ANNAVAJHULA VENKATACHELLAMAYYA GARU Vs. RAMAGIRJEE NEELAKANTA GIRJEE

JUDGEMENT

(1.) Under Order 21, Rules 84 - 86 of the Code of Civil Procedure on the default of a purchaser at a court auction either in making the deposit or paying the balance of purchase money within the specified period the property is to be resold; and under Order 21, Rule 71 any deficiency in price which may occur at the re-sale together with the expenses attending the re- sale, as certified to the Court, are recoverable at the instance of the decree-holder or the judgment-debtor under the provisions relating to the execution of a decree for the payment of money. By his failure to complete his purchase the purchaser commits a breach of contract and is answerable in damages to the Court or the persons on whose behalf it sells, viz., the decree-holder and the judgment-debtor. These damages estimated by the ordinary rule consist of the deficiency if any in the price obtained at the re-sale as compared with the price at the first sale together with the expenses of the re-sale; and the rule provides a summary method of recovering these damages in execution by the Court at the instance of either of the parties interested, the decree-holder or the judgment-debtor. This is a statutory provision intended to minimise the hardship resulting from the purchaser s default, and I see no reason why the Court should refuse to give effect to it unless the defaulting purchaser would be substantially prejudiced. This was the case in Baijnath Sahai v. Moheep Narain Singh (1889) I.L.R. 16 Cal. 535 where he had been induced to bid for the property as unincuimbered by the fact that the incumbrances were not mentioned in the proclamation of sale and the re-sale was on a proclamation in which the incumbrances were mentioned. ln such a case the difference between the two prices could not be regarded as a fair measure of damages, as the purchaser who afterwards defaulted must obviously have made a higher bid than he would have done if he had known of the incumbrances. If the learned Judges in Baijnath Sahai v. Moheep Narain Singh (1889) I.L.R. 16 Cal. 535 and Kali Kishore Deb Sirkar v. Guru Prosad Sukil (1897) I.L.R. 25 Cal. 99, intended to lay down a more stringent rule I am with great respect unable to agree with them.

(2.) There was no circumstance of this kind in the present case. The efforts, in which the Legislature joined, to save the ancient Zamindari of Kalahasti from being sold in execution having finally failed, a taluk, of the North A root District, was attached and brought to sale at the instance of a judgment-creditor. The taluk had been conveyed to a Mahant for six lakhs of rupees with an agreement for reconveyance if the money was repaid before a stipulated date, the 31st August 1914. The sale in execution to the respondent took place on the 25th August 1914 only a few days before the stipulated time for repayment to the Mahant, and the respondent was no doubt aware of this when he bid, as he would not have bid more than five lakhs for the judgment-debtor s interest without satisfying himself of the terms of the agreement for reconveyance mentioned in the sale proclamation, and in any case he must be taken to have had notice of it. The case for the appellant is that he was a man of straw employed by the Mahant to get the property knocked down to him as the highest bidder and make the necessary deposit with the money supplied by the Mahant in order to keep out genuine purchasers and to ensure that the specified date should be allowed to go by without repayment and the right to a reconveyance be lost; but all this has not been gone into and it is unnecessary to rely on it. On the 25th of August, the date of the sale, the respondent made the necessary deposit of Rs. 1,72,500 which entitled him to a delay of 15 days to complete the purchase, vide Order 21, Rule 85. On the completion of the 15 days he defaulted, and it became necessary to re-sell. By that time the 31st August 1914 had gone by, and the purchaser would no longer have a clear right to a reconveyance from the Mahant on payment of six lakhs, and could only rely on the positions that the transaction was really a mortgage or that the tender had been made before the specified date and refused. Now it is quite clear that what was put up to sale and purchased by the respondent on the 25th August included the right to get back this taluk from the Mahant on payment of six lakhs before the 31st August, and if he chose to purchase the judgment-debtors interest and let the day go by, I am clearly of opinion that he is the person to bear the resulting loss. The other view as regards this part of the case appears to be that the judgment-debtor s right to a reconveyance on payment of a fixed sum before a stipulated day, which might be a most valuable right and in this case is said to have been worth much more than the five lakhs which the respondent agreed to pay for it, cannot be made the subject of an effective sale in execution, if the sale takes place less than fifteen days before the stipulated date, as under Order 21, Rule 85, the purchaser has fifteen days to pay the balance and the sale is not final until confirmed after not less than thirty days. These provisions in my opinion were made alio intuitu and were not intended to have that effect. He could, if necessary, have procured the concurrence of the judgment- debtor in making the tender to the Mahant without prejudice to the question of the confirmation of the sale, and in that case would have been entitled to a charge on the property so released. In any view he got what he bargained for, and I can see no reason why he should not incur the ordinary consequences of failing to complete his bargain.

(3.) It is quite clear, and has not been disputed before us, that at the re-sale consequent on the respondent s default, the judgment-debtor s right, title and interest in the same properties was brought to sale. It was, however, no longer possible to put up a right to reconveyance on payment before the 31st August 1914 as that date had gone by; but the nature of the judgment-debtor s interest was represented as favourably as possible in the proclamation as it alleged that the transaction with the Mahant was a mortgage and also that the agreement for the reconveyance still subsisted because, it alleged, the Mahant had fraudulently gone away from his residence to avoid receiving the tender of six lakhs which the judgment-debtor made before the stipulated date. In this case the sale and the re-sale were both duly held and were of the judgment-debtor s interest as it existed at the date of the sale and re-sale respectively, and the depreciation which occurred in the meantime was one for which the respondent was exclusively responsible, In these circumstances I see no reason why the deficiency should not be recovered from him under the Code. It was scarcely disputed before us that he would have no answer to a suit for damages, and I see no reason for refusing to give effect to the plain language of the Code. I concur in the order proposed by Kumaraswami Sastri, J. Ayling, J.