1995 (2) TMI 359 - SC - Indian Laws

Whether the payment of one fourth of the amount of auction-sale by cheque is a valid tender within the meaning of Rule 285-D of U.P. Zamindari Abolition and Land Reforms Rules, 1952? Held that - It is settled law that the Provisions of Order 21, Rule 84, 85 and 86 of the Code of Civil Procedure are manda- tory and the provisions of Rules 285- D and 285-E being similar in terms of the aforementioned corresponding provisions of the Code of Civil Procedure and in view of the aforesaid discussion there is no escape from declaring the sale a nullity if Rule 285-D is not complied with. Deposit of 25 per cent of the bid amount by cheque will not be a valid tender within the meaning of the rule. Appeal allowed.

Issues Involved:
1. Validity of payment by cheque under Rule 285-D of U.P. Zamindari Abolition and Land Reforms Rules, 1952.
2. Interpretation of "immediately" and "forthwith" in Rule 285-D.
3. Mandatory nature of Rule 285-D and related provisions.
4. Consequences of non-compliance with Rule 285-D.

Detailed Analysis:

1. Validity of Payment by Cheque under Rule 285-D:
The core issue in this appeal is whether the payment of one-fourth of the auction-sale amount by cheque constitutes a valid tender under Rule 285-D of the U.P. Zamindari Abolition and Land Reforms Rules, 1952. The auction purchaser deposited Rs. 8000 by cheque on 18.10.1973, which was encashed and accounted for on 22.10.1973. The appellants argued that the cheque payment did not comply with Rule 285-D, which mandates immediate deposit of 25% of the bid amount.

2. Interpretation of "Immediately" and "Forthwith" in Rule 285-D:
The judgment delves into the interpretation of the terms "immediately" and "forthwith" as used in Rule 285-D. The court clarified that "immediately" does not mean instantaneously but requires action without undue delay within the same day. The term "forthwith" implies that the property should be re-sold promptly if the initial purchaser fails to deposit the required amount immediately. This interpretation aims to prevent delays and ensure that the auction process is not rendered nugatory.

3. Mandatory Nature of Rule 285-D and Related Provisions:
The court emphasized that Rule 285-D is mandatory. Failure to comply with the immediate deposit requirement renders the auction sale a nullity. The judgment references similar provisions in the Code of Civil Procedure, particularly Order 21, Rules 84, 85, and 86, which also mandate immediate deposit of 25% of the bid amount and re-sale of the property in case of default. The court cited previous rulings, including Mani Lal Mohan Lal v. Syed Ahmad, to support the mandatory nature of these provisions.

4. Consequences of Non-Compliance with Rule 285-D:
The court highlighted the consequences of non-compliance with Rule 285-D. If the 25% deposit is not made immediately, the property must be re-sold forthwith. Accepting a cheque instead of a cash deposit could lead to situations where the cheque is not honored, frustrating the purpose of the rule. The court concluded that Rule 285-D does not contemplate cheque payments; a cash deposit is required to meet the rule's mandatory requirements. This ensures that the auction process remains efficient and prevents delays in re-sale and fresh proclamation.

Conclusion:
The appeal was allowed, and the High Court's order dated 22.1.1992 was set aside. The auction sale was declared a nullity due to non-compliance with Rule 285-D. The judgment underscores the importance of adhering to mandatory procedural rules to maintain the integrity of the auction process.

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