RAMAJEYAM LORRY AGENCY Vs. V B GIRI
LAWS(MAD)-1998-8-119
HIGH COURT OF MADRAS
Decided on August 24,1998

RAMAJEYAM LORRY AGENCY REP. BY ITS PROPRIETOR A.RAGHTT Appellant
VERSUS
V.B.GIRI Respondents





Cited Judgements :-

MURUGESAN AND COMPANY VS. VIJAYALAKSHMI [LAWS(MAD)-2002-4-120] [REFERRED TO]


JUDGEMENT

C.SHIVAPPA, J. - (1.)IN this appeal, the appellant has challenged the order dated 24.4.1998 passed on Application Nos. 1457 and 1464 of 1998 in C.S. No. 201 of 1981, by the learned single Judge on the Original Civil Jurisdiction of this Court, accepting the highest offer and directing the issue of sale certificate in favour of respondent No. 14, in respect of the property, viz. , House No. 1/110, Third Block, Java Nagar, Bangalore-11, inter alia contending that the appellant's offer was the highest bid amount and the auction suffers from material mis-directions and illegality, and that the learned Judge failed to take note of the bona fides of the appellant and equities between the parties. Hence, in substance, he is seeking for setting aside the auction sale conducted and issuance of sale certificate in favour of J.P. Balasubramaniam and three others.
(2.)THE respondents 1 to 13 who are decree-holders have filed an application bearing No. 3124 of 1993, seeking for a directing to appoint an Advocate Commissioner to sell two items of properties, which includesthe one that was bid by the appellant herein. THE sale proclamation was issued and conditions of sale were enumerated in the sale proclamation. Though the sale was fixed on 16.3.1997, auction was postponed and parties were directed to submit their offers. On an earlier occasion, by order dated 23.3.1998, the Commissioner was directed to accept the highest offer of Rs. 67 lakhs given by Mr. Sathish D. Shah of Bangalore, with a direction that 25% of the sale consideration to be deposited by 27.3.1998 in the name of the Registrar and the entire sale consideration to be deposited within eight weeks. THE intending purchaser deposited the entire amount within the time given by way of seven demand drafts, drawn on Centurian Bank. THEn, few more persons came forward offering higher prices. THE appellant is one of those who offered Rs. 85 lakhs, but sought for time for payment. Respondent No. 14 herein and three others offered Rs. 71 lakhs by way of five demand drafts on that day itself. Since the offer made by Respondent No. 14 was higher, the same was accepted and Respondent No. 14 and three others were directed to file the draft sale certificate, under Order 38, Rule 11 of the Original Side Rules, within three days. THE amount deposited by Mr. Satish D. Shah was ordered to be returned with Rs. 50,000/- as compensation, by 27.4.1998 and the amount deposited by Respondent No. 14 was ordered to be kept in deposit in the name of the Registrar, to the credit of the suit.
The grievance of the appellant herein is that the appellant agency has offered the highest bid of Rs. 85,00,000/- and the sale ought to have been confirmed instead of the lesser bid. The appellant further contended that the learned Judge ought to have granted extension of time to deposit the sale consideration. The order rejecting the highest offer is vitiated by material irregularities and illegalities.

Respondents 1 to 13 are the sharers. The learned counsel appearing on their behalf submitted that the suit is of the year 1981 and many of the sharers are in their 80s and 60s, one of the plaintiffs already died and another plaintiff is admitted for serious illness at Jeslok Hospital in Munibai and if the process of closing the administration of the estate is delayed, it will cause irreparable injury and hardship. They also contended that it is almost an year that the sharers are in the same position as they were at the time when this Court was pleased to order sale of the two properties, and it is their grievance that the appellant herein has no locus standi to maintain the petition, since he did not deposit any money or complied with the conditions of the auction sale.

The question for consideration is whether the confirmed auction sale by the learned single Judge is valid in law or can it be reopened at the instance of the appellant in spite of non-deposit of the purchase-money"

The question whether an auction sale could be reopened inspite of non-deposit of purchase-money, has already been settled by this Court in several decisions. They are: " (1) In Vannisami v. Periayaswami (AIR 1917 Madras 176), it has been held that under 0.21, R. 89, deposit is a condition precedent to the making of an application for setting asidethe sale. The words "on his depositing" in 0.21, R. 89, C.P.C. qualify the term "apply" and a deposit is a condition precedent to the making of an application. Under Rule 92(2) of O. 21, the Court has no power to entertain an application for setting aside the sale, because the requirement being not merely directory but mandatory. It has also been held that the court has no power to extendthe time for makingthe deposit. (2) In Krishan Ayyar v. Arunachalam (AIR 1935 Madras 842 = 42 L.W. 307, F.B.), this Court has held "where an application was made by person interested in the property sold in execution, requesting the court to set aside the sale and the required deposit was also made by him". (3) In Krishnama Naicken v. Sivasami Chettiar (AIR (3) 1943 Madras 709 = 56 L.W. 490), this Court has held "Under O. 21, R. 89, it must be shown that the applicant has an interest in the property itself which has been sold. It is not enough that he is indirectly affected by the sale when he has no interest in the usual sense such as the interest of a judgment-debtor, mortgagee or even a lessee. 0.21, R. 89, contemplates that the title derived from the judgment-debtor must be in the property, the sale of which is sought to be set aside: () 15 AIR 1928 Mad. 1191, Approved)". Following the decision reported in AIR 1928 Madras 1191, it has been held that the appellant had no locus standi to apply under 0.21, R. 89, because, he was not a person deriving title from the judgment-debtor or a person holding an interest in the property. The same view was taken in () 26 AIR 1939 Madras 250 (F.B.). (4) In Jagannatha Iver v. Krishna Iyer (AIR 1962 Madras 99 = (1961) 74 L.W. 450), it has been held that me rule statutorily provides for setting aside the sale in execution while the jurisdiction thereunder can be exercised only if the prescribed conditions are satisfied; it would be wrong to call it a mere privilege or indulgence. It is further held that "In our opinion, a deposit under 0.21, R. 89, C.P.C. should be unconditional in this sense, namely, that it should not contravene the terms of that rule or frustrate its object, i.e. The deposit should not be accompanied by any request or statement to prevent the decree-holder and auction-purchaser from unconditionally drawing the respective amounts payable to them under the rule; the sale is deemed to have been conducted without any material irregularity and no application to set aside a sale under R. 90 could lie; therefore, there could be no reservation of any right to challenge the sale under that rule".

(3.)THE same view was taken in Rukminibai v. Gajadhar (AIR 1955 Nagpur 185), wherein it has been held that the provision of 0.21, R. 89(1), when is in the nature of indulgence to the judgment-debtor, must be strictly complied with. In Raman v. Authrose (AIR 1952 Travancore-Cochin 321), it has been held that the responsibility for paying the correct amount within the time lies with the person who seeks to set aside the sale, following Kalidasa Chetty v. Dodda Siddha Chetty (AIR 1947 Madras 56 = (1946) 59 L.W. 409). So also, in Amritlal Narsilal v. Sadasiv (AIR (31) 1944 Bombay 232), the High Court of Bombay held that the deposit under Rule 89, Order 21 is intended not merely for the benefit of the auction-purchaser and decree-holder, but also to maintain solemnity of court sales. Equitable principles cannot over-ride imperative provisions of Rule 89. Rule 89(1), Order 21 is being intended to guard the interests of the decree-holder and to ensure the judgment-debtor an opportunity to recover his property.
In Jaswanthlal Natvarlal Thakkar v. Sushila Ben Manilal Dangarwala (AIR 1991 S.C. 770), the Apex Court has taken the view that under O. 21, R. 90, it is not sufficient for the appellant to contend that there was illegality or irregularity in me conduct of the sale; he must also prove that some substantial injury has been caused to him as a result of the order viz. not granting him time to deposit the amount, or in confirming the auction.

It is obvious that an execution sale primarily affects the interest of three parties, although their interests may be different and conflicting, namely, the decree-holder, judgment-debtor and the auction-purchaser. The appellant herein, since he failed to comply with the requirements of law by depositing 25% of the amount of the offer he made, he does not come in any one of these categories. Therefore, it is not necessary to decide in this appeal whether "interests" in O. 21, R. 90, means only proprietary or possessory interest or will include even pecuniary interests. The application itself being defective from its inception, it must be deemed that there was no proper application under O. 21, R. 89, C.P.C. Even in the affidavit annexed to the Application No. 1464, at para 4, it is stated thus: "I state that the applicant is interested in purchasing the said property and willing to make the offer before this Hon'ble Court. I state that the applicant may be permitted to hand over his offer in a sealed cover in the open court through my counsel". He did not assert that he was prepared to pay 25% of the offer as required under Rule 84 of Order 21, C.P.C. It is in this context, the contention of respondents 1 to 13 that the appellant has no locus standi to maintain the petition, assumes relevance and force.



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