Execution Sale Vitiated by Non-Disclosure of Material Facts and Third-Party Rights: Kerala High Court”

The Kerala High Court underscored the significance of disclosing material facts and considering third-party rights in execution sales. The court, in the case of FAO No. 26 of 2022, ruled against the appellant, Anitha Kuply, upholding the execution court’s order that set aside the property sale due to material irregularities under Order XXI Rule 90 of the CPC.

The appellant challenged the execution court’s decision, which set aside the sale of a property, including a multi-storied apartment complex. The pivotal issues revolved around the accuracy of the property’s description and the judgment debtor’s limited saleable interest, impacting the rights of third-party apartment purchasers.

Irregularity in Property Description: The court identified a material irregularity in the sale process, pointing out significant discrepancies in property description. Justice Menon noted, “These aspects were not brought to the notice of the execution court while drawing up the proclamation of sale.”

Application of Order XXI Rule 90(3) CPC: The judges clarified the application scope of Order XXI Rule 90(3). Justice Narendran explained, “Order XXI Rule 90(3) of CPC would not be applicable where the sale was held in violation of mandatory requirements of the rule or is vitiated by material irregularity.”

Protection of Third-Party Rights: The judgment emphasized the importance of protecting third-party purchasers’ rights, especially when their interests are affected by the execution sale.

Decision: The High Court dismissed the appeal, supporting the execution court’s decision to set aside the property sale. It was noted that the appellant-decree holder could pursue other legal means for executing the decree in accordance with law.

Date of Decision: 5^th April 2024.

ANITHA KUPLY VS MARIKKAR PLANTATIONS (P) LTD.