1. Application to set aside auction sale of mortgaged property under Order XXI Rule 89, CPC — Dispute over timing of payment and statutory deposits. (Para 2 )
Back
Next 
2018 Supreme(SC) 2084
SUPREME COURT OF INDIA
Rohinton Fali Nariman, Navin Sinha, JJ.
Vaithegi - Petitioner
Versus
Gurusamypillai & Anr. - Respondents
Civil Appeal No(S). 8/2018, (Arising from SLP (C) No.2506/2016)
Decided On : 04-01-2018
Important Points
Strict compliance with the requirements of Order XXI Rule 89 C.P.C. is necessary for setting aside a sale, emphasizing the importance of timely payment and deposit of the purchase money as conditions precedent.
Subject
Civil Law - Execution of Decrees and Orders
Act Referred
Headnote
Order XXI Rule 89 C.P.C. - Setting aside sale - [Mortgage Property Sale] - [Order XXI Rule 89 C.P.C.] - The court discussed the requirements of Order XXI Rule 89 C.P.C. and emphasized the need for strict compliance with the rule. The court highlighted the importance of timely payment and deposit of the purchase money and the conditions precedent for setting aside a sale under the rule. The court also referred to relevant case laws to support its interpretation of the rule and emphasized the strict construction of the provision.
Fact of the Case:
The defendant was directed to pay a sum of Rs.5,37,268/- pursuant to a final decree. The mortgaged property was sold in a court auction, and the appellant was the highest bidder. The judgment-debtor filed an application to set aside the sale under Order XXI Rule 89 C.P.C. claiming payment of the decree amount and deposit of 5% after the stipulated period. The High Court set aside the Subordinate Judge's order, and the appellant appealed.
Finding of the Court:
The court found that the judgment-debtor did not strictly comply with the requirements of Order XXI Rule 89 C.P.C. The court emphasized the need for timely payment and deposit of the purchase money as conditions precedent for setting aside a sale under the rule. The court also referred to relevant case laws to support its findings.
Issues: The main issue was whether the judgment-debtor had fulfilled the requirements of Order XXI Rule 89 C.P.C. for setting aside the sale of the mortgaged property.
Ratio Decidendi: The court held that strict compliance with the requirements of Order XXI Rule 89 C.P.C. is necessary, emphasizing the importance of timely payment and deposit of the purchase money as conditions precedent for setting aside a sale under the rule.
Final Decision: The court set aside the High Court's judgment and restored the order of the Subordinate Judge, Srivilliputtur, dated 18.11.2014. The appeal was allowed in favor of the appellant.
Legal Category Hierarchy
Advocates Appeared:
For the Petitioner: Mr. Ajmal Khan, Sr.Adv., Mr. A. Lakshminarayanan, Adv., Mr. Aravindh S., AOR
For the Respondents: Mr. V. Ramasubramanian, AOR
For the Petitioner: Mr. Ajmal Khan, Sr.Adv., Mr. A. Lakshminarayanan, Adv., Mr. Aravindh S., AOR
For the Respondents: Mr. V. Ramasubramanian, AOR
Table of Contents
2. Strict compliance with Order XXI Rule 89 regarding deposit timelines versus validity of direct payment to decree-holder and delayed deposits under court order. (Para 4 , 5 )
3. Order XXI Rule 89 is a concession requiring strict compliance; undated receipts cannot prove timely payment; delayed deposits without court orders are invalid. (Para 6 , 7 )
4. Order XXI Rule 89, CPC must be strictly construed, requiring the entire specified amount and 5% deposit within 60 days of the sale. (Para 6 )
5. Appeal allowed — High Court judgment set aside — Order of the Subordinate Judge restored. (Para 8 )
6. How should the provisions of Order XXI Rule 89 of the Code of Civil Procedure be construed?
Order XXI Rule 89 is a concession granted to the judgment-debtor and must be strictly construed. A sale will not be set aside unless the entire specified amount is deposited within 60 days from the date of sale. (Para 6 )
7. Does direct payment to a decree-holder satisfy the requirements of Order XXI Rule 89 if the evidence is an undated receipt?
No. If the only evidence of direct payment is an undated receipt, it cannot be concluded that the payment was made within the mandatory 60-day period required to set aside the sale. (Para 7 )
8. Can a deposit of 5% of the purchase money made after 60 days be considered valid?
Such a deposit is generally invalid unless there was a specific court order directing the payment beyond the 60-day period. (Para 7 )
ORDER :
1. Leave granted.
2. Pursuant to a final decree dated 3rd January, 2007, the defendant was directed to pay a sum of Rs.5,37,268/-. If any such payment is made, the decree further went on to state that the mortgaged property or a sufficient part thereof shall be directed to be sold. Since, within the time stipulated, no such payment was made, by an order dated 15th February, 2008 a sale was directed of the mortgaged property. This took place on 18th November, 2011 in a Court auction, in which the appellant was the highest bidder at Rs.5,02,000/-. An application under Order XXI Rule 89 C.P.C. was filed on 23rd January, 2012 by the judgment-debtor in which it was stated that the sum of Rs.7,00,000/-covering the entire amount had been paid directly to the creditor on 21st December, 2011. On these facts, the learned Subordinate Judge, Srivilliputtur, by an order dated 18th November, 2014, dismissed the aforesaid application stating:-
“Point:7) Admittedly in execution petition NO.83/2008, the property was brought for sale and in the court auction dated 18.11.11, the present 2nd respondent has become a successful bidder and she has purchased the property for Rs.5,02,000/-and even on the same day, she has deposited 1/4th amount with boundage and the remaining sale consideration was deposited by her on 25.11.11.
8) On the other hand, the present petitioner who is the judgment-debtor has filed this application on 23.1.2012. The said application has been filed beyond 60 days. Even otherwise the petitioner who wants to set aside the sale under Order 21 Rule 89 C.P.C. has to deposit 5% of the sum equal to the purchase money. It is a condition precedent for entertaining an application under Order 21 Rule 89 C.P.C. Admittedly from the perusal of the records, the present petitioner has deposited the said amount of 5% with boundage only on 3.4.12 for the said delay there is no exercise and in fact it cannot be excused P.W.1 and P.W.2 have stated in their oral evidence that they have reached a compromise out of court and the 1st respondent has executed Ex.P1 to the petitioner. Admittedly the said Ex.P1 has been filed into the Court only on 23.1.2012 which is subsequent to 60 days from the date of Court auction sale. Moreover, in Ex.P1 there is no date mentioned in respect of the execution of the said receipt. Furthermore, the said decree amount has not been deposited into the Court which is also a condition precedent. In these aspects, P.W.1 and 2 have contradictorily stated about the date of execution of Ex.P1.”
3. In a revision petition filed before the Madras High Court, the impugned judgment dated 9th July, 2015 has set aside the aforesaid judgment of the learned Subordinate Judge as follows:-
“10. In the case on hand, it is not disputed that within the stipulated period of one month from the date of final bid in Court, the petitioner-judgment-debtor paid the decree amount to the decree-holder and also filed a memo for setting aside the sale in the form of objections. The executing court noted this aspect. By this payment the requirement under Rule 89(1)(b) of Order 21 was fulfilled. It is also noted that the Respondent 1-auction-purchaser refused to accept the solatium and he subsequently filed an application for confirmation of sale. Meanwhile, the executing Court ordered for the deposit of solatium with the Court. This deposit complied with the second requirement under Rule 89(1)(a) of Order 21.”
4. Learned counsel appearing on behalf of the appellant has argued before us that Order XXI Rule 89 has to be strictly observed and the High Court was incorrect in interfering with the learned Subordinate Judge's order inasmuch as it it clear that neither was the principal amount deposited in Court nor was any date mentioned on the only document, namely, Receipt (Exhibit P1) which evidenced payment of Rs.7,00,000/-. Further, admittedly 5% was deposited in Court only on 3rd April, 2012 i.e. long after the period of 60 days. In this
