NANI GOPAL PAUL versus T. PRASAD SINGH AND ORS.

Citation: [1995] 2 S.C.R. 521 · Decided: 06-03-1995 · Supreme Court of India · Bench: K. RAMASWAMY, B.L. HANSARIA · Disposal: Appeal(s) allowed

Judgment (excerpt)

\ 
NANI GOPAL PAUL 
A 
v. 
T. PRASAD SINGH AND ORS. 
MARCH 6, 1995 
[K. RAMASWAMY AND B.L. HANSARIA, JJ.) 
B 
Code of Civil Procedure, 1908: Order 21 Rules 89 and 90. 
Court Decree-Execution of-Auction sale for-Illegality in conduct 
of-Sale held vitiated. 
C 
In an auction sale conducted by a court receiver in execution of a 
Court decree, the appellant was the highest bidder and the sale was 
confirmed in his favour. Thereafter respondents were sought to be im· 
pleaded to the suit but a single judge of the High Court denied the same. 
On appeal a Division Bench while impleading the respondents pointed out D 
, 
that the sale was vitiated due to the manner in which the single judge dealt 
with the matter and passed orders relating to sale of the property in favour 
of the appellant when there were other higher offers. 
-< 
In appeal to this Court, taking suo motu judicial notice of the E 
illegality pointed out by the Division Bench and setting aside the sale and 
confirmation thereof, this Court 
HELD : 1. Normally an application under Order 21 Rule 89 or 90 or 
under section 48 CPC need to be filed within limitation to have the sale 
conducted by the court set aside and that procedure need to be insisted F 
upon; but this Court or appellate court would not remain a mute or 
helpless spectator to obvious and manifest illegality committed in conduct-
ing court sales. [523-D] 
2. In this case the circumstances are sufficient to vitiate the validity 
of the sale conducted by the court Receiver as approved by the Single G 
· --, 
Judge. Confirmation of sale was illegal. The appeal is remanded to the 
High Court and the appropriate Single Judge would proceed to conduct 
the sale in accordance with law by open auction after, due publication of 
the sale so that all the intending bidders would have opportunity to 
participate in the sale. [523-C, F] 
H 
521 
522 
SUPREME COURT REPORTS 
(1995) 2 S.C.R. 
A 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4007 of 
1995. 
From the Judgment and Order dated ·2.3.94 of the Calcutta High 
Court in A.No. 572/91 in (T.C. Suit No. 2 of 1966). 
B 
H.N. Salve, S. Ganesh, Pratap Venugopal and K.J. John for the 
Appellants. 
Soli J. Sorabjee and Ranjit Kumar for the Respondents. 
G.L. Sanghi, Anand Agarwalla and Ms. Radha Rangaswamy for the 
·c Respondent in No. 4. 
The following Order of the Court was delivered : 
Leave granted. 
D 
In Suit No. 2 of 1966 filed by United Bank of India against Hanuman 
Foundries Ud. for foreclosure and sale of hypothicated property, pursuant 
to a preliminary decree, the court receiver sold the hypothica at which the 
appellant became highest bidder for Rs. 60 lakhs and he paid a sum of Rs. 
5 lakhs. The sale was confirmed in his favour on August 29, 1990. There-
after respondents No. 1 and 2 were sought to be impleaded to the suit but 
E denied by the single Judge. On appeal, while impleading them, the Division 
Bench directed the single Judge to hear the respondents before they are 
ejected from the property in question by order dated 2.3.92 which is the 
subject-matter of this appeal. 
While disposing of the appeal, the Division Bench has pointed out 
F that the sale was vitiated due to the manner in which the single Judge 
dealing with Company Law matters, passed the orders in his Chamber by 
observing thus: 
G 
H 
"It would be sufficient for this court, if we make our observations 
to deprecate the way His Lordship took up the matter on various 
dates subsequent to the passing of the decree and sought to pass 
various orders relating to sale of the property in favour of the 
intending purchaser Nani Gopal Paul and others at a price of Rs. 
60 lakhs, when there were other ·offers on the field of a higher 
denomination and magnitude. Judicial property prevents us from 
making further comments in respect of the manner. His Lordship 
~ 
I 
N.G. PAUL v. T.P.SINGH 
523 
directed Mr. Gour Roychoudhury, the Receiver to make the choice A 
relating to the intending purchaser with full rights to make a 
contract with the intending purchaser in the manner it was so done. 
If there were other offers on the field, the court would have been 
vigilant enough to scrutinise such offers whatever they were worth 
and there ought to have been a due application of mind in this 
particular perspective. 
Sadly enough that was not so done in the present case." 
We are of the view that we can take suo motu judicial notice of the 
illegality pointed out by the Division Bench

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