Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2024 Supreme(AP) 1456

IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
NYAPATHY VIJAY, J.
Reddam Satyanarayana Prasad – Appellant
Versus
Angada Satyanarayana and others – Respondent
CRP No.3315 of 2017
Decided on : 05-12-2024

Advocates:
Advocate Appeared:
For the Appellant : T.V.S. Prabhakar Rao
For the Respondent: E.V.V.S. Ravi Kumar

Poundage under Order 21 Rule 89 CPC can be paid after a sale is set aside, not necessarily within 60 days, allowing the application to set aside the auction to be considered.

Headnote:(A) Code of Civil Procedure, 1908 - Order 21 Rule 89 - Civil Rules of Practice - Rule 281 - Setting aside of auction sale - Application for setting aside auction dismissed for failure to pay poundage within 60 days - Court held that judgment-debtor could pay poundage after sale is set aside. Court reaffirmed that absence of payment does not warrant dismissal of the application, and a full satisfaction memo filed indicates no decree exists for auction confirmation. (Paras 8 and 17)

(B) Legal Principle - In order to set aside an auction under Order 21 Rule 89, only the decretal amount and the poundage fee must be paid, with the latter to be determined after the sale is set aside. (Paras 11 and 14)

Facts of the case:
The judgment debtor filed an application to set aside an auction sale, having paid the decretal amount, but failed to deposit poundage within the prescribed period. The appeal to reverse the dismissal of this application is brought forth.

Findings of Court:
The dismissal of the application is unfounded due to the incorrect interpretation of the need to pay poundage prior to the sale being set aside. The auction sale is to be set aside following the payment of poundage within two months.

Issues: Whether the application was rightly dismissed solely based on the non-payment of the poundage fee within 60 days.

Ratio Decidendi: The court concluded that the payment of poundage is a post-condition to the setting aside of the sale, not a prerequisite, thus allowing the petitioner to complete the payment after the sale is set aside.

Result: Civil revision petition is allowed, and the auction sale is set aside.

Table of Content
1. overview of the case and procedural history. (Para 1 , 2)
2. arguments regarding procedural compliance and financial implications. (Para 3 , 6 , 7)
3. consideration of the issue of poundage payment. (Para 4 , 8)
4. judicial interpretation of poundage rules under cpc. (Para 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16)
5. conclusion allowing revision and setting aside auction. (Para 17)

JUDGMENT :

1. The present revision is filed questioning the judgment dated 05.07.2011 in CMA No.27 of 2009 passed by Judge, Family Court-cum-Additional District Judge, East Godavari District, Rajahmundry confirming the order dated 10.08.2009 passed by the I Additional Junior Civil Judge, Rajahmundry in EA No.52 of 2008 in EP No.28 of 2007 in OS No.1283 of 2004.

2. Brief facts : The petitioner is the judgment debtor. A suit OS No.1283 of 2004 was filed for recovery of money and the same was decreed on 14.06.2005. For realization of the decretal amount, the schedule property was auctioned on 02.09.2008 in EP No.28 of 2007. The petitioner then filed EA No.52 of 2008 under Order 21 Rule 89 CPC to set-aside the auction, as he had paid the decretal amount of Rs.45,000/- to the respondent No.1 towards full and final satisfaction of the decretal amount. A full satisfaction memo dated 12.09.2008 was filed into Court on 31.10.2008 by the decree holder. The above application was filed before confirmation of sale by the Court.

3. The respondent No.1/decree holder did not file any counter. The respondent No.2/auction purchaser filed his counter opposing the application and had contended that the sale was conducted on 02.09.2008 and the respondent No.2 was declared as the highest bidder and the respondent No.2 paid the entire bid amount of Rs.3,10,000/- with stamp duty and poundage. It was also contended that the petitioner failed to deposit the amount within the time as prescribed for setting aside the sale under Order 21 Rule 89 CPC.

4. The Trial Court after hearing the respective Counsels rejected the plea that the application of the petitioner is barred by time and was of the opinion that the limitation prescribed to set-aside sale under Order 21 Rule 89 CPC is 60 days and not 30 days as contended by the respondent No.2. Though, the Trial Court noticed that the application by the petitioner was filed on 31.10.2008, the application was filed without depositing the poundage amount and that the lodgment schedule was filed before the Court on 04.03.2009 i.e., after lapse of 6 months from the date of auction. Since the petitioner had failed to deposit the 5% of poundage amount as required within 60 days, the application of the petitioner was dismissed. The Appellate Court also took a similar view and dismissed the appeal. Hence, the present civil revision petition is filed.

5. Heard Sri T.V.S. Prabhakar Rao, learned Counsel for the petitioner and Sri Ramji, learned Counsel representing Sri E.V.V.S. Ravi, Kumar, learned Counsel for the contesting respondent.

6. Contentions: The Counsel for the petitioner contended that the full satisfaction memo was filed into Court on 31.10.2008 and unless the Court permits the petitioner to pay the poundage amount of 5%, the petitioner cannot pay the amount into Court. It was further contended that the value of the property as on date is more than Rs.20,00,000/- and that the petitioner would be suffering serious financial loss if the auction of the property is confirmed for realization of the decretal amount of Rs.45,000/-. It is also the contention of the petitioner that once the decretal amount has been paid, the respondent No.2/third party to the suit does not have any locus to seek for confirmation of the sale, as there is no decree to be executed.

7. The Counsel for the contesting respondent contended that the petitioner having not deposited the poundage within the period of limitation prescribed under Order 21 Rule 89 CPC, cannot call in question the sale. The respondent No.2 contended that the auction was an open auctio