IMPORTANT POINT
No holder of a decree in execution of which property is sold can without the excess permission of the Court, bid for or purchase the property.

ORDER

Leave granted. We have heard learned counsel on both sides.

2. This appeal by special leave arises from the judgment of the High Court of Allahabad, made on November 9, 1995 in Civil Miscellaneous Writ Petition No. 2680/89.

3. The admitted position is that the plaintiff-respondent had entered into an agreement with the appellant to purchase 43 decimals of land in plot No. 389/2 situated in Umraha, District Varanasi for a sum of Rs. 6625/-. A sum of Rs. 2000/- was paid as earnest amount while the balance amount had already been paid in the form of loan. The respondent filed the suit seeking specific performance of the agreement, which relief ultimately was refused; but a decree for refund of the earnest money was granted. Since the amount was not paid, the respondent had brought the properties of the appellant, to the extent of one acre, 52½ decimals to sale. The same came to be questioned by filing of an objection under Order XXI, Rule 90, CPC which was dismissed by the court below and upheld by the High Court. Thus, this appeal by special leave.

4. Two questions have arisen in this case, namely, whether the auction was properly conducted by the executing court and whether the respondent-decree holder was entitled to participate in the auction to bid and had the sale confirmed in that behalf ? It is not in dispute that the land, viz., plot Nos. 24 and 25 of admeasuring 1 acre 19-½ decimals and plot No. 50-A admeasuring 33 decimals totalling 1 acre 52-½ decimals was brought to sale to realise the decreetal amount of Rs. 10,921-50. The court fixed the valuation at Rs. 11,000/-. On a sale conducted by Amin of the court, the bid was knocked down on April 30, 1983 in favour of the respondent-decree holder for a sum of Rs. 12,000/-. As stated earlier, the question has arisen whether the sale conducted in execution of the decree is valid in law ? Order XXI, Rule 72, CPC envisage as under :

"72. Decree-holder not to bid for or buy property without permission.-(1) No holder of a decree in execution of which property is sold shall, without the express permission of the court, bid for or purchase the property.

Where decree-holder purchases, amount of decree may be taken as payment.-(2) Where a decree-holder purchases with such permission, the purchase-money and the amount due on the decree may, subject to the provisions of Section 73, be set off against one another, and the Court executing the decree shall enter up satisfaction of the decree in whole or in part accordingly.

(3) Where a decree-holder purchases, by himself or through another person, without such permission, the Court may, if it thinks fit, on the application of the judgment-debtor or any other person whose interests are affected by the sale, by order set aside the sale; and the costs of price which may happen on the re-sale and all expenses attending it, shall be paid by the decree-holder."

5. A reading thereof clearly indicates that no holder of a decree in execution of which property is sold shall, without the express permission of the Court, bid for or purchase the property. In the event of such a purchase, on an application by the judgment-debtor or any other person whose interests are affected by such a sale, set aside such a sale. In paragraph 13 of the petition, the appellant has stated, among others, thus :

"After the said auction sale, the judgment-debtor filed an objection under Order XXI, Rule 90, CPC mainly on the following grounds in the Court of Munsif Havali, Varanasi :

(i) The decree-holder purchase the said land through auction without the permission of the Court;"

6. In the counter-affidavit filed by the respondent, he has not specifically denied in that behalf except stating that it is a matter of record. The proceedings of the auction do indicate that if he was really the person permitted to participate in the bid, one would necessarily expect an active participation in the auction. But the proce