Smt. Raminder Kaur and Another vs Kharaiti Lal and Others

These two appeals actually arise out of one cause, Consequently, these can be disposed of by one order. A few facts may be noticed.

Colonel Joginder Singh filed a suit against Kharaiti Lal for recovery of mortgage amount by sale of Industrial Plot No. 255-P and the building constructed on it. On January 23, 1976, the trial Court passed a preliminary decree for the recovery of Rs. 28.187.50 along with future interest @ 9% per annum. The defendant judgment-debtor was given time to pay the decretal amount on or before March 23, 1976. He did not deposit. The plaintiff (Col. Joginder Singh) filed an application for the passing of the final decree. On April 8, 1976, the Subordinate Judge, Chandigarh, passed the final decree. The proceedings for execution of the decree were initiated. The mortgaged property was ordered to be auctioned. On August 25, 1976, the property was auctioned. Nazar Singh (the predecessor-in-interest of the present appellants) purchased the property for Rs. 45,500/-. On August 28, 1976, the judgment-debtor filed an application under Order 21, Rule 90. He raised objections against the sale and prayed that it be set aside. The Court framed an issue.-- "whether there had been an irregularity in publishing and conducting the sale as alleged?" It held that "wide publicity was given to the sale proclamation and there is no material" on record to show that there was any material irregularity or fraud in "publicising the sale". It further held that "the property in dispute is only one kanal in area and that building needed intensive repairs. . ..." It was occupied by a tenant who was also interested in purchasing it. As such, the property could not have fetched "more price". On this basis, the Court overruled the objections vide order dated November 28, 1977. On the next day, vide its order dated November 29, 1977, the Court confirmed the sale.

Aggrieved by these two orders, the judgment-debtor filed First Appeals Nos. 373 and 374 of 1977. While these appeals were pending, the judgment-debtor deposited an amount of Rs. 47,250/- on May 3, 1985. On August 19, 1985, another amount of Rs. 525/- was deposited. Thereafter, the two appeals were heard and decided by the learned single Judge vide order dated August 30, 1985. Following the rule laid down by a Division Bench of the Madras High Court in M. Sevugan Chettiar and Another Vs. V.A. Narayana Raja and Others, , the learned single Judge held that in view of "the factum of deposit of the auction money together with a sum equal to 5 percent thereof, I have no option but to consider this deposit as payment under Order 34, Rule 5 of the Code of Civil Procedure. As a consequence, the auction sale and its confirmation are set aside." It was directed that the deposited amount be paid "to the legal heirs of Nazar Singh, auction purchaser who had died during the pendency of the appeals." Both the appeals were, accordingly, disposed of.

Aggrieved by this order, the legal representatives of Nazar Singh, the auction purchaser viz. his daughter and widow have filed these two Letters Patent Appeals.

Mr. Rajan Gupta, counsel for the appellants has contended that the learned single Judge had erred in taking the view that the deposit made by the respondent judgment-debtor was a payment under Order 34, Rule 5 of the Code of Civil Procedure. Learned counsel has also contended that the view taken by the Division Bench of the Madras High Court in Chettiar''s case supra, does not lay down the correct principle of law and should thus, not be followed. The claim made on behalf of the appellants has been controverted by Mr. S.K. Singla who has appeared on behalf of Kharaiti Lal, the respondent-judgment-debtor. Learned counsel has submitted that the deposit could have been made even during the pendency of the appeal and that the sale cannot be said to have been confirmed till the appeal is decided by the competent Court. Both sides have placed reliance on different decisions.

The question that arises for consideration is -- When can a sale of the mortgaged property be said to have been confirmed? The ancillary question would be -- Can a deposit be made under Order 34, Rule 5 even when an appeal is pending?

Order 21 deals with the execution of decrees and orders. One of the modes of execution is by sale of immovable property. Rule 85 contemplates that the purchaser shall pay the full amount "into Court before the Court closes on the fifteenth day from the sale of the property." In case of default, the property can be re-sold. Rule 89 contemplates that any person claiming an interest in the property sold can request the Court to set aside the sale on depositing "for payment to the purchaser, a sum equal to five per cent 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....." Rule 90 permits the submission of an application for setting aside of the sale "on ground of a material irregularity or fraud in publishing or conducting it." Rule 92 inter alia provides that "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......"

A perusal of this provision clearly indicates that whenever an application under Rule 89, Rule 90 or 91 is disallowed, the Court has to make an order "confirming the sale." Thereupon, the sale becomes absolute. The provision does not contemplate or provide that the sale shall be deemed to have been confirmed after the order disallowing the application under Rule 89, Rule 90 or 91 has been affirmed by the appellate Court. It does not say that the application has to be disallowed ''finally'' before the sale can be ordered to be confirmed. It merely provides that the Court has to make an order confirming the sale when it disallows the application. In order words, whenever the executing Court rejects an application submitted under Rule 89, 90 or 91, it has to ''confirm the sale'' and thereupon the said sale becomes absolute. Still further, a proviso was added by Act No. 104 of 1976. It was enforced w.e.f. February 1, I977. By this, it was provided that "where any property is sold in execution of a decree pending the final disposal of any claim to, or any objection to the attachment of, such property, the Court shall not confirm such sale until the final disposal of such claim or objection." This addition to the provisions is clearly indicative of the legislative intent and shows that wherever it was considered appropriate to provide that the Court should not confirm a sale until the ''disposal'' of a claim, a specific provision was made. Likewise, if it was the intention of the legislative that a sale should not become absolute till the appeal or second appeal etc. are decided, a specific provision could have been made. No such provision having been made, we cannot read into the provision --something which does not exist. We can''t add to the Statute and say that an order confirming the sale shall be deemed to have been passed only after the decision of the appeal etc.

Mr. Gupta has very fairly pointed out the observations in AIR 1934 134 (Privy Council) ; Shri Ranga Nilayam Rama Krishna Rao v. Kandokori Chellayamma, AIR 1953 SC 425 and M. Sevugan Chettiar v. V.A. Narayana Raja, AIR 1984 Mad 334. Mr. Singla appearing for the respondent has also referred to a single Bench decision in Smt, Ram Jawai v. Smt. Shakuntala Devi, AIR 1993 Delhi 330 besides referring to the three aforesaid judgments.

It has undoubtedly been observed in these cases that on an appeal being filed, the "order is left at large." It has also been held that "until the confirmation of the sale becomes a finality in the eye of law, the provisions of Order 34, Rule 5 can be availed of by the judgment-debtor and it is not possible to give a narrow and a literal meaning to the expression ''before the confirmation of a sale'' occurring in Order 34, Rule 5, as meaning only the order confirming the sale passed by the first Court...." With utmost respect, we find ourselves unable to follow this view. In our opinion, the interpretation placed on the provision cannot be given unless we add certain words to the Statute. This is clearly not permissible.

Mr. Singla has vehemently contended that the Privy Council as well as their Lordships of the Supreme Court in Rama Krishna Rao''s case supra, have categorically held that "no finality can be attached to the order confirming the sale until the appeal is decided." It is indeed so. However, we find that the provisions of Order 21, Rule 92 and Order 34, Rule 5 have been considered by their Lordships of the Supreme Court in a subsequent decision in Hukamchand Vs. Bansilal and Others, . In paragraph 7 of the judgment, it has been inter alia observed as under at pages 88-89 :--

"What Order XXI, Rule 92 contemplates is that where conditions thereunder are satisfied an order for confirmation must follow. Further, we have already indicated that Order XXXIV, Rule 5 does not give any power to Court to grant time to deposit the money after the final decree has been passed. All that it permits is that a judgment-debtor can deposit the amount even after the final decree is passed at any time before the confirmation of sale and if he does so, an order in terms of Order XXXIV, Rule 5(1) in his favour has to be passed. With respect, we cannot understand what the Letters Patent Bench meant by saying that before a mortgagor could be prevented from making payment and redeeming the property his rights must have come to an end and that they could not come to an end unless his title to the property had been lost by confirmation of sale. It is true that so long as his right to redeem subsists the mortgagor may redeem the property. It is this principle which is recognised in Order XXXIV, Rule 5 which provides that the mortgagor judgment-debtor can deposit the amount due even after the final decree has been passed but this deposit must be made at any lime before confirmation of sale. It may be noted that there is no power under Order XXXIV, Rule 5 to extend time and all that it does is to permit the mortgagor judgment-debtor to deposit the amount before confirmation of sale. It docs not give any right to the mortgagor judgment-debtor to ask for postponement of confirmation of sale in order to enable him to deposit the amount. We have to interpret Order XXXIV, Rule 5 and Order XXI, Rule 92 harmoniously and on a harmonious interpretation of the two provisions it is clear that though the mortgagor has the right to deposit the amount due at any time before confirmation of sale, there is no question of his being granted time under Order XXXIV, Rule 5 and if the provisions of Order XXI, Rule 92(1) apply the sale must be confirmed unless before the confirmation the mortgagor judgment-debtor has deposited the amount as permitted by Order XXXIV, Rule 5. We may in this connection, refer to the decision of this Court in Janak Raj v. Gurdial Singh, C.A. No. 1322 of 1966, D/- 8-11-1964. reported in Janak Raj Vs. Gurdial Singh and Another, where it has been laid down that once the conditions of Order XXI, Rule 92(1) are compiled with the executing Court must confirm the sale."

A perusal of the above observations clearly shows that a sale has to be confirmed as soon as the objections under Order 21, Rule 90 or 91 are rejected. It has been further held that Order 34, Rule 5 does not give any power to the Court to grant time after the sale has been confirmed. The clear implication is that there can be no extension of time from the date of confirmation of sale by the executing Court to the date of the decision by the appellate Court. Still further, in paragraph 8, it has been observed as under :--

"The judgment-debtor mortgagor had the right to deposit the amount at any time before confirmation of sale within 30 days after the sale or even more than 30 days after the sale under Order XXXIV, Rule 5(1) so long as the sale was not confirmed. If the amount had been deposited before the confirmation of sale, the judgment-debtors had the right to ask for an order in terms of Order XXXIV, Rule 5(1) in their favour. In this case an application under Order XXI, Rule 90 had been made and therefore the sale could not be confirmed immediately after 30 days which would be the normal course; the confirmation had to await the disposal of the application under Order XXI, Rule 90."

Still further, it was observed by their Lordships that the Court had no jurisdiction to grant extension of time. These observations clearly indicate that the right to deposit money under Order 34, Rule 5 can be exercised only before the sale is confirmed. The sale is confirmed after the objections are rejected. In the present case, an order of confirmation of sale had been expressly passed on November 29, 1977. Thereafter, it could not be said that the judgment-debtor was entitled to make the deposit merely because the appeal was pending.

The question posed above is, consequently, answered in favour of the appellants. It is held that on the rejection of the objections raised under Order 21, Rule 90, the executing Court was bound to pass an order confirming the sale. In the present case, the objections were overruled on November 28, 1977. The sale was confirmed vide order dated November 29, 1977. Thereupon, it had become absolute. The mere pendency of appeal did not entitle the judgment-debtor to make the deposit under Order 34, Rule 5.

Counsel for the parties have referred to various other decisions. In view of the above noted decision of the Apex Court, it does not appear to be necessary to notice those judgments as it would only add to the volume.

We had called upon Mr. Singla to even show that the orders passed by the executing Court on November 28, 1977 and November 29. 1977 called for any interference. The only submission made by the counsel is that the provisions of Order 21, Rule 66 had not been complied with by the executing Court before the order for sale of the mortgaged property was made. Counsel, however, concedes that such an objection had not been raised before the executing Court.

Rule 66(2) undoubtedly contemplates that a proclamation for sale "shall be drawn up after notice to the decree holder and the judgment-debtor. ..." However, it is a question of fact as to whether or not the notice had been given to the judgment-debtor. Such an objection having not been raised before the executing Court, it cannot be permitted to be raised for the first time in the present proceedings. Learned counsel, however, did not challenge the finding recorded by the executing Court on the issue that had been framed in the application under Order 21, Rule 90. Resultantly, we find no ground even to interfere with the orders passed by the executing Court on November 28, 1977 and November 29, 1977 respectively.

No other point has been raised.

In view of the above, both the appeals arc allowed. The order passed by the learned single Judge are set aside. The orders passed by the executing Court are affirmed. It may be clarified that the other legal heirs of the auction purchaser having been impleaded as respondents Nos. 3 and 4, they will be entitled to the same benefits as are admissible to the appellants. In the circumstances, there will be no order as to costs.