GAS POINT PETROLEUM INDIA LTD. versus RAJENDRA MAROTHI & ORS. on 10 February 2023

1. Feeling aggrieved and dissatisfied with the impugned judgmentand order dated 29.04.2016 passed by the High Court of Madhya PradeshFPrincipal Seat at Jabalpur in W.P. No. 3342/2015, by which, the HighCourt has allowed the said writ petition preferred by respondent No. 1herein and has set aside the order passed by the lower Appellate Courtand has restored the order passed by the Executing Court with respectto the property in question, the original respondent No. 1– objector beforethe Executing Court has preferred the present appeal.G2. The facts leading to the present appeal in a nutshell are asunder: - 2.1 There was a dispute between National Ginni Enterprises andSmt. Gayatri Agrawal with respect to the L.P.G. gas agreement. A civilsuit No. 07-A/98 was filed by the said Smt. Gayatri Agrawal against theHNational Ginni Enterprises. The learned Trial Court passed a decree by

directing the judgment debtor (National Ginni Enterprises) to provideL.P.G. gas as per the conditions of the agreement. The decree providedthat if the defendants are unable to implement the said order, inalternatively it was directed that the plaintiff was entitled to get the amountof Rs. 2,38,450/- + Rs. 23,500/- (sic) relating to cost of the gas cylindersand regulators respectively. The judgment debtor did not fulfill the firstportion of the order and did not supply the gas cylinders and regulators.Therefore, the decree holder filed the execution petition before theExecuting Court. It was decided to sell the property of the judgmentdebtor. Accordingly, a declaration was made and property was auctionedand sold on 03.11.2011 in favour of respondent No. 1 herein. The appellantherein – original respondent No. 1 filed objection before the ExecutingCourt, contending, inter-alia, that the property was purchased by himfrom judgment debtor on 31.08.1999 and that they are in possession ofthe said land. An application under Order 21 Rule 90 r/w 151 of theCPC was filed. The learned Executing Court overruled the objectionsand rejected the application under Order 21 Rule 90 by order dated23.01.2013. The appellant flied miscellaneous civil appeal before theCourt of Additional District Judge, Damoh being Misc. Civil Appeal No.12/2013. The lower Appellate Court allowed the said appeal and setaside the order of Executing Court dated 23.01.2013 and remitted thematter back to the Executing Court to rehear the parties and after takinginto account all the facts and circumstances, pass a fresh order inaccordance with law. The order passed by the lower Appellate Courtwas the subject matter before the High Court by way of present writpetition. By the impugned judgment and order the High Court has allowedthe said writ petition and has set aside the order passed by the lowerAppellate Court by observing that the appellant herein – originalrespondent No. 1 has failed to plead and establish the nature of irregularityor fraud committed in sale and therefore, no fault can be found in theorder of the Executing Court.

2.2 Feeling aggrieved and dissatisfied with the judgment and orderpassed by the High Court, the original respondent No. 1 has preferredthe present appeal.

3. Shri Ravindra Shrivastava, learned Senior Advocate hasappeared on behalf of the appellant and Shri Sanjay K. Agrawal, learnedcounsel has appeared on behalf of respondent No. 1.

4. Shri Ravindra Shrivastava, learned Senior Advocate appearingon behalf of the appellant has vehemently submitted that in the facts and AB

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Acircumstances of the case the High Court has committed a serious errorin allowing the writ petition and quashing and setting aside the well-reasoned order passed by the lower Appellate Court.

4.1 It is submitted that in the present case there was breach ofOrder 21 Rule 64 and Order 21 Rule 84/85 of CPC and therefore, due toBnon-compliance of the aforesaid provisions the sale has been vitiated.

4.2 It is submitted that in the present case the property in questionwas put to auction on 18.10.2011 and therefore, the auction purchaserwas required to deposit 25% of sale amount immediately. It is submittedthat in the present case the auction purchaser deposited 25% of theamount on 03.11.2011. It is submitted that therefore there is aCnon-compliance of Order 21 Rule 84 of CPC. It is further submitted thatthe balance sale consideration (75%) was required to be deposited bythe auction purchaser within a period of fifteen (15) days from the dateof auction. It is submitted that in the present case balance 75% of thesale consideration was deposited by the auction purchaser on 04.11.2011.It is submitted that therefore there is also a violation of Order 21 Rule 85Dof CPC. Relying upon Order 21 Rules 64, 84, 85 and 86 and relying uponthe decisions of this Court in the cases of Manilal Mohanlal Shah andOrs. Vs. Sardar Sayed Ahmed Sayed Mahmad and Anr.; (1955) 1SCR 108 and Rosali V. Vs. Taico Bank and Ors.; (2009) 17 SCC690, it is prayed to allow the present appeal.E

4.3 It is further submitted by learned Senior Advocate appearingon behalf of the appellant that even otherwise the High Court has notproperly appreciated the fact that the property in question was purchasedby the appellant on 31.08.1999 from the judgment debtor and at thattime the property in question was not the subject matter of civil suit. It isFsubmitted that civil suit was filed for specific performance of the L.P.G.gas agreement. It is submitted that even injunction dated 18.05.1999was not the subject matter of property in question. It is submitted thatwhen the property in question was put to auction by the Executing Courton 18.10.2011/03.11.2011 much prior thereto the appellant purchasedthe property on 31.08.1999. It is submitted that therefore at the timeGwhen the property was auctioned the judgment debtor was not the ownerof the property in question, which as such was purchased by the appellantby the registered sale deed on 31.08.1999. It is submitted that thereforethe High Court has committed a very serious error in observing that theappellant purchased the property despite the injunction granted by theTrial Court on 18.05.1999 and that the appellant cannot be permitted toH

GAS POINT PETROLEUM INDIA LIMITED v. RAJENDRAMAROTHI & ORS. [M. R. SHAH, J.]

raise the objection as the appellant has purchased the property despitethe injunction.

4.4 Making the above submissions and relying upon the abovedecisions, it is prayed to allow the present appeal.

5. Present appeal is vehemently opposed by Shri Sanjay Agrawal,learned counsel appearing on behalf of respondent No. 1 herein – auctionpurchaser.

5.1 It is submitted by learned counsel appearing on behalf ofrespondent No. 1 that in the facts and circumstances of the case noerror has been committed by the High Court in restoring the order passedby the learned Executing Court and overruling the objections raised bythe appellant herein – objector.

5.2 It is submitted that on true interpretation of Order 21 Rule 90the High Court has rightly refused to set aside the sale on the allegedviolation of Order 21 Rule 64 and Order 21 Rule 84/85. It is submittedthat the appellant purchased the property in question during the pendencyof the suit and the injunction dated 18.05.1999 was in operation. It issubmitted that therefore the appellant shall not be entitled to raise anyobjection thereafter and pray to set aside the sale on the ground that theproperty in question was purchased by it. It is submitted that therefore,the High Court has rightly observed that since, in the civil suit a temporaryinjunction was granted by the Trial Court on 18.05.1999 and by that timethe property was not purchased by the appellant herein there was noquestion of putting the appellant to notice.

5.3 It is further submitted that even the alleged non- complianceof Order 21 Rule 64, Order 21 Rule 84 and 85 were not raised beforethe Executing Court and therefore, the High Court has rightly observedthat the same cannot be permitted to be raised subsequently.

5.4 Making the above submissions it is prayed to dismiss the presentappeal.

6. We have heard learned counsel appearing on behalf of therespective parties at length.

7. While appreciating the submissions on behalf of the respectiveparties the chronological dates and events are required to be consideredwhich are as under: - 7.1 In the year 1998, the decree holder filed a suit for specificperformance of the L.P.G. gas agreement; A

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438SUPREME COURT REPORTS

A7.2 The civil suit was not with respect to the property in question.An interim injunction application was filed by the original plaintiff. It wasapprehended that the defendants were trying to leave Damoh after sellingand transferring their firm, namely, National Gini Enterprises, to anyother person. The application was filed under Order 38 CPC as well asfor permanent injunction. By order dated 18.05.1999 the learned TrialBCourt directed to maintain status quo. The learned Trial Court alsodirected that if the defendants transfer their firm Ginni Enterprises toany other person then they would not transfer the same against theinterest of the plaintiff. That thereafter the decree came to be passed on30.09.1999 directing the defendants – judgment debtor – Ginni EnterprisesCto supply LPG gas and in the alternative to pay 2,38,450/- + Rs. 23,500/- (sic). As the decree was not executed the decree holder filed theexecution proceeding. In the execution proceeding the property in questionwas put to auction for recovery of Rs. 2,38,450/- + Rs. 23,500/- (sic).The property was put to auction on 18.10.2011. The auction purchaser –respondent No. 1 herein deposited 25% of the amount on 03.11.2011Dand deposited balance 75% of the amount on 04.11.2011. In light ofabove factual scenario, submissions on behalf of the respective parties,more particularly, submission on behalf of the appellant onnon-compliance of Order 21 Rules 64, 84 and 85 are required to beconsidered.E7.3 While considering the issue involved in the present appealwith respect to non-compliance of the relevant provisions of CPC, therelevant provisions of the CPC are required to be referred to, namely,Order 21 Rules 64, 84, 85 and 86, which read as under: -“Order 21 – Execution of Decrees and OrdersF

Rule 64. Power to order property attached to be sold andproceeds to be paid to person entitled.—Any Court executinga decree may order that any property attached by it and liable tosale, or such portion thereof as may seem necessary to satisfythe decree, shall be sold, and that the proceeds of such sale, or aGsufficient portion thereof, shall be paid to the party entitled underthe decree to receive the same.

Rule 84. Deposit by purchaser and re-sale on default.—(1)On every sale of immovable property the person declared to bethe purchaser shall pay immediately after such declaration a depositof twenty-five per cent on the amount of his purchase-money toH

the officer or other person conducting the sale, and in default ofsuch deposit, the property shall forthwith be re-sold.

(2) Where the decree-holder is the purchaser and is entitled toset-off the purchase-money under Rule 72, the Court may dispensewith the requirements of this rule.

Rule 85. Time for payment in full of purchase-money.—Thefull amount of purchase-money payable shall be paid by thepurchaser into Court before the Court closes on the fifteenth dayfrom the sale of the property:

Provided, that, in calculating the amount to be so paid into Court,the purchaser shall have the advantage of any set-off to which hemay be entitled under Rule 72.

Rule 86. Procedure in default of payment.—In default ofpayment within the period mentioned in the last preceding rule,the deposit may, if the Court thinks fit, after defraying the expensesof the sale, be forfeited to the Government, and the property shallbe re-sold, and the defaulting purchaser shall forfeit all claim tothe property or to any part of the sum for which it may subsequentlybe sold.”

7.4 As per Order 21 Rule 84, on every sale of immovable propertythe person declared to be the purchaser shall pay immediately aftersuch declaration deposit of twenty-five per cent on the amount of hispurchase-money and in default of such deposit, the property shallforthwith be re- sold.

7.5 As per Order 21 Rule 85, the full amount of purchase- moneypayable shall be paid by the purchaser into Court before the Court closeson the fifteenth day from the sale of the property. Thus, as per theaforesaid provisions, the purchaser has to deposit 25% of the sale amountimmediately on declaring to be the purchaser and the full amount of thepurchase-money shall have to be paid by the purchaser into the Courtbefore the Court closes on fifteenth day from the sale of the property.

7.6 In the present case admittedly the purchaser – respondentNo. 1 deposited 25% of the amount on 03.11.2011 and did not deposit25% of the amount as required under Order 21 Rule 84 immediately.The auction purchaser was required to deposit 25% of the amount theday on which he was declared purchaser i.e., 18.10.2011. Even thebalance 75% of the amount has not been deposited as required underOrder 21 Rule 85. The full amount of the purchase-money in the presentcase has been deposited on 04.11.2011 i.e., after the period prescribed/

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Aprovided under Order 21 Rule 85. Therefore, there is non-compliance ofOrder 21 Rule 84 and Rule 85 of CPC.

8. In light of the aforesaid facts, few decisions of this Court onOrder 21 Rules 84 and 85 are required to be referred to and considered.

8.1 In the case of Manilal Mohanlal Shah (supra), it is observedBand held that the provision regarding the deposit of 25% of the amountby the purchaser other than the decree-holder is mandatory and the fullamount of the purchase money must be paid within fifteen days fromthe date of the sale. It is further observed and held that if the payment isnot made within the period of fifteen days, the Court has the discretionto forfeit the deposit, and there the discretion ends but the obligation ofCthe Court to resell the property is imperative. In paragraph 8 of thedecision, it is observed and held as under: -

“8. The provision regarding the deposit of 25 per cent by thepurchaser other than the decree-holder is mandatory as thelanguage of the Rule suggests. The full amount of the purchasemoney must be paid within fifteen days from the date of the saleDbut the decree-holder is entitled to the advantage of a set-off.The provision for payment is, however, mandatory…. (Rule 85).If the payment is not made within the period of fifteen days, thecourt has the discretion to forfeit the deposit, and there thediscretion ends but the obligation of the court to resell the propertyEis imperative. A further consequence of non-payment is that thedefaulting purchaser forfeits all claim to the property.…(Rule 86).”

8.2 The decision of this Court in the case of Manilal MohanlalShah (supra) fell for consideration before this Court in the subsequentdecision in the case of Rosali V. (supra). In the said decision this CourtFinterpreted the word “immediately” in Order 21 Rule 84. In the saiddecision, this Court considered paragraph 11 of the decision in the caseof Manilal Mohanlal Shah (supra) in paragraph 20 as under: - “20. What would be the meaning of the term “immediately” cameup for consideration before this Court, as noticed hereinbefore, inGManilal Mohanlal Shah [AIR 1954 SC 349] wherein it was held :(AIR pp. 351-52, para 11)

“11. Having examined the language of the relevant rules andthe judicial decisions bearing upon the subject we are of opinionthat the provisions of the rules requiring the deposit of 25 percent of the purchase money immediately, on the person beingH

declared as a purchaser and the payment of the balance within15 days of the sale are mandatory and upon non-compliancewith these provisions there is no sale at all. The rules do notcontemplate that there can be any sale in favour of a purchaserwithout depositing 25 per cent of the purchase money in thefirst instance and the balance within 15 days. When there is nosale within the contemplation of these rules, there can be noquestion of material irregularity in the conduct of the sale.Non-payment of the price on the part of the defaulting purchaserrenders the sale proceedings as a complete nullity. The veryfact that the Court is bound to resell the property in the eventof a default shows that the previous proceedings for sale arecompletely wiped out as if they do not exist in the eye of thelaw. We hold, therefore, that in the circumstances of the presentcase there was no sale and the purchasers acquired no rightsat all.”

8.3 Applying the law laid down by this Court in the aforesaiddecisions to the facts of the case on hand, it is evident that there isnon-compliance of mandatory provisions of Order 21 Rule 84 and Order21 Rule 85 and therefore, the sale was vitiated.

9. Even otherwise, it is required to be noted that the appellantherein purchased the property in question much before the auction ofthe property i.e., 31.08.1999. At the relevant time the property in questionwas not the subject matter of suit. As observed hereinabove, the subjectmatter of suit was specific performance of the L.P.G. gas agreementand even the ad-interim injunction dated 18.05.1999 was also againstthe transfer of firm Ginni Enterprises to any other person and thedefendants were directed to maintain status quo with respect to theirfirm Ginni Enterprises. Therefore, at the time when the property inquestion was put to auction on 18.10.2011 the appellant had alreadypurchased the said property as far as back on 31.08.1999 as there wasno injunction with respect to the said property while ad-interim injunctiondated 18.05.1999 and as observed hereinabove, the property in questionwas not the subject matter of suit and the decree came to be passed on30.09.1999 and the property was put to auction in the year 2011 forrecovery of sum of Rs. 2,38,450/- + Rs. 23,500/- (sic). The ad- interiminjunction dated 18.05.1999 cannot be pressed into service against theappellant. Therefore, the High Court has committed an error in consideringinjunction dated 18.05.1999 against the appellant. Therefore, at the time A

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Awhen the property was put to auction on 18.10.2011, the judgment debtorwas not the owner and therefore, the same could not have been put toauction. Under the circumstances, learned Executing Court erred inoverruling the objections raised by the appellant against the auction/saleof the property which the appellant purchased much prior to the date ofthe auction i.e., on 31.08.1999.

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10. In view of the above and for the reasons stated above, theimpugned judgment and order passed by the High Court deserves to bequashed and set aside and is accordingly quashed and set aside andconsequently the order passed by the Executing Court overruling theobjections raised by the appellant also deserves to be quashed and setCaside and is quashed and set aside. The order passed by the lowerAppellate Court is hereby restored. It will be open for respondent No. 1to get back the amount deposited by him, lying with the Executing Court.Present appeal is accordingly allowed. In the facts and circumstance ofthe case there shall be no order as to costs.

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Bibhuti Bhushan Bose

Appeal allowed.

(Assisted by : Abhishek Pratap Singh, LCRA)

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