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2011 DIGILAW 504 (KER)

K. Balan v. S. B. I. Thrikkidiri

2011-05-30

K.T.SANKARAN

body2011
JUDGMENT :- 1. The court auction purchaser filed an application under Order XXI Rule 93 of the Code of Civil Procedure. The executing court dismissed the same, which is under challenge in this Revision. The State Bank of India, Thrikkidiri branch filed O.S.No.457 of 1996, Sub Court, Ottapalam for realisation of money. The suit was decreed. The decree holder put the decree in execution, in E.P.No.32 of 1997. The property belonging to the judgment debtor was sold in court auction and it was purchased by the revision petitioner for a sum of Rs.31,500/-. He deposited the sale amount. On 24.07.1998, the sale was confirmed and the sale certificate was issued. 2. Before the sale was confirmed, one Parameswaran Namboodiri filed O.S.No.269 of 1998 on the file of the Munsiff's Court, Ottappalam for a declaration that the attachment and sale in E.P.No.32 of 1997 does not bind the plaint schedule property (the property which was sold in court auction in E.P.No.32 of 1997) and that the property belongs absolutely to the plaintiff. A permanent prohibitory injunction was also sought for, restraining the defendants from obstructing the peaceful possession of the plaintiff. The defendants in O.S.No.269 of 1998 were: (1) the judgment debtor in O.S.No.457 of 1996; (2) the decree holder- State Bank of India and (3) the auction purchaser/ revision petitioner. O.S.No.269 of 1998 was decreed as prayed for. It was found by the court that an extent of 47 cents out of the plaint schedule property belongs to the plaintiff (Parameswaran Namboodiri) and that an extent of 3 cents with a house thereon belongs to the judgment debtor. 3. Meanwhile, when the decree holder bank applied for a cheque to withdraw the amount deposited by the auction purchaser, the revision petitioner/auction purchaser filed objections contending that Parameswaran Namboodiri had filed O.S.No.269 of 1998 and that the decree holder should be permitted to withdraw the amount only after the disposal of the suit. The executing court permitted the decree holder bank to withdraw the amount and the amount was withdrawn by the bank. 4. Thereafter, the auction purchaser filed E.A.No.654 of 2000 in E.P.No.32 of 1997 under Order XXI Rule 93 of the Code of Civil Procedure with a prayer to direct the bank to pay back the amount deposited by the auction purchaser. The application was opposed by the decree holder-bank. 4. Thereafter, the auction purchaser filed E.A.No.654 of 2000 in E.P.No.32 of 1997 under Order XXI Rule 93 of the Code of Civil Procedure with a prayer to direct the bank to pay back the amount deposited by the auction purchaser. The application was opposed by the decree holder-bank. It was contended by the bank that the application under Order XXI Rule 93 filed by the revision petitioner is not maintainable. The court below accepted that contention and rejected the application. 5. It is well settled that in a court auction sale, there is no guarantee for title. The auction purchaser steps into the shoes of the judgment debtor. Any defect in title of the judgment debtor would be defect in title of the auction purchaser as well. The auction purchaser is not entitled to complain of any defect in the title of the judgment debtor except in the manner provided under Order XXI Rule 91 of the Code of Civil Procedure, which reads as follows: "91. Application by purchaser to set aside sale on ground of judgment-debtor having no saleable interest.- The Purchaser at any such sale in execution of a decree may apply to the Court to set aside the sale, on the ground that the judgment-debtor had no saleable interest in the property sold." 6. In the application under Order XXI Rule 91, the auction purchaser would be entitled to contend that the judgment debtor had no saleable interest in the property sold, in which case, the court auction sale would be set aside if it is found that the judgment debtor had no saleable interest in the property. 7. A court auction sale could be set aside by filing an application under Rule 89 or Rule 90 or Rule 91 of Order XXI of the Code of Civil Procedure. If an application is filed under Rule 89, on deposit of the purchase price, the court auction sale could be set aside. The sale could be set aside on proving material irregularity or fraud in publishing or conducting the sale as provided under Rule 90. When no application is made under Rule 89 or Rule 90 or Rule 91 or where such application is made and disallowed, the executing court shall make an order confirming the sale as provided under Rule 92 and thereupon the sale shall become absolute. When no application is made under Rule 89 or Rule 90 or Rule 91 or where such application is made and disallowed, the executing court shall make an order confirming the sale as provided under Rule 92 and thereupon the sale shall become absolute. Sub-rule (4) of Rule 92 contemplates a suit by a third party. The said sub-rule reads as under: "Where a third party challenges the judgment/debtor's title by filing a suit against the auction- purchaser, the decree-holder and the judgment-debtor shall be necessary parties to the suit." Sub-rule (5) of Rule 92 provides that "if the suit referred to in sub-rule (4) is decreed, the court shall direct the decree holder to refund the money to the auction purchaser, and where such an order is passed the execution proceedings in which the sale had been held shall, unless the court otherwise directs, be revived at the stage at which the sale was ordered". Rule 93 states that where a sale of immovable property is set aside under Rule 92, the purchaser shall be entitled to an order for repayment of his purchase money, with or without interest as the court may direct, against any person to whom it has been paid. 8. An application under Rule 93 comes in when sale of immovable property is set aside under Rule 92. Rule 92 provides when a sale shall become absolute and it states that where no application is made under rule 89, rule 90 or rule 91, or where such application is made and disallowed, the court shall make an order confirming the sale and thereupon the sale shall become absolute. A combined reading of Rules 89, 90, 91, 92 and 93 would indicate that rule 93 would apply only in a case where sale of immovable property is set aside on a application filed under Rule 89 or Rule 90 or Rule 91. The application to set aside the sale has to be filed within a period of 60 days from the date of sale as provided in Article 127 of the Limitation Act. In the case on hand, the revision petitioner could make an application only under Rule 91 and not under Rule 89 or Rule 90. The revision petitioner did not file any application under Rule 91 and the sale having been confirmed, he is not entitled to invoke Rule 93 at all. In the case on hand, the revision petitioner could make an application only under Rule 91 and not under Rule 89 or Rule 90. The revision petitioner did not file any application under Rule 91 and the sale having been confirmed, he is not entitled to invoke Rule 93 at all. The auction purchaser would be entitled to an order for repayment of purchase money under Rule 93 only where the sale of immovable property is set aside under Rule 92. 9. The petitioner had invoked Rule 93 of Order XXI before the court below. I have found that Rule 93 has no application. It is well settled that quoting a wrong provision of law is not a ground to reject the application, if the party is entitled to the relief under any other provision of law. Dismissal of an application on the ground of quoting a wrong provision of law, has been consistently held to be illegal. 10. Now, the question to be considered is whether under sub-rule (5) of Rule 92 of Order XXI of the Code of Civil Procedure, the executing court would direct the decree holder to refund the money to the auction purchaser. The learned counsel for the petitioner submitted that under sub-rule (5) of Rule 92 of Order XXI of the Code of Civil Procedure, the executing court has such power notwithstanding that the Court which decreed the suit of a stranger did not provide for such a relief. The learned counsel appearing for the decree holder-bank submitted that the only court which could direct refund of the money to the auction purchaser is the court which dealt with the suit filed by the stranger. The counsel submitted that so long as the Court did not grant such a relief in the suit filed by the stranger for a declaration that the property does not belong to the judgment debtor, the executing court does not have jurisdiction to pass an order directing refund of the money to the auction purchaser. The counsel submitted that so long as the Court did not grant such a relief in the suit filed by the stranger for a declaration that the property does not belong to the judgment debtor, the executing court does not have jurisdiction to pass an order directing refund of the money to the auction purchaser. Learned counsel for the decree holder added that the provision for revival of the execution proceedings at the stage at which the sale was ordered, as provided under sub-rule (5) of Rule 92 of Order XXI of the Code of Civil Procedure, would apply only when in the decree in the suit filed by the stranger, a direction is issued to the decree holder to refund the money. The counsel submitted that this is the only interpretation that could be made on sub-rule (5). The counsel submitted that sub-rule (4), which provides that where a third party challenges the judgment debtor's title by filing a suit against the auction-purchaser, the decree holder and the judgment debtor shall be necessary parties to the suit, would support this interpretation. 11. The stranger filed a suit for declaration that the attachment and sale in the execution proceedings do not bind him or the plaint schedule property and that the property absolutely belongs to him. Though the civil court held that a small portion of the land belongs to the judgment debtor, the claim put forward by the stranger was accepted by the Court and a decree was passed in his favour. It is true that the civil court did not direct the decree holder to refund the money to the auction purchaser. In a suit filed by the stranger, he need not pray for such a direction. He is concerned with his rights and the title set up by him. If he proves that he has title to the property which necessarily implies that the judgment debtor did not have title, the suit would be decreed. It is not the concern of the stranger that the auction purchaser gets back the money deposited by him and paid to the decree holder. It is for the auction purchaser to work out his remedies in accordance with law. Sub-rules (4) and (5) of Rule 92 of Order XXI were introduced by the Code of Civil Procedure Amendment Act 104 of 1976. It is for the auction purchaser to work out his remedies in accordance with law. Sub-rules (4) and (5) of Rule 92 of Order XXI were introduced by the Code of Civil Procedure Amendment Act 104 of 1976. The amendment was made on the basis of the recommendation of the Law Commission in the 54th Report. In the 54th Report, it is stated thus: "21. 48D. Whatever be the correct view on the existing language, it appears to us that something should be done to improve the position. No doubt, to permit the auction purchaser to sue for refund from the decree-holder is to add to the troubles of the decree-holder, and thus to delay execution. But that seems to be the only possible alternative. As between the decree-holder and the auction-purchaser, if some one has to suffer, the former should suffer. It may not be feasible for the court to inquire into the title of the judgment debtor (at the time of the proclamation), in an elaborate manner; but that does not answer the basic question, namely, when a sale held by a Court and culminating in a certificate issued by the court is held to be a nullity for want of title, by reason of a defect discovered after expiry of the period for making objections under rule 91 etc., is it justice to dispose of the purchaser's grievance by saying that the purchaser purchased the property at his peril? The decree-holder should re-imburse him for the loss suffered by him, because it is the decree-holder at whose instance the sale was held. The abstract principle that there is no warranty at court sales fails to yield a just result in this case. The auction-purchaser should have a right to sue the decree-holder. Where a third party challenges the judgment debtor's title by filing a suit against the auction-purchaser, the decree-holder and judgment-debtor should be necessary parties, and in that suit the court shall direct the decree-holder to refund the money to the auction purchaser. If such a decree is passed, the original execution proceedings shall be revived at the stage where the sale was ordered, unless the court otherwise directs. If such a decree is passed, the original execution proceedings shall be revived at the stage where the sale was ordered, unless the court otherwise directs. This provision is necessary to avoid complications as to limitation." The Law Commission recommended for insertion of sub-rules (5) and (6) in Rule 92, which were inserted as sub-rules (4) and (5) in Rule 92 by the CPC Amendment Act 104 of 1976. 12. The Supreme Court in T.Vijendradas & another v. M.Subramanian & others (AIR 2008 SC 563 = (2007) 8 SCC 751), referred to the Law Commission report and the recommendation made by the Law Commission and held thus: "28. We have noticed hereinbefore that one of the objects sought to be achieved in amending Order XXI, Rule 92 was to do complete justice to the parties so as to enable the auction purchaser to get back the amount from the decree-holder and revive the execution proceedings so that the decree-holder may proceed against the judgment-debtor for realisation of the decretal amount." 13. Rule 92 of Order XXI of the Code of Civil Procedure applies in execution proceedings. In sub-rules (1) and (2) the expression "Court" occur. A perusal of sub-rules (1) and (2) would clearly indicate that "Court" is the executing court. Sub-rule (5) also refers to "Court". There is nothing in sub-rule (5) to indicate that the expression "Court" mentioned therein is the Court dealing with the suit filed by the third party and not the executing court. Going by the scheme of Rule 92, it would not be proper to assume that the "Court" referred to in sub-rule (5) is the Court which dealt with the suit filed by the third party and not the executing court. It is true that sub-rule (5) refers to sub-rule (4). But, after stating that if the suit referred to in sub-rule (4) is decreed, the sub-rule provides that the Court shall direct the decree holder to refund the money to the auction purchaser. Sub-rule (5) also provides that where such an order is passed, the execution proceeding in which the sale had been held shall, unless the Court otherwise directs, be revived at the stage at which the sale was ordered. Sub-rule (5) also provides that where such an order is passed, the execution proceeding in which the sale had been held shall, unless the Court otherwise directs, be revived at the stage at which the sale was ordered. Sub-rule (5) cannot be interpreted in such a way to mean that in the decree passed in the suit filed by the third party, the Court should direct the decree holder to refund the money to the auction purchaser and only then the executing court would get jurisdiction to pass such an order for revival of the execution proceedings at the stage at which the sale was ordered. Rule 92 as such deals with the powers of the executing court. What is meant by sub-rule (5) is that the executing court shall direct the decree holder to refund the money to the auction purchaser in case the suit filed by a third party, as referred to in sub-rule (4), is decreed. I am of the view that what is meant by sub-rule (5) of Rule 92 is not that in order to attract sub-rule (5), the Court decreeing the suit should pass a decree directing the decree holder to refund the money to the auction purchaser. A contrary interpretation cannot be comprehended in view of the Scheme of Rule 92 of Order XXI and also the specific wordings employed in sub-rule (5) of Rule 92. 14. There is another reason to hold that the direction to refund the money to the auction purchaser should be made by the executing court. Sub-rule (5) of Rule 92 states that if the suit referred to in sub-rule (4) is decreed, the Court shall direct the decree holder to refund the money to the auction purchaser. The third party who files the suit cannot be directed to refund the money to the auction purchaser since he did not receive the money deposited by the auction purchaser. The person to be directed to refund the money to the auction purchaser is the decree holder of the decree in execution of which the property was sold. He can be directed to do so only by the executing court. The 'decree holder' referred to in sub-rule (5) of Rule 92 is the decree holder at whose instance the property was sold in court auction. He can be directed to do so only by the executing court. The 'decree holder' referred to in sub-rule (5) of Rule 92 is the decree holder at whose instance the property was sold in court auction. It is thus clear that the Court having jurisdiction to direct the refund of the money to the auction purchaser is the executing court and not the Court which deals with the suit filed by the 'third party' referred to in sub-rule (4) of Rule 92. For the reasons mentioned above, I overrule the contentions put forward by the decree holder. 15. Learned counsel for the decree holder also submitted that in the suit filed by the third party, the civil court found that the judgment debtor had title to three cents of land, which forms part of the total extent of 50 cents of land sold in court auction. The counsel submits that so long as the civil court did not find that the entire property which was sold in auction belonged to the third party, the decree holder cannot be directed to refund the money to the auction purchaser, invoking sub-rule (5) of Rule 92. Learned counsel for the auction purchaser submitted that he purchased in auction the entire extent of land and if it is found that a major portion of the same did not belong to the judgment debtor, the auction purchaser should get the benefit of sub-rule (5). 16. In a court auction sale, the intending purchaser would participate in the sale and purchase the property on the basis of the proclamation of sale issued under Rule 66 of Order XXI of the Code of Civil Procedure. Rule 66 provides for incorporating in the sale proclamation the details with respect to the property sought to be sold. All the details which the Court considers material for a purchaser to know in order to judge the nature and value of the property, should be incorporated in the sale proclamation. Under sub-rule (3) of Rule 66 of Order XXI, it is mandatory that every application for an order for sale shall be accompanied by a signed and verified statement containing the matters required by sub-rule (2) to be specified in the proclamation. Sub-rule (3) is intended to make sure that the particulars mentioned in the sale proclamation are true and correct. Sub-rule (3) is intended to make sure that the particulars mentioned in the sale proclamation are true and correct. When an auction purchaser purchases the property which was sold in court auction, he would purchase the entire property. A bidder would participate in the auction sale with an intention to purchase the property which was sold and on the belief that the extent of the property sold in court auction belongs to the judgment debtor. If it is found by the civil court that the judgment debtor did not have title to the entire extent of land, it is for the auction purchaser either to be satisfied with the remaining extent or to apply under sub-rule (5) of Rule 92. No fetter can be placed on his election to do so. The decree holder cannot contend that since a portion of the property was found to belong to the judgment debtor, the auction purchaser has no right to get back the money which he paid for getting the entire property in auction. 17. For the aforesaid reasons, I set aside the order passed by the court below. The court below shall proceed in accordance with law and shall pass an order under sub-rule (5) of Rule 92 of the Code of Civil Procedure. 18. Learned counsel appearing for the decree holder expressed an apprehension that if the executing court is directed to proceed afresh, the execution proceedings would be barred by limitation. Sub-rule (5) of Rule 92 states that when an order for refund of the money to the auction purchaser is passed, the execution proceedings shall revive at the stage at which the sale was ordered. That means, no fresh execution petition is required. The same execution proceeding shall revive and the decree holder would be entitled to pray for any relief for realisation of the decree amount in accordance with law. The Civil Revision Petition is allowed as indicated above.