Nalluri Chenchaiah vs Padmanabhuni Venkata ...
2023 Latest Caselaw 3010 AP

   IN THE HIGH COURT OF ANDHRA PRADESH: AMARAVATI

        HONOURABLE SRI JUSTICE SUBBA REDDY SATTI

           CIVIL REVISION PETITION No.2473 of 2022

   Nalluri Chenchaiah, S/o Venkateswarlu, Hindu,
   aged about 64 years, Medical Practitioner,
   D.No.1-78, 3rd Ward, Thalamalla Village & Post,
   Prakasam District.
                                                  ... Petitioner.
              Versus

   Padmanabhuni Venkata Mallikarjuna Rao,
   S/o Subba Rao, Hindu, aged about 55 years,
   Business,   R/o      6-3-2,    Sali    Street,
   Stonehousepet, Nellore City and another.
                                              ... Respondents.

Counsel for the petitioner            : Sri Ponnam Ravindra Babu
Counsel for respondent No.1           : Sri J.Krishna Praneeth
Counsel for respondent No.2           : Sri V.Roopesh Kumar Reddy

                              ORDER

Judgment debtor filed the above revision against the

order dated 22.11.2022 in E.A.No.82 of 2022 in E.P.No.79 of

2018 in O.S.No.204 of 2015 on the file of Principal Junior

Civil Judge, Nellore.

2. 1st Respondent, being plaintiff, filed suit O.S.No.204 of

2015 against the defendant-judgment debtor for recovery of

money. Suit was decreed on 29.09.2016. Pursuant to decree

and judgment, decree holder filed E.P.No.79 of 2018 under

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Order XXI Rule 22 to issue notice to judgment debtor and

thereafter attach the schedule property under Rule 54 and to

sell the schedule property under Rules 64 and 66 for

realization of decretal amount. The schedule property

mentioned in the E.P. is an extent of 19 ankanams and 2

square feet or 152.222 square yards of vacant site. The

Executing Court, after following the procedure, conducted

auction on 26.08.2022. The 2nd respondent herein became

the auction purchaser for Rs.22,50,000/- and he deposited

1/4th of auction amount along with poundage on the date of

auction. Later deposited remaining 3/4th amount on

05.09.2022. E.P. was adjourned to 07.11.2022 for

confirmation of auction.

3. On 12.09.2022, judgment debtor filed E.A.No.82 of

2022 under Order XXI Rule 89 of CPC to set aside the sale.

In the affidavit, it was contended that one Narasimha Rao

filed suit O.S.No.50 of 2020 against the judgment debtor for

recovery of money and he got attached the schedule property

by filing I.A.No.32 of 2020. As per the mediation held by the

elders, Narasimha Rao agreed to purchase the schedule

property for Rs.35 lakhs and in fact, an agreement of sale

SRSJ CRP No.2473 of 2022

was also entered. The said Narasimha Rao promised to pay

the balance of consideration within 3 months, after deducting

his debt amount. Judgment debtor requested the counsel to

file an application in E.P.No.79 of 2018, however the counsel

could not file the application, as he was engaged in

conducting death ceremony of his maternal aunt. The

executing Court conducted Auction and 2nd respondent

became the auction purchaser. The Auction purchaser is no

other than close relative of plaintiff-decree holder. The

auction was knocked down for Rs.22,50,000/- and the

private market value of schedule property is more than Rs.40

lakhs and hence, filed the application to set aside the sale

under Rule 89.

4. Judgment debtor deposited proclamation amount of

Rs.2,01,668/- and an amount of Rs.67,645/-. It was

mentioned that Rs.67,645/- is towards poundage.

5. 2nd Respondent-auction purchaser filed counter and

opposed the application. It was contended that he is a

bonafide purchaser. Judgment debtor is having knowledge

about auction. He deposited the entire amount and thus,

prayed to dismiss the application.

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6. The Executing Court by order dated 22.11.2022

dismissed the application. Aggrieved by the same, the present

revision is filed.

7. Heard Sri Sri Ponnam Ravindra Babu, learned counsel

for petitioner, and Sri J.Krishna Praneeth, learned counsel

for 1st respondent and Sri V.Roopesh Kumar Reddy, learned

counsel for 2nd respondent.

8. Learned counsel for the petitioner would submit that

the judgment debtor deposited amount as per the lodgment

schedule issued by office of Executing Court. The wrong

calculation made by the office of Executing Court, while

issuing lodgment schedule, is no ground to refuse the relief in

favour of J.Dr. He also would submit that as per Order XXI

Rule 89 of CPC, along with application, judgment debtor

must deposit amount mentioned in proclamation along with

5% of purchase money. He would also submit that as per

Rule 281 of Civil Rules of Practice (for short "CRP"), if the sale

is set aside under Order XXI Rule 89 of the Code, the Court

may make an order for payment of the poundage, costs and

interest. In this case, 5% of purchase money would come to

Rs.1,12,500/-, however, judgment debtor deposited

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Rs.67,668/-. Due to wrong calculation proper amount was

not deposited and in fact, judgment debtor is ready to deposit

the amount. The Court below without considering these

aspects, dismissed the application.

9. On the other hand, learned counsel for decree holder

and auction purchase would submit that to make an

application under Order XXI Rule 89 of CPC, the judgment

debtor must deposit the amount mentioned in proclamation

and 5% of purchase money. Unless the amount mentioned in

clauses (a) and (b) is deposited, the application itself is not

maintainable and thus, prayed to dismiss the revision.

10. Now the point for consideration is:

Whether the amount of Rs. 67,668/- deposited by J.Dr can be treated as part amount towards 5% purchase money as mandated under Order XXI Rule 89 (1)(a) CPC?

11. Before proceedings further, it is apt to extract Rule 89

of Order XXI of CPC as hereunder:

89. 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

SRSJ CRP No.2473 of 2022

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.

HIGH COURT AMENDMENTS

[Andhra Pradesh and Madras--In Order XXI, Rule 89 sub-rule (1):--

(i) in clause (b) for "date of such proclamation" read "date of that proclamation".

(ii) Insert the following proviso at the end of sub- rule (1) :--"Provided that where the immovable property sold is liable to discharge a portion of the decree debt, the payment under clause (b) of this sub-rule need not exceed such amount as under the decree the owner of the property sold is liable to pay."]

12. A careful perusal of Order XXI Rule 89 of CPC would

manifest that judgment debtor or any other person claiming

interest in the property making the application to set aside

the sale, must deposit into the Court 5% of purchase money,

SRSJ CRP No.2473 of 2022

for payment to auction purchaser and the amount specified

in the proclamation, for payment to decree holder. Thus,

deposit of amount under two heads i.e. 5% sale amount and

amount mentioned in proclamation is sine qua non to

maintain application under Rule 89 CPC. Time prescribed to

make an application under Rule 89 is 60 days from the date

of sale. Once the amount is deposited into the Court, the

Court will pass appropriate orders under Rule 92.

13. Sub Rule 2 of Rule 92 of Order XXI of CPC, which is

relevant, is extracted hereunder:

92. Sale when to become absolute or be set aside

(2) Where such application is made and allowed, and where, in the case of an application under rule 89, the deposit required by that rule is made within sixty days from the date of sale, or in cases where the amount deposited under rule 89 is found to be deficient owing to any clerical or arithmetical mistake on the part of the depositor and such deficiency has been made good within such time as may be fixed by the Court, the Court shall make an order setting aside the sale:

Provided that no order shall be made unless notice of the application has been given to all persons affected thereby.

Provided further that the deposit under this sub- rule may be made within sixty days in all such cases where the period of thirty days, within which the deposit had to be made, has not expired before the commencement of the Code of Civil Procedure (Amendment) Act, 2002.

SRSJ CRP No.2473 of 2022

HIGH COURT AMENDMENTS

Andhra Pradesh and Madras-- In Order XXI Rule 92.-

In sub-rule (2) after the words "within thirty days from the date of sale" insert the following words:--"and in case where the amount deposited has been diminished owing to any cause not within the control of the depositor such deficiency has been made good within such time as may be fixed by the Court.

14. Sub Rule 2 of Rule 92 makes it clear that if the amount

deposited has been diminished owing to any cause not within

the control of the depositor, such deficiency can be made

good by fixing some time to deposit the amount.

15. Case on hand, sale was conducted on 26.08.2022.

Application to set aside the sale was filed on 12.09.2022.

Time prescribed to file the application under Rule 89 is sixty

days from the date of sale. Thus, the application filed by

judgment debtor is within time and in fact, judgment debtor

filed application on 17th or 18th day after conducting of sale.

As per the lodgment issued by the Executing Court, the

amount was paid.

16. It is appropriate to extract the prayer made in

E.A.No.82 of 2022 as hereunder:

SRSJ CRP No.2473 of 2022

"For the reasons stated in the accompanying affidavit, it is prayed that this Hon'ble Court may be pleased to:

a) Set aside the sale of E.P. schedule property dated 26.08.2022 conducted by this Hon'ble Court and permit the petitioner/J.Dr to deposit the E.P. amount and poundage amount.

b) and grant such other and further reliefs as this Hon'ble Court deems fit and proper in the circumstances of the case."

Thus Judgment Debtor by filing E.A. prayed to Court to

permit him to deposit E.P. amount and poundage.

17. Apart from the amount mentioned in Rule 89 of Order

XXI, judgment debtor or the person interested shall also

deposit Poundage. Poundage is the fee, which is levied in

England by the sheriff as remuneration for these services. In

this country, as the officers of the Court conducting sales are

paid a fixed salary, a certain percentage of the purchase

money, is taken for purchasing stamps. In effect the fee is a

charge paid by the decree holder for the services he obtains

from the Court. In England as well as in this country, the fee

is taken out of the sale proceeds for recovering money

through legal means, such as an execution or attachment.

Parvathi Ammal Vs Govindasami Pillai1.

AIR 1961 Mad 290

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18. Rule 281 of Civil Rules of Practice deals with deposit of

poundage, interest and costs etc., For better appreciation,

Rule 281 of CRP is extracted hereunder:

281. Refund of Poundage:-

(1) If the sale is set aside under Order XXI, Rule 89 of the Code, the court may make an order for payment by the judgment debtor or applicant at whose instance the sale is set aside, of the poundage, costs and interest, if any, not covered by the proclamation of sale. The amount deducted as poundage from the deposit made by the purchaser shall be refunded to him.

(2) If the sale is set aside under Order XXI, Rule 90 of the code, the court shall determine whether any and what party is responsible therefore and may order such party to pay the costs and expenses of the sale, the may make an order any other party entitled to have the property sold may have the property sold may have the conduct of the sale and may make an order for the re-sale of the property.

(3) If the sale is set aside under Order XXI, Rule 91 of the Code, the court may make an order for payment by the execution creditor of the poundage and other costs of the sale.

19. A glance at Rule 281 of CPR would manifest that if the

sale is set aside under Rule 89 of Order XXI, the Court may

make an order for payment by the judgment debtor as to the

poundage, costs and interest. Rule further mandates that the

amount deducted as poundage, purchaser is entitled to.

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20. Calculation of poundage is delineated in Rule 5 of

Process Fees Rules. As per the said Rule (i) on the first

Rs.500/-, ten paise in the rupee (ii) on the next Rs.500/-, five

paise in the rupee and (iii) on any sum exceeding Rs.1,000/-

three paise in the rupee.

21. Judgment debtor paid the amount in bank pursuant to

lodgment schedule. Judgment Debtor paid Rs.67,668/- along

with amount mentioned in sale proclamation. However, 5% of

the sale amount comes to Rs.1,12,500/- since auction was

knocked to Rs.22,50,000/-. When I.A. was filed well within

the time stipulated, the Executing Court, on verification,

should have directed the judgment debtor to deposit the

balance amount of 5% of purchase money in case of

diminution along with poundage. The executing Court ought

to have directed the judgment debtor to deposit the balance

amount within the stipulated time of 60 days. If the judgment

debtor fails to deposit the same within stipulated time i.e. 60

days, notwithstanding extension of time, he will be not

entitled for the relief of setting aside the sale.

22. In fact, Sub Rule 2 of Rule 92 as extracted supra, would

also indicate that the Court can fix time and direct the

SRSJ CRP No.2473 of 2022

judgment debtor to make good of balance. When such

discretion is given to the Court, the Court below ought to

have exercised the same in the interest of justice and equity.

23. The executing Court at the time of issuing lodgment

schedule should have mentioned the amount to be deposited

enabling the judgment debtor to pay the amount. Case on

hand, as seen from the material papers, whatever the amount

mentioned in lodgment schedule was paid.

24. It is settled principle of law that the act of court shall not

prejudice any party. In Jang Singh Vs. Brit Lal2, the Hon'ble

Apex Court observed as follows:--

"6. It is, no doubt, true that a litigant must be vigilant and take care but where a litigant goes to court and asks for the assistance of the Court so that his obligations under a decree might be fulfilled by him strictly, it is incumbent on the Court, if it does not leave the litigant to his own devices, to ensure that the correct information is furnished. If the Court in supplying the information makes a mistake the responsibility of the litigant, though it does not altogether cease, is at least shared by the Court. If the litigant acts on the faith of that information the Court cannot hold him responsible for a mistake which it itself caused. There is no higher principle for the guidance of the Court than the one that no act of Court should harm a litigant and it is the bounden duty of Courts to see that if a person is harmed by a mistake of the Court he should be restored to the position he would have occupied but for that mistake. This is aptly

AIR 1966 SC 1631

SRSJ CRP No.2473 of 2022

summed up in the maxim: 'Actus curiae neminem sravabit'."

25. The Hon'ble Apex Court in Sukumar DE Vs. Bimala

Auddy and Ors.3, while upholding the order of the High

Court observed as follows:

"7. In sum and substance, the position which emerges on the auction of the property in question can be summarised as below:

The property was put up on auction on July, 1970 and the bid of the Petitioner in a sum of Rs. 1.5 lakhs was the highest. The auction sale was confirmed on 9.7.1990. Under Order 21 Rule 89 Code of Civil Procedure, a chance is given to the applicant to deposit the amount payable including 5 percent for the successful auction purchases and on deposit of that amount the Executing Court will set aside the sale on 10.7.1990 itself. The Respondent No. 4/judgment debtor has filed the application requesting the executing court to intimate the amount to be deposited so that he could file application under Order 21 Rule 89 of Code of Civil Procedure. Though this application was rejected, the order of the executing court was set aside by the High Court allowing the revision of the judgment debtor and directing the executing court to intimate the same to the judgment debtor. In the first instance, the amount calculated was Rs. 1.14 lakhs which turned out to be wrong calculations, in as much as the High Court set aside the said order and on recalculation, the amount payable was calculated at Rs. 42,055.87/-. The Executing Court had directed the judgment debtors to pay this amount which was to be paid by 11.11.92. However, before that the judgment debtor filed another revision petition. This revision petition is decided by the impugned order passed on 8.6.2004. No doubt, the amount calculated is found to be correct but the High Court chose to give one opportunity to the judgment debtor to deposit the amount as upto that stage the controversy regarding actual payment had not been settled."

AIR 2014 SC 1000

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The High court while setting aside the order of

Executing Court observed as follows:

"Accordingly we dispose of the Revisional application by modifying the order passed by the learned executing Court on 24.9.1992 in the manner indicated herein below. The judgment debtor shall deposit with the executing court a sum of Rs. 42,055,87 as calculated by the office of the executing Court, within one month from date. On deposit of the said sum, the sale shall stand set aside. The learned executing court shall take steps to disburse to the purchaser and the decree holder their respective dues as contemplated under Clauses (a) of sub rule (1) of Rule 89 of Order 21 of the Code. In addition to the above, the executing court shall make over to the judgment debtors the stamps purchased by the auction purchaser for the purpose of the sale certificate so that the amount of the stamps may be recorded by the judgment debtor in accordance with the provisions of Section 54 of the Indian Stamp Act, 1899. The learned executing court shall pass an order of the basis whereof the judgment debtor would be entitled to receive back the amount of the stamp duty although the same had been purchased in the name of the auction purchaser who will be entitled to receive back the cash value thereof. The learned executing Court is directed to take steps to dispose of the matter expeditiously since the same has been pending for a long time."

26. Thus, the above discussion would manifest that,

Judgment Debtor made application praying the Court to

permit him to deposit E.P. amount along with poundage.

E.P. amount, as per Rule 89 of Order 21 CPC, includes 5% of

purchase money and amount mentioned in proclamation. As

per the lodgment schedule, judgment debtor paid the

amount, as indicated on 17th or 18th day from the date of

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sale. Once judgment debtor paid the amount, he will not be

unsuited on the ground of payment made by him, pursuant

to the lodgment schedule is less amount.

27. Keeping in view the expressions of Hon'ble Apex Court,

this Court is of the opinion that since the amount was paid

pursuant to lodgment schedule, if found to be deficient, the

Executing Court ought to have directed judgment debtor to

make good by paying the balance amount. Such a power is

vested with the Court as per Rule 92 of Order 21.

28. In view of the above discussion, this Court is of the view

that, whenever an application is filed under Rule 89 of Order

XXI of CPC, (within the time) the Executing Court must verify

whether there is compliance of Sub Rule 1 (a) and (b) of Rule

89 and payment of poundage as per Rule 281 of Civil Rules of

Practice. If application is filed within stipulated time and the

amount paid is less or diminished, due to calculation, the

executing Court shall give an opportunity and direct the

judgment debtor to make good of balance within the time

stipulated however not beyond 60 days. If this procedure is

adopted, even in case of diminution also, the judgment debtor

or any person interest will make good the balance.

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29. During arguments, learned counsel for petitioner would

submit that the judgment debtor is ready to deposit the

balance amount of 5% of purchase money and poundage. In

fact, when the matter was listed on 30.11.2022 learned

counsel for the revision petitioner would submit that

judgment debtor is ready to deposit balance amount of 5%

and poundage. Upon recording the same, the Court ordered

notice and granted stay of further proceedings in E.P. and

hence, the sale is not confirmed by virtue of stay granted by

this Court.

30. Thus, keeping in view the interest of all the parties, this

Court deems it appropriate to set aside the order dated

22.11.2022 in E.A.No.82 of 2022 in E.P.No.79 of 2018 in

O.S.No.204 of 2015 on the file of Principal Junior Civil Judge,

Nellore. Accordingly, E.A.No.82 of 2022 stands allowed. The

judgment debtor shall deposit balance of 5% of purchase

money excluding the amount already deposited and also

poundage within two weeks from today. If the judgment

debtor deposits the amount within two weeks, the executing

Court shall consider the same, as if the was deposited along

with application under Rule 89 of Order XXI of CPC. If the

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judgment debtor fails to deposit the amount within the time

stipulated, the order dated 22.11.2022 in E.A.No.82 of 2022

shall come into operation.

The executing Court shall dispose of E.P.No.79 of 2018

within a period of six weeks thereafter strictly in accordance

with law.

31. Accordingly, the Civil Revision Petition is allowed. No

order as to costs.

As a sequel, all the pending miscellaneous applications

shall stand closed.

_________________________ SUBBA REDDY SATTI, J 10th May, 2023

PVD