Telangana High Court
A.Sashikumar Reddy vs M/S Gowra Leasing And Finance Limited on 26 September, 2024
Author: P.Sree Sudha
Bench: P.Sree Sudha
THE HONOURABLE SMT. JUSTICE P.SREE SUDHA
CIVIL REVISION PETITION Nos.2459, 2462, 2463, 2465,
2466, 2467, 2468, 2469, 2470, 2471, 2472, 2473, 2474 and
2477 of 2022
COMMON ORDER:
These Civil Revision Petitions are filed against the Common Order dated 22.08.2022 in E.A.Nos.37 to 43, 46 to 52 of 2018 in E.P.No.15 of 2015 passed by the learned Special Judge for trial of offences under the Scheduled Castes and Scheduled Tribes (POA) Act, 1989-cum-III-Additional District Judge, Sangareddy.
2. Petitioners herein have filed an application vide E.A.No.37 of 2018 in E.P.No.15 of 2015, against respondents under Order 21 rules 84, 85 and 86 R/w. rule 90 of Section 151 CPC, seeking to set aside the auction sale conducted on 05.06.2018 in favour of auction purchaser/respondent No.9. The trial Court after considering the arguments of both sides, dismissed the application on costs. Aggrieved by the said Order, petitioners preferred the present Civil Revision Petitions.
3. Petitioners stated that said auction was conducted on 05.06.2018. The respondent No.9/auction purchaser instead of depositing Rs.51,00,000/-, paid only Rs.50,00,000/- and filed a 2 memo requesting the Court to grant time for payment of balance amount of Rs.1,00,000/-, and thus the case was posted to 06.06.2018, for payment of balance amount of 1/4th of the bid amount. Accordingly, respondent No.9 had paid the balance amount on 06.06.2018 and the case was posted to 19.06.2018, for payment of remaining amount, but there was no compliance of Order 21 rules 84 to 86. There are no specific boundaries for the land measuring Acs.17-00 gts out of Acs.27-00 gts in Sy.No.120. Without specific boundaries, auction should not have been conducted. For non-compliance of the Order 21 rules 84 to 86, warrant for resale of the property should have been issued and the memo filed by the auction purchaser for extension of time for depositing 25 % of the bid amount was not legal. As the petitioners are one of the purchasers of the property out of Acs.21-00 gts, they filed the applications to set aside the auction conducted on 05.06.2018.
4. Respondents No.1 and 9 filed their counter affidavits separately and contended that balance of Rs.1,00,000/- was paid with the permission of the Court on 06.06.2018, after filing of the memo and the total sale consideration of Rs.2,04,00,000/- was also paid within 15 days from the date of auction. The decree holder filed a memo along with sketch map 3 pointing out Acs.17-00 gts out of Acs.27-00 gts of the land. The sale deeds created by the petitioners were sub-judice as it was shown as one of the suit schedule properties. Petitioners have no locus standi to question the same as they were not a party to the suit and E.P.No.15 of 2015. When petitioners are seeking to set aside the auction sale, they have to make their readiness by depositing the amount mentioned under Clauses (a) and (b), sub-rule (1) of rule 89 of Order 21 of the CPC, within 30 days from the date of sale. Though they filed E.A.No.64 of 2018, for deposit of Rs.66,95,000/-, they failed to deposit 5% of the amount as mentioned under Order 21 rule 89 (a) of the Code, which is a condition precedent for entertaining the application. When the Judgment debtors in the execution applications are parties to the suit, they have no alienable right in favour of the petitioners. Petitioners are fully aware of the fact of filing the suit, attachments and proclamations and conducting of auction. After issuance of paper publication, they created sham and nominal documents in their favour. They have not made any mention about earlier E.P.No.103 of 2006, filed prior to the present E.P.No.15 of 2015.
5. Item No.2 of the suit schedule property in O.S.No.93 of 2003 was put for auction and charge on the said property was 4 already created in the year 2006 itself. When the decree was passed, the property was sold by the decree holder and the vendors of the petitioners have no right to alienate the property in favour of third parties. Other respondents did not file any counters. Therefore, the trial Court considering the above pleadings observed that E.A.No.64 of 2018, filed by the third parties under Order 21 rule 89 of CPC was still pending. It was filed on 19.09.2018 to set aside the decree in O.S.No.93 of 2003. Petitioners purchased the property from their vendors after attachment of the property in O.S.No.93 of 2002 and after filing of the E.P.No.103 of 2006, as such they have no right to claim to set aside the auction conducted on 05.06.2018 and accordingly, dismissed all the applications.
6. The learned Counsel for the petitioners mainly contended that Order 21 rule 85 of CPC is a mandatory provision and the auction purchaser is bound to deposit the entire 1/4th of the bid amount along with stamp duty within 15 days from the date of auction. Auction purchaser has no locus standi to seek for enlargement of time for depositing the amount, but the trial Court without considering the default of respondent No.9, conducted the auction and it is nullified. Executing Court is not vested with discretion to extend the stipulated time required for 5 stamp as sought by respondent No.9 vide E.A.No.76 of 2018 and it is still pending before the Executing Court and it is an un-curable material irregularity. The trial Court did not notice the timing of the attachment of E.P schedule property and sale deeds executed thereof and passed erroneous order. There was jurisdictional error in auctioning land admeasuring Ac.17-00 gts for Rs.2,04,00,000/- while it was required to recover a sum of Rs.66,94,463/- only (decreetal amount of Rs.26,78,841/- + costs of Rs.60,122/- + @ 36 % interest thereon). He further relied upon certain citations to show that the balance amount has to be deposited along with the stamp duty and requested the Court to set aside the order of the trial Court.
7. O.S.No.93 of 2003 was filed by M/s. Gowra Leasing and Finance Limited represented by its Recovery Officer, for recovery of sum of Rs.26,78,841/- under hire purchase agreement dated 03.07.1996. The respondent No.2 herein is a public limited company represented by its Managing Director and respondents No.3 and 4 are Managing Director and Director of the said company respectively. Respondent No.5 herein is the owner of land admeasuring Ac.14-00 gts and respondents No.6 to 8 are joint owners of land admeasuring Ac.27-00 gts situated at Pedda Kanjarla Kalam Village, Sangareddy. They have 6 deposited their title deeds with respondent No.1 towards security for the repayment of the amount obtained by the respondent No.2. In spite of service of notice, respondents remained ex-parte, as such ex-parte decree was passed on 29.04.2006, creating charge over the suit schedule immovable property.
8. Respondent No.1 in E.A.No.37 of 2018 in E.P.No.15 of 2015 filed counter stating that decree holder filed O.S.No.93 of 2003 which was decreed on 29.04.2006. After the decree, they filed an application for transfer of decree from Additional Chief Judge, Secunderabad to learned District Judge, Medak at Sangareddy for Execution and for realization of the decreetal amount and it was renumbered as E.P.No.103 of 2006 on the file of the learned Principal District Judge, Medak at Sangareddy. They served notices, but they were returned with an endorsement "no such person available in the addresses", as such they invoked provisions under Order 5 Rule-20 of CPC and paper publication was also ordered. Respondent No.1/decree holder filed an application vide E.A.No.6 of 2009 in E.P.No.103 of 2006, requesting the Court for bringing Ac.27-00 gts of land in Sy.No.120 i.e., item No.2 of the EP scheduled property out of Ac.41-00 gts and also filed E.A.No.7 of 2009 to pass an order for 7 fixing of the date of auction in the second week of June, 2009. Both the applications were allowed in order to conduct auction for an extent of Ac.27-00 gts out of Ac.41-00 gts in Sy.No.120. However, boundaries are to be fixed, as such applications were filed before the revenue department including Assistant Director of survey and land records to fix the boundaries. When they failed to do so, in E.A.No.23 of 2011, direction was given to the Assistant Director of Survey and Land Records to take up the survey of the land in Sy.Nos.120/35 to 120/37 and fix the boundaries after demarcation to enable the physical delivery of the land when it was sold in auction and sale proclamation was given on 28.07.2008. On 08.12.2008, the learned District Court directed the Field Assistant to report in respect of valuation of agricultural land in Sy.No.120/35, 120/36 and 120/37 measuring an extent of Ac.9-00 gts each, total measuring an extent of Ac.27-00 gts of land situated at Peddakanjarla Village. Accordingly, report was filed, in which the value of the said property was mentioned as Rs.1,20,000/- per acre. The trial Court issued sale notice on 28.08.2007. As there was delay in surveying, the said E.P was closed with a liberty to file fresh E.P. Accordingly, E.P.No.15 of 2015 was filed and again paper publication was given. Respondent No.1 stated that ECs and auction notices were issued, auction date was initially fixed as 8 04.06.2018. As the bidders could not get the demand drafts, it was posted to 05.06.2018. Bidders were directed to deposit 3% of the total amount of the auction amount. On 05.06.2018, respondent No.9 was declared as highest bidder and deposited Rs.50,00,000/- and also filed a memo seeking permission of the Court to deposit Rs.1,00,000/- on the next day. Permission was granted and accordingly he deposited the said amount including processing fee on 06.06.2018, as such it cannot be said that there is violation of Order 21 rule 84 r/w rule 90 of CPC. On the date of auction, the Court advised to auction Ac.17-00 gts of land instead of Rs.27-00 gts. As the realization of the decreetal amount is only Rs.66,95,000/-, the decree holder filed a memo along with sketch map pointing out Ac.17-00 gts, bidders also verified the same and accordingly auction was conducted for Ac.17-00 gts of land. Respondent No.1 further stated that petitioners have no locus standi, as they are strangers to the suit schedule property and they have no right or title. They never in possession of the property, they got created sale deeds by colluding with the vendors and requested the Court to dismiss the applications.
9. In the counter filed by respondent No.9 in E.A.No.37 of 2018 in E.P.No.15 of 2015, he stated that he deposited 9 Rs.50,00,000/- on the date of auction and filed a memo to deposit the balance amount of Rs.1,00,000/- along with processing fee on the next day and accordingly he deposited the same. The Court is having discretionary powers to extend the time and it cannot be questioned as it is a curable defect. He also deposited the balance amount within the stipulated period of 15 days. He further stated that depositing of 1/4th amount i.e., Rs.51,00,000/- is between him and the Court, petitioners have no locus standi to question the same, as they are not party to E.P.No.15 of 2015. He further stated that in E.P.No.103 of 2006, after giving vide paper publication, the decree holder along with surveyor went to the spot for demarcation of Acs.27-00 gts out of Acs.41-00 gts, but the petitioners nor their vendors never raised any objection. It is also stated that as the petitioners are seeking to set aside the auction proceedings, they have to make their readiness by deposit the amounts as per Order 21 rule 89, sub-rule (1), Clauses (a) and (b), within 30 days from the date of sale. Though they deposited Rs.66,95,000/-, failed to deposit 5% of the amount as mentioned in Section 89(a), which is equivalent to 5% of the purchase amount. The said amount has to be deposited along with the application and it is a condition precedent for 10 entertaining the application, as such requested the Court to dismiss the applications.
10. Petitioners through their affidavit contended that auction purchaser had not paid the stamp duty along with the balance amount within 15 days from the auction, which is mandatory under Order 21 rule 85 of CPC, as such he is not entitled for confirmation of the sale. Petitioner in E.A.No.37 of 2018 stated that she came to know about the auction on 11.06.2018 and got verified the Court records on 12.06.2018 and came to know about the ex-parte Order dated 29.04.2006 passed in O.S.No.93 of 2003 and thus filed the application to set aside the auction sale. The trial Court considering the arguments of both sides, dismissed all the applications. Aggrieved by the same, petitioners preferred the present Civil Revision Petitions.
11. The learned Counsel for the petitioners herein gave the chronological list of dates and events, which are as follows:
O.S.No.93 of 2003 was decreed on 29.03.2006, but the decree holder filed E.P.No.103 of 2006, for execution of the money decree on 16.12.2006.
J.Dr.No.5 sold the land to an extent of Acs.4-00 gts out of Acs.27-00 gts in Sy.No.120 of Peddakanjarla Village to 11 one D.Daram Dev Pandey, through registered sale deed bearing document No.8750 of 2007 dated 03.04.2007. Revision petitioner in C.R.P.No.2462 of 2022 purchased the land from D.Daram Dev Pandey, through registered sale deed bearing document No.4054 of 2008, dated 13.03.2008.
E.P.No.103 of 2006, was dismissed for default at the stage of publication of sale of E.P schedule property on 24.08.2011 and E.A.No.26 of 2012, seeking to restore the said E.P and it was also dismissed for default. E.P.No.15 of 2015 was filed on 12.11.2014, to bring Item Nos.1 and 2 of E.P schedule property for sale for realization of the amount.
Notice to J.Dr.Nos.1 to 7 was ordered on 12.08.2015, with a direction to appear before the Court on 14.09.2015.
As J.Drs remained ex-parte, warrant of attachment of E.P schedule properties was issued on 14.09.2015. After executing the attachment of warrant, sale proclamation was given on 14.10.2015.
Though initially auction was scheduled to be conducted on 04.06.2016, it was posted to 05.06.2018.
12 On 06.05.2018, respondent No.9 was declared as highest bidder for Acs.17-00 gts out of Acs.27-00 gts in Sy.No.120 of Pedda Kanjaria Village (part of Item No.2 of E.P schedule) for a sum of Rs.2,04,00,000/- @ Rs.12,00,000. He deposited Rs.50,00,000/- on the same day and filed a memo seeking time to deposit Rs.1,00,000/- on the next day.
On 06.06.2018, respondent deposited the remaining amount of Rs.1,00,000/-, but it is in contravention of Order 21 rule 84 of CPC and the matter was posted for payment of balance 3/4th amount and the money required for stamp.
On 11.06.2018, notice was affixed to the E.P schedule land.
On 14.06.2018 the petitioner in C.R.P.No.2462 of 2022 came to know about the auction and filed an application to set aside the auction on the ground that it is in contravention of Order 21 rule 84 of CPC. Similarly, six other E.As were filed on 14.06.2018, by the purchasers of remaining parcels of Item No.2 of E.P Schedule property. Though respondent No.9 deposited the balance of 3/4th of the bid amount, failed to deposit the requisite Stamp 13 Duty within stipulated period of 15 days and it is in contravention of Order 21 rule 85 CPC.
The revision petitioner in C.R.P.No.2462 of 2022, has filed E.A.No.50 of 2018, on 02.07.2018 seeking to set aside the auction sale dated 05.06.2018.
On 18.09.2018, she along with six other purchasers of remaining parcels of land total admeasuring Acs.27-00 gts in Sy.No.120 (Item No.2), jointly filed E.A.No.64 of 2018 along with Demand Drafts for Rs.66,95,000/- towards full satisfaction of the decree made in O.S.No.93 of 2003, seeking permission of the Executing Court to receive the same and terminate E.P.No.15 of 2015 and the same is pending.
12. Further, it is mentioned that respondent No.9 had filed E.A.No.76 of 2018 seeking permission of the Court to deposit a sum of Rs.12,24,000/- towards cost of Stamp Duty for sale certificate on 29.10.2018. In March, 2022 Decree Holder filed Cheque petition seeking to withdraw the amount deposited by respondent No.9 under rule 230 and 232 of Civil Rules of Practice and the same is pending. On 22.08.2022, the Executing Court dismissed E.A.No.37 of 2018, along with batch of E.As seeking to set aside the auction on the ground of 14 contravention of both rules 84 and 85 of Order 21 of CPC and further mentioned the points for consideration as follows:
i) What is the effect on the auction sale of Item No.2 of E.P schedule property, consequent to the failure of the auction purchaser to deposit entire 25% of the bid amount on the date of auction and his further failure to deposit money required for general stamp for sale certificate within 15 days, as mandated in Rules 84 and 85 respectively of Order 21 of C.P.C.
ii) Whether the Executing Court is vested with the jurisdiction to extend the time lines stipulated under rules 84 and 85 of Order 21 of C.P.C.
13. The learned Counsel for the petitioners relied upon the decision of the Hon'ble Apex Court in the case of Manilal Mohanlal Shah and others Vs. Sardar Sayed Ahmed Sayed Mahmad and another, 1 in which it was held that "the inherent powers of the Court cannot be invoked to circumvent the mandatory provisions of the Code and relieve the auction purchasers of their obligation to make the deposit of purchase money under Order 21 rule 85" and it was also held that "there was default in depositing 25 percent of the purchase money and further there was no payment of the full amount of the purchase 1 AIR 1954 SC 349 15 money within fifteen days from the date of the sale. Both the deposit and the payment of the purchase money being mandatory under the combined effect of rules 84 and 85, the Court has the discretion to forfeit the deposit but it was bound to re-sell the property with the result that on default the purchaser forfeited all claim to the property. These provisions leave no doubt that unless the deposit and the payment are made as required by the mandatory provisions of the rules there is no sale in the eye of law in favour of the defaulting purchaser and no right to own and possess the property accrues to him." The Counsel for the petitioners argued that in view of the language of the relevant rules and the judicial decisions, the very fact that the Court is bound to re-sell the property in the event of a default shows that the previous proceedings for sale are completely wiped out as if they do not exist in the eye of law and when there was no sale, purchasers acquire no rights at all. He further contended that it was specifically held in the above citation that Order 21 rule 85 and 86 are mandatory and its non-compliance renders the sale proceedings as complete nullity requiring the Executing Court has to proceed with resale unless J.Dr. satisfies the decree by making the payment before resale.
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14. Learned Counsel for the petitioners further relied upon the decision of this Court in the case of Dasarla Koteswaramma Vs. Alla Venkayamma, 2 in which it was held that rule 85 Order 21 was extracted as follows:
"Rule 85.Time for payment in full of purchase money and of stamp for certificate of sale:
The full amount of purchase money payable and the general stamp for the certificate under Rule 94 or the amount required for such stamp, shall be deposited into Court by the purchaser before the Court closes on the fifteenth day from the sale of the property; provided that in calculating the amount of purchase-money to be so deposited the purchaser shall have the advantage of any set-off to which he may be entitled under Rule 72."
Further it was held that not only the balance of sale consideration but also the amount required for general stamp for the certificate under rule 94 or the amount required for such stamp shall be deposited before the expiry of 15th day. Relying upon the said decision, he argued that the full amount of purchase money payable and the general stamp for the certificate under rule 94 or amount required for such stamp, shall be deposited into Court by the purchaser before the Court closes on the 15th day from the sale of the property. As the payment of balance amount along with stamp duty is to be paid within 15 days is a mandatory provision, if the 2 2009 (5) ALD 237 17 auction purchaser failed to pay, there is no sale in the eye of law and he has no right to own and possess the property accrues to him. The Court has no jurisdiction to extend the time prescribed under Order 21 rule 85 either for depositing the full amount of the purchase-money or the full amount required for the general stamp for the certificate under rule 94 and that in default of the deposit of either amount, the Court was bound to re-sell the property and the sale proceedings are complete nullity and are completely wiped out as if they do not exist in the eye of law. For the same proposition he relied upon the decision of this Court in the case of W.Veerabhadra RAo Vs. Nedungudi Bank Limited, 3 and in the case of Kudiyala Ramana Vs. Vattikolla Somaraju and others, 4 in which it was held that subsequent payment does not cure the defect. It was reiterated in V.Vedanda Vyasulu (died) by L.Rs Vs. K.Purushotham and another, 5 in which it was held as follows:
"10. Touching directly on the point is another decision of our Division Bench in Mudragadda Suryanayanamurti Vs.Southern Agencies, Rajahmundry and another, wherein it was held that when deposit of full amount required for general stamp for sale certificate is not deposited by the auction purchaser, the sale is nullity 3 1998 (6) ALT 216 4 2003 (2) ALD 93 5 2011 (2) ALD 616 18 and the property has to be re-sold and time for deposit cannot be extended.
11. It is also useful to refer the decision reported in Kudiyala Ramana Vs.Vattikolla Somaraju, wherein the question of bona fides and the failure to deposit the money by the auction purchaser along with the non- judicial stamps was considered and it was also held that there is no power for extension of the time, bona fides cannot be considered, which is the bone of contention of the Counsel of auction purchaser."
As per the list of events, the stamp duty was not deposited within the stipulated period of 15 days. An application was filed by the auction purchaser on 29.10.2018, requesting the Court to grant permission for depositing Rs.12,24,000/- towards cost of stamp duty for sale certificate and it is still pending. It is a clear violation of the mandatory provision of law.
15. List of events as per the respondent No.1 are that one A.Krishna Reddy and others have purchased the suit schedule property in the year 2008, after filing of E.P.No.103 of 2006. E.P.No.15 of 2015 was filed and suit schedule properties are attached. On 04.06.2018, Court auctioned Acs.17-00 gts of land and one J.Ravindra Raju became the highest bidder and A.Krishna Reddy and 6 others filed E.A challenging the auction sale on the ground that highest bidder has not deposited 25% amount on 04.06.2018 and not deposited the stamp duty within 19 15 days from date of auction. Krishna Reddy and others filed E.A.No.64 of 2018, on 18.09.2018 to set aside the sale by accepting the decreetal amount. They sold away their properties to M/s.Navya Developers in Aug-Oct, 2018. It is stated that in the auction, the property of A.Krishna Reddy, A.Indira, A.Shashikumar Reddy and part of property of A.Srujana, totally admeasuring Acs.17-00 gts was sold and the properties of P.V.Srikanth Reddy, B.Raghava and P.Swathi were not affected, but they filed C.R.P.Nos.2459, 2468, 2472, 2477, 2467 and 2474 of 2022 respectively. A.Shashikumar, Srujana, P.V.Srikanth Reddy, Swathi, A.Krishna Reddy and A.Indira sold the property to Navya Developers vide document Nos.33813, 33814, 33852, 40272, 40273 and 40271 of 2018 dated 25.08.2018, 30.08.2018 and 11.10.2018 respectively.
16. Learned Counsel for respondent No.1 mainly contended that present Civil Revision Petitions are not maintainable under Article 227 of the Constitution of India as the petitioners are having effective remedy of appeal under Order 43 rule 1(j). Order 21 rule 85, 86 and 89 are the grounds on which the sale can be set aside. However, a petition has to be filed under Order 21 rule 90. The consequences are set out in Order 21 rule 92. The Executing Court either can disallow the application filed 20 under Order 21 rule 90 by confirming the sale. In the present case the Executing Court passed Orders under Order 21 rule 92 and hence only appeals lie under Order 43 rule 1(j) but not the revisions. Perusal of the Order 43 rule 1(j) of C.P.C, shows that Order 43, rule 1(j) provides for appeal against an order under Order 21, rule 72 or rule 92 setting aside or refusing to set aside a sale, where a decree-holder purchases property in execution without the permission of the Court. Admittedly, the above applications are not filed under rule 72 or rule 92 of C.P.C, as such the contention of respondent No.1 that only appeal has to be filed, but not C.R.P, is not tenable. Though several other issues were raised by both the parties, the main point for consideration before this Court in the batch of C.R.P's is whether the auction purchaser paid the stamp duty along with the balance sale amount within stipulated period of time or not. As per E.A.No.76 of 2018 in E.P.No.15 of 2015, respondent No.9 failed to pay the stamp duty within stipulated time. No doubt, respondent No.9 deposited the balance of sale consideration within 15 days, but as per the amended Order 21 rule 85 of CPC, he has to deposit stamp duty also within 15 days from the date of auction, but he could not pay the same and it is in violation of the mandatory provisions of law, as such the auction sale is liable to be set aside.
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17. In the result, the present Civil Revision Petitions are allowed, setting aside the Common Order of the trial Court dated 22.08.2022 passed in E.A.Nos.37 to 43, 46 to 52 of 2018 in E.P.No.15 of 2015. There shall be no order as to costs.
Miscellaneous petitions pending, if any, shall stand closed.
_________________________ JUSTICE P.SREE SUDHA DATE: 26.09.2024 tri