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Punjab National Bank Vs. Baba Kishandas Thakur Das - Court Judgment

LegalCrystal Citation
SubjectBanking;Civil
CourtMadhya Pradesh High Court
Decided On
Case NumberC.R. No. 762 of 1994
Judge
Reported in1997(1)MPLJ208
ActsCode of Civil Procedure (CPC) - Sections 34
AppellantPunjab National Bank
RespondentBaba Kishandas Thakur Das
Appellant AdvocateR.K. Sanghi, Adv.
Respondent AdvocateR.S. Tiwari, Adv.
DispositionRevision dismissed
Cases ReferredKrishanlal v. Kothari Jathmal
Excerpt:
- - very strong reliance is placed on the decision of nagpur high court in ramchandra marotrao wanjari v. i am clearly of opinion that the amount deposited by the auction, purchaser on the date of sale and on the 15th day after the sale is not intended to be paid to the decree holder immediately on deposit but on confirmation of the sale. impossibility or inability is a good excuse in law. and though impossibility of performance is in general no excuse for not performing an obligation which a party has expressly undertaken by contract, yet when the' obligation is one implied by law impossibility of performance is a good excuse......of sale, the judgment-debtor is liable to pay interest also for the period from date of sale till the date of its confirmation. in none of these cases (supra) any question arose whether the liability towards interest ceases soon after the auction price is deposited in court and remains in such deposit till decision of objections for no fault on the part of the judgment-debtor. the aforesaid two decisions, therefore, can be distinguished on the ground that in none of them the above equitable aspect came up for consideration and there were distinguishable factual features. in the nagpur case (supra) decided by puranik, j., the judgment-debtor was held liable to pay interest also for the period between the date of sale till its confirmation on following, additional ground :'the.....
Judgment:
ORDER

D.M. Dharmadhikari, J.

1. In this revision under section 115 of the Code of Civil Procedure filed by the decree holder, a short but intricate point of law has been raised.

2. The factual background may first be given : The applicant/bank obtained a decree on the basis of mortgage against the non-applicant/judgment-debtor in the sum of Rs. 41,286.04 being the principal amount of loan with interest pendente lite and future interest at contractual rate of 16% per annum.

3. The operative part of the decree, which is relevant for deciding the contentions advanced by the parties, reads as under :

'The defendant shall pay to the plaintiff a sum of Rs. 41,286.04 p. together with the interest pendente lite and future at the contractual rate of 16% per annum with half yearly rest till full recovery.'

4. In execution of the decree, the property attached was put to sale by auction on 15-4-1991. The highest bidder deposited 1/4th of the amount on spot and deposited remaining amount of the bid money on 30-4-1991, which was deposited in Civil Court deposit.

5. Several objections were filed to the sale by third parties. The objections were overruled and the litigation went upto Supreme Court. Awaiting the decision of the objections filed, the sale could not be confirmed and it was confirmed by the executing Court only on 21-7-1994. After the sale was confirmed, the decree holder claimed that on the principal sum not only that he was entitled to interest at the rate of 16% upto 30-4-1991 when on the basis of sale full amount of purchase money was deposited but also till the sale was confirmed on 21-7-1994.

6. According to the judgment-debtor, for no fault on his part, decision on objections raised to the auction sale took more than three years for decision and he cannot be fastened with the liability of interest from 30-4-1991 when the purchase money in full came to be deposited in the Court till the confirmation of sale by the Court on 21-7-1994.

7. The executing Court by the impugned order held that the decree holder is not entitled to interest from 30-4-1991 when the purchase money was deposited by the auction purchaser till the confirmation of the sale and actual payment to the decree holder.

8. The learned counsel Shri Rajnish Sanghi appearing for the decree holder/bank submits that the judgment-debtor cannot avoid its liability towards interest in face of the express terms of the decree which provided payment of interest till full recovery of the amount. It is submitted that it is not open to the judgment-debtor to deny its liability for payment of interest for the period spent by the Court for deciding the objections raised by third parties. It is submitted that in fact third parties were none else than his own interested persons set up by him to frustrate the sale. Very strong reliance is placed on the decision of Nagpur High Court in Ramchandra Marotrao Wanjari v. Ramchandra Gujaba Shrawane, AIR 1938 Nag. 54 and particularly the following passage :

'.......The Civil Procedure Code contemplates proceedings for setting aside sales under Order 21, Rule 89, or Order 21, Rule 90. The title which the purchaser gets on sale is subject to these proceedings, if any of these proceedings are taken and the sale is set aside. It is but just and proper that the auction purchaser who has deposited the purchase money in Court should get it immediately from the Court and it does not appear reasonable to ask him to realise, from the decree holder to whom it has been paid immediately on deposit as held by the lower appellate Court. In many cases this will involve a great risk for the purchaser, as for instance, in a case where the decree holder is not a man of substance or is in the meantime declared insolvent or runs away with the amount paid to him and has no property. A purchaser would necessarily look to the Court for the return of the amount which has been paid by him in Court subject to the rules laid down in Civil Procedure Code and it is not proper to allow the decree holder to withdraw those amounts till objections to the confirmation of sale arc investigated into and decided, and it is held that the sale is to be confirmed. I am clearly of opinion that the amount deposited by the auction, purchaser on the date of sale and on the 15th day after the sale is not intended to be paid to the decree holder immediately on deposit but on confirmation of the sale. It is on confirmation of sale that the auction purchaser's title to the property purchased by him is declared, though it relates back to the date of the sale. Till then, his title is subject to the proceedings that may be taken by persons interested in the property for setting the sale aside. It would be unjust to pay the amount to the decree holder and then leave the auction purchaser to the risk of realizing it from the decree holder after the sale is set aside.'

9. On the undisputed facts mentioned above, the question is whether under the terms of the decree the decree holder can claim interest at the rate of 16% per annum with half yearly rest for the period between the date of sale of the mortgaged property till the confirmation of the same.

10. At the outset, it may be stated that there is nothing on record to hold that the objections to the sale were by parties who were set up by or on behalf of the judgment-debtor or that it was the judgment-debtor who got the objections filed in his interest. The entire auction price had been deposited by the auction purchaser in the Civil Court. For no fault either on the part of the Judgment debtor or the decree holder, the sale could not be confirmed for unreasonably long period and the objections to the same were finally rejected only by the Supreme Court. During this long period of pendency of consideration of objections to the sale, neither the decree holder made any attempt to withdraw the auction price nor the judgment-debtor took any steps to get the amount deposited with the decree holder which was the bank or with any other scheduled bank so that it earns interest at the bank rate. I do not find any rule under Order 21 of the Code of Civil Procedure which prohibits the decree holder from withdrawing the auction price before confirmation of sale. It is also true that the decree holder is not bound in law to withdraw the sale price before confirmation of sale as the decree holder may not take the risk of refunding the amount in the event of sale being set aside on the objections of the judgment-debtor or a third party. Order 21, Rule 93 envisages a situation where the sale price is paid to the decree holder and thereafter the sale is set aside. In that situation, under the said Rule, the Court is empowered to direct refund of purchase money to the auction purchaser by the decree holder with or without interest. After the amount was deposited by the auction purchaser in Civil Court, the decree holder was not bound to withdraw the auction price and the judgment-debtor would not insist that the auction price be paid to the decree holder. The auction price thus remained in deposit with the civil Court for no fault on the part of either of the parties. In such a situation, on the question whether interest would be payable on the amount which remained in Civil Court deposited, and the statute is silent, age old principles of equity found in the maxims of English law can be applied. Such maxims contain the basic principles of equity and have their 'source and sanction from an immemorial antiquity, from frequent judicial recognition, and from the imprimatur of the sages of our law.' (See : Latin for Lawyers, Second Edition, Page 113). The settled principle of equity is that fault or delay on the part of Court should harm or benefit none. The Latin maxims from which some support can be had in favour of judgment debtor are the following :

(1) 'Actus curiae neminem gravabit' - (the act of the Court shall prejudice no man).

The judgment debtor after the auction price came to be deposited in the Civil Court could not have taken any other action to avoid his liability towards future interest at the contractual rate as decreed. The judgment-debtor has, therefore, to be saved from such adverse consequences over which he can have or had no control. Impossibility or inability is a good excuse in law. See the following maxims :

(2) 'Impotentia excusat legem' - (Inability is an excuse in law).

(3) 'Lex non cogit ad impossibilia' - (The law does not compel the impossible).

These maxims should save the judgment-debtor from his liability towards interest on the purchase price which continued to remain in deposit with Civil Court because of the pendency of decision on the objections. The Latin maxims quoted above have been explained to mean thus :

'Where the law creates a duty or charge, and the party is disabled to perform it without any default in him, and has no remedy over, there the law will in general excuse him; and though impossibility of performance is in general no excuse for not performing an obligation which a party has expressly undertaken by contract, yet when the' obligation is one implied by law impossibility of performance is a good excuse.'

11. Sitting singly, it is necessary for me to notice and consider the two earlier decisions rendered by two learned Judges of this Court. The first is by Puranik, J. - in the case of Ramchandra Marotrao vs. Ramchandra Gujaba, AIR 1938 Nag. 54 on which heavy reliance has been placed on behalf of the decree holder and the other is of Hon. P. V Dixit, J. - (as he then was) in the case of Krishanlal v. Kothari Jathmal, AIR 1969 MP 115. The above two decisions no doubt wholly support the contention advanced on behalf of the decree holder that the decree holder being entitled to receive the auction price only on confirmation of sale, the judgment-debtor is liable to pay interest also for the period from date of sale till the date of its confirmation. In none of these cases (supra) any question arose whether the liability towards interest ceases soon after the auction price is deposited in Court and remains in such deposit till decision of objections for no fault on the part of the judgment-debtor. The aforesaid two decisions, therefore, can be distinguished on the ground that in none of them the above equitable aspect came up for consideration and there were distinguishable factual features. In the Nagpur case (supra) decided by Puranik, J., the judgment-debtor was held liable to pay interest also for the period between the date of sale till its confirmation on following, additional ground :

'The lower Appellate Court is also not right in saying that the judgment-debtor is not responsible for the delay in the confirmation of sale. The judgment-debtor himself had applied for setting aside the sale under Order 21, Rule 90 and had also filed an application under section 47, Civil Procedure Code. In addition to this, the wife of the judgment-debtor had instituted a suit claiming interest in the property and thus delaying the confirmation of sale. It could not, therefore, be said that the judgment-debtor was not responsible for the delay in the confirmation of sale. Such a judgment-debtor could not be heard to say that interest should not be allowed to the decree haider till the date of confirmation of sale.'

12. The Madhya Pradesh case (supra) decided by Dixit, J. was on different facts. There, the decree holder himself was the auction purchaser and was not entitled to have the decretal amount set-off against the purchase money until confirmation of the sale. It was, therefore, held that the decreed sum could not be said to have been realized until the sale was confirmed. It is on those facts that the decree holder was held entitled to interest upto the date of confirmation of the sale. In the Madhya Pradesh case (supra), the auction price was not deposited in Civil Court and did not remain in such deposit for the entire period during which the objections to the sale were under consideration by the executing Court and the appellate Court.

13. It has also been argued on behalf of the decree holder that the executing Court in disallowing the interest for the disputed period in question could not have gone behind the decree. It is argued that the decree directed payment of interest at contractual rate with half yearly rest till full recovery and, therefore, full interest at that rate is payable to the decree holder till confirmation of sale and payment. The above argument can be met on the strict terms of the decree. The decree has used the words 'till full recovery'. The decree does not say that the interest would be payable till actual payment of the decretal amount to the decree holder. After the auction price was deposited in Civil Court, the decretal amount had been recovered although it remained in deposit with the Court for its eventual payment to the party held entitled to it on culmination of proceedings under Order 21, Civil Procedure Code. The liability towards interest, therefore, can be held to have ceased as soon as the decretal amount came in deposit with the Court through the auction purchaser. Therefore, in holding that no interest is chargeable for the period between the date of sale and consequent deposit of sale price till confirmation of the sale the executing Court cannot be held to have gone behind the decree.

14. As has been held above, both on the strict terms of the decree as also on the principles of law and equity, the judgment-debtor cannot be made to pay interest at the contractual rate from the date of deposit of the decretal sum in C.C.D. till the confirmation of sale and its payment to the decree holder.

15. For the aforesaid reasons, it is held that the decree holder is entitled to interest at the contractual rate in terms of the decree only till the date of deposit of the sale price in full in Civil Court by the auction purchaser. With the above slight modification in the impugned order of the executing Court, this revision on behalf of the decree holder fails and is hereby dismissed. There shall be no order as to costs of this revision.


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