Non-Compliance Of Order XXI Rule 84 & Rule 85 Has Effect Of Vitiating Auction Sale- SC Reiterates
The Supreme Court reiterated that non- compliance of the mandatory period provided under Order 21 Rule 84 and Order 21 Rule 85 had the effect of vitiating the auction sale.
The Bench of Justice MR Shah and Justice C.T. Ravikumar was hearing a Civil Appeal filed against the impugned judgment of the Madhya Pradesh High Court wherein the Writ Petition filed against the order of Lower Appellate Court was allowed on the ground that the appellant had failed to plead and establish the nature of irregularity or fraud committed in sale and therefore, no fault could be found in the order of the Executing Court.
Aggrieved and dissatisfied with the judgment passed by the High Court, the appellant had preferred the present appeal.
Senior Advocate Ravindra Shrivastava appeared for the appellant and Advocate Sanjay K. Agarwal appeared for the respondent no. 1.
A suit was filed with regard to specific performance of an LPG gas agreement between National Ginni Enterprises and Gayatri Agrawal, wherein ad-interim injunction was granted and the judgment debtor was directed to maintain status quo with respect to his firm Ginni Enterprises.
It was contended by the appellant that he was the owner of the property and was in continuous possession of the property since 1999 as the property in question was purchased by the appellant from the judgment debtor by registered sale deed. It was also contended that the property in question was not the subject matter of civil suit against the judgment debtor and therefore, the injunction was not ordered with respect to the property in question..
The Apex Court observed that the ad-interim injunction could not be pressed into service against the appellant and at the time when the property was put to auction on in 2011, the judgment debtor was not the owner and therefore, the same could not have been put to auction.
Moreover, with regard to auction sale, the Apex Court noted that there was non-compliance of Order 21 Rule 84 and Rule 85 of CPC as the purchaser – respondent No. 1 did not deposit 25% of the amount as required under Order 21 Rule 84 immediately and even the balance 75% of the amount had not been deposited within 15 days of the auction as required under Order 21 Rule 85.
The Apex Court relied upon the decision of Apex Court in the case of Manilal Mohanlal Shah and Ors. Vs. Sardar Sayed Ahmed Sayed Mahmad and Anr.; (1955) 1 SCR 108 wherein it was held that “the provision regarding the deposit of 25% of the amount by the purchaser other than the decreeholder is mandatory and the full amount of the purchase money must be paid within fifteen days from the date of the sale. It is further observed and held that if the payment is not made within the period of fifteen days, the Court has the discretion to forfeit the deposit, and there the discretion ends but the obligation of the Court to resell the property is imperative.”
“It is evident that there is noncompliance of mandatory provisions of Order 21 Rule 84 and Order 21 Rule 85 and therefore, the sale was vitiated.” observed the Court.
Therefore, the Apex Court observed that the High Court had committed an error in considering injunction against the appellant and the Executing Court had erred in overruling the objections raised by the appellant against the auction/sale of the property which the appellant had purchased much prior to the date of the auction.
Accordingly, the appeal was allowed.
Cause Title- Gas Point Petroleum India Limited v. Rajendra Marothi & Ors