Case Note & Summary
The dispute arises from execution proceedings of a decree passed in favour of Shree Mahalaxmi Mercantile Coop Bank Ltd. (R2) against M/s. Abhilasha Construction (R3) and its partner Mukul Thakorebhai Amin (R1). The decree was for recovery of Rs. 1,89,94,105.50. In execution, the court receiver conducted an auction sale of 12 flats and 2 penthouses on 26.11.2007, wherein Aarifaben Yunusbhai Patel and others (appellants) were the highest bidders. The sale was confirmed on 10.12.2007 and a sale certificate was issued on 29.02.2008. R1 filed a writ petition before the Gujarat High Court on 26.12.2007 challenging the sale, and later on 20.06.2008 filed an application under Order XXI Rule 90 CPC before the executing court to set aside the sale on grounds of lack of notice and inadequate price. The executing court rejected the application, but the High Court allowed R1's petition and set aside the sale, holding that the sale was vitiated due to non-compliance with mandatory notice requirements. The High Court did not decide the issue of limitation raised by the appellants. The Supreme Court noted that it had earlier directed the executing court to decide both limitation and merits, but the High Court ignored this direction. The Supreme Court held that the issue of limitation must be decided first, as Section 5 of the Limitation Act is not applicable to applications under Order XXI Rule 90 CPC, and the period of limitation is 60 days under Article 127. The Court set aside the High Court's order and remanded the matter to the High Court to decide the limitation issue afresh, and if the application is within time, then to decide the objections on merits.
Headnote
A) Civil Procedure - Execution of Decree - Auction Sale - Limitation - Order XXI Rule 90 CPC, Article 127 Limitation Act, 1963, Section 5 Limitation Act, 1963 - Application to set aside sale must be filed within 60 days; Section 5 of Limitation Act is not applicable to such applications; delay cannot be condoned under Section 5. The court must first decide the issue of limitation before examining the merits of objections. (Paras 8-9) B) Civil Procedure - Execution of Decree - Auction Sale - Limitation - Section 14 Limitation Act, 1963 - Exclusion of time for bona fide proceedings in court without jurisdiction may be considered in computing limitation for application under Order XXI Rule 90 CPC. (Para 10) C) Civil Procedure - Execution of Decree - Auction Sale - Notice to Judgment-Debtor - Order XXI Rule 90 CPC - Sale set aside for lack of notice to judgment-debtor is a ground of material irregularity, but the court must first determine whether the application is within limitation. (Paras 6-7) D) Civil Procedure - Execution of Decree - Auction Sale - Supreme Court Directions - Binding Nature - High Court ignored specific direction of Supreme Court to decide both limitation and merits; such non-compliance vitiates the impugned order. (Para 6)
Issue of Consideration
Whether the High Court was justified in setting aside the auction sale without first deciding the issue of limitation, and whether the objections under Order XXI Rule 90 CPC were filed within the prescribed period of limitation.
Final Decision
The Supreme Court allowed the appeals, set aside the impugned order of the High Court, and remanded the matter to the High Court to decide the issue of limitation first. If the application is found to be within limitation, the High Court shall then decide the objections on merits. The contempt petition was also disposed of.
Law Points
- Limitation for application to set aside sale under Order XXI Rule 90 CPC is 60 days under Article 127 of Limitation Act
- 1963
- Section 5 of Limitation Act not applicable to Order XXI Rule 90 CPC
- Section 14 of Limitation Act may be applicable for exclusion of time
- High Court must decide limitation issue before merits as directed by Supreme Court
