Supreme Court: Once Limitation Period For Application Under Order XXI Rule 99 CPC Lapses, Person Can’t File Separate Suit To By-Pass Prescribed Period
The Supreme Court said that when a party other than the Judgment-debtor, including a third party, is dispossessed during the course of execution of a decree, the only remedy for such a dispossessed party would lie in filing an application under Rule 99 complaining of its dispossession.
Justice J.B. Pardiwala, Justice R. Mahadevan, Supreme Court
The Supreme Court held that once the period of limitation for preferring an Application under Rule 99 of the Civil Procedure Code, 1908 (CPC) lapses, the person who has been dispossessed in the course of the execution of the decree, including a third party, cannot file a separate suit to circumvent or by-pass the said prescribed period of limitation.
The Court held thus in a Civil Appeal arising from the Judgment of the Punjab and Haryana High Court by which the second Appeal was dismissed and the Judgment of the Appellate Court was affirmed.
The two-Judge Bench comprising Justice J.B. Pardiwala and Justice R. Mahadevan observed, “The words “may” used in Rule 99 along with the words “and not by a separate suit” used in Rule 101, must not be read to mean that a party who has been dispossessed has two options i.e., to either prefer an application under Rule 99 or to file a separate suit, the moment they are dispossessed. This would defeat the underlying object of the amendment made to the scheme of Rules 99 to 104 respectively wherein the executing court has been specifically empowered to look into the questions relating to the right, title and interest of the parties, quite akin to that which would have been done by way of a separate suit. Once the period of limitation for preferring an application under Rule 99 lapses, the person who has been dispossessed in the course of the execution of the decree, including a third party, cannot file a separate suit to circumvent or by-pass the said prescribed period of limitation.”
The Bench said that when a party other than the Judgment-debtor, including a third party, is dispossessed during the course of execution of a decree, the only remedy for such a dispossessed party would lie in filing an application under Rule 99 complaining of its dispossession and in such an application, all questions including that of the right, title, and interest of the parties in the proceeding, to the property, would be examined by the Executing Court.
Senior Advocate Vikas Singh appeared for the Appellants, while Senior Advocate Aparajita Singh appeared for the Respondents.
Court’s Observations
The Supreme Court in view of the facts and circumstances of the case, noted, “Rule 90 of Order XXI CPC provides that the sale shall be set aside if there exists any material irregularity or fraud in publishing or conducting the sale. Furthermore, such material irregularity or fraud must cause a substantial injury to the applicant under Rule 90. In other words, there must be a direct nexus between the material irregularity or fraud and the substantial injury caused to the applicant.”
The Court added that the words “material irregularity in publishing or conducting it” in Rule 90 CPC would include any material irregularity or fraud occurring at a stage prior to the proclamation of sale as well, provided that the applicant did not have an opportunity to raise or could not have raised such a grievance at the appropriate time.
“Furthermore, the mere absence of or any defect in the attachment, by itself, cannot be a ground for setting aside the sale under Rule 90, unless substantial injury is proved. The applicant must make specific averments as regards the alleged irregularities or fraud, and convince the executing court that a substantial injury has been caused to him as a consequence”, it said.
The Court was of the view that the absence of a saleable interest on the part of the Judgment-Debtor to the suit property cannot be brought in as a ground under Rule 90 of Order XXI CPC and such a ground would squarely fall within the ambit of Rule 58 of Order XXI CPC, if the sale is yet to be confirmed.
“Rule 102 prevents the executing court from passing any order under Rule 100 if it is found that the applicant under Rule 99 is a transferee pendente lite of the judgment-debtor. This again, cannot be construed as giving leeway to such a person to institute a separate suit. We say so for the simple reason that, even in the separate suit, the law would not look favorably upon a pendente lite transferee, and no relief of declaration of title and/or possession would be granted to him. His fate would be the same as under an application under Rule 99”, it observed.
The Court also emphasised that Courts must be vigilant as to when the Plaintiff is invoking grounds which otherwise could be said to fall under the scope of Rule 90 of Order XXI CPC and when the grounds raised by the Plaintiff are such that the entire execution proceedings and the consequent sale suffered from the want of jurisdiction and/or was a nullity.
Accordingly, the Apex Court allowed the Appeal, directed the Appellants to pay Rs. 75 lakhs to the Respondents, and directed the Registry to circulate one copy each of the Judgment to all the High Courts.
Cause Title- Danesh Singh & Ors v. Har Pyari (Dead) Thr. LRs. & Ors. (Neutral Citation: 2025 INSC 1434)
