Summary
Ludhiana Improvement Trust never paid landowners the enhanced compensation fixed by the Land Acquisition Tribunal. In execution, its plot and godown were attached and sold at a court auction in 1992 for Rs. 22.65 lakh, and the sale was confirmed in 1993. The Trust's Order XXI Rule 90 CPC objections were rejected twice by the executing and appellate courts. The High Court then set the sale aside because the auction covered Khasra nos. 271 and 272 while the application mentioned only 272. The Supreme Court restored the sale. The property was clearly identified by its site plan, and the Trust had ignored every stage of execution. It showed neither material irregularity or fraud nor substantial injury.
Issues
- Whether an execution sale could be set aside under Order XXI Rule 90 CPC because the auctioned land included a khasra number not mentioned in the execution application
- Whether a judgment debtor that took no objection at any stage of execution could later have the confirmed sale set aside, and how a bona fide auction purchaser's rights are protected
Provisions considered
- Order XXI Rule 90, Code of Civil Procedure, 1908A sale can be set aside only if both a material irregularity or fraud and substantial injury are shown, and not on grounds available before the proclamation. Neither condition was met. (¶¶ 11, 34, 36, 38)
- Order XXI Rules 66 and 89, Code of Civil Procedure, 1908The Trust did not object to the valuation in the proclamation or to the sale of the whole property, and it made no Rule 89 deposit of the decretal amount and 5% of the price. (¶¶ 17, 33, 35)
- Article 300A, Constitution of IndiaThe owners could be deprived of their land only by law, which required prompt payment of the compensation determined. The Trust's non-payment was not condonable. (¶ 30)
Held
- Dismissal of the first execution petition as unsatisfied did not bar a second petition specifying the property. That petition followed the stages of Order XXI, and the Trust chose to stay away. (¶ 31)
- Omitting Khasra no. 271 from the application was immaterial. The site plan clearly described the bounded property, and there was no dispute about its identity or ownership. (¶ 32)
- Neither limb of the Rule 90 test was satisfied. The Trust led no evidence despite repeated opportunities, did not object to the valuation, did not seek sale of only part of the property and made no Rule 89 deposit. A higher price later fetched cannot be held against the purchaser, and the mere auction of a godown and quarter is not substantial injury. (¶¶ 33, 34, 35, 36, 38)
- Once the sale is confirmed, a bona fide auction purchaser's rights can be extinguished only for fraud or collusion. (¶ 37)
- Order XXI is a complete code for execution. Being an Improvement Trust gives a judgment debtor no licence for extra indulgence or to prolong litigation indefinitely. (¶¶ 29, 39)
Result
Appeal allowed; the High Court's judgment of 06.03.2018 was set aside and the Executing Court's order of 10.11.2012, as affirmed on 14.09.2015, was restored; costs of Rs. 1 lakh were awarded to the appellant against the Trust.