1
IN THE HIGH COURT OF JUDICATURE OF BOMBAY
BENCH AT AURANGABAD
WRIT PETITION NO.4104 OF 2009
Bhagwandas s/o Chunilal Purohit,
age: 46 years, Occ: Business,
R/o Shivajinagar Dalphad, Jalgaon,
Tq. and District Jalgaon. Petitioner
Versus
1 Machindra s/o Rama Patil,
age: 45 years, Occ: Agril.,
R/o Sanjay Nagar, Plot No.300,
Survey No.48, Udana Yard Limbayat,
Surat.
2 Chandrashekhar Shankar Nandedkar,
age: major, Occ: Business,
R/o 14, Rachna Colony, Jalgaon,
Tq. And District Jalgaon. Respondents
Mr.Ajay Talhar, advocate for the petitioner.
Mr.S.B.Yawalkar, advocate for Respondent No.1.
Mr.Vinod P. Patil, advocate for Respondent No.2.
CORAM: R.M.BORDE, J.
Reserved on : 27th April, 2010.
rd
Pronounced on: 03 May, 2010.
JUDGMENT.:
1 Heard Shri Ajay Talhar, learned Counsel for petitioner, Shri
S.B.Yawalkar, learned Counsel for Respondent No.1 and Shri Vinod P. Patil,
learned Counsel for Respondent No.2.
Rule, made returnable forthwith and heard finally by consent of
::: Downloaded on – 09/06/2013 15:54:56 :::
2
learned Counsel for respective parties.
2 Petitioner – original defendant is raising exception to the order
dated 02.05.2009, passed by II Joint Civil Judge, Senior Division, Jalgaon,
below Exhibit-75 in Special Darkhast No.38/2006, whereby objection
application tendered by petitioner – judgment debtor came to be turned
down by the executing court.
3 Respondent No.1 is decree holder who had presented Special
Civil Suit No.252 of 2001 claiming recovery of amount of Rs.5,29,000/- against
rd
petitioner – judgment debtor. Suit presented by Respondent No.1 came to
th
be decreed on 23 December 2005 by 4 Ad hoc Additional District Judge,
Jalgaon. The judgment and decree passed by the trial Court was subject
matter of challenge in First Appeal No.704 of 2006 at the instance of
petitioner – judgment debtor. Appeal is admitted by this Court on 18.01.2007.
Initially stay of execution of decree was granted on condition of deposit of Rs.
4,00,000/- by appellant – judgment debtor. However, petitioner – judgment
debtor failed to deposit the amount. As such, interim stay to the execution of
decree granted by this Court in First Appeal stood vacated.
4 Special Darkhast No.38 of 2006 came to be presented by
Respondent No.1 – original decree holder seeking execution of decree. The
property in question bearing G.No.800 admeasuring 71 ares was put to
nd
auction. The auction sale was conducted on 2 March 2009 after observing
procedure prescribed in that behalf. Initially, it appears, one Sitaram Omkar
Puprohit, who participated in the bid, was declared as successful bidder,
whose offer for purchase of land was for Rs.4,61,000/-. His bid was accepted
on 02.03.2009 and he was directed to deposit 25% of the amount. However,
::: Downloaded on – 09/06/2013 15:54:56 :::
3
said Sitaram failed to make deposit of the amount up to 5.30 p.m. on the said
date, as such, his offer was cancelled. On the same day, property was put to
resale and Respondent No.2, whose bid was second highest, agreed to
purchase the property for an amount of Rs.4,61,000/- equivalent to the offer
made by Sitaram Purohit. The offer made by Respondent No.2 was,
therefore, accepted. However, by the time proceedings for resale were
completed, Court time was over. As such, he was permitted by the executing
court to deposit 25% of the amount on the next day i.e. 03.03.2009.
Accordingly, Respondent No.2 deposited 25% of the amount on 03.03.2009
and has also deposited balance of 75% amount within period permissible in
law.
5 In the meantime, judgment debtor presented an application
purported to be an application under Rule 101 of the Code of Civil Procedure
and objected to auction proceedings. In the application tendered by
judgment debtor, it is contended that Respondent No.2, whose bid was
nd
accepted, was required to deposit 25% of the amount on 2 March itself,
rd
however, he was permitted to deposit the amount on next day i.e. 3 March,
which is not permissible in accordance with Rule 84 of Order XXI of the Code
of Civil Procedure. On this count alone, according to judgment debtor,
auction proceedings are liable to be quashed. Another objection raised by
the judgment debtor is that valuation of the property is Rs.23,82,938/-,
whereas, same is being sold at meager amount of Rs.4,61,000/-. Next ground
of challenge is that the property in question is already mortgaged to Central
Bank for an amount of Rs.5,00,000/- borrowed by the judgment debtor and as
such, the property is not liable to be put to auction sale. In this view of the
matter, it was urged to the executing Court to set aside the auction sale.
::: Downloaded on – 09/06/2013 15:54:56 :::
4
6 The application tendered by judgment debtor was opposed by
decree holder contending that first highest bidder, namely Sitaram Purohit
failed to deposit 25% of the amount on the same day, as such, in
accordance with Rule 84 of the Code of Civil Procedure, the property was
put to resale and Respondent No.2, who was second highest bidder, raised
his bid to match with offer made by Sitaram Purohit and agreed to purchase
the property. By the time, proceedings were finalised, the Court time was
over. As such, upon request made by Respondent No.2, he was permitted to
make deposit of the amount on the next day. It is contended that there is no
infirmity in the procedure and as such, application tendered by judgment
debtor is liable to be rejected.
7 The executing court, on consideration of contentions raised by
respective parties, was pleased to reject the application in view of order
passed on 02.05.2009. The order passed by executing Court, referred to
above, is subject matter of challenge in this petition.
8 Learned Counsel appearing for petitioner has vehemently
contended that executing court has erred in permitting resale of the property
in favour of Respondent No.2 and has also committed an illegality in
accepting 25% of the amount on next day. According to learned Counsel
appearing for petitioner, the purchaser has to deposit 25% amount
immediately. On failure to deposit the amount, the sale is liable to be
declared as invalid meaning thereby there is no sale in the eye of law at all.
According to learned Counsel appearing for petitioner, for holding resale, a
notification calling fresh bids is again required to be published and only after
following the procedure of inviting afresh bids, the property could be resold.
It is also contended that valuation of the property is far more than the price
::: Downloaded on – 09/06/2013 15:54:56 :::
5
offered by successful bidder and as such, bid finalised needs to be set aside.
9 Learned Counsel appearing for Respondent No.1-decree
holder as well as Respondent No.2 – purchaser at auction sale, have
opposed contentions raised by petitioner and supported the order passed by
executing court. It is the contention of Respondents that on failure of the
purchaser to deposit 25% of the amount, the property is required to be resold
forthwith and the procedure does not contemplate publication of fresh
proclamation. The property is required to be resold then and there. It is
contended that as permitted by the executing Court, Respondent No.2
deposited the amount to the extent of 25% on the next day. The reason
behind depositing the amount on the next day is that the Court time was
already over and Nazir of the Court was unable to accept the amount. It is
also contended that balance of 75% amount has also been deposited by
Respondent No.2 and in such circumstances, it is proper for the executing
Court to issue sale certificate in his favour and direct that he be put in
possession of the property.
10 I have heard arguments of learned Counsel for respective
parties and perused the record. It would be appropriate to refer to Rule 84 of
Order XXI of the Code of Civil Procedure:
84 Deposit by purchaser and re-sale on default – (1) On
every sale of immovable property the person declared
to be the purchaser shall pay immediately after such
declaration a deposit of twenty-five per cent, on the
amount of his purchase-money to the offer or other
person conducting the sale, and in default of such
deposit, the property shall forthwith be re-sold.(2) Where the decree-holder is the purchaser and is
::: Downloaded on – 09/06/2013 15:54:56 :::
6entitled to set-off the purchase-money under rule 72, the
Court may dispense with the requirements of this rule.11 So far as instant case is concerned, it is not controverted that
Sitaram Purohit was the successful bidder whose offer for purchase of
property for Rs.4,61,000/- was highest. It is also borne out from record that he
failed to deposit the amount up to 5.30 p.m. on the given date i.e. 02.03.2009.
The property was thereafter resold in favour of second highest bidder who
agreed to raise his bid to Rs.4,61,000/-. The executing Court accepted offer of
Respondent No.2 and as time for deposit of 25% of the amount was over, the
Court permitted him to deposit the amount on next day.
12 Rule 84 contemplates deposit of 25% amount immediately
after declaration. The deposit of amount by Respondent No.2, in the
circumstances noted above, on the next day i.e. on 03.03.2009 cannot be
construed as delayed payment. The main objection raised by judgment
debtor that the property needs to be put to re-auction meaning thereby
afresh proclamation needs to be issued, is not acceptable for the reason that
Rule 84 contemplates that in default of payment of purchase money by the
successful bidder, the property shall be resold forthwith. Resale of the
property immediately i.e. “forthwith” does not contemplate observance of
the procedure, as contemplated by Rule 66 and onwards.
13 Relying upon the Full Bench judgment in the case of
Venkatasubbiar Vs. Akkamma, reported in AIR 1930 Madras 761), the
Karnataka High Court, in the matter of Kamaxi Kom Bhikku Shetty Vs. Vaman
Thippayya Bhattageri, reported in AIR 1976 Karnataka 3, has observed thus:
::: Downloaded on – 09/06/2013 15:54:56 :::
7“As fresh sale proclamation is not called for, the
re-sale on the same day immediately following on theabortive sale should be encouraged if circumstances
justify.”14 The term “forthwith” occurring in Rule 84 of Order XXI of the
Code of Civil Procedure has been explained by Nagpur High Court in the
matter of Madhao Narayanrao Ghatate Vs. Mt. Watsalabai w/o Ganpatrao
Deshmukh and another, reported in AIR (35) 1948 Nagpur 142, wherein it is
observed thus:
“In all cases where the word “forthwith” occurs, it
must ordinarily be understood to mean “within a
reasonable time”. (See Maxwell’s Interpretation of
Statutes Edn. 8, p. 351, where the following passageoccurs:
“When a statute requires that something shall be
done “forthwith”, or “immediately”, or even“instantly”, it would probably be understood as
allowing a reasonable time for doing it.”15 Reliance can also be placed on the observations made by the
Apex Court in the matter of Manilal Mohanlal Shah & others Vs. Sardar Sayed
Ahmed Sayed Mahmad & another, reported in AIR 1954 SC 349:
“The provisions of O.21 Rules 84, 85 and 86
requiring the deposit of 25 per cent of the purchase-
money immediately, on the person being declared as a
purchaser, such person not being a decree holder, 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::: Downloaded on – 09/06/2013 15:54:56 :::
8stranger purchaser without depositing 25 per cent of the
purchase-money in the first instance and the balancewithin 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 resell the
property (Rule 86) in the event of a default shows thatthe previous proceedings for sale are completely wiped
out as if they do not exist in the eye of law. 16 Cal 33,
Overruled; Remark in AIR 1931 Lah 15, Not approved.”
16 It is well established that Rule 84 does not lay down
requirement of issuing fresh proclamation before conducting resale. What is
contemplated by Rule 84 of Order XXI is that on failure of purchaser to
deposit 25% of the amount immediately i.e. in the event of sale rendering
abortive, the property shall be forthwith resold and in the instant matter also,
having found that Sitaram Purohit, who had offered highest price, failed to
deposit 25% of the amount, the property was resold to Respondent No.2.
17 Learned Counsel appearing for the petitioner has placed
heavy reliance on the judgment of this Court in the matter of Jagdish
Radhakisan Kayasth Vs. Ramesh N. Wagh & others, reported in 2001 (3)
Bom.C.R. 276. In the reported matter, the prospective purchaser, whose bid
was for an amount of Rs.91,000/-, had failed to deposit the amount on the
date of conduct of auction and his request for extension of time was also
rejected by the executing Court on the same day. He, however, deposited
the amount on next day with the executing court. On the next day, there
were two offers made by third parties, one for an amount of Rs.3,50,000/- and
another for an amount of Rs.2,50,000/-. The executing Court allowed the third
::: Downloaded on – 09/06/2013 15:54:56 :::
9
party, namely Ramesh Choube to deposit Rs.3,50,000/- on or before
04.01.1999 by way of security to establish his bona fides. The executing Court
passed an order to the effect that considering price of the property as
contended by judgment debtor to be Rs.7,00,000/-, in order to safeguard his
interest, prayer of judgment debtor was accepted and property was kept for
resale on 04.12.1999 at the cost of judgment debtor. It is further made clear in
the order that if no sale takes place on the given date, the offer of third
party would be confirmed. On failure of third party to deposit amount, the
offer of first auction purchaser will be considered. It further transpires that
Ramesh Choube, who offered to deposit amount of Rs.3,50,000/-, had failed
to deposit the amount and as such, auction in favour of first purchaser had
been confirmed for an amount of Rs.91,000/-. In these circumstances,
judgment debtor approached the Court contending that on failure of first
auction purchaser to deposit the amount on given date, as contemplated by
Rule 84 of Order XXI of the Code of Civil Procedure, the auction proceedings
were rendered null and void and in the eye of law there is no sale of the
property. It was not open for the executing Court to accept the offer of first
auction purchaser on deposit of amount on next day when on earlier day,
the executing Court refused to extend time. In the reported matter, with a
view to examine bona fides of the judgment debtor, the Court permitted him
to bring a prospective purchaser who would be willing to deposit highest
price. Accordingly, one Rahul Pethe offered to purchase the property for Rs.
3,50,000/- and in fact deposited sum of Rs.1,50,000/- in the Court. He also
undertook to deposit further balance sum of Rs.2,00,000/- in the event of
acceptance of his bid. In these circumstances, this Court thought it fit to
examine the case put up by judgment debtor. One thing, that is required to
be taken into account, is that there is a vast difference between offer made
by first auction purchaser and offer made before this Court in pending
::: Downloaded on – 09/06/2013 15:54:56 :::
10
petition. The difference is more than 3 / 4 times. In the instant matter,
petitioner could bring a prospective purchaser who was willing to offer
additional sum of approximately Rs.39,000/-. Considering the facts of instant
case, ratio laid down in the reported judgment cannot be made applicable.
This Court, while causing interference in the reported matter, has taken into
account provisions of Rule 84 of Order XXI of the Code of Civil Procedure. In
the reported matter, the prospective purchaser failed to deposit 25% of the
amount on the day of conduct of sale and his prayer for extension of time
was turned down. It was, therefore, obligatory for the executing Court to
resale the property as mandated by Rule 84. However, instead of adopting
permissible course, the executing court permitted first auction purchaser to
deposit the amount on the next day and same is not permissible in terms of
Rule 84. In paragraph 24 of the judgment, this Court has observed thus:
“If the auction purchaser fails to deposit 25% of
the purchase money as required, the officer conductingsale has no authority to extend time for such deposit and
in default of such deposit the officer or the person
conducting the sale has to put the property to resale
and has to continue with the auction sale. There is a
reason behind such deposit. Failure to deposit 25% ofthe purchase money results in automatic cancellation of
sale of the property and the same is required to be put
to resale forthwith so as to avoid further loss of time and
expenses involved for re-proclamation and republication
of such auction sale. The purpose is not only to save
money and time but to realise the sale proceeds of theproperty as expeditiously as possible so as to realise the
fruits of the decree.”
18 Learned Single Judge, while dealing with the matter, has
further observed in paragraph 26 of the judgment that:
::: Downloaded on – 09/06/2013 15:54:56 :::
11
“Having found that the auction sale dated
12.12.1999 was null and void, acceptance of the entire
amount of Rs.91,000/- on the next day by the ExecutingCourt, by no stretch of imagination, can be said to be
legal and valid, as Respondent No.2 auction purchaser
was never declared to be the successful purchaser as
contemplated under Rule 84(1).”
In the subsequent paragraph, this Court has also taken into
account failure of third party i.e. Ramesh Choube to deposit amount of Rs.
3,50,000/-. The executing Court, in the reported judgment, on account of
failure of third party to deposit amount offered i.e. Rs.3,50,000/-, proceeded
to confirm the sale in favour of first auction purchaser for Rs.91,000/-. This was
found by the learned Single Judge to be irregularity and therefore, this Court
proceeded to quash the auction also on account of failure of the executing
court to extend an opportunity of hearing to the judgment debtor.
19 In the given set of facts of instant matter, the executing Court
has acted in consonance with Rule 84 of Order XXI of the Code of Civil
Procedure. On failure of the first bidder to deposit amount, the property was
immediately resold to Respondent No.2 and the executing court, on request
made by Respondent No.2 because of closure of transactions of the Court
on the given date, permitted him to deposit amount on the next day. In the
given set of facts, considering mandate of the Apex Court in Manilal’s case
(cited supra), I am of the view that procedure adopted by executing court
is legal and proper and do not call for any interference. Instant petition is
devoid of substance.
::: Downloaded on – 09/06/2013 15:54:56 :::
12
20 In the result, Petition stands dismissed. Interim relief stands
vacated. Rule discharged. In the facts and circumstances of the case, there
shall be no order as to costs.
(R.M.BORDE)
JUDGE
*******
adb/wp410409a
::: Downloaded on – 09/06/2013 15:54:56 :::