Setting aside of sale of immovable property:
Where immovable property has been sold in execution of a decree, and the person claiming an interest in the property sold at the time of the sale or at the time of making the application or acting for in the interest of such person, may apply to have the sale set aside on his depositing in court,—
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(a) For payment to the purchaser, a sum equal to five per cent of the purchase-money; and
(b) For payment to the decree-holder, the amount specified in the proclamation of sale for the recovery of which the property was ordered to be sold, less any amount which the decree-holder may have received in payment of the decretal amount. [O. 21, R. 89].
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It will be seen from the above that the application to set aside a sale of immovable property under the above rule may be made by—
(a) Any person owning the property. He may be the judgment-debtor or some other person whose property has been sold as the property of the judgment-debtor.
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(b) Any person holding an interest in property by virtue of a title acquired before the sale. A co-sharer of a mortgagee may be such a person.
2. Where any immovable property has been sold in execution of a decree, the decree-holder or the purchaser, or any other person entitled to share in a reteable distribution of assets, or whose interests are affected by the sale, may apply to the court to set aside the sale on the ground of a material irregularly or fraud in publishing or conducting It [O. 21, R. 90 (1)].
No sale shall be set aside on the ground of irregularity or fraud in publishing or conducting it, unless, upon the facts proved, the court is satisfied that the applicant has sustained substantial injury by reason of such irregularity or fraud. [O. 21, R. 90 (2)].
No application to set aside a sale under R. 90 shall be entertained upon any ground which the applicant could have taken on or before the date on which the Proclamation of sale was drawn up.
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Explanation:
The mere absence of, or defect in attachment of the property sold shall not by itself, be a ground for setting aside a sale under this rule. [(O. 21, R. 90)].
Under Order 21, rule 90, the only persons who may apply for setting aside the sale are:
(1) The decree-holder;
(2) The purchaser;
(3) Any person entitled to share in a rateable distribution of assets under Section 73; and
(4) Any person whose interests are affected by sale.
This includes the judgment-debtor, the legal representative of a judgment-debtor and a purchaser from the judgment-debtor pendente lite.
The sale under the above rule can be set aside if the following conditions exist:—
(1) Material irregularity or fraud in publishing or conducting the sale;
(2) Substantial injury to the applicant; and
(3) Such injury must be connected directly with the result of the irregularity or fraud.
It was observed by their Lordship of the Judicial Committee in B.N. Naidu v. V.B. Naidu, (1946) A.L.J.R., 1. P.C.), that mere irregularity or fraud in publishing or conducting the sale will not entitle the court to set it aside, unless, upon the facts proved, the court is satisfied that the applicant has sustained injury substantial by reason of such irregularity or fraud.
The rule speaks of irregularity and no illegality, for if the act complained of is illegal the sale is void altogether and substantial injury need be proved as is necessary in the case of material irregularity.
It may also be noted that where a person applies under Order 21, rule 90 to set aside the sale of his immovable property (on the ground of material irregularity or fraud and no substantial injury resulting there from), he shall not be allowed to make or prosecute an application under rule 89 unless he withdraws his application under Order 21, R. 90.
3. The purchaser at any such sale in execution of a decree may apply to the court to set aside the sale on the ground that the judgment-debtor had no saleable interest in the property sold. (O. 21, R. 91).
The rule applies only where the judgment-debtor had no interest at all, e.g., when the property sold turns out to be not the property of the judgment-debtor or when the interest was not saleable. It does not apply when the judgment-debtor has no saleable interest in a portion of the property.