In C.A. No. 619 OF 2023-SC- As per Order 21 Rules 84 & 85 of CPC, purchaser has to deposit 25% of sale amount immediately on declaring to be purchaser and full amount of purchase-money has to be paid before Court closes on 15^th day from sale of property:SC
Justices M.R. Shah & C.T. Ravikumar [10-02-2023]

Read Judgment: GAS POINT PETROLEUM INDIA LIMITED V. RAJENDRA MAROTHI & ORS

Mansimran Kaur

New Delhi, February 13, 2023: Referring to Order 21 Rules 84 & 85 of CPC, the Supreme Court has opined that the auction purchaser is required to deposit 25% of the amount the day on which he is declared as a purchaser and 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. 

While allowing the present appeal  instituted against the impugned judgment passed by the High Court of Madhya Pradesh, the Division bench of Justice M.R. Shah and C.T. Ravikumar observed that at the time when the property was put to auction on October 18, 2011, the judgment debtor was not the owner and therefore, the same could not have been put to auction.

The Facts leading to the present appeal were that there was a dispute between National Ginni Enterprises and Smt. Gayatri Agrawal with respect to the L.P.G. gas agreement. 

A civil suit was filed by the said Smt. Gayatri Agrawal against the National Ginni Enterprises. The Trial Court passed a decree by directing the judgment debtor (National Ginni Enterprises) to provide L.P.G. gas as per the conditions of the agreement. The decree provided that if the defendants are unable to implement the said order, in alternatively it was directed that the plaintiff was entitled to get the amount of Rs. 2,38,450/- + Rs. 23,500/- (sic) relating to cost of the gas cylinders and regulators respectively. 

The judgment debtor did not fulfill the first portion of the order and did not supply the gas cylinders and regulators. Therefore, the decree holder filed the execution petition before the Executing Court. It was decided to sell the property of the judgment debtor. Accordingly, a declaration was made and property was auctioned and was sold in favour of the first respondent. 

 The appellant - original respondent filed an objection before the Executing Court, contending, inter-alia, that the property was purchased by him from judgment debtor on August 31, 1999 and that they are in possession of the said land. An application under Order 21 Rule 90 r/w 151 of the CPC was filed. 

The Executing Court overruled the objections and rejected the application under Order 21 Rule 90 through an order. The appellant filed a miscellaneous civil appeal before the Court of Additional District Judge

The lower Appellate Court allowed the said appeal and set aside the order of the Executing Court and remitted the matter back to the Executing Court to rehear the parties and after taking into account all the facts and circumstances pass a fresh order in accordance with law.

 The order passed by the lower Appellate Court was the subject matter before the High Court by way of present writ petition. By the impugned judgment and order the High Court has allowed the said writ petition and has set aside the order passed by the lower Appellate Court by observing that the appellant failed to plead and establish the nature of irregularity or fraud committed in sale and therefore, no fault can be found in the order of the Executing Court.

 Feeling aggrieved and dissatisfied with the judgment and order passed by the High Court, the original respondent instituted the present appeal.

After considering the submissions from both the sides, the Court took into account relevant provisions of the CPC.  In view of the same, the Court noted that in the present case admittedly the purchaser – first respondent deposited 25% of the amount on November 3, 2011 and did not deposit 25% of the amount as required under Order 21 Rule 84 immediately. 

The auction purchaser was required to deposit 25% of the amount the day on which he was declared purchaser i.eOctober 18, 2011.  Even the balance 75% of the amount was not deposited as required under Order 21 Rule 85. The full amount of the purchase-money in the present case was deposited on November 4, 2011 i.e., after the period prescribed/provided under Order 21 Rule 85. Therefore, there was non-compliance with Order 21 Rule 84 and Rule 85 of CPC.

At this stage reference was made to the judgment in  Manilal Mohanlal Shah and Ors. Vs. Sardar Sayed Ahmed Sayed Mahmad and Anr.

In pursuance of the same, the Court noted that it was evident that there was non-compliance of mandatory provisions of Order 21 Rule 84 and Order 21 Rule 85 and therefore, the sale was vitiated.

At the outset, the Court thus observed, “...the High Court has committed an error in considering an injunction dated May 18, 1999 against the appellant. Therefore, at the time when the property was put to auction on October 18, 2011, the judgment debtor was not the owner and therefore, the same could not have been put to auction”. 

Under the circumstances, the Executing Court erred in overruling the objections raised by the appellant against the auction/sale of the property which the appellant purchased much prior to the date of the auction i.e., on August 31, 1999, the Bench held while setting aside the impugned order and allowing the appeal.