2007 (1) TMI 550 - SC - Indian Laws

What would be the meaning of the term immediately occurring in Order XXI Rule 84 of the Code, in view of the peculiar facts and circumstances of this case? Whether the sale was void only because it was confirmed before expiry of the period of 30 days?

Summary

Issues Involved:
1. Interpretation of the term "immediately" in Order XXI Rule 84 of the Code of Civil Procedure.
2. Validity of the auction sale confirmed before the expiry of 30 days.

Issue-Wise Detailed Analysis:

1. Interpretation of the term "immediately" in Order XXI Rule 84 of the Code of Civil Procedure:

The primary issue was the interpretation of the term "immediately" as used in Order XXI Rule 84 of the Code of Civil Procedure, which mandates that the purchaser must deposit 25% of the purchase-money immediately after being declared the purchaser. The High Court had held that the auction sale was invalid because the 25% deposit was made on the following day instead of immediately after the auction.

The Supreme Court, however, noted that the term "immediately" should be interpreted in a reasonable manner, considering the circumstances. The Court emphasized that literal interpretation leading to absurdity or anomaly should be avoided. The Court referred to the principle that statutes must be read reasonably and in a manner that promotes the legislative intent. The Court cited various precedents and legal principles, including the common-sense construction rule and the presumption against absurdity, to support its interpretation.

The Court concluded that the auction purchaser's inability to deposit the 25% amount immediately due to the banks being closed was a valid reason, and the direction by the executing court to deposit the amount the next day satisfied the requirements of law. Therefore, the Court held that the High Court was incorrect in its interpretation that the provisions of Order XXI Rule 84 had not been complied with.

2. Validity of the auction sale confirmed before the expiry of 30 days:

The second issue was whether the auction sale was void because it was confirmed before the expiry of the 30-day period. The High Court had relied on the precedent set in Manilal Mohanlal Shah v. Sardar Sayed Ahmed Sayed Mahamad, which held that non-compliance with the mandatory provisions of Order XXI Rule 84 renders the sale a nullity.

The Supreme Court, however, distinguished the present case from the precedent. The Court noted that the auction purchaser had deposited the full purchase money within the stipulated time as per Order XXI Rule 85. The Court also observed that the decree holder's application to set aside the sale was filed eight years after the sale was confirmed, and the reasons for setting aside the sale were not adequately explained.

The Court held that the confirmation of the sale within 30 days was not a decisive factor to set aside the sale after such a long period. The Court found the High Court's reliance on the precedent misplaced, as the circumstances in the present case were different.

Conclusion:

The Supreme Court set aside the impugned orders of the High Court and the Executing Court. The Court clarified that it had not addressed other contentions raised by the respondents, which could be determined by the Executing Court if raised in accordance with law. The appeal was allowed, and no order as to costs was made.