Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 619 OF 2023
(@ SLP(C) NO. 15635 OF 2016)
Gas Point Petroleum India Limited ...Appellant(S)
Versus
Rajendra Marothi & Ors. ...Respondent(S)
J U D G M E N T
M. R. Shah, J.
1. Feeling aggrieved and dissatisfied with the impugned
judgment and order dated 29.04.2016 passed by the High
Court of Madhya Pradesh Principal Seat at Jabalpur in
W.P. No. 3342/2015, by which, the High Court has
allowed the said writ petition preferred by respondent No.
1 herein and has set aside the order passed by the lower
Appellate Court and has restored the order passed by the
Executing Court with respect to the property in question,
Signature Not Verified
Digitally signed by R
Natarajan
Date: 2023.02.10
16:41:43 IST
Reason:
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the original respondent No. 1 – objector before the
Executing Court has preferred the present appeal.
2. The facts leading to the present appeal in a nutshell are as
under:
2.1 There was a dispute between National Ginni Enterprises
and Smt. Gayatri Agrawal with respect to the L.P.G. gas
agreement. A civil suit No. 07A/98 was filed by the said
Smt. Gayatri Agrawal against the National Ginni
Enterprises. The learned 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
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judgment debtor. Accordingly, a declaration was made
and property was auctioned and sold on 03.11.2011 in
favour of respondent No. 1 herein. The appellant herein –
original respondent No. 1 filed objection before the
Executing Court, contending, interalia , that the property
was purchased by him from judgment debtor on
31.08.1999 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 learned Executing Court overruled
the objections and rejected the application under Order 21
Rule 90 by order dated 23.01.2013. The appellant flied
miscellaneous civil appeal before the Court of Additional
District Judge, Damoh being Misc. Civil Appeal No.
12/2013. The lower Appellate Court allowed the said
appeal and set aside the order of Executing Court dated
23.01.2013 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
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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
herein – original respondent No. 1 has 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.
2.2 Feeling aggrieved and dissatisfied with the judgment and
order passed by the High Court, the original respondent
No. 1 has preferred the present appeal.
3. Shri Ravindra Shrivastava, learned Senior Advocate has
appeared on behalf of the appellant and Shri Sanjay K.
Agrawal, learned counsel has appeared on behalf of
respondent No. 1.
4. Shri Ravindra Shrivastava, learned Senior Advocate
appearing on behalf of the appellant has vehemently
submitted that in the facts and circumstances of the case
the High Court has committed a serious error in allowing
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the writ petition and quashing and setting aside the well
reasoned order passed by the lower Appellate Court.
4.1 It is submitted that in the present case there was breach of
Order 21 Rule 64 and Order 21 Rule 84/85 of CPC and
therefore, due to noncompliance of the aforesaid
provisions the sale has been vitiated.
4.2 It is submitted that in the present case the property in
question was put to auction on 18.10.2011 and therefore,
the auction purchaser was required to deposit 25% of sale
amount immediately. It is submitted that in the present
case the auction purchaser deposited 25% of the amount
on 03.11.2011. It is submitted that therefore there is a
noncompliance of Order 21 Rule 84 of CPC. It is further
submitted that the balance sale consideration (75%) was
required to be deposited by the auction purchaser within a
period of fifteen (15) days from the date of auction. It is
submitted that in the present case balance 75% of the sale
consideration was deposited by the auction purchaser on
04.11.2011. It is submitted that therefore there is also a
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violation of Order 21 Rule 85 of CPC. Relying upon Order
21 Rules 64, 84, 85 and 86 and relying upon the decisions
of this Court in the cases of
Manilal Mohanlal Shah and
Ors. Vs. Sardar Sayed Ahmed Sayed Mahmad and Anr.;
(1955) 1 SCR 108 and Rosali V. Vs. Taico Bank and
Ors.; (2009) 17 SCC 690, it is prayed to allow the present
appeal.
4.3 It is further submitted by learned Senior Advocate
appearing on behalf of the appellant that even otherwise
the High Court has not properly appreciated the fact that
the property in question was purchased by the appellant
on 31.08.1999 from the judgment debtor and at that time
the property in question was not the subject matter of civil
suit. It is submitted that civil suit was filed for specific
performance of the L.P.G. gas agreement. It is submitted
that even injunction dated 18.05.1999 was not the subject
matter of property in question. It is submitted that when
the property in question was put to auction by the
Executing Court on 18.10.2011/03.11.2011 much prior
thereto the appellant purchased the property on
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31.08.1999. It is submitted that therefore at the time when
the property was auctioned the judgment debtor was not
the owner of the property in question, which as such was
purchased by the appellant by the registered sale deed on
31.08.1999. It is submitted that therefore the High Court
has committed a very serious error in observing that the
appellant purchased the property despite the injunction
granted by the Trial Court on 18.05.1999 and that the
appellant cannot be permitted to raise the objection as the
appellant has purchased the property despite the
injunction.
4.4 Making the above submissions and relying upon the above
decisions, it is prayed to allow the present appeal.
5. Present appeal is vehemently opposed by Shri Sanjay
Agrawal, learned counsel appearing on behalf of
respondent No. 1 herein – auction purchaser.
5.1 It is submitted by learned counsel appearing on behalf of
respondent No. 1 that in the facts and circumstances of
the case no error has been committed by the High Court in
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restoring the order passed by the learned Executing Court
and overruling the objections raised by the appellant
herein – objector.
5.2 It is submitted that on true interpretation of Order 21 Rule
90 the High Court has rightly refused to set aside the sale
on the alleged violation of Order 21 Rule 64 and Order 21
Rule 84/85. It is submitted that the appellant purchased
the property in question during the pendency of the suit
and the injunction dated 18.05.1999 was in operation. It is
submitted that therefore the appellant shall not be entitled
to raise any objection thereafter and pray to set aside the
sale on the ground that the property in question was
purchased by it. It is submitted that therefore, the High
Court has rightly observed that since, in the civil suit a
temporary injunction was granted by the Trial Court on
18.05.1999 and by that time the property was not
purchased by the appellant herein there was no question
of putting the appellant to notice.
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5.3 It is further submitted that even the alleged non
compliance of Order 21 Rule 64, Order 21 Rule 84 and 85
were not raised before the Executing Court and therefore,
the High Court has rightly observed that the same cannot
be permitted to be raised subsequently.
5.4 Making the above submissions it is prayed to dismiss the
present appeal.
6. We have heard learned counsel appearing on behalf of the
respective parties at length.
7. While appreciating the submissions on behalf of the
respective parties the chronological dates and events are
required to be considered which are as under:
7.1 In the year 1998, the decree holder filed a suit for specific
performance of the L.P.G. gas agreement;
7.2 The civil suit was not with respect to the property in
question. An interim injunction application was filed by
the original plaintiff. It was apprehended that the
defendants were trying to leave Damoh after selling and
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transferring their firm, namely, National Gini Enterprises,
to any other person. The application was filed under Order
38 CPC as well as for permanent injunction. By order
dated 18.05.1999 the learned Trial Court directed to
maintain status quo. The learned Trial Court also directed
that if the defendants transfer their firm Ginni Enterprises
to any other person then they would not transfer the same
against the interest of the plaintiff. That thereafter the
decree came to be passed on 30.09.1999 directing the
defendants – judgment debtor – Ginni Enterprises to
supply LPG gas and in the alternative to pay 2,38,450/ +
Rs. 23,500/ (sic). As the decree was not executed the
decree holder filed the execution proceeding. In the
execution proceeding the property in question was put to
auction for recovery of Rs. 2,38,450/ + Rs. 23,500/ (sic).
The property was put to auction on 18.10.2011. The
auction purchaser – respondent No. 1 herein deposited
25% of the amount on 03.11.2011 and deposited balance
75% of the amount on 04.11.2011. In light of above factual
scenario, submissions on behalf of the respective parties,
more particularly, submission on behalf of the appellant
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on noncompliance of Order 21 Rules 64, 84 and 85 are
required to be considered.
7.3 While considering the issue involved in the present appeal
with respect to noncompliance of the relevant provisions
of CPC, the relevant provisions of the CPC are required to
be referred to, namely, Order 21 Rules 64, 84, 85 and 86,
which read as under:
“Order 21 – Execution of Decrees and Orders
Rule 64. Power to order property attached to be sold
and proceeds to be paid to person entitled .— Any Court
executing a decree may order that any property attached
by it and liable to sale, or such portion thereof as may
seem necessary to satisfy the decree, shall be sold, and
that the proceeds of such sale, or a sufficient portion
thereof, shall be paid to the party entitled under the
decree to receive the same.
Rule 84. Deposit by purchaser and resale 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 twentyfive per cent on the
amount of his purchasemoney to the officer or other
person conducting the sale, and in default of such
deposit, the property shall forthwith be resold.
(2) Where the decreeholder is the purchaser and is
entitled to setoff the purchasemoney under Rule 72, the
Court may dispense with the requirements of this rule.
Rule 85. Time for payment in full of purchasemoney.
— The full amount of purchasemoney payable shall be
paid by the purchaser into Court before the Court closes
on the fifteenth day from the sale of the property:
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Provided, that, in calculating the amount to be so paid
into Court, the purchaser shall have the advantage of any
setoff to which he may be entitled under Rule 72.
Rule 86. Procedure in default of payment.— In default
of payment within the period mentioned in the last
preceding rule, the deposit may, if the Court thinks fit,
after defraying the expenses of the sale, be forfeited to the
Government, and the property shall be resold, and the
defaulting purchaser shall forfeit all claim to the property
or to any part of the sum for which it may subsequently
be sold.”
7.4 As per Order 21 Rule 84, on every sale of immovable
property the person declared to be the purchaser shall pay
immediately after such declaration deposit of twentyfive
per cent on the amount of his purchasemoney and in
default of such deposit, the property shall forthwith be re
sold.
7.5 As per Order 21 Rule 85, 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. Thus, as per the aforesaid provisions, the
purchaser has to deposit 25% of the sale amount
immediately on declaring to be the purchaser and the full
amount of the purchasemoney shall have to be paid by
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the purchaser into the Court before the Court closes on
fifteenth day from the sale of the property.
7.6 In the present case admittedly the purchaser – respondent
No. 1 deposited 25% of the amount on 03.11.2011 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.e., 18.10.2011. Even the balance 75%
of the amount has not been deposited as required under
Order 21 Rule 85. The full amount of the purchasemoney
in the present case has been deposited on 04.11.2011 i.e.,
after the period prescribed/provided under Order 21 Rule
85. Therefore, there is noncompliance of Order 21 Rule 84
and Rule 85 of CPC.
8. In light of the aforesaid facts, few decisions of this Court
on Order 21 Rules 84 and 85 are required to be referred to
and considered.
8.1 In the case of Manilal Mohanlal Shah (supra), it is
observed and held that the provision regarding the deposit
of 25% of the amount by the purchaser other than the
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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. In paragraph 8 of the decision,
it is observed and held as under:
“8. The provision regarding the deposit of 25 per cent by
the purchaser other than the decreeholder is mandatory
as the language of the Rule suggests. The full amount of
the purchase money must be paid within fifteen days
from the date of the sale but the decreeholder is entitled
to the advantage of a setoff. The provision for payment is,
however, mandatory…. (Rule 85). 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. A further consequence of nonpayment is
that the defaulting purchaser forfeits all claim to the
property.… (Rule 86).”
8.2 The decision of this Court in the case of Manilal Mohanlal
Shah (supra) fell for consideration before this Court in the
subsequent decision in the case of In
Rosali V. (supra).
the said decision this Court interpreted the word
“immediately” in Order 21 Rule 84. In the said decision,
this Court considered paragraph 11 of the decision in the
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case of Manilal Mohanlal Shah (supra) in paragraph 20 as
under:
“20. What would be the meaning of the term
“immediately” came up for consideration before this
Court, as noticed hereinbefore, in Manilal Mohanlal
Shah [AIR 1954 SC 349] wherein it was held : (AIR pp.
35152, para 11)
“11. Having examined the language of the
relevant rules and the judicial decisions
bearing upon the subject we are of opinion that
the provisions of the rules requiring the deposit
of 25 per cent of the purchase money
immediately, on the person being declared as a
purchaser and the payment of the balance
within 15 days of the sale are mandatory and
upon noncompliance with these provisions
there is no sale at all. The rules do not
contemplate that there can be any sale in
favour of a purchaser without depositing 25
per cent of the purchase money in the first
instance and the balance within 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.
Nonpayment 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
in the event of a default shows that the
previous proceedings for sale are completely
wiped out as if they do not exist in the eye of
the law. We hold, therefore, that in the
circumstances of the present case there was no
sale and the purchasers acquired no rights at
all.”
8.3 Applying the law laid down by this Court in the aforesaid
decisions to the facts of the case on hand, it is evident that
there is noncompliance of mandatory provisions of Order
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21 Rule 84 and Order 21 Rule 85 and therefore, the sale
was vitiated.
9. Even otherwise, it is required to be noted that the
appellant herein purchased the property in question much
before the auction of the property i.e., 31.08.1999. At the
relevant time the property in question was not the subject
matter of suit. As observed hereinabove, the subject matter
of suit was specific performance of the L.P.G. gas
agreement and even the adinterim injunction dated
18.05.1999 was also against the transfer of firm Ginni
Enterprises to any other person and the defendants were
directed to maintain status quo with respect to their firm
Ginni Enterprises. Therefore, at the time when the
property in question was put to auction on 18.10.2011 the
appellant had already purchased the said property as far
as back on 31.08.1999 as there was no injunction with
respect to the said property while adinterim injunction
dated 18.05.1999 and as observed hereinabove, the
property in question was not the subject matter of suit and
the decree came to be passed on 30.09.1999 and the
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property was put to auction in the year 2011 for recovery
of sum of Rs. 2,38,450/ + Rs. 23,500/ (sic). The ad
interim injunction dated 18.05.1999 cannot be pressed
into service against the appellant. Therefore, the High
Court has committed an error in considering injunction
dated 18.05.1999 against the appellant. Therefore, at the
time when the property was put to auction on 18.10.2011,
the judgment debtor was not the owner and therefore, the
same could not have been put to auction. Under the
circumstances, learned 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
31.08.1999.
10. In view of the above and for the reasons stated above, the
impugned judgment and order passed by the High Court
deserves to be quashed and set aside and is accordingly
quashed and set aside and consequently the order passed
by the Executing Court overruling the objections raised by
the appellant also deserves to be quashed and set aside
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and is quashed and set aside. The order passed by the
lower Appellate Court is hereby restored. It will be open for
respondent No. 1 to get back the amount deposited by
him, lying with the Executing Court. Present appeal is
accordingly allowed. In the facts and circumstance of the
case there shall be no order as to costs.
…………………………………J.
(M. R. SHAH)
…………………………………J.
(C.T. RAVIKUMAR)
NEW DELHI,
FEBRUARY 10, 2023.
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