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TMI Blog1962 (9) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... trict Hoshiarpur, besides land measuring about 10 acres in that village, be sold in execution of the decree. On 2nd February, 1962, I passed the following order: -- Let the sale be held of the house in Hoshiarpur, on 9th March, 1962, and sale-proclamation be affixed on the premises on 12th February, 1962. Case to come up on 16th March, 1962. Let the house in Jullundur be attached. The official liquidator made an application on 28th February, 1962, under Order 21, rule 72, praying for permission to bid at the auction which was allowed. The Court-auctioneer, Hoshiarpur, sold the house on 9th March, 1962. According to his report, dated 9th March, 1962, the sale was advertised by posters and drum beating. There was also drum beating when the auction was going on. The last bid of Rs. 5,000 of Shiv Singh, Contractor, respondent, of Gujjarpur, was accepted and one-fourth of the amount was paid by the auction-purchaser at that very time. There were only two bids recorded. The 'first bid was of Rs. 2,000 on behalf of the official liquidator and the second bid was of Rs. 5,000 of Shiv Singh, auction-purchaser. 2. The judgment-debtor through his counsel Mr. Daljit Singh submitted objectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection raised by him was that the applicant Dharam Singh had no locus standi and that it was a collusive application to support the objections of the judgment-debtor who was his near relation. The allegation that the date of auction announced by beat of drum was 16th March, 1962, and the sale was conducted on 9th March, 1962, was denied, and it was stated that the sale had in fact been conducted on 9th March, 1962. It was alleged that a number of persons were present at the spot but besides the representative of the official liquidator and the auction-purchaser himself no other person bid. It was also alleged that Dharam Singh was personally present at the auction and did not make any bit. I framed the following issue in L.M. 85 of 1962-- Has the applicant a locus standi to bring the application? On 31st August, 1962, this case was ordered to come up along with L.M. 42 of 1962, on 7th September, 1962. 4. In this case the main contention of the learned counsel for the auction-purchaser is that Dharam Singh has no locus standi to present the application and such an application is barred by limitation allowed for making applications under Order 21, rule 90, by Article 166 of the Limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e house, no doubt, is an exceptionally large one and the estimated value, according to the witnesses of Shiv Singh himself, has varied from Rs. 25,000 to Rs. 50,000. There is sufficient indication on the record that the auction-sale was not genuine and the parties were interested- in keeping the price too low. It is strange that for a two-and-a-half storyed house, which is built on an area of three kanals, according to one witness, and the dimensions of which are 150' x 100' according to another witness, no. bidder was forthcoming in the village other than Shiv Singh and he too did not offer more than Rs. 5,000. He is, according to his own showing, a collateral of the judgment-debtor and the other proprietors of the village are of the same Got. It is also intriguing that the judgment-debtor, beyond filing an objection petition to the sale, has neither come into the witness-box nor has led any evidence, and it was only during the course of arguments that a statement was made by the judgment-debtor's counsel that he did not desire to press his objections. This conduct does support the theory that the auction was not genuine and the judgment-debtor was willing to let his v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R. 1951 S.C. 16. It was said in Vane v. Vane (1873) 8 Ch. Appeals 383, that those who fraudulently appropriate the property of others should be assured that no time will secure them the fruits of their dishonesty. A party who wrongfully conceals facts cannot be allowed Do take advantage of his own wrong by setting up the law of limitation. In this case, there has been a fraud on the Court and on the decree-holder. It would, therefore, be monstrous to hold that a Court, upon which such fraud has been committed, is nevertheless bound to confirm the sale [vide Ramayyar v. Ramayyar I.L.R. (1897) 21 Mad. 356 (358)]. 7. The next question is whether this Court possesses inherent powers in the exercise of which it can set aside the sale on grounds of fraud or sharp practices perpetrated upon it. 8. The power of vacating judgments entered by mistake, of relieving against judgments procured by fraud, are among the several inherent powers of a Court. These inherent powers are not conferred on the Court by the statute, but they are necessary to ordinary and efficient exercise of jurisdiction. It is a protective power necessary to the existence and due functioning by the Courts and to the due a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t ex debito justitiae in order to do that real and substantial justice for the administration of which alone Courts exist. This principle now finds support in Section 151 of the Code of Civil Procedure. Reliance was placed on Hukam Chand Bold v. Kamalnand Singh I.L.R. (1906) 33 Cal. 927. There Woodroofe, J., said-- ....firstly, that the Code is not exhaustive and, secondly, that in matters with which it does not deal the Court will exercise an inherent jurisdiction to do that justice between the parties which is warranted under the circumstances and which the necessities of the case require . (p. 932). In Durga Dihal Dass v. Anoraji I.L.R. (1895) 29 All. 31, Blair, J. thought that the Code was not exhaustive and there are cases which are not provided for in the Code and the learned Judge declined to believe that those are cases where a High Court must fold its hands and allow obvious injustice to be done. The above observations have been adopted in later decisions, vide Bhagat Singh v. Dewan Jagbir Sawhney. A.I.R. 1941 Cal. 670. 9. In Kendall v. Hamilton L.R. (1879) 4 A.C. 504 (525), Lord Penzanc, in a celebrated passage, observed-- Procedure is but the machinery of law after all-- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt, which ordered the sale, had jurisdiction to refuse to confirm the sale on the ground of the fraud practised by the agent of the execution-creditor and the purchaser. 12. As a result of collusion between the judgment-debtor and the auction-purchaser, in the instant case, a fraud has been practised in order to gain an unfair advantage. It would have been appropriate if the official liquidator had taken early steps to expose the fraud and to get the sale, which had been tainted, set aside. This fraud was unearthed as a result of the application made by Dharam Singh (L.M. 85 of 1962). 13. Shri Ram Rang, counsel for the auction-purchaser, has vehemently urged that Dharam Singh has no locus standi to move this Court and, therefore, any disclosure now discovered on account of the statement of Shiv Singh, during the course of his cross-examination by the counsel of Dharam Singh should not be taken into consideration even though it may reveal a fraud on the Court. It was argued that the Court should rule out that part of the admission of Shiv Singh which was brought out during the course of his cross-examination by Shri Amar Chand, counsel for Dharam Singh. The effect of this submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present interest which is affected by the sale of the property, (vide Basanta Kumar Roy v. Charu Chandra Pal, A.I.R. 1958 Cal. 543 which Dharam Singh admittedly does not possess. It was also argued that the petition was barred by limitation as provided by Article 166 of the Limitation Act. It was further contended that if Dharam Singh has no rights either under Order 21, Rule 90, or under Section 47, Code of Civil Procedure, he cannot interfere with the auction sale by moving this Court under section 151. There is, no doubt, force in this argument, and the logical result of this argument is that Dharam Singh cannot assail the validity of the auction sale. But Dharam Singh comes into the picture only to the extent that he is instrumental in revealing a fraud, on the Court. Even if Dharam Singh has no locus standi, the Court has an ample reserve of inherent powers to satisfy itself suo motu that its process has been abused. Because the source of information happens to be a person who has no locus standi, the Court cannot close its eyes and decline to exercise its inherent powers to set aside the sale on being satisfied that as a result of conspiracy a fraud has been perpetrated and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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