1980 (9) TMI 289 - HC - Indian Laws

Summary

Issues Involved:
1. Whether an executing court has the power to fix the upset price for the sale of property.
2. Whether an executing court has the power to reduce the upset price once fixed.
3. Interpretation of the amendments made to Order XXI, Rule 66 of the Civil Procedure Code by Act 104 of 1976.

Issue-wise Detailed Analysis:

1. Whether an executing court has the power to fix the upset price for the sale of property:

The contention of the revision petitioner was that the executing court has no power to fix the upset price. This argument was based on the second proviso to Rule 66 (2) (e) of Order XXI, which states that "nothing in this rule shall be construed as requiring the court to enter in the proclamation of sale its own estimate of the value of the property." The petitioner argued that this proviso should be interpreted as a prohibition on the court from fixing an upset price. However, the court noted that historically, courts had the discretion to fix an upset price to ensure that properties were not sold at an undervalue, as evidenced by various case laws such as *Srinivasan v. Andhra Bank Ltd., AIR 1949 Mad 398* and *Kuppammal v. Devendra Iyer: (1957)2MLJ134*. The court concluded that the power to fix an upset price was not removed by the second proviso, which only clarified that the court was not obligated to enter its own estimate of the property's value in the sale proclamation.

2. Whether an executing court has the power to reduce the upset price once fixed:

The court examined whether the power to fix an upset price inherently included the power to reduce it. The court referred to the case of *Susila v. Saraswathi Ammal: AIR1970Mad357*, which held that the fixation of an upset price is an administrative action aimed at facilitating the sale and protecting the interests of both the judgment-debtor and the decree-holder. The court emphasized that the executing court's role includes ensuring that the property is sold at a fair value and that the upset price can be adjusted to reflect market conditions. Therefore, the court concluded that the power to fix the upset price also includes the power to reduce it when necessary.

3. Interpretation of the amendments made to Order XXI, Rule 66 of the Civil Procedure Code by Act 104 of 1976:

The court analyzed the amendments brought by Act 104 of 1976, particularly the second proviso to Rule 66 (2) (e). The court noted the legislative intent behind the amendment, which was to ensure that the court did not vouch for the accuracy of any value of the property entered in the sale proclamation. The court referred to the statement of objects and reasons, which indicated that the amendment aimed to prevent mistakes in the estimated value of the property from affecting the sale. The court concluded that the proviso did not prohibit the court from fixing an upset price but rather clarified that the court was not required to provide its own estimate of the property's value in the sale proclamation.

Conclusion:

The court concluded that the executing court has the power to fix the upset price for the sale of property and that this power includes the ability to reduce the upset price when necessary. The amendments made to Order XXI, Rule 66 by Act 104 of 1976 did not remove or limit this power. Consequently, the court dismissed the revision petition, upholding the lower court's decision to reduce the upset price for the properties in question. The judgments delivered by Sathiadev, J. in *Kanniayan v. Chidambaram Finance Corporation* and other similar cases were overruled, while the views taken by Ramanujam, J. and Nainar Sundaram, J. were approved.