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1993 DIGILAW 83 (HP)

UCO BANK v. GIAN CHAND

1993-05-20

KAMLESH SHARMA

body1993
JUDGMENT Kamlesh Sharma, J.—By this application the decree bolder bank has prayed that sale of immovable property of the judgment debtors held on 15-11-1988 may be set aside and it may be ordered to be resold on the ground that auction purchaser Surinder Krishan had not deposited 75% of the sale price within 15 days from the date of auction as required under Order 21 Rule 85 C. P. C According to decree holder bank, this sale was effected in favour of the auction purchaser in connivance with the judgment debtors as he is son of judgment debtor No. 4. This application has been resisted by the auction purchaser. 2. This Court has heard learned Counsel for the parties and gone through the record. 3. Mr. K. D. Sood, learned Counsel for the decree holder bank has urged that the provisions of Order 21 Rules 84 and 85 are mandatory and the sale conducted in contravention thereof is nullity and deserves to be set aside and the property in question should be resold. For making this submission, Mr. Sood has relied upon Manilal Mohanlal Shah and others v. Sardar Syed Ahmed Mohamad and another, AIR 1954 SC 349 ; Uttamchand Milapchand v. Balkrlshna Ramnath, AIR 1961 Bom 224; Tapesh Chandra Bagchi v. United Bank of India Ltd and others, AIR 1969 Assam and Nagaland 10 ; Subbammal v. P. Gurusamy Thevar and others, AIR 1974 Mad 278 ; Mool Chand v. Collector, Jalaun and others, AIR 1982 All 141 and Ram Singh v, Uttam Chand, AIR 1985 P and H 35 L 4. On the other hand, Mr. Rakesh Kanwar, learned Counsel for the auction purchaser, has pointed out that the auction purchaser is not at fault in not complying with the provisions of Order 21 Rule 80 C. P. C. as at the time of auction, he had deposited 25% of sale price on the spot and for the remaining amount of sale price r e. 75%, he was directed by the auctioneer, Tehsildar, Palampur that he might deposit after the sale is confirmed by the High Court Thereafter, when the matter was taken up by this Court for confirmation of sale, the decree holder bank objected to it on the ground that the property was sold for less than the upset price fixed by the Court and took two weeks time to file written objections. The decree holder bank failed to file objections and this Court proceeded to confirm the sale on 7-3-1989 and directed the auction purchaser to deposit the balance sale price in the Registry within a period of three weeks. Ultimately the execution petition was dismissed as partly satisfied on 5-9-19^0. Mr. Kan war has shown from the record that for the first time he was informed of the order dated 7-3-1989 by notice dated 19-3-1990, by which date he had already deposited the balance amount of Rs. 15,000 on 2-3-1990 on receipt of another notice dated 27th December, 1989 whereby he was asked to clarify whether he had deposited the remaining auction money or not. In these circumstances, according to Mr. Kanwar, no default has been committed by the auction purchaser making him liable under Rule 86 Order 21 C. P C For making this submission, Mr. Kanwar has relied upon Ramanlal Nagindas Jariwala and etc. v. State Bank of India and others, AIR 1983 Guj 82. 5. Another argument raised by Mr. Kanwar is that the auction purchaser should not suffer for the fault of the auctioneer, the Tehsildar Palampur, who directed him to deposit remaining 75% of the sale price after the sale is confirmed by this Court- The auction purchaser was not negligent and he had deposited the remaining sale price on receipt of notice dated 27-12-1989 whereby only his clarification was sought whether he had deposited the same or not According to Mr. Kan war, even the decree holder bank had remained silent throughout and never pointed out that the auction purchaser was liable to deposit the remaining amount within 15 days from the date of sale, as such it cannot object at this late stage. For urging this, Mr. Kanwar has relied upon Jagat Dhish Bhargava v. Jawahar Lai Bhargawa and others, AIR 1961 SC 832 ; Shastri Yagnapurush-dasji and others v. Muldas Bhundardas Vaishya and another AIR 1966 SC 1119 and Jang Singh v. Brij Lal and others, AIR 1966 SG 1631. 6. This Court has given its best consideration to the respective submissions of the Counsel for parties. The provisions of Rules 84 and 85 of Order 21 C. P. C. have been interpreted as mandatory by the Supreme Court in the case of Manila! Mohanlal Shah. 6. This Court has given its best consideration to the respective submissions of the Counsel for parties. The provisions of Rules 84 and 85 of Order 21 C. P. C. have been interpreted as mandatory by the Supreme Court in the case of Manila! Mohanlal Shah. After considering the earlier judgments of various High Courts, the Supreme Court has held that ;— "Having examined the language of the relevant rules and the judicial decisions bearing upon the subject we are of opinion that the provisions of the rules requiring the deposit of 25 per cent of the purchase money immediately, on the person being declared as a purchaser and the payment of the balance within 15 days of the sale are mandatory and upon non-compliance with these provisions there is no sale at all. The rules do not contemplate that there can be any sale in favour of a purchaser without depositing 25 per cent of the purchase money in the first instance and the balance within 15 days. When there is no sale within the contemplation of these rules, there can be no question of material irregularity in the conduct of the sale. Non-payment of the price on the part of the defaulting purchaser renders the sale proceedings as a complete nullity. The very fact that the Court is bound to re-sell the property in the event of a default shows that the previous proceedings for sale are completely wiped out as if they do not exist in the eye of law. Non-payment of the price on the part of the defaulting purchaser renders the sale proceedings as a complete nullity. The very fact that the Court is bound to re-sell the property in the event of a default shows that the previous proceedings for sale are completely wiped out as if they do not exist in the eye of law. We hold, therefore, that in the circumstances of the present case there was no sale and the purchasers acquired no rights at all." Following the judgment of Supreme Court in Manila] Mohan Lai Shah and others v. Sardar Sayed Ahmed Mohamad and another, AIR 19^4 SC 349t the Bombay High Court in Uttamchand Milapchand v. Balkrishna Ramnath, AIR 1961 Bom 224 further held that in view of the mandatory provisions of Rules 85 and 86 of Order 2l C. P. C. the Court has no jurisdiction to extend the time for payment of the balance of the purchase price and effect of the non-payment thereof within 15 days from the date of sale is that the sale made in favour of the auction purchaser is non est aad there is no question of irregularity in such a sale being waived on account of the consent of the judgment debtor to the time extended in favour of the auction purchaser. 7. Similarly, the learned Judges of Punjab and Haryana High Court in Ram Singh v. Uttam Chand, AIR 1985 P and H 351 have gone to the extent that a sale which is in contravention of the provisions of Rules 84 and 85 of Order 21 C. P. C. is nullity and even if it is confirmed by the High Court, the trial court in execution can entertain the objection under section 47 C. P. C that balance of the sale price is not deposited within the stipulated time and can set aside the sale and order resale of the property Their lordships have also held that it is for the executing Court to see that the provisions of Rules 84 and 85 of Order 21 C. P. C. are complied with or not and even if the judgment debtor does not bring these to the notice of the Court. Once there is violation of Rule 85 Order 21 C P. C, the sale becomes non est and void, and there is no necessity of challenging the sale nor there can be any question that objections filed to impugn the sale were time barred. Similar view was taken in Tapesh Chandra Bagchi v. United Bank of India Ltd and others, AIR 1969 Assam and Nagaland 10 ; Subbammal v. P Gurusamy Thevar and others, AIR 1974 Mad 278 and Mool Chand v. Collector Jalaun and others, AIR 1982 All 141. 8. This Court is bound by the law laid down by Supreme Court in Manilal Mohan Lai Shah v. Sardar Sayed Ahmed Mohamad and another; AIR 1954 SC 349 and, with respect, agrees to the view taken hy other High Courts in other judgments referred to hereinabove, still the point for consideration in the case in hand is whether the auction purchaser has committed default in making the payment within the period mentioned in Rule 85 Order 21 C. P, C. as envisaged in Rule 86 Order 21 C P. C. The answer to this question will depend upon the facis and circumstances of each case on the basis of which it can be determined whether the auction purchaser has committed default or not. This point was considered by the learned Judge of Gujarat High Court in Ramanlal Nagindas Jariwala and etc v. State Bank of India and others, AIR 198i Guj 82 and his lordship considering the meaning of the word ^default as per the Oxford English Dictionary, has held that 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 Rules 85 and 86 of Order 21 C. P. C. he cannot come within the sweep of mandatory provisions of Rule 86 of Order 21 C. P. Cr But non-deposit as a consequence of wrong assumption of law or due to negligence is covered by default. 9. This Court is in respectful agreement with the view taken by Gujarat High Court. 9. This Court is in respectful agreement with the view taken by Gujarat High Court. Applying it to the facts and circumstances of the present case the auction purchaser cannot be held defaulter, because he was misled by the directions of auctioneer, the Tehsildar Palampur, He had deposited 25% of the sale price at the time of auction in compliance with Rule 84 of Order 21 C. P, C. He could not deposit the remaining amount of 75% in compliance of Rule 85 Order 2i C. P. C f as he was made to understand by the auctioneer the Tehsildar Palampur that he was to deposit the balance of the sale price after the sale is confirmed by the High Court. The order dated 7-3-1989 confirming the sale and directing him to deposit the balance of the sale price within three weeks, was not passed in his presence and the notice of it was sent to him as late as on 19-3-1990, by which date he had already deposited the balance of the sale price on receipt of notice dated 27-12-1989 seeking his clarification whether he had deposited the auction money or not. There is nothing on record to show that he was negligent. But for these circumstances the sale was nullity and rigours of Rule 86 of Order 21 C. P, C. would have applied. For holding this view, this Court has also taken support from the judgment of this Court in H. P. Financial Corporation v. Narinder Industrial Corporation and another, 1990 (1) Sim LC 183, where the learned Judge has though not interpreted the word default9 appearing in Rule 86 of Order 21 C. P. C but has held that in the peculiar circumstances of that case where the auction purchaser had deposited 25% of the sale price by way of bank draft on the next day of the date of auction as the auction was completed at about 5.00 p m., when the banks had closed, there was no violation of Rule 85 Order 21 C. P. C. making the sale bad. In this view of the matter, this Court need not discuss the judgment of Supreme Court in Jagat Dhish Bhargava v Jawahar Lal Bhargawa and others, AIR 1961 SC 832 ; Shastri Yagnapurushdasji and others v, Mutdas Bhundardas Vaishya and another, AIR 1966 SC 1119; and Jang Singh v Brij Lal and others, AIR 1966 SC 1631 in which other provisions of law have been discussed to hold that if it is found that these provisions are not complied with due to the fault of the Court or it was beyond the capacity of the person who was to comply with these provisions, he should not suffer. 10. The result of above discussion is that there is no merit in the present application and it is rejected. The amount deposited by the auction purchaser in the Registry, be released in favour of the decree holder bank along with interest. Application rejected