Case Note & Summary
The appellants, who were judgment debtors in execution proceedings, filed an application under Order XXI Rule 90 read with Section 151 CPC to set aside an auction sale of their property conducted in Execution Case No.1221/2012. The execution court dismissed the application, leading to the present appeal. The factual background involves a chit fund transaction where the appellants had subscribed to a chit of Rs.6,00,000 from respondent No.1 and paid installments. Disputes arose, leading to an award and subsequent execution. The auction sale was conducted on 16.12.2017, and the auction purchaser (respondent No.2) failed to deposit 25% of the purchase money on the same day as required under Order XXI Rule 84 CPC. The appellants contended that this non-compliance rendered the sale void. The High Court analyzed the mandatory nature of Order XXI Rule 84 CPC, which requires the auction purchaser to deposit 25% of the purchase money immediately after the sale. The court noted that the execution court had not considered this crucial aspect and had dismissed the application without addressing the material irregularity. The court held that the failure to deposit the 25% on the same day makes the sale a nullity and constitutes a material irregularity under Order XXI Rule 90 CPC. Consequently, the High Court allowed the appeal, set aside the execution court's order, and directed that the application under Order XXI Rule 90 CPC be allowed, thereby setting aside the auction sale.
Headnote
A) Civil Procedure Code - Execution - Auction Sale - Order XXI Rule 84 CPC - Mandatory Deposit - The auction purchaser must deposit 25% of the purchase money immediately on the same day of sale, failing which the sale is void. The court held that non-compliance with Order XXI Rule 84 CPC renders the sale a nullity and the execution court erred in dismissing the application under Order XXI Rule 90 CPC without considering this mandatory requirement. (Paras 5-10) B) Civil Procedure Code - Execution - Setting Aside Sale - Order XXI Rule 90 CPC - Material Irregularity - Non-deposit of 25% as per Order XXI Rule 84 CPC constitutes a material irregularity and fraud, justifying setting aside of the sale. The court held that the execution court's order dismissing the application was perverse and liable to be set aside. (Paras 8-12)
Issue of Consideration
Whether the execution court was justified in dismissing the application under Order XXI Rule 90 CPC to set aside the auction sale when the auction purchaser failed to deposit 25% of the purchase money on the same day as required under Order XXI Rule 84 CPC.
Final Decision
Appeal allowed. The order dated 16.12.2017 passed on I.A.No.3 in Ex.C.No.1221/2012 by the XLII Additional City Civil and Sessions Judge, Bengaluru is set aside. I.A.No.3 is allowed, and the auction sale is set aside.
Law Points
- Order XXI Rule 84 CPC
- mandatory deposit of 25% purchase money on same day
- auction sale void if not complied with
- Order XXI Rule 90 CPC
- Section 151 CPC
- execution proceedings
- chit fund dispute
