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Uda Vs. Balu Lal and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtRajasthan High Court
Decided On
Case NumberCivil Revn. Nos. 62 and 63 of 1951
Judge
Reported inAIR1952Raj169
ActsCode of Civil Procedure (CPC) , 1908 - Order 21, Rules 84, 89, 90, 91 and 92
AppellantUda
RespondentBalu Lal and ors.
Appellant Advocate Udharam, Adv.
Respondent Advocate Sumerchand, Adv. for Respondent No. 1
Excerpt:
.....best it was an order under order 21 rule 84 when the court refused to declare balu lal to be the purchaser of the property. the highest bidder shall be declared to be the purchaser of any lot, provided always that he is legally qualified to bid, and provided that it shall be in the discretion of the court or officer holding the sale to decline acceptance of the highest bid when the price offered appears so clearly inadequate as to make it advisable to do so. in my opinion, the correct interpretationwould be that both the court and the officer haddiscretion to act in the matter so that either of the two officers could adjourn the sale if the price offered by the highest bidder appeared so clearly inadequate as to make it advisable to do so. the court could, however, notwithstanding a..........amounted to a setting aside of the sale within the meaning of order 21, rule 92, c.p.c., and the purchaser balu lal had a right of appeal under the provisions of order 43, rule 1 (j) of the civil procedure code, another point urged by the learned counsel for the petitioner is that the purchaser balu lal was not authorised to deduct the amount of the mortgage money from the purchase price and, thereafter, to deposit only one-fourth of the net amount of the price and that the learned munsiff took this point also into consideration in setting aside the sale as observed by him in his order of the 25th of january 1951.4. there is a difference of opinion among the high courts in india as to whether acceptance of the highest bid by the court is necessary. the nagpur, lahore and rangoon high.....
Judgment:
ORDER

Bapna, J.

1. These two revisions arise out of a single order passed by the Additional District Judge, Udaipur, on 9th of March, 1951, in two connected appeals.

2. In execution of a decree obtained by Kashi Ram against Khushal, the judgment-debtor's property was put up for sale and on the 12th of January, 1951, the Nazir accepted the last bid of Balu Lal amounting to Rs. 6310/-. Balu Lal was also a mortgagee of this property for a sum of Rs. 5200/-. Balu Lal paid one-fourth of the amount of the purchase money after adjusting his mortgage amount to the Nazir and the Nazir made a report to the Munsiff of Rajsamand in whose Court the execution proceedings were being carried on stating the above facts. The Court ordered that the amount of Rs. 277/8/- paid by Balu Lal be deposited in the Court. Some time later on the same day, a petition was presented by Chhagan Lal that he had been making bids at the sale of the property and had just absented himself for about 10 minutes after making a bid for Rs. 6305/- intimating to the Nazir to wait for his return but when he returned he found that the Nazir had knocked down the sale in favour of Balu Lal for Rs. 6310/-. He intimated that he was willing to pay Rs. 6400/- for the property and even higher if the property be sold to him. The Court asked the Nazir to report whereupon the latter stated that Chhagan Lal had made a bid of Rs. 6205/- and thereafter he went away and did not return. He closed the sale at 6 P.M. when the last bid of Rs. 6310/- was made by Balu Lal, and nobody at that time, was willing to make a higher bid. The Court recorded an order that the sale of the property be again conducted on the 13th and 14th of January, 1951. The Nazir complied and made a report on the 15th of January, 1951, that he started sale taking the bidof Rs. 6400/- of Chhagan Lal and no one gave a higher bid and he therefore accepted it. On the same day, that is, 15th of January, 1951, Balu Lal made a petition that he had been lawfully declared to be the purchaser on the 13th of January and that he was ready to deposit the balance of amount of the purchase money after adjustment of his mortgage, which should be accepted, and a certificate of sale be issued in his favour. Khushal, judgment-debtor, had in the meanwhile presented one petition to the Nazir while he was conducting the sale that the sale be stopped as he was prepared to pay the decretal amount on which the Nazirdirected him to deposit the amount in Court. Another petition was presented by Chhagan Lal on the 20th of January, 1951, that he was only a 'Benamidar' for Uda who may be considered as the purchaser. The learned Munsiff passed an order on the 25th of January, 1951, upholding the correctness of his order directing re-sale of the pro-perty and accepted Uda as the purchaser of the second sale. The judgment-debtor's objection was rejected as he had not paid the decretal amount and only wanted time. Against this order, Balu Lal, and Khushal filed separate appeals. The learned Additional District Judge, Udaipur, by his order dated 9th of March, 1951, held that the lower Court was not right in setting aside the first sale made in favour of Balu Lal and he, therefore, quashed the subsequent proceedings. Uda has filed two revisions as there were two appeals pending before the lower Courts.

3. It is argued that the order of the Executing Court, dated the 25th of January 1951, was not open to appeal, inasmuch as, at best it was an order under Order 21 Rule 84 when the Court refused to declare Balu Lal to be the purchaser of the property. It was urged that a sale made by the Nazir was not complete until the bid had been accepted by the Court. It was also argued that the appeal was preferred against the order of the Munsiff dated the 25th of January 1951, while no appeal had been preferred against his order of the 13th of January 1951, and, therefore, if the order of the 13th January stood, the appeal against the second order was incompetent. Learned counsel for the opposite party urged that the sale wascomplete as soon as the Nazir had knocked down the sale in favour of Balu Lal and, as a matter of fact, the Court also accepted him as the purchaser by accepting the deposit of one-fourth of the purchase price and, therefore, the order directing re-sale on the 13th amounted to a setting aside of the sale within the meaning of Order 21, Rule 92, C.P.C., and the purchaser Balu Lal had a right of appeal under the provisions of Order 43, Rule 1 (j) of the Civil Procedure Code, Another point urged by the learned counsel for the petitioner is that the purchaser Balu Lal was not authorised to deduct the amount of the mortgage money from the purchase price and, thereafter, to deposit only one-fourth of the net amount of the price and that the learned Munsiff took this point also into consideration in setting aside the sale as observed by him in his order of the 25th of January 1951.

4. There is a difference of opinion among the High Courts in India as to whether acceptance of the highest bid by the Court is necessary. The Nagpur, Lahore and Rangoon High Courts have held that the sale is complete as soon as the property is knocked down in favour of the highest bidder by the officer conducting the sale. 'HOSHNAK RAM V. PUNJAB NATIONAL BANK LTD.', AIR (23) 1936 Lah 555; 'LOKMAN CHHABILAL v. MOTILAL TULSIRAM', AIR (26) 1939 Nag 263 and MAUNG OHN TIN V. P. R. N. P. S. R. M. CHETTYAR FIRM', AIR (16) 1929 Rang 311. Theother view is that a sale is not complete till the highest bid is accepted by the Court though the officer conducting the sale may have knocked down the property in favour of a particular person as being the highest bidder. 'RATNASAMI PILLAI v. SABAPATHY PILLAI' AIR (12) 1925 Mad 318; 'FAZIL MEAH v. PROSANNA KUMAR', AIR (10) 1923 Cal 316 (1) and 'JAIBAHADUR v. MATUK-DHARI, AIR (10) 1923 Pat 525. Order XXI Rule 84, C. P. C., reads as follows :

'(1) On every sale of immovable 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 Order 31, Rule 65, every sale in execution of a decree except as otherwise prescribed, is to be conducted by an officer of the Court or by such other person as the Court may appoint in this behalf, and shall be made by public auction in the manner prescribed. Under Order 21, Rule 84, the provision for payment of twenty-five per cent. of the purchase-money to the officer or such other person conducting the sale is to be made after the person is declared to be the purchaser. So that up to that stage, it is the officer or such other person conducting the sale who is functioning and, therefore, the declaration as to who is purchaser can be made by that officer. The language of Rule 84 of Order 21 does not require that the permission of the Court is to be obtained before, a certain person can be declared to be a purchaser. The decision in the Patna case 'JAIBA-HADUR v. MATUKDHARI', AIR (10) 1923 Pat 525, as appears from the first paragraph of the judgment, rested on the provisions of the Code taken together with the High Court General Rules and Circular Orders as observed in the Rangoon case. The Madras case does not give any reason for the decision and the decision actually relates to a sale by a Receiver appointed under Order XL of the Civil Procedure Code. In AIR (10) 1923 Cal 316 (1), the Court had ordered re-sale of the property on an offer of Rs. 700/- when the Nazir had reported the last bid to be of Rs. 450/- made by the petitioner in that case. The learned Judge referred to Form No. 29, Appendix E, of the First Schedule of the Civil Procedure Code in coming to the conclusion that the Court had a discretion in the matter to accept or refuse to accept a bid and to direct a re-sale of the property. Form No. 29 relates to conditions of sale settled by the Court under Order 21, Rule 66 of the Code and condition No. 3 stated therein is:

'The highest bidder shall be declared to be the purchaser of any lot, provided always that he is legally qualified to bid, and provided that it shall be in the discretion of the Court or officer holding the sale to decline acceptance of the highest bid when the price offered appears so clearly inadequate as to make it advisable to do so.'

It is argued by the learned counsel for the opposite party that the discretion is in the Court or in the officer holding the sale in the alternative. So that if the officer holding the sale has accepted, the highest bid, it would mean that he has refused to exercise the discretion of not accepting the highest bidder as the purchaser and thereafter no further discretion is left in the Court in that matter. In my opinion, the correct interpretationwould be that both the Court and the officer haddiscretion to act in the matter so that either of the two officers could adjourn the sale if the price offered by the highest bidder appeared so clearly inadequate as to make it advisable to do so. The word 'or' seems to have, been used in the meaning of 'and' in this condition of sale. A different meaning would give an officer greater powers than would be vested in the Court. In the present case, however, the Court did not exercise its power when the Nazir intimated to the Court that Balu Lal was the highest bidder and that the twenty-five per cent. of the purchase money may be deposited in the Court. The Court on that report made an order that the amount be deposited. Although there is no specific order that the Court accepted Balu Lal, who was the highest bidder to be the purchaser, but as discussed above, the declaration that the highest bidder was the purchaser can be made by the officer conducting the sale. The Court could, however, notwithstanding a declaration, made by the officer conducting the sale, decline to accept the bid if in its opinion, the price offered appeared to be clearly inadequate in the circumstances of the case. This would further lead to the proposition that once the Court had omitted to exercise the discretion mentioned in this clause, it could not thereafter reopen its own order under this clause and if it purported to do so, it would not be an order under Order 21, Rule 84 of the Code. In the present case, on Chhagan Lal's application, no notice was given to the previous purchaser or judgment-debtor or creditor and the order of re-sale was made which in other words amounted to a setting aside of the previous sale in favour of Balu Lal. The order setting aside the sale was appealable under Order 43, Rule 1 (j) of the Code. The contention of the learned counsel for the petitioner is that there had been no application before the Court under Rules 89, 90, or 91 of Order 21 and, therefore, the setting aside of the sale could not be considered to be one under Rule 92. This may be so but this is exactly the reason on which Balu Lal could file an appeal that the Court had no authority to set aside thesale except under the conditions mentioned under Order 21, Rule 92 of the Code.

5. In respect of the contention that no appealhad been filed against the order of the 13th January 1951, I find from the memorandum of appeal that the first ground taken is that the Executing Court had no jurisdiction to set aside the sale in favour of Balu Lal and direct a fresh sale of the property. The fact that a copyof the order of the 13th January was not produced along with the memorandum of objection, is, in my opinion, not fatal since that order of the 13th January was in a measure confirmed by the order of the 25th January 1951 and the copy of that order was produced along with the memorandum of appeal.

6. As to the contention that the auction-purchaser Balu Lal had not deposited twenty-five per cent. of the entire amount of the purchase-money viz., Rs. 6,310/-, it appears from a perusal of the record that in the proclamation of sale, the property was put up for sale subject to incum-brance of Rs. 5,200/- in respect of the mortgage in favour of Balu Lal. The sale that actually took place was thus of the equity of redemption only. In the list of bids also, it is clearly mentioned that the incumbrance on the property consisted of the mortgage in favour of Balu Lal for Rs. 5,200/- and the bid was started by adding Ra 100/- thereto so that the parties and everybody who was present at the sale understood that the property was being sold subject to the incumbrance. Since the mortgagee himself happened tobe the purchaser, he was justified in deductingthe amount of incumbrance and considering thepurchase-price of the equity of redemption to beRs. 1,110/-. There was no dispute about theamount of incumbrance and there was, therefore,no point in paying the mortgage money in Court,which was only to be handed over again to BaluLal. The revision against Balu Lal has, therefore,no force and is dismissed with costs. The revisionagainst Khushal automatically fails.


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