Lal Mahendra Pratap Singh v. Radhika Devi — 1969 DIGILAW 102 (ALL)

JUDGMENT S.N. Dwivedi, J. - This is an appeal by the judgment-debtors. Facts giving rise to the appeal are these : The first respondent is the decree-holder. She applied for the execution of her decree by attachment and sale of certain agricultural plots belonging to the judgment debtors. The application for execution was made as far back as September 1962. But the execution proceedings proceeded with a snail's pace; and ultimately on March 28, 1968, the plots were auctioned by the Amin. The auction took place in the village where the plots were situated. The Amin divided the plots in three lots. Each lot was separately auction-sold by him. One of the lots was purchased by the second respondent. He is a stranger auction-purchaser. His bid was the highest. It was for Rs. 65,000/-. The Amin accepted his bid. Thereupon he deposited 25 per cent of the auction money with the Amin. The other two lots were auction-sold to the decree-holder. Her bid was the highest for these lots. The Amin accepted a letter by her Mukhtaram for setting off the decretal amount against the auction money. 2. The appellants filed an objection to the sale of the three lots. The objection was under Rule 90 of Order 21, Civil Procedure Code. It was filed on April 29, 1968. The respondents took exception to the objection on the ground of limitation. They said that the objection was filed more than 30 days after the date of the auction sale on March 28. The execution court heard the parties on the issue of limitation. The court held that the objection of the appellants was time-barred. Accordingly it was rejected. 3. Limitation for filing an objection under Rule 90 of Order 21 is now prescribed by Article 127, Limitation Act. The limitation is 30 days "from the date of sale." The word "sale" is not defined in the Act. There should be no dispute that it will receive the same meaning which it bears in the inter-related provisions of the Code of Civil Procedure. So it is necessary to ascertain the meaning of this word in those provisions of the Code. There should be no dispute that it will receive the same meaning which it bears in the inter-related provisions of the Code of Civil Procedure. So it is necessary to ascertain the meaning of this word in those provisions of the Code. Counsel for the appellants says that there is a sale when the execution court accepts the bid of the highest bidder; counsel for the respondents, on the other hand, says that there is a sale when the Sale Officer, be he an Amin or anybody else, accepts the highest bid. Both counsel have referred us to certain decisions on this controversy. Some of them support counsel for the appellant; the others, counsel for the respondents. We shall refer to them after examining the relevant provisions of the Code. 4. Section 51 provides various modes for execution of a decree. One of the modes is attachment and sale, or sale without attachment of any property. Section 65 proides that where an immovable property is sold in execution of a decree and such has become absolute, the property shall be deemed to have vested in the purchaser from the time when the property is sold. In Order 21, Rules 64 to 94 deal with the ale of property in execution of decree. Rule 64 says that. any court executing a decree may order that any property attached by it and liable to sale shall be sold. Rule 65 provides that save as otherwise prescribed, every sale in execution of a decree shall 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 a public auction in the manner prescribed. Rule 66 provides for the drawing of a proclamation of sale "" by public auction. Form no. 29 in Appendix E to the First Schedule of the Code is the prescribed form for proclamation of sale. The prescribed form contains several conditions of sale. Condition no. 3 has been deployed by counsel for the appellants in his support. Rule 66 provides for the drawing of a proclamation of sale "" by public auction. Form no. 29 in Appendix E to the First Schedule of the Code is the prescribed form for proclamation of sale. The prescribed form contains several conditions of sale. Condition no. 3 has been deployed by counsel for the appellants in his support. It reads: "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." Rules 67 and 68 are not necessary for our purpose and are not dealt with. It appears from Rule 69 that an auction sale may take place either in the precincts of the court or at an outlying place where the property proposed to be auction-sold is situated. Rule 71 deals with any deficiency in price which may occur on resale by reason of "the purchaser's default", and all expenses attending such resale shall be recoverable at the instance of either the decree-holder or the judgment debtor from the "defaulting purchaser." Rule 72, as enacted by the Legislature, provides for permission to the decree-holder to hid in the auction sale. Sub-Rule (3) is important. It provides that where a decree-holder purchases by himself or through any other person without the court's permission, the court may, on the application of the judgment debtor or any other person whose interests are affected by the sale, by an order "set aside the sale." It may be mentioned here that this Court has radically amended Rule 72: sub-rule (3) has been deleted. We have referred to sub-rule (3) as the meaning of the word "sale" should be ascertained from its total context which includes sub-rule (3) as well.' Rules 73, 74, 75 and 76 are not relevant for our purpose. Sub-rule (1) of Rule 77 provides that where movable property is sold by public auction, the price of each lot shall be paid at the time of sale or as soon after as the officer or other person holding the sale directs. It further provides that in default of such payment the property shall forthwith be resold. Sub-rule (1) of Rule 77 provides that where movable property is sold by public auction, the price of each lot shall be paid at the time of sale or as soon after as the officer or other person holding the sale directs. It further provides that in default of such payment the property shall forthwith be resold. Sub-rule (2) states that when the purchase money has been paid, the officer holding the sale shah grant a receipt for the same, and the sale shall become absolute. Rules 78, 79, 80, 81, 82 and 83 are not material for our purpose. Rule 84 is important. As amended by this Court, it reads: " (1) On every sale of immovable property the person declared to be the purchaser shall make immediately after such declaration a deposit of 25 per cent of 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 resold. (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. 5. The Court shall not dispense with the requirements of this rule in a case in which there is an application for ratable distribution of assets. "Rules 85, 86, 87 and 88 are not material. Rule 89 provides for the setting aside of the sale in certain contingencies. Rule 90, under which the objection of the appellants was made, provides that where any immovable property has been sold in execution of a decree, an objection may be filed by certain specified persons to the sale on the ground of a material irregularity or fraud in publishing or conducting the sale. Rule 91 provides that the purchaser may apply to the court to set aside the sale on the ground that the judgment debtor had no saleable interest in the properties sold. We omit rules 92 and 93 for they are not relevant. Rule 94 provides that where a sale of immovable property has become absolute, the court shall grant a certificate specifying the properties sold and the name of the person "who at the time of sale is declared to be the purchaser." 6. We omit rules 92 and 93 for they are not relevant. Rule 94 provides that where a sale of immovable property has become absolute, the court shall grant a certificate specifying the properties sold and the name of the person "who at the time of sale is declared to be the purchaser." 6. We have already mentioned that the highest bids of the two respondents were accepted by the Amin who was conducting the auction sale. As the second respondent was a stranger bidder. The Amin, on his accepting the bid of the second respondent, accepted the amount equal to 25 per cent of the auction money from the second respondent. The bid list and other connected papers prepared by the Amin were placed before the execution court on March 30. Counsel for the appellants says that limitation for filing an objection under Section 90 will run from March 30 and not from March 28 when the Amin accepted the highest bids of the two respondents. It may he emphasised here that we are dealing with a case where the auction was conducted. at an out-lying place by the Amin. Again, it is a case where the Amin, in our judgment, finally accepted the highest bids of the two respondents. We should not understood to have said anything about a case where the auction takes place in the precincts of the court building under the supervision of the Presiding Officer of the court or where the Amin, who has conducted the auction sale at an outlying place, himself does not accept the highest bid but reserves the bids acceptance by the court. 7. Counsel for the appellants says that the acceptance of the bids by Amin does not conclude the matter: there is a perfect sale only when the court accepted the bids. The chief plank of his argument is condition no. 3 in form no. 29 in Appendix E to the first schedule of the Code of Civil Procedure. We have already quoted condition no. 3. According to condition no. 3 the highest bidder shall be declared to be the purchaser provided neither the officer conducting the sale nor the court declines to accept the highest bid. In the present case the Amin, who conducted the sale, did not decline to accept the highest bids of the respondents: he accepted those bids. 3. According to condition no. 3 the highest bidder shall be declared to be the purchaser provided neither the officer conducting the sale nor the court declines to accept the highest bid. In the present case the Amin, who conducted the sale, did not decline to accept the highest bids of the respondents: he accepted those bids. It may be observed that condition No. 3 vests a negative power in the court; it does not vest in any positive power. In other words, it does not empower the court to perform the positive act of accepting the highest bid where the Amin has already accepted them. It i open to the court to decline acceptance of the highest bids even though they have been accepted by the Amin. It appears to us that where the Amin accepts the highest bids, condition no. 3 does not envisage a second acceptance of the bids by the court. The acceptance of' the bids by the Amin is final subject, of course, to the negative power of the court to refuse to accept the bids. So the question arises as to whether there is a sale at the point of time when the Amin accepts the highest bid of a bidder. The Amin conducts the sale under Rule 65. According to Rule 84 (I) the person declared to be the purchaser has to make immediately after such a declaration deposit of 25 per cent of the amount of purchase money to the officer conducting the sale. In default of such deposit the property shall forthwith be resold. The language of this provision shows that there is a sale of property when the officer conducting the sale accepts the highest bid of a person and declares him to be the purchaser. The amount of 25 per cent is to be paid immediately after the declaration to the officer conducting the sale. Again the word "re-sold" in the provision also suggests that the property has already been sold once by the officer conducting the sale. Sub-rule (3) of Rule 72, which we have quoted earlier, also suggests that there is a sale when the officer conducting the sale accepts the highest bid and declares the highest bidder purchaser. Sub-rule (3) empowers the court to set aside the sale where the decree-holder has purchased the property without its permission. Sub-rule (3) of Rule 72, which we have quoted earlier, also suggests that there is a sale when the officer conducting the sale accepts the highest bid and declares the highest bidder purchaser. Sub-rule (3) empowers the court to set aside the sale where the decree-holder has purchased the property without its permission. The words "set aside the sale" in this sub-rule are significant. They strongly show that there is a sale when the officer conducting the sale accepts the highest bid. If the legislature had intended that the sale does not take place until the court accepts the highest bid, then the words "set aside the sale," would be inapt in sub-rule (3). Instead of these words, the legislature would have then used some such words as the court may decline to accept the highest bid of the decree-holder. 8. It may also be noticed that so far as the sale of movable property is concerned, it becomes a fact when the officer conducting the sale accepts the highest bid and the highest bidder pay; the amount of the purchase money. Rule 77 (2) lends some support to the view that there is sale of an immovable property as soon as the officer conducting the sale accepts the highest bid and declares the highest bidder to be the purchaser and accepts the deposit of 25 per cent from him. 9. Rule 84 (1) uses the words "the person declared to be the purchaser". Rule 94 requires the court to specify in the sale certificate the name of the person "who at the time of the sale is declared to be the purchaser." So Rule 94 relates back to Rule 84 (1). There is little doubt that under Rule 84 (1) the officer conducting the sale has the power to declare the highest bidder whose bid he has accepter as the purchaser. So under Rule 94 the court is required to enter in the sale certificate the name of the highest bidder whose bid has been accepted by the officer conducting the sale and who has been declared by such officer to be the purchaser. Rule 94 accordingly contemplates that the sale has taken place at the point of time when the officer conducting the sale has accept ed the highest bid and declared the highest bidder to be the purchaser. Rule 94 accordingly contemplates that the sale has taken place at the point of time when the officer conducting the sale has accept ed the highest bid and declared the highest bidder to be the purchaser. According to Section 65 the auction-purchaser is deemed to have become the owner of the property auction-sold not from the point of time when the sale becomes absolute but from the point of time when the property is sold. In the context of Rules 84 (1) and 94 the auction-purchaser will become the owner of the property from the point of time when his highest bid is accepted and he is declared to be the purchaser by the officer conducting the sale. 10. Our interpretation will avoid several difficulties which will arise from the acceptance of the argument of counsel for the appellants. Those difficulties were pointed out to him by us in the course of arguments but he could not give any effective reply. Take a hypothetical case where the Amin conducting the auction sale at an out-lying place accepts the highest bid, declares the highest bidder to be the purchaser and accepts 25 per cent of the purchase money from him on June 2. He sends the bid list and other connected papers thereafter. But the court is closed for the summer vacation for a month from June 3 to July 3 and reopens on July 4. The bid list and the connected papers are placed before the court for the first dme on July 4. Can the highest bidder in such a case withdraw his highest bid and ask the court to refund the amount of 25 per cent deposited by him with the Amin ? Again, during the one month vacation the sold property is sold again to a stranger at an auction sale held for recovery of arrears of land revenue or municipal taxes or income tax. Can the first auction purchaser file an objection under Rule 91 for setting aside the sale in his favour on the ground that the judgment debtor had no saleable interest in the property sold to him. Obviously the judgment debtor had saleable interest on the date on which the Amin had accepted his highest bid and declared him to be the purchaser. Obviously the judgment debtor had saleable interest on the date on which the Amin had accepted his highest bid and declared him to be the purchaser. But he loses a saleable interest during the time intervening between June 2 and July when the court reopens and bid list and connected papers are placed before it. Having regard to these difficulties it appears to us that the better construction is the one which appeals to us. Our construction avoids these difficulties. 11. We shall now refer to the cases cited before us. In Bhawani Kuer v. Mathura Prasad Singh, ILR XL Cal. 89, the Privy Council held that the crucial date is the date of public auction. In Abdul Rahman v. Fateh Das, A.I.R. 1926 Oudh 1889 a Division Bench of the Oudh Chief Court held that the auction purchaser becomes the owner of the property from the date of the auction sale. In Chowdhry Kesri Sahay v. Giani Roy, ILR XXIX Cal. 626 and in lqbal Narain v. Raj Kumar, A.I.R. 1934 Oudh 25 it was held that for an objection under Order 21 Rule 89 the limitation of 30 days starts from the date when the property was put up for sale and knocked down to the highest bidder. A learned Single Judge of our Court has taken the view which appeals to us in Ebadullah Khan v. Municipal Board, Allahabad, A.I.R. 1950 Alld. 450. Counsel for the respondent also referred us to these cases: Rajendra Prasad Jha v. Upendra Nath, AIR 1915 Calcutta 815, Mt. Khairan v. Alliance Bank of Simla, A.I.R. 1919 Lah. 309, V.K. Patil v. Ratilal Bhaidas, A.I.R. 1926 Bom. 335, Maung Ohn Tin v. P.R.M.P.S.R.M. Chettyar, A.I.R. 1929 Rangoon 311, Nur Din v. Bulaqi Mal and sons, A.I.R. 1931 Lah. 78, Mahomed Yaqob v. P.L.R.M. Firm, A.I.R. 1932 Rangoon 17, Mannu Lal v. Nanhelal & others, A.I.R. 1933 Nag. 123, Hoshnak Ram v. Punjab National Bank Ltd., A.I.R. 1936 Lah. 555 and L.C. Jain v. Motilal Tulsiram Aagrwala, A.I.R. 1939 Nag. 269. In all these cases the High Courts of Bombay, Calcutta, Lahore, Nagpur and Rangoon have accepted the view which we are taking in this case. According to these decisions the sale takes place at the point of time when the officer conducting the sale accepts the highest bid and declares the highest bidder to be the purchaser. 12. 269. In all these cases the High Courts of Bombay, Calcutta, Lahore, Nagpur and Rangoon have accepted the view which we are taking in this case. According to these decisions the sale takes place at the point of time when the officer conducting the sale accepts the highest bid and declares the highest bidder to be the purchaser. 12. Counsel for the appellants has referred us to these cases: Jaibhadar v. Matukdhari, A.I.R. 1923 Patna 525. Surendra Mohan v. Manmathanath, AIR 1931 Calcutta 583, Hari Shankar v. Mt. Amina Bibi, A.I.R. 1935 Oudh 131, Radhey Lal v. Mt. Janki Devi, A.I.R. 1935 Alld. 204, S. Hadi Husain v. Zainul Ibad, A.I.R. 1940 Oudh 261, Subbarava Mudaliar v. Sundararajan, A.I.R. 1951 Mad. 986. Uda v. Baby La1, A.I.R. 1952 Raj 169, Ramkrishna v. Duli Chand, A.I.R. 1956 MB 30. In the Patna case the auction sale was held by the Nazir. The sale was not held in the presence of the Presiding Officer of the court. The Nazir did not accept the highest bid. He sent the bid list to the Munsif who wrote "close" against the highest bid and signed the order. After the court had risen for the day certain persons , approached the Munsif and represented that the auction was not held fairly and that they were willing to make a higher offer. The Munsif told them that he had not signed the order knocking down the sale and will consider their representation next day. On the day following the Munsif signed the note put up before him to the effect that the bid of the highest bidder was accepted. He was about to sign the bid sheet but then he realised that he had already told the person who had made representation the day before that he would consider their representation. So he struck out his initials on the note and directed that sale should be held again. The highest bidder objected to this fresh sale but he did not succeed. The Patna High Court said that in order to conclude a sale not only the order of the Presiding Officer to close the bid but also his order under Order 21 Rule 84 formally accepting the bid and declaring the bidder a purchaser is required. The highest bidder objected to this fresh sale but he did not succeed. The Patna High Court said that in order to conclude a sale not only the order of the Presiding Officer to close the bid but also his order under Order 21 Rule 84 formally accepting the bid and declaring the bidder a purchaser is required. This remark does not help the appellant for in that case the Nazir did not accept the highest bid but left the matter completely in the hands of the Court to accept or refuse to accept the highest bid. The Calcutta case is also distinguishable. It appears from the judgment of that case that the auction sale was held by the court itself. It also appears that the Nazir submitted a report to the court for accepting bids. In our case, however, the highest bids of the respondents were accepted by the Amin himself. In Hari Shankar'str case the sale was of some agricultural pro-pert) So the papers of the case were sent to the Collector under Rule 211 Oudh Civil Rules. On December 21, 1931, the Sale officer reported to the execution court that the property had been sold to the decree holder. On 22nd December the decree-holder deposited the sale commission fee and receipt for the decretal amount. On 8th January, 1932, the sale was approved by the execution court. The judgment debtor then deposited the sale amount under Rule 89. But the decree-holder said that the application under Rule 89 has been made 30 days after 21st December. The judgment-debtor on the other hand said that the sale was completed on 8th January, 1932, when the court approved the sale. The facts of this case also are distinguishable from the facts of our case. Sub-rule (5) of Rule 211 Oudh Civil Rules provides that the Deputy Commissioner or other officer conducting the sale will report to the civil court enforcing the decree the result of the order for sale, retaining in deposit the amount realised pending further instructions. So it is clear from this provision that the officer con-ducting sale under Rule 211 has not got the power of accepting the highest bid. That power is reserved to the court which is executing the decree. So it is clear from this provision that the officer con-ducting sale under Rule 211 has not got the power of accepting the highest bid. That power is reserved to the court which is executing the decree. In Radhey Lal's's case a certain person made the highest bid but before the sale was sanctioned by the court she made an application that she had bidden under a misapprehension and that she should be permitted to withdraw her bid. The execution court permitted her to do so. A revision filed against this order was dismissed by a Division Bench of this Court. It does not appear from the judgment of this case that the officer who was conducting the sale had accepted the highest bid and had declared the highest bidder to be the purchaser. On the other hand, it appears that the sale was yet to receive sanction of the court. So this case is also distinguishable on facts. The case of S. Hadi Husain" also is distinguishable on facts. There the Kurk Amin who conducted the sale accepted th of the amount of the highest bid from the highest bidder but reported to the court for acceptance of sale. So the Kurk Amin did not accept the highest bid and did not declare the highest bidder to be the purchaser. It is, otherwise in the instant case. The case of Mudaliar also is distinguishable on facts. In that case the auction sale was held by the Receiver appointed by the court. The sale was held subject to an express condition imposed by the court. That condition was that the sale shall be subject to confirmation by the court. We have gone through the judgment of the Rajasthan High Court hi Uda's case. We find it difficult to understand how this case helps the appellants. If at all, it helps the respondents. The case of Ramkrishna is also different on facts. It appears from the judgment of this case that there was a practice hi Madhya Bharat according to which the officer conducting the sale had no authrity to accept the bid or conclude the sale and that the sale was completed only when the highest bid was accepted by the court. 13. It appears from the judgment of this case that there was a practice hi Madhya Bharat according to which the officer conducting the sale had no authrity to accept the bid or conclude the sale and that the sale was completed only when the highest bid was accepted by the court. 13. We were also referred to sub-rule (2) of Rule 84 for showing that in the case before us there was no sale at the point of time when the Amin accepted the highest bid of the decree-holder respondent in respect of two lots because the decree-holder applied for a set off of the purchase money under sub-rule (2) of Rule 84. Until the court allowed that application, there was no sale. It appears to us that the decree-holder auction purchaser is entitled to a set off ordinarily. There is only one exception to this general rule. He is not entitled to a set off where there is an application for ratable distribution of assets. It has not been shown to us that in this case there was an application for ratable distribution of assets before the court at the time of the application of the decree-holder auction purchaser for a set off. So there was a sale when the Amin accepted-the highest bids of the decree-holder and declared the decree-holder to be the purchaser. 14. In the end, counsel for the appellants tried to take advantage of the words "Sweekar Kiya Jaya" occuring at the end of the bid-sheet prepared by the Amin who conducted the sale. The Amin is one A. U. Khan. It is paper no. 102 C 2. The report runs over about a page. It is written in Hindi. The scribe has drawn a line at the end of the report. Immediately after the line the Amin has put his signature. Under his signature he has described his designation and put the date as 28-3-1968. The words "Sweekar Kiya Jaya" are in a fresh line. The writer, whosoever he may be, has started writing these words from near the beginning of the left-hand margin of the report. These words are written in such a manner as to create an impression that at all events they were written after the Amin had put his signature. The court below is of opinion that these words had been added subsequently. These words are written in such a manner as to create an impression that at all events they were written after the Amin had put his signature. The court below is of opinion that these words had been added subsequently. They are not installed by the Amin and are below his signature. The finding of the court below appears to be supported by the contents of the report. In the report it is clearly stated that the highest bid was made by the two respondents, that no one gave a higher bid, that the auction was closed in favour of the two respondents, and that one of them who was a stranger auction purchaser, deposited an amount of 25 per cent of the purchase money. There is no doubt that the Amin had accepted the bids of the two respondents as well as 25 per cent of the purchase money from the stranger auction purchaser and an application from Mukhtaram of the decree-holder auction purchaser for a set off of the purchase money with the decretal amount. As the Amin had himself accepted the highest bids of the respondents, it is difficult to believe that he would leave the acceptance of the bids of the court thereafter. Assuming, however, that these words have not been interpolated subsequently they do not help the appellants. As we have already indicated, on the acceptance of the bids of the respondents by the Amin there was no occasion for accepting the bids by the court. The court could only refuse to accept the bids. Further, the words "Sweekar Kiya Jaya" in the context of the entire report may also mean that the report of the Amin should be accepted and not that the highest bids were to be accepted by the court. Having regard to all the circumstances of the case we are of opinion that these words do not show that there was no sale on March 28 when the Amin accepted the highest bids of the respondents and closed the auction in their favour and accepted 25 per cent of the purchase money in one case and an application for set off in the other two cases. 15. In view of the foregoing discussion we hold that the limitation for filing an objection under Rule 90 of order 21 started from March 28. 15. In view of the foregoing discussion we hold that the limitation for filing an objection under Rule 90 of order 21 started from March 28. 1968, and that accordingly the objection of the appellants was time-barred. The appeal is dismissed with costs.