# 372 GAJADHAR PRASAD & ORS v. BABU BHAKTA RATAN & ORS

- **Citation:** [1974] 1 S.C.R. 372
- **Court:** Supreme Court of India
- **Decided:** 1974
- **Bench:** K. K. Matiiew, M. H. Beg
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/372-gajadhar-prasad-ors-v-babu-bhakta-ratan-ors-5983
- **Pages:** 9

## Headnote

Code of Civil Procedure (Act S of 1898), 0.21, r.66(2)(e)-Scope of.
In execution of a decree, six houses of the judgment debtors were sold. In
·the sale proclama.tion, 3 houses were shown as one item, two bungalows as one . ,
item and the remaining house as another item. The valuation of each item in
the proclamation was practically that given by the decree-holders. The Amin
put up tor sale the 3 houses comprised in one item as separate houses and the
total amount realised from the sale of the 3 houses was 2! times the amount in
the sale proclamation. The two bungalows were however sold as a single unit
and purchased by the decree holders. After the sales, the

## Text

:372
GAJADHAR PRASAD & ORS.
v.
BABU BHAKTA RATAN & ORS.
A11gu.rt 14, 1973
[K. K. MATIIEW AND M. H. BEG, JJ.J
Code of Civil Procedure (Act S of 1898), 0.21, r.66(2)(e)-Scope of.
In execution of a decree, six houses of the judgment debtors were sold. In
·the sale proclama.tion, 3 houses were shown as one item, two bungalows as one . ,
item and the remaining house as another item. The valuation of each item in
the proclamation was practically that given by the decree-holders. The Amin
put up tor sale the 3 houses comprised in one item as separate houses and the
total amount realised from the sale of the 3 houses was 2! times the amount in
the sale proclamation. The two bungalows were however sold as a single unit
and purchased by the decree holders. After the sales, the
judgment
debtors
.applied for setting aside the sales on the ground of fraud and material irregu·
laritv in conducting them, and also complained of substantial injury. The ex~u
tion court and the High Court, in appeal, dismissed the applications.
In appeal to this Court,
HELD : The 2 bungalows should be sold afresh after judicialJy considering
and deciding the question lVhether they can be sold separately and what parti-
.culars should be inserted in the sale proclamation. [380C--D]
(a) The object of 0.21, r.66(2)(e), C.P.C., is that essential facts having
· .a bearing on the question of value of the property and which would assist the
pur.cliaser in forming his cwn. opinion on the value must be stated by the Court.
The Court should normaily state the v&Juation given by both the decree-bolder .
.as weIJ as the judgment debtor where they have both. valued the property and
these do not appear fantastic. It may useftilly 'State other
material
facts.
such as the area of Iand7 n~ture of the rights in it, municipal assessment, actual
rents realised, which cou1d reasonably be expected to· affect
the
valuation.
'Vhat -".:ould be reasonably 3.nd usefuIJy stated succinctly in a sale proclamation
has to be determined on the facts of each pacticular case. It is not necessary for
the execution court to state its own estimate; nor is it necessary for th~ execution court to .order the insertion of a judi:ially pa"ised order in the sale proclamation itself. but. it should pass -an order showing that it had applied its
mind to the need for determinir:.g a11 the ess.ential particulars, which
would
reasonablv be looked for by a purchaser and which should be insected in the
· saJe proefarnation. The order should show that the Court had considered' the
objection. if any, of the decree-bolder or the judgment-debtor as the case may
he. and the Court should not ·merely accept the ipse dixit of one side.
[378C-HJ
In the present case, the judgment-debtors had given their valuation and even
applied for the appointment of a eommissioner at their expense to report on
matters aJlectic.g the value of the property, but, the execution court had practicaUy accepted, as its own valuation, without indicating reasonable grounds for
this preference, whatever the decree-holder had asserted about the ,·alue of the -
property. The area of the compound in which the l\vb bungalows were situa~ed
\vas not mentioned in the sale proclamation, ar~. though this land v.·as
nu:rool
le;isehold land neither the unexpired period of lease nor rent were mentioned.
lt was not s!ated whether the bungalows would be sold as one or two iterm of
propecty, thoul'.!b the ju<l~r:.t debtors asserted that they \\o'Ould Rtch a mu.:h
higher value if sold separortely. The Court rejected the judgment dcb!ors' figures
hy merely observing that they- are exaggerated and practicaliy accepted \Yithout
"hesitation, the figures of the decree-holders. But, the valuation was prO\"ed
ta
"h~ incorrect judged by the re·.sults of all the auction sale<> taken as a whole
[3790_:4]
Therefore, th:: execution court had not perfonned its duty fairly and reason-
;;b1y.
I-Jenee, there \Vas a material irregularity in conducting the safe. 1379 G]
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GAJADll"'R PRASAD v. B. D. RATAN (Beg, J.)
373
Case law considered.
[Whether decree-holders' conduct amounted to actual fraud practised on the
Court, not decided]. [3790-EI
(b) The result of the separate sales of the 3 houses comprised in one item
was tha! when the sale price5 were added up,
they
fetched a considerably
higher price than that put upon the propertLs when Jumped together in one Jot.
The High Court found that the sale of the two bungalows separately
~ould
probably have similarly fet:hed a higher price. Therefore, there
is enough
evidence to indicate that the judgment-debtors baa suffered substantial
injury
in so far as the sale of the 2 bungalows is concerned. [3.SOA-B]
C1v1L APPELLATE JURISDSCTION: Civil Appeal No. 1648 of 1967.
Appeal by special leave from the judgment and decree dated the
9th day of January 1964 of the High Court of Judicature at Allahabad in First Appeal No. 81 of 1957.
J. N. Chatterjee and E. C. Aggarwala for the appellant.
The Judgment of the Court was delivered byBEG, J.-This is a judgment debtors' appeal, by Certificate of fitness of the case for appeal to this Court granted by the High Court
of Allahabad, arising out of an application filed under Order 21, Rule
90, Civil Procedure Code.
The Respondent decree-holders had obtained a decree for about
Rs. 76,000/- against the appellants in a mortgage suit. In execution
of that decree sales of three items of property, shown as houses belonging to the Judgment debtors took place on 5-5-1955 and 7-5-1955.
The items were described as follows in the sale proclama(.:m :
''Boundaries
----·
----------------- -------·
East
West
North
South
1. puoca build h.,use b.!'lring preU1iv~rsity
Lane and House of Colonel
vious No. 8 and present No. 5 Road
temple of Mari um
Ganj
situate in Colonefgunji city of
KaJiji
Bibi&
Roud
Allahabad, together · with site
Mohd.
aild building materials entfrc
Ra1a.
16
anna
share
value at
Rs.10,350/·.
2. BO.tire houSe
b~aring previous House of
J.,<Hic
House of \Vay
No. 805 situate in
Mohal!a Gajadhar
hereafter Gajadh;;.r
Katra,
plsiyana
City
of Prasad.
House of Prasad.
Allahabad. valued at Rs. 5040/-.
Maheshwary
Prasad
Vakil.
Bungalows bearing Nos. S a~ld Lyal Road
Bungalow Th01nClub
).
10 situ~tc on Club Ro::id, Cit.\'
'lo. 12
Ml Rc,d. Rc<d
of' Alh.h~bl'.ld with co1npcund
riot No. 129 together with trees.
four waUs and out house!. etc.
;i l! things
rights ~nd interest.:;.
374
SUPREME COUllT REPORTS
app~rtaining to 'bungalows the
site land whereof
has been
acquired on lease dated 20-11-1948
and which lies within the same
boundary. BJngalow
No. 8
valued at Rs. 24000/- Bungalow
No. 10 valued at Rs. 31200/·.
There is no encumbrance".
[ 1974 J 1 s.c.tt.
The main objection of the judgement-debtors-appellants to
this·
proclamation is that the execution Court had, in giving the valuation
of the properties in the proclamatior1, practically accepted the statements made on behalf of the ·decree-holders, and, without assigning
any reason, failed to mention the values put by the judgment-debtors
on these properties.
The respective valuations of the properties by
the two sides were :
"1. No. 10 T. B. Sapru Road
Valuation put by
the
Valuation put hy the
D. H. Rs. 40,000/·.
J, D. Rs. 100,000
2. No. 8 T. B. Sapru Road
3. No. 5 Colonelgunj
Rs. 10,000;-
Rs. 60,000/-
4. No. 805 Katra.
Rs. 1,000/-
Rs. 25,000/-"
On 18-5-1948, long before the proclamation of sale was drawn
up on 31-3-1955, the judgment debtors had put in an objection to the
execution Court's order of 14-2-1948 relating to the framing of the
gale proclamation,
particularly
with regard to the two
bungalows
situated in the heart of the Civil Lines, the best residential area of
Allahabad,
They had stated that the area of land in the compound
in which the two bungalows were situated was three acres and that
the whole property was not worth less than Rupees one lac.
They
had objected to the sale of the two bungalows in one lot. They
had
also
asserted
that
the
latest
municipal
assessment
of
1944 had displaced the municipal assessment of 1934 relied
upon
by the decree-holder.
According to the judgment-debtors, the two
bungalows Nos. 8 & 10 on Tej Bahadur Sapru Road were assessed
at annual rents of Rs. 15001- and Rs. 1200/· per year. In an affidavit
of 19-4-1947 they had asserted that a
bungalow situated
nearby,
assessed at an annual rent of Rs. 1500/-, was sold for Rs. 50,000/-
on 23-4-45 when prices were lower.
On 18-5-1948, the judgmentdebtors had also prayed for the issue of a commission, at their expense,
presumably to view the property and give a report on relevant facts
before actually framing a sale proclamation in accordance with the
court's order of 14-2-1948 directing insertion of the value made by it.
On 5-5-1955, the Court Amin had himself put up house No. 5
situated in Colonelgunj, Allahabad, separately for sale and sold it for
Rs. 10,500/-.
On the same date, the Amin sold house No. 5·A in
Colonelgunj for Rs. 8500/- and also house No. 5-B separately for
Rs, 7,000/-. Thus, a total amount of Rs. 26,000/- was realised from
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GAJADHAR PRASAD V. B. B. ltATAN (Beg,/.)
:i1s
the sale of the three houses in one. compound at Colonelgunj described
as one item of property in the sale proclamation. They had been
valued at Rs. 10,000/- by .the decree-holder and Rs. 60,000/- by the
judgment-debtor.
The· court bad
valued the whole ·property at
Rs. 10,350/-, and thus practically assented to the
decree-holder's
valuation and rejected the judgment-debtor's ·without assigning any
reason; beyond expressing the opinion that it was exaggerated. The
property in Katra .was sold for Rs. 3,750/- on 5·5-1955.
After the sale, ·the judgment-debtors applied to set aside the sales
on the ground of fraud :and μiaterial irregularity in conducting the111
and complained of substantial injury.'. Tuey relied on uncontrovert~d .
assertions made in their affidavit of 194·1974 as well as on the asser·
lions made in an application dated 18-5-1948 wh.ere it was slated
'~That the judgment de~tor is informed that the whole
game of the decree holder is to undervalue the property get
the 'auction for a song and purchase the property himself.
This underhand game may ,be stopped and justice be done"'.
_ The l~d Counser for the. judgment-debtors submitted that, on
tlie uncontroverted assertions of the judgment debtors, the conclusion
is incsistible 'l!lat the decree-holder had deliberatt.y misled the Court
and bad comJ:".itted •a fraud upon it. It was urged that the decree·
bo.lders' game h~ succeeded because they bad themselve• bought the
two bungalows on Tej B:ibadur Sapru Road for Rs. 56,000/-. Accord·
ing to the judgment..(lcbtors, ·Bungalow No. 8, in. which they carried
on the business of' cabinet making, could be let for Rs. 250/- per
month and was itself 'worth that much.
The Execlltion Court had relied upon the Amin's report for holding that the two bungalows could be properly sold as a single unit
because the. servants' quarters for the two bungalows, . which were
sifuated in one. compo\llld, were the same. The judgment debtors'
application bad been dismissed for absence of m;i.terial irregularity
or fraud and want of proof of substantial injury as a· result of these
auction sales. A Divisibn Bench of .the High Court had affirmed these
findings, but had certified the case, under Art. 133
of the Constitution of India, as fit one. tor an appeal to. this Court.
, T_.:o 'qi°iesti~ns arise before us for decision.
They are : firstly,
whether there was either fraud uoon the court or material irregularity
·in conducting the auction sales; and, s_econdly, whether substantial
injury to the judgment-O•btor had been proved have resulted from
the auction sales.
It rr.ay be mentioned here that no one has put in appearance on
behalf of the decree-holders respondents, Mr. J. N. Chatterjee, appearing on behalf of the judgment-debtors-appellants, stated that he did
not want to press objection to sales of Colonelgunj and Katra properties. Indeed, their auction purchasers were not impleaded. Therefore,
we will refrain from decidii\g any question relating to Colonelgunj and
K~tra. properties.
376
SUPREME COURT REPORTS
[ 1974] 1 S.C.R.
We will now consider the question of material irregularity in ordering and conducting the auction sale of the twp bungalows on Sir Tej
Bahadur Sapru Road (formerly known as Club Road). The provision
which was said to have been infringed is Order 21, Rule 66(2).
'Ihe whole of Rule 66 reads as follows :-
"R. 66( 1) Where any property is ordered to be sold by
public auction in execution of a decree, the court shall cause
a proclamation of the intended sale to be made in tjie language of such Court.
(2) Such proclamation shall be dn:wn up after notice
to the decree-holder and the judgment-debtor and shall state
the time and place of sale, and specify as fairly and accurately
as possible-
( a) the property to be sold;
(b) the revenue assessed upon the estate or part of the
estate, where the property to be sold is an interest
in an estate or in part of an e~tate paying revenue to
the Government;
( c) any incumbrance to which tbe property is liable;
(d) tbe amount for-the recovery of which the sale is
ordered; and
.( e) every other thing which the C<:'urt considers material
for a purchaser to know in order to
judge of the
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nature and value of the property.
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(3) Every application for an order for sale under this
rule shall be accompanied by a statement signed and verified
in the manner hereinbefore prescribed for the signing and
verification of pleadings and containing, so far as they are
known to or can be ascertained by the person making the
verification, the matters
required by sub-1'Ule
(2) to- be
specified in the proclamation.
( 4) For the purpose of ascertaining the matters to be
specified in the proclamation, the Court may summon any
person whom it thinks necessary to summon and may
examine him in respect to any such matters and require
him to produce any document in his possession or power
relating thereto".
It was submitted that the Court should not have put it.~ own valuation on the property, as suCh a procedure was certain to prejudice
the minds pf prospective purchasers with regard to. the value. of the
property to be auctioned. We find that there is some conflict of opinion
in the High Courts on this Question:.
The Madras High Court, in
S. K. Veeraswami Pillai v. Kalyanasundaram MudaUar &
Ors.,(')
R. Srinivasan & Os. v. the Andhra Bank Ltd.,(>) V. A. S. Ye/lappa
!"'(I) AIR 1927 Mad. 1009.
(2) AIR 1949 Mad. 398.
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GAJADHAR PRASAD V. B, B. RATAN (Beg, /.)
371
Naidu v. G. Venugopal Naidu,(') and the Allahabad High Court, in
Md. Said Khan v. Md. Abdus Sami Kha11 & A11r., (') Dwarka Dass
v. Bhawani Prasad & Ors.,(") have held that it is unnecessary for
the Court to give its own estimate. The Calcutta High Court in Rajah
Ramessur Proshad11arai11 Singh v. Rai Sham Krissen
&
Ors.,(')
Saurendra Mohan Tagore v. Rurruk Chand & Ors.,(') Bejoy Singh
Dadhulla v. Ashutosh-Gossami & Ors.,( 6 )
Lachira v.
Ra111es/1war
Singh & Ors.,( 7) Pashupati Nath Maliah &
Anr.,
v.
Bank
of
Behar,( 8) New Birbhum Coal Co. Ltd. v. Surendra Nath
Laik
&
Ors.,(') the Patna High Court, in Raghunath Singh v. Hazari
Sahu
& Ors.,(1°) and Mt. Golab Kuer
&
A11r. v.
Mt.
Bibi Saira &
Ors.,( 11 ) and the Rangoon High Court, in
A.M.K.M. Firm
V.
Baishmaw,( 12 ) have expressed opinions favouring giving of the Court's
own estirilate of the value of the property to be sold.
But, a mere
acceptance of the valuation given by the decree-holder has been he!<!
to be material irregularity in A.M.K.M. Firm v. Baishmaw (Supra).
Th~ High Court of Bombay, in Charandas Vasanji
& Anr. v.
Dossabhoy Maganlal & Ors.,(1 3) Premaraj Panna/al Shop v. Sadabaz
& Ors., ( ") has held that, although, it is not necessary for the exe~ution
Court to value the property to be sold, yet, it may do so if it thinks fit.
In Sitabai Rambhau Marathe v. Gangadhar Dhanram
Marwadi
&
Anr.,(1') however, the Bombay High Court held that the Court is
bound to hold an enquiry as to the value of the property and to state
it in the sale proclamation. _ Although the Madras High Court had
held that it is not necessary for the Court to give its own valuation,
it expressed the opinion that it is desirable, where there is a wide
divergence between the valuation of the decree-holder and of the judgment debtor, to have property valued through an Amin and to state it
in the proclamation. The Calcutta view, in some of the cases mentioned above, was tltl!f, although the Court need not give its own valuation
of the ptopeity in the sale proclamation, it would be justified in stating
tl)e valuation given by the parties.
It may be noticed here that there have been amendments of Order
21, Rule 66 by different High Courts from 1929 onwards dealing with
the question of valuation. The Calcutta a,1d the Punjab High Courts
have made it clear that "it shall not _be necessary for the Court itself
to give its own estimate of the value of the property but the proclamation shall in~lude the estimate, if any, given by either or both the
parties". Jn Andhra Ptadesh, Order 21, Rule 66(2\(e) has been
amended to make it obligator;y to give the value of the property as
stated : (i) by the decree-holder; (ii) by the judgment-debtor. The
(I) AIR 1958 Mad. 423.
(2) AIR 1932 All 664.
(3) AIR 1960 All. 510.
(4) VIII Calcutta Weekly Notes 257.
(5) XII Calcutta Weekly Notes 542.
(6) AIR 1924 Cal. 589.
(7) AIR 1930 Cal. 781.
(8) AIR 1932 Cal. 141.
(9) AIR 1934 Cal. 205.
(10) AIR 1917 Pat. 381.
(11) AIR 1919 Pat. 372.
(12) AIR 1937 Rangoon 137.
(13) AIR 1939 Born. 182.
(14) AIR 1956 Born. 248.
(15) AIR 1935 Born. 331.
378
SUPREME COURT REPORTS
[ 1974] 1 s.c.&.
Madras and Kerala High Courts have also adopted the rule as
amendtd by the Andhra Pradesh High Court. The Madhya Pradesh
High Court amendment only mentions that the particulars to be pro·
vided may include the decree-holder's estimate of the approximate
market pric.e.
The Patna High Court amendment provides :-
"that no estimate of the value of the property, other
than those, if any, made by the decree-holder and judgmentJebtor resjlcctively together with a statement that the Court
does not vouch for the accuracy of either, shall 'be inserted
in the sale proclamation".
A review of the authorities as well as the amendments to rule 66 (2)
(e) makes it ·abundantly clear that the Court, when stating the estimated value of the property to be sold, must not accept merely the
ipse dixzt of one side. It is certainly n6t necessary for it to state its
own estimate. If this were required, it may, to be fair, necessitate insertion of something .like a summary of a judicially considered order,
giving its grounds, in the sale proclamation, which may
confuse
bidders. It may also be quite misleading if the Court's estimate
is
erroneous. Mon:over, Rule 66(2)(e) reqnires the Court to state only
the facts it considers material for a purchaser to judge the value and
1rntu:·e of the property himself. Hence, the purchaser should be left
to judge the value for himself. But, essential facts which have a bearing on the very material question of value of the _property and which
would assist the purchaser in forming his own opinion must be stated
That is, after all, the whole object of Order 21, Rule 66(2)(e),
Civil Procedure Code. The Court has only to decide what all these
material particulars are in each case. We think that this is an obligation imposed by Rule 66(2)(e). In discharging it, the Court should
norrnaily state the valuation given by both the decree-bolder as well
as the judgllleGt debbor where they have both valued the
property,
and these do not appear fantastic. It may usefully state other material
facts, such as the area of land, nature of rights in it, municipal assess·
ment, actual rents realised, which could reasonably be
expected to
affect valuation.
What could be reasonably and usefully stated succinctly in a sale proclamation has to be determined on the facts of each
particular case. Inflexible rules are not desirable on such a question.
In the case before us, the execution Court had practically accepted,
as its own valuation, without indicating reasonable gronnds for this
preference, whatever the decree holders had asserted about the value
of the property. It did not bother to seriously even conside1' the objec"
tions.. of the judgment·debtors. We think that the duty to consider
what particulars should be inserted in the sale proclamation and how
the sale ought to be conducted should be performed judicially and rea·
sonably. If the execution <;:ourt does not, as it did not in the
case before us, apply its mind or give any consideration whatsoever
to the objections of the judglllent-debtor, we think a material irregularity would be committed by the execution Court. It is not necessazy for the execution Court to order the insertion of a
judicially
passed order in the sale proclamation itself, but, it should pass an
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GAJADHAR PRASAD V. B. B. RATAN (Beg, J.)
379
order showing that it applied its mind to the need for determining
all the essential particulars, which would reasonably be looked for
by a purchaser, and which should be inserted in the sale proclamation.
The order should show that it considered the objections, if any, of
the decree-holders or the judgment debtors, as the case may be. It should
not merely accept unhesitatingly the ipse dixil of one side.
We think
that the execution Court had not performed its duty fairly and reasonably in this case, After embarking on the difficult task of valuation, it
rejected the judgment debtors' figures by merely observing that they
are exaggerated and practically accepted without hesitation whatever
the decreeholders submitted, but this valuation was proved to be incorrect judged by the results of auction sales taken as a whole.
Mr. J. N. Chatterji relied upon the following passage in Mamdanayagam Pillai v_ Manickavasakam Chettiar('') :
"If t!J.e respondent knew the true facts, if he purchased at
what he knew was too low a figure based on an upset price
accepted by the Court owing to his own initial misrepresentation and subsequent suppression of material facts, his conduct would amount to fraud on the Court as
the learned
subordinate ju~ge points oμt"
lt is not necessary for us to decide whether the decree-holders'
conduct in the case before us would amount to actual fraud practised
on the Court with regard to the valuation.
The judgment-debtors
were there. with their own valuation and had even applied for
the
appointment of a Commissioner at t!J.eir expense to report about
matters affectmg the value of the proper!~'· They had asserted that the
two bungalows at Tej Bahadnr Sapru Road would fetch a much higher
value if sold separately.
The execution court should have at least performed the duty of considering whether these objections were
wellfounded.
We find from a perusal of the sale proclamation in this case that
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even the area of the compound in which the two bungalows were
situated was not there. The land in the compound is evidently nuzool
leasehold land but the unexpired period of the lease or rent payable
on it are not mentioned. It was not stated whether the bungalows,
which were valued separately, would be sold as one or two items of
property. Probably, it was left to the Amin to exercise his own discretion in this matter, as he had exercised it in the case of ColonelG
gunj property. The cumulative effect of all the katures of the case
mentioned above is that we think that there was material irregularity
here in the conduct of the execution sale of the two bungalows.
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We now turn to the question of substantial injury. The result of
the separate sales of the houses in Colonelgunj was that, when sale
prices were added up, they fetched a considerably higher pdce than
that put upon these properties, lumped together in one lot, by the
decree-holders. The High Court had also found that sales of the two
bungalows on the Tej Bahadur Sapru Road separately would probabli
(I) AIR 1945 PC. 67 @ 70.
380
SUPREME COURT REPORTS
[ 1974 j 1 S.C.R.
similarly have fetched a higher price.
The affidavit dated 19-7-1947
filed by the judgment-debtors, as stated above, had not been controverted by any material put forward by the decree-holders.
We, therefore, think that there is enough evidence to indicate that
the judgment-debtors had suffered substantial injury so far as the sale
of the two bungalows numbers 8 & 10 on Tej Bahadur Sapru Road,
Allahabad, is concerned.
The result is that we allow this appeal to the extent that we set
aside the judgments and orders of the High Court and of the execution
Court with regard to the sale of bungalows Nos. 8 & 10, together with
their compound, and dismiss it as regards the other properties. We
also set aside the execution sale of 7-5-1955 of these two bungalows
with all the land in their compound. We order that these two bungalows
will be sold afresh after judicially consideriiJ.g and deciding the question
whether they can be sold separately and what partiC\llars should be
inserted in the sale proclamation. The parties will bear their own
costs.
V.P.S.
Appeal partly allowed
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