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2024 Supreme(AP) 1089

IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATHI
Ravi Nath Tilhari, J.
Godithi Veera Prasad, S/o. Venkata Rao – Petitioner
Versus
Chundru Srinivasu, S/o. Kondala Rao – Respondent
Civil Revision Petition Nos.3291 & 3292 of 2023, Civil Revision Petition No.1154 OF 2023
Decided On : 20-03-2024

Advocates:
Advocate Appeared:
For the Petitioner: Sri Mangena Sree Rama Rao

IMPORTANT POINT
The court ruled that failure to deposit the mandatory 25% bid amount in a court auction renders the sale void, necessitating a resale, and coercive measures against the auction purchaser are not permissible.

Headnote:

(A) Code of Civil Procedure, 1908 - Order XXI, Rules 84, 85, and 86 - Court auction - Defaulting auction purchaser failed to deposit 25% of the bid amount immediately after the auction - Court cannot compel deposit post-auction or take coercive measures without a resale - The auction purchaser's rights are not established until the deposit is made as per mandatory provisions. (Paras 19-30, 33-34)

(B) Jurisdiction - The Court must act within the bounds of law and cannot issue orders against a non-judgment debtor under the guise of enforcement. (Paras 106-112)

Facts of the case:

The petitioner participated in a court auction but failed to deposit the required amount, leading to show cause notices and subsequent orders for recovery, which were challenged.

Findings of Court:

The impugned orders were set aside as they were beyond jurisdiction and not in accordance with the law.

Issues: Whether the auction purchaser can be compelled to deposit the bid amount after the auction without a resale.

Ratio Decidendi: The court ruled that the provisions regarding deposit are mandatory, and failure to comply renders the sale void, necessitating a resale.

Result: The petitions were allowed in part, setting aside the impugned orders.

JUDGMENT :

RAVI NATH TILHARI, J.

Heard Sri Mangena Sree Rama Rao, learned counsel for the petitioner and perused the material on record.

2. The petitioner in both the civil revision petitions is the defaulting auction purchaser in the Court auction in execution of the decree against the judgment debtor No.2. The petitioner is defaulting under Rule 84 of Order XXI of the Code of Civil Procedure (in short, C.P.C) in as much as 25% of the sale price was not deposited.

3. The respondent No.1 is the plaintiff/decree holder. The respondent Nos.2 to 5 are the judgment debtors.

4. Considering the fact situation and for the consideration made herein after, issuance of notice to the decree holder the respondent No.1 is dispensed with. The reason is that the decree holder has a right for execution of his decree but he has no right to insist, that the defaulting auction purchaser under Rule 84, be directed to deposit such amount, except as provided under Order XXI Rule 71, on satisfying the prerequisites of Rule 71, which is not the case here, as the resale has not taken place. The decree holder has also filed another application for execution against the another judgment debtor.

5. The notices to the respondent Nos.2 to 5 are also dispensed with as any of their rights is not being affected by the impugned order nor if the same is interfered on a case being made out.

6. The respondent No.6 is the IV Additional District Judge and Sessions Court, represented by its Presiding Officer, Kakinada.

7. The respondent No.6 has been impleaded by the petitioner in as much as the impugned order has been passed by him pursuant to the show cause notices dated 14.08.2023 and 01.09.2023 issued by the said Court directing the petitioner to deposit the 1/4th amount along with the pounding charges, failing which further orders, resorting to the coercive measures such as warrant under Order XXI Rule 38 and attachment under Order XXI Rule 54 C.P.C, have also been passed. The petitioner’s property has been attached by the Court with further order that the amount under the show cause notices if not deposited, shall be recovered as a decree.

8. The issue as involved in the present petitions is with respect to the property of the auction purchaser for which the Court has passed the orders taking coercive steps and also for direction to deposit the amount under Rule 84. The point for consideration is, if any such direction as has been issued by the respondent No.6, which is neither on any application of the decree holder or the judgment debtor, could be issued on the show cause notices issued by the Court itself.

9. Though the impugned order is passed on the show cause notices issued by the learned Court/the respondent No.6, the Court is not to be made a party in CRP(s), is settled in law. It is also considered by this Court not proper, to issue notice to the respondent No.6, for judging the legality or otherwise of the impugned orders or asking the respondent No.6, by issue of notice, to justify its order. Therefore notice is not issued to the respondent No.6.

10. The Court proceeds to decide the matter finally on the facts which are undisputed, on record from the show cause notices and as mentioned in the impugned order, though for clarity, the facts are mentioned elaborately hereinafter.

Facts:-

11. O.S.No.8 of 2002 was filed by the respondent No.1/plaintiff against the defendant/respondent Nos.2 to 5 which was decreed for eviction of the defendants; for future profits from the date of his dispossession from the plaint schedule property till possession was recovered vide judgment dated 06.10.2005 passed by the learned Court of IV Additional District Judge, Kakinada and the final decree dated 14.12.2015.

12. On calculation of the amount, the plaintiff/decree holder/respondent No.1 filed E.P.No.8 of 2017 for recovery of amount of Rs.17,19,825/- with subsequent interest. In the said EP, the property of the respondent No.3/the 2nd judgment debtor (JDR) was attached i.e. land to

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