IN THE HIGH COURT OF JUDICATURE AT MADRAS
N. ANAND VENKATESH, J.
S. Sambavi – Petitioner
Versus
Balasundaram (Died) – Respondent
C.R.P. Nos. 3062, 3063 of 2008
Decided On : 08-12-2022
Order XXI Rule 89 - Setting aside auction sale - Order XXI Rule 89 of C.P.C. - Summary of Acts and Sections: Order XXI Rule 89 and Order XXI Rule 90 of C.P.C. - The court discussed the provisions of Order XXI Rule 89 and Order XXI Rule 90 of C.P.C. which provide different scenarios for setting aside an auction sale. It highlighted the requirement for the judgment debtor to deposit the entire decree amount and 5% of the purchase money under Order XXI Rule 89, and the grounds of irregularity or fraud under Order XXI Rule 90. The court also referred to the interpretation of Order XXI Rule 89(2) of C.P.C. and its application in the present case, emphasizing the intention of the Legislature and the bar on prosecuting an application under Rule 89 when an application under Rule 90 is pending.
Fact of the Case:
The petitioner filed a suit for recovery of a sum against the judgment debtor, which was decreed. The judgment debtor filed an application under Order XXI Rule 89 of C.P.C. to set aside the sale on deposit of the decree amount and 5% of the purchase money. The decree holder and the auction purchaser challenged the fair and final order passed by the Court below.
Finding of the Court:
The Court found that the judgment debtor's application under Order XXI Rule 89 of C.P.C. was maintainable, as the entire decree amount and 5% of the purchase money were deposited. The Court emphasized that the provisions of C.P.C. should not cause injustice to the parties and referred to a relevant judgment to support its finding.
Issues: The key issue was whether the judgment debtor could maintain the application under Order XXI Rule 89 of C.P.C. without withdrawing the earlier application filed under Order XXI Rule 90 of C.P.C. to set aside the sale on the ground of fraud.
Ratio Decidendi: The Court held that the judgment debtor's application under Order XXI Rule 89 of C.P.C. was maintainable, as the earlier application under Order XXI Rule 90 of C.P.C. was withdrawn. It emphasized that the provisions of C.P.C. should not cause injustice to the parties and referred to a relevant judgment to support its decision.
Final Decision: Both the civil revision petitions were dismissed, and the decree holder and the auction purchaser were entitled to file an application for payment out before the Court below and withdraw the amount lying in the credit of the suit.
ORDER :
1. The issue involved in both the Civil Revision Petitions are common and hence they are taken up together, heard and disposed of through this common order.
2. The decree holder is the petitioner in C.R.P. No. 3062 of 2008 and the Auction Purchaser is the petitioner in C.R.P. No. 3063 of 2008. Both have challenged the fair and final order passed by the Court below in E.A. No. 5437 of 2007 allowing the application filed by the judgment debtor under Order XXI Rule 89 of C.P.C. for setting aside the sale on deposit of the decree amount and 5% of the purchase money paid by the auction purchaser.
3. The brief facts of the case is that the petitioner in C.R.P. No. 3062 of 2008 filed a suit for recovery of a sum of Rs. 70,400/- against the judgment debtor along with further interest on the principal amount. This suit in O.S. No. 7146 of 2000 came to be decreed by Judgment and Decree dated 16.04.2001. Since the Decree was not complied with by the judgment debtor, the decree holder filed E.P. No. 978 of 2002 to recover the amount by bringing the property of the judgment debtor for sale.
4. In the above Execution Petition, auction was conducted on 08.08.2007, in which several bidders participated and the petitioner in C.R.P. No. 3063 of 2008 was the highest bidder and he also deposited the entire bid amount.
5. The judgment debtor initially filed an Application under Order XXI Rule 90 of C.P.C. to set aside the sale on the ground that the sale is vitiated due to fraud. When this application was pending, the judgment debtor filed E.A. No. 5437 of 2007, under Order XXI Rule 89 of C.P.C. to set aside the sale on deposit. The earlier application that was filed by the judgment debtor under Order XXI Rule 90 of C.P.C. was withdrawn during the pendency of the application in E.A. No. 5437 of 2007, on 01.11.2007. Subsequently, the application filed in E.A. No. 5437 of 2007 was taken up for hearing and the Court below on considering the facts and circumstances of the case and after taking into account the deposit of the entire decree amount and 5% of the purchase money, allowed the application through a fair and final order dated 31.03.2008. Aggrieved by the same, the decree holder and the auction purchaser have filed the above Civil Revision Petitions.
6. Heard Mr. P. Sankaranarayanan, learned counsel appearing on behalf of the petitioner, Mr. B. Premkumar, learned counsel appearing on behalf of the 1st respondent and Mr. R. Rajesh, learned counsel appearing on behalf of the 2nd respondent in C.R.P. No. 3062 of 2008 Mr. R. Rajesh, learned counsel appearing on behalf of the petitioner, Mr. B. Premkumar and Mr. P. Sankaranarayanan, learned counsel appearing on behalf of the 2nd respondent in C.R.P. No. 3063 of 2008.
7. The short issue that arises for consideration is as to whether the judgment debtor could have maintained the application under Order XXI Rule 89 of C.P.C. without withdrawing the application that was earlier filed in E.A. No. 5437 of 2007 under Order XXI Rule 90 of C.P.C. to set aside the sale on the ground of fraud.
8. The learned counsel appearing on behalf of the petitioners submitted that Order XXI Rule 89 (2) of C.P.C. mandates that an application cannot be filed under Order XXI Rule 89 of C.P.C. without withdrawing the application that was already filed under Order XXI Rule 90 of C.P.C.
9. Per contra, the learned counsel appearing on behalf of the judgment debtor submitted that the entire decree amount was deposited and 5% of the purchase money that was due and payable to the auction purchaser was also deposited and hence, the Court below was perfectly right in setting aside the sale on such deposit. The learned counsel submitted that the order passed by the Court below does not suffer from any perversity and hence does not require the interference of this Court.
10. Order XXI Rule 89 and Order XXI Rule 90 of C.P.C. provides different scenarios for setting aside an auction sale. Insofar as Order XXI Rule 89 of C.P.C. is concerne
Point of Law : If sale is vitiated by material irregularity or fraud in publishing and conducting sale, which attracts Rule 90 Order XXI of C.P.C. The very maintainability of execution petition would....
The executing court must ensure only necessary property is sold to satisfy a decree, and dismissal of a claim under Order XXI Rule 58 does not bar a subsequent application under Order XXI Rule 90 for....
Execution sales must adhere to the limitations set by procedural rules to ensure justice, with only sufficient property sold to satisfy the decree amount.
The sale of property in execution of a decree must comply with procedural rules, only necessitating sufficient property to satisfy the decree amount, failing which the sale is invalid.
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