1954 (4) TMI 46 - SC - Indian Laws

Whether the failure to make the deposit under Order XXI, rules 84 and 85, is only a material irregularity in the sale which can only be set aside under rule 90 or whether it is wholly void? Held that - 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. Nonpayment of the price on the part of the defaulting purchaser renders the sale proceedings as a complete nullity. The very fact that the Court is bound to resell 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. We hold, therefore, that in the circumstances of the present case there was no sale and the purchasers acquired. no rights at all. We do not think that the inherent powers of the Court could be invoked to circumvent the mandatory provisions of the Code and relieve the purchasers of their obligation to make the deposit. The appellants by misleading the Court want to benefit by the mistake to which they themselves contributed. They cannot be allowed to take advantage of their own wrong. Appeal dismissed.

Issues Involved:

1. Validity of the sale of properties on August 13, 1942.
2. Compliance with Order XXI, rules 84 and 85 of the Civil Procedure Code.
3. Jurisdiction of the Court to allow set-off in execution proceedings.
4. Consequences of non-compliance with mandatory provisions of the Civil Procedure Code.

Issue-wise Detailed Analysis:

1. Validity of the sale of properties on August 13, 1942:

The appeal questions the validity of a sale conducted on August 13, 1942, involving properties valued at Rs. 1,50,000, which were previously mortgaged for Rs. 60,000. The properties were sold to the mortgagees for Rs. 53,510 without notice to the judgment-debtor. The sale was challenged on the grounds of fraud, collusion, and gross undervaluation. The trial court found discrepancies in the valuation of the properties and set aside the sale due to non-compliance with Order XXI, rules 84 and 85, stating that the sale was conducted without proper jurisdiction and was thus invalid.

2. Compliance with Order XXI, rules 84 and 85 of the Civil Procedure Code:

The principal question was whether the failure to deposit 25% of the purchase money and the full amount within 15 days rendered the sale void or merely irregular. The Court emphasized that the provisions requiring the deposit of 25% immediately and the balance within 15 days are mandatory. Non-compliance with these provisions results in no sale in the eye of the law. The Court concluded that the purchasers did not comply with these mandatory provisions, thus rendering the sale proceedings null and void.

3. Jurisdiction of the Court to allow set-off in execution proceedings:

The mortgagees, without having obtained a decree on their mortgage, applied for a set-off, which the Court allowed without proper adjudication. The Court held that the set-off was not admissible under rule 84, which applies only to decree-holders. The Court had no jurisdiction to allow such a set-off, and the purchasers misled the Court to obtain an unauthorized advantage. The inherent powers of the Court could not be invoked to circumvent the mandatory provisions of the Civil Procedure Code.

4. Consequences of non-compliance with mandatory provisions of the Civil Procedure Code:

The Court analyzed the relevant rules (72, 84, 85, and 86) and concluded that the provisions for deposit and payment are mandatory. Upon non-compliance, the Court must forfeit the deposit and resell the property, and the defaulting purchaser forfeits all claims to the property. The Court cited several precedents supporting the view that non-compliance with these provisions results in no sale. The Court held that the sale proceedings were a complete nullity due to the purchasers' failure to comply with the mandatory requirements, and thus, the purchasers acquired no rights to the property.

Conclusion:

The appeal was dismissed, affirming that the sale was invalid due to non-compliance with mandatory provisions of Order XXI, rules 84 and 85. The Court emphasized that purchasers cannot benefit from their own wrong by misleading the Court and circumventing mandatory legal requirements. The inherent powers of the Court could not override these mandatory provisions, and the purchasers' actions rendered the sale null and void.

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