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1972 Supreme(AP) 103
Andhra Pradesh High Court
Judges : K.MADHAVA REDDY
Midumolu Lakshminarasimha Rao - Appellant
Versus
Vemuru Saramma - Respondent
Decided On : 07-04-72
Poundage fee forms part of expenses or costs incurred and must be paid by a person who seeks to apply under Rule 5 of Order 34, Civil P. C.
Headnote:
POUNDAGE FEE - MORTGAGE DECREE - ORDER 34, RULE 5, CIVIL P. C. - WHETHER POUNDAGE FEE SHOULD BE LEVIED BY THE COURT BEFORE SETTING ASIDE THE SALE HELD IN EXECUTION OF A DECREE FOR REDEMPTION - INTERPRETATION OF RULE 5 OF ORDER 34, CIVIL P. C. AND RULE 203 OF THE CIVIL RULES OF PRACTICE - HELD, POUNDAGE FEE FORMS PART OF EXPENSES OR COSTS INCURRED AND MUST BE PAID BY A PERSON WHO SEEKS TO APPLY UNDER RULE 5 OF ORDER 34.
Fact of the Case:
The appellant, who was the 13th defendant in the suit for a mortgage decree, purchased the decree for redemption passed in O. S. No. 60 of 1963 on the file of the Subordinate Judges court, Masulipatnam. The sale in execution of this decree was held in E. P. No. 33 of 1966 on 31. 7. 1967. A petition to set aside that sale, E. A. No. 194 of 1969 was filed under Order 34, Rule 5, Civil P. C. The executing court held that the appellant was not entitled to get the sale set aside without payment into court all the amounts due from him including poundage and subsequent costs and interest after the sale is set aside.
Finding of the Court:
The court held that the appellant was bound to pay the poundage fee for seeking to set aside the sale held in execution of the mortgage decree. The court interpreted Rule 5 of Order 34, Civil P. C. and Rule 203 of the Civil Rules of Practice and held that poundage fee forms part of expenses or costs incurred and must be paid by a person who seeks to apply under Rule 5 of Order 34.
Issues: Whether poundage fee should be levied by the court before setting aside the sale held in execution of a decree for redemption.
Ratio Decidendi: The court relied on the following principles: * Rule 5 of Order 34, Civil P. C. lays down that only when the defendant makes payment of all amounts due under sub-rule (1) of R. 4 that the court is empowered where the mortgage property is sold in accordance with sub-rule (3) of Rule 5 of Order 34 to make an order setting aside the sale. * Rule 4 (1) of Order 34, Civil P. C. enjoins that the defendant making the application under Rule 5 is bound to pay the subsequent costs, charges and expenses and interest. * Poundage fee is an expense of sale held by the court and forms part of costs and expenses of the sale. * The A. P. Court fees and suits Valuation act, 1956, Rule 3 prescribes that in respect of sales, whether conducted by the court or its officers a fee by way of poundage shall be levied on the purchase money for each lot separately.
Final Decision: The court dismissed both the appeals filed by the appellant. The appellant was directed to deposit the poundage fee within two months from the date of receipt of records in the lower court.
( 1 ) THE only question that arises for consideration in these two appeals is whether poundage fee should be levied by the court before setting aside the sale held in execution of a decree for redemption.
( 2 ) THE appellant, who is the 13th defendant in the suit for a mortgage decree, purchased the decree for redemption passed in O. S. No. 60 of 1963 on the file of the Subordinate Judges court, Masulipatnam. The sale in execution of this decree was held in E. P. No. 33 of 1966 on 31. 7. 1967. A petition to set aside that sale, E. A. No. 194 of 1969 was filed under Order 34, Rule 5, Civil P. C. The executing court held that the appellant was not entitled to get the sale set aside without payment into court all the amounts due from him including poundage and subsequent costs and interest after the sale is set aside. Accordingly the court directed the appellant to deposit the poundage fee by an order dated 26. 3. 1970. It is also directed against the appellate order confirming that order. By yet another order dated 24. 4. 1970 after the parties filed calculation memo, the court fixed the amount of poundage fee to be paid by the appellant. , On appeal that amount has been varied. As against that order C. M. S. A. No. 44 of 1971 is filed. In the executing court the appellant had also contended that he was entitled to counter interest on the amounts deposited by him pursuant to the conditional order or stay made by the appellate court.
( 3 ) IT is seen that whatever amount was deposited it was first deducted towards interest and the balance towards the principal from the date of deposit. Hence no question of payment of counter interest arises. That is what the lower court also held. The same contention that is raised in this court has therefore no merit.
( 4 ) THE only point that survives for consideration, on which both the courts below have held against the appellant is, whether the appellant is bound to pay the poundage fee for seeking to set aside the sale held in execution of the mortgage decree. In order to decide this question, it is necessary to read rule 5 of the Order 34, Civil P. C. which is as follows:-" 5 (1) Where on or before the day fixed or at any time before the confirmation of a sale made in pursuance of a final decree passed under sub-rule (3) of this rule, the defendant makes payment into courts of all amounts due from him under sub-rule (1) of the rule 4 of the court shall, on application made by the defendant in this behalf, pass a final decree, or, if such decree has been passed, an order (a) Ordering the plaintiff to deliver up the documents referred to in the preliminary decree, and, if necessary; (b) Ordering him to transfer the mortgaged property as directed in the said decree, and, also if necessary (c) Ordering him to put the defendant in possession of the property (2) Where the mortgaged property or part thereof has been sold in pursuance of a decree passed under sub-rule (3) of this rule, the court shall not pass an order under sub-rule (1) of this rule, unless the defendant, in addition to the amount mentioned in sub-rule (1) deposits in court for payment to the purchaser a sum equal to five per cent of the amount of the purchase money paid into court by the purchaser. Where such deposit has been made, the purchaser shall be entitled to an order for repayment of the amount of the purchase-money paid into court by him together with a sum equal to five percent, thereof. (3) Where payment in accordance with sub-rule (1) has not been made the court shall on application made by the plaintiff in this behalf pass a final decree directing that the mortgaged property or a sufficient part thereof he sold and that the proceeds of the sale be dealt with in the manner provided in sub-rule (1) of Rule 4. "thus that rule lays down that only when the defendant makes payment of all amounts due under sub-rule (1) of R. 4 that the court is empowered where the mortgage property is sold in accordance
