Karnataka High Court
Sri. Yuvaraja vs Smt. Varadamma on 2 July, 2024
Author: N S Sanjay Gowda
Bench: N S Sanjay Gowda
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NC: 2024:KHC:24761
CRP No. 779 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 2ND DAY OF JULY, 2024
BEFORE
THE HON'BLE MR JUSTICE N S SANJAY GOWDA
CIVIL REVISION PETITION NO. 779 OF 2023 (IO)
BETWEEN:
1. SRI.YUVARAJA,
S/O LATE DESAIAH,
AGED ABOUT 51 YEARS,
R/AT No.363, 2ND CROSS,
3RD MAIN, NANDINI LAYOUT,
VIJAYANANDANAGAR,
BANGALORE-560 096.
...PETITIONER
(BY SRI. THIMMAIAH.K.H., ADVOCATE)
AND:
1. SMT.VARADAMMA,
W/O LATE DESAIAH,
AGED ABOUT 70 YEARS,
SINCE DEAD,
Digitally PETITIONER AND R-2 AND R-3 ARE
signed by ALREADY ON RECORD AS LEGAL HEIRS.
KIRAN
KUMAR R
Location: 2. SMT. SUNDRAMMA,
HIGH
COURT OF D/O LATE DESAIAH,
KARNATAKA AGED ABOUT 49 YEARS,
3. SRI.GOPALAKRISHNA
S/O LATE DESAIAH,
AGED ABOUT 45 YEARS
R-1 TO R-3 ARE R/AT No.363,
2ND CROSS, 3RD MAIN,
NANDINI LAYOUT,
VIJAYANANDANAGAR,
BANGALORE-560 096.
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NC: 2024:KHC:24761
CRP No. 779 of 2023
4. SRI.B.RAVICHANDRAN,
S/O LATE BASAVANTHAPPA,
AGED ABOUT 47 YERS,
R/AT No.307, 3RD MAIN,
2ND CROSS, VIJAYANANDA NAGAR,
NANDINI LAYOUT,
BENGALURU-560 096.
...RESPONDENTS
(BY SRI. HARISH.D.K., ADVOCATE FOR R-1 & R-2;
SRI. ANIL SHEKAR, ADVOCATE FOR R-3;
SRI.H.K.SRIVASTHAVA, ADVOCATE FOR R-4)
THIS CRP IS FILED UNDER SECTION 115 OF CPC.,
AGAINST THE ORDER DATED 26.10.2016 PASSED ON I.A.No.7
IN FDP No.50/2007 ON THE FILE OF XXV ADDITIONAL CITY
CIVIL AND SESSIONS JUDGE, BANGALORE., ALLOWING THE IA
No.7 FILED UNDER ORDER 21 RULE 92 AND 94 READ WITH
SECTION 151 OF CPC.
THIS PETITION HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 24.04.2024, COMING ON FOR
PRONOUNCEMENT THIS DAY, THE COURT MADE THE
FOLLOWING:
ORDER
1. Smt. Varadamma (the petitioner's mother) and Smt. Sundramma (the petitioner's sister) instituted a suit for partition against the petitioner--Yuvaraja and his younger brother--Gopalakrishna in respect of a house property bearing No.363, measuring 30 X 17½ feet. The said suit was decreed on 01.02.2007, as a result of which the plaintiffs and the defendants were each granted 1/4th -3- NC: 2024:KHC:24761 CRP No. 779 of 2023 share and a preliminary decree was ordered to be drawn up.
2. Thereafter, proceedings were initiated to draw up a final decree and during the pendency of these proceedings, Smt. Varadamma--the mother of the petitioner passed away, and as a consequence, Yuvaraja, his sister--Smt. Sundramma, his brother--Gopala Krishna and himself became entitled to 1/4th share each.
3. In the final decree proceedings, a Court Commissioner was appointed to partition the property, but the Court Commissioner filed a memo stating that the property could be partitioned, having regard to its extent. In view of said report, the Court directed that the property be auctioned.
4. After the Court directed that the property be sold in auction, the petitioner filed an application under Sections 2 and 3 of the Partition Act, 1983 requesting the Court to permit him to participate in the auction for purchasing the -4- NC: 2024:KHC:24761 CRP No. 779 of 2023 shares of his siblings and of his mother. This application was, however, dismissed on merits and since this order was not challenged, the same has attained finality.
5. The first auction was conducted on 24.05.2014 wherein the property was sold for a sum of Rs.26,50,000/- .The auction purchaser did not deposit said amount and the sale was not concluded.
6. The property was auctioned for the second time on 06.09.2014, and in this auction, the highest bid was for a sum of Rs.17,00,000/- but, even in respect of this auction, the auction price was not deposited and the sale could not be concluded.
7. On 17.01.2015, the property was auctioned for the third time and the 4th respondent herein was the highest bidder for a sum of Rs.25,00,000/-, and this bid was also accepted by the Court Commissioner.
8. The 4th respondent deposited said sum of Rs.25,00,000/- in 5 installments on the following dates: -5-
NC: 2024:KHC:24761 CRP No. 779 of 2023 SL. DATE PAYMENT
1. 17.01.2015 1st part installment paid at Rs.3,00,000
2. 20.01.2015 2nd part installment paid at Rs.3,50,000
3. 02.02.2015 3rd part installment paid at Rs.6,00,000
4. 12.02.2015 4th part installment paid at Rs.9,00,000
5. 19.02.2015 5th part installment paid at Rs.3,50,000
9. After the above deposits were made, the 4th respondent filed an application for confirmation of the sale and for issuance of the sale certificate. This application was opposed by the petitioner, but the Trial Court by way of the impugned order has allowed said application and, while allowing the application, the Trial Court has taken note of the fact that the petitioner had filed an application seeking to exercise his option to purchase the property and since the same was rejected, he could not question the sale conducted.
10. As can be seen from the tabular column indicating the payments made pursuant to the auction, it is clear that as against the 25% of the auction amount which ought to have been deposited (i.e., Rs.06,25,000/-), the -6- NC: 2024:KHC:24761 CRP No. 779 of 2023 4th respondent had only deposited a sum of Rs.3,00,000/-. It is thus clear that proceedings pursuant to the auction should not have been continued and the bid of the petitioner ought to have been rejected and the property was to be re-auctioned.
11. It may also be noticed here that the balance of the bid amount, in view of Order XXI Rule 84 of the CPC, is required to be deposited within 15 days from the date of the auction. In this case, the 15th day from the date of the auction (17.01.2015) would be 01.02.2015.
12. The 2nd installment of Rs.3,50,000/- was paid on 20.01.2015, which would mean that out of the auction price of Rs.25,00,000/-, by the 15th day, only a sum of Rs.6,50,000/- was deposited.
13. The 3rd, 4th and 5th installments of Rs.6,00,000/-, Rs.9,00,000/- and Rs.3,50,000/- were paid only after the 15th day i.e., beyond the period of 15 days prescribed under Order XXI Rule 85 of the CPC.
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NC: 2024:KHC:24761 CRP No. 779 of 2023
14. The Supreme Court in the case of Sardara Singh1 has laid the down the law relating the time during which the deposit is required to be made pursuant to a Court sale, as follows:
"4. ...It is clear from the above observations that this Court came to the conclusion that both the initial deposit and the subsequent payment of the purchase money within the time allowed are mandatory under Rules 84 and 85 of Order XXI CPC and the court is bound to re-sell the property in the event of there being a default. This is how this Court puts it: (SCR p. 115) "These provisions leave no doubt that unless the deposit and the payment are made as required by the mandatory provisions of the rules, there is no sale in the eye of law in favour of the defaulting purchaser and no right to own and possess the property accrues to him."
It is clear from this decision that the requirement of deposit contained in Sections 85, 86 and 88 of the Act, which are substantially the same as Order XXI Rules 84 and 85 of the Code, are mandatory and failure to comply with either of them renders the sale non-est. Once the effect of non-payment of 1 Sardara Singh v. Sardara Singh, (1990) 4 SCC 90. -8-
NC: 2024:KHC:24761 CRP No. 779 of 2023 the amount is to render the sale non-existent, it becomes the imperative duty of the authority to re- sell the property as the purchaser forfeits all claim to the property for default of payment. Where there is no sale in the eye of law, there can be no question of applying for setting aside the sale on the ground of material irregularity under Section 91 of the Act which is analogous to Order XXI Rule 90 of the Code. Non-payment of the balance amount had the effect of rendering the entire sale null and void. There can be no doubt that no right, title or interest passed to the auction-purchasers under the sale certificate of March 12, 1966. In fact, technically speaking, in such cases, it may not be necessary to have the sale set aside as in the eye of law there is no sale whatsoever. The owner of the land was, however, required to file a suit as there was an imminent threat to dispossess him on the strength of the sale certificate of March 12, 1966. To protect his possession he was compelled to file the suit. Unfortunately, during the pendency of his appeal he was dispossessed and, therefore, he was required to amend the plaint and claim possession also. The suit was, therefore, clearly de hors the provisions of the Act and hence ordinarily the civil court was entitled to hear and decide the same."
(emphasis supplied) -9- NC: 2024:KHC:24761 CRP No. 779 of 2023
15. In view of this judgment rendered by the Apex Court, it is clear that the non-deposit of the balance amount by the auction purchaser in this case -- within 15 days -- would render the sale non est and there would not even be a need to make an application to set aside the same.
16. As already noticed, in the instant case, even the initial requirement of making the deposit of 25% of the auction amount was not complied with and the subsequent requirement of depositing the balance amount of 75% within 15 days, both of which are held to be mandatory, had not been complied with. This basically indicates that the entire manner in which the sale was conducted and concluded was contrary to the provisions of Order XXI Rules 84 and 85 of the CPC.
17. It may be pertinent to state here that in this case, this proposition was not argued, and the main argument of the petitioner was that the reserve price had not been fixed before the auction, and the auction was therefore illegal. In this regard, it may be stated that the petitioner
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NC: 2024:KHC:24761 CRP No. 779 of 2023 did not make an application for setting aside the sale and, hence, this argument cannot be accepted when the auction purchaser sought issuance of a sale certificate.
18. The matter was heard and thereafter reserved for pronouncement of orders. At the time of preparing the judgment, the aspect of non-deposit of entire auction sale consideration was noticed and the matter was thus posted for further hearing.
19. Learned counsel for the respondents contended that the provisions of Order XXI Rule 84 of the CPC cannot be applied to an auction conducted under the provisions of Partition Act and it is only in respect of sales in execution that the provisions of Order XXI Rule 84 of the CPC would apply.
20. This argument, in my view, is untenable. Whenever a property is ordered to be sold by way of an auction by a Court, necessarily, the Court would have to follow the principles laid down under Order XXI of the CPC. It does
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NC: 2024:KHC:24761 CRP No. 779 of 2023 not matter whether the sale has been conducted under the Partition Act or under any other enactment, and so long as the auction is by the Court, the procedure prescribed under Order XXI of the CPC would have to be followed.
21. The gross and incurable illegality of not depositing the auction price within the statutorily prescribed timelines were noticed when the records were perused, and a copy of the memo filed by the auction purchaser was discovered by this Court. Though the argument advanced by the petitioner was on the aforementioned ground that the reserve price as mandated under Section 2 of the Partition Act had not been indicated, in my view, since the memo indicating the dates on which the deposits were made pursuant to the auction had rendered the very sale non est, the impugned order is required to be set aside and it is thus declared that the very auction sale is rendered void by the non-deposit of the auction price within the time frame provided under Order XXI Rules 84 and 85 of the CPC.
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NC: 2024:KHC:24761 CRP No. 779 of 2023
22. In the result, it is held that the auction conducted on 17.01.2015 is non est and the Trial Court is directed to re- auction the property and ensure that the sale is conducted in the manner contemplated under Section 2 of the Partition Act, as well as in compliance with the provisions of Order XXI regarding the sale of an immovable property.
23. The present petition is accordingly disposed of.
SD/-
JUDGE GSR List No.: 1 Sl No.: 76