K.V. Janakirama Iyer vs Radhakrishna Chettiar and Another

Padmini Jesudurai, J.—The short point that arises for consideration is whether the amendment introduced to Order 21, Rule 90, C.P.C., by

the High Court demanding furnishing of security from an applicant seeking to set aside the sale, stands repealed by the Central Act 104 of. 1976 as

being inconsistent with it.

The facts necessary for the disposal of the revision are as follows:

The first respondent obtained a money decree against the petitioner in O.S. No. 102 of 1975 on the file of the District Munsif, Valangaiman at

Kumbakonam, and in execution thereof, brought certain properties belonging to the petitioner to sale. The second respondent purchased the same

In the Court auction. The petitioner filed an application under Order 21, Rule 90, C.P.C., to set aside the above sale. The petitioner was called

upon by the executing Court to furnish security in the above petition under the second proviso to Order 21, Rule 90, C.P.C., added to the rule by

virtue of Madras Amendment dated 30.10.1936 made by this Court u/s 122, C.P.C. Both parties had raised different contentions in the Court

below, based on the facts of the case and on a consideration of those contentions, the Court had passed the impugned order directing the

petitioner to furnish security.

In the revision, however, the order of the Court below was challenged on the ground that the second proviso to Order 21, Rule 90, C.P.C.

introduced by this Court u/s 122, C.P.C., stood repealed by virtue of Section 97 of Central Act 104 of 1976 (hereinafter referred to as the

Amending Act), as being inconsistent with the Amending Act and was, therefore, no longer in force.

The question that arises for consideration is whether the amendment introduced by this Court in the proviso to Order 21, Rule 90, C.P.C.,

requiring furnishing of security, is inconsistent with Rule 90 as it now stands after the amendment?

Section 97(1) of the Amending Act is as follows:

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far as such amendment or provision is consistent with the provisions of the Principal Act as amended by this Act, stand repealed.

For easy reference, Order 21, Rule 90, C.P.C., as it stood before the Amending Act may also be extracted.

(Rule 90: Application to set aside sale on ground or irregularity or fraud : (1) Where any immovable property has been sold in execution of a

decree, the decreeholder or any 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:

Provided that no sale shall be set aside on the ground of irregularity or fraud unless upon the facts proved the Court is satisfied that the applicant

has sustained substantial injury by reason of such irregularity or fraud.

(High Court Amendment-Madras)-After the first paragraph and before the present proviso to the rule, insert the following-

Provided that the Court may, after giving notice to the appellant, 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;

Provided also that the security furnished or the deposit made as aforesaid, shall be liable to be proceeded against only to the extent of the deficit on

a re-sale of the property already brought to sale.

The above rule after the Amending Act stands as follows:

Application to set aside sale on ground of irregularity or fraud : (1) 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 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.

(2) 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.

(3) No application to set aside a sale under this rule 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.

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.

In Ganpat Giri Vs. Second Additional District Judge, Ballia and Others, , the Supreme Court had occassion to examine this aspect with

reference to Order 21, Rule 72 of the Civil Procedure Code. That was a case where the decree-holder, who was required to obtain permission to

bid under Rule 72(1) as it then stood, had failed to obtain the permission and was the successful bidder in the auction held. The executing Court

before which the sale was challenged on this ground, set aside the sale holding that Order 21, Rule 72, C.P.C., as it was in force in the State of

Uttar Pradesh prior to the Amending Act, was not repealed by the Amending Act. The District Court upheld the order of the executing Court. The

High Court, took the view that since the Amending Act did not specifically amend Order 21, Rule 72, C.P.C., the latter continued to be in force

with all the local amendments. The Supreme Court, however, taking into acount the view expressed by the Law Commission regarding the

proposed amendment to Order 21, Rule 72, held that, though Rule 72 had not been amended, its retention in the present form had been

recommended by the Law Commission and Rule 72-A had been added and that, therefore, the provisions in Rule 72 requiring the decree-holder

to seek prior permission of the Court to bid in the auction was inconsistent with the Code as it stood after the amendment and that, therefore, the

local amendments which had been made to Rule 72 stood repealed by Section 97(1) of the Amending Act. It, therefore, follows that merely

because no amendment had been introduced to any particular section or rule in the CPC by the Amending Act, it would not follow, as a matter of

rule, that all prior amendments are to be retained, the test in each case would be to see whether the prior amendment could be said to be

inconsistent with the section as amended or retained after the amendment.

No doubt, no substantial amendment has been made by the Amending Act to Rule 90. A purchaser in Court auction is also given the right to

apply under Rule 90. By the Amending Act, Sub-section (3) and the Explanation to it, have been added. Sub-section (3) limits the ground of

challenge of the sale to any ground that could occur after the drawing up of the proclamation of sale would not, therefore, under the Amending Act

be a ground for setting aside the sale under Rule 90. The Explanation makes it clear that 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. It is, therefore, clear that the Amending Act as such has not

introduced any change on the question of requiring the furnishing of security from an applicant under Rule 90. Following the principles laid down by

the Supreme Court in the decision referred to in para 8 above, it is clear that the mere absence of an amendment to any provision would not imply

retention of local amendments made prior to the Amending Act. The question would be whether the local amendment is inconsistent with the

particular provision as retained.

The Andhra Pradesh High Court had occasion to go into this aspect in D. Venugopala Reddy v. Smt. Chilla Laxmikantham (1983) 2 An.

W.R. 138, wherein a single Judge of that Court has taken the view that the Madras Amendment to Rule 90 requiring furnishing of security is

inconsistent with Section 90 as it stands after the amendment. The learned Judge finds support for his conclusion from the fact that, Rule 90 after

the amendment confers an unqualified and absolute right on the applicant seeking to set aside a Court sale, and that it could not be taken that the

Parliament intended that such a right of the applicant should be clogged by imposition of pre-conditions like furnishing security; It is also significant

to note that, even according to the High Court amendment, requiring the applicant to furnish security was not mandatory but was left to the

discretion of the executing Court. When the Legislature introduced Rule 90 as it now stands, it obviously meant to take away even this discretion

from the executing Court and had therefore not incorporated the same in Rule 90 introduced by the Amending Act. When the Legislature by the

Amending Act had chosen to give an unfettered right to the applicant subject only to the limitations imposed by Rule 90 itself, viz., Proof of

material irregularity or fraud resulting in substantial Injury, any amendment seeking to fetter the rights of the applicant by introducing any fresh

limitation like requiring furnishing of security should be taken to be inconsistent with the Amending Act, Just as seeking permission of the executing

Court before a decreeholder could bid in Court auction as contained in the local amendment in U.P., was found to be inconsistent with Rule 72,

which did not require any such permission, requiring the applicant to furnish security should be taken to be inconsistent with Rule 90, which does

not contemplate any such requirement. I am in agreement with the view expressed by the single Judge of Andhra Pradesh High Court in D.

Venugopala Reddy v. Chilla Laxmikanthan (1983) 2 An. W.R. 138, that, the amendment to Rule 90 introduced by this Court on 30.10.1936 u/s

122, C.P.C., stands repealed by the Amending Act.

The executing Court, therefore, could not call upon the petitioner to furnish security in an application under Order 21, Rule 90, C.P.C.

In the result, the civil revision petition is allowed. The order of the learned District Munsif, Valangiman at Kumbakonam in E.A. No. 271 of

1984 is set aside. No costs.