Niranjan Mal vs Asa Ram and Others

Teja Singh, C.J.—The facts of the case giving rise to this appeal are mentioned in my .Meter of K-7-1952 by which the case was referred to the Division Bench. That order should be read as a part of the final order.

The position taken up by the Appellants counsel is two-fold. First is that since the sale Miras confirmed by the executing Court under is 92 of Order 21, C.P.C. and the Plaintiffs'' suit is virtually to set aside that order of the executing Court, it is barred by Sub-rule (3) of Rule 92. Secondly he contends that the questions raised by the Plaintiffs in the suit in so far as they relate to auction-purchaser''s failure to deposit three-fourth of the purchase money and the legality of the sale, are questions relating to execution and accordingly they could only be agitated by an application u/s 47, C.P.C, and not by a regular suit.

In order to appreciate the first point it is necessary to refer to some of the Rules of Order 21. Rule 84 lays down that on every sale of Immovable property the person declared to be the purchaser shall pay immediately after such declaration a deposit of twenty-five per cent on the amount of his purchase money to the officer or other person conducting the sale, and in default of such deposit, the property shall forthwith be resold. Rule 85 is to the effect that the full amount of purchase money payable shall be paid by the purchaser into Court before the Court closes on the .fifteenth day from the sale of the property. There is a proviso to this Rule but we are not concerned with it in the present case. Rule 96 reads as follows:

In default of payment within the period mentioned in the last preceding rule, the deposit may, if the Court thinks fit, after defraying the expenses of the sale, be forfeited to the'' Government, and the property shall be resold, and the defaulting purchaser shall forfeit all claim to the property or to any part of the sum for which it may subsequently be sold.

Rule 89 provides for an application by a person owning the property sold or holding an interest therein to set aside the sale after the deposit in Court of the amount specified in the proclamation of sale for payment to the decree-holder and a sum equal to five per cent of the purchase money for payment to the purchaser. Rule 90 deals with applications to set aside sales on grounds of irregularity or fraud and Rule 91 for applications by purchasers to set aside sales on ground of judgment-debtors having no saleable interest in the property. The words of Rule 92 are:

(1) Where no application is made under Rule 89, Rule 90 or Rule 91, or where such application is made and disallowed, the Court shall make an order confirming the sale, and thereupon the sale shall become absolute.

(2) Where such application is made and'' allowed, and where, in the case of an application under Rule 89, the deposit required by that Rule is made within thirty days from the date of sale, the Court shall make an order setting aside the sale. Provided that no order shall be made unless notice of the application has been given to all persons affected thereby.

(3) No suit to set aside an order made under this Rule shall be brought by any person against whom such order is made.

Both sides agree that before the executing Court made an order confirming the sale the judgment-debtors, who are the Plaintiffs in the present case, put in objections under Order 21 Rule 90, C.P.C., on the ground that the sale was vitiated because of irregularities, etc. This objection petition of theirs was dismissed and the sale was confirmed. The main ground urged by the Plaintiffs in support of their contention that the sale in favour of the auction-purchaser could not have been confirmed is that he did not deposit three-fourth of the purchase money within time allowed by Rule 85 and because of this the executing Court had no option but to order the resale of the property, under, Rule 86. Their counsel conceded that time for payment of the amount in question was extended by the executing Court, but he argued that the Court had no power to do so. Mr. Dalip Chand counsel for the Defendant (auction purchaser) argued that the executing Court was competent to extend time and he further urged that even if it be conceded for a moment that the order extending the time for deposit of the three-fourth of the purchase money was without jurisdiction, the auction purchaser''s failure to make the deposit within the time allowed by Rule 85 amounted merely to an irregularity and this being the case the only course open to the judgment-debtor was to raise the question by an application under Order 21 Rule 90 and since his application was dismissed and the sale was confirmed, Sub-rule (3) of Rule 92 debarred him from bringing the suit. This contention of his is supported by a number of cases.

In - ''Bhim Singh v. Sarwan Singh'' 16 Cal 33 the auction-purchaser at a court-sale failed to deposit 25 per cent of the amount of the purchase money in accordance with the provisions of Section 306 of the Code of 1882 which corresponds to our present Rule 84. It was held by the High Court that this constituted a material irregularity in conducting the sale and the matter must be enquired into upon an application u/s 311 (of the C.P.C. of 1882) and consequently a separate suit to set aside a sale on such a ground would not lie. The same view was taken by another bench of the same Court in ''Mahomed Ali Mia v. Kiberia Khatun'' 9 Ind Cas 66 (Cal). There is no doubt that the deposits of one-fourth of the purchase money and that of the remaining three-fourth are dealt with by two different Rules, one by Rule 84 and the other by Rule 85, but as regards the consequences that must follow when default is made in payment of these amounts they are the same in both the erases, because the word used in Rule 84 as well as in Rule 86 is "shall". The first (Rule 84) says that in default of such deposit the property shall forthwith be sold. Similarly it is mentioned in Rule 86 that in default of payment within the period mentioned in Rule 85 the property shall be resold. This makes me think that the above mentioned cases which relate to the auction-purchaser''s failure to deposit one-fourth of the purchase money also apply to the case where the three-fourth money is not paid in time.

In - Varankkot Illath Subramaniyam Nambudri, Karnavan and Manager of the Illom Vs. V.K. Vykunda Kammathi and Others, a decree-holder was the auction-purchaser and he deposited the three-fourth of the purchase money a few days after the time allowed by law. In spite of this the sale was confirmed. After the confirmation of the sale the judgment-debtor applied under Sections 47 and 151, C.P.C. that the sale be declared null and void. The executing Court dismissed the application as barred by time. The High Court while dismissing the judgment-debtor''s appeal from the order of the executing Court made the following observations:

We agree with the contention of Mr. Menon to this extent, i.e., that a Court ought not to extend the time for deposit by the purchaser (Order 21 Rule 85, C.P.C.) or accept a deposit paid beyond time without the consent of all the parties concerned; if the Court does so extend the time or accept the deposit without the consent of all parties interested, probably it is an irregularity only and does not render the sale a nullity.

The fact of the issue of a sale certificate is conclusive if it is not set aside - sale certificates not being documents which can be lightly regarded or loosely construed...

... The contentions that the deposit was wrongly accepted and that the time was wrongly extended could have and ought to have been raised prior to the confirmation... We are therefore, of opinion that the sale in this case was not a nullity. The sale being found not to be a nullity any application to set it aside must be filed within thirty days under Article 166, Limitation Act and the present application is thus baxred.

In - ''Nathu Mal v. Malawa Mal'' AIR. 1931 Lah. 15 the auction-purchaser had tendered the three-fourth of the purchase money within the period prescribed by law and the Court, in view of the pendency of the objections to the sale, extended the time for the payment of this money till the disposal of those objections. The objections to the sale were dismissed. One of the points urged before the High Court in civil appeal preferred by the judgment-debtor was that the executing Court could not extend time and the sale was vitiated by an illegality. The learned Judge of the High Court while spurning this contention observed that the provisions of Rule 85 are intended to be directory only and not absolutely mandatory and also that if time for deposit under Rule 85 is extended with the judgment-debtor''s consent the case is one of material irregularity within the meaning of Rule 90.

Mr. Lachhman Dass counsel for the Plaintiffs, cited the following authorities - ''Intizam Ali v. Narain Singh'' 5 All 316. The person declared to be the purchaser of the property put up for sale in execution of a decree did not deposit twenty live per cent of the amount of his purchase money immediately after such declaration but on a date subsequent to the date on which the property was put up for sale. It was held that there was no sale at all of the property. No reasons were given and no case law was discussed. It may be pointed out that the question was raised not by a regular suit but by an application made by the judgment-debtor to the executing, Court. Hence the precise point which has arisen for determination in the present case namely whether, when a sale is confirmed by an executing Court, a suit lies to set aside that order of the Court, did not arise at all.

''Amir Begam v. Bank of Upper Indiana Ltd. 30 All 273. The facts of this case are almost similar to those of the case mentioned above and the learned Judges while holding that because one-fourth of the purchase money had not been paid in time the sale wall not merely irregular but no sale at all. Reliance was placed on the previous case.

''Gauri Ram v. Jaishi Ram'' AIR 19511 Him. P. 1. In this case certain property of the judgment-debtor was sold in execution of a decree and the sale was confirmed on the very day on which it took place. The judgment debtor brought a suit against the auction-purchaser for declaration that the sale was illegal and without jurisdiction and should be declared null and void on the ground of fraud practiced on the Court. An objection was raised by the auction-purchaser that the suit wan barred by the provisions of Order 21 Rule 92

The learned Judicial Commissioner held that the suit was competent because of the allegations of fraud. The learned Judicial Commissioner after quoting the words of Rule 92 of Order 21 remarked as below:

The learned Counsel relies upon this Sub-rule (3) and contends that the Plaintiff is debarred from bringing a suit to set aside the sale. There is much force in his contention. The Legislature intended that all matters relating to the sale, after an auction takes place should be decided not only by the Court that holds the sale but also without the least possible delay.

It is admitted that the Plaintiff could have applied under Order 21 Rule 90 to set aside the sale within thirty days as provided by Article 166, Limitation Act. But the Plaintiff alleged that he could not do so as the sale was confirmed on the very date it was held. He was fraudulently debarred from challenging the sale under Rule 90 of Order 21.... The Plaintiff further alleges that he was not able to resort to Rule 90 of Order 21, in order to show that there was fraud in publishing and conducting the sale.

In my view the Plaintiff was shut out from his remedy which law provides under Order 21 Rule 90. The indecent haste with which the sale was confirmed cannot but be deemed to have been in fraud of the Plaintiff. Once it is held that the sale was confirmed on the very date, the inference is that the sale was confirmed and made absolute in order to prevent the Plaintiff from obtaining relief under Rule 90 of Order 21 C.P.C. The sale consequently becomes voidable arid the Plaintiff is entitled to bring a suit to set aside the confirmation of the sale.

This will show that the case instead of helping the Plaintiffs goes against them. It was urged that in the present case too the Plaintiffs made allegations of fraud but no particulars of fraud were given and the only thing urged by the Plaintiffs'' counsel in support of his contention that the sale was illegal and void was that the three-fourth of the purchase money was not deposited by the auction-purchaser within time allowed by law

''Dal Chand v. Parshadi Lal'' AIR. 1947 All 400 . It was held in this case that Order 21 Rule 92 does not constitute a bar to a suit when the sale is sought to be set aside on allegations of fraud and that fraud is established. These conditions are not satisfied in the present case and consequently this authority does not help the Plaintiffs. - Earamalla Sanjamma Vs. Anna Sayanna, The view taken in this case was almost the same as in the case just mentioned.

''Kabul Chand v. Ram Parshad'' AIR 1951 Pepsu 163. In this case no question relating to the applicability of Order 21 Rule 92 arose, because the judgment-debtor applied to the executing Court for setting aside the order by which the sale had been confirmed. The application was dismissed by the Courts below as barred by time and the learned Judge of he High Court upheld their order. The Plaintiffs'' counsel wanted to take advantage of certain observations appearing in the judgment of the learned Judge to the effect that after the executing Court makes the order f confirming the sale it becomes functus officio and no application lies to it for setting aside the sale. In the first place since the learned Judge agreed with the Courts below that the judgment-debtor''s application was barred by time, the observations made by him on other points appear to me of the nature of the obiter dictum. Moreover they have no bearing on the question whether the present suit was hit by Order 21 Rule 92(3) or not.

On a careful consideration of the above cases it appears to me that the weight of the authority is in favour of the view that a suit like the present is hit by Sub-rule (3) of Order 21, Rule 92, C.P.C.

I may mention here that in the trial Court as well as in the Court of the District Judge the Appellant merely relied upon Section 47,'' Civil P.C. and his position was that the suit was barred because of the provisions of that section in spite of this we allowed his counsel to argue that Order 21 Rule 92 was applicable to the case, because it was purely a question of law and it could be argued on the facts proved or admitted.

In view of my finding on the first point urged by the Appellants'' counsel question of the applicability of Section 47 does not arise and consequently it is not necessary to deal with counsel''s second point.

The result is that the appeal is allowed, the decree and judgment of the Additional District Judge are set aside and the Plaintiffs'' suit is dismissed with costs throughout.

Gurnam Singh, J.

I entirely agree.