R. Jagadish Naik vs Smt. Gowramma

Aravind Kumar, J.—Heard Sri Sagar, learned Counsel appearing on behalf of Sri Satish M. Doddamani for petitioner. Perused the records.

Petitioner is the auction purchaser of a sale conducted in FDP No. 19 of 2007 where under the immovable property which was subject-matter of suit O.S. No. 48 of 2002 had been brought to sale since it was opined that it was not feasible to divide the properties and allot shares among the sharers. Suit schedule property was subjected to public auction by consent of parties and Court sale was conducted on 30-7-2012. Writ petitioner herein was the successful bidder namely he had offered highest bid which was for Rs. 66,00,000/-. Said Court auction is said to have concluded at 5.05 p.m. and as such successful bidder was directed to deposit 25% of the sale amount on the next day i.e., on 31-7-2012 as recorded in the order sheet. Undisputedly the order sheet dated 30-7-2012 also contains the signatures of legal representatives of deceased defendant-Smt. Gowramma. It is not in dispute that successful bidder i.e., writ petitioner deposited the following amounts on the dates indicated correspondingly:

DATE

AMOUNT

10-08-2012

Rs. 4,50,000/-

31-7-2012

Rs. 2,00,000/-

15-11-2012

Rs. 45,50,000/-

Since 25% of successful bid was not deposited as contemplated under Order 21, Rule 84 an application came to be filed by legal representatives of 1st petitioner in FDP No. 19 of 2007 to hold that sale held on 30-7-2012 is a nullity and contrary to Order 21, Rules 84,85 and 86 of Civil Procedure Code, 1908. After considering the objections filed by successful bidder as per Annexure-F Trial Court adjudicated the said application and by impugned order dated 6-2-2014 - Annexure-G set aside the sale held on 30-7-2012 on the ground that it is contrary to Order 21, Rules 84,85 and 86 and declare the sale conducted as null and void. On account of auction purchaser having deposited the amount and other sharers including the applicants having sought for payment of the amount so deposited by auction purchaser, Court below had ordered payment of amount in favour of sharers to the extent of their share to which they were entitled as per judgment and decree passed in O.S. No. 48 of 2002. It is this order winch i impugned in the present writ petition.

It is the contention of Sri Sagar, learned Counsel appearing for petitioner that Court below erred in allowing the application filed by legal representatives of 1st petitioner i.e., petitioners 1(a), 1(b) to 1(f) and 2nd petitioner without considering the fail that property which has been sold was under Partition Act, 1893 which enables the Court to follow the mandate prescribed under Code of Civil Procedure to the extent practicable and in the instant case though 25% of sale amount or the auction purchase price was not deposited within due dates, it was subsequently deposited and sharers have also withdrawn the amount and as such rigour of Rules 84 to 86 of Order 26 could not have been applied since the sharers are deemed to have waived their right by withdrawing the amount deposited by the auction purchaser. Hence, it is contended that order passed by Trial Court is erroneous and liable to be set aside.

Having heard the learned Counsel appearing for petitioner and on perusal of the records it would dearly indicate that auction of the property in question was conducted on 30-7-2012 namely Court sale was conducted on said date and highest bid of Rs. 66,00,000/- was offered by writ petitioner which was highest. Auction sale proceedings was concluded on 30-7-2012 by Executing Court at 5.05 p.m. Undisputedly auction purchaser did not deposit any amount on that day. However, Executing Court itself permitted the auction purchaser to deposit 25% of bid amount by next date i.e., 31-7-2012 by order of even date i.e., 30-7-2012.

Perusal of Order 21, Rule 84 would clearly indicate that on sale of an immovable property by auction, the person declared to be purchaser will have to deposit 25% of the total bid amount immediately after such declaration with the officer or the person conducting the sale and in default of such deposit, the property is required to be resold forthwith by the Executing Court. In the instant case Trial Court permitted the auction purchaser to deposit the amount on the next day since the timing of registry was closing and auction sale proceedings had got concluded at 5.05 p.m. However, the auction purchaser did not deposit 25% of the total bid amount which was Rs. 16,50,000/- but he deposited only Rs. 2,00,000/-. No extension was sought for and there was no order passed by Trial Court granting any extension suo motu. Provision of Order 21, Rules 84 to 86 are mandatory. Non-compliance of said provision would render such sale void and Executing Court conducting such sale is bound to direct resale of the property by way of auction afresh. It has been held by Apex Court in the case of Manilal Mohanlal Shah and Others v. Sardar Sayed Ahmad Sayed Mahmad and Another, AIR 1954 SC 349, that inherent power of the Court cannot be invoked to circumvent the mandatory provision of above said rules. Following said judgment Apex Court in the case of M/s. Ram Chand Spinning and Weaving Mills v. M/s. Bijli Cotton Mills (Private) Limited, Hathras and Others, AIR 1967 SC 1344, has held that if the provisions of Order 21, Rules 84 and 85 is not followed or complied there would be no sale at all and the Court is bound to order a resale. This Court in the case of S. V. Kanakaraj v. Vijaya Bank, 1987 (2) Kar. 1317, having considered the tenor of Rule 84 Order 21 has held that Executing Court cannot give time to the auction purchaser to deposit �th of bid amount beyond the time prescribed under the said rule, since rule is to be construed as mandatory. It is further held that any other interpretation to the contrary would cause immense injury or loss. The Hon''ble Apex Court in the case of Rao Mahmood Ahmed Khan v. Sh. Ranbir Singh and Others, AIR 1995 SC 2195, while examining Rule 285-D of Uttar Pradesh Zamindari Abolition and Land Reforms Rules, 1952 which mandates deposit of 25% when auction sale is conducted was considering as to whether deposit of 25% amount by way of cheque would constitute a valid deposit and in this background Order 21, Rules 84 to 86 also came to be juxta positioned and examined by Apex Court and concluded that Rule 285-D is mandatory. Said Rule being corresponding to Order 21, Rules 84 to 86 of the CPC, the only conclusion which has to be drawn by this Court in the instant case is that on account of 25% bid amount having not been deposited by auction purchaser immediately after the Court auction i.e., 30-7-2012 or even before lapse of the period granted by Executing Court i.e., 31-7-2012, said sale proceedings conducted by Executing Court cannot be held either as valid or proper. In that view of the matter no fault can be found with the impugned order.

The mere import of the words in Section 7 of Partition Act, 1893 to the effect that "as far as practicable the provisions of Civil Procedure Code shall be applicable to the auction sale" is considered, it requires to be held that Section 7 of Partition Act cannot whittle down the tenor of Rule 84 Order 21 to arrive at a conclusion that non-deposit of 25% of bid amount by the auction purchaser would constitute an irregularity not an illegality.

Going one step further, it can be noticed in the instant case, even Rule 85 Order 21 has been given a complete go by, namely writ petitioner has not deposited balance amount within 15 days from the date of auction which expired on 16-8-2012. Further, amount which came to be deposited by writ petitioner on 15-11-2012 was to the extent of Rs. 45,50,000/- and in total Rs. 52,00,000/- deposited would also does not constitute the entire auction sale amount and as such contention of learned Counsel for petitioner cannot be accepted.

In the light of afore stated facts it cannot be gain said by petitioner that deposit of portion of money, which in the instant case being substantial and not full auction sale price is to be construed as substantial compliance of provisions of Order 21, Rules 84 to 86 of the CPC or Section 7 of Partition Act, 1893 since the entire amount has not been deposited by auction purchaser, Court below was fully justified in arriving at a conclusion that provisions of Order 21, Rules 84 to 86 had not been complied by auction purchaser and on that score it has rightly set aside the auction sale conducted by it.

However it requires to be noticed that on account of petitioner having deposited the partial bid amount intermittently before the Executing Court, he would be at liberty to either seek refund or withdrawal of said amount from the Executing Court or petitioner would be at liberty to participate in the auction resale proceedings if conducted. Executing Court shall take note of such deposit being made which also since been partially disbursed to the sharers by permitting the petitioner to participate in the resale auction proceedings and shall consider the claim of petitioner insofar as deposit is concerned, since petitioner has already deposited substantial sum. All contentions are kept open. Subject to observation made herein above writ petition stands rejected.