IMPORTANT POINT
The auction purchaser's failure to deposit the balance amount within the stipulated time results in forfeiture of the deposit, with no provision for refund under the CPC.

ORDER :

V.G. Arun, J.

The revision petitioner is the auction purchaser of the immovable property sold in execution of the decree in O.S.No.178 of 2008 of the Subordinate Judge's Court, Payyannur. The first respondent herein is the creditor and the second respondent, the principal debtor. The property was brought to sale on 18.01.2020 as per the order in E.P.No.83 of 2011. The petitioner auctioned the property for Rs. 4,26,000/- and deposited 25% of the auction amount, i.e, Rs. 1,06,500/- on the same day. According to the petitioner, he was given the impression that the balance amount of Rs. 3,19,500/- could be deposited within one month of sale. When the petitioner approached the court for depositing the balance amount on 18.02.2020, he was informed that the balance amount ought to have been deposited within 15 days of the sale. Thereupon, the petitioner submitted an application before the execution court, seeking refund of the deposited amount of Rs. 1,06,500/-. The court below having dismissed the application, this revision petition is filed.

2. Learned Counsel for the petitioner contended that it is not mandatory for the execution court to forfeit the amount deposited in all cases. If the auction purchaser is able to convince the court that the failure to deposit the balance amount within time was not wilful, the court can direct refund of the amount. According to the learned Counsel, the conscious use of the term 'may' in Order XXI Rule 84 of CPC clearly indicates that such discretion is vested with the court.

3. It is contended that the court below grossly erred in relying on Order XXI Rule 71, to find that the amount in deposit could be adjusted towards the deficiency of price, which may happen on re-sale. It is argued that, as per the procedure prescribed in Order XXI Rule 71, the deficiency if any has to be certified by the officer or other person holding the sale and thereupon, the certified amount shall be recoverable from the defaulting purchaser at the instance of either the decree holder or the judgment debtor. The recovery in such cases would be as per the provisions relating to the execution of a decree for the payment of money. Insofar as the property auctioned in the petitioner's favour is not put up for re-sale, Order XXI Rule 71 has no application.

4. In reply, learned Counsel for the first respondent contended that Order XXI Rule 86 provides for forfeiture of the deposit to the Government in case of default in paying the balance purchase money. Such forfeiture shall be effected, after defraying the expenses of the sale conducted. As such, there is no question of refunding the deposit amount.

5. The provisions relating to sale of immovable property are included at Order XXI Rules 82 to 96 of C.P.C. As per Order XXI Rule 84(1), the person declared to be the purchaser in a sale of immovable property shall immediately deposit 25% of the purchase money to the officer or other person conducting the sale. In default of such deposit, the property shall forthwith be resold. The time provided for payment of the full amount of purchase money provided in Order XXI Rule 85 is 15 days from the sale of the property. The procedure in default of payment stipulated in Order XXI Rule 86 reads as under;

"Procedure in default of payment

In default of payment within the period mentioned in the last preceding rule, the deposit may, if the court thinks fit, after defraying the expenses of the sale, be forfeited to the Government, and the property shall be resold, and the defaulting purchaser shall forfeit all claims to the property or to any part of the sum for which it may subsequently be sold."

The provision makes it clear that in the event of the purchaser failing to remit the full amount of purchase money, the amount already deposited shall be forfeited to the Government after defraying the expenses of the sale already conducted and the property shall be resold.

6. On the other hand, Order XXI Rule 71 would come into play when there is