Begraj vs Oriental Bank Of Commerce And ...
2022 Latest Caselaw 1072 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

?Court No. - 4
 
Case :- MATTERS UNDER ARTICLE 227 No. - 550 of 2008
 
Petitioner :- Begraj
 
Respondent :- Oriental Bank Of Commerce And Others
 
Counsel for Petitioner :- Arjun Singhal
 
Counsel for Respondent :- Tarun Varma,SC,Shailly Saxena,Vipin Sinha
 

 
Hon'ble Salil Kumar Rai,J.

List has been revised.

No one appears for the respondents.

Heard the counsel for the petitioner.

The present petition has been filed challenging the order dated 31.1.2008 passed by the Civil Judge (Senior Division), Muzaffar Nagar in Execution Case No. 6 of 1988 as well as the order dated 1.5.2008 passed by the District Judge, Muzaffar Nagar in Civil Revision No. 80 of 2008.

The facts of the case are that the respondent-Oriental Bank of Commerce, filed Execution Case No. 6 of 1988 against the petitioner for realization of the decreetal amount. The decree was passed in Suit No. 249 of 1994 for a sum of Rs. 2,05,000/- with interest at the rate of 16% from the date of institution of the suit till the date of decree. In the said execution case the property of the petitioner, which the petitioner states to be land measuring 7-17-18 was auctioned by the Ameen on 27.10.2007. The auction was in favour of respondent No. 3. The respondent No. 3 deposited 25% of the amount and the balance of the sale consideration had to be deposited within 15 days. However, the auction purchaser filed an application on 12.11.2007 praying for further time to deposit the balance of the sale consideration. The executing court, i.e., theCivil Judge (Senior Division), Muzaffar Nagar permitted the auction purchaser to deposit the balance amount by 12.12.2017. On 12.12.2017, the auction purchaser, i.e., the respondent No. 3 again filed an application praying for permission to deposit the balance amount and the court permitted him to deposit the balance amount, which was ultimately deposited on 13.12.2017. The petitioner, who is the judgement debtor in the case, filed an application before the executing court to set aside the auction on the ground that the balance amount had to be deposited within 15 days from the date of auction and to proceed under Order 21 Rule 86 C.P.C. for a re-auction of the property. The said application was dismissed by the executing court vide its order dated 31.1.2008 on the ground that the balance amount was deposited by the auction purchaser-respondent No. 3 after seeking permission of the court. Civil Revision No. 80 of 2008 filed against the order of the executing court has also been dismissed by the revisional court vide its order dated 1.5.2008. Hence, the present petition.

It was argued by the counsel for the petitioner that the Provisions of Order 21 Rule 85 are mandatory in nature and in case the auction purchaser does not deposit the balance amount within 15 days as required under the aforesaid Provision, steps have to be taken under Order 21 Rule 86 C.P.C. and the property has to be put up for resale. It was argued that the court has no discretion to extend the time as provided under Order 21 Rule 85 and for the said reasons, the impugned orders are liable to be set aside. In support of his argument, the counsel for the petitioner has relied on the following judgements :-

(1) Siya Ram Vs. Smt. Aghani Devi & Others, (1983) ALL. L.J. 1213

(2) Gangabai Gopaldas Mohata Vs. Fulchand & Others, AIR (1997) SC 1812

(3) Balram, S/o Bhasa Ram Vs. Ilam Singh & Others, AIR (1996) SC 2781

I have considered the submission of the counsel for the petitioner.

The auction purchaser, in the present case, is not the decree holder.

In Manilal Shah Vs. Sardar Sayed Ahmed Sayed Mahammad, AIR (1954) SC 349, the Supreme Court while considering the scheme of Order 21 Rules 84, 85 and 86 C.P.C. observed as follows :-

"...The principal question which falls to be considered is whether the failure to make the deposit under Order XXI, rules 84 and 85, is only a material irregularity in the sale which can only be set aside under rule 90 or whether, it is wholly void. It is argued that the case falls within the former category and the application under rule 90 being barred by limitation, the sale cannot be set aside. It is also contended that the Court having once allowed the set-off and condoned the failure to deposit, the mistake of the Court should not be allowed to prejudice the purchasers who would certainly have deposited the purchase price but for the mistake. We are of opinion that both the contentions are devoid of substance. In order to resolve this controversy a reference to the relevant rules of Order XXI of the Civil Procedure Code will be necessary. These rules are 72, 84, 85 and 86;

xxx xxx xxx

The scheme of the rules quoted above may be shortly stated. A decree-holder cannot purchase property at the Court- auction in execution of his own decree without the express permission of the Court and that when he does so with such permission, he is entitled to a set-off, but if he does so without such permission, thenthe Court has a discretion to set aside the sale upon the application by the judgment-debtor, or any other 'person whose interests are affected by the sale (Rule.72). As a matter of pure construction this provision is obviously directory and not mandatory - See Rai Radha Krishna and Others v. Bisheshar Sahai, 49 Ind App 312 : (AIR 1922 PC 356). The moment a person is declared to be the purchaser, he is bound to deposit 25 per cent. of the purchase-money unless he happens to be the decree-holder, in which case the Court may not require him to do so (Rule 84).

The provision regarding the deposit of 25 per cent. by the purchaser other than the decree-holder is mandatory as the language of the rule suggests. The full amount of the purchase-money must be paid within fifteen days from the date of the sale but the decree-holder is entitled to the advantage of a set-off. The provision for payment is, however, mandatory... (Rule 85). If the payment is not made within the period of fifteen days, the Court has the discretion to forfeit the deposit, and there the discretion ends but the obligation of the Court to re-sell the property is imperative. A further consequence of non-payment is that the defaulting purchaser forfeits all claim to the property... (Rule 86).

xxx xxx xxx

(Pages 112-114) of SCR) : (At Pp. 350 and 351 of AIR)

"Having examined the language of the relevant rules and the judicial decisions bearing upon the subject we are of opinion that the provisions of the rules requiring the deposit of 25 per cent. 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 favour of a purchaser without depositing 25 per cent. 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 resell 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 eye of law. We hold, therefore, that in the circumstances of the present case there was no sale and the purchasers acquired no rights at all.

It was urged before us that the Court could allow a set-off in execution proceedings under its inherent powers apart from the provisions of Order XXI, rule 19, of the Civil Procedure Code. We do not think that the inherent powers of the Court could be invoked to circumvent the mandatory provisions of the Code and relieve the purchasers of their obligation to make the deposit...

(Pages 116-117) (of SCR) : (at Pp 351-52 of AIR)"

(Emphasis added)

The aforesaid observations of the Supreme Court show that the only discretion the executing court has in the matter is to forfeit the amount deposited by the auction purchaser, in case he fails to deposit the balance consideration as required under Order 21 Rule 85. The courts have no discretion to extend the time prescribed under Order 21 Rule 85 C.P.C. The said power can also not be exercised under Sections 148 or 151 of C.P.C.

In the circumstances, the auction of the property failed and the executing court was bound to take steps for reselling the property under Order 21 Rule 86 C.P.C.

Apparently, the orders dated 31.1.2008 and 1.5.2008 passed by the courts below are contrary to law.

The order dated 31.1.2008 passed by the Civil Judge (Senior Division), Muzaffar Nagar in Execution Case No. 6 of 1988 as well as the order dated 1.5.2008 passed by the District Judge, Muzaffar Nagar in Civil Revision No. 80 of 2008 are hereby quashed. The petition is allowed.

The matter is remanded back to the executing court, i.e., the Civil Judge (Senior Division), Muzaffar Nagar to take steps for resale of the property and for execution of the decree in accordance with law and as prescribed under Order 21 Rule 86 C.P.C.

Order Date :- 11.4.2022

Anurag/-