Ramji Lal and Another vs Sarab Singh (Dead) through LRs and Others

Rakesh Kumar Jain, J.—This revision petition is directed against the order dated 20.2.1997 passed by learned Addl. Civil Judge (Senior Division), Kaithal, by which an application filed by Sarab Singh, judgment debtor (since deceased) under Order 21 Rules 89 and 90 of Code of Civil Procedure, 1908 (for short, " Code of CPC ") assailing the Court auction of the property in dispute in favor of Ramji Lal and Chand Ram (Petitioners) has been allowed and upheld by learned Addl. District Judge, Kaithal, vide his order dated 3.4.2001.

Brief facts of the case are that M/s Jyoti Parshad Vinod Kumar and Krishan Kumar filed a suit against Sarab Singh for recovery of Rs. 13,500/- which was decreed on 18.10.1986 for a sum of Rs. 10,000/- plus Rs. 3,350/- as interest from the date of filing of the suit @ Rs. 1% and further interest @ Rs. 6% per annum till the date of realisation. The said decree became final between the parties. The decree holders filed an execution but the amount could not be recovered. Consequently, the land in dispute measuring 15 kanals 1.3 marlas was sold by way of Court auction on 4.2.1992. The Petitioners were the highest bidders for a sum of Rs. 32,000/-. The sale was confirmed and sale certificate was issued in their favor. The judgment debtor (Sarab Singh) filed a composite application under Order 21 Rules 89 and 90 of Code of CPC on 6.6.1992. It was also alleged in para No. 4(i)(h) that the Petitioners have not even paid 25% of the auction money on the date of auction, therefore, sale should not have been confirmed in their favor.

The application was contested by the Petitioners before the Court below. Issues were framed. Evidence was led. Ultimately, the trial Court allowed the application and the sale dated 4.2.1992 confirmed on 07.3.1992 was set aside.

The Petitioners have raised two legal issues (i) the property was sold on 4.2.1992 which was confirmed on 7.3.1992, whereas the objections were filed on 6.6.1992, therefore, the objections were not within limitation. According to the learned Counsel for the Petitioners, the objections should have been filed within 60 days from the date of auction in terms of Article 127 of the Limitation Act, 1963 (for short the "Act") and (ii) that a composite application filed under Order 21 Rules 89 and 90 of Code of CPC was not perse maintainable.

Besides this, learned Counsel for the Petitioners has submitted that the Court below had no jurisdiction even to receive the application and to adjudicate upon the issue of nullity of sale dated 4.2.1992.

In support of his submission that the application was barred by limitation and could not have been entertained, learned Counsel for the Petitioners has relied upon a judgment of the Supreme Court in the case of Mohan Lal Vs. Hari Prasad Yadav and Others, and a Division Bench judgment of Allahahad High Court in the case of Babu Ram v. Addl. District Judge, Dehradun AIR 1983 All 170.

In support of his second contention, that a composite application filed under Order 21 Rules 89 and 90 of Code of CPC is not maintainable, learned Counsel has relied upon a decision of this Court in the case of Parkash Kaur Vs. Sandhooran and Another, .

On the other hand, learned Counsel for the Respondents has submitted that the Petitioners have not deposited 25% of the auction money on 4.2.1992, therefore, auction proceedings were a nullity in view of Order 21 Rule 84 of Code of CPC and secondly, the Respondents/objectors though filed an application under Order 21 Rules 89 and 90 of Code of Civil Procedure, they had deposited the principal amount of Rs. 10,000/- and Rs. 3,350/- in fixed deposit He contended that the fixed deposit would be an indication that the Respondents/judgment debtors did not press the application insofar as Order 21 Rule 90 of Code of CPC is concerned. It is submitted that though the Respondents/judgment debtors had filed an application, yet it is not even required as the Court can even take suo-moto notice of the violation of Order 21 Rule 84 of Code of Civil Procedure, which is mandatory in nature and can declare the impugned sale to be nullity. In support of his submission, learned Counsel for the Respondents has relied upon a decision of the Supreme Court in the case of Manilal Mohanlal Shah and Others Vs. Sardar Sayed Ahmed Sayed Mahamad and Another, ; Balram Vs. Ilam Singh and others, ; Gangabai Gopaldas Mohata Vs. Fulchand and others, and a Single Bench judgment of this Court in the case of Nachhattar Singh and Others Vs. Babu Khan and Others, and also a decision of Madhya Pradesh High Court in the case of Progressive Industrial Enterprises Vs. Bank of Baroda and Others, and a decision of the Supreme Court in the case of Rao Mahmood Ahmed Khan Vs. Sh. Ranbir Singh and others, a decision of Bombay High Court in the case of Jagdish Radhakisan Kayasth Vs. Ramesh N. Wagh and Others, and a Division Bench decision of this Court in the case of Ram Singh Vs. Uttam Chand, .

I have heard learned Counsel for the parties and perused the record with their assistance.

Before adverting to the rival contentions of learned Counsel for the parties, it would be fruitful to refer to the relevant provisions of Code of CPC which have been invoked by both the learned Counsel for the parties:

Deposit by purchaser and re-sale on default.-

(1) On the every sale of immovable property the person declared to be purchaser shall pay immediately after such declaration 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 re-sold.

(2) Where the decree-holder is the purchaser and is entitled to set-off the purchase-money under Rule 72, the Court may dispense with the requirements of this rule.

Time for payment in full of purchase money.- 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.

Provided that, in calculating the amount to be so paid into Court, the purchaser shall have the advantage of any set-off to which he may be entitled under Rule 72.

Application to set aside sale on deposit.-

(1) Where immovable property has been sold in execution of a decree, [any person claiming an interest in the property sold at the time of the sale or at the time of making the application, or acting for or in the interest of such person,] may apply to have the sale set aside on his depositing in Court,-(a) for payment to the purchaser, a sum equal to five per cent, of the purchase-money, and (b) 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.

(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.

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 rate able 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."

Facts in this case are not disputed.

Admittedly, there is a decree of recovery and the amount was not paid by the judgment debtor. The land in dispute was put to auction on 4.2.1992, which has been purchased by the Petitioners being highest bidders for a sum of Rs. 32,000/-. Admittedly, 25% of the bid amount was not deposited on the same date i.e. 4.2.1992. However, the entire amount was paid within 15 days.

Now, the questions involved in this revision petition which are mentioned in the opening part of the judgment would be decided one by one.

Question No. 1 whether an application filed under Order 21 Rules 89 and 90 Code of CPC after a period of 60 days from the date of impugned sale is within limitation? In this regard, Article 127 of the Limitation Act is to be referred to which provides that to set a sale in execution of a decree including any such application by a judgment debtor, time period is 60 days from the date of the sale''.

In the present case, sale took place on 4.2.1992 and the application was filed for setting aside the sale on 6.6.1992/26.6.1992, which is apparently beyond the period of limitation. The Supreme Court in Mohan Lal''s case (supra) has held that an application under Order 21 Rule 89 of Code of CPC could be filed only within 60 days and the said period cannot be condoned with the aid of Section 5 of the Limitation Act or even extended with the help of Section 148 Code of Civil Procedure. In nutshell, the law laid down by the Supreme Court is that if an application is filed after a period of 60 days, it is barred by time in terms of Article 127 of the Limitation Act. Similar view has been taken by the Allahabad High Court in Chunni Lal''s case (supra) in which objections were filed under Order 21 Rule 90 Code of CPC which were required to be filed within a period of 30 days as per unamended Article 127 of the Act. In the said case, auction sale took place on 21.5.1978 whereas objections under Order 21 Rule 90 were filed on 2.9.1978, therefore, it was found to be beyond 30 days and the said period was not found to be not condonable. No judgment to the contrary has been cited by learned Counsel for the Respondents/judgment debtors, therefore, the first point raised by the learned Counsel for the Petitioners that the application was barred by limitation, is answered in their favor.

Now adverting to the second question as to ''whether a composite application under Order 21 Rules 89 and 90 of Code of CPC is maintainable?

A close reading of Order 21 Rules 89 and 90 of Code of CPC would show that where the suit property has been sold in execution of a decree, a person who has any interest in the property at the time when the property was sold or at the time when the application was made, may apply to have the sale set aside by depositing in Court for payment to the purchaser, a sum equal to five percent of the purchase-money and 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. As a matter of fact, while moving an application under Order 21 Rule 89 of Code of Civil Procedure, the judgment debtor throws himself to the mercy of the Court much-less the auction purchaser or the Decree holder whereas in an application moved under Order 21 Rule 90 CPC the judgment debtor challenges the process of auction sale on the ground of irregularity or fraud in publishing or conducting it or if the Court is satisfied that the judgment debtor has sustained substantial injury by reason of such irregularity or fraud, the sale in favor of auction purchaser could be set aside. Import of Rules 89 and 90 are altogether different. From a bare perusal of Order 21 Rule 90, it is evident that a composite application under Order 21 Rules 89 and 90 is not maintainable. In this regard, the support is taken from the decision of this Court in Smt. Parkash Kaur''s case (supra) in which similar question was involved and it was decided that a composite application is not maintainable. Thus, the second question raised by learned Counsel for the Petitioners is decided in their favor.

The question is as to whether after the decision of both points about limitation and maintainability of the application, orders of both the Courts below could be sustained?

Learned Counsel for the Respondents has argued that admittedly the property in dispute has been sold in terms of Order 21 Rule 84 of Code of CPC which provides that on the every sale of immovable property the person declared to be purchaser shall pay immediately after such declaration twenty-five per cent of 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 re-sold.

It is submitted that this provision has been interpreted by the Supreme Court and the various High Courts and is held to be mandatory. In case of Manila! Mohan Lal Shah''s case (supra), the Apex Court has held as under:

Having examined the language of the relevant rules and the judicial decisions bearing upon the subject we are of the opinion that the provisions of the rules requiring the deposit of 25% of the purchase money immediately on the person being declared as a purchaser and the payment of the balance within 15 days of the sale are mandatory and upon non-compliance with these provisions there is no sale at all. The rules do not contemplate that there can be any sale in favor of a purchaser without depositing 25% of the purchase money in the first instance and the balance within 15 days. When there is no sale within the contemplation of these rules, there can be no question of material irregularity in the conduct of the sale. Non-payment of the price on the part of the defaulting purchaser renders the sale proceedings as a complete nullity. The very fact that the Court is bound to re-sell the property in the event of a default shows that the previous proceedings for sale are completely wiped out as if they do not exist in the eyes of law.

Some-what similar view has been taken by the Supreme Court in the case of Balram''s case (supra) and Gangabai''s case (supra).

Learned Counsel for the Petitioners has referred to two judgments i.e. one of Madhya Pradesh High Court in M/s Progressive Industrial Enterprises''s case (supra) and a decision of the Supreme Court in Rao Mahmood Ahmed Khan''s case (supra). In these two cases, at the time of sale, payment was made by way of cheque which was en-cashed on a later date. The question arose as to whether the amount realized by encasings the cheque would relate back to the date when the auction took place. It was held by the Supreme Court that the said payment by cheque would not be considered to be a payment made at the time of sale. Thus, the learned Counsel for the Respondents has submitted that payment of 25% on the date of sale is a sine-qua-non for holding the sale to be legal in the eyes of law.

The question then arises as to whether the Court can set aside the sale dehors the application filed by the objector/judgment debtor under Order 21 Rule 89 Code of Civil Procedure. In this context, there is a decision of this Court in the case of Ram Singh (supra) in which it has been held that:

Adverting to the second question, it was for the Executing Court to see whether the provisions of Order 21 Rules 84 and 85 of the Code have been complied with or not, even if the judgment debtor could not bring these to the notice of the Court. In Nichhattar Singh''s Case, (A.I.R. 1972 Punj. and Har. 204) (supra), it was laid down that if provisions of Order 21, Rule 85 of the Code are not complied with, the sale proceedings become a nullity and the Court is bound to put the property to re-sale under Rule, 86 of the Code irrespective of the fact that no application has been made by any party to the proceedings to challenge the sale. In Kailash Nath Mehta v. State of Punjab (1982) 84 P.L.R. 71 it was held that once there is a violation of provisions of Order 21 Rule 85, of the Code, the sale becomes non est and void and there is no necessity of challenging the sale nor can there be any question that the objections filed to impugn the sale were time barred.

The Court is now faced with a situation where the sale in favor of the Petitioners is not in accordance with Order 21 Rule 84 of Code of CPC as the Petitioners/purchasers did not deposit 25% amount at the time of sale.

Thus, I hold that the orders passed by the Courts below are well in accordance with law as they not suffer from any irregularity or illegality because in the auction proceedings dated 4.2.1992, the Petitioners did not deposit 25% of the sale amount at the time of fall of hammer and as such the auction proceeding was a nullity.

In view of the above, I do not find any merit in this revision petition and the same is hereby dismissed.