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Kalyan Sahai Vs. Mola Bux and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtRajasthan High Court
Decided On
Case NumberEx. Second Appeal No. 8 of 1956
Judge
Reported inAIR1961Raj91
ActsCode of Civil Procedure (CPC) , 1908 - Order 21, Rules 71 and 84
AppellantKalyan Sahai
RespondentMola Bux and anr.
Advocates: R.K. Rastogi and; D.P. Gupta, Advs.
DispositionAppeal allowed
Cases ReferredWarlow v. Harrison
Excerpt:
- - the appellant raised an objection that he was not liable to pay up the deficiency but his objection was dismissed by the executing court on 18-7-55. he filed an appeal but he was unsuccessful and hence he has approached this court......24-12-52, and 28-12-52 and a report should be submitted on 2-1-53.it appears from the sale amin's report dated 24-12-52 that the appellant did not present himself that day at the time of auction and this meant that he had impliedly withdrawn the offer made on 21-12-52, then, no auction proceedings seem to have been taken on 28-12-52 in spite of the court's order. on 2-1-53, the property was again put to auction and on that day also the appellant was not present. in spite of the appellant's absence on 2-1-53, the sale amin made a report that the sale was knocked down in his favour.it may be observed that the sale amin had no authority to force the sale on the appellant on 2-1-53 simply because he had made a bid on 21-12-52. it appears from the report that the court also did not pass any.....
Judgment:

D.S. Dave, J.

1. This is an appeal by the auction purchaser against the order of the learned Senior Civil Judge, Jaipur City, dated the 27th January, 1956.

2. The facts giving rise to it are that respondent No. 2 had obtained a decree for Rs. 361/- against respondent No. 1 Mola Bux. After adding Rs. 48/12/- for costs etc., he took out execution for realising the total amount of Rs. 408/12/-. In order to satisfy the said decree, the judgment-debtor's house, which was situated in Jaipur City, was put to auction subject to the mortgagee's charge to the extent of Rs. 4000/-. The auction of the said property commenced from 28-11-52 and continued for several days with intervals.

On 10-12-52, the highest bid for Rs. 2000/- was one of Sanghi Gendilal, but it was not accepted. The property was again auctioned on 14th and 18th December, 1952, but nobody raised the bid. On 21st December, 1952, when the property was again auctioned, the appellant raised the bid to 2250/-. It was, however, not accepted as the final bid and the Sale Amin made a report to the Presiding Officer of the court and adjourned the sale to 24-12-52. On 24-12-52, the appellant was not present at the auction sale which was again adjourned to 2-1-53.

On 2-1-53 also, the appellant was not present; still the Sale Amin knocked down the sale in his favour in his absence. The appellant did not deposit 25 per cent of the auction money on 2-1-53, nor did he deposit the remaining amount on or before the 15th day. On 10-2-53, the appellant was served with a notice to deposit the money by fee 12th of February, 1953. The appellant did notturn up in the court in response to the said notice and so on 12-2-53 the court directed the property to be resold.

It appears that although the resale was also conducted on a number of dates, yet the highest bid did not rise beyond Rs. 800/- and so the sale was knocked down in favour of one Subhan on 2-5-53. Thereafter, on the application of the judgment-debtor the appellant was directed to deposit Rs. 1450/- being the difference between his bid and that of Subhan. The appellant raised an objection that he was not liable to pay up the deficiency but his objection was dismissed by the executing court on 18-7-55. He filed an appeal but he was unsuccessful and hence he has approached this Court.

3. It is contended by learned counsel for the appellant that his client had certainly made a bid on 21-12-52 and if the sale were knocked down in his favour on that date, he could be held responsible for depositing the money, but since his bid was not accepted and the sale was ordered to be conducted again on 24-12-52 and 28-12-52 and since the appellant did not make any bid on those dates, there was no offer from his side. It is urged that it was not opera tq the executing court to accept the appellant's bid on any subsequent date at its own choice and that the order passed against him was therefore quite illegal and fit to be set aside.

4. 1 have gone through the orders of both the courts below and it appears that they did not apply their mind to the case from the view point which has been advanced in this Court. The main argument which seems to have been raised in both the courts below was, that since the sale was not ordered forthwith under Order 21, Rule 84 C. P. C., the proceedings were illegal. The real question for decision before the courts below was whether the appellant's offer was open for acceptance on 24-12-52, 28-12-52 or 2-1-53 and whether it was left to the court to accept the bid on 2-1-53 even though the appellant was not present at the auction sale on that date or on the two previous dates i.e. 24-12-52 and 28-12-52.

I have gone through the report of the Sale Amin dated 18-12-52 and it appears that on that date the highest bid was one of Gendilal but it was not accepted. The Amin adjourned the sale to 21-12-52 of his own accord and made a report to the presiding officer that there was no hope of the bid being raised and therefore proper direction should be given to him. The court simply wrote on this report that the auction sale should be concluded according to the procedure. On 21-12-52, when the property was auctioned, the appellant happened to be present at the auction sale and he raised the bid to 2250/-.

If the court had accepted his bid and declared him as the purchaser of the property on that date, then under Order 21, Rule 84 C. P. C., it would have been incumbent upon the appellant to deposit 25 per cent of the purchase money forthwith and the balance on or before the 15th day from that date. It is, however, clear from the report of the Sale Amin and the order-sheet of the executing court that in spite of the court's order dated 18-12-52, the appellant's bid was not taken as final and he was not declared as the purchaser of the property. On theother hand, the court passed an order on 22-12-52-that the property should be sold again on 24-12-52, and 28-12-52 and a report should be submitted on 2-1-53.

It appears from the Sale Amin's report dated 24-12-52 that the appellant did not present himself that day at the time of auction and this meant that he had impliedly withdrawn the offer made on 21-12-52, Then, no auction proceedings seem to have been taken on 28-12-52 in spite of the court's order. On 2-1-53, the property was again put to auction and on that day also the appellant was not present. In spite of the appellant's absence on 2-1-53, the Sale Amin made a report that the sale was knocked down in his favour.

It may be observed that the Sale Amin had no authority to force the sale on the appellant on 2-1-53 simply because he had made a bid on 21-12-52. It appears from the report that the court also did not pass any order on 2-1-53. It was on 16-1-53 that the court wrote on the order-sheet that the appellant had not deposited the money and that he should be given a notice to deposit the same. It does not seem to have been realised by the executing court that if 25 per cent of the purchase money is not deposited by an auction purchaser forthwith under Order 21, Rule 84 C. P. C., then the proceedings become illegal and he should not thereafter be called upon to deposit the amount.

Moreover since there was no sale in favour of the appellant on 21-12-52, it was illegal on the part of the executing court to order him to pay up the deficiency between the bid of that date and the subsequent sale on 2-5-53. In Rajah of Bobbili v. Suryanarayana Rao, AIR 1920 Mad 911 it was held following Jones v. Nanney, (1824) 147 E. R. 925 that

'a bid at a sale in a Court auction is merely an offer or, in the language of Section 6, Contract Act, a proposal. It is the highest bidder that is regarded as having made the final proposal which may or may not be accepted by the auctioneer. Every bid that is made does not remain in abeyance pending acceptance by the auctioneer. Where a higher bid is made, all preceding lower bids are impliedly refused'.

Seshagiri Aiyar, J. explained the above principle by the following illustration:

'A makes the first offer and when that is succeeded by the offer of B, if A wants to purchase the property, he must have a higher offer. Otherwise he walks out of the bargain. There may be C, D and E and so on, who may bid higher than their immediate preceding bidders. It is the highest bidder that is regarded as having made the final propopsal, which may or may not be accepted by the auctioneer. If it is not accepted there is no contract''.

It was further observed by the learned Judge that

'even in this country (India) where it is said that people conclude their contracts more leisurely than in England, when the Judge in the lower Court adjourned the sale to another date with a view to get a higher bid for the property, he certainly must be regarded not to have intended to accept the previous offer........The theory that every bid isa contract has been repudiated long ago in England,see Warlow v. Harrison, (1859) 120 ER 925, and is not law in this country'.

I respectfully agree with the learned Judges that every bid at an auction is not a contract or a subsisting offer which can be converted into a contract at the option of the auctioneer or the purchaser at any moment of time. When the court adjourns the sale fixed for a certain date to another date with a view to get a higher offer for the property, it must be regarded not to have intended to accept the previous offer and it cannot at a subsequent time accept the offer made by some personon a previous date and then compel him to pay upthe price.

It may be pointed out that in the present case also the appellant's bid was not accepted on 21-12-52 and the subsequent dates 24-12-52, 28-12-52 and 2-1-53 were intentionally fixed with the purposethat somebody else will make a higher bid and that the court will consider whether to accept the said bid or not. The appellant did not make any bid on these three dates and it was wrong on the part of the executing court to say that the appellant's bid of 21-12-52 could be accepted on 2-1-53 and that he could be compelled to pay up the amount offered by him. The order passed by the executing court and upheld by the Civil Judge is obviously wrong and cannot be upheld.

5. The appeal is, therefore, allowed and the order of the executing court dated 18-7-55 and that of the appellate court dated 27-1-56 are set aside. The appellant will get his costs in the executing court from the judgment-debtor.


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