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Ramanlal Nagindas Jariwala and Etc. Vs. State Bank of India and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtGujarat High Court
Decided On
Case NumberCivil Revn. Appln. Nos. 597 and 710 of 1982
Judge
Reported inAIR1983Guj82; (1983)1GLR313
ActsCode of Civil Procedure (CPC) , 1908 - Sections 115 - Order 21, Rules 72, 85, 86 and 90; Indian Limitation Act - Sections 14
AppellantRamanlal Nagindas Jariwala and Etc.
RespondentState Bank of India and ors.
Appellant Advocate R.A. Mehta, Adv. and; S.H. Sanjanwala, Adv. in C.R.A. No. 710 of 1982
Respondent Advocate S.H. Sanjanwala, Adv. in 597 of 1982,; A.K. Mankad and;
DispositionRevision dismissed
Cases ReferredUttamchand Milapchand v. Balkrishna Ramnath
Excerpt:
civil - auction sale - section 115 and order 21 rule 86 of code of civil procedure, 1908 and section 14 of indian limitation act - property auctioned in pursuance to execution proceedings - auction challenged on ground of irregularities and illegalities committed while conducting auction - non compliance of order 21 rule 86 on part of auction-purchaser alleged - case not of default - rigorous provisions of order 21 rule 86 not applicable to facts - auction valid. - - his submission is that after having deposited 25% of the purchase price spontaneously, the auction purchaser had failed to deposit the remainder of 75% within 15 days of the date of acceptance of the bid and this having been not done, that by itself vitiated the entire proceedings and nothing further remained to be done..........same is the finding of a. d. desai j., as he then was, as per his judgment dated 28-3-78 in the civil revision application no. 1088 of 1977, which was pertaining to the very parties and was pertaining to this very execution application. in that case, the auction sale was challenged on the ground that the trial court without jurisdiction had granted time to the auction purchaser to pay up the amount after the expiry of 15 days' period. the facts of that case appear in paragraph 1 of that judgment. in that case, the auction purchaser had deposited 1/4th amount of the sale price on 22-2-1977 and had to deposit the balance with the executing court before 9-3-1977. on 7-3-1977, the petitioner there filed an application to set aside the sale. on 8-3-1977, the auction purchaser filed an.....
Judgment:
ORDER

N.H. Bhatt, J.

1. These two revision applications respectively by the original defendant No. 4 and by the original defendants Nos. 1 and 3 are directed against the order of the executing court in the Special Darkhast No. 81 of 1971 pending in the court of the Civil Judge (S. D.) Surat. The challenge is laid against the acceptance of the bid at the court auction, the auction purchaser being the respondent No. 2 Hitendrakumar Jashwantlal Jariwala. The objection to the auction sale is based on the alleged irregularities and illegalities alleged to have been committed in the matter of conducting the auction sale.

2. In the latter of the two revision applications, Mr. Sanjanwala has raised one neat question of law by recourse to Order 21, Rule 86 of the Civil Procedure Code. His submission is that after having deposited 25% of the purchase price spontaneously, the auction purchaser had failed to deposit the remainder of 75% within 15 days of the date of acceptance of the bid and this having been not done, that by itself vitiated the entire proceedings and nothing further remained to be done in the matter.

3. As far as the objections on the merits or the procedural aspect of the auction are concerned, this High Court exercising its revisional jurisdiction under Section 115 of the Civil Procedure Code would be loath to entertain them, particularly when the objectionists had an opportunity to ventilate the grievances by having recourse to Order 21, Rule 90 of the Code. On this ground, I refuse to go into those questions, though they were vigorously sought to be urged before me by Mr. R. A. Mehta for the petitioner of the first of the two revision applications. I make it clear that if it is legally possible for the objectionists now to agitate that question, they may do so and I am not to be understood to have expressed any opinion in that regard here one way or the other. The question of delay can be sought to be thrashed out by recourse to Section 14 of the Indian Limitation Act and the objectionists may invoke this provision and the executing court will consider it on its own merit.

4. Coming to the main point about non-deposit of 75% of the remaining amount of sale consideration. Mr. Sanjanwala, whose arguments were adopted by Mr. R. A. Mehta, urged that provisions of Order 21, Rules 85 and 86, which are reproduced below, provide for no extension. The provisions are:--

'Time for payment in full of purchase-money.

85. The full amount of purchase-money payable shall be paid by the purchaser into court before the court closes on the fifteenth day from the sale of the property.

Provided that in calculating the amount to be so paid into court, the purchaser shall have the advantage of any set-off to which he may he entitled under Rule 72.

Procedure in default of payment.

86. In default of payment within the period mentioned in the last preceding rule, the deposit may, if the court thinks fit, after defraying the expenses of the sale, be forfeited to the Govt. and the property shall be resold, and the defaulting purchaser shall forfeit all claim to the property or to any part of the sum for which it may subsequently be sold.'

The learned Advocates M/s. Sanjanwala and Mehta submitted that the auction purchaser had made default of payment within those 15 days mentioned in Rule 85 and so there was no alternative for the court but to order re-sale of the property. In this connection, heavy reliance was placed by Mr. Sanjanwala on the judgment of the Supreme Court in the case of Manilal Mohanlal Shah v. Sardar Sayed Ahmed AIR 1954 SC 349. In paragraph 8 of the said judgment, the Supreme Court has categorically ruled that the provision regarding the deposit of 25% by the purchaser other than the decree-holder is mandatory as the language of the rule suggests. The full amount of 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.....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-sale the property is imperative. A further consequence of non-payment is that the defaulting purchaser forfeits all claim to the property.'

5. A ratio of this judgment was followed by the Bombay High Court in the case of Uttamchand Milapchand v. Balkrishna Ramnath AIR 1961 Bom 224, which is the judgment of the Bombay High Court delivered on 26-6-1960, and as per the judgment of the Full Bench of this High Court, this is also the law of the land to be followed. In that Bombay judgment, it was laid down that 'the provisions of Order 21, Rule 85 as well as Rule 86 are mandatory in the sense that in the event of the auction purchaser failing to deposit the full purchase price within 15 days from the date of the auction sale, the court will have no option but to order a re-sale of the property. This necessarily implies that the court has no jurisdiction whatever to extend the time for the payment of the balance of the purchase price as fixed under O. 21, R. 85. Where the auction purchaser fails to pay the full purchase price within 15 days of the auction sale, there is no question of any irregularity in such a sale being waived on account of the consent of the judgment-debtor to the time being extended in favour of the auction purchaser'. The ratio of this judgment is that even if the extension of time is sought for and is granted by the court, even with the consent of the judgment-debtor, the rigours of the provisions of Order 21, Rule 86 of the Code, latter part, do not stand in any way mitigated. Same is the finding of A. D. Desai J., as he then was, as per his judgment dated 28-3-78 in the civil revision application No. 1088 of 1977, which was pertaining to the very parties and was pertaining to this very execution application. In that case, the auction sale was challenged on the ground that the trial court without jurisdiction had granted time to the auction purchaser to pay up the amount after the expiry of 15 days' period. The facts of that case appear in paragraph 1 of that judgment. In that case, the auction purchaser had deposited 1/4th amount of the sale price on 22-2-1977 and had to deposit the balance with the executing Court before 9-3-1977. On 7-3-1977, the petitioner there filed an application to set aside the sale. On 8-3-1977, the auction purchaser filed an application. Ex. 154, praying for extension of time to deposit the balance of amount on the ground that under the law, sanction of textile authority was necessary before the sale was effected. Upholding the contention of the judgment-debtor, the learned Judge held that the court had no jurisdiction to extend the time and reliance was placed on the judgment of the Supreme Court in the case of Manilal Mohan Lal Shah (AIR 1954 SC 349) (supra). Had the matter been as simple as it was before the Bombay High Court in the case of Uttamchand (AIR 1961 Bom 224) (supra) or in the civil revision application number 1088 of 1977 before this court in the year 1977, no difficulty would have presented itself. The peculiar facts of this case present a unique picture. In this case, the bid was accepted on 12-3-1982, 1/4th of the amount was admittedly deposited soon on the bid having been accepted. The remainder of the 75% of the amount was to be deposited by the auction purchaser on or before 27-3-1982. Now it so happened that before the expiry of those 15 days' period, that is, on 22-3-1982, the original judgment-debtor Ramanlal Nagindas Jariwala filed the present civil revision application No. 597 of 1982, in this High Court with a prayer to stay the proceedings for confirmation of sale and bid of the respondent No. 2 in the special darkhast in question. On behalf of the auction-purchaser, caveat was already filed and when the matter was called out before the learned Judge A. N. Surti, J., on 23-3-1982, an objection was lodged by Mr. Mankad for the auction purchaser. That seems to be the obvious purpose of filing a caveat application and appearing before the court on 23-3-1982, Mr. Mankad in his affidavit produced on the record of the civil revision application No. 710 of 1982 shows that he had invited the attention Of my brother Surti, J. regarding deposit of the remaining 3/4th of the purchase money to be made on or before 27-3-1982 and that under the decision of A. D. Desai, J. in the civil revision application No. 1088 of 1977, already referred to above and which had arisen in the course of these very execution proceedings, the executing court would not have any power to extend the date and accept deposit after the decision of that Civil revision application No. 597 of 1982. My brother A. N. Surti, J., then passed, the following order:--

'Stay of further deposit by the auction purchaser and stay of further proceedings.'

It is the say of the auction purchaser now before me that the court, despite the objection being raised on behalf of the auction-purchaser, stayed not only the further proceedings but also the deposit of the 3/4th of the remainder amount ol consideration, and, therefore, this action of the court, taken in the face of the opposition by the auction purchaser cannot now go to the detriment of the auction purchaser so as to upset the whole auction sale. For the purpose of putting the record straight, I state that the civil revision application No. 597 of 1982 was filed only by the judgment-debtor, who was the defendant No. 4, Ramanlal Nagindas Jariwala, whereas the civil revision application No. 710 of 1982 is filed by the original firm and Arvindlal Bhagwandas. who were the defendants Nos. 1 and 3 in the execution proceedings. In the earlier civil revision application No. 597 of 1982, the petitioners of the civil revision application No. 710 of 1982 were however certainly parties, though they might not be present before the Court on 23-3-82, the day on which this Court took up the admissional hearing and passed the above-mentioned order.

6. In the light of the facts stated above, the only point that arises for my consideration is whether the Court's staying of even the deposit of the remainder of the purchase price by the auction purchaser can go to mitigate the rigours of provisions of Order 21, R. 86 of the Code. M/s. Sanjanwala and Mehta on the one hand asserted that as laid down in the earlier judicial precedents referred to above, even the Court has no power to rewrite the provisions of O. 21, Rule 86 of the Code and grant time. On the other hand, Mr. Mankad for the auction purchaser and Mr. G. N. Desai for the judgment creditor, urged that for no fault or default of the auction purchaser, the amount could not be deposited despite the auction purchaser's resistance before this court to the move of the original defendant No. 4 that proceedings should be stayed. These learned advocates urged that once the court stayed that part, there would be no impunity. It is evident that once this High Court stayed the payment of the remainder of the 3/4 amount of consideration, this auction purchaser, even if he had gone to the executing court with the remainder of the money, would not have found the court to accept the same.

7. It is conceded for the purposes of this judgment and even M/s. G. N. Desai and Mankad did not urge otherwise that the court has got power to extend the time, but what they argued is that if the court stalls the payment and thereby makes the auction purchaser almost helpless in depositing the remainder of the amount, they cannot be visited with any evil consequences flowing directly from the court's action. In other words, their emphasis is that this is not a case of default.

8. In Oxford English Dictionary, the word 'default' has been defined, as 'failure of something' and 'failure' is a noun from the word 'fail', which from the very nature of things refers to some volitional act. In other words, the word 'default' implies a volitional and deliberate act and if a man for no fault of his is not able to deposit the amount required to be deposited under Order 21 Rr. 85 and 86 of the Code, he cannot be said to have been within the sweep of a mandatory provision of Order 21 Rule 86 of the Code. It is truism to state that wrong assumption of law and thereby consequential non-deposit of or negligence in being ready with the money latest on the 15th day would be covered by the term 'default'. In the facts and circumstances of this case, as said above, it is evident that there is no case of any default on the part of the auction purchaser. For reasons totally beyond his control, he was prevented from depositing the amount and one of the principles known to law is that court's action, when it is suo motu and not ad invitum, cannot go to the detriment of a citizen. In my view, therefore, the otherwise rigorous provisions of Order 21 Rule 86 of the Code will not be applicable to the facts of the present case because this is not a case of any dafault whatsoever. This is a case where the supervening hand of the court intervened, and no party can be allowed to suffer because of the court's order.

9. It is to be noted that there has been produced on record the affidavit of Advocate Mr. K. N. Mankad and it is on the file of the Civil Revision Application No. 710 of 1982 at pages 12-13. He has explained that he had appeared by virtue of the caveat filed on behalf of the auction purchaser and that when A. N. Surti, J, was about to pass an order of stay of further proceedings of the Dar-khast, he had objected to the same on the ground that the deposit of the remaining 3/4th of the purchase money was to be made on Or before 27-3-1982 and that in view of the decision of A. D. Desai, J., in the Civil Revision Application number 1088 of 1977 (supra) in these very proceedings arising out of the previous sale, the executing court would not have any power to extend the date and accept deposit. Mr. Mankad then proceeds to state on oath that A. N. Surti, J. proceeded to observe that in that earlier case extension was sought for by the auction purchaser whereas this time, he (Surti J.) was on his own staying the deposit of the remaining 3/4th amount so as not to cause injustice to the present auction purchaser.

10. There being no counter affidavit to challenge the words of Mr. Mankad and from the very nature of things what Mr. Mankad stated on oath appears to be the possible picture of the time, I act on that word and hold that there was a suo motu order by the court to stay not only the further proceedings in the matter, but also to stay the deposit of the remainder of the amount, which was to be deposited on 27-3-1982.

11. Mr. Sanjanwala had requested me that in view of the categorical ruling of A. D. Desai. J., and looking to the importance of the matter, I must refer this question for the more considered opinion to the Division Bench of this court. Had there been any shred of doubt in my mind about what I have observed above, I would have very willingly referred the matter to the Division Bench, but in my view that court's suo motu action takes the auction purchaser out of the charge of default, which is a condition precedent to the further obligation of the payment of remainder of the amount,

12. The result is that both the petitions are rejected. Time up to 16th September 1982, (and no further) is given to the auction purchaser to deposit the remainder of the amount in the trial court. Rule is accordingly discharged in both the petitions with no order as to costs. Stay is also vacated in both the petitions. A copy of this operative order to be given to Mr. Mankad to-day with which he can go to the executing court and deposit the amount.

In order to enable the petitioners to have further recourse in accordance with law, the further proceedings except the depositing of the 3/4th amount of consideration are stayed for a period of four weeks from today.


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