Himachal Pradesh High Court
United Commercial Bank vs Mani Ram And Ors. on 23 October, 2002
Equivalent citations: AIR2003HP63
Author: M.R. Verma
Bench: M.R. Verma
JUDGMENT M.R. Verma, J.
1. This application under Order 21, Rules 84/85 read with Sections 148/151 of the Code of Civil Procedure (hereafter referred to as 'the Code') has been filed by the applicant-auction purchaser (hereafter referred to as 'the auction purchaser') for extension of time to deposit the auction money and not to direct resale of the property already auctioned in his favour and not to forfeit the amount already deposited by him.
2. Brief facts leading to the presentation of this application are that in execution of a decree pursuant to the warrant of sale dated 22-6-2002, the landed property of JD No. 1 was put to auction in which the auction purchaser was the highest bidder in the sum of Rs. 1,25,000/-. Immediately after the auction, he deposited a sum of Rs. 33,000/- of the auction money on the spot. However, he failed to deposit the remaining auction money within 15 days of the date of auction. Hence this application.
3. It has been averred in the application that the auction purchaser is an illiterate rustic villager and was not aware that the "total sale amount" was required to be deposited within 15 days of the auction nor he was so informed by anyone. Further, mother of the auction purchaser, who is about 78 years of age, fell ill and had to be removed to Chandigarh for treatment and this fact also resulted in delay in depositing the remaining auction amount within the prescribed time. In the aforesaid circumstances, the remaining auction amount has been deposited by the auction purchaser on 3-9-2002, therefore, the time to deposit such amount may be extended till 3-9-2002 and the property may not be ordered to be resold and deposited amount may not be forfeited.
4. I have finally heard the learned counsel for the decree holder. However, learned counsel for the auction purchaser was not present today but he has been heard in part on 30-9-02 and 1-10-2002. Records also perused.
5. When the matter was partly heard on 30-9-02 and 1-10-2002, the learned counsel for the auction purchaser had contended that the lapse in not depositing the amount within the stipulated period was not intentional but because of the illness of the mother of the auction purchaser and want of knowledge on his part that such amount had to be deposited within 15 days of the auction. It was, therefore, urged that the time for depositing the amount may be extended till 3-9-2002 in exercise of the powers of this Court under Sections 148/151 of the Code and the amount tendered on 3-9-2002 may be accepted as valid discharge of the obligation of the auction purchaser and the property may not be resold and the l/4th of the amount deposited by him on the spot may not be forfeited.
6. On the other hand, learned counsel for the DH and the learned Law Officer for the State, submitted that the provisions of Section 148 and/or 151 of the Code cannot be invoked to extend the time and the necessary consequences as per Rule 86 of Order 21 of the Code must follow.
7. There is no dispute that the auction took place on 3-8-2002. Rule 84 of Order 21 of the Code requires the auction purchaser to pay immediately after he is so declared, a deposit of 25% of the amount of his purchase money to the officer or other person conducting the sale. Having deposited a sum of Rs. 33,000/-, the auction purchaser had complied with this requirement.
8. Rule 85 of Order 21 of the Code provides for depositing of the remaining purchaser money and reads as follows :
Time for payment in full of purchase money The full amount of purchase money payable shall be paid by the purchaser into Court before the Court closes on the fifteenth day from the sale of the property.
Provided that, in calculating the amount to be so paid into Court, the purchaser shall have the advantage of any set off to which he may be entitled under Rule 72."
9. It is clear on a bare reading of the aforesaid provisions that the full amount of purchase money shall be paid by the auction purchaser to the Court on or before the 15th day from the sale of the property and this provision is apparently mandatory in nature.
10. The contention of the learned counsel that this period of 15 days as prescribed under Rule 85 supra, can be extended by the Court in exercise of its powers under Sections 148 and 151 of the Code, is not tenable. Section 148 of the Code will apply only to a case where the time has been fixed by the Court for doing any act under any provision of the Code. This section will, however, have no application where the time for doing certain act has not been fixed by the Court but is prescribed by law. The 15 days time for depositing the entire purchase money by the auction purchaser is prescribed by the Statute and is not fixed by the Court, therefore, the Court has no power to extend the time prescribed under Rule 85 supra in exercise of its powers under Section 148 of the Code. The inherent powers of the Court under Section 151 of the Code also cannot be invoked to grant a relief beyond the scope of law. Once the law has fixed time of 15 days for depositing the full amount of purchase money in the Court, such period cannot be extended by the Court in exercise of its inherent powers.
11. In Manilal Mohanlal Shah v. Sardar Sayed Ahmed Sayed Mahmad, AIR 1954 SC 349, the Hon'ble Apex Court, while dealing with the provisions of Order 21, Rule 85 of the Code, held as under :
The provision regarding the deposit of 25 per cent by the purchaser other than the decree holder is mandatory as the language of the rule suggests. The full amount of the purchase money must be paid within fifteen days from the date of the sale but the decree holder is entitled to the advantage of a set off. The provision for payment is, however, mandatory. ..... (Rule 85). If the payment is not made within the period of fifteen days, the Court has the discretion to forfeit the deposit and there the discretion ends but the obligation of the Court to resell the property is imperative. A further consequence of non payment is that the defaulting purchaser forfeits all claim to the property.... (Rule 86)."
12. In view of the above position in law, the time limit of 15 days to deposit the full amount of purchase money payable by the auction purchaser, as provided under Rule 85 supra, cannot be extended.
13. The next question which arises for consideration is whether the default of the auction purchaser in depositing the full purchase money within the stipulated, must invariably result in forfeiture of 25% of purchase money deposited by him immediately after the finalisation of the auction or the Court has the discretion in the matter of such forfeiture?
14. Rule 86 of Order 21 of the Code which deals with the procedure in default of payment of the purchase money as provided under Rule 85 reads as follows :
"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 re-sold, 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."
15. A bare reading of the above provisions makes it abundantly clear that it is not obligatory upon the Court to forfeit the deposit made under Rule 84 of Order 21 of the Code in case of default to deposit the full purchase money. The use of expression "may" regarding such forfeiture clearly makes out that it is discretionary with the Court to forfeit such deposit as a whole or in part or not to forfeit it at all and permit the auction purchaser to withdraw the same after defraying the expenses of the sale.
16. In Manilal Mohanlal Shah's case (AIR 1954 SC 349) (supra), (the extract whereof has already been quoted hereinabove) the Hon'ble Supreme Court, while dealing with the scope of Rule 86 (supra), also held that the Court has the discretion in the matter of forfeiture of deposit. However, in view of the provisions of Rule 86 supra read with Rule 87 providing for resale of the property, it is clear that default of the auction purchaser in making the payment of full purchase money in accordance with Rule 85, will result in automatic cancellation of the auction purchase and the obligation of the Court to resell the property is imperative and indispensable as held by the Hon'ble Supreme Court in Manilal Mohanlal Shah's case (supra), the relevant part whereof has already been quoted hereinabove.
17. As already stated hereinabove, the default committed by the auction purchaser in not depositing the full amount within the prescribed period has been attributed to his being illiterate and unaware of the relevant provisions of the law and also to the illness of his mother and the time consumed in her treatment. The averments in this regard as made in the application are duly supported by affidavit of the auction purchaser and there is no counter. Thus, there is no reason to disbelieve the reasons assigned by him for committing the default. I am, there fore, inclined to hold that the forfeiture of the entire amount deposited by the auction purchaser under Rule 84 of Order 21 of the Code will be too harsh an action. The interest of justice will be met if after deducting the expenses of the sale, one half of the remainder of the amount is forfeited and the remaining half is ordered to be refunded to the auction purchaser.
18. As a result, the prayer of the auction purchaser to extend the time for depositing of full purchase money and not to resell the property is dismissed. Out of the amount of Rs. 33,000/- deposited by the auction purchaser immediately after the auction, the expenses incurred in the sale will be retained and 50% of the remaining amount, after defraying expenses of sale is forfeited to the government and the remaining half thereof is ordered to be refunded to the auction purchaser. Needless to say, that the amount of Rs. 92,000/- deposited by the auction purchaser on 3-9-2002 will be refunded to him. Application is accordingly disposed of in terms of the above order.