have been ignorant of it. Considering the very-vague and general nature of the evidence given for the respondent and the fact that the learned Subordinate Judge had the advantage of seeing all the witnesses before him, we see no reason to differ from his conclusion that the publication was not properly or adequately made.

(2.) With regard to the question of substantial loss, the learned Subordinate Judge has pointed out that one of the appellant's own witnesses stated that the value of the vacant site which covers an area of 1,000 sq. yards was Rs. 4 or 5 per square yard. If the average is taken between these two figures the site was worth: Rs. 4.500. The mortgage on it was for Rs. 1,500 and the amount due under that mortgage at the time of sale is said to have been Rs. 2,500. The sale price was Rs. 200. Therefore the property worth Rs. 4,500 has been sold for Rs. 2,700. We cannot but agree with the learned Subordinate Judge that this is a substantial loss. We consider also that on the facts of this case the learned Subordinate Judge was quite justified in drawing the inference that the deficiency in price was due to the want of proper publication. It follows that C. M. A. No. 376 of 1934 must be dismissed with costs. C. M. A. No. 35 of 1935 is preferred by the Official Receiver of West Godaveri. Before us it is contended that the learned Subordinate Judge was wrong in setting aside the sale in part and confirming it in part. He relies upon the ruling in Chhaterbijai Singh V/s. Damodar Das 1933 12 Pat 181, where it was held that unless both the irregularity and the injury to the objector can be satisfactorily laid to one part only of the sale, the whole sale should be set aside and not the sale of particular plots only. There is no reasoning in support of this conclusion and we regard that we are not able to follow it. Order 21, Rule 90, proviso appears to be quite clear. It is provided that no sale shall be set aside on the ground of irregularity or fraud unless upon the facts proved the court is satisfied that the applicant has sustained substantial injury by reason of such irregularity or fraud. In the present case the learned Subordinate Judge has found, that, the price realised by the sale of the house was adequate and that there was no substantial loss occasioned to the Official Receiver who represented the judgment-debtor. If that be so, we think it clear that the proviso to Order 21, Rule 90, forbids the setting aside of the sale. Lots were sold separately and we see no reason why the sale of the house should be set aside when it is established that it was sold for an adequate price. The learned Subordinate Judge's finding that the price realised for the house was adequate has not been criticised before us.

(3.) Another objection taken on behalf of the appellant is that the sale was void as against the Official Receiver because no notice was given to him of the sale of the house. It appears that an insolvency petition No. 9 of 1928, was filed against the judgment-debtors and that an interim receiver was appointed on 27 October 1928. According to the statement of the facts given in the order of the learned Subordinate Judge the petition was dismissed on 29th September 1931 but it was restored on 25 September 1932. The execution petition in pursuance of which this property was sold was filed on 26 October 1932. The sale was held on 18 April 1933. The insolvent was not adjudicated until 26 August 1933 which was long after the sale. No authority is quoted for the proposition that the sale was bad for want of notice to the Official Receiver who at the time the sale was held was only an interim receiver. As the learned Subordinate Judge has pointed out, the property did not vest in the interim receiver before adjudication. It is of course the case that under Section 52, Provincial Insolvency Act, if notice had been given to the Court that an insolvency petition against the judgment-debtor had been admitted, the Court would have been obliged to hand over the property to the receiver. But it is not alleged that any notice was in fact given to the executing Court of the admission of the insolvency petition and since it is also not alleged that the property ever vested in the interim receiver, we are unable to agree that the sale was bad for want of notice to him. No other point arises in this appeal which is dismissed with costs of the contesting respondents separately to be paid by the Official Receiver out of the estate.