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Cites 4 docs
Varankkot Illath Subramaniyam ... vs V.K. Vykunda Kammathi And Ors. on 16 March, 1922
Haji Inam Ullah vs Mohammad Idris on 8 March, 1943
Manilal Mohanlal Shah And Others vs Sardar Sayed Ahmed Sayed Mahmad ... on 14 April, 1954
Chief Post Master, Delhi, G.P.O., ... vs Ram Avtar Gupta on 1 June, 2006

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Punjab-Haryana High Court
Nachhattar Singh And Ors. vs Babu Khan And Ors. on 2 August, 1971
Equivalent citations: AIR 1972 P H 204
Bench: M M Singh, Gujral


1. This second appeal filed by the judgment-debtor and two others arises out of an execution application in which the sale of property of the judgment-debtor was confirmed and the objection petition of Milkha Singh was dismissed.

2. The facts giving rise to this appeal are not in dispute and are as follows. Rukan Din (who has since died) and obtained a decree for the recovery of Rs.2,400/- against Darbara Singh and in execution of that decree he got land belonging to the judgment-debtor and measuring 32 kanals and 2 marlas attached. In a subsequent execution application the land was ordered to be auctioned and the sale to place on 19th June, 1966. Babu Khan respondent was the highest bidder and he immediately deposited Rs.900/- being the one-fourth of the sale-price. The balance of the money was, however, not deposited till 25th August 1966. While the property was under attachment Darbara Singh, the judgment-debtor executed a gift deed on 12th April 1965 in respect of his entire land measuring 99 bighas and 16 biswas in favour of Nachattar Singh and Milkha Singh. An objection petition under O. 21, R. 58, Civil P. C. was filed by Nachhattar Singh and Milkha Singh but this petition was dismissed by the executing Court and the suit brought by them under Order 21, Rule 63, was also dismissed. In view of these proceedings, the execution proceedings remained stayed and ultimately on 16th December 1968 the auction purchaser applied for the confirmation of the sale. Notice of this application was given to the parties concerned but as in the meantime Rukan din died his widow and daughters were brought on the record as his legal representatives. The legal representatives of the decree-holder have also applied for the confirmation of the sale and for the payment of money to them. Milkha Singh, one of the transferees from Darbara Singh, filed an objection petition and all the three applications were disposed of by the trial Court by order dated 30th July 1969. Against this order, besides Milkha Singh who had file the objection-petition, Nachhattar Singh and Darbara Singh also filed an appeal which was dismissed by the impugned order.

3. On behalf of the appellants the only argument raised was that as the auction-purchaser had failed to deposit the balance of the money within fifteen days as required by Rule 85 of Order 21, the sale was a nullity and the Court was bound to order the re-sale of the property. The learned Courts below following Shahzadi Begum v. Hakim Manohar Lal, AIR 1955 Hyd 110 and V. I. Subramanyan Nambudri v. V. K. V. Kammathi, AIR 1923 Mad 48 took the view that as the time was extended by the Court with the consent of the interested parties the sale was not rendered a nullity and that the rule can be waived by the persons who stand to benefit by the sale.

4. In order to understand the respective contentions of the parties it is necessary to make reference to Rr. 85 and 86 of Order 21, which are in the following terms:--

"85. 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.

86. 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 for-feit all claim to the property or to any part of the sum for which it may subsequently be sold."

These rules came up for interpretation before the Supreme Court in Manilal Mohanlal Shah v. Sardar Sayed Ahmed Sayed Mahmad, AIR 1954 SC 349, and on a review of the entire case law, it was observed as under:--

"Having examined the language of the relevant rules and the judicial decisions bearing upon the subject we are of the 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 with 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. We hold, therefore, that in the circumstances of the present case there was no sale and the purchasers acquired no rights at all".

5. While considering this question in Manilal Mohanlal Shah's case. AIR 1954 SC 349 the view taken in Haji Imam Ullah v. Mohd Idris, AIR 1943 All 282, which has been cited by the learned counsel for the appellants, was accepted and the observation occurring in this judgment that the Court was bound to re-sell the property upon default irrespective of any application being made by any party to the proceeding was cited with approval.

6. While accepting the view that in case payment was postponed by the consent of the parties, the sale need not be set aside, the learned District Judge relied on Shahzadi Begum's case, AIR 1955 Hyd 110 while trial Court also made reference to V. I. Subramanyan Nambudri's case, AIR 1923 Mad 48. The case of Shahzadi Begum is clearly distinguishable on facts as in that case the failure to deposit the price in the Court on the due date was brought about by the insistence of the judgment-debtor that the balance of the sale-price be not accepted from the auction-purchaser till the disposal of his objection. In view of this it was observed that as petitioner had himself secured an order from the Court that the money should not be taken from the respondent till after the disposal of his objection, the auction-purchaser cannot be blamed or allowed to suffer if he acted on the faith of the judgment-debtor and allowed the period set down in Rule 85 of Order 21 to pass and that the petitioner cannot in such a case be allowed to turn round and claim advantage of the delay in making of the deposit which was occasioned by his own act. This view in Shahzadi Begum's case was taken on the basis of certain observations occurring in Nathu Mal v. Malwa Mal, AIR 1931 Lah 15. In Manilal Mohanlal Shah's case, AIR 1954 SC 349 the Supreme Court specifically considered Nathu Mal's case and did not accept the remarks made therein that the provisions of Rule 85 were merely directory and not mandatory. This being the position, the learned Courts below had erred in relying on Shahzadi Begum's case especially when their attention had been drawn to Manilal Mohanlal's case.

7. Even on facts the observations in Shahzadi Begum's case AIR 1955 Hyd 110 were not applicable in the instant case. The sale had taken place on 19th June 1966 and the balance of the sale-price was to be deposited within fifteen days of this date. No extension of time was obtained by the auction-purchaser within this period and it was only on 20th August 1966 that for the first time the Court ordered the auction-purchaser to deposit the remaining price and again on 25th August 1966 the Court ordered that the remaining price be deposited within seven days. In neither of these orders is there any mention that the time was being extended with the consent of the parties. From the fact that the judgment-debtor had not objected to the deposit of the money or had not filed any objection to the confirmation of the sale an inference was drawn that the time had been extended with his consent and he, therefore, could not raise any objection to the confirmation of sale. This view is clearly erroneous and the observations made in Shahzadi Begum's case cannot be applied to these facts. Here the delay in depositing the balance of the sale-price has not been brought about by any request of the judgment-debtor or the decree-holder and the judgment-debtor has not benefited as he has not withdrawn the balance of the money which was lying in Court. His failure to file objection to the confirmation of the sale cannot be equated to the having agreed to the deposit of the balance of the sale-price beyond the period provided by the rules. In this connection, it may also be noticed that in Manilal Mohanlal Shah's case, AIR 1954 SC 349 the Supreme Court had approved the observations made in A. R. Davar v. Jhinda Ram, AIR 1938 Lah 198, that the Court has no jurisdiction to extend the time for the payment of the balance of the purchase-money under Rule 85 and must order re-sale under Rule 86.

8. As regards the objection that Darbara Singh having not filed any objection before the executing Court objecting to the confirmation of the sale was debarred from raising any objection at this stage the observations made in Haji Imam Ullah's case AIR 1943 All 282 (Supra) reference to which has already been made are a complete answer to the argument. Rule 85 places a duty on the Court to re-sell the property in case of default irrespective of the fact that no application has been made by any party to the proceedings to challenge the sale. Once there has been a default in the payment of the balance of the amount the sale proceedings become a nullity and the Court is bound to put the property to re-sale.

9. For the reasons stated above, I find that the Courts below had erred in confirming the sale as there had been violation of Rule 85 of Order 21 Civil Procedure Code and the sale was complete nullity. I, therefore, accept this appeal and set aside the orders of the Courts below confirming the sale. The applications of the auction-purchaser and the decree-holder are consequently dismissed. Considering the circumstances of the case, I leave the parties to bear their own costs throughout.

10. Appeal allowed.