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1925 Supreme(Mad) 517

IN THE HIGH COURT OF MARAS
Devadoss
Sree Mahant Prayaga Doss Jee Varu
Versus
Raja Of Kalahasti
Decided On : 14 September, 1925

The defaulting purchaser's deposit could be recovered as a deficiency under Order 21 Rule 71, and all decree-holders were entitled to rate-able distribution under Section 73.

Headnote:

Defaulting Purchaser - Recovery of Deficiency - Order 21 Rule 71, Section 73 - The judgment discusses the recovery of deficiency from a defaulting purchaser under Order 21 Rule 71 and the entitlement of other decree-holders to rateable distribution under Section 73 of the Civil Procedure Code.

Fact of the Case:

The property was sold in execution of a decree, and the defaulting purchaser failed to pay the balance. The decree-holder sought recovery of the deficiency, and other decree-holders applied for rate-able distribution.

Finding of the Court:

The court found that the defaulting purchaser's deposit could be recovered as a deficiency under Order 21 Rule 71, and all decree-holders were entitled to rate-able distribution under Section 73.

Issues: The issues involved the recovery of deficiency from the defaulting purchaser, entitlement of other decree-holders to rate-able distribution, and the interpretation of Order 21 Rule 71 and Section 73.

Ratio Decidendi: The court held that the defaulting purchaser's deposit could be recovered as a deficiency under Order 21 Rule 71, and all decree-holders were entitled to rate-able distribution under Section 73.

Final Decision: The appeals were allowed, and the petitions were remanded to the lower court for rate-able distribution under Section 73, Civil Procedure Code.

JUDGMENT

Devadoss, J.

1. The taluk of Pamur in Kalahasti zamin was sold by the District Court of Nellore on 25th August 1914, in execution of the decree in C.S. No. 187 of 1912 and was knocked down for Rs. 6,90,000 to one Ramagarji Neelakanthagarji who made a deposit of 25 per cent. of the amount of his bid and subsequently defaulted to pay the balance The property was again put up to sale, but did not fetch more than Rs. 1,01,000. The decree-holder in C. S. No. 187 of 1912. there upon applied to the Court under Order 21, Rule 71 for the recovery of the difference between Rs. 6,90,000 and Rs. 1,01,000 from the defaulting purchaser. The District Judge dismissed his application but the High Court in L.P.A. No. 42 of 1917 set aside the order of the District Judge and directed him to dispose of the petition according to law.

2. Several persons who had obtained decrees against the Raja of Kalahasti applied to the District Court for attachment of the deposit made on 25th August 1914 and prayed in the alternative for a rate-able distribution of the amount under Section 73, Civil Procedure Code. The District Judge held that the only person entitled to proceed against the defaulting purchaser was the decree-holder in C. S. No. 187 of 1912 and the other decree-holders were neither entitled to attach the amount in Court under Order 21, Rule 52 nor to claim rate-able distribution of the same under Section 73 and dismissed their applications. Decree-holders other than decree-holder in C. S. No. 187 of 1912 preferred these appeals against the orders of the District Judge.

3. The facts are not disputed. The only question for determination is : Are the appellants entitled to any relief, and if so, what ? It is admitted by both the appellants and the respondents that the deposit of 25 percent in Court belonged. to the defaulting purchaser and that the decree holder in C.S. No. 187 of 1912 made an application under Order 21, Rule 71 for the recovery of the deficiency from the defaulting purchaser. It is common ground that the defaulting purchaser is a man of straw and there is no likelihood of any amount being recovered from him. Under Order 21, Rule 86, if the auction purchaser makes any default in payment within the time mentioned 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 claim to the property or to any part of the sum for which it may subsequently be sold. Mr. Hughes, the then District Judge of Nellore, held that it was not a proper case for forfeiting the amount of the deposit to the Government and directed that the amount should be in Court pending the disposal of certain petitions.

4. Re-sale of the property was held under. Order 21, Rule 87, and as the property fetched a considerably lower sum than that for. which it was first sold, a certificate was. given as to the amount of deficiency by the officer conducting the sale. Order 21, Rule 71, is in these terms:

Any deficiency of price which may happen on a, re-sale by reason of the purchasers default, and all expenses attending such re-sale, shall be certified to the Court or to the Collector or subordinate of the Collector, as the case may be by the officer or other person holding the sale, and shall, at the instance of either the decree-holder or the judgment-debtor, be recoverable from the defaulting purchaser under the provisions relating to the execution of a decree for the payment of money.

5. Under this rule the decree-holder became entitled to proceed against the defaulting purchaser for the difference between Rs. 6,90,000 and Rs. 1,01,000. From the terms of this rule it is quite clear that the decree-holder who brings the property to sale gets a decree against the defaulting purchaser for the deficiency and may recover the amount from him under the provisions relating to execution of decrees. If he does not choose to execute the decree















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