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1970 (8) TMI 89 - SC - Indian Laws

Issues Involved:
1. Whether the order of the learned single Judge was a 'judgment' within the meaning of Clause 10 of the Letters Patent.
2. Whether the auction sale suffered from a material irregularity causing substantial injury to the appellant and thus liable to be set aside.

Detailed Analysis:

1. Whether the order of the learned single Judge was a 'judgment' within the meaning of Clause 10 of the Letters Patent:
The appellant contended that the order of the learned single Judge was not a 'judgment' within the meaning of Clause 10 of the Letters Patent, and hence, no Letters Patent appeal could be filed against it. The Division Bench of the High Court, following the Full Bench decision in *Standard Glass Beads Factory v. Shri Dhar*, rejected this contention. The Division Bench held that the order of the single Judge was a 'judgment' as it affected the rights of both the auction purchaser and the judgment-debtor. The Supreme Court agreed with the High Court's view, stating that an application under Order XXI, Rule 90, to set aside an auction sale concerns the rights of the purchaser. If the application is allowed, the sale is set aside, depriving the purchaser of the right to have the sale confirmed. This right is valuable as it vests ownership rights in the purchaser upon confirmation. Therefore, an order in such a proceeding is a 'judgment' as it determines the rights of the parties involved.

2. Whether the auction sale suffered from a material irregularity causing substantial injury to the appellant and thus liable to be set aside:
The appellant argued that the auction sale suffered from a material irregularity because the notice for the adjourned auction sale did not specify the hour of the sale, contrary to Order XXI, Rule 69. The learned single Judge upheld this objection, stating that the failure to mention the hour amounted to a material irregularity, causing prejudice to the appellant as the sale fetched a low value. However, the Division Bench reversed this finding, holding that the appellant failed to establish any prejudice resulting from the irregularity. The Supreme Court concurred with the Division Bench, emphasizing that mere proof of material irregularity and inadequacy of price is insufficient. It must be shown that the inadequacy was caused by the irregularity. The appellant relied on a report by the Amin of the Execution Court, which valued the appellant's share at Rs. 20,000/-. However, the Division Bench found, and the Supreme Court agreed, that the report was unreliable as it was prepared without notice to the respondent and without giving the respondent an opportunity to contest it. No other evidence was presented to show the inadequacy of the price or its connection to the irregularity. Consequently, the Supreme Court dismissed the appeal, concluding that the appellant failed to demonstrate that the sale was vitiated by a material irregularity causing substantial injury.

Conclusion:
The Supreme Court upheld the Division Bench's decision, affirming that the order of the learned single Judge was a 'judgment' within the meaning of Clause 10 of the Letters Patent, and that the appellant failed to establish that the auction sale suffered from a material irregularity causing substantial injury. Thus, the appeal was dismissed with costs.

 

 

 

 

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