Manicka Gramani vs V. Venkateswara Iyer and Others

V. Ratnam, J.—The legal representative of the deceased judgment-debtor in O. S. No. 6757 of 1973, 10th Assistant Judge, City Civil

Court, Madras, is tin appellant in this appeal. The property bearing door No. 206, Arcot Road, Vada Palani, Kodambakkam, Madras belonged

to the family of the appellant and respondents 1 and 2 in execution of the decree obtained by them in O. S. No. 6757 of 1975, brought the

property to sale in E. P. No. 2336 of 1976 and the third respondent purchased the property in the sale held on 22nd November, 1978, for a sum

of Rs. 56,250. The third respondent had also deposited, according to the appellant. 25 per cent of the sale consideration on 23rd November,

1978. The appellant further stated that out of the amount due to the decree-holder mentioned in the sale proclamation, a sum of Rs. 6,500 in

instalments of Rs. 5,000 and Rs. 1,500 had been paid after the E. P. and therefore, the amount due to the decree-holder as on the date of sale

was only Rs. 19,500 Claiming that he had deposited a sum of Rs. 19,500 together with a sum of Rs. 2.812 50 representing 5 per cent of the sale

consideration paid by the court-auction-purchaser and a further sum of Rs. 677.50 to cover the expenses of sale, totalling in all to Rs. 23,000, the

appellant, filed the application under Order 21, Rule 89 of the Code of Civil Procedure, to set aside the Court sale held on 22nd November, 1978

The appellant had also expressed his willingness to deposit some more amount if found due, though he had stated that he had paid into Court a

sum of Rs. 23,444.

The decree-holders viz., respondents 1 and 2 herein made an endorsement that they have no objection for the sale being set aside as the decree

amount has been deposited into Court. The application was resisted only by the third respondent herein on the ground that the application had

neither been filed in time nor the correct amount deposited.

The learned 10th Assistant Judge, City Civil Court, Madras, held that the petition under Order 21, Rule 89 of the Code of Civil Procedure,

having been filed by the appellant on 21st December, 1978, was well within time. However, the learned 10th Assistant Judge held that in the

absence of any date or document to show that the sum of Rs. 6,500 had been paid to respondents 1 and 2, this amount could not be deducted

from out of the amounts to be deposited. In addition, it was also held that the appellant had not paid the poundage of Rs. 1,725. In this view, the

Court below held that the appellant had not paid the entire amount and therefore, the sale cannot be set aside. Consequently, the petition was

dismissed. It is the correctness of this order that is challenged in this appeal.

It is necessary at this stage to deal with an objection raised by the learned counsel for the 3rd respondent to the effect that the petition is barred

by limitation. It is not disputed that the sale of the property was held on 22nd November, 1978. The objection that is raised by the third

respondent is that the petition had been filed on 6th January, 1979, and therefore, the application is barred. The other objection that is raised in this

connection is that the deposit of the amount was made on 27th February, 1979, long after the filing of the application and consequently, there was

no deposit within time as contemplated in an application under Order 21, Rule 89, Civil Procedure Code. A perusal of the application filed by the

appellant under Order 21, Rule 89 shows that the petition had been signed on 21st December, 1978 and, it also bears the Court''s seal for having

been presented into Court on 21st December, 1978. Therefore, there is no substance in the objection of the third respondent that the petition was

filed only on 6th January, 1979, and consequently, it is barred. With reference to the objection that there was a delayed deposit of the amount into

Court, it is found from the records that a sum of Rs. 23,000 had been deposited into the Reserve Bank of India on 22nd December, 1978, and

that chalan had also been produced before the City Civil Court, Madras; but that the amounts so paid had been given credit to on 27th February,

1979, after verifying the payment made into the Reserve Bank of India, Madras. It is, therefore, obvious that the payment had also been made

within 30 days from the date of sale. Consequently, it is not open to the third respondent to raise the objection that the application and the payment

were made out of time.

The learned counsel for the appellant contends that respondents 1 and 2 in this case accepted the payment of Rs. 6.500 made by the appellant

after the proclamation of sale and consequently, it is not open to the third respondent to dispute those payments and claim that there is a short-fall

in the deposit as contemplated under Order 21, Rule 89, Civil Procedure Coda. On the other hand, the learned counsel for the third respondent

contends that inasmuch as there is no proof before the Court that the amount of Rs. 6,500 had been paid to the decree-holders/respondents 1 and

2 herein, the appellant is not entitled to deduct that amount from the deposit and therefore, the deposit is not for the full amount. It is necessary to

consider therefore the question whether the payment made by the appellant to respondents 1 and 2 should be either certified or otherwise

established apart from the statement of the respondents 1 and 2 that the money had been so paid in order to enable him to deduct that amount

from rut of the amounts to be deposited in an application under Order 21, Rule 89, Civil Procedure Code. In this connection, the learned counsel

for the appellant draws my attention to the decision in Yalamanchili Anantaramayya Vs. Suryadevara Narasayya, . In that case, the question arose

whether the expression ""any amount which may have been received by the decree-holder"" would include anything equivalent to the amount which

is due to the decree-holder by the judgment-debtor under the decree. In that case, the judgment-debtor in an application under Order 21, Rule 89,

Civil Procedure Code, merely deposited 5% requited under Clause (1)(a); but did not deposit the amount required under Clause (1)(b) viz., for

payment to the decree-holder of the amount specified in the proclamation. According to the judgment-debtor, this was so because the decree-

holder had accepted a mortgage from the judgment-debtor in satisfaction of the amount due to him under the decree. On an objection raised by

the auction-purchaser that it was not sufficient compliance with Order 21, Rule 89, and therefore the sale ought not to be set aside, Beasley, CJ.,

held that the judgment-debtor had complied with the conditions laid down in Order 21, Rule 89, Civil Procedure Code, and it was not necessary

that the decree-holder should have received the amount under Clause (1)(b) in cash, that it was enough if the decree holder was satisfied with

regard to the whole amount due to him under the decree and that the Court was bound to set aside the sale. In doing so, Beasley, CJ., referred to

Vedula Lakshminarasimhacharyulu v. Lakshmiamma (1912) MWN. 756 and Ananta Lakshmi Ammal v. Sankaran Nair (1913) 24 ML J 203. In

the first case which arose under the provisions of the old Code of 1882, the wording of which is exactly similar to words found in Order 21, Rule

89, Civil Procedure Code, it was held that an agreement with the decree-holder''s widow to treat a portion of the decree debt as discharged in

consideration of services rendered by the judgment-debtor to her husband is a valid discharge and actual receipt of cash is not necessary. In the

latter decision, the decree-holders waived a portion of the decree amount and such waiver was held to satisfy the requirements of the Rule. At

page 206, the Bench observed thus:

The whole amount due to the decree-holder was no doubt paid in cash to the decree-holders. They waived a portion of the amount due to them

and put in an application to the Court requesting that satisfaction might be entered of the whole amount due to them under the decree.... It was held

by this Court in Vedula Lakshminarasimhacharyulu v. Lakshmiamma (1912) MWN 756 that the payment to the decree holder need not be in cash

and that it is enough if the decree-holder is satisfied with regard to the whole of the amount due to him to justify an application under Order 21,

Rule 89.

In Muthuvenkatapathy Reddi Vs. Kuppu Reddi and Others, , a Full Bench of this Court had occasion to consider the scope of Order 21, Rule 89.

Civil Procedure Code, and the question whether payment in cash to the decree-holder alone is within the contemplation of the provisions of Order

21, Rule 89, Civil Procedure Code, and the assignment of a mortgage would not amount to payment to a decree holder. In considering this

question, Leach, CJ, speaking for the Full Bench stated thus:

Order 21, Rule 89, Civil Procedure Code, permits a judgment debtor to apply to the Court to have a sale of immovable property in execution set

aside provided certain conditions are fulfilled. He must deposit in Court for payment to the purchaser a sum equal to 5 per cent. of the purchase

money and in addition must deposit for payment to the decree-holder the amount specified in the proclamation of sale as that for the recovery of

which the sale was ordered, less any amount which may, since the date of such proclamation of sale have been received by the decree-holder.

Rule 92 requires these deposits to be made within 30 days from the date of sale. If the deposits are made within the required period the Court is

bound to set aside the sale. Under the provisions of Article 166 Limitation Act, the application for setting aside must be filed within 30 days of the

sale.

Again in considering the question whether the delivery by the judgment-debtor to the decree-holder of money''s worth would not relieve him from

the necessity of paying into Court the whole of the decretal amount to entitle him to an order setting aside the sale, the Full Bench referred to the

decision in Lakshinarasimhacharyulu v. Lakshiammal (1912) MWN 756, Anantha Lakshmi Ammal v. Sankaran Nair (1913) 24 MLJ 105, and

Subbayya v. Venkata Subba Reddi (1935) 42 LW 692 : AIR1935 Mad 1030 and held that any payment or adjustment made by the judgment-

debtor which satisfies the decree-holder is a payment within the meaning of the rule. It is thus evident that payment to the decree-holder need not

be only by cash and that it is also open to the decree-holder as pointed out by Benson and Sundaram Ayyar, JJ , to waive a portion of the amount

due to him and that the waiver operated as payment under Order 21, Rule 89, Civil Procedure Code. In the present case, it is not as if the

appellant pleaded an adjustment as such, but the appellant and respondents 1 and 2 decree-holders are not at variance with reference to payment

of Rs. 6,500 made by the appellant to the decree-holders. In view of the circumstance that respondents 1 and 2 accepted the payment of Rs.

6,500 made by the appellant, this would amount to payment received by respondents 1 and 2 since the date of the proclamation of sale which has

to be deducted under the provisions of Order 21, Rule 89, Civil Procedure Code, from out of the amounts payable by the appellant while making

the deposit in his application under Order 21, Rule 89, Civil Procedure Code. The Court below was, therefore, in error when it held that the

appellant had not deposited the sum of Rs. 6,500 along with his application to set aside the sale under Order 21, Rule 89, Civil Procedure Code.

The next objection that is raised by the learned counsel for the appellant is that the poundage need not be deposited by the appellant who seeks

to set aside the Court-auction sale by resorting to Order 21, Rule 89, Civil Procedure Code. That provision as amended in Madras reads thus:

89(1). Where immovable property has been sold in execution of a decree, the judgment-debtor, or any person deriving title from the judgment-

debtor, or any person holding an interest in the property may apply to have the sale set aside on his depositing in Court--

(a) for payment to the purchaser, a sum equal to 3 per cent. of purchase money; and

(b) for payment to the decree-holder, the amount specified in the proclamation of sale as that for recovery of which the sale was ordered less any

amount which may, since the date of the proclamation of sale, have been received by the decree-holder:

Provided that where the Immovable property sold is liable to discharge a portion of the decree debt the payment under Clause (b) of this sub-rule

need not exceed such amount as under the decree the owner of the property sold is liable to pay.

(2) Where a person applies under Rule 90 to set aside the sale of his Immovable property, he shall not, unless he withdraws his application, be

entitled to make or prosecute an application under this rule.

(3) Nothing in this rule shall relieve the judgment-debtor from any liability he may be under in respect of costs and interest not covered by the

proclamation of sale.

A reading of the aforesaid provision does not indicate that poundage as such is contemplated as an item of deposit under the provisions of Order

21, Rule 89, Civil Procedure Code. That this is so is also put beyond doubt by Rule 203(1) of the Civil Rules of Practice which states that if the

sale is set aside under Order 21, Rule 89, of the Code, the Court may nuke an order for payment by the judgment-debtor of the poundage and

other costs and interest, if any, not covered by the proclamation of sale. A plain reading therefore of the provisions of Order 21, Rule 89, Civil

Procedure Code, along with Rule 203(1) of the Civil Rules of Practice, clearly establishes that in an application under Order 21, Rule 89, Civil

Procedure Code, seeking to set aside the sale, poundage need not be deposited.

The learned counsel for the appellant invited my attention in this connection to the decision of the Calcutta High Court reported in Gopal

Chandra Chanda Vs. Gobardhan Chandra Chanda and Others, . In that case, an application was filed by the judgment-debtor under Order 21,

Rule 89, Civil Procedure Code, depositing a sum equivalent to 5% of the purchase money and also the amounts specified in the proclamation of

sale for the recovery of which the sale was ordered, but the poundage was not paid. The sale was set aside and in the appeal by the auction-

purchaser, it was contended that the poundage had not been paid and therefore, the sale could not be set aside under Order 21, Rule 89, Civil

Procedure Code. Repelling this contention Derbyshire, CJ., observed at page 523, thus:

There is nothing in Order 21, Rule 89 which makes it necessary for the judgment-debtor to put in the poundage fee as a condition precedent to the

sale being set aside. Order 21, Rule 92 provides that where an application is made to set aside a sale under Order 21, Rule 89 and the deposit

required by that Rule is made within 30 days from the date of sale, the Court shall make an order setting aside the sale. In my opinion, the learned

Judge was right in setting aside the sale. There is no hardship or injustice upon the auction-purchaser because Order 21, Rule 89(3) provides:

Nothing in this rule shall relieve the judgment-debtor from any liability he may be under in respect of costs and interest not covered by the

proclamation of sale.

In the Civil Rules and Orders which are made by this Court for application to District Courts it is provided in Chapter X, Rule 246:

When a sale of immovable property is set aside under Order 21, Rule 89 or Section 174(1), Bengal Tenancy Act, the Court, may make an

order for payment by the judgment-debtor or by the person at whose instance the sale is set aside, of the poundage fee and other costs, if any, not

covered by the proclamation of sale.

On this reasoning, the order setting aside the sale even though poundage had not been deposited, was upheld. In Sannidhanam Lakshmi Kantayya

Vs. Ghatam Suryanarayana and Another, a Division Bench of that Court held that on the language of Order 21, Rule 89, Civil Procedure Code,

and the relevant rules of the Civil Rules of Practice that in order to entitle the judgment-debtor to have the sale set aside under Order 21, Rule 89.

Civil Procedure Code, only two payments have to be made, namely : (i) compensation to the auction-purchaser equivalent to five per cent. of the

purchase money; and (ii) the decretal amount as indicated in the proclamation of sale for the recovery of which the sale was ordered for being paid

to the decree-holder. The Court observed in this connection thus:

We cannot import into this provision of law the payment of poundage which should only follow the setting aside of the sale as is clear from Rule

203 of the Civil Rules of Practice which postulates that the Court ''may make an order for payment by the judgment-debtor of the poundage and

other costs and interest, if any, not covered by the proclamation of sale'', after the sale is set aside under Order 21, Rule 89, Civil Procedure Cods

and not before. If that were the legal position, we fail to see how the failure to deposit the full poundage which here we are told comes to Rs.

32.49 nP. would result in the dismissal of the application to set aside the sale.

In view of the decisions referred to above and since poundage is a charge made by the Court in the sale of the property which can be made

payable by the judgment-debtor under Rule 203 of the Civil Rules of Practice only after the sale is set aside, the poundage of Rs. 1,725-need not

have been deposited at all by the appellant. The conclusion of the Court below contra cannot, therefore, be sustained.

It is not disputed that if the sum of Rs. 6,500 is deducted as it should be and the poundage also need not be deposited, the amount actually

deposited by the appellant is in excess of the amounts that should be deposited by him in his application under Order 21, Rule 89, Civil Procedure

Code. The appellant, therefore, is entitled to have the Court-sale held on 21st November, 1978, set aside. The order of the Court below is

therefore set aside and the Civil Miscellaneous Appeal is allowed. No costs.