Order XXI Rule 90(3) Bars Belated Challenge To Execution Sale Where Judgment Debtors Had Notice and Acquiesced

A Bench of Justices Sanjay Kumar and Alok Aradhe heard Civil Appeal No. 8887 of 2011 arising from a challenge to an auction sale conducted in execution of a money decree by the City Civil Court, Chennai. The appeal questioned whether Order XXI Rule 90(3) of the Code of Civil Procedure prevented the judgment debtors from setting aside a 2002 sale on the ground that the entire property was sold when a part would have sufficed.

The Supreme Court allowed the appeal, set aside the Madras High Court’s order of 10.02.2009 that had invalidated the auction, and affirmed the judgments of the trial and first appellate courts which had dismissed the judgment debtors’ applications to set aside the sale. The Court held that after the 1976 amendment inserting Rule 90(3), a person seeking to set aside an execution sale had to show that the ground relied upon could not have been taken on or before the date on which the proclamation of sale was drawn up; failure to raise such a ground at the appropriate stage would bar it later. The Court, in its reasoning, observed: “Given the insertion of Order XXI Rule 90(3) in the statute book with effect from 01.02.1977, it would be incumbent upon a judgment debtor or any other interested person who applies for setting aside an execution sale, held thereafter, to satisfy the executing Court that the ground upon which the application was made could not have been taken on or before the date on which the proclamation of sale was drawn up. In effect, if such a ground could have been taken by that applicant who seeks setting aside of the sale but he failed to do so at the appropriate stage, he would stand barred, by Order XXI Rule 90(3) CPC, from doing so at a subsequent stage. It is in this context that the aforementioned observations made by this Court in Desh Bandhu Gupta (supra) gain significance as that was a case involving an execution sale held after the insertion of Order XXI Rule 90(3) CPC and this Court made it clear that, even in the context of a material irregularity under Order XXI Rule 66(2)(a) CPC, if the judgment debtor had been put on notice by the executing Court but had acquiesced, by taking no action before the date of the sale, he would be precluded from assailing its legality or correctness thereafter. In a given case, where a judgment debtor is not given notice prior to the sale, as was the situation in Desh Bandhu Gupta (supra), Order XXI Rule 90(3) CPC obviously cannot posit a bar to his raising a ground thereafter.” The Court further noted that, on the facts, the judgment debtors “were put on notice at every stage” and “participated to an extent and then chose to refrain from doing so,” and therefore they could not belatedly challenge the sale.

Background The dispute originated from O.S. No. 9158 of 1995 filed by Rasheeda Yasin for recovery of ₹3,75,000 against Komala Ammal and K.J. Prakash Kumar. The suit was decreed ex parte on 16.04.1997 and an execution petition sought attachment and sale of a house and site measuring 2,120 sq. ft. Successive auction attempts between 2000 and 2002 failed for want of bids and the executing court repeatedly reduced the upset price. On 12.09.2002 the property was sold to G.R. Selvaraj for ₹11,03,000 and a sale certificate issued after deposit of the consideration. The judgment debtors filed E.A. No. 475 of 2002 under Order XXI Rule 90 CPC, alleging irregular reduction of the upset price without notice and that the sale was not at the spot; the trial and appellate courts dismissed the application. The High Court set aside the sale on the ground that the executing court had not considered whether sale of a part of the property would have satisfied the decree, invoking Order XXI Rule 66(2)(a), and concluded that sale in entirety caused substantial injury. The Supreme Court reviewed precedents including Ambati Narasayya, Takkaseela Pedda Subba Reddi and Desh Bandhu Gupta, and held that where the judgment debtors had notice and could have raised the point before proclamation but did not, Rule 90(3) operated as a bar. The Court therefore allowed the civil appeal, set aside the High Court’s judgment dated 10.02.2009, confirmed the orders of 15.10.2004 and 13.07.2007, and ordered that there be no order as to costs.

Case No.: Civil Appeal No. 8887 of 2011 (Reportable as 2025 INSC 1353) Case Title: G.R. Selvaraj (Dead), through LRs. v. K.J. Prakash Kumar and others Appearances: For the Petitioner(s): Not indicated in the judgment For the Respondent(s): Not indicated in the judgment