Madras High Court
K.Vivekanandan vs N.Vijayakumar ... First on 24 September, 2014
Author: S.Vimala
Bench: S.Vimala
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 24.09.2014 CORAM: THE HON'BLE MRS.JUSTICE S.VIMALA CRP.(NPD) No.1548 of 2014 and M.P.No.1 of 2014 K.Vivekanandan ... Petitioner/Third Party/Auction purchaser ..vs.. 1. N.Vijayakumar ... First Respondent / Plaintiff 2. N.Pandian 3. N.Sekar 4. N.Ashok Kumar 5. Rukumani (deceased) 6. Nagarathinam 7. Suresh Kumar 8. B.Gnanambal 9. C.Mohana 10. J.Amsa 11. N.Murugan 12. N.Kumar 13. Muthulakshmi 14. N.Usha 15. N.Chitra (R8 to R15 are the legal heirs of deceased R5). ... Respondents 2 to 15/ Defendants 1 to 6 except D4 since deceased and D7 to D14 added as legal heirs of deceased D4 16. T.N.Muralimohan ... Respondents/Defendants (R16 suo-motu has been impleaded as respondent vide order of the Court dated 16.04.2014 made in CRP.NO.1548 of 2014 and M.P.No.1 of 2014) Prayer: Petition is filed under Article 227 of Constitution of India, to set aside the order dated 05.03.2014 made in I.A.No.3088 of 2001 in O.S.No.5429 of 1993 by the learned XIV Assistant Judge, City Civil Court, Chennai and thereby confirm the sale made in respect of the property at No.5, Kothandaraman First Lane, Old Washermanpet, Chennai 600 021 in favour of the petitioner. For Petitioner : Mr.S.R.Rajagopal for Mr.P.Ramachandran For R-1 : M.Kamalanathan for R1 For R-2 : Mr.Abdul Kahader For R-3 to R5 R9 & R14 : Mr.M.Selva Mariappan For R6 to R8 R10 to R13 : M/s.D.Kamatchi ORDER
The suit was filed for the relief of partition and separate possession part from means profit. Preliminary decree for partition of plaintiff's 1/7th share was passed by Judgment dated 28.07.2000.
2. The plaintiff/first respondent herein filed I.A.No.3088 of 2001 in O.S.No.5429 of 1993, under Order 26 Rule 13 C.P.C. seeking passing of final decree by effecting partition by metes and bounds through appointment of Commissioner and for separate possession of his 1/7th share. The Court appointed Mr.Kishore Kumar to sell the property by Court auction and this sale was cancelled by the Court. Thereafter, the Court has appointed Mr.T.N.Murali Mohan, by the order dated 01.08.2013 to sell the suit property in public auction. The Advocate Commissioner conducted auction proceedings on 09.11.2013 and filed the report stating that one Vivekanandan, S/o. Kadavul Chettiar was the highest bidder. Memo of objection was filed by the first defendant/second respondent herein and it was recorded. Accepting the objections, the Court passed the order that the sale conducted on 09.11.2013, by the Advocate Commissioner, Mr.T.N.Murali Mohan in respect of the suit property stands cancelled. This order is under challenge in this Civil Revision Petition filed by the third party/auction purchaser.
3. The auction purchaser was declared as successful bidder on his bid of Rs.72,05,000/-. The revision petitioner had deposited 1/4th of the amount of Rs.16,00,000/- by demand draft and Rs.2,00,000/- by way of cash on 09.11.2013. The petitioner had deposited the balance amount of Rs.54,05,000/- on 21.11.2013. Thereafter,On 25.11.2013, the Advocate Commissioner filed a report disclosing that the petitioner herein is the successful bidder.
4. It is contended that the revision petitioner has no locus standi to file the revision petition as the sale in favour of him has not been confirmed by the Court and that he has not acquired any sort of interest in the immovable property auctioned. This contention cannot be accepted as the revision petitioner has participated in the auction proceedings and he has paid the entire sale consideration, though it is claimed to be an outdated payment of money. Therefore, the auction purchaser has every right to challenge the cancellation of sale and as an affected party, he has right to challenge the cancellation of sale, even though the sale is not confirmed in favour of him.
5. The main contention of the learned counsel for the second respondent is that the Commissioner did not follow the Rules prescribed i.e. Rules 84 to 88 and 92 to 94 of Order 21 C.P.C. read with Clause B of Sections 7 and Section 8 of the Partition Act,1983 while conducting the sale and therefore, the sale is invalid. Therefore, in view of the contention raised, it is necessary to look into Sections 7 and 8 of the Partition Act,1983.
7. Procedure to be followed in case of sale.Save as herein before provided, when any property is directed to be sold under this Act, the following procedure shall, as far as practicable, be adopted, namely:
(a) if the property be sold under a decree or order of the High Court of Calcutta, Madras or Bombay, in the exercise of its original jurisdiction, 3 [***] the procedure of such court in its original civil jurisdiction for the sale of property by the Registrar;
(b) if the property be sold under a decree or order of any other court, such procedure as the High Court may form time to time by rules prescribe in this behalf, and until such rules are made the procedure prescribed in the Code of Civil Procedure 4 in respect of sales in execution of decrees.
8. Orders for sale to be deemed Decrees.Any order for sale made by the court under section 2, 3 or 4 shall be deemed to be a decree within the meaning of section 2 of the Code of Civil Procedure, (14 of 1882).
6. It is also necessary to consider the Rules 84 to 88 and 92 to 94 of Order 21 C.P.C.
84 . Deposit by purchaser and re-sale on default (1) On every sale of immovable property the person declared to be the purchaser shall pay immediately after such declaration a deposit of twenty-five per cent, on the amount of his purchase money to the officer or other person conducting the sale, and in default of such deposit, the property shall forthwith be re-sold.
(2) Where the decree-holder is the purchaser and is entitled to set-off the purchase-money under rule 72, the Court may dispense with the requirements of this rule.
85. 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.
86. 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 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.
87. Notification on re-sale Every re-sale of immovable property, in default of payment of the purchase-money within the period allowed for such payment, shall be made after the issue of a fresh proclamation in the manner and for the period herein-before prescribed for the sale.
88. Bid of co-sharer to have preference Where the property sold is a share of undivided immovable property and two or more persons, or whom one is a co-sharer, respectively bid the same sum for such property or for any lot, the bid shall be deemed to be the bid of the co-sharer.
89. .
90. .
91. .
92. Sale when to become absolute or be set aside (1) Where no application is made under Rule 89, Rule 90 or Rule 91, or where such application is made and disallowed, the Court shall make an order confirming the sale, and thereupon the sale shall become absolute:
[Provided that, where any property is sold in execution of a decree pending the final disposal of any claim to, or any objection to the attachment of, such property, the Court shall not confirm such sale until the final disposal of such claim or objection.] (2) Where such application is made and allowed, and where, in the case of an application under Rule 89, the deposit required by that rule is made within sixty days from the date of sale, [or in cases where the amount deposited under Rule 89 is found to be deficient owing to any clerical or arithmetical mistake on the part of the depositor and such deficiency has been made good within such time as may be fixed by the Court, the Court shall make an order setting aside the sale]:
Provided that no order shall be made unless notice of the application has been given to all persons affected thereby.
[Provided further that the deposit under this sub-rule may be made within sixty days in all such cases where the period of thirty days, within which the deposit had to be made, has not expired before the commencement of the Code of Civil Procedure (Amendment) Act, 2002.] (3) No suit to set aside an order made under this rule shall be brought by any person against whom such order is made.
[(4) Where a third party challenges the judgment-debtor's title by filing a suit against the auction-purchaser, the decree-holder and the judgment-debtor shall be necessary parties to the suit.
(5) If the suit referred to in sub-rule (4) is decreed, the Court shall direct the decree-holder to refund the money to the auction-purchaser, and where such an order is passed the execution proceeding in which the sale had been held shall, unless the Court otherwise directs, be revived at the stage at which the sale was ordered.]
93. Return of purchase-money in certain cases Where a sale of immovable property is set aside under Rule 92, the purchaser shall be entitled to an order for repayment of his purchase-money, with or without interest as the Court may direct, against any person to whom it has been paid.
94. Certificate to purchaser Where a sale of immovable property has become absolute, the Court shall grant a certificate specifying the property sold and the name of the person who at the time of sale of is declared to be the purchaser. Such certificate shall bear date the day on which the sale became absolute.
7. The auction sale was held on 09.11.2013. The amount equivalent to 25% of the purchase money has to be paid to the officer or other person conducting the sale, as required under Rule 84 of Order 21 C.P.C. The balance of purchase money has to be deposited into the Court before the Court closes on the 15th day from the sale of property as contemplated under Rule 85 of Order 21 C.P.C.
8. In order to find out, whether there is irregularity or violation in payment of purchase money when the auction was conducted, it is necessary to look into the details of the proceedings of the sale.
Details of sale S. No. Date Proceedings 1. 08.10.2013 Notice issued by Advocate to the respondents intimating the date of auction, time, place and upset price, etc. 2. 17.10.2013 Communication addressed to Editor, Dinamalar and Deccan Chronicle requesting publication of notice of public auction. 3. 18.10.2013 Public auction notice published in those two newspapers. 4. 18.10.2013 Notice by Dum Dum in the suit property as well as in adjacent area by Deepan Music Band. 5. 18.10.2013 Public auction notice was affixed and Photographs filed in proof of that, giving the following details. Date of auction 09.11.2013 Place of auction 2/22, 14th Street, Nandanam Extension, Chennai 35 at 11.00 a.m. Upset price at Rs.60,68,090/- 6. 09.11.2013 Auction conducted. DD dated 09.11.2013 drawn on Axis Bank for Rs.16,00,000/- in the name of Advocate Commissioner and a sum of Rs.2,00,000/- by cash was paid. D.D. Dated 21.11.2013 for a sum of Rs.54,05,000/- drawn on Axis Bank was handed over to the Commissioner. Furnishing all these details, the Commissioner has filed the report.
9. In the said report, the Advocate Commissioner has said that he is in custody of the total bid amount and he has sought for direction for disbursement of bid amount in the proportion in which the parties to the suit have to be paid.
10. From the details furnished, it is for the Court to find out whether there is any violation of any Rule, while conducting the auction sale.
11. It is the grievance of the learned counsel for the first respondent that the purchase money was not paid in time and that as per the procedure contemplated, it was not paid into the account of the Court. It is further contended that payment in the hands of the Commissioner would not amount to payment into Court.
12. Per contra, it is contended that payment of money to a person nominated by the Court would be equivalent to payment into the Court and as the auction purchaser paid the money to the Commissioner well in time, it must be construed to be payment into Court. It is further submitted that any default committed by the Commissioner cannot operate as a detriment to the rights of the revision petitioner and therefore, the order setting aside the sale should be held illegal.
13. As rightly contended by the learned counsel for the revision petitioner, the payment of purchase money has been paid in time by the auction purchaser. But, he has not deposited the money into Court, but, has paid it to the Commissioner. Whether this could be construed as sufficient compliance is the issue to be decided.
14. There cannot be any manipulation in the date of payment as substantial part of the money has been paid by way of demand draft drawn on Axis Bank on the date of sale. Therefore, the contention that money was paid to the Commissioner on the date of sale itself must be true and correct.
14.1. The main contention is that, payment of money in hands of the commissioner is not the procedure contemplated and that the money was not deposited into Court as per the requirement. As already discussed, payment into Court is equivalent to payment to a person nominated by the Court to conduct the sale. If the Commissioner appointed by the Court had directed the auction purchaser to deposit the money into Court, he should have done that. There was no such direction from the Commissioner to the Auction Purchaser. During Auction, the counsel for D2 to D13 have also been present there. They did not raise any objection with regard to mode of payment at that point of time. Therefore, when there was no willful violation in the mode of payment, the contention that the payment was outdated/outmoded and therefore, the sale is not valid, cannot be accepted. There is vital difference with regard to the validity of the order when it is branded as irregularity and illegality. If at all, the delay is on the part of the auction purchaser in making the payment itself, then it can be termed as an illegality. But, it is not a case here. It is a case where payment of money has been made by Demand Draft drawn on the Bank and it has been paid in the hands of the Commissioner. Therefore, when the purchase money has been paid within the prescribed time and within the prescribed time, if the Commissioner has not chosen to deposit the money into Court, then the mistake committed by the Commissioner cannot be construed as the mistake committed by the auction purchaser. Moreover, when the mistake of the Court itself can cause no prejudice to anybody, the mistake committed by the Commissioner appointed by the Court also cannot cause any prejudice to the auction purchaser.
15. Contending that the violation of time limit prescribed and violation regarding issuance of fresh proclamation are fatal and therefore, the setting aside of the sale by the Court is justified, the learned counsel for the first respondent has relied upon the following decisions:
(i) AIR 1954 SCC 349 (Manilal Mohanlal Shah and others vs. Sardar Sayed Ahmed Sayed Mahmad and another) The provisions of O.21, Rr.84, 85 and 86 requiring the deposit of 25 per cent of the purchase-money immediately, on the person being declared as a purchaser, such person not being a decree-holder, and the payment of the balance within 15 days of the sale are mandatory and upon non-compliance with these provisions there is no sale at all. The rules do not contemplate that there can be any sale in favour of a stranger purchaser money in the first instance and the balance within 15 days. When there is no sale within the contemplation of these rules, there can be no question of material irregularity in the conduct of the sale. Non-payment of the price on the part of the defaulting purchaser renders the sale proceedings as a complete nullity.
(ii) AIR 1974 Madras 278 (Subbammal v. P.Gurusamy Thevar and others) That was a case of non-payment of the purchase money. But it must be remembered that under Rule 85, there is no distinction between purchase money and the general stamps. The rule makes it clear that the full amount of the purchase money as well as the general stamps has to be deposited within 15 days from the date of the sale of the property. Therefore, what applies to the purchase money equally applied to the general stamps. In the case referred above, the Supreme Court has clearly held that if the requirements of Rule 85 of Order 21 are not complied with within the prescribed time, then the sale is a nullity, and the purchaser acquires no right at all.
(iii) AIR 1990 Madras 226 (Jagannathan @ Govindarasu and others v. Angamuthu Pillai and others) 7. On the other hand, the learned Counsel for the appellants relied on certain decisions, in Appu v. Achuta Menon A.I.R. 1926 Mad. 755. it was held:
It is for the court to settle the proclamation of sale and it cannot delegate that power to the commissioner appointed by it. In Venkateswara Ettu Naicker v. Ayyammal AIR 1950 Mad 367 : 1950 Mad WN 44, it was held:
A sale held without a proclamation as required under Order 21, Rule 66, C.P.C., is void. Where the sale itself is held to be an illegality, the sale in its entirety must be set aside and setting aside cannot be confined to the share of the applicant.
16. Contending that the applicability of the provisions of Civil Procedure Code while conducting the auction sale is only for the purpose of guidance and therefore, any violation even if any would not affect the validity of sale, the learned counsel for the revision petitioner relied upon the following decisions:
(i) 2008 (9) SCC 299 (Valji Khimji and Acompany vs. Official Liquidator of Hindustan Nitro Prodcut (Gujarat) Ltd. and others).
28. ...... When an auction-sale is advertised in well-known newspapers having wide circulation, all eligible persons can come and bid for the same, and they are themselves to be blamed if they do not come forward to bid at the time of the auction. They cannot ordinarily later on be allowed after the bidding (or confirmation) is over to offer a higher price. Of course, the situation may be different if an auction-sale is finalised, say for Rs.1 crore, and subsequently somebody turns up offering Rs.10 crores. In this situation, it is possible to infer that there was some fraud because if somebody subsequently offers Rs.10 crores, then an inference can be drawn that an attempt had been made to acquire that property/asset at a grossly inadequate price. This situation itself may indicate fraud or some collusion. However, if the price offered after the auction is over which is only a little over the auction price, that cannot by itself suggest tht any fraud has been done.
(ii) 1986 (4) SCC 27 (Tarlok Singh vs. Municipal Corporation of Amritsar and another) 9. .... the use of the phrase as far as it can be made applicable clearly indicates that it is not expected in any one of these proceedings to follow the procedure of a suit technically and strictly in accordance with the provisions contained in the Code of Civil Procedure. It is only for purposes of guidance that the procedure of a suit as provided in the Code of Civil Procedure can be considered and it will be the discretion of the authority (the District Judge) to apply as far as it could be applied in the appropriate proceedings. ....
(iii) AIR 1961 Supreme Court 200 (L.Hazari Mal Kuthiala vs. Income-tax Officer, Special Circle, Ambala Cantt. and another) The question whether provisions in a statute are directory or imperative has very frequently arisen in this country, but it has been said that no general rule can be laid down and that in every case, the object of the statute must be looked at.
17. The next contention is that general stamps for the certificate of sale to be issued has not been paid to anybody and therefore, the sale is liable to be set aside.
18. Perusal of decisions relied on the side of the revision petitioner would go to show that with regard to auction sale following the procedure under Order 21 C.P.C. is not mandatory while effecting the sale under the Partition Act. The requirement is that the provisions of C.P.C. have to be followed only as far as practicable. It means that those provisions have to be followed only as guidelines and that it is not mandatory. Therefore, all the decisions relied on by the learned counsel for the first respondent under which the following provisions of Order 21 Rules 84, 85 and 86 and apart from Rule 66 are said to be mandatory, will not apply to the sale effected under the partition Act.
19. It is not the case of the respondent that there was a fraud and collusion in effecting the sale. The auction sale was conducted after adequate notice to both parties and also after effectingf publicity in well known newspapers. It is not a case where the amount of purchase money is not paid at all, but, paid to the Commissioner, who is a person appointed by the Court. The non-deposit of general stamps for certificate by the auction purchaser is not out of the mistake committed by the auction purchaser, but, out of mistake committed by the Commissioner in not giving such a direction to the auction purchaser to deposit the same.
20. Even assuming that it is a mistake of the auction purchaser, even then, as the provisions of Order 21 Rule 85 are not mandatory, in so far as sale under partition Act is concerned, the sale cannot be set aside on that ground alone. Therefore, the setting aside of the sale by the Court below is unjustified and therefore, it is liable to be set aside.
21. In the result, the revision petition is allowed. The Executing Court is directed to give direction to the Commissioner to deposit the money into Court and to direct the auction purchaser to deposit the general stamps for certificate and to pass further orders. No costs. Consequently, connected Miscellaneous Petition is closed.
24.09.2014 ogy Index : Yes / No. Internet: Yes / No. S.VIMALA, J.
ogy To
1. The learned XIV Assistant Judge, City Civil Court, Chennai.
Pre-delivery order made in CRP.(NPD) No.1548 of 2014 24.09.2014