Research › Search › Judgment

Andhra High Court · body

2005 DIGILAW 1228 (AP)

Ganesh Dal Mill, Miryalguda v. Maram Narsaiah

2005-12-26

P.S.NARAYANA

body2005
( 1 ) HEARD Sri B. Venkat Rama rao, the Counsel representing the revision petitioners and Sri V. Ravi Kiran Rao, the counsel representing the 1st respondent who had lodged the caveat. ( 2 ) THE matter came up on 20-12-2005. After hearing the Counsel on record, this court granted interim stay for a period of one week in case the cheque had not been already issued and directed the matter to appear in the list on this day. It is represented by Sri Venkat Rama Rao, the Counsel representing the revision petitioners that the 1st respondent in the C. R. P.- the 3rd party auction purchaser alone is the contesting party and respondents 3 to 6 are not necessary parties and inasmuch as R. 2 - the plaintiff is not seriously disputing the matter notice need not be served on the 2nd respondent. ( 3 ) THE C. R. P. is filed by the revision petitioners under Article 227 of the constitution of India as against the order of the learned I Additional District Judge, nalgonda, dated 14-12-2005, dismissing the application I. A. No3229/2005 in LA. No. 2711/2005 in O. S. No. 8/2002. The said application was filed by the revision petitioners and others - defendants 1 to 8 under Order XXI Rule 71 read with Section 151 c. P. C. praying the Court to withhold the auction price amount of Rs. 26,50,000/- till the re-auction is concluded in the suit or to pass any other order which the Court deems fit and proper. The learned Judge made a common order in I. A. No. 3229/05, i. A. No. 2865/2005 and I. A. No. 3173/2005. The learned Judge dismissed I. A. No. 2865/ 2005 and the office was directed to refund the deposited amount to the auction purchaser by withholding Rs. 30,000/- for the expenses to be incurred for conducting re-auction plus expenses already incurred by the Commissioner in the previous auction. I. A. No. 3229/2005 also was dismissed. I. A. No. 3173/2005 was closed in view of the orders in I. A. No. 2865 of 2005. 30,000/- for the expenses to be incurred for conducting re-auction plus expenses already incurred by the Commissioner in the previous auction. I. A. No. 3229/2005 also was dismissed. I. A. No. 3173/2005 was closed in view of the orders in I. A. No. 2865 of 2005. ( 4 ) SRI B. Venkat Rama Rao, the learned Counsel representing the revision petitioners had made the following submissions : ( 5 ) THE learned Counsel maintained that the learned Judge erred in dismissing the application filed under Order XXI Rule 71 c. P. C. without appreciating the scope and ambit thereof. The learned Counsel also would submit that in the light of the clear language of the provision, the 1st respondent in the , C. R. P.- the 3rd party auction purchaser cannot be permitted to have any refund of any amount, whatsoever, unless and until the resale is conducted. The learned Counsel also would maintain that in the light of the clear language of order XXI Rule 85 C. P. C. , within the specified time, the auction purchaser ought to have deposited the rest of the amount and since the same was not done, it is in breach or in violation of the mandatory provision and hence Order XXI Rule 71 c. P. C. automatically is attracted and in view of the same, the impugned order suffers from illegality. The learned Counsel also had taken this Court through Order XXI rules 84 and 86 C. P. C. in this context and had explained the scope and ambit of the order XXI Rules 71, 84, 85 and 86 C. P. C. in this regard. The learned Counsel also would maintain that except stating that on the advice of the Commissioner, some bona fide mistake was committed, this deposit made on the re-opening day of the Court cannot be said to be on the advice of the Commissioner in the absence of any material in this regard and hence order XXI Rule 71 C. P. C. is clearly attracted. The learned Counsel also placed strong reliance on certain decisions in this regard. The learned Counsel also placed strong reliance on certain decisions in this regard. The learned Counsel also had drawn the attention of this Court to the order made in C. R. P. No. 5981/05 by this Court and would maintain that the applicability or otherwise of Order XXI Rule 71 C. P. C. had not been considered by this Court and hence this question can be agitated by the revision petitioners in the present C. R. P. ( 6 ) PER contra, Sri Ravi Kiran Rao, the learned Counsel representing the 1st respondent would maintain that virtually the self-same stand had been taken even in la. No. 2711/2005 in O. S. No. 8/2002 on the file of I Additional District Judge, nalgonda, which was no doubt filed by the auction purchaser and the said order was carried by way of C. R. P. No. 5981/2005. The learned Counsel also pointed out that while making submissions the learned counsel representing the revision petitioners in the said C. R. P. had referred to Order xxi Rules 71 and 84 of C. P. C. and in the light of the same, the said question cannot be re-agitated The learned Counsel also would further maintain that the Commissioner also was heard while making the impugned order and Commissioner in fact filed a memo relating to expenses and inasmuch as the auction itself was conducted by the Commissioner in pursuance of a consent order during vacation when the 1st respondent approached the Commissioner in relation to the deposit of the amount made on 31-5-2005 he was advised that inasmuch as the Courts would be closed, as the courts are on vacation, on the re-opening day the same can be deposited and in the light of the said advice, on 6-6-2005 the deposit in fact was made. In the light of this factual situation the Counsel would maintain this default cannot be said to be the default committed by the auction purchaser and at the best such default if any was due to the bona fide mistake, if any, committed by the Commissioner who was acting under the directions of the Court. In the light of this factual situation the Counsel would maintain this default cannot be said to be the default committed by the auction purchaser and at the best such default if any was due to the bona fide mistake, if any, committed by the Commissioner who was acting under the directions of the Court. The learned Counsel also had taken this court through the language employed in order XXI Rule 71 C. P. C. and would maintain that this is a case which would not fall within Order XXI Rule 71 C. P. C. ( 7 ) HEARD the Counsel on record. Perused the impugned order and also the previous order made by this Court in C. R. P. No. 5981/2005. ( 8 ) THE application LA. No. 3229/2005 in LA. No. 2711/2005 in O. S. No. 8/2002 on the file of I-Addl. District Judge, Nalgonda, was moved by the revision petitioners under order XXI Rule 71 read with Section 151 c. P. C. praying the Court to withhold the auction price amount of Rs. 26,50,000/- till the re-auction is concluded in the suit and to pass such other suitable orders. The main ground taken by the revision petitioners is that inasmuch as default was committed by the 1st respondent-auction purchaser in depositing the 3/4th of the price amount till the re-auction is held and till the deficiency of price which may happen on a re-sale and all expenses attending such re-sale be decided, the refund of the amount cannot be ordered. The 1st respondent - auction purchaser had taken the specific stand that on the advise by the Commissioner who conducted the auction inasmuch as it was during vacation, on the re-opening day the deposit was made and hence, it cannot be said that it was due to the default on the part of the auction purchaser. It may be appropriate to refer to the relevant portion of the order made by this Court in C. R. P. No. 5981/2005, wherein the learned Judge observed as hereunder :"taking into consideration of the said advise rendered by the Advocate Commissioner and other circumstances, the Court below found that the sale cannot be confirmed because of the delay occurred and passed the present impugned order. The provisions of Order XXI Rules 84 to 86 C. P. C. and the legal principles settled in the judgments (W. Veerabhadra Rao v. Nedungudi Bank ltd. , Vijayawada and others, 1998 (6) ALT 216 and Balram v. Ham Singh and others, air 1954 SC 349 , make it very clear that any money sought to be forfeited by the Court in an auction depends upon the facts and circumstances of the case. Taking into consideration of the ill-advise of the commissioner, the Court below, in exercise of its discretion, passed the impugned order directing the expenses of the sale. The Court below also directed the Commissioner to take steps to respondents-auction of the same and to file memo of expenditure incurred for such auction and after deducting the said amount only the balance of amount deposited by the auction purchaser has to be refunded. "it is no doubt true that though Order XXI rules 71 and 84 C. P. C. had been referred to in the contentions advanced by the counsel for revision petitioners, this aspect in relation to applicability or otherwise of order XXI Rule 71 C. P. C. had not been dealt with in elaboration by this Court. Order XXI Rule 71 C. P. C. dealing with "defaulting purchaser answerable for loss on re-sale" reads as hereunder :"any deficiency of price which may happen on a re-sale by reason of the purchaser s default and all expenses attending such re- sale, shall be certified to the Court by the officer or other person holding the sale, and shall, at the instance of either the decree-holder or the judgment-debtor, be recoverable from the defaulting purchaser under the provisions relating to the execution of a decree for the payment of money. "the Apex Court while dealing with this aspect in O. K. Das v. N. Biswas, AIR 1975 SC 1290 , at Para 9 observed as hereunder:"it is clear on a careful reading of Rule 71 that its application is limited to cases in which the deficiency of price has occurred by reason of the auction purchaser s default. Property once put to sale in execution proceedings may have to be resold for reasons which may or may not be connected with the default of the auction purchaser. Property once put to sale in execution proceedings may have to be resold for reasons which may or may not be connected with the default of the auction purchaser. A re-sale consequent on the failure of the auction purchaser to deposit 25 per cent of the purchase price immediately after he is declared to be the purchaser of the property or a re-sale consequent upon his failure to deposit the balance of the purchase price within 15 days of the sale are instances when the resale is occasioned by the default of the auction purchaser. On the other hand, re-sale consequent upon the setting aside of the sale on the ground of material irregularity in publishing or conducting the sale as provided in Order XXI, Rule 90, may not be attributable to the default of the purchaser. The provisions of Order XXI, rule 71, come into play only if the property is required to be re-sold on account of the default of the auction purchaser. If the re-sale is not due to the auction purchaser s default there can be no question of mulcting him with the deficiency in the price realised in the re-sale. The provisions of Order XXI, rule 71, come into play only if the property is required to be re-sold on account of the default of the auction purchaser. If the re-sale is not due to the auction purchaser s default there can be no question of mulcting him with the deficiency in the price realised in the re-sale. "order XXI Rule 84 C. P. C. dealing with"deposit by purchaser and re-sale on default" reads as hereunder : (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 it entitled to set off the purchase-money under Rule 72, the court may dispense with the requirements of this rule order XXI Rule 85 C. P. C dealing with "time for payment in full of purchase money" reads as hereunder "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 be entitled under Rule 72 likewise, Order XXI Rule 86 C. P. C. dealing with "procedure in default of payment"reads as hereunder :"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 Government, and the property shall be re-sold, 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 "certain submissions were made in relation to the difference of language employed in these provisions and the discretion to be exercised only in relation to the forfeiture of the 1/4th amount deposited not in relation to the amounts specified under Order XXI rule 71 CP. C. Reliance was placed on united Commercial Bank v. Mam Ram, air 2003 HP 63 and W Veerabhadra rao v. Nedungudi Bank Ltd, Vijayawada and others, 1998 (6) ALT 216 . C. Reliance was placed on united Commercial Bank v. Mam Ram, air 2003 HP 63 and W Veerabhadra rao v. Nedungudi Bank Ltd, Vijayawada and others, 1998 (6) ALT 216 . The Division bench of this Court in Nelluri Brahmaiah v Mohd Sheik Mohiddin and another, 1964 (1) ALT 321, after discussing the fact m detail, ultimately held that so long as the judgment-debtor has some interest, however small that may be, in the property sold, the auction-purchaser cannot seek to avoid the sale under Order XXI Rule 91 c. P. C. or claim any relief under Order XXI rule 71 C. P C. Reliance also was placed on Sivasubramaniam v. Murugesa, AIR 1940 Mad. 566 and Madhao N Ghatate v Watsalabai Deshmukh, AIR 1948 nag. 142 ( 9 ) CERTAIN submissions were made on the strength of the language or the words "shall" and "may" used in Order XXI rule 71 and Order XXI Rule 85 C. P. C. respectively. This aspect need not detain this Court any longer for the reason that the present CRP to be decided on the facts of this case. Here is a case where by virtue of a consent order, the Commissioner proceeded with the auction. While making the impugned order, the Commissioner also was heard and in fact the same was recorded by the learned Judge. The commissioner also filed a memo relating to the expenses incurred by the Commissioner. It is needless to say that the Commissioner had conducted the auction m pursuance of the orders of the Court as an Officer of the Court, representing the Court. It is also pertinent to note that during vacation, the learned Commissioner might have felt that the deposit may have to be made only on the re-opening day and accordingly, the first respondent - auction purchaser - a third party to the litigation had to be advised. It is not as though the default was committed by him in making the deposit on the re-opening day. In all promptness he made the deposit on 6-6-2005, the re-opening day of the Court, and there is no dispute or controversy relating to this fact. It is not as though the default was committed by him in making the deposit on the re-opening day. In all promptness he made the deposit on 6-6-2005, the re-opening day of the Court, and there is no dispute or controversy relating to this fact. The fact that but for the advice of the commissioner, the first respondent - auction purchaser would have complied with and would have made the deposit as specified by Order XXI Rule 85 C. P. C. , can be definitely inferred from the facts and circumstances of the case, the reason being the learned Commissioner was heard by the learned Judge and the learned Commissioner also filed a memo specifying the expenses incurred and these aspects clearly go to show that the stand taken by the first respondent - auction purchaser is bonafide and correct stand. Hence, on facts, this court is of the considered opinion that the first respondent - auction purchaser - third party cannot be said to be a defaulting party within the meaning of Order XXI Rule 71 c. P. C. The expression "purchaser s default" in Order XXI Rule 71 C. P. C. to be understood in the backdrop of the facts and circumstances of a particular given case. ( 10 ) THE other questions which had been argued in elaboration need not be adverted to inasmuch as this Court is of the considered opinion that on facts, the first respondent - auction purchaser cannot be said to be a defaulting party so as to attract Order XXI rule 71 C. P. C. Be that as it may, apart from this aspect of the matter, may be the prior application was moved by the auction purchaser but the self-same contention was advanced before the learned Judge. In the prior C. R. P. No. 5981 of 2005 though the said contention was not dealt with in elaboration, it may be taken that the said contention was not seriously canvassed to its logical end and hence the revision petitioner cannot be permitted to re-agitate that question again by moving an independent application. Viewed from any angle, the impugned order does not suffer from any illegality, whatsoever. Even otherwise, in view of the limitations imposed on this Court under article 227 of the Constitution of India, this court is not inclined to interfere with the well-considered order of the learned Judge. Viewed from any angle, the impugned order does not suffer from any illegality, whatsoever. Even otherwise, in view of the limitations imposed on this Court under article 227 of the Constitution of India, this court is not inclined to interfere with the well-considered order of the learned Judge. The civil revision petition being devoid of merit, the same shall stand dismissed. No costs.