Madras High Court
K.B.Hemchand vs K.J.Shankar
Author: P.T.Asha
Bench: P.T.Asha
C.M.A.No.2701 of 2013
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON: 25.11.2022
PRONOUNCED ON: 10.01.2023
CORAM
THE HON'BLE Ms.JUSTICE P.T.ASHA
C.M.A.No.2701 of 2013
and
C.M.P.No.13295 of 2017
K.B.Hemchand
...Appellant
Vs.
1. K.J.Shankar
2.M/s.Mahalakshmi Tea Growers,
Partnership Firm
Rep. by its partners K.J.Prabhu,
ISSU Buildings, Bed Fort,
Coonoor - 1, Nilgris District.
3.K.J.Prabhu
4.Rukmani
5.Dr.Mahalakshmi
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C.M.A.No.2701 of 2013
6.Usha @ Gowri Lakshmi
7.K.J.Prabhu
8. Karnataka Bank
Rally Compound, Coonoor.
... Respondents
PRAYER :- This Civil Miscellaneous Appeal is filed under Order 43
Rule 1(j) of the C.P.C, against the fair and decreetal order dated
07.06.2013 in E.A.No.63 of 2013 in E.P.No.5 of 2010 in O.S.No.32 of
2007 on the file of the District Court, Nilgris at Udhagamandalam.
For Appellants : Mr.B.Ravi
For Respondents : Mr.V.Raghavachari for Mr.N.Surya
Senthi [R.1]
: Mr.Elayarajkumar for M/s.
Ramalingam and Associates [R.8]
: R3 to R7 - No appearance
: R.2 - served [No appearance]
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JUDGMENT
The short points for consideration in the above Appeal are as follows :-
i) Whether the auction sale conducted under the provisions of Order 21 Rule 54 and 66 of the Code of Civil Procedures pursuant to a mortgage decree could be set aside by invoking the provisions of Order 21 Rule 89 read with Order 21 Rule 92 or Order 34 Rule 5(2) of the Code of Civil Procedures.
ii) Whether the judgement debtor can invoke the remedy available to him under the provisions of Order 34 Rule 5 of the Code of Civil Procedure at the stage of appeal especially when the application before the Court is one filed under the provisions of Order 21 Rule 54 and 66 of the CPC.
2. The appellant is the auction purchaser before the Executing Court.
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3. Since the questions involved are purely legal, it would be necessary to only touch upon the dates and events which have culminated in the filing of the above appeal.
Dates and Events:-
S.No. Dates Events
1. 10.09.2007 The suit OS.No.32 of 2007 filed by the plaintiff/8th respondent herein on the file of the District Court, Ooty for a preliminary mortgage decree to recover a sum of Rs.7,20,587.06/-.
2. 30.06.2008 Sale executed by defendants and others in favor of one M.M.Venkatachalam.
3. 26.11.2008 Preliminary decree in the mortgage suit is passed.
4. 15.09.2009 Final decree is passed.
5. 04.02.2010 Execution petition filed in E.P.No.5 of 2010 on the file of the the District Court, Nilgiri, Udhagamandalam.
6. 11.12.2012 Auction sale conducted and the successful bidder is the appellant herein. Auction purchaser bids for a sum of Rs.10,66,000/- and deposits a sum of Rs.2,67,000/-.
7. 20.12.2012 E.A.No.63 of 2012 filed by the 1st respondent who is the 5th judgement debtor invoking the provisions of Order 21 Rule 89 of CPC to set aside the auction sale and to permit the deposit of the decree amount shown in the enclosed lodgement schedule.
8. 21.12.2012 Entire auction amount deposited by the auction 4/39 https://www.mhc.tn.gov.in/judis C.M.A.No.2701 of 2013 S.No. Dates Events purchaser/appellant herein.
9. 07.06.2013 The District Court allows the petition to set aside the auction sale against which the present appeal is filed. Submissions:-
3. Mr.B.Ravi, learned counsel appearing on behalf of the appellant would base his argument on the following:-
a) The application being one under Order 21 Rule 89 of the Code of Civil Procedure, the deposit ought to have been made within a period of 60 days from the date of the sale. However, in the instant case, the amount was deposited only on 27.03.2013.
b) Under Order 21 of Rule 89, CPC the deposit was not only a prerequisite but also mandatory.
c) The 1st respondent/5th judgment debtor and the other judgement debtors have sold the property to a third party and therefore they had no subsisting interest in the property.
d) The provisions of Order 34 Rule 5 of the Code of Civil Procedure 5/39 https://www.mhc.tn.gov.in/judis C.M.A.No.2701 of 2013 cannot be invoked without there being any application before the Court.
4. He would also rely upon the following judgements:-
i) AIR 1963 Madras 156- T.S.Sailppan Vs. Subbiah Pillai and Others in support of his contention that under the provisions of Order 21 Rule 89 CPC only a person having an interest in the property can seek to have the sale set aside.
ii) AIR 1968 SC 86- Hukumchand Vs. Bansilal and Others in support of his contention that the Court does not have the power to extend the time for making deposit beyond the period prescribed under law.
iii) A 5 bench judgement of the Hon’ble Supreme Court reported in (2001) 7 SCC 71 - Dadi Jagannadham Vs. Jammulu Ramulu and another in support of his argument that the deposit should have been made within a period of 30 days as envisaged under the provisions of Order 21 Rule 89 and within a period of 60 days under Article 127 of the Limitation Act.
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5. Per contra, Mr.Raghavachari, learned counsel appearing on behalf of the 1st respondent would contend that the entire amount paid by the auction purchaser together with requisite interest and poundage has been fully deposited by the appellant on 27 March 2013 and the sale is yet to be confirmed. He would submit that though the application has been filed invoking the provisions of Order 21 Rule 89 of CPC, however, the same can be treated as one filed under Order 34 Rule 5 of the Code of Civil Procedure since the decree is a mortgage decree. He would submit that the total decree amount of over Rs.16,06,286/- has been paid.
6. He would rely on the judgement reported in AIR 1992 Mad 200- N. Krishnamoorthy Vs. N.M.A.R.H.Ramaswamy Chettiar and Ors. in support of his contention that even without an application under Order 34 Rule 5 CPC, the Court could still invoke the same to give relief to the judgement debtor. He would also rely on the judgement reported in (1994) I MJL 554- Mohanaram Chettiar Vs. K.V.Santhanam and Anr. where the question involved was whether under Order 34 Rule 5 CPC the amount 7/39 https://www.mhc.tn.gov.in/judis C.M.A.No.2701 of 2013 should be deposited prior to the filing of the application or at the time of the filing of the application. The learned Judge held that under the provision of Order 34 Rule 5 the amount can be deposited at any time before the confirmation of sale. He would also rely upon the judgement reported in (1991) 1 MLJ 380- Subbulakshmi Ammal Vs. R.Balasubramanian and Others to put across a contention that the provisions of Order 34 Rule 5 can be invoked by any person.
7. He would further rely upon the judgement of the Division Bench of this Court reported in (1984) 97 LW 328 - Sevugan Chettiar Vs. V.A.Narayana Raja and Others in support of his contention that the provisions of Order 34 Rule 5 of the Code of Civil Procedure can be invoked anytime before the confirmation of the sale. He would also rely upon the judgement of the Hon’ble Supreme Court reported in 2000 (3) SCC 664 - Kharaiti Lal Vs. Raminder Kaur and Others to contend that even a third party may be permitted to invoke the provisions of Order 34 Rule 5 of the Code of Civil Procedure. He would also place reliance upon 8/39 https://www.mhc.tn.gov.in/judis C.M.A.No.2701 of 2013 yet another judgement of the Hon’ble Supreme Court reported in 2006 (2) SCC 608 - Philomina Jose Vs. Federal Bank Ltd. and Others in support of his contention that since the sale had not been confirmed there was no impediment for setting aside the sale as the right of redemption is vested with the mortgagor anytime till the sale is confirmed.
8. Heard both the counsels.
Discussion.
9. Before proceeding to consider the arguments advanced on each side it would be necessary to extract the following provisions:-
i) Order 21 Rule 54 - Attachment of immovable property.—(1) Where the property is immovable, the attachment shall be made by an order prohibiting the judgment-debtor from transferring or charging the property in any way, and all persons from taking any benefit from such transfer of charge.
[(1A) The order shall also require the judgment-debtor to 9/39 https://www.mhc.tn.gov.in/judis C.M.A.No.2701 of 2013 attend Court on a specified date to take notice of the date to be fixed for settling the terms of the proclamation of sale.] (2) The order shall be proclaimed at some place on or adjacent to such property by beat of drum or other customary mode, and a copy of the order shall be affixed on a conspicuous part of the property and then upon, a conspicuous part of the Court-house, and also, where the property is land paying revenue to the Government, in the office of the Collector of the district in which the land is situate [and, where the property is land situate in a village, also in the office of the Gram Panchayat, if any, having jurisdiction over that village.]
ii) Order 21 Rule 66 - Proclamation of sales by public auction.—(1) Where any property is ordered to be sold by public auction in execution of a decree, the Court shall cause a proclamation of the intended sale to be made in the language of such Court.
(2) Such proclamation shall be drawn up after notice to the decree-holder and the judgment-debtor and shall state the time and place of sale, and specify as fairly and accurately as possible— 10/39 https://www.mhc.tn.gov.in/judis C.M.A.No.2701 of 2013
(a) the property to be sold 1 [or, where a part of the property would be sufficient to satisfy the decree, such part];
(b) the revenue assessed upon the estate or past of the estate, where the property to be sold is an interest in an estate or in part of an estate paying revenue to the Government;
(c) any encumbrance to which the property is liable;
(d) the amount for the recovery of which the sale is ordered; and
(e) every other thing which the Court considers material for a purchaser to know in order to judge of the nature and value of the property :
[Provided that where notice of the date for settling the terms of the proclamation has been given to the judgment-debtor by means of an order under rule 54, it shall not be necessary to give notice under this rule to the judgment-debtor unless the Court otherwise directs : Provided further that nothing in this rule shall be construed as requiring the Court to enter in the proclamation of sale its own estimate of the value of the property, but the proclamation shall include the estimate, if any, given, by either or both of the Parties.] 11/39 https://www.mhc.tn.gov.in/judis C.M.A.No.2701 of 2013 (3) Every application for an order for sale under this rule shall be accompanied by a statement signed and verified in the manner hereinbefore prescribed for the signing and verification of pleadings and containing, so far as they are known to or can be ascertained by the person making the verification, the matters required by sub-rule (2) to be specified in the proclamation.
(4) For the purpose of ascertaining the matters to be specified in the proclamation, the Court may summon any person whom it thinks necessary to summon and may examine him in respect to any such matters and require him to produce any document in his possession or power relating thereto.
iii) Order 21 Rule 89 - Application to set aside sale on deposit.—(1) Where immovable property has been sold in execution of a decree, 1 [any person claiming an interest in the property sold at the time of the sale or at the time of making the application, or acting for or in the interest of such person,] may apply to have the sale set aside on his depositing in Court,—
(a) for payment to the purchaser, a sum equal to five per cent. of the purchase-money, and 12/39 https://www.mhc.tn.gov.in/judis C.M.A.No.2701 of 2013
(b) for payment, to the decree-holder, the amount specified in the proclamation of sale as that for the recovery of which the sale was ordered, less any amount which may, since the date of such proclamation of sale, have been received by the decree-holder.
(2) Where a person applies under rule 90 to set aside the sale of his immovable property, he shall not, unless he withdraws his application, be entitled to make or prosecute an application under this rule.
(3) Nothing in this rule shall relieve the judgment-debtor from any liability he may be under in respect of costs and interest not covered by the proclamation of sale.
iv) Order 34 Rule 5 - Final decree in suit for sale.— (1) Where, on or before the day fixed or at any time before the confirmation of a sale made in pursuance of a final decree passed under sub-rule (3) of this rule, the defendant makes payment into Court of all amounts due from him under sub-rule (1) of rule 4, the Court shall, on application made by the defendant in this behalf, pass a final decree or, if such decree has been passed, an order— 13/39 https://www.mhc.tn.gov.in/judis C.M.A.No.2701 of 2013
(a) ordering the plaintiff to deliver up the documents referred to in the preliminary decree, and, if necessary,—
(b) ordering him to transfer the mortgaged property as directed in the said decree, and, also, if necessary,—
(c) ordering him to put the defendant in possession of the property.
(2) Where the mortgaged property or part thereof has been sold in pursuance of a decree passed under sub-rule (3) of this rule, the Court shall not pass an order under sub-rule (1) of this rule, unless the defendant, in addition to the amount mentioned in sub-
rule (1), deposits in Court for payment to the purchaser a sum equal to five per cent. of the amount of the purchase-money paid into Court by the purchaser. Where such deposit has been made, the purchaser shall be entitled to an order for repayment of the amount of the purchase-money paid into Court by him, together with a sum equal to five per cent. thereof.
(3) Where payment in accordance with sub-rule (1) has not been made, the Court shall, on application made by the plaintiff in this behalf, pass a final decree directing that the mortgaged property or a sufficient part thereof be sold, and that the proceeds of the sale 14/39 https://www.mhc.tn.gov.in/judis C.M.A.No.2701 of 2013 be dealt with in the manner provided in sub-rule (1) of rule 4.
10. To put the facts, preceeding the auction sale in perspective it is necessary to peruse the notes of proceeding in the execution petition which would show that on 22.02.2011, since the judgement debtors had not made the payment, the learned Judge had directed sale of the property. The records would show that the property was earlier attached by an order dated 12.07.2010. When the proclamation of sale was filed into Court on 13.09.2010, the Amin’s value was fixed at Rs.14,00,000/-. The decree holder namely the 8th respondent herein had shown the market value as Rs.30,00,000/-. It is seen that thereafter applications were made to reduce the upset price and ultimately the upset price of the property was fixed at Rs.10,65,000/- by order dated 08.11.2012.
11. The sale proclamation issued had fixed the date of sale on 10.12.2012, however, since the learned Judge was on other duty, the sale was adjourned to 11.12.2012. On 11.12.2012, the property was sold to the 15/39 https://www.mhc.tn.gov.in/judis C.M.A.No.2701 of 2013 appellant herein for a sum of Rs.10,66,000/-. 1/4th of the total amount i.e; Rs.2,66,500/- less poundage amount of Rs.33,010/- was lodged by the appellant with the Head Clerk on the said date. On the very next day i.e; on 20.12.2012, the 5th judgement debtor/1st respondent herein had filed the application which is the subject matter of this appeal. Along with the said petition, the 1st respondent herein had also filed the lodgement schedule. In fact, the prayer in the petition was to set aside the auction sale held on 10.12.2012 and permit the 1st respondent to deposit the amount shown in the lodgement schedule. Meanwhile, the balance sale amount has been deposited by the auction purchaser/appellant herein on 21.12.2012, however, to date the sale has not been confirmed.
12. The 1st respondent herein has filed the application to set aside the sale invoking the provisions of Order 21 Rule 89 of the CPC and in the affidavit filed in support of the petition he has stated that he is ready to deposit the amount paid by the auction purchaser on that day together with 5% interest on the auctioned amount amounting to a sum of Rs.3,20,300/-. 16/39 https://www.mhc.tn.gov.in/judis C.M.A.No.2701 of 2013 The lodgement schedule for the said amount was also enclosed. An argument was raised by the appellant that the 1st respondent did not have a subsisting interest in the property as the property has been sold. He would rely upon the judgement in AIR 1963 Mad 156 - T.S. Sailappan vs. Subbiah Pillai and Ors. in support of this contention. However, the provisions of Order 21 Rule 89 CPC has been amended by Act 104 of 1976 and the following words have been inserted therein “any person claiming an interest in the property sold at the time of sale or at the time of making the application, or acting for or in the interest of such person"
in the place of the words "any person holding an interest”. Therefore, post the amendment, even a person acting for or in the interest of a person claiming an interest in the property can apply to have the sale set aside provided he deposits a sum equal to 5% of the purchase money and pays the decree holder the amounts specified in the proclamation of sale. The 1st respondent who is said to have sold the suit property alongwith the others has undertaken to clear all the encumbrances in respect of the property. He is therefore, definitely acting in the interest of a person claiming an interest in the property.
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13. In the case of a sale pursuant to a final decree in a suit for mortgage, the provisions of Order 34 Rule 5 CPC provides that before the confirmation of sale made in pursuance of a final decree, if the defendant makes a payment into Court of all the amounts due by him under the provisions of Sub Rule 1 of Rule 4, the Court shall on an application made by the defendant in this behalf order the plaintiff to deliver the documents referred in the preliminary decree and if necessary order him to transfer the mortgage property and put the defendant in the possession of the same. Therefore a reading of Order 34 Rule 5, CPC would clearly indicate that if the amount is deposited before the sale is confirmed then the Court has to necessarily pass an order directing the plaintiff to deliver the documents and put the plaintiff in possession of the property, if necessary.
14. The argument of the learned counsel for the 1st respondent is that though the application has been filed invoking the provisions of Order 21 Rule 89, CPC the remedy to set aside the sale is very much available 18/39 https://www.mhc.tn.gov.in/judis C.M.A.No.2701 of 2013 under the provisions of Order 34 Rule 5 of the Code since the sale is one in pursuance of a mortgage decree. Therefore in the light of the above argument it is necessary to consider the March of Law with reference to the applicability of the provisions both of Order 34 Rule 5 and Order 21 Rule 89 of the Code of Civil Procedure to applications for setting aside the sale. The provisions of Order 34 Rule 5 CPC is available only in the case of a mortgage decree whereas, the provisions of Order 21 Rule 89 CPC is applicable to all other decrees pursuant to which the property is brought to sale. As regards the provisions of Order 34 Rule 5 CPC there is a clear mandate that the sale can be set aside at any point up to its confirmation. This principle stems from the provisions of Section 60 of the Transfer of Property Act which gives a right to the mortgagor to redeem the mortgage.
15. The issue is whether this right can be exercised a) without an application being filed; and b) whether the application can be invoked even where there is a confirmation of sale?. This conundrum came up for consideration before this Court in the judgment reported in (1964) 1 MLJ 19/39 https://www.mhc.tn.gov.in/judis C.M.A.No.2701 of 2013 275 - Valliammal Vs. Subramania Iyer that was a case where a mortgagor sought to redeem the mortgage during the pendency of the appeal preferred against the dismissal of his petition under Order 21 Rule 90 of the CPC and the sale subsequent to the dismissal of the petition had been confirmed by the lower Court. The learned Judge gave a finding in favour of the mortgagor and held as follows-
" It must be noticed that notwithstanding the fact that the petition for setting aside the sale had been dismissed by the executing Court, the matter was at large before the appellate Court in appeal. It would, therefore, follow that there was no final order of confirmation of sale before the appeal was disposed of. It is clear from the terms of O. 34, R. 5, C.P.C., that so long as the sale had not been confirmed, it will be open to the mortgagors to deposit the amount due together with the solatium as prescribed therein and avoid the sale."
16. In the judgement reported in (1953) 1 MLJ 148 - Varadarajan Vs.Muthu Venkatapathi Reddy, this Court had held that the effect of restoring an application under Order 21 Rule 90 CPC automatically operates to vacate the earlier order confirming the sale under Order 21 20/39 https://www.mhc.tn.gov.in/judis C.M.A.No.2701 of 2013 Rule 92 of the CPC. The reasoning for the above decision was that during the pendency of an application under Order 21 Rule 90 there is a bar for the confirmation of sale under Order 21 Rule 92 CPC being made or remaining ineffective. Therefore, the restoration of an application under Order 21 Rule 90 which has been dismissed earlier for default would tantamount to an application being treated as pending and not disposed of despite the confirmation of sale in the interregnum. This judgment was followed in a later decision reported in (1967) 1 MLJ 260 - Ramathal Vs. Nagarathinammal. The above cases would demonstrate that the stage of final irrevocability is not reached even after the executing Court confirms the sale of the immovable property to the auction-purchaser either on account of the applications not being preferred under Rule 89, 90 & 91 of the Order 21, CPC or such application having not been made and disallowed under the provisions of Order 21 Rule 92 of CPC. Therefore, these judgments would clearly demonstrate that the right of a mortgagor to have the mortgage redeem takes predominance over the right of an auction purchaser whose sale has been confirmed.
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17. In the judgement reported in 1975 2 MLJ 494 -
S.V.Ramalingam and Ors Vs. K.E.Rajagopalan and Anr, the learned Judge relying upon the judgement cited above had set out the distinctive features in the sale and confirmation of a mortgage property and the right available to the mortgagor to redeem the mortgage as follows:-
" 15. A conspectus of the entire matter brings to the surface certain distinct features in the sale and confirmation thereof, of mortgaged property and the right made available to the mortgagor to redeem the mortgage after the passing of the final decree and even after the sale of the property in terms of the final decree. O. 34, R. 2, C.P.C., provides for the passing of a preliminary decree in a foreclosure suit, and acting thereunder, the court has not only to take account due to the plaintiff-mortgagee at the date of the decree, but has also to give the mortgagor time extending upto six months for payment of the money due to the plaintiff on taking of accounts. Sub-Cl. (2) of R. 2 of the O. 34 gives the option to the court, on good cause being shown, to extend, from time to time, the time fixed for payment of the amount adjudged due. And then comes O. 34, R. 4 which deals with the preliminary decree to be passed in a suit for sale. Lastly, there is O. 34, R. 5 which states that if the mortgagor, on or before the day fixed or at any time before the confirmation of sale made in pursuance of a final decree makes 22/39 https://www.mhc.tn.gov.in/judis C.M.A.No.2701 of 2013 payment into Court of all amounts due from him, the court shall allow redemption. The only condition that is enjoined under sub-R. (2) is that, if the mortgaged property or part thereof had been sold, the: mortgagor would not be entitled to redemption unless he also deposits into Court, for payment to the purchaser, a sum equal to five per cent of the purchase money paid into Court by the purchaser. Such facility is obviously afforded to the mortgagor, because the general principle of law is that there should be no clog on the equity of redemption until the sale is concluded finally by Court's order or confirmation or as stated, under O. 21, R. 92, of the sale becoming absolute. "
"16. The confirmation of a sale subsequent to the dismissal of a petition under O. 21, R. 90 cannot, in reality, after the situation when the mortgagor judgment-debtor has preferred within time an appeal against the dismissal of his petition under O. 21, R. 90. Though the confirmation of the sale does take the auction-purchaser a step further than before the confirmation of the sale, the confirmation, by itself, is, in one sense, inchoate. The confirmation gives the sale only viability, but does not render the sale an indefeasible one, till such time the appeal preferred by the mortgagor against the validity of the sale remains undisposed. In that sense, the confirmation effected by the executing court may become final as far as the executing court is concerned, but it certainly does not stamp the transaction with irrevocable finality when 23/39 https://www.mhc.tn.gov.in/judis C.M.A.No.2701 of 2013 alone the rights of parties get crystallised beyond retracement. Consequently, the appeal preferred by the judgment-debtor has the effect of rendering a sale and its confirmation fluidal and nebulous. It, therefore, follows that the finality of the sale is rendered at large before the appellate court in appeal and as such, the petitioners will be entitled to exercise the right conferred on them under O. 34, R. 5 to redeem the mortgage. "
18. The aforesaid judgement has been followed by another learned Judge of this Court in the judgement reported in (1989) 2 MLJ 212 - Kaliammal and Ors Vs. S.A.S. Alagappa Chettiar and Ors. The learned Judge had observed that there was no necessity for an application to be filed and a mere deposit would constitute compliance of the provisions of Order 34 Rule 5 of the CPC. The learned Judge has drawn strength from a judgement of the Division Bench of this Court reported in (1945) 58 LW 333 - Nanjappa Gounder Vs. Sreeranga Chettiar. The Division Bench had observed that the deposit should be treated as a payment under Order 34 Rule 5, CPC and had proceeded to allow the appeal. The learned Judge therefore following the above judgment and held that the deposit made 24/39 https://www.mhc.tn.gov.in/judis C.M.A.No.2701 of 2013 prior to the confirmation of sale and within a period of limitation was sufficient compliance under Order 34 Rule 5 as well as Order 21 Rule 89 of CPC. The learned Judge had also relied upon the judgments reported in AIR 1981 Mad. 254 Thangammal Vs. K.Dhanalakshmi and AIR 1985 Cal 382 - Court Liquidator Vs. Bimalendu Das. The ratio laid down in the above decisions was that there was no time limit for deposit under Order 34 Rule 5 of the CPC and the only condition was that it should be prior to the confirmation of sale.
19. The Hon'ble Supreme Court in a judgement reported in Magan Lal Vs. M/s. Jaiswal. Industries, Neemach- AIR 1989 SC 2113 - had rendered a finding that the provisions of Order 34 Rule 5 of the CPC would be attracted even in the case of an execution of an order of sale of mortgage property passed under Section 32 of the State Financial Corporation Act. Considering the various judgment in this aspect the learned Judge observed as follows:-
" It cannot be disputed that the provisions contained in Order 34 25/39 https://www.mhc.tn.gov.in/judis C.M.A.No.2701 of 2013 Rule 5 of the Code are attracted as is apparent from the plain language thereof during the proceedings in execution of a final decree for sale and are thus provisions contained in the Code with regard to and having a material bearing on the execution of a decree as aforesaid. As seen above, the provisions contained in Order 34 Rule 5 of the Code in substance permit the judgment debtor to redeem the mortgage even at the stage contemplated by Order 34 Rule 5 unless the equity of redemption has got extinguished. Since the contingency whereunder an equity of redemption gets extinguished is contained in the proviso to Section 60 of the Transfer of Property Act and and since as indicated above, in the instant case the equity of redemption has not extinguished we find no good ground to take the view that even though all the remaining provisions with regard to execution of a decree for sale of mortgaged property will apply to execution of an order under Section 32 of the Act, the provision contained in 0. 34 Rule 5 of the Code shall not apply. Nothing has been brought to our notice as to how and why it is not practicable to apply the said provision. As already pointed out earlier it has been held by this Court in the case of Mhadagonda Ramgonda Patil MANU/SC/0280/1988 [1988]3SCR689 that in a suit for redemption of a mortgage other than a mortgage by conditional sale or an anomalous mortgage, the mortgagor has a right of redemption even after the sale has taken place pursuant to the final decree but before the 26/39 https://www.mhc.tn.gov.in/judis C.M.A.No.2701 of 2013 confirmation of such sale and that in view of these provisions the question of merger of mortgage debt in the decretal debt does not at all arise. We again do not find any good ground for holding that the said principle will not be attracted to a sale which has taken place pursuant to an order under Section 32 of the Act in so far as the provisions in the Code with regard to execution of a decree are concerned. Of course, in view of the limited scope of legal fiction as indicated above the provisions in the Code shall be applicable to an order of sale under the Act only with regard to execution of that order as if it was a decree in a suit and the Financial Corporation was a decree holder and the debtor a judgment-debtor and this legal fiction will not be capable of being extended so as to treat an order of sale passed under the Act to be a decree in a suit for any other purpose for instance applying Section 34 of the Code as was sought to be done in the case of M/s. Everest Industrial Corporation MANU/SC/0067/1987 [1987]3SCR607 nor could it be extended for treating the application made under Section 31(1) of the Act as a plaint for purposes of payment of court fee as was sought to be done in the case of Gujarat State Financial Corporation MANU/SC/0007/1978 [1979]1SCR372.
"30. That the provisions of the Code with regard to execution of a decree for sale of mortgaged property would apply to execution of an order under section 32 of the Act is clear from section 32(8) of the Act 27/39 https://www.mhc.tn.gov.in/judis C.M.A.No.2701 of 2013 and the reasons stated above. It would also be so inasmuch as even otherwise once the order under section 32 for sale is made executable by a District Judge in his capacity as District Judge and not persona designata the provisions of the Code which are exercisable by the District Judge in execution of a decree for sale of mortgaged property would get attracted. "
These principles has also been enunciated in the judgment of this Court reported in AIR 1992 Mad 200- N. Krishnamoorthy Vs. N.M.A.R.H.Ramaswamy Chettiar & Ors. The learned Judge, relying upon the earlier judgement of Magan Lal Vs. M/s. Jaiswal Industries, Neemach supra held that even at the stage of revision the mortgagor can invoke the provisions of Order 34 Rule 5 of the Code of Civil Procedure.
20. In the Judgement of the Hon’ble Supreme Court reported in AIR 1999 SC 3750 - U.Nilan Vs. Kannayyan the Hon'ble Supreme Court has observed as follows:-
"Adversity of a person is not a boon for others. If a person 28/39 https://www.mhc.tn.gov.in/judis C.M.A.No.2701 of 2013 in stringent financial conditions had taken the loan and placed his properties as security therefore ,the situation cannot be exploited by the person who had advanced the loan. The Court seeks to protect the person affected by adverse circumstances from being a victim of exploitation. It is this philosophy which is followed by the Court in allowing that person to redeem his properties by making the deposit under Order 34 Rule 5 C.P.C."
The Hon’ble Supreme Court was considering the validity of an application for depositing the mortgaged money made during the pendency of the appeal filed by the judgement debtor against the order passed by the executing Court rejecting the application for setting aside the sale. The Hon’ble Supreme Court has observed as follows:-
" Application under Order 34 Rule 5 for deposit of balance mortgage money would be maintainable even after confirmation of sale but during pendency of appeal filed by Judgment-debtor against an order passed by executing Court rejecting application for setting aside the sale effected in execution of Decree passed in mortgage suit or against an order rejecting the Application for restoration of 29/39 https://www.mhc.tn.gov.in/judis C.M.A.No.2701 of 2013 application for setting aside the sale - Sale is deemed to be absolute not on confirmation of sale but on and from the date of disposal of such appeal, if any - Moreover the application for deposit of mortgage money does not become infructuous on rejection of application to set aside the sale on merits - Limitation period of three years under Limitation Act for making an application for delivery of possession under Order 21 Rule 95 C.P.C should be reckoned from the date the sale is deemed to be absolute...."
21. In a judgement of this Court reported as A.Mariammal Vs. V.S.Balasubramanian - MANU/SC/0637/1999 the learned Judge had relied upon the judgement in U.Nilan Vs. Kannayyan case and had upheld the order of the District Court in allowing an application filed by the judgment debtor to deposit the amount under Order 34 Rule 5 of the CPC at the appellate stage.
22. In the judgement of the Hon’ble Supreme Court reported in (2004) 1 SCC 453 - Challamane Huchha Gowda Vs. M.R.Tirumala and 30/39 https://www.mhc.tn.gov.in/judis C.M.A.No.2701 of 2013 Another the learned Judges were considering the correctness of the order passed by the executing Court in construing the objection filed by the petitioner judgement debtor as an application under Order 21 Rule 89 of the CPC. The argument advanced by the decree holder was that an objection could not be treated as an application as it should be by way of a regular petition and therefore the setting aside of the sale by the executing Court is not correct. The learned Judges relying upon the earlier judgments had observed as follows:-
" 9. Execution is the enforcement by the process of the court of its orders and decrees. This is in furtherance of the inherent power of the court to carry out its orders or decrees. Order 21 CPC deals with the elaborate procedure pertaining to the execution of orders and decrees. Sale is one of the methods employed for execution. Rule 89 of Order 21 is the only means by which a judgment-debtor can escape from a sale that has been validly carried out. The object of the rule is to provide a last opportunity to put an end to the dispute at the instance of the judgment-debtor before the sale is confirmed by the court and also to save his property from dispossession. Rule 89 postulates two conditions: they 31/39 https://www.mhc.tn.gov.in/judis C.M.A.No.2701 of 2013 are depositing: (1) of sum equal to five per cent of the purchase money to be paid to the purchaser, (2) of the amount specified in the proclamation of sale less any amount received by the decree-holder since the date of such proclamation, in the court. If these two conditions are satisfied the court shall make an order for setting aside the sale under Rule 92(2) of Order 21 CPC on an application made to it. In other words, then there will be compliance with the court's order or decree that is sought to be executed. Because the purpose of Rule 21 is to ensure the carrying out of the orders and decrees of the court, once the judgment-debtor carries out the order or decree of the court, the execution proceedings will correspondingly come to an end. It is to be noted that the Rule does not provide that the application in a particular form shall be filed to set aside the sale. Even a memo with prayer for setting aside sale is sufficient compliance with the said Rule. Therefore, upon the satisfaction of the compliance with conditions as provided under Rule 89, it is mandatory upon the court to set aside the sale under Rule 92. And the court shall set aside the sale after giving notice under Rule 92(2) to all affected persons."
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23. In fact, even in the judgment relied upon by the appellant in AIR 1968 SCC 86 -Hukumchand Vs. Bansilal and others, the Hon’ble Supreme Court has observed that the provisions of Order 34 Rule 5(1) gives an opportunity to a judgement debtor in a mortgage decree for sale to deposit the amount due under the mortgage decree at any time before the confirmation of sale made in pursuance of the final decree. The learned judge goes on to state that when such a deposit is made, the executing Court has to accept the payment and make an order in favour of the judgment debtor. The learned Judge has observed as follows in this regard :-
" It is true that so long as his right to redeem subsists the mortgagor may redeem the property. It is this principle which is recognized in Order 34 Rule 5 which provides that the mortgagor judgment-debtor can deposit the amount due even after the final decree has been passed but his deposit must be made at any time before confirmation of sale."
24. The learned Judges had further considered the provisions of 33/39 https://www.mhc.tn.gov.in/judis C.M.A.No.2701 of 2013 Order 34 Rule 5 and Order 21 Rule 92 of the CPC and observed as follows:-
" We have to to interpret Order 34 Rule 5 and Order 21 Rule 92 harmoniously and on a harmonious interpretation of the two provisions it is clear that though the mortgagor has the right to deposit the amount due at any time before confirmation of sale, there is no question of his being granted time under Order 34 Rule 5 and if the provisions of Order 21 Rule 92(1) apply the same must be confirmed unless before the confirmation the mortgagor judgement- debtor has deposited the amount as permitted by Order 34 Rule 5"
25. Therefore, from a reading of all the above judgments the following factors emerge:-
a) The provisions of Order 34 Rule 5 CPC is available to a mortgagor in the case of a mortgage decree till the confirmation of sale and once the provision is invoked and there is a due compliance of the deposit, the Court is bound to set aside the sale/ put the mortgagor in possession/ direct the mortgagee to hand over the original title deeds to the mortgagor. 34/39
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b) For invoking the remedy under Order 34 Rule 5 CPC it is not mandatory that it should be in the form of an application, the same could be in the form of an objections with deposit of the entire amount or by an oral representation however with due compliance of the provision of deposit.
c) The provisions of Order 34 Rue 5 CPC can be invoked when an appeal or revision is filed as well and would apply parallely alongwith an application filed under the provisions of Order 21 Rule 89 CPC.
d) The provisions of Order 34 Rule 5 CPC stand on a different footing and on a higher plane from the provisions of Order 21 Rule 89, 90 and 92 of the CPC.
e) The provisions of Order 21 Rule 89 CPC would apply to mortgage decrees where there is no challenge to the decree and amounts have not been deposited as contemplated under the provisions of Order 34 Rule 5 CPC.
f) This Right of the mortgagor is based on the provisions of Section 60 of the Transfer of Property Act. Since the general principle is that there 35/39 https://www.mhc.tn.gov.in/judis C.M.A.No.2701 of 2013 can be no clog on redemption until the sale is finally concluded by orders of Court or by confirmation of sale or by sale becoming absolute as per Order 21 Rule 92 CPC.
26. It is therefore amply clear that the right of a mortgagor to redeem the property and have the sale set aside stands on a higher platform than the right given to the other judgement debtors. From the records it is further seen that in the instant case the entire amount as contemplated has been deposited by the judgement debtor on 02.04.2013. Therefore, taking into account the ratio laid down in the judgements and taking into account the fact that an application under Order 34 Rule 5 CPC could be moved at any time before the confirmation of a sale, the order passed by the learned District Judge, Nilgiris, Udhagamandalam has to necessarily be upheld. The order has to be upheld for the following reasons as well:-
a) that the application for setting aside the sale had been made even before the entire amounts had been deposited by the judgement debtor, and 36/39 https://www.mhc.tn.gov.in/judis C.M.A.No.2701 of 2013
b) the sale had not been confirmed and even before the confirmation of sale the entire amount as contemplated under Order 34 Rule 4(1) CPC has been deposited by the judgement debtor.
27. The balance amount has been paid by the auction purchaser only after the application had been moved by the judgement debtor to set aside the sale. It is needless to state that procedure is nothing but a hand made of justice. Order 34 Rule 5 of the CPC provides a procedure for setting aside a sale pursuant to the final decree in a mortgage suit. The impugned application though styled as one under Order 21 Rule 89 CPC could very well be treated as an application under Order 34 Rule 5 of the Code of Civil Procedure, particularly when the entire amount has been deposited before the confirmation of sale as contemplated under the provisions of Order 34 Rule 5 of the CPC and the decree in execution is a mortgage decree. The provisions of the two has to be harmoniously interpreted to give the benefit to the judgement debtor/mortgagor who has deposited the entire sale price.
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28. Therefore, considering the above the above I see no reason to interfere with the judgement and decree of the learned District Judge, Ooty and consequently, the Civil Miscellaneous Appeal stands dismissed. No costs. Consequently, the connected Miscellaneous Petition is closed.
10.01.2023 Index : Yes / No speaking Order : Yes / No Neutral Citation : Yes/No shr To,
1.The District Court, Nilgris at Udhagamandalam.
2. .The Section Officer, V.R.Section, High Court, Madras -104.
38/39 https://www.mhc.tn.gov.in/judis C.M.A.No.2701 of 2013 P.T.ASHA, J., shr Pre-delivery Judgment in C.M.A.No.2701 of 2013 and C.M.P.No.13295 of 2017 10.01.2023 39/39 https://www.mhc.tn.gov.in/judis