A. Shanmugham vs Lakshmipathy Naidu and Another

Kader, J.—This civil revision raises an important question about the validity of the Madras Proviso to O.21, R.90, C.P.C. of 1908,

hrerinafter referred to as the principal Act, as a mended by the Amendment Act 104 of 1976.

(Order 21, Rule 90(1) of the principal Act runs thus-

Where any immovable property has been told in execution of a decree, the decree holder or the purchaser, or any other person entitled to share

in a rateable 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 irregularity or fraud in publishing or conducting it.

To this main provision the following proviso has been added by this Court-

Provided that the Court may, after giving notice to the applicant, call upon him before admitting the application, either to furnish security to the

satisfaction of the Court for an amount equal to that mentioned in the sale warrant or that realised by the sale, whichever is less, or to deposit such

amount in Court.

It is the validity of this proviso that is in question.

The petitioner herein, who is the judgment debtor in the above suit, filed an application to set aside the Court auction sale deed in E.P. 361 of

1984 and the learned District Munsif called upon the petitioner to furnish security in accordance With the aforesaid proviso. ''The petitioner then

filed an application to dispense with the furnishing of security and the learned District Munsif dismissed the same. Hence this revision.

It is contended on behalf of the revision petitioner that the Madras proviso empowering the Court to call upon the applicant to furnish security is

inconsistent with 0. 21, R. 90 of the principal Act, and is therefore invalid. The learned District Munsif was, therefore, in error in calling upon the

petitioner to furnish security before admitting his application to set aside sale. Reliance is sought to be placed on the decision of BalasubrAhmanyan

J. in V. Karman v. Haji Abdul Rawoof Sahib, 1982 TLNJ 502, where the learned Judge has held that the proviso introduced by this Court is

inconsistent with the principal Act as amended by the Amending Act 104 of 1976. The learned Judge has proceeded on the assumption that 0. 2

1, R. 90 of the principal Act before the principal Act was amended by the Amending Act 104 of 1976, contained a provision for calling for

security and that the Amending Act 104 of 1976 has dispensed with that condition and hence the Madras proviso is inconsistent with the principal

Act as amended by Act 104 of 1976, as is clear from the following passage in his judgment : -

The learned counsel for the decree-holder does not dispute that in the rule which now stands introduced by the parliament as 0. 21, R. 90 by Act

104 of 1976 there is no mention at all of any security as a pre-condition for An application by the judgment debtor for setting aside the sale on the

ground of material irregularity. The -omission of a provision of this kind might have passed unnoticed but for the fact that in 0. 21, R. 90, C.P.C. as

framed by the High Court of this State there, was a specific l5rovision to the following effect :-

''Provided that the Court may, after giving notice to the applicant, call upon him before admitting the application, either to furnish security to the

satisfaction of the Court for an amount equal to that mentioned in the sale warrant or to that realised by the sale, whichever is less, or to deposit

such amount in Court.''

This proviso is conspicuous by its absence in the rule after it was re-fashioned by Act 104 of 1976 .....""The enquiry therefore is whether the

provision in the High Court rule insisting upon the furnishing of security as a pre-condition for admission of the application under 0. 21, R. 90, can

be said to be consistent with the amended R. 21, R. 90.as it exists after Act 104 of 1976. There requirement as to furnishing of security imposed

an erroneous burden on the judgment debtor. The proviso passed by the High Court in 0. 2 1, R. 90 says that the security must be for an amount

equal to that mentioned in the sale warrant, or, where the sale had taken place, equal to that realisation by the sale whichever '' is less. The proviso

also lays down that such security must be furnished to the satisfaction of the Court As an alternative to furnishing the security the judgment-debtor

must deposit the amounts into Court. All these conditions are to be satisfied or to be fulfilled by the judgment debtor even before his application

under 0. 21,R. 90; is admitted. These onerous requirements are now gone by the beard by a sheer non-mention in the, rule as amended and re-

enacted by the Parliament. If ail to see how in these circumstances, the rule passed by this Court can be as being read ''consistent'' with the

principal Act as amended by Amending Act 104 of 1976. The conclusion is that the proviso to 0. 21, R. 90 stands repealed by S. 97 of the Act

104 of 1976.

But, as a matter of fact, 0. 21, R. 90 of the principal Act has not been touched by the Amending Act, 104 of 1976. The said rule stands as it was

before the Amending Act. Hence, the very assumption on which the learned Judge has proceeded to hold that the Madras proviso is in consistent

is not correct.

In Ganpat Giri Vs. Second Additional District Judge, Ballia and Others, the Supreme Court had occasion to deal with the effect of S. 97(l) of

the Amendment Act '' 104 of 1976 on local amendments. The said section runs thus-

Any amendment made or any provision inserted in the principal Act by a State Legislature or a High Court before the commencement of this Act

shall, except in so far as such amendment or provision is consistent with the provisions of the principal Act as amended by this Act, stand

repealed.

The learned Judges of the Supreme Court have held that -

The effect of S. 97(l) is that all local amendments made to any of the provisions of the Code either by a State Legislature or by a High Court

which were in consistent with the Code as amended by the Amending Act stood repealed irrespective of the fact whether the corresponding

provision ~in the Code had been amended or modified by the amending Act .......

The learned counsel for the petitioner would rely upon this decision and contend that even though the provisions of 0. 21, R. 90 have not been

amended by the Amending Act 104 of- 1976 the, Madras proviso is still inconsistent with & same and is not valid. The Supreme'' Court in that

case was dealing with the provisions of R. 72 of 0. 21, C.P.C. which runs thus -

Decree holder not to bid for or buy property without permission- (1) No holder of a decree in execution of which property is sold shall without

the express permission of the Court, bid for or purchase the property. Where decree holder purchases, amount of decree may be taken as

payment - (2) Where a decree holder purchases with such permission, the purchase money and the amount due on the decree may, subject to the

provisions of S. 73, be set off against one another, and the Court executing the decree shall enter up satisfaction of the decree in whole or in part

accordingly. (3) Where a decree holder purchases, by himself or through another person, without such permission, the Court may, if it thinks fit, on

the application of the judgment-debtor or any other person whose interests are affected by the sale, by order set aside the sale, and the costs of

such application and order, and any deficiency of price which may happen on the resale and all expenses attending it, shall be paid by the decree

holder.

It may be mentioned here and now that this rule has not been amended by the Amending Act 104 of 1976. The rule as it was in force in the State

of Uttar Pradesh prior to the commencement of the Amending Act 104 of 1976 was that in the State of Uttar Pradesh sub-rules (1) and (3) of R.

12 of 0. 21 had been completely deleted and sub-rule (2) had been renumbered as R. 72 with the modification that for the words ''with such

permission the words ''the property sold'' had been substituted. The result was that in the case of the decree holder the need for obtaining the

express permission of the executing Court before offering the bid for or purchasing the property put up for sale under sub, rule (1) was not there

and the power of the Court to set aside the sale under sub-rule (3) of R. 72 in the absence of such permission had also been taken away: The

Supreme Court held that the High Court was in error in holding that because no amendment had been made to R. 72 by the Amending Act 104

of''1976, S. 97(l) of the Amending Act 104 of 1976 had no effect on the rule as it was in force in the State of Uttar Pradesh before the

commencement of the Amending Act. The Supreme Court found that the Allababad amendment cannot continue to be in force after 1st Feb,

1977, when the Amending Act 104, of 1976 came into force. That was a case where there was a clear inconsistency between the provisions of

the principal Act embodied in R. 72 of 0. 21 and the Allahabad amendment. The principal Act laid it as a condition precedent for the decree

holder to obtain prior permission of the Court before purchasing the property brought to sale in execution of his decree and empowered the

executing Court to set aside the sale if he purchases the property without such permission. The Allahabad amendment dispensed this condition.

Because of this patent inconsistency S. 97(l) of the Amending Act is attracted. But, the case on hand is entirely different. Order 21, Rule 90 of the

principal Act is totally silent about imposing any precondition before an application to set aside the sale is admitted, while the Madras amendment

provides imposing a precondition for furnishing security. The Madras proviso is only a case of legislation in an unoccupied field and is not

inconsistent with or contrary to the provisions of the principal Act.

I shall now refer to the Full Bench decision of this Court in Gunturu Seeta Ramanjaneyulu, minor by mother and guardian Seetamma Vs.

Vishnubhotla Ramayya and Others, where the vires of the Madras Proviso to 0. 21, R. 90, C.P.C. came up for consideration. The appellant

therein filed an application to set aside the Court auction sale on the ground of material irregularity. The District Munsif of Masulipatnam ordered

the appellant to enter into a security bond in the amount for which the property had been sold acting tinder the Madras proviso to 0. 21, R. 90. As

the security was found unsatisfactory, the Court ordered the appellant to deposit the amount into Court in cash if he wished to proceed with his

application. The appellant failed to deposit the amount within the time allowed and consequently the District Munsif dismissed the application''.

When the matter came up before the Full Bench, the validity of the Madras proviso was challenged. The Madras proviso originally ran as follows -

Provided that the Court may before admitting, the application call upon the applicant either to furnish security to the satisfaction of, the Court for

an amount equal to that mentioned in the sale warrant or that realised by the sale Whichever is less, or to deposit such amount in Court.

In order to avoid any misunderstanding as to whether the applicant must be heard before he is directed to furnish security, the proviso was

refrained in 1937 as follows -

Provided that, the Court may, after giving notice to the applicant, call upon him before admitting the application either to furnish security to the

satisfaction of the Court f or an amount equal to that mentioned in the sale warrant or to that realised by the sale whichever is less or to deposit

such amount in Court.

As pointed out by the Full Bench, this amended proviso put it beyond doubt that opportunity must be given to the applicant of showing cause

before an order requiring security is passed against him. According to the Full Bench, even before this amendment, the proviso as it stood should

be read as giving a right to the applicant to be heard on the matter of security and the opportunity had been given to the applicant in that case by

the District Munsif of Masulipatnam. It was contended before the Full Bench that the Court had no power in any-circumstances to require security

to be furnished, even where his application to set aside-the sale was entirely. unwarranted. The Full Bench observed -

That is an agreement which we are not prepared to accept. A person has a right of being, heard but once he has been he heard, the Court can put

him on terms before allowing him to proceed further with such a matter. We hold that the rule as it stood in 1937 was intra vires the Court and that

therefore District Munsif has power to pass the orders which he -did on 26th June and 19th August, 1937.

More so, in the case of the amended proviso which makes it explicit that an opportunity must be given to the applicant before directing him to

furnish security.

For the foregoing reasons I hold that the Madras proviso to 0. 21, R. 90 is not inconsistent with R. 90 of 0. 21 of the principal Act and is not hit

by S. 97(l) of the Amending Act 104 of 1976. The learned District Munsif was therefore well within his'' rights in directing the revision petitioner to

furnish security before admitting his application to set aside the sale. The civil revision petition fails and is dismissed. No costs.

Revision petition dismissed.