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Sivaraya Pundarikaksharao Vs. Lingareddi Venkatareddi - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAndhra Pradesh High Court
Decided On
Case NumberCivil Revn. Petn. No. 987 of 1961
Judge
Reported inAIR1966AP201
ActsCode of Civil Procedure (CPC) , 1908 - Order 21, Rules 72, 84, 84(1) and 84(2)
AppellantSivaraya Pundarikaksharao
RespondentLingareddi Venkatareddi
Appellant AdvocateA.S. Prakasam, Adv.
Respondent AdvocateA. Raghavaiah, Adv.
DispositionPetition allowed
Excerpt:
.....auction sale - order 21 rules 84 (1) (2) and 72 of code of civil procedure, 1908 - respondent was decree holder - in execution of decree, auction for sale of land conducted - respondent himself became highest bidder but did not deposit 25% of purchase money with officer conducting sale under order 21 rule 84 (1) - whether it was mandatory for decree holder auction purchaser to deposit required amount under order 21 rule 84 - rule 84 (1) applied to every person including decree holder auction purchaser - rule 84 (2) provided that court may dispense with requirements of rule 84 (1) where decree holder was purchaser and entitled to set off money under rule 72 - requirements of rule 84 (2) were satisfied - held, it was mandatory for decree holder auction purchaser to deposit required amount..........judge's court, ongole and the respondent is the decree-holder. in execution of the decree, the decree-holder got attached the undivided half share of the judgment-debtor (ac. 5-49 1/2 cents) out of a total extent of ac. 10-99 cents of dry land in s. no. 157 in the village ithamukkala, and brought it to sale. he obtained permission from the court to bid at the auction and to set off. the sale was held on 27-3-61 and the decree-holder him self became the highest bidder, his bid being for rs. 2,225. the amount due under the decree on the date of the sale was rs. 500. the decree-holder, though he was the highest bidder and the bid was knocked down in his favour, did not deposit 25 per cent on the amount of the purchase money with the officer conducting the sale under order 21, rule 84(1).....
Judgment:
ORDER

Chandrasekhara Sastry, J.

1. The petitioner herein is the judgment-debtor in Small Cause Suit No. 6 of 1960 on the file of the Subordinate Judge's Court, Ongole and the respondent is the decree-holder. In execution of the decree, the decree-holder got attached the undivided half share of the judgment-debtor (Ac. 5-49 1/2 cents) out of a total extent of Ac. 10-99 cents of dry land in S. No. 157 in the village Ithamukkala, and brought it to sale. He obtained permission from the court to bid at the auction and to set off. The sale was held on 27-3-61 and the decree-holder him self became the highest bidder, his bid being for Rs. 2,225. The amount due under the decree on the date of the sale was Rs. 500. The decree-holder, though he was the highest bidder and the bid was knocked down in his favour, did not deposit 25 per cent on the amount of the purchase money with the officer conducting the sale under Order 21, Rule 84(1) C. P. C. But the next day, i.e., on 28-3-61, he applied to the lower court to permit him to deposit the entire sale amount after deducting the amount due to him under the decree and to direct the office to receive the same. The judgment-debtor resisted this application contending that the sale became a nullity and that there was no sale at all in the eye of law as the decree-holder who was declared to be the purchaser, failed to deposit immediately twenty-five per cent on the amount of his purchase money with the officer, who conducted the sale. The lower court framed the point for determination as follows:

'Whether it is mandatory on the part of the decree-holder auction-purchaser to deposit one-fourth amount on the date of sale itself under the provisions of Order 21 Rule 84 of the Civil Procedure Code?'

The lower court referred to Order 21, Rule 84(2) C. P. C, and observed that it is abundantly clear that, where the decree-holder purchased the property with the previous permission of the court, the court may dispense with the requirements of this rule. Next, the lower court referred to the decision in Suryanarayana Rao v. Chinna Konda, AIR 1958 Andh Pra 472 and the decision of the Supreme Court in Manilal Mohanlal v. Sayed Ahmed, : [1955]1SCR108 and expressed the view that, in the circumstances of this case, it cannot be said that any mandatory provision of Order 21, Rule 81 C. P. C. has been contravened. In the result, the lower court found the point framed for determination by it in favour of the decree-holder-auction-purchaser and passed an order permitting him to deposit the entire balance of the amount of the purchase money after deducting the amount due to him under the decree. This revision petition is filed by the judgment debtor against the order of the lower court.

2. It is strenuously contended by Mr. N. V. Suryanarayana Murthy, the learned counsel, who appeared for the petitioner, that though under Order 21, Rule 84(2), the Court may dispense with the requirements of the deposit of twenty-five per cent on the purchase money where the decree-holder himself is the purchaser and is entitled to set off the purchase money under Order 21, Rule 72, still in the present case, since there is no order of the court dispensing with the requirements of Order 21, Rule 84(1), the purchaser though he is a decree-holder, is bound to deposit twenty-five per cent of the purchase money immediately after the sale with the officer conducting the sale. Since such deposit is not made, it is argued, the sale is a nullity i.e., there is no sale at all in the eye of law and the court had no jurisdiction to receive the balance of the purchase-money and confirm the sale in favour of the decree-holder. On the other hand, it is contended by Mr. S. Suryaprakasam, the learned counsel for the decree-holder-auction-purchaser that, where the decree-holder himself obtains leave to bid and to set off, it was not necessary for him to make the deposit under Rule 84(1). In order to decide which of the respective contentions is correct, it is necessary to refer to Order 21, Rule 84, which is as follows;

'84(1): On every sale of immoveable property the person declared to be the purchaser shall pay immediately after such declaration a 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.' Under clause (1) of the above rule, whenever a person is declared to be the purchaser in any sale of immoveable property held in execution of a decree, such person shall pay immediately after such declaration a 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. That this provision is mandatory and unless it is complied with, there would be no sale at all in the eye of law is held by the Supreme Court in : [1955]1SCR108 . But Mr. S. Suryaprakasam pointed out rightly that the case before the Supreme Court was that of a stranger auction-purchaser and not that of a decree-holder-auction-purchaser, who obtained leave to bid and to set off. Therefore, it is contended that though in the case of a purchaser other than the decree-holder the provision of Order 21, Rule 84(1) is mandatory, it is not at all mandatory in a case where a decree-holder, who obtained leave to bid and to set off the bid amount against the purchase-money, is declared to be the purchaser. That, according to the learned counsel, is the result of the decision of the Supreme Court. It is also argued by him that, in the case of such a decree-holder-auction-purchaser, there was no necessity for him at all to deposit twenty-five per cent on the amount of his purchase-money under Rule 84(1). I am unable to accept the argument of the learned counsel. Rule 84(1), on a plain reading, applies to every person declared to be the auction purchaser be he the decree-holder or anyone other them the decree-holder. But Clause (2) of Rule 84 provides that 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 Rule 84. From this clause, it is clear that, in the case of a decree-holder, who is entitled to set off the purchase-money under Rule 72, the Court may dispense with the requirement of the deposit of twenty-five per cent on the amount of the purchase-money under Clause (1) of Rule 84. In the absence of any order of the court under Clause 2 of Rule 84, in my opinion, even a decree-holder, who is entitled to set off the purchase-money under Rule 72, shall pay immediately after he is declared to be the purchaser, twenty-five per cent on the amount of the purchase-money to the officer or other person conducting the sale. From the statement of the Supreme Court in : [1955]1SCR108 that the provision regarding the deposit of twenty-five per cent by the purchaser other than the decree-holder is mandatory, it does not follow that the rule is not mandatory in the case of a decree-holder, who is declared to be the purchaser under Rule 84(1). In the case of a decree-holder-auction-purchaser the rule is not mandatory only in the sense that the court has a discretion to dispense with the deposit of twenty-five per cent on the amount of the purchase-money. But in the case of a purchaser other than the decree-holder, the court has no such discretion at all in the matter. Unless the court dispenses with the requirement of this rule in the case of a decree-holder-auction-purchaser, the requirement of Rule 84(1) is equally mandatory.

3. I am also referred to the decision in Punnamchand Chatraban, Firm v. Satyanandam, ILR 57 Mad 38: (AIR 1933 Mad 804). But the following passage in the judgment makes it clear that there has to be an order of the court dispensing with the requirement of Rule 84:

'Ordinarily under Rule 84 of Order XXI the successful bidder has to pay a deposit of 25 per cent of his bid immediately on his being declared to be the purchaser, but, if the purchaser is the decree-holder and is entitled to set-off the purchase-money under Rule 72, then the court may dispense with the requirements of the rule.'

4. It is next contended by Mr. S. Suryaprakasam, the learned counsel for the respondent that in the case of a decree-holder, who had obtained leave to bid and to set off under Rule 71 and who was declared to be the purchaser, the court has to presume that the deposit of twenty-five per cent on the amount of the purchase-money is dispensed with under clause 2 of Rule 84. In support of this contention, reliance is placed upon the decision in AIR 1958 Andh Pra 472. But a perusal of that decision shows that it does not support the contention of the learned counsel. It is necessary to refer to the following passage in the judgment of the learned Judges:

'The learned counsel for the petitioner contends that, in the present case, there is no specific order within the meaning of Section 84(2) of Order 21, dispensing with the requirement of Rule 84(1) and, therefore, the decree-holder-purchaser should have deposited the twenty five per cent of the purchase-money so soon as he was declared to be the purchaser. The order directing set-off is not placed before us.

It is not possible to hold on the material placed before us that the court did not dispense with the obligation cast upon the purchaser under Rule 84(1). It may be presumed, in the absence of evidence to the contrary, that the learned Judge, having given the decree-holder the requisite permission to bid and purchase, would have also dispensed with the requirement of Rule 84(1). We cannot, therefore, say that, in the present case, any mandatory provision of Rule 84 has been contravened.'

From the above passage, it is quite clear that the learned Judges did not lay down as a proposition of law that in every case where a decree-holder is given leave to bid and to set off under Rule 72, the Court has to presume, without a specific order to that effect, that the requirement of Rule 84(1) is dispensed with by the court under Rule 84(2). The learned Judges pointed out that the order directing set-off was not placed before them and that it was not possible to hold on the material placed before them that the Court did not dispense with the obligation cast upon the purchaser under Rule 84(1). On the other hand, the above passage implies that it was necessary for the court to dispense with the requirements of Rule 84(1) before a decree-holder-auction-purchaser may be relieved of the obligation to deposit twenty-five per cent on the amount of the purchase-money.

5. In the present case, there is no scope for any presumption at all. It is not suggested before me or in the lower court that the Court dispensed with the requirements of Rule 84(1) when granting leave to bid and to set off or at any time before the sale was held on 27-3-61 or even immediately after the decree-holder is declared to be the purchaser. It is only on the next day i.e., on 28-3-61, the decree-holder-auction-purchaser filed E.A. 223/61, out of which this revision petition arises, praying to permit him to deposit the entire sale proceeds after deducting the amount due to him under the decree. This was not an application under Rule 84(2) to dispense with the requirements of Rule 84(1). In this case, there is no reference at all to the deposit of twenty-five per cent on the amount of the purchase-money required under Rule 84(1) and no prayer at all to dispense with the deposit of the same, though the application itself purports to have been filed under Rule 84. What happened on the date of the sale immediately after the decree-holder was declared to be the purchaser is stated in the order of the lower Court. The lower Court says that, from the report of the office, it appears that on the day of the sale, the amin waited for the decree-holder to deposit twenty-five per cent on the amount of the purchase-money till 6-30 P.M. But the decree-holder failed to do so. Then, the Sheristadar and the amin left the office. Thereafter, it appears that the decree-holder went with the amount to the house of the Sheristadar and requested him to accept the same; but the Sheristadar refused. From this also, it is clear that there is no order at all by the Court under Rule 84(2) dispensing with the requirements of Rule 84(1). The result is that there was no order at all of the court dispensing with the requirement of the deposit of twenty-five per cent on the amount of the purchase-money in the present case.

6. It is already stated that the purchase-money is Rs. 2,225. Twenty-five per cent of the same comes to Rs. 556-4-0 which is in excess of the amount due under the decree by Rs. 56-4-0.

7. Next Mr. Suryaprakasam relied upon the decision in Mir Ahmad-Aziz Ahmad v. Mangal Singh Lakhbir Singh, 157 Ind Gas 748: (AIR 1935 Pesh 123). In that case, immediately after the sale, the decree-holder, who was declared to be the purchaser, applied to the court under Order 21, Rule 84(2) to dispense with the requirements of Rule 84(1). The application was ordered only four days later. Objection was taken on behalf of the judgment-debtor since the requirement of Rule 84(1) was not complied with, the sale could not be confirmed. The actual point that was decided was about the meaning of the word 'immediately' in Rule 84 (1). The learned Judl. Commissioner in overruling the objection of the judgment-debtor, referred to the following passage in a prior judgment of his in Bhagchand Mulchand v. Najab Sultan, AIR 1934 Pesh 25.

'It was essential for the auction-purchaser to deposit 25 per cent, whether he were the decree-holder or not. It he were the decree-holder, he could have asked the court to dispense with that obligation, but he failed to do so, with the natural consequence, that the sale has not been completed.'

This passage from the judgment of the learned Judicial Commissioner really supports the contention urged on behalf of the judgment-debtor in the present case. But it is argued by Mr. S. Suryaprakasam that the application made in the present case the next day after the sale to receive the entire amount of the purchase-money after deducting the amount due under the decree substantially satisfies the requirements of Rule 84(2). Here again, I am unable to accept the contention of the learned counsel for the reason that there was no prayer at all to dispense with the requirement of the deposit of twenty-five per cent on the bid amount. Further this application was not filed immediately after the respondent was declared to be the purchaser. The report of the office referred by the lower court in its order shows that the amin and the Sheristadar waited till 6-30 P. M. on the day of the sale to enable the decree-holder to deposit the amount. Even assuming that such an application under Rule 84(2) to dispense with the deposit of twenty-five per cent on the amount of the purchase-money could be made after the decree-holder is declared to be the purchaser and not before the sale, in the present case, no application was matte immediately after such declaration and even the application, which was actually made the next day, did not refer to the said requirement and pray for its being dispensed with. Therefore, the decision in 157 Ind Cas 748: (AIR 1935 Pesh 123) does not help the respondent.

8. The decision in Murugappa v. Ramasami, AIR 1985 Mad 893 has really no bearing at all on the question to be decided in this case. The question that arose for decision in that case related to rateable distribution under Sec 73 C. P. C. The learned Judge had to consider the effect of the decree-holder being permitted to bid and to set off.

9. Next reliance is placed upon the decision in Rajkishore Prasad v. Chhotey Narayan, AIR 1934 Pat 329 where the Patna High Court held that the provisions of Rule 84 are to he read along with Rule 72 and that, if the decree-holder's application for set-off is pending and the decree-holder is not called upon to deposit, the sale is not a nullity because the 25 per cent of the purchase-money has not been deposited by the decree-holder at the time of the sale. That was a decision on the peculiar facts of that case and I do not understand that judgment as laying down any general proposition of law.

10. Next it is contended by Mr. Suryaprakasam that, in the present case, there is no order of the, Court declaring the decree-holder to be the purchaser. Therefore, the question of depositing twenty-five per cent on the amount ol the purchase-money, which had to be deposited only on the decree-holder being declared to be the purchaser under Rule 84(1) does not arise. The argument is that it is the Court that has to approve the bid and declare the highest bidder to be the purchaser. In support of his argument, reliance is placed upon the decision in Poongavana v. Muthurama, : AIR1953Mad762 . There was no suggestion in the court below that the decree-holder was not declared to be the purchaser in the present case. In fact, the affidavit filed by the respondent in support of E. A. 223/61 shows that he was conscious of the fact that he was declared to be the purchaser and that he went to consult his counsel, as he felt a doubt whether the entire balance of the purchase-money after setting off the decree amount had to be deposited or whether 1/4th of the balance alone had to be paid. The question of deposit would not have arisen at all unless he was declared to be the purchaser under Rule 84(1). Under these circumstances, I am satisfied that the respondent was declared to be the purchaser under Rule 84(1).

11. Finally, my attention was drawn to the decision of a Bench of the Rajasthan High Court in Kanhaiyalal v. Sansmal, (S) . Wanchoo, C.J. (as he then was) delivering the judgment of the court, expressed the view that:

'Reading these two rules together, it seems to us plain common sense that where a decree-holder is permitted to bid at an auction, there is an implied dispensation also that he need not deposit 25 per cent of the purchase-money unless the sale price is more than the decretal amount. Where the sale price is more than the decretal amount, the decree-holder must deposit the excess upto 25 per cent of the purchase money, depending upon the excess of the sale price over the decretal amount.'

I already expressed above my view that irrespective of the fact whether the purchase money exceeds the amount due under the decree or not, the requirement of the deposit of twenty-five per cent on the amount of the purchase-money under Rule 84(1) is mandatory even in the case of a decree-holder-auction-purchaser, who obtained leave to set off under Rule 72 unless it was dispensed with by the Court under Rule 84(2), But, even in the view expressed by Wanchoo. C. J. in (S) the decision in the present case must be against the respondent for the reason that the amount due under the decree (Rs. 500) is less than the 25 per cent on the amount or the purchase-money (Rs. 556-4-0).

12. As, in my opinion, the requirements of Order 21, Rule 84 are not complied with in the present case, there was no completed sale at all in execution of the decree on 27-3-61.

13. In the result, the revision petition is allowed and the order of the lower court is set aside and E. A. 223/61 is dismissed. In the circumstances of this case, I direct the parties to bear their own costs here and in the lower court.


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